[Federal Register Volume 67, Number 129 (Friday, July 5, 2002)]
[Notices]
[Pages 44843-44844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16760]


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FEDERAL MARITIME COMMISSION

[Docket No. 98-14]


Shipping Restrictions, Requirements and Practices of the People's 
Republic of China

AGENCY: Federal Maritime Commission.

ACTION: Further notice of inquiry.

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SUMMARY: In connection with an ongoing inquiry, the Federal Maritime 
Commission (``FMC'' or ``Commission'') is seeking comments from the 
shipping public specifically with regards to recently proposed 
implementing rules of the Government of the People's Republic of China 
which may have an adverse impact on U.S. shipping, and which may merit 
Commission attention under section 19 of the Merchant Marine Act, 1920 
or the Foreign Shipping Practices Act of 1988.

DATE: Comments due on or before August 5, 2002.

ADDRESS: Send comments (original and 15 copies) to: Bryant L. 
VanBrakle, Secretary, Federal Maritime Commission, 800 North Capitol 
Street, NW., Washington, DC 20573-0001, (202) 523-5725, e-mail: 
[email protected].

FOR FURTHER INFORMATION, CONTACT: David R. Miles, Acting General 
Counsel, Federal Maritime Commission, 800 North Capitol Street, NW., 
Washington, DC 20573-0001 (202) 523-5740.

SUPPLEMENTARY INFORMATION:

Background

    This proceeding was initiated on August 12, 1998, to gather 
information regarding certain apparently restrictive laws, rules and 
regulations of the People's Republic of China (``PRC'' or ``China'') 
with the issuance of Information Demand Orders and a Notice of Inquiry. 
The Commission is attempting to compile a record in order to determine 
if further Commission action under section 19 of the Merchant Marine 
Act, 1920 or the Foreign Shipping Practices Act of 1988 is 
warranted.\1\ The Commission issued a Notice of Inquiry seeking 
information regarding the Regulations of the PRC on International 
Maritime Transportation (Regulations), promulgated on December 21, 2001 
and effective January 1, 2002. 67 Fed. Reg. 11695-11696 (March 15, 
2002). The Commission, in its effort to continue to monitor the issues 
identified in this proceeding, is now issuing this Further Notice of 
Inquiry.
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    \1\ Section 19 of the Merchant Marine Act, 1920, 46 U.S.C. app. 
Sec. 876, authorizes and directs the Commission, inter alia, to 
``make rules and regulations affecting shipping in the foreign trade 
not in conflict with law in order to adjust or meet general or 
special conditions unfavorable to shipping in the foreign trade * * 
* which arise out of or result from foreign laws, rules, or 
regulations or from competitive methods or practices employed by 
owners, operators, agents, or masters of vessels of a foreign 
country* * * .'' The Foreign Shipping Practices Act of 1988, 46 
U.S.C. app. Sec. 1710a, authorizes the Commission to investigate 
whether any laws, rules, regulations, policies, or practices of 
foreign governments, or any practices of foreign carriers or other 
persons providing maritime or maritime related services in a foreign 
country result in the existence of conditions that (1) adversely 
affect the operations of United States carriers in the United States 
oceanborne trade; and (2) do not exist for foreign carriers of that 
country in the United States under the laws of the United States or 
as a result of acts of United States carriers or other persons 
providing maritime or maritime-related services in the United 
States. If the Commission determines that such adverse conditions 
exist, it may take actions including limitations on sailings, 
suspension of tariffs, suspension of agreements, or fees not to 
exceed $1,000,000 per voyage.
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    Recently, the Ministry of Communications (``MOC'') issued a 
``Notice on Inviting Comments on the Implementing Rules for the 
Regulations of the People's Republic of China on International Maritime 
Transportation'' (``Notice'') on June 21, 2002. This Notice, published 
on the MOC website (http://www.moc.gov.cn), together with the text of 
the proposed ``Implementing Rules,'' both in English, solicits comments 
in writing (via fax or email) by July 15, 2002.
    The Commission is concerned that the proposed Implementing Rules 
may have significant effects on the companies currently operating in 
the U.S.-China trade, as well as the Commission's continuing review of 
potentially restrictive practices of the PRC. Therefore, the Commission 
is now issuing this Further Notice of Inquiry. The Commission may also 
formulate further Information Demand Orders, as appropriate, to ensure 
it has the most accurate information with regard to these issues, and 
so that it may in turn determine whether any current Chinese laws, 
rules, regulations or practices merit the initiation of a proceeding 
under section 19 of the Merchant Marine Act, 1920, or the Foreign 
Shipping Practices Act.

Discussion and Request for Comments

    It appears that U.S. ocean transportation intermediaries, carriers 
and other transportation operators may face serious restrictions in 
obtaining the necessary licenses and permissions to do business in 
China. Indeed, it appears that wholly foreign-owned NVOCCs continue to 
be completely barred from engaging in a number of commercial 
activities, such as offering through transportation as an NVOCC. Other

[[Page 44844]]

types of services may be permitted, but only if a foreign firm enters 
into a joint venture with a Chinese entity. It appears that these 
enterprises must be structured in such a way that the Chinese partner 
controls the majority of the joint venture and that Chinese nationals 
must control the highest levels of management. The Commission is also 
interested in hearing about any other impacts of the Implementing Rules 
on companies serving the U.S.-China trade.
    The Commission is particularly seeking to establish a clear record 
of the likely or anticipated impact of these rules on the services U.S. 
NVOCCs are now permitted to perform in China, what activities are 
prohibited, what requirements or prerequisites are imposed and what, if 
any, detrimental effects these requirements and prohibitions have on 
U.S. companies doing business or seeking to do business in China. It 
would also be helpful to learn whether compliance with the Implementing 
Rules by ocean common carriers, agents or other entities has affected 
or is likely to affect the ability of U.S. NVOCCs to do business and 
serve customers in China and the U.S.
    In light of the publication of the Notice and Implementing Rules by 
the Government of the People's Republic of China, the Commission 
encourages companies affected by the Regulations and the Implementing 
Rules to submit comments to MOC. The Commission would also welcome 
comments from any carrier, shipper, intermediary or any other party 
directly or indirectly affected by the Implementing Rules. Providing 
such comments will assist the Commission in measuring the effects of 
the Implementing Rules. Specifically, the Commission is seeking 
information with regard to how companies serving the U.S.-China trade 
will be affected by the Implementing Rules. Any supporting 
documentation would be especially welcome. Upon request, the Commission 
may hold information submitted in response to this Further Notice of 
Inquiry confidential, pursuant to 46 U.S.C. 876(h) and 46 U.S.C. 
1710a(d)(3). The Commission cannot, however, ensure the confidentiality 
of documents submitted via e-mail due to the nature of such 
transmissions.
    Persons who have commented on the Commission's prior NOI may wish 
to take this opportunity to supplement their comments, if necessary, in 
light of these new implementing rules.
    Now therefore, it is ordered, that this Further Notice of Inquiry 
be published in the Federal Register.

    By the Commission.
Bryant L. VanBrakle,
Secretary.
[FR Doc. 02-16760 Filed 7-3-02; 8:45 am]
BILLING CODE 6320-01-P