Freight News, Sea

UK forwarders do not need China registration (probably)

[ June 4, 2014   //   ]

Confusion reigns over the Chinese Ministry of Transport’s NVOCC registration requirements, reports BIFA in its latest newsletter.

Over the last few weeks BIFA has received several enquiries from members after a shipping line said that it would not be able to accept bookings directly from UK based freight forwarders unless they are registered as a NVOCC with the Shanghai Shipping Exchange (SSE) for NVO movements from China.

BIFA says that it has held “extensive and very sensible discussions” with the carrier in question, and it is clear that they have major concerns about this piece of legislation and their liabilities under it, should they inadvertently carry freight from a non-registered NVOCC. However, BIFA has carried out its own research including consulting with leading London based solicitors and other trade associations and has reached a very different conclusion, namely that a UK freight forwarder who has negotiated rates with the UK office of a carrier and makes a booking via them does not need to register with the SSE if they use a SSE registered Chinese NVOCC to complete the housebill of lading.

Rates for shipping the goods negotiated in the UK are accepted under the bills of lading raised in China and it is the NVOCCs in China accepting the rates and the subsequent contract who need to be registered. This is because whilst the rates may have been negotiated in the UK, the contract is arranged in China, when there is an actual offer of a shipment to the Chinese NVOCC and their acceptance of that shipment.

The only exception would be if the UK based freight forwarder was to issue its own house bills of lading, in which case it would have to register with the SSE, BIFA believes.

Where an overseas forwarder enters into a contract with a carrier for goods being shipped in China, it must show its Chinese agent as affiliate on its rates agreement with the line and this Chinese agent must be registered as an NVOCC through the Ministry of Transport. BIFA understands that the filing of these rates when agreed outside China may be undertaken by either the carrier or the Chinese registered NVOCC.

Other carriers and trade associations have also interpreted the rules in the same way and require only the registration details of the Chinese NVOCC.

But a court ruling on this matter or clearer information directly from the SSE would be needed to completrely clarify the situation, says BIFA.