Problems relating to Trade and Investment on China

9. Restrictive export/import trade, duty, and customs clearance
Issue details
(1) High Import Duty - In light of protecting the domestic industry, etc. high tariff rates continue on certain products, depriving cost competitiveness of products exported to PRC vis-a-vis the domestic manufacturers. Furthermore, high tariff rates imposed on raw materials and parts make it difficult for FFEs to fully reflect the cost merit of their local production in PRC to product prices. Moreover, tariff amount finally collected remains uncertain despite the fact that tariff rates are established.
-- 3%-30% on VTRs, 3-35% on VTR parts
-- 20% on DVD Players
-- 3-35% on camcorder parts
-- 15-20% on radio-cassette recorders
-- 30% on CTV
-- 5-25% on camera, 3-15% on camera parts,
-- 12-21% on sewing machine
-- 3-15% on moving crane
-- 8.4-10.5% on battery operated forklift
-- 20-25% on textile equipment
-- 9.7-15% on machine tool
-- 10% on auto parts
-- 25% on auto parts (automatic transmission)
-- 30-45% on Motorcycles
-- 11-23% (2007) on finished watches, 10-16% on watch movements
-- 16-23% (2007) on finished clocks, 16% on clock movements
-- 30-40% on equipment
-- 30% liquid crystal display panel (for TV), and 0% (for PC)
-- 10-18% on Textile products
-- Air cylinder: 14%
-- Valve: 5%
-- Air filter: 10%
-- 6.5% on polypropylene copolymer
- Import Duty of 10% levied on imported products (auto-vehicle-parts) from Japan deprives the competitive edge of the imports. Importers are unable to meet the market competition and secure profit.
- While the rapid growth in the market demand for large motorcycles is expected hand in hand with the rising standard of living in PRC, GOC imposes high tariffs (45% for less than 500cc, 40% on 500-800cc, 30% on over 800cc motorcycles), that serve as barriers for export of large motorcycles from Japan.
- Our member firm (MF) faces severe difficulty in boosting its share in PRC for its solenoid valve, a machine part, which attracts 5% duty and 17% tax. Products with the same function are available from domestic manufacturers and Japanese affiliated manufacturers in PRC. MF is compelled to lower its prices to meet the competition.
- GOC levies different duties rates on copolymer of polypropylene (CPP) between imports and exports:
-- Duty rate on CPP exported from Japan to PRC:
--- 6.5% 3902.3010.00 ethylene propylene copolymer
--- 6.5% 3902.3010.00 Other
-- Duty rate on CPP imported from PRC to Japan:
(WTO Agreement)
--- 2.8% 3902.30.10.2 In blocks of irregular shapes, lumps, powders (including molding powders), granules, flakes and similar bulk forms
--- 2.8% 3902.30.090.5 Other
- It is requested that the tariff rates are reduced and tariffs are repealed.
- It is requested that GOC reduces import tariff on imports from Japan.
- It is requested that GOC reduces tariffs on large motorcycles from Japan.
- It is requested that GOC reduces or repeals import duty on this product.
- It is requested that GOC applies the duty rate identical to Japan (by reduction of its duty rate).
- Customs Rules and Regulations
- Customs Act
- Notice on Tariff Execution Plan 2011
- Customs Import/Export Tariff Regulations
- In November 2001, upon its accession to WTO, PRC committed to reduce the average tariff rate down to 8.9% by 2010.
- GOC decided to impose 25% tariff on CKD and SKD with its "Policy on Development of Automotive Industry" enforced in June 2004 and "Measures for the Administration of Import of Automobile Components and parts Featuring Complete Vehicles" (issued on 28 February 2005 and enforced on 1 April 2005) contrary to its commitment that it would be no more than 10%, possibly in violation of GATT Article II (Concession List).
In addition, the concept of applying the tariff rate for complete vehicles where imported components exceed 60% of complete vehicles coincides with the method employed for imported components for elevators, and excavators (Notice on Strengthening Import of Major Components For Elevators, and Excavators, issued on 20 September 1999).
- On 30 March 2006, USTR requested WTO dispute settlement consultations with PRC due to its unfair treatment of U.S. auto parts pursuant to the WTO dispute settlement procedure. USTR asserted that in its WTO accession agreement China expressly committed to eliminate all local content requirements and to lower and bind its tariffs on auto parts, whereas PRC imposes the same tariff rates as finished automobiles on imported auto parts not reaching certain levels of local contents in contravention of its commitment.
Later USTR filed complaint with the WTO Dispute Settlement Panel (WTO Panel). On 18 July 2008, WTO Panel concluded, effectively upholding the complaints of the U.S. that PRC treats imported auto parts less favourably than its WTO accession agreement.
- The new import/export duty rates have been applied since 1 January 2008. In substance, adjustments are made in the context of the most favoured nation tariff rates, annual temporary tariff rates, treaty tariff rates, and GSP tariff rates. The average tariff rate after adjustment is 9.8%: 15.2% in average for agricultural products, and 8.9% in average for industrial products. Temporary import tariff rates are applied on approx. 600 items, including:
(1) resources and energy category such as coals, stones, and fuels;
(2) poly-silicon, important materials for diesel engines, and equipment and parts; and
(3) public insurance related products such as X-ray photos, artificial plasma materials, and home electric appliances.
PRC continues to impose selective tariffs on imported natural rubber, while it continues to impose temporary rates of export duty on coal, crude oil, gold dust, iron sand, etc. PRC has raised export duty rates on pulps, coke, etc. which substantially consumes resources, impacting on environment.
- On 15 December 2008, GOC released The Implementation Scheme for the Tariff Schedule 2009 (ISTS 2009). However, there are no practical changes from ISTS of 2008 with the average tariff rate at 9.8%, the same as 2008. The average tariff rates of agricultural and mining products also remain the same at 15.2% and 8.9%, respectively. ISTS 2009 covers 7,868 items (compared to 7,758 items in ISTS 2008). ISTS 2009 has been effective since 1 January 2009.
- On 20 August 2009, Ministry of Finance (MOF) and 5 other government institutions promulgated "Notice on Adjustment of Tax Revenue Policy on Import of Equipment with Major Technological Importance", based on which tariff and value added tax (VAT) are exempted on import of parts and raw materials for enterprises satisfying the requisite conditions, (previously, refunded.) The Notice has repealed the exemption measures for tariff and VAT exemption on complete set of equipment. The Notice is enforced retroactive to 1 July 2009 and is valid until the end of 2009. (Ref: Notice on Adjustment of Tax Revenue Policy on Import of Equipment with Major Technological Importance.
