China NVOs can choose insurance in lieu of cash deposit
Starting Nov. 1, non-vessel-operating common carriers operating in China can acquire liability insurance in place of a cash deposit required by the Chinese government for an NVO license, according to a notice from the trade law firm Rodriguez O'Donnell.
'On Oct. 8, 2010 the China Ministry of Transport issued a notice to test a NVOCCs' liability insurance in place of the 800,000RMB (roughly $120,000) cash deposit which is currently required for NVOCCs participating in China global trade lanes,' the notice said. 'This development would provide an option to NVOCCs in the China worldwide trades to either purchase an NVOCC liability insurance with a qualified insurance company or to continue to meet the requirement with a cash deposit.'
According to Rodriguez O'Donnell, a qualified insurance company must be registered in China and qualified by the China Insurance Regulatory Commission. The insurance products must also be qualified by the MOT as well as filed or approved by the China Insurance Regulatory Commission. The NVO liability insurance only covers liability incurred due to an NVO's non-performance or inappropriate performance of its NVO duties, and does not cover any penalties.