Circular of the Ministry of Commerce of the People’s Republic of China
No. 82
In accordance with the relevant procedure provisions of the Measures of the Ministry of Commerce for Drafting Laws and Administrative
Regulations and Formulating Rules and Normative Documents on the departmental rules and regulations’ formulation, after widely soliciting
opinions, the Ministry of Commerce of the People’s Republic of China has made a decision on modifying the Detailed Rules for Implementation
of the Regulation of the People’s Republic of China on the Administration of International Freight Forwarding Industry (for Trial
Implementation) (hereinafter referred to as Detailed Rules for Implementation).
The content of Article 6 of the former Detailed Rules for Implementation, namely, “The applicant of international freight forwarding
agency shall be entities in relation to import and export trade or of international freight forwarding and having stable supply of
goods. The investor in conformity with the above-mentioned requirements shall hold majority shares in the application projection.”,
shall be modified as: “The shareholders of international freight forwarder may comprise enterprise legal persons, natural persons
or other economic organizations. The big shareholder shall be enterprise legal person in relation to import and export trade or international
freight forwarding and having stable supply of goods, and shall account for the majority shares in the international freight forwarder.
No shareholders other than the enterprise legal person may account for majority shares in international freight forwarder.” In addition,
“Ministry of Foreign Trade and Economic Cooperation” and “Ministry of Foreign Economy and Trade” shall be modified as ” Ministry
of Commerce”; “the competent administrations of foreign trade and economy” in the former articles shall be modified as “competent
administrations of commerce”; and “local competent administrations of foreign trade and economy” shall be modified as “local competent
administrations of commerce”.
Detailed Rules for Implementation of Regulations of the People’s Republic of China on the Administration of International Freight
Forwarding Industry are hereby promulgated anew after the modification and shall be implemented as of the promulgation.
Ministry of Commerce of the People’s Republic of China
January 1st, 2004
Detailed Rules for Implementation of Regulations of the People’s Republic of China on the Administration of International Freight
Forwarding Industry
Chapter I General Provisions
Article 1
With a view to maintaining the order of international freight forwarding market, strengthening supervision over the international
freight forwarding industry, and promoting the healthy development of the international forwarding industry of our country, the present
Detailed Rules are hereby formulated in accordance with the Regulations of the People’s Republic of China on the Administration of
the International Freight Forwarding Industry (hereinafter referred to as the Regulations) as promulgated by the former Ministry
of Foreign Trade and Economic Cooperation upon approval of the State Council on June 29, 1995.
Article 2
An international freight forwarding enterprise (hereinafter referred to as the international freight forwarder) may act as an agent
of the consignee or the consignor of import and export cargo, or as an independent operator engaging in international freight forwarding
operations.
The international freight forwarding operations of an international freight forwarder as an agent refer to the activities whereby,
entrusted by the consignee or consignor of import and export cargo or their agents, it handles related operations in the name of
its clients or its own, and collects agent fees or commissions.
The international freight forwarding operations of an international freight forwarder as an independent operator refer to the activities
whereby it accepts the entrustment of the consignee, consignor of import and export cargo or their agents, signs and issues transport
documents, performs transport contracts and collects transport fees and service charges.
Article 3
The name and logo of an international freight forwarder shall comply with the relevant provisions of the State and with its business
operations, and be able to demonstrate the characteristics of the industry. Its name shall contain such relevant words as “freight
forwarding”, “transport services”, “container transport” and “logistics”, etc.
Article 4
The “scope of authorization” as prescribed in paragraph 2, Article 4 of the Regulations refers to, with the authorization of the
Ministry of Commerce, the competent departments of commerce of the People’s Government of a province, an autonomous region, a municipality
directly under the central government, or a city directly under State planning are responsible for the supervision over and administration
of the international freight forwarding industry in their respective jurisdictions (The Ministry of Commerce and the competent local
departments of commerce are hereinafter jointly called the competent departments in charge of the trade sector), Such a scope of
authorization shall cover: preliminary examination on the application of an enterprise for engaging in an international freight forwarding
project, the annual examination and license-change examination on international freight forwarders, business statistics, training
of professionals, guidance of local trade associations in carrying out work as well as working with relevant local administrative
departments in standardizing the operational behaviors of freight forwarders and rectifying the operational order of the freight
forwarding market.
