NCBFAA WANTS FMC SANCTIONS AGAINST CHINESE SHIPS, ABSENT MITIGATION
Frustrated by China’s new maritime regulations for non-Chinese ocean transportation intermediaries, the National Customs Brokers and Forwarders Association of America has asked the Federal Maritime Commission to impose sanctions on Chinese ships calling at U.S. ports, if the Chinese government refuses to soften its stance.
“It is grossly inappropriate and unfair for the U.S. to maintain an open market that is easily accessed by Chinese companies, including a number that are state-owned, and yet find that its own citizens and other non-PRC (Peoples Republic of China) companies are subjected to such these new barriers,” the NCBFAA said in a filing to the FMC on Aug 8.
The FMC is gathering comments from the U.S. shipping industry regarding China’s new international maritime rules, which were issued by the Chinese government on Jan. 1.The agency has since expressed concern about “serious restrictions” contained within the law against shipping companies in the U.S. trade with China.
With sufficient evidence, the FMC has the authority to sanction Chinese-owned vessels and ocean transportation intermediaries under section 19 of the 1920 Merchant Marine Act and the 1988 Foreign Shipping Practices Act.
The NCBFAA, which previously submitted comments to the Chinese government about its new maritime regulations, said the rules, as they stand now, would “create unreasonable barriers to U.S. owned ocean transportation intermediaries and require them to work with Chinese companies who may often be their competitors.”
The biggest barriers to non-Chinese OTIs are the licensing and financial surety requirements, the NCBFAA said.
“Insofar as the licensing procedures are concerned, the Implementing Rules still appear to preclude non-PRC companies from direct investment and control of subsidiaries in China, which is obviously a difficulty not faced by Chinese companies,” the NCBFAA said. “Similarly, there is no indication as to whether freight forwarders who possess a Class A license issued by the Chinese Ministry of Foreign Trade and Economic Cooperation are able to act as NVOCCs. And, the application process itself is burdensome both in the initial requirements and appears to require some form of annual re-qualification that, again, appears to be unduly burdensome.”
The NCBFAA also said the Implementing Rules “make it plain that the PRC government has rejected the use of less costly insurance or surety bond requirements as a way of satisfying the concern about financial viability of NVOCCs.”
While the NCBFAA appreciates the Chinese government’s concerns about “inappropriate behavior” by NVOs, the association said that’s no excuse for maintaining such “rigid rules” against non-Chinese NVOs.