Question
July 10, 2003
Mr.Michael B. Verne .
Federal Trade Commission -
Pre-Merger Notification Office
Bureau of Competition, Room 303
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Re: HSRRule 802.51(b)
DearMike:
This confirm our conversations earlier todayregarding HSR Rule 802.51(b). The issue we discussed is under whatcircumstances pickups and deliveries of cargo from United States ports bytankers/freighters constitute "salts in or into the United States" forpurposes of the $50 million threshold under the Rule. We discussed twoscenarios.
First, we assumed cargo is being picked up in New York Cityand shipped to London. If the shipper delivering the cargo to the vessel in New York City is paying for the transportation, the revenues are considered"United States sales" of the firm providing the transportationservices. This is true even if the shippers headquarters are located in Stockholm.Alternatively, if the party receiving the cargo in Spain is paying for thetransportation services, the revenues are not considered "United Statessales" of the transportation firm, even if the paying party is a companyheadquartered in the United States.
The converse would also be true.Assume the cargo is being picked up in London and shipped to New York. If the shipper in London is paying for the service, the revenues axe not "United Statessales." If the party receiving the cargo in New York is paying for the service,the revenues are considered "United States sales."
Second, we assumed that achatterer hires a ship to pick up cargo in Africa and bring it to New York City. For practical purposes, the chattereris both the sender and the recipient. In this case, payment for the serviceswill be considered "sales in or into the United States" if the cargo is being broughtinto the United States, as it would be under our hypothetical. If the conversewere the case (i.e., the charterer had arranged for the pick up of goods in New York City fordelivery to Africa), payment for the services would not be considered"sales in or into the United States."
Please let me know if I havemisunderstood the staffs analysis, or if you need additional information.