The Federal Maritime Commission yesterday took a retaliatory action against Ecuador, which last week refused to permit an American vessel to unload at one of its ports.
The FMC proposed a rule which would virtually prevent Ecuadorian ships from carrying goods into or out of the United States by imposing stiff fines for violation of the ruel.
The initial refusal by the Ecuadorian government to let a ship operated by Coordinated Caribbean Transport from Miami unload at the port of Manta came after Ecuador put a new decree into effect preventing "flag of convenience" ships from unloading at its ports.
A "flag of convenience" ship is one that although owned by a firm in one country, flies a flag of another nation - frequently to take advantage of tax differences. The CCT ship, though operated by an American firm, flies under a Norwegian flag.
Presumably because Ecuador is seeking to have its own ships carry more goods to and from its ports, it imposed new rules ordering that 50 percent of all ships going between Ecuador and a foreign port must be Ecuadorian and the other 50 percent must be the flag of a trading partner.
FMC Chairman Richard Daschbach said "the unwillingness of the Ecuadorian government to permit U.S. commerce to move without restraint leaves this commission with the choice of doing nothing or acting to fulfill our regulatory responsibility."
Daschbach said he had hopes that a 20-day comment period, which must be allowed before the FMC retaliatory action can take effect, might allow for the two countries to negotiate a settlement of their differences.
Daschbach said the proposed FMC rule would put a find of $1,000 on every individual shipment carried in or out of a U.S. port by an Ecuadorian ship. Each ship usually carries dozens of individual shipments, or more.
He said the CCT ship that was prevented from unloading in Manta had some 140 individual shipments of road building equipment, and other farm and building materials. "CCT has been operating that route for four years, without trouble," he added.
In addition, he said, CCT is only chartering the Norwegian ship until new tug-barge vessels it has ordered are completed and ready for travel - under American flags.
Daschbach said his staff had asked the State Department on Sept. 15 to attempt to solve the problem "through diplomatic channels," but nothing happened.