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cordance with sound accounting prac- $ 299.38 Definitions. tice.
Except where the context clearly indi(Sec. 5, 60 Stat. 43, as amended; 50 U. 8. O.
cates otherwise, as used in this part: App. 1788)
(a) “Administration” or “owner" reFINAL ACCOUNTINGS BY CHARTERERS UNDER fers to the United States of America act
WARSHIPDEMISEOUT 203 AND SHIP- ing by and through Maritime AdminisSALESDEMISE 303 BAREBOAT CHARTER tration or the United States Maritime AGREEMENTS
(b) “Charterer” refers to a person, & 299.37 Procedure.
firm, or corporation that has chartered (a) Every Charterer, under the form vessels from the Administration under a of bareboat charter agreement known bareboat charter agreement known as as WARSHIPDEMISEOUT 203, and/or WARSHIPDEMISEOUT 203 and/or & the form of bareboat charter agree- bareboat charter agreement known as ment known as SHIPSALESDEMISE SHIPSALESDEMISE 303, and addenda 303, shall within ninety (90) days after thereto. publication of this order in the FED- (c) “WARSHIPDEMISEOUT 203" reERAL REGISTER prepare and submit to fers to the form of bareboat charter the Maritime Administration, in the agreement published in the FEDERAL REGform and manner prescribed in the an- ISTER on April 25, 1946, § 302.62a of this nexed “Procedure to be Followed by chapter. Charterers in the Rendition to the Com- (d) “SHIPSALESDEMISE 303" refers mission of Final Accountings under to the form of bareboat charter agreeWARSHIPDEMISEOUT 203 and SHIP- ment published in the FEDERAL REGISTER SALESDEMISE 303 Bareboat Charter on September 4, 1946, $ 299.130, and Agreements" (88 299.38 to 299.56, in- addenda thereto. clusive), an accounting covering the (e) "Other operations” refers to the entire period of operations under the operation by the charterer of vessels WARSHIPDEMISEOUT 203 Agreement other than those chartered from the and accountings covering all operations
Administration, or the furnishing by the under the SHIPSALESDEMISE 303
charterer of services and facilities to
such other vessels, and all other business Agreement (including addenda thereto)
activities of the charterer. through December 31, 1949: Provided,
(f) "Uniform System of Accounts" however, That, upon application of the
refers to the “Uniform System of ACCharterer the Administration may ex
counts for Operating-Differential Subtend, for such further period as in its sidy Contractors" prescribed by the judgment is warranted by the circum
Administration February 4, 1938 in Genstances in any instance, the time limit eral Order No. 22 (Part 282 of this prescribed in this paragraph for the chapter). submission of such accounting.
(g) "Allowable return” refers to the (b) Every Charterer, under the form amount, at the rate of ten per centum of bareboat charter agreement known as
per annum of “capital necessarily emSHIPSALESDEMISE 303, shall prepare
ployed,” which, to the extent earned, the and submit to the Maritime Administra
charterer is permitted to deduct from tion a similar accounting for each sub
the cumulative net voyage profit in the
computation of additional charter hire. sequent annual or overall accounting
(h) “Accounting period" or "other period (as defined in the procedure
accounting period” refers to a period mentioned in paragraph (a) of this sec
with respect to which a separate detertion) within ninety (90) days after the
mination of additional charter hire due expiration of such accounting period, the Administration is required to be as provided in the said agreement and made pursuant to the provisions of the addenda thereto: Provided, however, applicable bare boat charter agreement, That, upon application of the Charterer commencing with the first day of the the Administration may extend, for such calendar year, or the first day of the further period as in its judgment is war- month during which the first vessel is ranted by the circumstances in any in- delivered to the charterer under the stance, the time limit prescribed in this agreement involved, or the first day of paragraph for the submission of such the month during which an addendum accounting.
requiring a separate determination of
additional charter hire becomes effec- “Uniform System of Accounts" and untive, and ending with the last day of the der such regulations as may be precalendar year or the last day of the scribed
the Owner: Provided, month in which the last vessel is re- however, That, if the Charterer is subdelivered to the Administration under ject to the jurisdiction of the Interstate the agreement (or addendum) involved. Commerce Commission, the Owner shall
(i) "Over-all accounting period” re- not require the duplication of books, recfers to a period from the earliest com- ords, and accounts required to be kept mencement of an accounting period to in some other form by that Administrathe latest termination of an accounting
tion; and period during the same calendar year.
