Circular No. 40 in 2010 on the Implementing Rules for NVOCC Freight Filing
Circular No. 40 in 2010 on the Implementing Rules for NVOCC Freight Filing

  For the purpose of regulating the pricing practices of China’s international container transport market, protecting the legitimate rights and interests of all relevant parties and promoting sound development of maritime transport market, NVOCCs are required to file freight rates in accordance with Article 20 of the Regulations of the People’s Republic of China on International Maritime Transportation (hereinafter referred to as the Regulations). The implementing rules are as follows:

  I. Basic Principle
  NVOCC business is an important part of China’s international maritime businesses. Pursuant to the Regulations, a NVOCC accepts the cargo of the shipper as the carrier, collects the freight charges and bears the responsibilities of the carrier. Based on the business characteristics and market supply and demand conditions of non-vessel shipping industry, a NVOCC should issue its own bills of lading or other transport documents and provide corresponding transport services based upon its own operational cost. A NVOCC should charge normal and reasonable freight rates and any cargo soliciting by “zero” or “negative” freight rate is prohibited. 

  II. Obligor of Freight Filing 
  Pursuant to the Regulations and its Implementing Rules, the Chinese legal entities with NVOCC license and the foreign enterprises licensed for NVOCC business at the Chinese ports are the obligors of freight filing. 

  III. Scope of Freight Filing
  A NVOCC should file the range of ocean freight (i.e. maximum rates and minimum rates of the public quotes) of exported containerized goods carried from China’s ports to foreign base ports. The range to be filed should be normal and reasonable and higher than the negotiated rates concluded with liner companies. 
  The base ports refer to the direct ports of call of a ship to which a NVOCC provide cargo service and which are within the scope publicized by the Ministry of Transport.
  A NVOCC may decide the range of freight rates based on its own conditions and business scope but shall file such rates in the format developed by Shanghai Shipping Exchange and accepted for filing by the Ministry of Transport. 
  A NVOCC may at its own discretion adjust the range of freight rates. The filed range of tariff rates shall take effect thirty (30) days after the date upon which the ranged is accepted for filing. However the first filed range of freight rates after these Rules’ entry into force shall immediately become effective on the date of acceptance.

  IV. Agency Accepting Freight Filing 
  The Ministry of Transport hereby designates Shanghai Shipping Exchange as the agency accepting the freight filing. Shanghai Shipping Exchange should develop the operational guidelines for NVOCC freight filing in light of this Implementing Rules and provide the relevant technology service. 
  Shanghai Shipping Exchange and its staff members must properly keep the filed freight information without prejudice to any commercial confidentiality.

  V. Supervision and Inspection
  All the provincial authorities in charge of traffic and transport as well as port and shipping affairs shall reinforce their supervision over their local international maritime transport market and strengthen the on-site inspection. Any enterprise in breach of the Regulations shall be required for rectification within a certain time limit and the case shall be reported to the Ministry of Transport.

  VI. Penalty
  i. The NVOCC shall, in case of failure to go through filing formalities or apply the freight rates as filed, be required to rectify within a certain time limit and a fine of no less than RMB20,000 but no more than RMB100,000 shall be imposed concurrently in accordance with Article 49 of the Regulations.
  ii. Where 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 operators of the same scale offering the same service that may impair the market fair competition, the Ministry of Transport will conduct investigation as per Chapter V of the Regulations.
  During the investigation, the NVOCC in question shall faithfully provide the investigatory authorities with all the transport documents, freight invoices, service contracts, account billings and other relevant materials of each voyage without any refusal, concealment or misstatement. In case of refusal of investigation or unfaithful providing materials, the NVOCC in question shall be required to rectify and a fine of no less than RMB20,000 but no more than RMB100,000 shall be imposed concurrently in accordance with Article 53 of the Regulations.
  Pursuant to Article 40 of the Regulations, the Ministry of Transport will adopt restrictive or prohibitive measures such as ordering to amend relevant agreements, limiting the frequency of liner services, suspending the application of freight rates, or stopping for the time being the filing of freight rates, or ordering to submit relevant materials on a regular basis towards the NVOCC whose business conducts impair the fair competition. 

  VII. Effective Date
  The Implementing Rules shall take effect since October 1st, 2010 with sixty days as the transitional period. 

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