NVOs to be required to file rates in China

NVOs to be required to file rates in China    China's Ministry of Transport this week released a new set of rules governing freight filings for non-vessel-operating common carriers to take effect Oct. 1.
   The rules require 'Chinese legal entities with NVO licenses and foreign NVOs who are licensed for NVO business at the Chinese port to file freight rates with the Shanghai Shipping Exchange,' according to a notice from the trade law firm Rodriguez O'Donnell Gonzalez & Williams. 'The rules provide that NVOs shall file the range of ocean freight (i.e. maximum rates and minimum rates quoted to the public) of exported containerized goods carried from China's ports to foreign base ports.'
   Though the rules take effect Oct. 1, China is offering a 60-day grace period. Most notably, the new rules require NVOs to charge 'normal and reasonable' freight rates, with a prohibition on companies soliciting non-compensatory rates. Just as significantly, the filed rates must be higher than rates negotiated directly with liner carriers.
   'If an NVO fails to follow the filing formalities or apply the freight rates as filed, the NVO shall be required to rectify these violations within a certain time limit and is subject to a fine of no less than RMB 20,000 (about $3,000) but no more than RMB 100,000 ($15,000) shall be imposed concurrently,' the law firm's notice said. 'If the filed freight rates go beyond the normal and reasonable scope, or are lower than the negotiated rates level concluded with liner operators, or seriously deviate from the average level of the filed rates by the same scale offering the same service that may impair the market fair competition, the Ministry of Transport will conduct a cumbersome and detailed investigation and penalties may be imposed.' ' Eric Johnson