(2) Shall file, upon notice from the
Owner, balance sheets, profit and loss ACCOUNTING REQUIREMENTS
statements, and such other statements $ 299.39 Contract provisions and appli
of financial operations, special reports, cable orders and instructions.
memoranda of any facts and transac
tions, which in the opinion of the Owner (a) Clause 13 of Part II of WARSHIP
affect the financial results in, the perDEMISEOUT 203 and SHIPSALESDE
formance of, or transactions or operaMISE 303 prescribes the fundamental
tions under, the agreement. bases for the calculation and payment to the Administration of additional charter
CROSS REFERENCE: For regulations of the hire. These clauses provide, among other
Interstate Commerce Commission affecting things, for preliminary payments by the
carriers by water, see 49 CFR, Chapter I, Sub
chapter C. Charterer to the Owner on account of additional charter hire, subject to ad
& 299.40 Annual and final accountings. justment upon completion of final audit (a) Pursuant to the applicable proviby the Owner, at which time such pay- sions of the bareboat charter agreements, ments will be made by or to the Owner
the Administration hereby requires that as such final audit may show to be due.
each Charterer submit a separate final (b) Section 229.31 (k) prescribes the accounting of additional charter hire times at which and the manner and
accrued to the owner during the entire amounts in which such preliminary pay- period of operations under WARSHIPments are required by the Owner to be
DEMISEOUT 203 and for each annual made by the Charterer. To implement or overall accounting period under these provisions of General Order 60, on SHIPSALESDEMISE 303 and addenda or about November 25, 1946, instructions
thereto. Each such accounting shall be were issued for the guidance of Charter
submitted in sextuplicate and shall iners in the preparation of the statements clude the basic statements prescribed in required to accompany preliminary pay- $ 299.54. ments on account of additional charter
(b) with respect to each such achire, upon the express understanding counting, if the amount of additional that neither their issuance by the Ad- charter hire shown thereby to have acministration nor their observance by the crued to the Owner is in excess of the Charterer would prejudice the rights of total of the payments theretofore made either under the applicable agreement to the Administration (less any refunds or otherwise, and that the Administra
theretofore made by the Administration tion reserved the right to prescribe other on account of such payments) on acbases for the determination of additional
count of additional charter hire for the charter hire at the time of the annual or
period involved, such accounting shall be final accounting under the respective accompanied by the Charterer's check agreements. Such instructions have payable to “Treasurer of United States been supplemented from time to time. for account of Maritime Administration"
(c) Clause 13 of Part II of WAR- in the amount of such excess. SHIPDEMISEOUT 203 and Clause 28 of (c) If, conversely, in any instance the Part II of SHIPSALESDEMISE 303 pro- amount of additional charter hire shown vide, among other things, that the by such accounting to have accrued to Charterer:
the Owner is less than the total of the (1) Shall keep its books, records and accounts relating to the management,
1 The books, records and accounts referred
to in this section shall be retained two years operation, conduct of the business of and
after a final release or settlement agreement maintenance of the vessels covered by
is completed between the Maritime Administhe agreement in accordance with the tration and the charterer.
payments theretofore made to the Commission (less any refunds theretofore made by the Administration on account of such payments) on account of additional charter hire for the period involved, the Charterer may apply to the Administration for refund of such overpayment and, if such application is found to be in order, the amount of the overpayment will be refunded by the Administration. The application should be made on a public voucher (Form 1034—Revised) in quintuplicate, bearing language substantially as follows:
Claim for refund of excess of preliminary payments made to the Maritime Administration, on account of additional charter hire, over the amount of such additional charter btre indicated to be due the Administration for the period from to
under Bareboat Charter Agreement WARSHIPDUMISEOUT 203/SHIPSALESDEMISE 803 [delete inapplicable reference No.
as per accounting rendered pursuant to General Order No. 60, Supplement 21, which, by this reference, is Incorporated in this claim for refund.
(d) The accounting comprising the statements and accompanying remittance or voucher required under this section shall be submitted to the Administration through the District Comptroller in the district, area, or port in which the home office of the Charterer is located, or (if there be no such auditor of the Administration in the district in which the home office of the Charterer is located) to the Comptroller, Maritime Administration, Washington 25, D. C. 8 299.41 Subsequent adjustments.