- On 29 June 2010, GOC and GOT signed ECFA (Cross-Strait Economic Cooperation Framework Agreement), corresponding to FTA, agreeing to reduce import tariffs on 539-items as to PRC and on 267-items as to Taiwan after enforcement under the early harvest scheme. In service trade, GOT liberalised 9-items (1-item on financial service and 8-items on non-financial services) while GOC liberalised 11-items (3-items on financial service and 8-items on non-financial services) under the early harvest scheme. The 9-items liberalised by GOT are: R&D, conference service, exhibition service, special design service, motion picture, broker service, sports and recreation service, computerised air transport service and banking.
- In May 2011, at the 5th Japan, China, South Korea Summit, it was decided to complete during the year 2011 the Japan-China-South Korea industries/government/academic FTA joint study and to accelerate the joint study thereafter to follow it up.
- The Customs Tariff Commission of the State Council imposes provisional import tariffs on 637-tariff lines (mostly for the first time), comprising of resource products, raw materials, and certain major components for electronic equipment (such as propane, butane, fatty acids, polyamide films, titanic strip, high definition camera, light polariser for LCD projector, electronic brake, etc.). In light of the fact that the provisional import tariff rates are lower than the MFN tariff rates, this measure reveals the GOC's intent of encouraging imports of the items designated in 2011. In addition, on certain items, such as carbon fiber threads, ion exchange membrane, and car super-charger, provisional import tariffs are repealed or raised as well, in response to the advancement of industrial technology and the change in the demand and supply patterns.
- At the 4th Japan/China/ROK FTA negotiation held during 4-7 March 2014, no agreement was reached as there was a gap between the Japan/China proposals, while ROK opposed to the proposal. At the 5th negotiation held during 1-5 of September, no agreement was reached on the focal issue of the repeal of tariffs, which had to be postponed pending next negotiation planned in November in Japan.
- On 20 December 2015, both PRC-Australia FTA and PRC-ROK (South Korea) FTA came into force.
- In accordance with the WTO approval on April 24, of 2003 of the PRC's accession to ITA, PRC repealed tariffs on all 256-tariff lines of the ITA products on January 1, 2005.
- The issue on PRC's non-performance of its commitment under WTO accession agreement for which improvement was sought in the WTO Market Access for Goods Committee and in 2006 Japan-PRC economic partnership talk for photographic films, etc. was resolved by the PRC's revision of tariff rates in January 2007, which reduced the tariff rates corresponding to the WTO concession rates.
- After 1 July 2010, GOC will apply zero import tariff on 4,762-items imported from 33-developing countries.
- On 15 July 2010, MOF repealed import tariff and VAT on equipment, technology and materials used for the State Level Development Project. (Notice on Import Tariff/Tax Policy on Major Scientific Technology Project (MOC/GCA[2010] No.28))
- In January 2010, ACFTA with ASEAN entered into force in its entirety, while CPFTA with Peru and ECFTA with Taiwan became effective in March and September 2010, respectively.
(2) High Import Duty levied on ITA Products - Despite the fact that PRC is a signatory to WTO, GOC levies high import duty of 35% on surveillance cameras (including those once shipped back to Japan and re-imported into PRC), regarding them as (the excluded) sensitive items, de facto, foreclosing export of this product to PRC. It is incumbent upon GOC to review the import duty rate applicable to this product.
Reference: apart from PRC, high duty rates in Brazil (20%), Argentina (20%), India (10%), Indonesia (10%), FR Russia (20%), and Turkey (4.9%) serve as high tariff barriers.
- Some countries levy no duty on single function projectors, while high duty applies to multiple function projectors.
- It is requested that GOC, as a WTO Member State, reviews the import duty rate applicable to surveillance camera at the same rate as other WTO Member States.
- It is requested that GOJ approaches GOC for the problem solution.
- It is requested that GOJ confirms and provides the latest information on the ITA expansion
- It is requested that GOJ continually supplies the latest information on a continual basis.
(3) Import Duty Levied on Samples for Sales Meetings - While PRC accedes to ATA Carnet (Customs Convention on the ATA Carnet for the Temporary Admission of Goods), GOC restricts its use only to samples brought in for large scale exhibitions. Upon each sample imported for business negotiation purposes, GOC imposes a high amount of Import Duty. - It is requested that GOC expands the scope of business samples to the extent of ATA Carnet.
(4) Repeal of Provisional Rates of Import Duty - Since 1 January 2010, GOC has repealed the provisional tariff rates (PTRs) on 3-tariff lines, (1) cold rolled steel (HS Code 7209.1810), (2) directional electromagnetic steel sheet, and (3) seamless stainless steel pipe for boilers (7304.4110 & 4910), while PTRs lower than the MFN rates were previously applied on materials, etc. which are not capable of local production in PRC, or whose production capacity is too small to meet the domestic needs. This is an effective tariff raise, resulting in a cost increase factor by a large margin as regards the imported raw materials for Japanese affiliated enterprises (tinplate manufacturers, etc.) locally operating in PRC. In 2010, State Tariff Commission (STC) issued STC Notice on Implementing 2011 Tariffs Bill (ShuiWeiHui [2010] No.26), without, however, resurrecting the PTRs on the 3-tarrif lines mentioned in the foregoing on which MFN rates will continue to apply. - It is requested that GOC resurrects the PTRs. - Customs Import and Export Tariff 2010
- NTC Notice on Implementing 2011 Tariffs Bill (ShuiWeiHui [2010] No.26)
- On 1 January 2013, GOC reduced provisional import duty of ferro-alloy from 2% to 1% (7202.7000, 7202.8010, 7202.9100).
(5) Import Restriction - In April 1999, GOC implemented the import quota (I/L) system on steels as a relief for the ailing steel industry that suffers from the radically waning profits caused by the aggravated market conditions, excessive competition and inflow of low priced imports. To this end, it has shifted away from "Automatic Registration for the Import of Goods", whereby application for registration is automatically approved to "Controlled Volume Registration for the Import of Goods", whereby import volume is controlled on all steels excluding semi-finished products. Importers must present to the Customs Authority "Registration Certificate for Important Import Industrial Products" (generally called "Siliandan") issued and directed by State Economic Committee or "Special Products Import Registration Certificate" issued and directed by Foreign Trade Department, both of which serve as de facto import restrictions. While these restrictions are repealed in the majority of steel products, GOC introduced "Detailed Rules for the Administration of Issuance of Automatic import licenses for Important Industrial Goods" of February 1, 2002, whereby import license certificate is automatically issued to importers filing advance application that provides specific details, such as the contents of the import contract, and the expected time of arrival of the imported goods.
- GOC enforces quota (quantitative restrictions) on import of books.
- GOC restricts foods import into PRC.
