FMC grants key exemptions for Chinese lines

FMC grants key exemptions for Chinese lines

WASHINGTON -- The Federal Maritime Commission on Wednesday granted exemptions from the Controlled Carrier Act for three Chinese liner companies.

The exemption will allow Cosco, China Shipping Container Lines and Sinotrans Container Lines to change tariff rates on a day's notice. Under the controlled-carrier law, foreign carriers had to wait 30 days to effect any tariff rate changes.

The commission also finalized a rule that will allow non-vessel-operating common carriers to meet China's financial-responsibility requirements by adding to their U.S. bond coverage in lieu of a $96,000 cash deposit in a Chinese bank.

Both issues are key elements in the normalization of maritime relations with Beijing, which sought relief for its carriers from the controlled-carrier act when it signed a maritime agreement with the U.S. last December.

Implementation of the agreement was held up pending the FMC's assent.

The approval of rules for NVO bonding was an item that the U.S. put on the table. Under a maritime law and regulations that China enacted in 2002, U.S. NVOs had to put up cash to do business in China. NVOs complained that the requirement was a de facto trade barrier.

The commission still has an open case from 1998 investigating charges of alleged discrimination that kept U.S. companies from operating freely in China's maritime and logistics market.

While the commission did not close the probe, it asked for comments from the industry to find out if market conditions in China have changed for the better.