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The Quest
August 2011 - Issue 71
              
Inside this issue:
        
CBP updates 301 bond form

New bill proposed to fight fraud in trucking

Ways to red-flag fraud, by Andrew Spector, Esq.

New report identifies cargo theft trends

China proposes increase in FMC optional bond rider

Updates on liquidated damages for Periodic Monthly Statement

CBP updates mitigation guidelines for advance cargo information violations

U.S. government urges companies to strengthen Internet security
 
Trucking associations ask NHTSA to examine truck crashworthiness standards
 
       

                    

              
China proposes increase in FMC optional bond rider
  
The Chinese Ministry of Transport (MOT) is proposing to increase the amount of the optional rider that licensed NVOCCs in the United States obtain when they wish to ship goods to or from China.

 In 2003, China required all NVOCCs transacting business in the country to register with the MOT and post a cash deposit of 800,000 RMB (at that time, about $96,000). The Federal Maritime Commission (FMC) later updated its regulations to allow licensed NVOCCs in the United States to amend their $75,000 surety bond with a $21,000 rider to meet these requirements and avoid depositing cash in a Chinese bank.

Because of fluctuating exchange rates, $96,000 no longer corresponds with 800,000 RMB. The MOT has asked the FMC to adjust the amount of the optional China rider when the exchange rate between the United States and China changes by 20%. If the FMC accepts the MOTís proposal, China would require NVOCCs to obtain security for $122,000, providing for a $47,000 optional China rider and $75,000 FMC bond.

The FMC's comment period ended on July 15. They plan to post public responses to its website and use the information to determine how the change would affect OTIs and the economy.

Avalon Risk Management is committed to your industry and will keep you up-to-date on changes regarding this important issue. We have a strong surety program tailored to logistics providers, and can assist you with obtaining the China rider and the required bonds to conduct business as an OTI.


    
For more information, please contact your local Avalon office or Andriana Davis at (847) 700-8087 or at adavis@avalonrisk.com. A list of our offices may be found at www.avalonrisk.com.
             
       

Avalon Risk Management
150 Northwest Point Boulevard | 4th Floor | Elk Grove Village, IL 60007
Phone: (847) 700-8100 | Fax: (847) 700-8116

www.avalonrisk.com

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