The international freight forwarding subsidiaries, branches and non-commercial executive offices set up by enterprises directly under
the departments of the State Council or by enterprises from other localities in a city directly under State planning (excluding special
economic zones), shall, in pursuance of the scope of authorization as prescribed in the preceding paragraph, accept the supervision
and administration from provincial competent departments of commerce.
No other entity may engage in the examination, approval or administration of the international freight forwarding industry without
authorization from the Ministry of Commerce.
Article 5
The Ministry of Commerce shall be responsible for carrying out professional training on employees of international freight forwarders
and making an examination of the qualifications of the training institutions. No entity without approval may engage in the qualification
training of employees of international freight forwarders. The conditions for the establishment of training institutions and their
training contents and teaching materials shall be separately prescribed by the Ministry of Commerce.
Professionals engaged in international freight forwarding operations shall accept the training as prescribed in the preceding paragraph.
Upon passing the examinations, they shall obtain qualification certificates of international freight forwarding.
Chapter II Conditions for Establishment
Article 6
The applicants for establishing international freight forwarders shall be an enterprise legal person, a natural person or other economic
organizations, of which the big shareholder shall be an enterprise legal person in relation to import and export trade or international
freight transportation and have stable supply of cargo, and shall account for the majority shares in the international freight forwarders.
No shareholders except the enterprise legal person may account for majority shares in the international freight forwarders.
Article 7
An international freight forwarder shall possess the enterprise legal person qualification of the People’s Republic of China according
to law. The enterprise’s organizational form shall be a limited liability company or a joint-stock company. Any entity with administrative
monopoly powers shall be prohibited from applying for investing and dealing in international freight forwarding business. Carriers
and other enterprises, which may entail unfair competition to the international freight forwarding industry, shall not file an application
for dealing in international freight forwarding operations.
Article 8
The operational conditions as prescribed in Article 7 of the Regulations shall include:
1.
Having at least five professionals who have been dealing in international freight forwarding operations for over three years and whose
qualifications have been certified by their previous employers; or, they have obtained the qualification certificates issued by the
Ministry of Commerce according to Article 5 of the present Detailed Rules;
2.
Having a fixed place of business, and property rights certificates shall be presented in the case of self-owned housing and sites;
and tenancy contracts shall be presented in the case of leased housing and sites;
3.
Having necessary operational facilities, including a certain amount of telephones, fax machines, computers, short-distance transport
tools, loading and unloading equipment, packaging equipment etc.; and
4.
Having a stable supply of import and export cargo, which means that the amount of import and export cargo in the present area is relatively
larger, that the freight forwarding industry has the conditions and potentials for further development, and that the applying enterprise
can get a sufficient supply of cargo.
Article 9
In case multimode transport business is included in the scope of business of international freight forwarding operations as applied
for by an enterprise, the following conditions shall also be met with in addition to meeting with the conditions as prescribed in
Article 7 of the Regulations and in Articles 6, 7 and 8 of the present Detailed Rules:
1.
Having been engaging in the relevant operations as listed in Article 32 of this Detailed Rules for over three years;
2.
Having corresponding domestic and overseas agent networks; and
3.
Having international freight forwarding bills of lading, which are registered and put on records at the Ministry of Commerce.
Article 10
An international freight forwarder shall, when applying for establishing each subsidiary, increase its registered capital by RMB 500,000
Yuan accordingly. If the enterprise’s registered capital has exceeded the minimum amount as prescribed in the Regulations (RMB 5
million Yuan for sea transport, RMB 3 million Yuan for air transport and RMB 2 million Yuan for land transport and express delivery),
the excess amount can be used as the capital increased for establishing the subsidiary.
Article 11
The “branch organs” as mentioned in the Regulations and the present Detailed Rules refer to the branch companies.
Chapter III Procedures for Examination and Registration
Article 12
To deal in international freight forwarding operations, it is imperative to obtain the International Freight Forwarder Approval Certificate
of the People’s Republic of China (hereinafter referred to as the Approval Certificate) issued by the Ministry of Commerce.
The entity applying for dealing in international freight forwarding operations shall submit the following documentation:
1.
The application, specifying the name of the investors, explanations to the application qualification and the application project;
2.
The feasibility study report, specifying basic information, qualification statement, current conditions, market analysis, business
forecasts, establishment program, economic budget and development budget, etc.;
3.
Enterprise legal person business licenses (Photostat copies) of the investors;
4.
The resolutions of the board of directors, the shareholders meeting or the general assembly of shareholders;
5.
The Articles of Association (or draft) of the enterprises;
6.
