Supreme People's Court Restructured
The Chinese Supreme People's Court will be restructured, according to Zhu Mingshan, Vice Chief of the Supreme Court.
Under the new structure, the former Transportation Court will be split into two parts. Cases regarding transportation by railway will be transferred to the Second Civil Court. Maritime cases will be governed by the Fourth Civil Court, which will also handle non-maritime commercial disputes involving parties or subjects of foreign jurisdictions, the Hong Kong SAR, and Macao.
The reforms have been taken in preparation for China's impending entry into the World Trade Organization (WTO), as there is expected to be a substantial increase in the number of maritime and railway cases once WTO entry is realized.
When the restructuring finishes, the civil & commercial functions of the Court will include: the First Civil Court (handling marriage, family, personal rights and real property cases), the Second Civil Court (contractual disputes among legal persons and other entities, and tort cases), the Third Civil Court (intellectual property cases) and the Fourth Civil Court (maritime cases, and cases involving foreign parties or subjects).
This restructuring is a fundamental reform rather than a superficial name change. It is expected that the reform will boost the efficiency of the court system by allowing increased specialization of the courts. As maritime and railway cases are relatively new in China, some judges are not well versed in the relevant law.
However, the separation of railway transportation cases from maritime cases may cause some difficulty in trying cases involving multi-mode transportation, especially in cases where the cause of damage is not easily attributable to maritime or railway carriers.
The structural reform of the Supreme People's Court also stresses the independent functioning of the various divisions. As the authority to accept cases will be held by one division, and a separate division will oversee the trial, it is hoped that trials will be fairer, and that the practice of private deals between litigants and judges will be minimized.
Source: China Ocean News and China Daily
Mainland Tanker Collision
A Chinese oil tanker and a Norwegian vessel collided on Tuesday, November 14, causing an oil spill in the region of the Pearl River, near Guangdong Province. The accident occurred near the Humen Bridge near Dongguan, Guangdong Province. Guangzhou authorities saved three crew members from the sinking vessel, but two are still missing and presumed dead.
The Chinese tanker, the Dehang 298, was carrying 230 cubic meters of heavy oil when it collided with the Norwegian vessel, the Bowcecil.
The Bowcecil was carrying a full load of chemicals, but has not reported any spillage. The Norwegian vessel dropped anchor after the collision.
Guangdong Province, Hong Kong SAR and Macau authorities are monitoring the situation. It is believed that the spill has been contained, although the extent of the spillage is currently unknown. In March 1999, approximately 500 tons of oil leaked from a Chinese oil tanker after a collision at the mouth of the Pearl River off Zhuhai, also in Guangdong Province.
That spill covered an area of 300 square kilometers, and polluted 55 kilometers of coastline, causing damage of 40 million RMB, nearly 8 million US dollars.
Source: South China Morning Press
Customs Law to Be Amended
To improve and enhance its Customs supervision, China is preparing major amendments to the Customs Law, which came into effect in 1987. The amended Customs law will take effect January 1, 2001.
The current law is considered outdated and unable to regulate present customs practices. Some parts of the current law are inconsistent with the Chinese foreign trade system and international practices.
The amendments allow for the formation of an anti-smuggling police force empowered to carry out investigation, detention, arrest and preliminary questioning in connection with smuggling cases. The customs police will have substantial authority, including the power to inspect vehicles, goods and people suspected of being involved in smuggling, and power to retain such vehicles, goods and individuals.
The amended law also permits consignors and consignees to declare exports or imports by themselves, or through customs declaration companies, unless other prevented by law. If a customs declaration company undertakes the declaration services in their own names as entrusted by a consignor or consignee, they are subject to the same legal liabilities as the consignor or consignee would face had they personally declared exports or imports. These companies are also responsible for reasonably verifying the representations made by the consignor or consignee.
The amendments also contain provisions providing customs officials more power to punish violators, including those who fail to timely pay their fines, while simultaneously strengthening the penalties on customs officials who take bribes or otherwise violate their duties.
Source: China Ocean News
Setting up a Foreign Shipping Service Company in China
In January 2000, MOFTEC and the Ministry of Transportation jointly issued the Provisional Supervision Regulations on the Approval of Wholly Foreign Owned Shipping Service Companies (hereinafter referred to as "the Regulations"). Here is a brief look at these Regulations. If you have further interest, please contact us.
Type of investment: Wholly Foreign Owned Enterprises allowed
There are basically three types of foreign direct investment in China, wholly foreign owned enterprises ("WFOE"), joint ventures in equity, and joint ventures by contract. WFOEs, while usually preferred because they allow the foreign owner sole control of management, is restricted by the Chinese government from many businesses and trades, such as life insurance, freight forwarding, and advertising. The Regulations allow WFOE investment without necessarily involving a Chinese partner.
Intergovernmental treaties or agreements
Article 3 of the Regulations stipulates that the establishment of such business shall be approved only in accordance with intergovernmental treaties or other related documents regarding marine shipping between China and the home country of the investor. During its WTO negotiations concerning market access, including access to the marine shipping market, China has reached treaties with most major economies. The Regulations may be regarded as domestic legislation in compliance with these treaties.
Qualifications of foreign investors
At least 15 years' experience in the marine shipping industry
More than 3 years' presence as a rep office in the proposed business location
Close business ties with China (at least one monthly liner stop or a stable business source) No violation of Chinese law or regulations in the past two years
Business Scope
Foreign invested shipping service companies may include in their business scope such activities as soliciting cargo, issuing bills of lading, and collecting freight charges for and providing services to vessels owned or operated by the parent company of the shipping service company.
Business Expansion: subsidiaries
The minimum capital required is 1 million USD, and this minimum increases by 120,000 USD for each subsidiary. The Regulations also include some preconditions for expansion.
Employment
Chinese employees must make up at least 85% of the total number of employees.
Start-up Procedures
Submit documents including an application letter, a feasibility study, the articles of association, the identity of the investor(s), the composition of the board of directors, and approval documents from shipping lines.
Apply for preliminary approval with the provincial branch of MOFTEC; if this approval is granted, submit documents to the head office of MOFTEC.
The head office of MOFTEC will review the documents with the Ministry of Transportation, and if approved, will issue a Certificate of Approval.
Lehman Lee & Xu
China Lawyers, Notaries, Patent, Copyright and Trademark Agents
(formerly known as the L&A Law Firm)
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The CHINA MARITIME LAW NEWSLETTER is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
