In order to further implement the instructions of the Ministry of Foreign Trade and Cooperation (MOFTEC) on improving the operation order in international freight forwarding market, and to create an environment of fair competition for the transport market by standardizing the specific practices in the freight forwarding industry and firmly fighting unlawful practices of illegal operators, after consulting and heeding the opinions of the parties concerned, Shanghai Foreign Trade and Economic Relation Commission enacts the Regulations.

I.  Consignors
1. All the enterprises entrusted with the management of import and export (including foreign invested enterprises) must accept “the uniform invoice” in the international freight allowance settlement. Invoices without the stamp of tax supervision and overseas invoices shall be regarded as invalid, and shall not be used as finance payment vouchers.
2. In freight forwarding transactions of import and export, all consignors shall stick to the practice of “three unified”: unified booking of shipping space, unified checking of the price and settlement, and unified bill delivery and settlement of exchange. Non-international freight forwarding personnel shall not conduct operation of international foreign forwarding.
3. Consignors shall entrust freight transportation to international freight forwarders approved by MOFTEC, and shall not trust good transportation to the illegal operators.
4. consignors shall strengthen the document management. Entrusting documents and customs declaration documents shall be managed by special personnel, and a system of signing names for receipt shall be established.

II.  International freight forwarders
1. The practice of hitching among all international freight forwarders shall be put to an end. The term hitching in this Regulations refers to the practice that the “hitched” lends or sells its managerial authority for low return in various names, and that the “hitcher” undertakes all operations in the name of the “hitched” for gain high profits. The practices of “hitching” include:
(1) The operator undertakes all kinds of operations in the name of a certain international freight forwarder with none of its employees in formal personnel force of the freight forwarder.
(2) The financial management of the operator, “two funds” (accumulation fund and pension), and the payment of taxes are not managed and operated by the freight forwarder.
(3) The office does not locate in places recorded, registered and approved by the industry and commerce administration departments and other supervising departments.
(4) None of the operations concerning international freight forwarding is operated through the freight forwarder.
2. International freight forwarders shall carry out self-check and self-correction before the end of March, 1999 (those that truthfully report will not be considered for penalty). As of April 1, the Commission will work with the comprehensive law-executive departments to conduct investigation. Freight forwarders found to have conducted in any one of the four above-mentioned ways will be regarded as hitched freight forwarders, and the Commission shall advise MOFTEC to withdraw certificates of approval of international freight forwarders.
3. International freight forwarders have the right to recommend the setting up of a deputy office for international freight forwarding business, but shall shoulder the following responsibilities and commitments:
(1) In cases of civil liability or debt conflict, the recommending freight forwarder shall should related responsibility;
(2) In cases of tax or debt default, the deputy office shall compensate with the deposit paid before, and the rest shall be cleared by the recommending freight forwarder.

III. Deputy organizations of international freight forwarders
1. The deputy office of foreign freight shall be set up in office buildings assigned by the Government for foreign business. The registration address shall be consistent with the office address. If the office is to move to a new address, alteration procedures shall be conducted in Shanghai Foreign Trade and Economic Relation Commission in advance.
2. The deputy office for foreign freight shall only conduct non-business activities. Its recruiting and employment must be conducted through foreign services companies approved by the State. In principle, the staff shall be no more than seven.
3. The deputy office for international freight forwarder shall observe “one principle”, “two don’ts” and “three musts” in its business communications with its headquarter ( namely, the parent company):
One principle: All entrusting contracts or agreements must be signed by the international freight forwarder and its headquarter (the parent company). Deputy offices shall not have the right to sign trust contracts or agreements.
Two don’ts:  (1) The deputy office shall not sign the bill of lading without authorization; and (2) shall not involve operational financial contacts.
Three musts:  (1) The deputy office must entrust the international freight forwarders authorized by MOTTEC with the booking of shipping space; (2) The deputy office must entrust the international freight forwarders authorized by MOTTEC or the customers-declaration companies authorized by the State Customs Administration (3) The deputy office must conduct all the freight operations, including consignment, encasement, de-casement, piecing together, allocation, transshipment, balance and delivery of all kinds of documents, through international freight forwarders authorized by MOFTEC.