- Mercury Lamp incorporated into photolithography equipment contains thorium, which is a radioactive material, at the level exceeding the allowable limit for import into PRC. Therefore, our member firm ships photolithography equipment to PRC without incorporating mercury lamp, which is procured locally in PRC after import. Export to PRC of mercury lamp itself is made possible by virtue of the mercury lamp manufacturer's pending application for exemption filed to the PRC competent authority via China Association of Lighting Industry (CALI). Until the outcome of the application is notified, next acceptance of application does not begin. Member firm continues to await the receipt of the outcome of its application. (The notification of outcome of the application due in September 2012 remains pending to this date.)
- Import control in the PRC makes import procedures complex, when a member firm exports to its local subsidiary in PRC, CD-ROM (inclusive of the data contents).
- It is requested that GOC repeals the quota system on books.
- It is requested that GOC repeals import restrictions on foods.
- It is requested that GOJ induces GOC to expedite the 2nd GOC solicitation of application for mercury lamp.
- It is requested that GOC deregulates import restrictions on software products.
- Administrative Measures for Software Products (2009)
- Measures for the Inspection and Supervision Administration of Imported Old Mechanical and Electrical Products (2002)
- "Catalogue of Goods Subject to Import License Administration in 2015", MOC, GAC, GAQSIQ
- "Catalogue for the Administration of the Issuance of Import Licenses by Classification of Goods in 2015", MOC

- GOC has embargoed export of processed foods destined to PRC after the 11 March 2011 East Japan Great Earthquake, By the end of November, it would appear that the embargo will be relaxed by the end of November in exchange for submission of documents prepared in certain format.
- Since 1 October 2012, General Administration of Quality Supervision, Inspection and Quarantine (GAQSIQ) has implemented "Announcement for Administration of the food importing enterprises' filing notice (AQSIQ No.148 [2012])" that mandates overseas enterprises exporting to PRC foodstuff, agents, and domestic consignees of imported foodstuff to file notification via internet under the notification control system.
- "Detailed Rules for the Administration of Issuance of Automatic Import Licenses for Automobile Products" based on "Measures for the Administration of Issuance of Automatic Import Licenses for Automobile Products" (enforced since 1 January 2005) has eliminated cars and important parts thereof' from the target items that require I/L.
- On 29 August 2014, Dispute Settlement Body (DSB) of World Trade Organisation (WTO) adopted the report of its panel (Dispute Settlement Sub-Committee) and dispute settlement appellate body, finding China's restrictive measures on the exportation of rare earths; tungsten and molybdenum are in violation of its obligations under WTO, incapable of being recognised as exceptional measures under GATT.
- On 23 April 2015, Ministry of Finance announced repeal of export duty on rare earths, tungsten and molybdenum, which had been levied for promoting export of these products.
(6) Restricted Domestic Resale of Steel Products Imported under Incentive Measures - To curb resale of steel imported under tax incentive measures, etc., GOC has removed incentive measures on barter trade, and trade with the frontier. GOC also prohibits resale of imported steel material originally intended for in-house consumption by FFEs for manufacture of re-export product. Furthermore, GOC prohibits transfer outside the zones of imported steel materials originally intended for construction work within special economic zones, developed zones, and bonded zones. - It is requested that GOC deregulates or repeals the restrictions.
(7) Customs Clearance made difficult due to the Aggravated Japan-PRC Relationship - Since November 2012, certain Customs in Shenzhen has disallowed import of goods for free of charge (excepting for processing materials). Import customs clearance lags behind in cases where declared prices are outside the price range GOC assesses.
- Customs clearance operation has become more complex due to the Senkaku issues.
Decline in sales and aggravation in cash flow have resulted from the Senkaku issues.

- Backlogs of customs clearance and cargo delivery delays resulted from the diplomatic conflicts between PRC and Japan. In fact, the cargo shipped in September 2010 to Shanghai by boat delayed. In effect the delay did not stretch over a longer period and the problems subsided before getting too serious. However, what happens next is a matter of great concern. Likelihood of a similar issue arising hereafter with Taiwan and ROK is another matter of concern also.
- Customs clearance procedures have been made more complex, resulting from the Senkaku islands issues.
- It is requested that GOJ considers approaching GOC for resolving the problems:
-- Especially, the assessed prices tend to disregard the decline in the market price,
-- Renewal of the market price assessment, (which does not seem to reflect the declining market price average).
- It is requested that GOJ:
-- improves the method to develop relations with GOC,
-- considers trade with PRC in its maintenance of relations.

- It is requested that GOJ and GOC normalises the diplomatic relations between the two countries.
- It is requested that GOJ takes actions that take account of the international trade issues.
- Announcement No. 33 [2010] of GACA on Regulating the Import and Export Trade Order and Strengthening the Administration of Samples and Advertising Articles of Import and Export Goods (05-25-2010)
(8) Import Restrictions on Used Machinery and Equipment - Imports are restricted on used machinery and equipment.
- GOC effects import restrictions on used machineries and equipment.
It takes a few months for completing the procedures for obtaining prior approval of Administration of Quality, Supervision, Inspection and Quarantine (AQSIQ), necessary for import into PRC of old mechanical and electrical products. From time to time, it impacts production schedule.
- It takes much time for processing pre-shipment inspection, etc. relative to import of used machinery and equipment in conjunction with the transfer of the manufacturing depot from one region to another in PRC.
- GOC exercises import control on used machineries and equipment.
- It is requested that GOC treats used machinery and equipment as if they are new, since transfer of the existing production facility in Japan to PRC is an inevitable process for an enterprise desiring to expand its business in PRC.
- It is requested that GOC:
-- streamlines the import PC disorders and
-- shortens the time required for completion of import procedures.
- It is requested that GOC deregulates the complications in import control and procedures.
- It is requested that GOC repeals or clearly sets forth the applicable rules.
- Measures for the Inspection and Supervision Administration of Imported Old Mechanical and Electrical Products (12-31-2002)
- Provisions on the Inspection and Supervision Procedures for Import of Used Mechanical and Electric Products [2003] No.53 of 18 August 2003, and enforced on 1 October 2003
- Measures for the Inspection and Supervision Administration of Imported Old Mechanical and Electrical Products (12-31-2002), AQSIQ Order No. 37
- On 10 April 2009, MOC, General Administration of Customs and General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) in their joint signatures issued and implemented "Circular on simplifying import procedures for used electric machineries and equipment" (No.166 [2009]), with the view to streamline the import procedure for used electric machineries and equipment (Used EME) as follows:
(1) Where Automatic Import Licence is required but Pre-Shipment Inspection is not required, importers may file import applications direct to Import Administration of Electric Machineries and Equipment. Such applications are processed within 5-business days.
(2) Where import licence is required but the Used EME is less than 5-years old from the production date, the on-going procedure continues to apply, provided, however, that, the application is processed within 10-business days.
(3) Enterprises classified under AA and A Classes enjoy a more favorable customs procedure than the others.
(4) Pre-shipment inspection is exempted, where judging from the application materials, the authority determines that the conditions of the machineries and equipment are in good order, and the risk is minimal in terms of safety, hygiene and environment.
