NVOCCs: China Registration

Transcription

1 NVOCCs: China Registration Carlos Rodriguez and Zheng Xie Husch Blackwell LLP

2 U.S. NVOCC Registration in China Who needs to register? NVOCC whose housebill issued from China Conducting international maritime transportation and operation activities entering or leaving the ports of the PRC, and all other auxiliary operation activities of international maritime transportation Currently only enforcing outbound from China this could change.

3 U.S. NVOCC Registration in China Why register now? Public comments from MOT of enforcement Enforcement begins with ocean carriers for accepting cargo from unregistered NVOCCs denial of vessel access Penalties: Suspension of business transactions Confiscation of illegal income If illegal income exceeds RMB200,000 yuan: five times the illegal income No illegal income or illegal income is less than RMB100,000 yuan: subject to a fine of between RMB50,000 to RMB200,000 yuan

4 Basic Requirements for Registration & Doing Business in China Registering B/L with Ministry of Transport (MOT) Depositing a cash security or bond equivalent Establishing approved Chinese agency

5 Preparation: What Do You Need To Do First? Prepare Special Chinese Documentation (All docs in Chinese except Housebill) Security Deposit/NVOCC Insurance/FMC Bond Rider (Global or U.S. trades only?) Chinese Liaison/Agent (Two different agency functions) B/L (MOT special requirements not in regs.)

6 Documentation Requirements Application Form (available from MOT) Feasibility Study Report (including a general introduction and a basic business analysis) Notarized Certificate of Incorporation, Certificate of Good Standing, FMC license, and FMC Bond Rider by Secretary of State, State Department and Chinese Embassy Sample B/L Form (3 Copies) Power of Attorney for designating the Chinese Liaison Agreement with the Chinese Liaison person Applicant introduction of the Chinese Liaison Evidence of financial responsibility in the total amount of RMB 800,000 or U.S. $125,000 or FMC Bond China Bond Rider. Note: application form, feasibility study report, power of attorney, agreement, introduction of local liaison must be in Chinese.

7 Security Deposit Summary Relevant China MOT and the U.S. FMC Agreement If a U.S. non-vessel-operating common carrier has acquired the qualification for the non-vessel-operating services with the FMC and has obtained a legal financial liability guaranty, it does not need to deposit cash at the bank or purchase NVOCC insurance...

8 Security Deposit Summary (continued) MOT/U.S. Agreement The requirement: Current U.S. NVOCC bond amount must be $125,000 in the aggregate Examples: 1. FMC NVOCC bond ($75,000) the additional bond requirement would be additional $50, Example: FMC NVOCC bond ($95,000) two branches; additional bond requirement would be $30, Example: FMC NVOCC Bond ($125,000) five branches, no additional bond required. Note: due to depreciation of the U.S. dollar and appreciation of RMB, this amount may change.

9 Role of the Chinese Liaison/Agent For registration purposes only, the liaison party is not necessarily a registered Chinese NVOCC Role of Liaison Agent: to interact with MOT on behalf of NVOCC; receive notices; accept service For issuing B/L purposes, agent should be a registered Chinese NVOCC; The Chinese NVOCC Agent can also be the Liaison Agent. (Two for one) ESSENTIAL: A responsive Chinese Liaison

10 MOT Bill of Lading Requirements Do your bills of lading meet MOT s requirements? Definition of Carrier in terms and conditions Agent of master issue on B/L face Discrepancies can hold up registration

11 MOT Process (Two Levels): Local Port and Beijing Local Port: Where Chinese Liaison agent is registered Submits application and relevant documents Reviews application within seven business days Submits comments to MOT, Beijing Forwards application to MOT

12 Shanghai Pilot Program MOT defers NVOCC approval authority to Shanghai Transport Authority; Starting from May 15, 2014; Company or Foreign NVOCC s Liaison is registered in Shanghai; One Level of Approval. Expected to defer NVOCC approval authority to all provincial Port levels by 2015.

13 MOT Process (Two Levels Generally): Local Port and Beijing Beijing: Examines and makes final decision within 15 business days Posts on the NVOCC list in MOT website, if approved NVOCC can now do business in China Approved NVOCC must only use MOT Chinese licensed NVOCC to issue U.S. NVOCCs housebill Note: Due to a large number of applications, the government agency might not complete the above work within the provided days, so constant communication with them is required.

14 Contacts Carlos Rodriguez, Partner Husch Blackwell LLP th Street, NW, Suite 900 Washington, D.C Zheng Xie, Associate Husch Blackwell LLP th Street, NW, Suite 900 Washington, D.C