News
The U.S. Federal Maritime Commission (FMC) is issuing a notice of inquiry to solicit public comment on the Ministry of Transport of China's proposal to increase the amount of the bond for U.S.-bases non-vessel operating common carriers (NVOCCs).
Pursuant to the 2003 bilateral maritime agreement between the U.S. and China, China does not require U.S. NVOCCs to make a cash deposit in a Chinese bank as would otherwise be required by Chinese regulations, as long as the NVOCC: 1) is a legal person registered by U.S. authorities; 2) obtains an FMC license as an NVOCC; and 3) provides evidence of financial responsibility in the total amount of RMB800,000 or $96,000.
MOT has now requested that the FMC review its financial responsibility regulations now that the exchange rate between the US$ and the RMB has risen from 1:8.276 in 2003 to 1:6.536 at present, an increase of approximately 21.02%. Consequently, MOT asserts, the amount of $96,000 is inadequate to meet RMB800,000 at the current exchange rate. Specifically, MOT requests that the regulation be revised to include a provision that would allow for adjustments to the USD amount required in a NVOCC optional bond rider covering transportation activities in the U.S./China trades when the USD and the RMB exchange rate fluctuates 20% higher or lower than that of the last adjustment.
If this proposal is adopted, the MOT also proposes that the existing total required bond amount of $96,000, be increased to $122,000, which, MOT asserts, is the equivalent amount of RMB800,000 at the present exchange rate.