- On 17 June 2015, "Notice on Issues on Import Administration of Used Machine and Electrical Products (UMEPs)" was promulgated. Excluding the specific UMEPs, clarification notice of "Used Machinery and Equipment Product" on Import Customs Clearance Certificate now suffices the formalities, provided, however, that submission of pre-shipment inspection report is necessary upon import on the 15-items relative to health, safety, hygiene, environmental protection, and the 4-items specifically embargoed by the State, and the items used in the industries on which investment or import is restricted. In addition, on the 18-items of electrical products, an AQSIQ agent's on site inspection is necessary upon import.
(9) Nebulous Import Duty Exemption Basis and delays in approval on the Imported Equipment - GOC establishes the tariff exempted import cap for the equipment imported by an FFE for installation at its own factory. However, the basis remains ambiguous for decision and handling by the Customs Authority. The ambiguity leads to delay in authorisation, despite the timely submission of explanatory documents and price information. Such delays materially affect the schedule for production start or factory expansion and substantial person-hours are wasted.
- In 2014, a Member Firm's Subsidiary (MFS) was qualified for grant of tax exemption incentive on imported machineries and equipment. Despite the introduction of electronic processing on application formalities, etc., it took six-months to complete the application formality. Until then, the progress of which was hard to follow and simply wait was all that could be done...such state of affairs continued.
- It is requested that GOC clarifies and streamlines the basis of its determination and clearly identifies the requisite documents for submission to the authority.
- It is requested that GOC improves the application process, by making it more visible, etc.
- GOC granted the import right only to the designated trade firms which recognized to meet certain conditions and deal with limited number of raw materials (12 items including steel materials, having a monopolistic nature in the international market) of which prices fluctuate widely and relate closely to peoples' livelihood. However, effective 11 November 2004, in pursuance of its WTO commitment, GOC repealed the practice.
(10) Irrational Employment of Customs Valuation Rules - Customs in certain regions in their customs valuation of parts and materials imported from Japan frequently employ a method, which is different from the international norm as to a Japanese enterprise's subsidiary in PRC (a Japanese enterprise). GOA in calculating the taxable value of imported PAM adds royalty under the manufacturing know-how licencing agreement, despite the fact that the manufacturing know-how relates to finished products and not to individual parts and materials.
Furthermore, GOC's relating the licencing fees to "machineries and equipment specifically designed or manufactured for executing the licenced patent or know-how" under Article 1.1(3) of "measures for evaluation of the royalties of imported goods" is unprecedented in the customs valuation regulations of various other countries.

- PRC Customs frequently unilaterally resort to the use of irrational methods in determination of the customs value.
[Case Example]
A certain machine parts manufacturing subsidiary incorporated and operating in PRC imports in USD from Japan seamless alloy steel pipe through intervention of an unrelated international trade firm (ITF), exporter, who periodically amends prices by reflecting the fluctuations in the rate of exchange between Japanese yen and USD. However, PRC Customs notified ITF that the price revisions in concern amounted to dumping and levied duty not on the new lower prices but on the old higher prices as bases for determination of the customs value. On the ground that (1) the price review in concern was nothing but reflection of the fluctuation in the rate of exchange between Japanese yen and USD, and (2) PRC Customs failed to show the basis of dumping finding on the seamless alloy steel pipe (the total quantities of which were in knock-down (KD) format for fabrication of wire net used exclusively for incorporation into machine parts in the PRC factory, with no distribution of the imported products per se in the PRC market, ITF considered filing protest to the Customs Authority. However, because of the impending due delivery date, ITF was compelled to enter the goods by payment of high import duty based on the old price. Moreover, PRC Customs has continued levy of deemed import duty. The consequent payment of excessive duty heavily burdens both MFS, a manufacturing subsidiary in PRC, and our member firm, its parent in Japan. [Please refer to 2013 version of this report, titled: "Issues and Requests for Improvements on Trade and Investment Barriers in 2013" at Page 63.]
- A Member Firm's Subsidiary (MFS) are at their wit's end on the methods employed by the customs for calculating tariff on imported materials. In numerous cases, the customs deviate from the internationally accepted general norm. What the customs do is to add to "the Price of the Imported Materials", "Royalty Fees for Manufacturing Know-How Licence and Trademark Licence Fees", all of which concern the finished products, NOT the imported materials.
Furthermore, as regards, "In the case where the product is especially designed or manufactured to execute patent or know-how," under Article 13(1)3 of GAC No.213, recognition of its relationship with "licence fees" is considered to be unprecedented in the customs valuation regulation of other countries world over.
Moreover, during the process of investigation/guidance, the customs investigators seemed to be merely turning their deaf ears and would not listen to the logical reasoning provided by MFS. In many cases, they merely assumed the stance of "tax levy must come first".
- It is requested that GOC operates the customs clearance procedure in accordance with the international norm.
- It is requested that GOC:
-- approves the price revisions based on WTO Agreement, and
-- refrains from levying unjustifiable import duty.
- It is requested that GOC overhauls the customs valuation rules in accordance with the international standard.
- In addition, it is further requested that GOC investigators will apply the fair employment of the current laws and regulations as well.
- "Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994," PART I Rules On Customs Valuation, Article 9
1. Where the conversion of currency is necessary for the determination of the customs value, the rate of exchange to be used shall be that duly published by the competent authorities of the country of importation concerned and shall reflect as effectively as possible, in respect of the period covered by each such document of publication, the current value of such currency in commercial transactions in terms of the currency of the country of importation.
2. The conversion rate to be used shall be that in effect at the time of exportation or the time of importation, as provided by each Member.
- Measures of the Customs for the Assessment and Determination of Duty-paid Value of Import and Export Goods GAC [2006] No.148 (enforced on 1 May 2006)
- Measures for Evaluation of the Royalties for Licence used on Imported Goods (enforced on1 July 2003)
- Measures of the Customs of the People's Republic of China for the Determination of the Customs Value of Imported and Exported Goods GAC No. 213, enforced on 1 February 2014
(11) Nebulous Nature of Determining Customs Value - PRC Customs occasionally notify pricing of imported goods are too low, and attempt to collect additional import duty, generally in an informal manner verbally, not in writing. It is therefore not possible for importers to lodge a formal complaint for inconsistency with the WTO customs valuation rules. Nevertheless, it heavily burdens importers.
- It seems customs investigators are levying additional tax on imported materials declared at prices lower than the book prices in hand with customs. MFS is concerned lest the same will extend to it.
- In customs price examination, a particular custom picks off a particular product item for comparison with its own data. Investigated firm's attempt at justifying the price with solid evidence, however, more often than not, would end up in compromise to a degree.
