Federal Maritime Commission
Washington, D.C. 20573

NR 05-08 CORRECTED

 COMMISSION DISCONTINUES DOCKET NO. 98-14

CONTACT     BRYANT L. VANBRAKLE, Secretary
                        (202) 523-5725, e-mail: secretary@fmc.gov

 FOR RELEASE - April 25, 2005

The Commission today announced the termination of Docket No. 98-14, Shipping Restrictions, Requirements, and Practices of the People=s Republic of China , which had been initiated on August 12, 1998.  After several years of difficult negotiations, the Commission noted that the U.S. and China were able to reach a diplomatic accord to remedy the practices identified by the Commission as problematic in this proceeding.  Specifically, the Commission noted the U.S.-China Maritime Bilateral Agreement, together with its Annexes and Memorandum of Consultations positively addressed the following matters:

• limitations on non-Chinese vessel operators from establishing branch offices in locations other than port cities at which they or their carrier partners have regular vessel calls, which results in their inability to directly serve inland customers (including particularly the inability to is sue through bills of lading for carriage originating in or destined for inland points in China);
  

• vague and opaque regulatory limitations and requirements on foreign vessel operators wishing to open branch offices, even in the port cities they serve by direct vessel call;
  

• Chinese regulations limiting the types of entities which can establish vessel agency (i.e., husbanding) operations to Chinese state-owned entities, which essentially require non-Chinese liner operators to employ vessel agents which are subsidiaries of their Chinese competitors; and 
  

• requirements arising from the Chinese Regulation on International Maritime Transport (ARIMT@) and final implementing rules issued December 25, 2002, effecting the ability of non-vessel-operating common carriers (ANVOCCs@) to do business in China .

Although the Commission is optimistic that these developments will yield positive effects for vessel operators, intermediaries and the U.S. shipping public, it cautioned that it will continue to take seriously its statutory duty to respond to any future allegations of unreasonably restrictive practices with respect to this, or any other, U.S.-foreign trade.

The Chairman noted, AI am gratified that the U.S. and Chinese negotiators were able to reach a diplomatic resolution with regard to the matters identified as potentially restrictive in the course of this proceeding.  It appears that China has made significant progress in relieving foreign vessel operators and non-vessel-operating common carriers from requirements that would have posed serious impediments to those companies= ability to serve Chinese and U.S. customers and to compete with their state-run Chinese counterparts.  The Commission is very pleased to have played a key role in identifying the areas most important to the industry and the U.S. shipping public.@

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