Carlos Rodriguez and Zheng Xie - Microsoft · 2018. 7. 9. · Carlos Rodriguez and Zheng Xie. U.S. NVOCC Registration in China Who needs to register? ̶NVOCC whose housebill issued

© Husch Blackwell LLP

NVOCCs: China RegistrationCarlos Rodriguez and Zheng Xie

U.S. NVOCC Registration in China

Who needs to register? NVOCC whose housebill issued from China

Conducting international maritime transportation and operation activities entering or leaving the ports of the PRC, and all other auxiliary operation activities of international maritime transportation

Currently only enforcing outbound from China – this could change.

© 2014 Husch Blackwell LLP. All rights reserved.

U.S. NVOCC Registration in ChinaWhy register now? Public comments from MOT of enforcement Enforcement begins with ocean carriers for accepting cargo

from unregistered NVOCCs – denial of vessel access Penalties:

Suspension of business transactions Confiscation of illegal income If illegal income exceeds RMB200,000 yuan: five times the illegal

income No illegal income or illegal income is less than RMB100,000 yuan:

subject to a fine of between RMB50,000 to RMB200,000 yuan


Basic Requirements for Registration & Doing Business in China Registering B/L with

Ministry of Transport (MOT)

Depositing a cash security or bond equivalent

Establishing approved Chinese agency


Preparation: What Do You Need To Do First?

Prepare Special Chinese Documentation• (All docs in Chinese except Housebill)

Security Deposit/NVOCC Insurance/FMC Bond Rider • (Global or U.S. trades only?)

Chinese Liaison/Agent• (Two different agency functions)

B/L • (MOT special requirements not in regs.)


Documentation Requirements

Application Form (available from MOT)

Feasibility Study Report (including a general introduction and a basic business analysis)

Notarized Certificate of Incorporation, Certificate of Good Standing, FMC license, and FMC Bond Rider by Secretary of State, State Department and Chinese Embassy

Sample B/L Form (3 Copies) Power of Attorney for designating

the Chinese Liaison Agreement with the Chinese

Liaison person Applicant introduction of the

Chinese Liaison Evidence of financial responsibility

in the total amount of RMB 800,000 or U.S. $125,000 or FMC Bond China Bond Rider.

Note: application form, feasibility study report, power of attorney, agreement, introduction of local liaison must be in Chinese.


Security Deposit Summary

Relevant China MOT and the U.S. FMC Agreement“If a U.S. non-vessel-operating common carrier has acquired the qualification for the non-vessel-operating services with the FMC and has obtained a legal financial liability guaranty, it does not need to deposit cash at the bank or purchase NVOCC insurance...”


Security Deposit Summary(continued)MOT/U.S. Agreement The requirement: Current U.S. NVOCC bond amount must be $125,000

in the aggregateExamples: 1. FMC NVOCC bond ($75,000) – the additional bond requirement would

be additional $50,0002. Example: FMC NVOCC bond ($95,000) – two branches; additional

bond requirement would be $30,000.3. Example: FMC NVOCC Bond ($125,000) – five branches, no

additional bond required. Note: due to depreciation of the U.S. dollar and appreciation of RMB, this amount may change.


Role of the Chinese Liaison/Agent

For registration purposes only, the liaison party is not necessarily a registered Chinese NVOCC

Role of Liaison Agent: to interact with MOT on behalf of NVOCC; receive notices; accept service

For issuing B/L purposes, agent should be a registered Chinese NVOCC; The Chinese NVOCC Agent can also be the Liaison Agent. (Two for one)

ESSENTIAL: A responsive Chinese Liaison


MOT Bill of Lading Requirements

Do your bills of lading meet MOT’s requirements?

Definition of “Carrier” in terms and conditions

“Agent of master“ issue on B/L face

Discrepancies can hold up registration


MOT Process (Two Levels): Local Port and BeijingLocal Port: Where Chinese Liaison agent is registered Submits application and relevant documents Reviews application within seven business days Submits comments to MOT, Beijing Forwards application to MOT


Shanghai Pilot Program

MOT defers NVOCC approval authority to Shanghai Transport Authority;

Starting from May 15, 2014; Company or Foreign NVOCC’s Liaison is

registered in Shanghai; One Level of Approval. Expected to defer NVOCC approval authority to

all provincial Port levels by 2015.


MOT Process (Two Levels Generally):Local Port and BeijingBeijing: Examines and makes final decision within 15 business

days Posts on the NVOCC list in MOT website, if approved NVOCC can now do business in China Approved NVOCC must only use MOT Chinese

licensed NVOCC to issue U.S. NVOCCs housebillNote: Due to a large number of applications, the government agency might not complete the above work within the provided days, so constant communication with them is required.


ContactsCarlos Rodriguez, PartnerHusch Blackwell LLP750 17th Street, NW, Suite 900Washington, D.C. [email protected]

Zheng Xie, AssociateHusch Blackwell LLP750 17th Street, NW, Suite 900Washington, D.C. [email protected]


Documents

Carlos Rodriguez and Zheng Xie - Microsoft · 2018. 7. 9. · Carlos Rodriguez and Zheng Xie. U.S. NVOCC Registration in China Who needs to register? ̶NVOCC whose housebill issued