Information of major professionals (inclusive of educational experience, majors of study, work experiences, qualification certificates);
7.
The credit standing certificates (capital verification reports of all the investors issued by accountant firms);
8.
The agreement of capital contribution of investors;
9.
The resume of the legal representative;
10.
The format of the international freight forwarding bill of lading (transport document);
11.
The letter of advance approval of enterprise name (Photocopy, issued by the administrative departments for industry and commerce);
12.
The international freight forwarder application form I (Attachment Form I); and
13.
Transaction clauses.
With the exception of Items (3) and (11), the above-mentioned documents shall all be submitted in their original texts and annexed
with official seals.
Article 13
The competent departments in charge of the trade sector shall make an examination of application projects, which shall include:
1.
The necessity of establishing the project;
2.
The authenticity and integrality of the application documents;
3.
The qualifications of the applicants;
4.
The credit standing of the applicants; and
5.
The qualifications of the professionals.
Article 14
The competent local departments of commerce shall, after making examinations on the application projects, report to the Ministry of
Commerce the preliminary opinions (including the scope and areas of business, and the proportion of capital contributions of investors
as suggested for approval, etc.) and all the application documents according to the time as prescribed in paragraph 1 of Article
11 of the Regulations for examination and approval.
Article 15
In any of the following circumstances, the Ministry of Commerce shall reject the application and explain the reasons:
1.
The documentation is incomplete;
2.
The submission procedure is inconformity with the requirements; or
3.
The Ministry of Commerce has circulated a notice, suspending the acceptance of applications for dealing in international freight forwarding
operations.
Article 16
In any of the following circumstances, the Ministry of Commerce shall give a reply of disapproval upon investigation and verification:
1.
The applicant is not qualified for dealing in international freight forwarding operations;
2.
The applicant has been engaging in illegal forwarding operational activities within 5 years from the date of submission, and has been
imposed a penalty by the administrative departments of the State;
3.
The applicant purposely disguises or gives false information on submission information; or
4.
Other conditions inconformity with the relevant principles of Article 5 of the Regulations.
Article 17
An applicant shall, upon receiving the official reply of approval from the Ministry of Commerce, within 60 days from the date of receiving
the reply, take the revised Articles of Association (original copy) of the enterprise, go to the Ministry of Commerce and obtain
the approval certificate upon the strength of the introductory letter of the competent local departments of commerce.
Article 18
An enterprise may apply for expansion of its business scope and areas one year after its establishment and dealing in international
freight forwarding operations. The competent local departments of commerce shall, upon examination, report to the Ministry of Commerce
for approval in accordance with the procedures as prescribed in Article 11 of the Regulations.
An enterprise may, one year after its establishment and dealing in international freight forwarding operations, and on the condition
of having built up a certain business scale, apply for establishing subsidiaries or branches. The enterprise shall present the opinions
of the competent local departments of commerce of the place where the enterprise is located (in case of Beijing-based enterprises
directly under the departments of the State Council, the letter of opinion solicitation from the Ministry of Commerce), file an application
with the local departments in charge of business affairs of the place (excluding cities directly under State planning) where the
branches or subsidiaries are to be located; in case of a city directly under State planning, the application shall be submitted to
the Ministry of Commerce for approval in accordance with the provisions of Article 14 of the present Detailed Rules. The business
scope of the branches or subsidiaries shall not go beyond that of its parent company or head office.
When setting up a non-commercial executive office, an international freight forwarder shall make submission to and put on the archival
files at the competent local department in charge of the trade sector at the place where the executive office is located and accept
administration.
Article 19
Where an enterprise files an application in accordance with paragraphs 1 and 2 of Article 18 of the present Detailed Rules, it shall
submit the following documents in addition to the relevant documentations as prescribed in Article 12 of the present Detailed Rules:
1.
The original official reply on international freight forwarding operations (Photocopy);
2.
The approval certificate (Photostat copy);
3.
The business license (Photostat copy);
4.
The Form II for the Application of International Freight Forwarders (Attachment Form II, Attachment Form I is for the establishment
of subsidiaries);
5.
The operational situation report (inclusive of network construction);
6.
The resumes of the legal representatives of subsidiaries or the executives of the branches; and
7.
Registration form for annual examination of the previous year.
