FMC OPENS INQUIRY INTO RESTRICTIONS FROM NEW CHINESE MARITIME LAW

FMC OPENS INQUIRY INTO RESTRICTIONS FROM NEW CHINESE MARITIME LAW    The U.S. Federal Maritime Commission has started a new inquiry into China’s new restrictive law, the “Regulations of the People’s Republic of China on the International Maritime Transportation,” and invited comments from the industry.
   The FMC expressed concern with “serious restrictions” contained in the law, which became effective on Jan. 1, as they would affect the operations of shipping companies and intermediaries in the U.S. trade with China.
   The FMC is concerned about restrictions affecting:
   * the ability of: U.S. ocean transportation intermediaries, carriers and other providers of transportation services to obtain the necessary licenses and permissions to do business in China;
   * the ability of non-Chinese vessel operators to operate or increase the number of their branch offices in China, including restrictions on the geographic area they may serve and the scope of services they may offer;
   * the ability of vessel operators and non-vessel operating common carriers to establish rates they charge customers for carriage to and from China “without filing or government approval of rate levels and with the confidentiality accorded ocean common carrier service contract rates under U.S. law.”
   The FMC has received expressions of concern regarding the new Chinese legislation from several sources, including the National Customs Brokers and Forwarders Association of America and U.S. government officials responsible for transportation policy and the conduct of negotiations with foreign governments.
   The FMC has had a long-running inquiry into restrictive practices of China that pre-dates the introduction of the new maritime regulations. The agency said that it is requesting information that will assist it in evaluating the effects of recent changes in Chinese law. “It appears that this new law and regulations may significantly affect the Commission’s review of the potentially restrictive practices that existed prior to January 1, 2002,” the FMC said.
   “The Commission seeks to ensure that it has the most accurate information with regard to these issues, so that it may determine whether any current Chinese laws, rules, regulations or practices merit the initiation of a proceeding under section 19 of the Merchant Marine Act, 1920 or the Foreign Shipping Practices Act of 1988,” a spokesman for the FMC said.
   Interested persons, including shippers, ocean transportation intermediaries, vessel operators and others in the shipping industry, are invited to comment within 90 days.
   In a related development, the U.S. Maritime Administration said that a U.S. government delegation will meet with mainland China’s authorities in Beijing on March 19-22 to obtain clarification about the meaning and impact of the recent decree of maritime regulations and any related implementing regulations.
   On March 1, Maritime Administrator William G. Schubert wrote to Harold Creel, chairman of the Federal Maritime Commission, expressing concern that the new law may restrict the operations not only of shipping companies, but also of shippers and ocean transportation intermediaries.
   MarAd has made these concerns known to the Chinese government. It has also “sought clarification on the law and the suspension of the effectiveness of any implementing regulations” pending an opportunity to discuss the impact they may have with the government of the China, according to a source at the FMC.
   The inter-government meeting follows complaints made by the industry to government in the U.S. about the new Chinese regulations.
   In a letter to MarAd and the FMC in early March, the National Customs Brokers and Forwarders Association of America said that “U.S. intermediary and shipper interests will be directly and discriminatorily affected in an adverse manner.”