1. Delegations of The Republic of China and The Republic of Kor-
ea held the 8th round of Joint Maritime Consultative Committ-
ee Meeting in Taipei on April 15, 1992, in accordance with a-
rticle 8 of the Agreement on Maritime Transport between The
Government of The Republic of China and The Government of The
Republic of Korea. (hereinafter called the "Shipping Agreeme-
nt")
2. The Delegation of The Republic of China was headed by Mr. Lin
, Chin Chuan, Deputy Director, Department of Navigation and
Aviation, Ministry of Transportation and Communications, The
delegation of The Republic of Korea was headed by Mr. Cho, Y-
oung-Hoon, Director General, Marine Transport Bureau, Korea
Maritime and Port Administration. The list of both delegatio-
ns are attached as Annex A and B.
3. During the Meeting, both delegations exchanged views on a nu-
mber of shipping related issues in an amicable and cordial a-
tmosphere and highly evaluated the usefulness of the Joint M-
eeting.
4. The two delegations frankly and sincerely discussed issues of
mutual interest and reached understandings as follows:
A. Discrimination on dockage and pilotage for the ROK carrie-
rs in Taiwan.
The R.O.K. side indicated that the R.O.C. carriers enjoy a t-
hirty-three percent (33%) discount on pilotage in R.O.C. por-
ts. In addition, Taichung Harbour Bureau offers a forty perc-
ent.(40%) discount of Dockage to the ROC Carriers. The R.O.K.
side requested that the R.O.C. side should eliminate the abo-
ve mentioned discrimination and provide the R.O.K. carriers
equal treatment as with the R.O.C. carriers calling R.O.C po-
rts.
The R.O.C. side explained that there is no discrimination on
dockage between R.O.C. carriers and foreign carriers calling
at Taichung port. After ROC explanation, the R.O.K. side rea-
lized that the Dockage discrimination at Taichung Port is ca-
used due to R.O.K. side's misunderstanding.
Regarding the pilotage, the R.O.C. side explained that the c-
urrent Taiwan international port Pilotage is paid according
to draft and Gross Tonnage of vessel per National Pilot Asso-
ciation of R.O.C. The pertinent tariff of the pilotage is not
guided by the R.O.C. Government but is concluded by mutual a-
greement between the Carrier and the National Pilot Associat-
ion of R.O.C. Regarding to the subject matter, R.O.K. side r-
equested R.O.C. side to provide information about any discri-
minations or any unfair treatment against foreign carriers c-
alling R.O.C. ports. Furthermore, R.O.K. side requested that
R.O.C. Government to give the R.O.K. carriers fair treatments
in spirit of reciprocal cooperation between the two countries
. R.O.C. side confirmed they would try to investigate whether
the R.O.K. vessels have been unfairly treated on aforementio-
ned issue.
B. The scope of application on the exemption of income tax f-
or international sea transport.
The ROK delegation expressed that the enlargement of Agreeme-
nt between the Government of the Republic of China and the G-
overnment of the Republic of Korea concerning the Tax Exempt-
ion on International Sea Transport Income have been in effect
by the exchange of memorandum on December 10, 1991.
The ROK Delegation further stated that the coverage of exemp-
tion items of above Agreement was reduced by the interpretat-
ion of the R.O.C. Ministry of Finance ref. 800101859 dated M-
ay 13, 1991.
Subject interpretation declared the exemption items only app-
lies to the Basic Ocean Freight Income derived from the oper-
ation and transportation of cargoes in international traffic
of ships. Other incomes, such as income from the rental of s-
hips on time, voyage or bareboat basis, income from the rent-
al of containers and related equipment which is incidental to
the international operation of ships, income from the operat-
ion of space charter, demurrage, terminal handling charge are
not included under the scope of coverage of exempted items.
The R.O.K. side indicated that the above mentioned items, de-
tention and other surcharges like BAF, DDC, CAF, SOFA, which
is related to the operation in international traffic of ships
, should be included in the exemption items of the Agreement.
The ROC delegation expressed that R.O.C. Government will ref-
er to the OECD model and on the reciprocal basis to exempt i-
ncome tax above mentioned incomes on ROK carriers. Further,
the ROC delegation ask the ROK delegation of R.O.K. Governme-
nt have been exempted income tax on R.O.C. carriers as above
mentioned. The ROK delegation answered that they are not cer-
tain of this matter but they will check this matter after th-
is meeting. On the request of R.O.C. side, R.O.K. side confi-
rmed that the R.O.K. Government will also exempt income tax
on R.O.C. carriers on the reciprocal basis, these items which
the ROK side have requested as above mentioned.
And the R.O.K. side requested that all over-paid tax portion
shall be refunded to respective carriers retroactively since
the effective date of said initial tax exemption agreement,
December 10, 1991. And the ROC side expressed that they will
inform the ROK side this matter after ROK confirmation on ex-
emption items for ROC carriers operating in Korea.