(a) In instances where operations under SHIPSALESDEMISE 303 continue beyond December 31, 1949, at the time of the submission of the accounting for each succeeding annual or over-all accounting period as required hereunder, the Charterer shall submit also a revised accounting for the period ended December 31, 1949 under SHIPSALESDEMISE 303 and addenda thereto, including all adjustments affecting that period that occurred subsequent to the rendition of the accounting therefor. Such revised accounting shall include also all such adjustments under SHIPSALESDEMISE 303 and addenda thereto applicable to the period prior to January 1, 1949: Provided, however, That if such adjustments are substantial, a separate revised accounting shall be submitted with respect to such prior period, the Administration reserving the right to determine in each
instance whether the amount of the ad. justment involved shall be regarded to be substantial for this purpose.
(b) If, in any instance, at the time of the submission of an accounting for an annual or over-all accounting period, no adjustment affecting the preceding period has occurred subsequent to the submission of the accounting for such period, the Charterer shall submit to the Administration an appropriate certification to that effect, over the signature of a duly authorized officer.
CAPITAL NECESSARILY EMPLOYED 299.42 Fundamental bases.
The fundamental bases for the determination of "capital necessarily employed" are provided in Clause 23 (c) of Part II of WARSHIPDEMISEOUT 203 and SHIPSALESDEMISE 303. 8 299.43 Interim additions and deduc
tions. The definition of "capital necessarily employed” in SHIPSALESDEMISE 303 provides, among other things, that additional capital in the form of cash or tangible property paid in during the charter period shall be included in the computation of “capital necessarily employed" from the date paid in and that any withdrawals of capital shall be deducted from the date withdrawn. Such interim adjustments are neither required nor permitted under WARSHIPDEMISEOUT 203. In the determination of "capital necessarily employed" under SHIPSALESDEMISE 303, addi. tional capital, in the form of cash or tangible property paid in, and any withdrawals of capital during an annual or overall accounting period thereunder shall be included or deducted (as the case may be), pro rata, on the basis of the proportion of such additions or withdrawals represented by the relation that the number of days from the date thereof to the end of the calendar year or overall accounting period involved bears to the total number of days within such period, such proportion to be allocated to or between “capital necessarily employed" under SHIPSALESDEMISE 303 and "other operations" in the manner hereinafter prescribed. In any instance where such an adjustment affects the effective period of WARSHIPDEMISEOUT 203 the proportion of such adjustment otherwise allocable to operations under WARSHIPDEMISEOUT 203 shall be treated in the same manner as the
proportion allocable to "other operations". 299.44 Allocation among operations
under bareboat charter agreements
and "other operations”. The definition of “capital necessarily employed" in WARSHIPDEMISE 203 and in SHIPSALESDEMISE 303 provides, among other things, that if the Charterer engages in other activities in addition to the operation of the vessels thereunder, the Owner shall determine the proper allocation of capital as between such activities. To implement this provision of the bareboat charter agreements, the following bases of allocation are prescribed:
(a) Wherever practicable and the result will not be disproportionate, assets (and applicable liabilities) shall be allocated directly to the operation in which they are employed. For example, such assets (and applicable liabilities) as
(1) Non-shipping inventories,
(2) Replacement and similar special funds (including contractual and statutory reserve funds of subsidized operators),
(3) Amounts on deposit under purchase contracts,
(4) Investments in related companies,
(5) Advances and loans to related companies,
(6) Non-current receivables from, and payables (not in excess of receivables) to, related companies,
(7) Net book value of vessels and of non-shipping property and equipment, less the portion of any long-term debt arising from the acquisition of such assets due more than one year after the date of the balance sheet involved,
(8) Vessels under construction,
(9) Notes and accounts receivable from oficers and employees,
(10) Good will and other intangible assets, and
(11) Liability for recapture under operating-differential subsidy agreements, are not necessarily employed in operations under WARSHIPDEMISEOUT 203 or SHIPSALESDEMISE 303 and, therefore, are not allocable to such operations.
(b) Except in instances involving (1) considerable non-shipping Operations, (2) the operation of passenger vessels, (3) substantial dissimilarity between the operations of the vessels chartered from the Administration and those of vessels owned or chartered from others
by the Charterer, or (4) agency operations actually carried on as a separate and substantial business activity of the Charterer for its own account and not merely incidental to the operation of the chartered vessels, (with respect to which the Charterer shall submit for the consideration of the Administration, in advance of the accounting herein pre. scribed, its concept of a fair and reasonable formula, addressed in the manner prescribed in § 299.40 (d)),
(i) Net current assets (excluding non-shipping inventories),
(ii) Voyages in progress (unterminated voyage revenue, less unterminated voyage expenses, or vice versa).
(iii) Advance ticket sales and deposits,
(iv) Special and guaranty deposits (such as those made with utilities corporations),
(v) The net book value of furniture and fixtures and other property and equipment not included in paragraphs (a) and (c) of this section, less the portion of any long-term debt arising from the acquisition of such property and equipment due more than one year from the date of the balance sheet involved.
