Legal Compliance

Response to Countries' Competition Laws

Yang Ming 's operations span globally. To comply with relevant regulations established by various countries, the company has established a Legal Compliance Office to manage competition laws information in important business regions, actively participates in external organizations to stay informed of the latest information and regulations, continuously monitors environmental and competitive conditions, and timely adjusts operational behavior to ensure compliance with legal requirements. To respond to countries’ competition laws updates and ensure the consistency of internal information with the updated competition laws, in addition to sending emails regularly to all employees of the Group, including its agents worldwide, to propagate the competition laws so as to enhance their compliance awareness and reduce the probability of violations of law by them, the Legal Compliance Office presents compliance matters at important meetings and increases the knowledge of the personnel assigned overseas on local competition laws to prevent violations of law. 

Vessel PSC Inspection and Detention Events

In 2024, classification society inspections of owned vessels identified 157 recommended improvement items, all of which were completed with corrective measures within the required timeframe. Port State Control inspections covered 145 vessel visits, with 98 vessels passing without deficiencies and 47 vessels being cited for a total of 139 deficiencies. Subsequently, accident anomaly and non-compliance reports (NC), corrective action reports (CAR/CAP), and corrective evidence were prepared for continuous tracking and improvement completion, then submitted to flag state authorities for case closure.

In 2024, 2 vessels were detained in cooperation with Port State Control inspections. One vessel completed corrective measures before departure without time delays. Regarding the detention of YM Efficiency at Jakarta Port, Indonesia, the relevant details are as follows:

Personal Data Protection Laws

Personal data protection is not only an important process to implement corporate governance, but also a key commitment to achieve sustainable development. The Company established the “Personal Data Protection Operating Procedures” as the norm for employees’ collection, processing and use of personal data. The Company has developed a sound personal data protection system, kept an eye on the development of laws and regulations related to personal data protection, and, if appropriate, adjusted the Company’s legal compliance policies and relevant norms to ensure that the related procedures are compliant with the latest regulatory requirements. Our company is committed to protecting personal privacy, has established a privacy policy, and adopts a zero-tolerance stance towards violators of this policy; please refer to Corporate ESG website.

The Company’s employees are required to attend courses on personal data protection laws and regulations regularly, and the education and training hours include those for such courses, raising the employees’ personal data protection awareness and enhancing management measures. In response to digital development trends, our company has formulated personal data protection and computerized information system related control procedures in accordance with Articles 8, 9, and 13 of the "Regulations Governing Establishment of Internal Control Systems by Public Companies," and since 2024 has incorporated privacy protection and information security inspections into the audit items of the annual internal audit plan.

To comply with the General Data Protection Regulation (GDPR) implemented by the European Union, our company has adjusted the Privacy Policy of group websites and established a Data Protection Officer (DPO) at the European regional center to handle local personal data protection related matters.

To respond to the “Personal Information Protection Law” implemented by China from November 2021 to regulate the collection and use of personal data, the Company’s Huan Ming (Shanghai) International Shipping Agency Co., Ltd. has reviewed internal procedures and made adjustments and revisions to relevant documents for compliance with the regulatory requirements.  

In 2024, there were no confirmed employee personal data leakage incidents or complaints from stakeholders regarding personal data collection and use, nor were there any customer privacy data leakage incidents.

Litigations and Violations of Law

The Legal Affairs Office has been providing quarterly reports to the Board of Directors on major projects, contracts, or legal case lists and brief explanations since 2022, to achieve information transparency and facilitate the Board's timely grasp of major case developments. In 2024, our company's global operations had 1 anti-competition case (not yet closed) and 1 antitrust case. The antitrust case penalty amount was KRW 2.42 billion (approximately USD 2 million). For detailed explanations of these 2 cases, please refer to the following descriptions. There were no litigation cases involving corruption; no major regulatory violation penalty cases occurred in environmental and social aspects, and no money laundering, insider trading, or conflict of interest incidents occurred.

*Regulatory violation penalty cases use fines reaching NT$1 million as the materiality threshold.

Anti-competition case

The company had one ongoing anti-competition litigation case in 2024, originating from the Intermodal Motor Carriers Conference (IMCC) of the American Trucking Associations (ATA) filing a complaint with the Federal Maritime Commission (FMC) against the Ocean Carrier Equipment Management Association (OCEMA) and its member carriers and our company for restricting the rights of US trucking companies to choose chassis suppliers.
In 2023, the FMC judge ruled that the respondents’ specific conduct violated the Shipping Act and issued a cease and desist order, and did not impose a fine on the respondent or hold the respondent liable for compensation. The Company appealed within the time limit to protect the Company's rights and interests.
Regarding the remaining claims of this case that FMC previously remanded to the judge for continued review, the FMC judge dismissed these claims in December 2024, and this ruling shows that the FMC judge has turned to substantially support the carriers.