- There has been no disclosure of the price information in hand at customs, including without limitation, the evidence, information, etc. that justify their price determination. It makes it difficult for the investigated parties to rebut their assertions.
- It is requested that GOC ensures transparency in application of its rules.
- It is requested that GOC makes its employment transparent.
- Measures of the Customs for Assessing and Determining the Duty-paid Value of Bonded Goods Sold in the Domestic Market GAC Order [2013] No. 211
- On 1 February 2014, General Administration of Customs (GAC) Order [2013] No.211 "Measures of the Customs for the Determination of the Customs Value of Non-bonded Import and Export Goods", as well as GAC Order [2013] No.213 "Measures of the Customs for the Determination of the Customs Value of Domestic Sales of Bonded Goods" came into effect.
(12) Inconsistency and Arbitrariness in HS Code Classifications - While the majority of the non-directional electromagnetic steel plate is of general-purpose grade of less than 0.6% silicon content, determination of HS Code for this product is not harmonised in each District Customs Office. Various problems arise from this disharmony, such as regional inequality of import duty, delays in customs clearance procedures, requiring hurried correction of shipment documents from Japan. Troubles due to disharmony in the HS Code classification sporadically arise at Customs in relation to the verifying and writing off of the Processing Trade Manual (Bonded Processing Manual) upon re-export of finished products after processing of materials in EPZ, etc.
- GOC levies 3% duty on printers, including ink-jet printers, having the printing speed of 60ppm, and using the A4 size paper with less than 297mm in printing width, and 5% (although reduced from 8%) on A3 size or larger. The basis is undisclosed for imposition of higher duty (5%) on A3 size or larger. To begin with, GOC continues to impose these duty rates, despite GOC's accession to WTO Information Technology Agreement under which 0% duty applies to these products.
- Interpretation of HS Code various by officers in charge in each jurisdiction of regional Customs. Where our member firm in the same line of business operates plural depots, it must run the risk of problems arising from inconsistency for import/export procedures, import duty applied, etc.
- At customs clearance, the trouble arises frequently over the interpretation and applicability of HS code. Interpretation of the list of customs tariff varies by each customs personnel in charge who demands explanation and renewed filing of application, halting the physical distribution of imported goods. The HS code approved by the customs at the factory location can be rejected at the customs of the destination country. The fragmented supply chain mushrooms into the industry-wide supply problems, finally resulting in the hiatus of the industries-wide production activities.
- An MFS has experienced a number of cases in which HS code on a product varies by the customs personnel in charge so that in some cases the customs tariff goes up on the identical product, (for example, from 8% to 10%). These cases seem to occur frequently when it is concerned about the shortage of tax revenues in the port.
- Application of a different tax code by custom drives exporters to select port of export, because VAT refund is dependent upon the tax code determined by the custom. It drives exporters to select a different port of export, despite the fact that the products are procured from the same supplier.
- The results of advance examination have been valid only within the jurisdiction of the customs in concern, and not in other customs jurisdictions. Recently, 5-customs in the vicinity of Shanghai and the customs in Guandong province decided to mutually recognise the validity of the HS code. It shows the spread of the mutual recognition of the HS code determined in other jurisdictions.
- HS code used and authorised upon import customs clearance gets later disapproved from time to time. In so far as the product description remains as declared, it is requested that the HS code at customs declaration is accepted as final.
- The customs authority, after rejecting the declared price of imported the importer's own product samples for being too low, has apparently levied import duty based on the price deemed to represent the average of the products within the applicable HS code. The product in concern, being manufactured from raw materials different from those used in the high priced products within the HS code, should attract no extra duty. However, the importer has no alternative but pay the higher duty, as preparation of evidential documents requires both much workload and time.
- It is requested that GOC harmonises determination of HS Code for this product.
- It is requested that GOC ensures transparency in determining duty rates, provides justifiable explanation and reduces the duty rate to zero.
- It is requested that GOC expedites unification of HS Code interpretation all across Customs in PRC.
- It is requested that GOC establishes the uniform official authentication of HS code by each product. (While the states of affairs appear to be on the way toward improvement, it remains a long way to solution.)
- Due to the numerosity of the cargoes being handled, application of varying HS code is understandable. However, it is requested that the customs refrain from retroactive application by several years of the newly determined HS code. Namely, the retroactive application period, at most, should be limited within the same fiscal year. Otherwise, it makes difficult for the MFS to keep its profitability.
- It is requested that GOC rectifies the varying discretionary decisions by the customs.
- There is no change in the status quo, to wit: Examination is not by customs itself, but by a designated customs agent, the result f advance examination is valid only within the area of the customs jurisdiction, not in any other outside jurisdiction. It is continually requested that GOC implements the advance examination by customs service itself (not customs agent) valid throughout PRC.
- In so far as the product description is as declared, it is requested that GOC ensures that the HS code used upon import declaration and accepted remains final.
- It is requested that GOC:
--breaks down the HS code into finer details, and
--levies import duty on proper price.
- Customs Law
- GOC employs two official methods to rule on the tariff classification, namely, the advance ruling, and the administrative ruling by the General Administration of Customs (GAC), the latter of which is stipulated after the PRC's accession to WTO. While the advance ruling is valid only for one year limited in the customs area in concern, the administrative ruling is published nation-wide and is permanently valid for all importers. There has been no case where the administrative ruling is issued.
- Since January 2012, GOC has been amending the 2007 version of the 10-digit HS Classification Numbers.
- On 22 February 2016, GAC promulgated "Announcement No. 11 [2016] Announcement on Issuing the Decisions on Commodity Classification for 2016" (enforced from 1 March 2016) (New Additions in part, and Modifications in part). With the view to facilitate classification of imported items and customs declaration process, it revises the product item notation on 11-tariff lines.
- GAC promulgated in March 2007 as basis of customs classification "Provisions of GAC on the Administration of the Commodity Classification of Import and Export Goods" in response to request for improvement by GOJ, etc. This makes permanent the validity period of the decision made under the Preliminary Commodity Classification. The new provision ensures transparency by expressly stating the validity under the preliminary commodity classification and the necessity of administrative classification decision.
(13) Rigorous Customs Control - Customs control is rigorous compared to other countries:
-- Import right, international trade right
-- Export/import licence
-- Gap in response at Customs
-- Prior notification to importers, etc.
- It is requested that GOC deregulates its customs control paralleling the EU/U.S. practices.
- On 12 December 2014, Ministry of Commerce promulgated "Announcement on Issuing the Implementation Measures for the Regulatory Compliance of Trade Policies (for Trial Implementation)", aimed at ensuring compliance of China trade policy and compliance of its responsibility with the WTO rules.
(14) Complex, Delayed and Nebulous Import Customs Clearance Procedures - In certain regions, it takes much time to receive the cargoes as simplified customs clearance procedure is inapplicable.
