Beijing tightens laws for freight agents
CHINA has incorporated penal provisions in the recently promulgated regulations covering the international freight forwarding agency business.
Under the new rules, severe punishment will be meted out to forwarders violating the provisions, including warning, suspension of business, consolidation, unification and abrogation of licences.
Rules had been promulgated on the management of international freight forwarding agencies in July 1990 and the rules concerning the examination and approval of international freight forwarding agencies involving foreign investment in February 1995.
About 700 firms are licensed to engage in international freight forwarding and they can issue their own bills of lading.
However, it is said that about 5,000 other firms issue bills of lading without formal licences.
The government has decided to tighten control over forwarders because of problems between randomly formed forwarders and shippers. The new rules contain detailed provisions on the forwarding business.
The recently promulgated rules call for, among other things, publicly making clear the places of business, using bills approved by tax authorities and submitting data on the business performance for the previous year.
When setting up a branch or subsidiary in China, a freight forwarder must increase its capital by 500,000 yuan (about HK$465,500).