Article 20
Where an enterprise applies for establishing a subsidiary, the applicant shall, upon receipt of the affirmative reply and within ninety
days as of the date of the reply, present a legally valid capital verification report as well as the revised Articles of Association
(the original copy) of the enterprise after the head office has expanded the registered capital according to the provisions of Article
10 of the present Detailed Rules and go to the Ministry of Commerce to obtain the approval certificate upon the strength of the
introductory letter from competent local departments of commerce at the place where the branches are to be located.
Article 21
In case an applicant fails to go through formalities for obtaining the certificate within a prescribed time limit, or fails to start
business operation without justifiable reasons 180 days beyond the date of obtaining approval certificate, his qualification of dealing
in international freight forwarding operations will be invalidated automatically unless otherwise his application for extension has
been approved.
Article 22
The Ministry of Commerce may, on the basis of the development and overall arrangement of international freight forwarding industry,
decide to suspend accepting the application for dealing in international freight forwarding operations within a period of time or
take restrictive measures.
The Ministry of Commerce shall make announcement on the decisions made in pursuance of the preceding provisions.
Article 23
In case of any change with an international freight forwarder as follows, it shall report to the Ministry of Commerce for examination
and approval, and obtain a new approval certificate:
1.
Name of the enterprise;
2.
Type of the enterprise;
3.
Equity relationship;
4.
Decrease of the registered capital;
5.
Business scope; or
6.
Business areas.
In case of any of the following changes, it shall directly obtain another approval certificate after reporting and filing a record
with the Ministry of Commerce.
1.
Mailing address or place of business;
2.
Legal representatives;
3.
Increase of the registered capital; or
4.
Department directly subordinated.
Article 24
An international freight forwarder shall go though registration formalities upon strength of the approval certificate at the administrative
department for industry and commerce and customs.
No entity may, without obtaining the approval certificate, use the “international freight forwarding operation” or other wordings
identical or similar to the meaning thereof in its business license for industry and commerce.
Chapter IV Annual Examination and Change of Certificates
Article 25
The Ministry of Commerce shall implement a system of annual examination and change of certificates on international freight forwarders.
Article 26
The Ministry of Commerce shall be responsible for the annual examination on Beijing-based enterprises directly under the departments
of the State Council, and for the change of certificates of the international freight forwarders all over the country. The competent
local departments of commerce shall be responsible for the annual examination on the international freight forwarders within their
own districts (including the subsidiaries and branches established by enterprises directly under the departments of the State Council
and by enterprises from other localities).
Article 27
An international freight forwarder shall submit the annual examination registration form (Attachment III), capital verification report
and business license (Photocopy) to the competent local department of commerce (Beijing-based enterprises directly under the departments
of the State Council shall submit directly to the Ministry of Commerce) at the place where it is located before the end of March
each year and apply for annual examination.
The annual examination focuses on the examination of the management of the enterprises, and their compliance and implementation of
the Regulations and other relevant laws, regulations and rules. After the enterprises have passed the annual examination, the department
in charge of the trade sector shall add the seal of “passing the annual examination” to their approval certificates.
Article 28
The period of validity of the approval certificate is 3 years.
An enterprise shall, 60 days before the expiry of the period of validity of the approval certificate, file an application with the
competent local department of commerce for changing the certificate, in which process, the enterprise shall submit the following
documentation:
1.
The registration form of certificate change application (Attachment Form IV);
2.
The approval certificate (Original copy); and
3.
The business license (Photocopy).
Article 29
In case an enterprise has passed the annual examination for three consecutive years, the competent local department of commerce shall
submit to the Ministry of Commerce the approval certificate 30 days before the expiration of its period of validity, and apply for
a new approval certificate.
Article 30
When an international freight forwarder applies for changing its certificate, the competent department in charge of the trade sector
shall make an examination of its operational qualification and situation and shall refuse to grant a new approval certificate in
any of the following circumstances:
1.
Failing to comply with the provisions of Article 27 of this Detailed Rules;
2.
Failing to punctually go through formalities for changing certificate;
3.
Transferring shareholder’s rights without authorization; or
4.
Changing of such major matters as the enterprise’s name, place of business, and registered capital without authorization and failing
to file a record for archival purposes in accordance with relevant provisions.
Article 31
In case an enterprise fails to change a new approval certificate due to its own reasons, its qualification for engaging in international
freight forwarding operations shall be invalidated automatically on expiration of its validity. The Ministry of Commerce shall make
announcement on the above-mentioned conditions. The administrative departments for industry and commerce shall write off the above-mentioned
enterprises or order them to go through the formalities for the alteration of their scope of business.