- It takes much time to take delivery of the goods, as duty free customs clearance begins after acquisition of residence certificate.
- While Bonded Zone Customs now administer customs clearance work by central processing in bonded zone, it takes 1 to 2-months for new products registration. The delay affects the delivery lead-time.
- On general cargoes, the lead-time is one day at Shenzhen Customs from filing import customs declaration to completion of customs clearance.
However, as regards pre-production samples (pre-pro samples) and equipment, it takes one week to complete the customs clearance.

- Compared to the delivery lead-time of one-day on generation cargo destined to Shenzhen, one-week is necessary for pre-production prototype (PPP) and equipment, because it takes time from filing import application to grant of import licence.
- Customs regulations vary from district to district. While airports in eastern (Huadong) district allow import customs clearance by HAWB, airports in mid western district accept only MAWB.
- It is time consuming to complete import/export procedures that require examination of tools and commodities necessary for product repair, inspection and trade shows (now taking 18-days).
- Delays in customs clearance, demand for additional production of export documents, etc.
- At an interval of a few times a year, customs clearance procedures get stuck for various reasons. However, in the absence of information from the authority as to "what responsive measures applicants should take?", "if then, how soon customs clearance can be completed", etc., applicants are unable to determine actions to take and the manner of taking such actions.
- It is requested that GOC applies Simplified Customs Clearance Procedure at all airports in PRC.
- It is requested that GOC expedites customs clearance.
- It is requested that GOC reduces the examination period on pharmaceutical products.
- It is requested that GOC overhauls export/import customs declaration scheme so that the lead-time is minimised for pre-pro samples, the same as general cargoes.
- It is requested that Shenzhen customs authority will modify the import licence application scheme to cut down the lead-time for filing the import licence application on PPP, the same as general cargoes.
- It is requested that GOC harmonises customs regulations regardless of districts. Requiring MAWB on customs clearance of each shipment lot is costly.
- It is requested that GOC deregulates customs clearance procedures for business entities of good standing and reputation.
- Observance of international trade practices.
- In the event delays in customs clearance procedures arise, it is requested that GOC promptly discloses the causes and prospect for resumption of customs clearance formalities.
- Announcement of the MOF and GAC (No. 16 [2006]) The List of Goods Prohibited from Export (the Fourth Batch)
- In a series of measures to facilitate trade, the authority has expedited the work surrounding the customs clearance. For this purpose, the "2R & 2H Project" has been introduced to all Customs throughout the country.
- The Shanghai Customs, Customs General Administration, started from 12 April 2004, a new system which applies a different treatment according to the list classifying enterprises into good and bad categories, based upon the legality and the volume of import and export business of each enterprise, in order to enhance its efficiency in customs clearance and observance by enterprises of rules and regulations. Enterprises classified in the good category enjoy the following benefits:
(1) Priority in getting the customs documents accepted and examined, and exemption of physical inspection of export/import cargoes in normal cases;
(2) Post customs clearance payment of customs tariff;
(3) Exemption of random inspection of imported cargoes requiring inspection.
(4) Exemption of the requirement for Bank Guarantee Ledger System or bond deposit.
On the other hand, enterprises listed in the bad category are subjected to the 8 items of supervisory measures, such as 100% inspection of export/import cargoes, auditing of the accounting records concerning the export and import cargoes, and tightening of collection of bond deposit.
Incidentally, enterprises are required to meet the following to be classified into the good category:
(1) Creditability Rank A (A through D ranks classified by Customs),
(2) No record of smuggling in three years from January 1, 2001 and for 3 years thereafter, and
(3) No record of illegal act at Ministry of Commerce, State Administration for Industry and Commerce, SAT, State Administration of Foreign Exchange, etc.
- General Administration of Customs ("GAC") on 5 July 2004, pursuant to Foreign Trade Law (enforced on 1 July 2004), issued and enforced on July 7, 2004, "GAC Series On Matters Concerning Foreign Trader's Customs Registration (GAC Series No.25, 2004)" that provides for the requisite documents to be submitted and procedures to be followed by a foreign trader to obtain the registered documents as a foreign trader (a recipient of import and export cargoes or a shipper). The Customs Clearance Registration Certificate is issued to a foreign trader submitting the 10 kinds of exhibits and materials and meeting the requisite conditions.
- GAC on July 7, 2004 issued and enforced on the same day, "GAC Series On Matters Concerning Foreign Trader's Customs Registration (GAC Series No.26, 2004)". Under this publication, enterprises filing Customs Registration are required to satisfy conditions such as the minimum capital of RMB 1.5 million, adequate location of sales office, and deployment of personnel in charge of customs clearance, and to submit the 9 kinds of the designated materials to the Customs authority, before the Customs Registration Certificate is issued. Customs are unable to process customs clearance by foreign trade operators, who have not completed the Customs Registration Certification Procedures.
- In January 2009, GAC declared that it would promote paperless customs clearance, with a comment that the paperless customs clearance experimentally authorised to law abiding enterprises at Customs in Shanghai, Nanjing, Shenzhen, etc. had brought forth a significant achievement such as expedited customs clearance.
- On 24 June 2009, MOFCOM released draft "Measures for Foreign Trade Operators' Registration Certificate", inviting public comment. (It was closed on 8 July.) The draft Measures (18 Articles in all) stipulates the procedures and requirements for application, change, and renewal of "Foreign Trade Operators' Registration Certificate."
- In 2009, General Administrative of Customs (GAC) made a trial run for Electronic Customs Declaration on-line on export cargoes at 15 Customs including Shanghai and Shenzhen restricted to the firms classified under Category A and Category AA based on the compliance history with the view to simplify and expedite the procedure.
- After the seizure of a fishing boat at sea near Senkaku (or Diaoyu) Islands in September 2010, GOC has delayed, since 25 September or thereafter, the customs clearance by raising the sampling rate for export cargo inspection, etc.
- On 8 August 2014, GAC and MOC jointly promulgated "Announcement No. 58 [2014] of GAC/MOC on the Pilot Program of Paperless Customs Clearance for the Goods Subject to Automatic Import License Administration that Are Imported from the China (Shanghai) Pilot Free Trade Zone".
- On 3 February 2015 General Office of the State Council (GOSC) announced publication of a circular on realizing the policy of "SanHu" (Mutual Information exchange, supervision control and support on enforcement) which is aiming at achieving general improvement of PRC customs clearance regime (security in goods, smoothening of international trade, and modernization of port administration, etc.) by unifying custom clearance and promoting "Grand Scheme for Customs Integration".
- On 4 February 2015, GOC ratified "WTO Trade Facilitation Agreement", excluding however, certain provisions concerning Category A (the items, coming into effect upon enforcement of the Agreement).
- The overhaul of the infrastructure is much appreciated, such as electronic customs clearance that leads to enhancement of efficient customs handling and processing. Foreign Trade Operators' Filing Registration Application.
