CREEL CONTINUES TO MONITOR NEW CHINESE SHIPPING LAW

CREEL CONTINUES TO MONITOR NEW CHINESE SHIPPING LAW    The U.S. Federal Maritime Commission will continue to monitor closely the new Chinese maritime law effective since Jan. 1, despite reassurances given recently by Chinese government officials that it was in line with international shipping policies.
   “The Commission has recently learned that the People’s Republic of China issued a new law effective Jan. 1, 2002, and is expected very soon to promulgate implementing regulations for operators in international shipping generally,” Harold Creel, chairman of the FMC, told a conference in Gwangyang, South Korea.
   Creel warned that the new law and regulations may significantly affect the FMC’s review of potentially restrictive practices.
   “It appears that U.S. ocean transportation intermediaries, or OTIs, carriers and other providers of transportation services may face serious restrictions in obtaining the necessary licenses and permissions to do business in China,” Creel said. “Indeed, it appears that wholly foreign-owned non-vessel-operating common carriers continue to be completely barred from engaging in a number of commercial activities, such as offering through transportation as an NVOCC. Other types of services may be permitted, but only if a foreign firm enters a joint venture with a Chinese entity,” he added.
   A U.S. delegation that included officials of the Maritime Administration met with Chinese government officials in Washington at the end of March to seek to clarify the contents of the new Chinese law.
   “We now have indications that the new law may not be as troublesome as it seems upon its face,” Creel said. “However, we will continue to monitor closely the Chinese implementation of this new law.”
   The FMC has sent requests for information to carriers and ocean transportation intermediaries operating in the U.S./China trade, asking them about the effect of the new regulation on their operations.
   “We are dedicated to ensuring that U.S. and other non-Chinese carriers are not subject to discrimination in China,” Creel commented.
   Creel also referred to the power held by the FMC under Section 19 of the Merchant Marine Act of 1920. Under the 1920 law, the FMC may take action against vessels of a country whose laws or regulations create conditions unfavorable to shipping in the U.S. international trade for any carrier in that trade – not just U.S. carriers.
   “I would like to emphasize that there can be no preference shown for U.S. carriers over non-U.S. carriers,” Creel said. “So, for example, if Hanjin were to encounter problems in shipping between China and the U.S. because of restrictions placed on them by Chinese laws, then Hanjin may come to the Commission and seek help in addressing those restrictions that create unfavorable shipping conditions. The object of the law is to keep trade to and from the United States free and open,” he added.
   Hanjin Shipping is the largest Korean container shipping line.