C. Discussion Agreement on Taiwan/Korean Services.
The ROK side stated that the cargo sharing ratio is 37% and 5
4% for the R.O.K. carriers and R.O.C. carriers respectively.
Obviously, the cargo share for R.O.C. and R.O.K. carriers is
not balanced. On the basis of mutual benefit and reciprocity,
the R.O.K .side requested R.O.C. side to improve the situati-
on.
The ROC side stated that according to the R.O.C. statistics,
the cargo sharing ratio is 40% for both R.O.C. and R.O.K. ca-
rriers respectively, the unbalance seems due to the capacity
and the scale of carriers. The government should not interfe-
re with this commercial affair.
The both sides agreed that the problem will be solved in the
meeting of the association of shipowners between the R.O.K.
and the R.O.C. If there is any difficulty remained, it can be
put to be discussed at the next joint Maritime Consultative
Committee Meeting.
D. Lease of exclusive container terminal to ROK Carriers in
the Kaohsiung Port.
The ROK side stated that the lease agreement of pier 64 in t-
he Kaohsiung port was nearly concluded between Kaohsiung Har-
bor Bureau and the Hanjin Shipping Co., Ltd. However, there
has been sudden declaration made by Kaohsiung Harbor Bureau,
without any clear explanation, at the time, it was known the
sudden change of decision was caused by protest of a ROC car-
rier.
It was also stated by the ROK side that Hanjin Shipping Co.,
Ltd. deserves to secure one exclusive terminal berth in view
of fact that said company has been ranked 2nd in volume hand-
led of containers in the R.O.C.
The R.O.K. side expressed serious concern above mather and r-
equested R.O.C. side implement the commitment to render best
assistance to enable Hanjin Shipping Co., Ltd. to secure one
exclusive terminal berth in Kaohsiung Harbor.
The MOTC confirmed to assist and consult wi.th the Taiwan Pr-
ovincial Government, with their utmost, in leasing a suitable
terminal berth and the Kaohsiung Harbor Bureau also agreed to
report to their governing authority, Taiwan Provincial Gover-
nment, about ROK above serious concern and suggest Taiwan Pr-
ovincial Government review the whole leasing poilicy in Kaoh-
siung Harkor Rureau as soon as possible .
The R.O.K. side maintained that, by the Agreement, national
treatment for R.O.K. carriers must be applied in utilization
of facilities at R.O.C. ports.
E. Assistance for R.O.C. on GATT and GATS
The R.O.C. side expressed that the R.O.C. Government is now
applying to join the GATT. The draft of GATS (General Agreem-
ent on Trade in Services) has been proposed by the Service G-
roup of Uruguay Round negotiations of GATT in November, 1990.
In order to learn from some experience and measures that R.O.
K. Government has taken on shipping industries in respect to
GATT, R.O.C. side requested the ROK side to provide related
information and materials by the R.O.K. government for R.O.C.
reference in order to participate in the Uruguay Round Negot-
iations on matters involving General Agreement on Trade in S-
ervices. The ROK side stated that they are pleased to provide
all materials concerning the Uruguay Round Negotiations of G-
ATT and GATS in specific to the shipping industries. If the R
.O.C. side needs any other specific information or material,
the R.O.K. side requested detail list to be provided and the
R.O.K. side will assist and provide as best as possible. Mea-
nwhile, R.O.C. side may assign staff(s) who are in charge of
the affairs of GATT to R.O.K., and the R.O.K. side will do t-
heir best to render the R.O.C. side necessary assistance acc-
ordingly.
F. Regulate ROK ocean-going carriers operatinginterport serv-
ices and dumping soliciting cargo.
The ROC side stated that according to the 7th round of Joint
Maritime Consultative Committee Meeting in Seoul, the ROK si-
de had expressed that it would take actions against ROK ocea-
ngoing liners while violated the R.O.K. laws about interpret
services in the near asea route of the R.O.C. if the R.O.C.
side hands in evidence materials to tell any ROK shipping co-
mpany had violated the rules, however, as the ROC side under-
standing, The Hanjin company still operated interpret servic-
es in the near sea route in 1991. This unlawful act have been
informed to R.O.K. authorities by R.O.C. and R.O.K. Shipping
Company, but R.O.K. Government didn't take any action. In ad-
dition, according to R.O.C. shipping company, Hanjin Shipping
Company is alleged to make a dumping on its Middle-East and
Red Sea services, the R.O.C. side requested the R.O.K. Gover-
nment to regulate it immediately.