- It has not been possible in some cases to get the goods cleared through the Customs by submission of Authorisation Letter required upon customs clearance. However, since switching to Customs Web Site filing, Member Firm's subsidiary has no longer experienced such problems. The introduction of Customs Net System has eliminated problems concerning clearance procedures.
- Since the change to Customs Website Registration from Letter of Certification, certifying that the applicant is an authorised party the trouble at the customs has disappeared.
- In April 2014, against the eligible enterprises with B or higher grade of GAC's creditability rating, GAC implemented change in the customs clearance procedures to "First Carry in Goods, and then notify Customs (on Entry of Goods into the Zone) in China (Shanghai) Pilot Free Trade Zone" Scheme. The change is beneficial to importers, in reducing the delivery time from port to warehouse in the Zone, achieving the cost of container yard utility charge, enabling importers to correct entry errors in the documents before customs clearance, and minimising errors in customs declaration.
- In April 2014, in China (Shanghai) Pilot Free Trade Zone, GAC introduced "consolidated customs declaration" against the eligible enterprises with B or higher grade of GAC's creditability rating (or A grade or higher for enterprises that file "collective tax return" in the Pilot Free Trade Zone), and "consolidated customs clearance", such as declaring export/import customs clearance in and out of the Pilot Free Trade Zone collectively for each month, payment of export/import taxes (customs tariffs, VAT, excise tax) in lump sum (consolidated tax payment). These expediencies mean much saving in time and cost to enterprises that frequently transport (import) goods out of the Pilot Free Trade Zone from the reduced time required for customs declaration and customs clearance.
- In April 2014, in China (Shanghai) Pilot Free Trade Zone, GAC changed, from manual to real-time electronic handling, the system for confirming by crosscheck the imported raw materials in bond and the finished exported products against the eligible enterprises/ warehouse enterprises with B or higher grade of GAC's creditability rating. As a result, Customs and private enterprises have gotten hooked up to the on-line network, enabling enterprises to transmit data online to customs for customs processing of the received data. The change has cut down by large margin the time required for customs approval of the differences between the book and the actual stock.
- On 27 July 2015, GAC promulgated " Announcement on diffusion on nationwide the en bloc tax levy model on custom duty for improving trade efficiency and reducing the cost of custom clearance( executed on the same date); it makes it enable to enterprises satisfying certain requirements.
- On 19 August 2015, Guangzhou Customs started the Pilot Programme of Paperless Customs Clearance for Customs Declaration.
- On 29 September 2015, GAC promulgated "(No. 47 [2015]) Announcement on implementing the Regional Customs Clearance Integration Reform (RCCIR) in areas under the special customs supervision and supervised bonded places," in order to achieve the expansion of the regions subject to RCCIR, aimed at maximizing the total Chinese customs-wide efficiency and results in the national scale.
- On January 25 2016, GAC and MOF jointly promulgated "Announcement on implementing the paperless customs clearance for goods (as of 1 February 2016) with automatic import licenses" that implements state-wide paperless customs clearance for goods subject to automatic import licences.
(15) Delays in Export/ Import Procedures during Spring Festival - Due delivery dates become unpredictable around the Spring Festival (Chunjie) for cargoes to and from PRC/Taiwan (especially PRC). It becomes particularly worrisome for emergency shipments. - It is requested that GOC/Freight Forwarder will establish a scheme unaffected by holidays.
(16) Difficulty in Customs Clearance at Inland State Borders - Customs clearance at inland state borders with Russian federation and Mongolia continue to disapprove paperless customs clearance and customs clearance at the customs of the applicant's residence. It remains difficult for an enterprises residing in the eastern coastal area to conduct export/import business as a direct party. - It is requested that GOC introduces enhancement measures of customs clearance, which customs promote statewide.
(17) Abuse of Antidumping Measures - On 8 September 2011, in response to the Petition filed by the domestic stainless steel pipe enterprises, MOC initiated antidumping investigation on high performance seamless stainless steel pipe used for superheater and reheater of supercritical and extra supercritical power generation boiler imported from Japan and EU.
8 May 2012: Provisional affirmative finding.
8 November 2012: Final affirmative finding.
20 December 2012: GOJ requested consultations with China on plural issues found to be inconsistent with WTO Antidumping Agreement with regard to the antidumping investigation GOC instituted.
11 April 2013: GOJ filed request for WTO panel examination (first instance).
24 May 2013: WTO Panel (DS545) was established at the GOJ's second request.
EU filed WTO for bilateral consultations.
13 June 2013: EU requested establishment of WTO Panel as to PRC (DS460).
30 August 2013, DSB at the 1st examination approved establishment of panel as to EU.
- 22 March 2013: Northern Heavy Industries Group Co. Ltd. filed antidumping petition on certain alloy-steel seamless tubes and pipes for high temperature and pressure service from EU, U.S. and Japan.
24 April 2013: MOFCOM announced in Gazette initiation of an antidumping investigation.
13 December 2013: MOFCOM announced preliminary affirmative dumping finding on certain alloy-steel seamless tubes and pipes for high temperature and pressure service from EU, the U.S. and Japan.
- GOC levies antidumping duty on coated paper (more than 70 g/sq.m.) exported from Japan. (Its review due in August 2015 remains unconfirmed.)
- It is requested that GOC implements Antidumping Investigation coherently with the WTO Antidumping Agreement.
- It is requested that GOC revokes the antidumping measures.
- MOC Announcement [2011] No.57 (Revocation of AD Measures)
- MOC Announcement [2012] No.72
- On 17 April 2007, GOC made the final determination to impose antidumping duty in the range of 15-40.83% on paper for electrolytic capacitor originating from Japan.
- On 30 August 2007, GOC made the final affirmative finding of dumping on Bis Phenol A originating from Japan, South Korea, Singapore and Taiwan.
- On 21 November 2007, GOC made the final affirmative finding of dumping on Methyl Ethyl Ketone originating from Japan, Taiwan and Singapore.
- On 22 November 2007, GOC made the affirmative preliminary finding of dumping on Acetone originating from Japan Singapore, South Korea and Taiwan.
- During the first half of 2009, PRC has received a rapidly spiraling number of 60 cases of initiation of investigation, amounting to 8.76 billion U.S. dollars, on issues concerning antidumping and countervailing duties.
- On 14 December 2011, Ministry of Commerce published its decision to impose Antidumping Duty and Countervailing Duty on passenger vehicles and off-road vehicles with engine displacement of 2.5 litre or more originating from the U.S.
- On 6 September 2012, European Commission initiated Antidumping Investigation against imported solar panel and parts thereof originating from PRC.
- On 17 September 2012, the U.S. Government (GOU) requested WTO Dispute Settlement Body to set up a panel (WTO Dispute Settlement Subcommittee) concerning the GOC's measures to impose Antidumping Duty and Countervailing Duty on motor vehicles originating in the U.S.
