MARAD Rulemaking Authority Under Cargo Preference Laws: Memorandum for Stephen H. Kaplan, General Counsel, Department of Transportation [April 19, 1994] [open pdf - 58KB]
"This responds to your letter requesting our opinion whether the U.S. Maritime Administration (MARAD) has authority to promulgate rules establishing mandatory uniform charter terms for the carriage of cargoes subject to the Cargo Preference Act of 1954 (CPA), section 901(b) of the Merchant Marine Act of 1936 (MMA), as amended, 46 U.S.C. app. § 1241(b). In addition to the submission accompanying your letter, on November 23, 1993, the Department of Agriculture (USDA) and the U.S. Agency for International Development (USAID) each submitted memoranda setting forth their views in opposition to MARAD's position (hereinafter cited as 'USDA Mem.' and 'USAID Mem.'). On January 25, 1994, we received a final submission from MARAD in reply to the submissions of USDA and USAID. We conclude that MARAD's statutory authority is broad enough to warrant issuance of charter term regulations. Under the CPA, agencies are only required to allocate the targeted share of cargo to U.S.-flag carriers to the extent that shipment on such carriers is available at 'fair and reasonable rates.' The proposed regulations appear to be a reasonable means of containing charter-related pass-through costs incurred by U.S.-flag carriers in the preference trade, thereby helping those carriers to maintain 'reasonable' rates and to utilize the full statutory allocation of cargo preference, both overall and by 'geographic areas,'"
United States. Department of Justice: http://www.justice.gov/