The R.O.K. side stated that criteria of dumping is very vague
to get clear picture. Therefore, if R.O.C. side can submit t-
he evidence of dumping to the R.O.K. side, they will investi-
gate such kind of alleged dumping case in due course and take
proper action. In Korea, the R.O.K. side also have got infor-
mation of R.O.C. shipping company's dumping cases through va-
rious channels. Both sides agreed as far as dumping matter is
concerned, both sides do utmost effort to stabilize R.O.K./R.
O.C. service route with mutual cooperation.
The R.O.K. also expressed that if the R.O.C. request to prev-
ent ROK ocean-going carriers from operating prevent ROK ocea-
ngoing carriers from operating R.O.K./R.O.C. route, current
imbalanced lifting share between R.O.K./R.O.C. shipping comp-
any should be improved in favor ofR.O.K. shipping company in
advance. As for participation of Hanjin Shipping Company in
interpret services, the R.O.K. side understand it is inevita-
ble for Hanjin Shipping Company to carry some of its cargoes
via ocean-going vessel due to service structure as worldwide
service carrier.
The R.O.K. side have never received any complaints from the
Korean interpret carriers for the above mentioned Hanjin Shi-
pping company's case because handling volume of Hanjin Shipp-
ing Company in the interpret service can not give any impact
to other Korean near sea shipping companies. If the R.O.C. s-
ide submit any evidence, the R.O.K. will investigate such ki-
nd of case in detail and if it is necessary, the R.O.K. side
restrict ocean going carrier interpret services from/to R.O.K
.
Both sides agreed that it may be discussed common issues in
the meeting in the friendship of both countries.
The R.O.C. side gave some evidence after meeting for the vio-
lating such as Hanjin's advertisement on near-sea services a-
nd the statistics of cargo share on R.O.C./R.O.K. route.
G. Restriction on cargo solicitation for the ROC carriers in
Korea.
The ROC side stated that ROK side promised that the ROC carr-
iers shall be able to participate in the feeder services on
the Korea-Japan route once the Japanese carriers are allowed
to engage in services during the 7th round meeting in Seoul.
However, the ROC carriers still haven's been permitted to pa-
rticipate the above services. Therefore, the ROC side reques-
ted that ROK inform the ROC side about the result of Korea/J-
apan meeting. In order that the ROC carriers can enjoy the s-
ame treatment as Japanese carriers have. The ROK side explai-
ned that two Korea-Japan Maritime meeting will be held in May
of this year, respectively for Government and private sector.
If the ROK side promises the Japanese carriers to engage Kor-
ea-Japan route on the conclusions of the Korea-Japan shipping
company meeting, the ROC carriers shou- ld be allowed to enj-
oy the same treatment as Japanese carriers have. The ROK side
further explained that only feeder services in Korea/Japan r-
oute will be discussed at the following Korea/Japan meeting
and the ROK side will inform ROC side result of the ROWJAPAN
shipping company meeting through the ROWROC shipping company
channel as soon as possible.
The ROC side further requested that the ROK side explained t-
he current situation of the integrating of Korea-Japan and K-
orea-Southeast Asian routes.
The R.O.K. side explained that actual integration still have
not been implemented due to decrease of cargoes in the Korea-
Japan routes. As the R.O.C. requested, the R.O.K. side stated
that the law of waiver system will be revised in 1993 and the
related regulations shall be stream lined by 1995.
H. Restriction on changing general agent and establishing br-
anch office.
The R.O.C. side stated that the R.O.K. Shipping Act stipulat-
es that the shipowner should aquire the agreement from the e-
xisting general agent before the shipowner applies for chang-
ing their general agent or establishing their branch office
in Korea. Therefore, the R.O.C. carriers faced difficulty wh-
en they applied for changing their general agent and establi-
shing branch office in Korea. The agency transfer usually can
not be completed until the shipowner paid much compensation.
The ROK side explained, as far as the ROK Shipping Act is co-
ncerned, that the implement regulation of the R.O.K. Shipping
Actstipulates that a new applicant for international shipping
agent should aquire the agreement from the existing shipping
agent in case the shipowner have already contract with the e-
xisting international agent. If the agency contract has expi-
red, the agreement from the original general agent is not ne-
cessary for the shipowner. In addition, an application for e-
stablishing the branch office is not necessary to aquire agr-
eement from the general agent. However, if the existing gene-
ral contract is still valid, the shipowner should aquire the
said agreement.
5. Both delegations reached the same conclusion that the 8th Jo-
int Meeting was cons tructive and it would contribute to str-
engthen the traditional relationship and mutual cooperation
in the Maritime field between the two countries.
6. Both delegation agreed that the 9th round of Consultative Me-
eting will be held in Seoul next year, and the date will. be
determined through the formal diplomatic channels.
April 15,1992
(Signed)
Mr. Lin, Chin-Chuan
Chief Delegate
The Republic of China
(Signed)
Mr. Cho, Young-Hoon
Chief Delegate
The Republic of Korea