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Federal Register / Vol. 86, No. 228 / Wednesday, December 1, 2021 / Rules and Regulations
further states that when and if these rule changes take effect, it would appear that a request for initial determination of acceptability to serve as COFR
Insurance Guarantor must be made 90
days before issuing a guaranty. That statement is correct. Finally, the commenter asks whether this is only for a new guarantor. That is, will existing approvals be grandfathered in or is the new provision essentially a revocation of all existing guarantors who must restart the process before the rule can take effect? Under the final rule, prior COFR insurance guarantors do not lose their status and do not have to restart the process. It was never NPFCs intention to revoke all existing guarantors and start over; those guarantors already approved will continue to be approved. We did not make a change from the proposed rule based on this comment.
The same commenter states that while it has no objection to having to establish continued acceptability of asset levels each year as set forth in section 138.110b2ii, any requirement that guarantors report on themselves is vague and nebulous. Without guidance in the proposed rule, guarantors will be unable to determine what constitutes material changes in financial condition that need to be reported. We disagree with this commenter. A guarantor should know if their financial situation has changed or if other major changes have occurred that should be reported, such as a change that would impair their ability to fully satisfy their financial responsibility obligations under OPA 90, or a material condition that affects their ability to pay claims, or incur the expense of paying for cleanup.
If there is no change, the guarantor should be able to report no change.
Withdrawal of application comments.
Two commenters note that a COFR
Operator is permitted under proposed section 138.140a to withdraw an Application for a COFR at any time prior to issuance of a COFR and suggests that section should be amended to include and permit the withdrawal of any Application made on behalf of the COFR Operator or responsible party, including by a COFR guarantor. We agree that a COFR Guarantor should also have the ability to withdraw an application for a COFR at any time prior to its issuance. As a result, we will be revising the regulatory text in 138.140a to add the clause or anyone authorized to act on their behalf after A COFR
Operator. Section 138.140a will now read: A COFR Operator, or anyone authorized to act on their behalf, may withdraw an Application at any time prior to issuance of the COFR.

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Reporting requirements comments.
While two commenters support the changes in 138.150, several commenters oppose them. An opposing commenter believes these requirements are unrealistic, unreasonable, and impracticable and thus should be revised to deal with the realities of the industry without compromising the purposes for which COFR guaranties are issued. That same commenter continues by stating that the 21-day and 3-day prior reporting requirements are in many cases unrealistic and unworkably inconsistent with how vessels are scheduled to call in the United States.
The commenter gave an example of a foreign vessel without a COFR which suddenly must make a call to a U.S.
port, either for a repair or a spot charter to receive goods from a U.S. port, causing that vessel to apply for a COFR
opportunistically.
We disagree with this commenter.
The scenario that this commenter describes does not apply to the revised 138.150. The 21-day notifications in 138.150b requiring issuance of a new COFR and 3-day notification in 138.150c not requiring issuance of a new COFR refer to pre-existing COFRs, which must now be either replaced, or updated, based on a change of circumstances in the pre-existing COFR.
The scenario of a foreign vessel without a COFR requiring a COFR prior to entry into a U.S. port will follow the procedures set forth in 138.60 and 138.70 for issuance of a new COFR. A
waiver is still available under 138.60e3, permitting the Director to grant an exception to a deadline for good cause shown.
Two commenters allege that the reporting requirements in 138.150b are duplicative. One commenter states that COFR guarantors should not be required to report changes that have already been reported to the Director by a COFR
Operator, even though the COFR
guarantor will receive notice of such changes and thus in the ordinary course of its business pursuant to section 138.150b. Otherwise an unnecessary double reporting requirement will exist in the new regulations. The other commenter almost reiterates the previous commenter, stating that it is noted that COFR Operators are required by section 138.150b to give notice to their COFR
guarantors, at the same time that they give notice to the Director, of changes that may require issuance of a new COFR. The commenter continues by saying that COFR guarantors should not be required to report the same changes, which have already been reported to the Director by a COFR Operator. Finally,
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the commenter says that otherwise, an unnecessary and redundant reporting requirement will exist in the new regulations. The commenters presume that the operator has reported the information to the Coast Guard. If the Coast Guard receives the information from two different sources, it will validate the information received.
Four commenters expressed concern with the reporting requirement imposed on them in proposed section 138.150d.
The commenters principal concern is that the new reporting requirement requires guarantors to report changes to vessels that the guarantor cant possibly give notice until they themselves are given notice by the vessel operator. A
secondary concern held by the commenters is that the new reporting requirement will require guarantors to breach non-disclosure agreements in place with customers should it take effect. NPFC agrees with the group of commenters regarding section 138.150d. As a result, we are amending the regulatory text to limit a guarantors obligation to report material changes in prior COFR Applications to information of which it becomes aware in the ordinary course of its business.
We have inserted once known, or should have known, in the ordinary course of business, after the phrase explaining the reason for the intended termination. The final sentence In addition, each guarantor or, if there are multiple guarantors, each lead guarantor must give the Director notice by email or other electronic means as soon as possible before any other change occurs that would require new evidence of financial responsibility or issuance of a new COFR under paragraph b of this section. has been deleted.
Several suggestions were made that were outside of the scope of this rulemaking, and therefore we will not address them here.
IV. Discussion of the Rule After considering these comments received on the NPRM published May 13, 2020 85 FR 28802, we are issuing this final rule that revises 33 CFR part 138, subpart A, and removes the superseded regulations in 33 CFR parts 135 and 153. We explain specific changes this final rule introduces below.
A. Overview of Changes to Existing COFR Regulations Following is an overview of revisions to 33 CFR part 138, subpart A:
1 Evidence of financial responsibility for tank vessels greater than 100 gross tons but less than or equal to 300 gross tons. As required by 33 U.S.C. 2716a3, we extend the
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