Antitrust case

In 2022, the Korea Fair Trade Commission (KFTC) confirmed that a total of 23 carriers (including the Company) around the world were engaged in an illegal concerted action on the Korea-Southeast Asia line, which was in violation of Korea's Monopoly Regulation and Fair Trade Act and thus imposed penalties and rectification orders. For the written ruling by the KFTC, the Company sought relief by “submitting an objection against the ruling by the KFTC and, if necessary, filing an administrative lawsuit.” After KFTC rejected our objection statement in July 2022, our company filed an administrative lawsuit with the Seoul High Administrative Court on August 12, 2022, in accordance with the law to protect our company's interests, and the case is currently still in court review procedures.

Training

The Company has always spared no effort when it comes to legal compliance. The Company arrange regular legal compliance courses for continuing learning and education for employees to ingrain the idea of legal compliance in their daily work routine.

Implementation of the Internal Audit System

Project and Subsidiary Supervisory Audit System

The Audit Department is responsible for internal auditing of the Company and its subsidiaries and agency oversight management operations, serving as the third line of defense for internal control and compliance governance. It conducts comprehensive evaluation and inspection of corporate internal controls and operational conditions. Through auditing, it ensures that all operations comply with regulations, internal control systems, management systems, Codes of Ethical Conduct, and Ethical Corporate Management Best Practice Principles, identifying and resolving deficiencies early to enhance regulatory compliance and risk management capabilities.

Yang Ming's Audit Department introduced a project audit system in 2022. In addition to routine internal control audits of management departments, project audits covering vessels, finance, and information systems were completed between 2022-2023. Through cross-departmental vertical and horizontal project communication and collaboration, this helps enterprises optimize processes, reduce redundant work and resource waste, assists relevant units in identifying potential issues and bottlenecks, proposes innovative management solutions, effectively assists managers in improving decision-making quality, enhances enterprise risk management and prevention capabilities, and reduces potential risks and losses. Furthermore, the Company actively promotes subsidiaries to establish their internal control systems. From 2022-2024, it has guided important subsidiaries including Huan Ming (Shanghai), YES Logistics, Kuang Ming Shipping Corp., Hong Ming Terminal & Stevedoring Corp., and Yang Ming (Singapore) to establish internal audit units that regularly report their audit operations and improvement tracking to the Audit Department. Through the aforementioned internal auditing, project auditing, and implementation of subsidiary audit systems, the Company assists the Board of Directors and management in examining and reviewing deficiencies in the Group's internal control systems, measuring operational effectiveness and efficiency, providing timely improvement recommendations, ensuring continuous effective implementation of internal control systems, enhancing stakeholder trust and recognition, increasing the reliability, timeliness, and transparency of the Company's information disclosure, and helping the enterprise achieve long-term sustainable business development.

Compliance Review

The Company's Legal Affairs Office, Insurance & Claim Department, Legal Compliance Office, and relevant departments and offices assist in reviewing contracts, tender notices, and other legal documents to confirm the legality, compliance, and reasonableness of document content, thereby reducing risks and losses from violations and breaches of contract. In addition, they also give relevant units reminders to pay attention to competition laws, personal data protection, anti-money laundering, economic sanctions, embargos and other related laws and regulations and help clarify and identify legal risks to avoid violations of related laws and regulations.

Contract Management

In line with information security standards for digital transformation, the Company adopts an electronic contract management system to comprehensively and systematically manage the Company's contract review operations, ensuring complete tracking records for contract cases and addressing the difficulties in preserving and accessing paper documents and emails. In addition, the system also provides various auxiliary functions, such as a document comparison system and the setting of contract expiry notice, to improve operational efficiency and reserve business response time, avoiding an interim between the end of a contract and the start of a new one. In the future, the Company will continue to adjust or upgrade the system functions and optimize contract management procedures based on the Company’s policies and needs.

Integration of Sustainability Information into Internal Control

Yang Ming, in accordance with the "Regulations Governing Establishment of Internal Control Systems by Public Companies," incorporated sustainability information management into the company's internal control system in September 2024. The annual sustainability report is completed by respective responsible units for content formulation and updates, coordinated by the Public Affairs Department, and published after discussion and approval by the Board of Directors.

The Duty of Audit Office

The organizational regulations of Yang Ming Marine Transport Corporation has been  approved at the 369^th (12^th meeting of the 20^th session) Board of Directors, the duty of audit office as following： 

1. Auditing of each department's compliance with policies, objectives and operating procedures. 
2. Internal control to cycle operation by internal audit system. 
3. ISO /ISM CODE internal operation audit matters. 
4. Coordinate and handle ISO/ISM CODE external audit matters. 
5. Deliberation and supervision the projects including construction, renovation, purchase and sale property. 
6. Auditing of business matters entrusted by the agents and shipowners. 
7. Execution of the internal control system audit of the group's subsidiaries. 
8. Other assigned and special audit cases.

Audit Office organization table

In addition to the appointment and dismissal of the Senior Auditor, evaluation, and Remuneration shall be approved by the Board of Directors. The rest of the internal auditors can be approval by the Chairman.