In case an enterprise, which has lost its qualification of dealing in international freight forwarding operations, desires to continue
with this business, it shall file another application in compliance with relevant provisions.
Chapter V Business Management
Article 32
An international freight forwarder may engage in management activities as an agent or independent operator. Its scope of business
shall include:
1.
Canvassing cargo, booking space (including ship renting, plane chartering and cabin booking), consignment for shipment, warehousing
and packaging;
2.
Supervision over cargo loading and unloading, container stuffing and dismantling, distribution, transit, and related short-distance
transport services;
3.
Declarations to the customs, the commodity inspection and checking, and insurance purchases;
4.
Making, signing and issuing relevant documents and bills, payment of transport fees, settlement and payment of incidental charges;
5.
Freight forwarding of international items on display, personal effects and cargo passing through the territory of a country;
6.
International multimodal transport, and container transport (including container assembling);
7.
International express delivery (excluding personal letters); and
8.
Consultation and other international freight forwarding operations.
Article 33
International freight forwarders shall engage in business activities in accordance with the business scope and areas as enumerated
in the approval certificates and business licenses.
Article 34
The Ministry of Commerce may, on the basis of the development of the respective industry, entrust the trade associations to formulate
the standard transaction clauses by referring to the international customs, and the international freight forwarders may refer to
them without the approval of the Ministry of Commerce. The international freight forwarders may formulate transaction clauses by
themselves, but they may not use it until the clauses have been put on record at the Ministry of Commerce.
Article 35
The international freight forwarders shall submit the business statistics to the competent departments in charge of the trade sector,
and be responsible for the truthfulness of the statistical numbers. The measures for the compilation of the business statistics shall
be separately prescribed by the Ministry of Commerce.
Article 36
The international freight forwarders shall, when accepting entrustment to handle relevant businesses as agents, sign written entrustment
agreement with the import or export consignees or consignors. The disputes arising between the two parties shall be settled on the
basis of the written agreement they signed.
An international freight forwarder shall, as an independent operator, when engaging in the relevant operations as prescribed in Article
32 of the present Detailed Rules, sign transport documents and bills to the owner of cargo. Should a business dispute occur with
the owner of cargo, it shall be settled on the basis of the transport documents and bills as signed by the enterprise. When a business
dispute occurs with the actual carrier, it shall be settled on the basis of the transport contract signed with the actual carrier.
Article 37
The international freight forwarding bill of lading used by the international freight forwarders shall be subject to a registration
and numbering system. All the international freight forwarding bills of lading signed and issued within the Chinese territory shall
be submitted by the international freight forwarders to the Ministry of Commerce for registration and indicate the approval number.
International freight forwarders shall strengthen management on their international freight forwarding bills of lading. No such bills
of lading may be lent. In case of loss or revision of the edition, it shall be reported to and put on the archival files at the Ministry
of Commerce in time.
The transfer of an international freight forwarding bill of lading shall meet the following provisions:
1.
Straight bill of lading: transfer shall be prohibited;
2.
Order bill of lading: to be transferred after endorsement in full or endorsement in blank;
3.
Bearer bill of lading: no need to be endorsed before transfer.
The international freight forwarding bill of lading shall be subject to the system of liability insurance. Liability insurance shall
be covered by an insurance company upon approval of the People’s Bank of China.
Article 38
As an independent operator, the term of liability of an international freight forwarder shall begin from receiving cargos and end
on delivering them when it is performing or organizing international multimode transport. The basis for their undertaking liabilities,
limitations of liability, exemption conditions and preconditions for losing liability restrictions shall be specified in relevant
legal provisions.
Article 39
An international freight forwarder shall undertake international freight forwarding operations by the name and the serial number of
the enterprise as specified in the approval certificate, and shall print the name and serial number of the enterprise in major office
stationery and documents and bills.
Article 40
No international freight forwarder may use the registered capital within the prescribed scope for other purposes.
Article 41
No international freight forwarder may transfer any international freight forwarding operation right directly or in disguised form;
nor may it allow any other entity or individual to engage in international freight forwarding operations in the name of the international
freight forwarder or its business department; nor may it sign any agreement with entities who do not have the international freight
forwarding operation right to allow them to deal in international freight forwarding operations independently or jointly with it,
to collect agent fees, commissions or get other interests.
Article 42
An international freight forwarder may, as an agent, collect agent fees to the owners of cargo, and may also get commissions from
the car