(vi) Non-current receivables from, and payables to, others than related companies, oficers, and employees,
(vii) Long-term debt incurred in borrowing funds to provide working capital,
(viii) Deferred charges, prepaid expenses, and deferred credits, and
(ix) Other debits and credits, if, and to the extent that, they are employed in the general conduct of the shipping business, shall be allocated between operations under the bareboat charter agreements with the Administration and “other operations" on the basis of the relation that the number of days (eliminating fractions by considering twelve hours or more a full day and omitting portions of days amounting to less than twelve hours) of operation or maintenance of vessels under each SHIPSALESDEMISE 303, under each addendum to SHIPSALESDEMISE 303 whereunder additional charter hire is required to be computed, accounted for, and paid separately, under each WARSHIPDEMISEOUT 203, and in "other operations" (including those under service agreements) during the annual or over-all accounting period involved individually bear to the total of such days: Provided, That, for the purposes of this calculation only, a vessel day
shall be valued in the manner described
8 299.45 Limitation of “capital neces. in the following formula:
sarily employed”. (a) Vessels owned and operated by the
(a) If in any instance the amount alCharterer
1 located to "capital necessarily employed" (b) Vessels bareboat chartered from
under SHIPSALESDEMISE 303, in acothers and operated by the Char
cordance with the provisions of $$ 299.43 terer
and 299.44, is in excess of the greater of (c) Vessels time chartered from
the working capital requirements, or the others (d) Vessels time chartered to others.. 263 net worth requirements determined in (e) Vessels under Time Charter
the manner provided in paragraph (2) of Agency Agreements.
1/30 Clause H-Special provisions, of Part I of (1) Vessels under General Agency
SHIPSALESDEMISE 303, such allocaAgreements where General Agents
tion shall be disregarded and “capital act in dual capacity of General Agent
necessarily employed" shall be deterand Berth Agent...
mined in accordance with such Special (g) Vessels under General Agency
Provisions. Agreements where General Agent
In the application of this does not act in capacity of Berth
limitation, for the purpose of determinAgent---
145 ing: (h) Vessels under Berth Agency Agree
(1) The number of vessels involved in ments where Berth Agent does not
instances where they do not remain conact in capacity of General Agent.--- 230
stant throughout the accounting period, Provided, That in instances where more
and than one Berth Agent act for the vessel
(2) The amount of the working capion a single voyage, the number of days tal requirements or the net worth reso calculated shall be divided between quirements (whichever is the greater) the Berth Agents involved on the basis
in instances where more than one type of the relation that the number of days
of vessel is involved, under the agency of each bears to the
the following formula is prescribed: total number of days of the voyage.
(1) The number of vessels involved In this calculation the expired days of shall be deemed to be the result obtained voyages in progress at the commence- by dividing into the total number of days ment of the annual or over-all account- covering which charter hire was paid for ing period will be omitted and the
all vessels for the accounting period inexpired days of voyages in progress at
volved, the number of calendar days the termination of such period will be
within such period, and taken into account (in other words, only
(ii) The average working capital rethe vessel days within the annual or over-all accounting period involved will
quirements or net worth requirements be taken into account).
per vessel shall be determined by multi(c) The net book value of tugs, barges,
plying the greater of such requirements SCOws, launches, lighters, cranes, and
(as modified in sub-paragraphs (a) and similar floating equipment; terminal
(b) of paragraph (2) of Clause H of property and equipment; Stevedoring
Part I of “SHIPSALESDEMISE 303") and other cargo-handling gear and for each type of vessel involved by the equipment; and other property and number of days covering which charter equipment used exclusively in shipping hire was paid for all vessels of that type and its auxiliary operations, less the
for the accounting period involved, and portion of any long-term debt arising dividing the sum of the results thus obfrom the acquisition of such property tained for all types of vessels involved and equipment due more than one year by the aggregate number of days covered from the date of the balance sheet in- by such payments for all types of vessels. volved, shall be allocated between op- (b) The amount to be deducted in the erations under the bareboat charter determination of additional charter hire agreements with the Administration and (as ten per centum per annum on "cap"other operations” on the same basis as ital employed") shall be that proportion is the income derived from, and the ex- of ten percent represented by the relapense incurred in the operation and tion that the number of days within the maintenance of such services or facili- accounting period involved bears to three ties as prescribed in 8$ 299.47 to 299.53. hundred and sixty-five, the number of