- During the period of autumn 2011 through autumn 2012, before WTO-AD Committee, GOJ urged a fair decision be made in favour of the Japanese parties in concern, as literally almost all subject products exported from Japan are high value added products for use by coal fired power plant at its Advanced Extra-Ultra-Supercritical Boilers, not competing against Chinese products, hence not injurious to the domestic industries in PRC. Japanese side further emphasized for GOC to consider listening to the voices of the Chinese users of the Japanese products in concern. However, it failed to reach an equitable solution. (2013 Report on Compliance by Major Trading Partners with Trade Agreements - WTO, FTA/EPAs, BITs -, METI, April 2013).
- In December 2012, GOJ filed request for consultation under the WTO Agreement on the GOC's Antidumping Measures on Seamless Stainless Steel Pipe from Japan.
- On 20 January 2014, MOFCOM promulgated the final determination on its investigation on antidumping/countervailing duty (only antidumping investigation on the ROK products) against polly-crystal silicon manufactured in ROK and USA: affirmative finding of dumping on products from both ROC and USA and affirmative countervailing duty finding on certain U.S. enterprises.
- On 30 April 2014, MOFCOM made final affirmative finding in its antidumping / countervailing duty investigations against pollycrystal silicon manufactured in EU.
- On 9 May 2014, MOFCOM announced final determination on its antidumping investigation against high heat high pressure seamless steel pipe imported from EU, Japan and USA, finding 13.0 - 14.1% dumping duty against USA and EU. No dumping duty is payable on products from Japan, as the import volume was less than 3% as to the products originating from Japan during the investigation period.
- On 9 May 2014, MOFCOM released Announcement No. 34 [2014] on Final Ruling on the Anti-dumping of the Imported Alloy-steel Seamless Tubes and Pipes for High Temperature and Pressure Service Originated in the EU, Japan and United States, (PRC Import Tariff Code Nos. 73045110, 73045190, 73045910, 73045990), while finding no dumping duty as to the subject products from Japan. (MOFCOM Announcement [2014]No.34).
- On 23 May 2014, WTO Panel released its Report holding imposing anti-dumping and countervailing duties (DS440) on certain automobiles from the United States are not in conformity with its obligations under the WTO Agreements (the Anti-Dumping and SCM Agreements.) (
- On 23 July 2015, PRC Ministry of Commerce (MOC) initiated anti-dumping investigation against imports of grain oriented flat-rolled electrical steel originating in Japan, South Korea and EU.
- On 24 July 2015, MOC announced the preliminary anti-dumping investigation ruling on the imports of methyl-methacrylate originated in Singapore, Thailand and Japan. MOC will start collecting preliminary anti-dumping duty from each respondent (maximum 34.6% among the Japanese) payable from 19 August 2015).
- On 19 August 2015, MOC announced the final ruling of the anti-dumping investigation against imported optical fiber preforms originating in Japan and the United States, finding anti-dumping duty of 8%-9.1% on imports from Japan, and 17.4-41.17%, (payable from 19 August 2015.)
- On 18 November 2015, MOC announced initiation of anti-dumping investigation against imports of iron-based amorphous alloy ribbon (strip) originated in Japan and the USA.
- On 1 April 2016, MOC announced final determination of anti-dumping duty on grain oriented flat-rolled electrical steel originating in Japan, South Korea and EU, collecting anti-dumping duty security deposit (DDSD) from 2 April 2016 (.Maximum DDSD as to Japan, 45.7%).
(18) Irrational Continuation of Antidumping Duty Levy - On 18 December 2000, GOC found antidumping duty on cold-rolled stainless steel from Japan and Republic of Korea, excluding the 4-items destined to home electric appliances and car industry. GOC imposes antidumping duty in the range of 17-58% on 8-Japanese manufacturers, and 4-57% on Korean manufacturers, excluding the parties that separately signed the minimum price undertaking with Department of Economy and Foreign Trade.
On 8 April 2006, Ministry of Commerce (MOC) determined to continue imposition of antidumping duty.
On 18 October 2010, MOC announced the termination of the antidumping duty levy by 8 April 2011, and began accepting petition from the domestic industries desiring to continue the antidumping duty levy. (If no petition is received by 7 February 2011, MOC will terminate the antidumping measures, provided, however, that if the petition is accepted, and continuation of antidumping measures is affirmatively determined, the period of antidumping duty levy will be further extended.)
- Anti-Dumping Regulation of PRC as amended on 31 March 2004
- MOC Announcement [2010] No.68 (Acceptance of Domestic Industries Petition)
- MOC Announcement [2011] No.11 (Revocation of AD Measures)
- MOFCOM that levied antidumping duty on coated papers exported from Japan during 2003 through 2008 took measures to extend the antidumping duty levy for 5-years, during which period, PRC's own manufacturing facilities have grown stronger by large margin. The surplus is now exported to neighbouring countries.
- On 31 August 2009, MOC released Announcement No. 56 (2009) on continuation of antidumping measures for 5-years on phthalic anhydride from Japan, Republic of Korea and India.
- On 4 August 2014, MOFCOM by its Announcement No.48, published termination of its antidumping duty levy that had continued since 2003 on coated papers from Japan and ROC, in the absence of the domestic manufacturers request for sunset review, and in the absence of investigation at its own initiative. No further dumping duty will be collected beginning 6 August 2014.
- On 7 September 2014, MOFCOM announced its discontinuation of antidumping measures on styrene-butadiene rubber originating from Japan, Russia and ROK as it decided against the second sunset review. MOFCOM had continued for 5-years from 2009 antidumping measures after the initial 5-years of antidumping measures since 2003.
- On October 8, 2015, MOC promulgated announcement, "Ruling on expiry review of anti-dumping measures against imports of polyvinyl chloride originated in the U.S., South Korea, Japan, Russia and Taiwan region", extending by 3-years the period of anti-dumping Duty Levy as to Japan, South Korea, Taiwan, and the U.S., while terminating the AD measures as to Russia, in each case, with effect from 28 September 2009).
- On 8 April 2011, MOC promulgated Announcement in Gazette revoking the Antidumping Measures.
MOC formally revoked this measure without instituting the 2nd sunset review, in the absence of request within the prescribed deadline for sunset review from neither individuals nor corporations, and by its own decision not to review the proceedings subjectively.
(19) Levy and Raise of High Export Tax - GOC imposes export duty and provisional export duty rates on export of raw materials from PRC. This has been a factor for pushing up the market prices of these raw materials:
Coal (coking coal/steam coal) 10%, earthy graphite 20%, cokes 40%, pig iron 25%, ferro silicon 25%, silicon manganese, ferro manganese, metallic manganese 20%, ferro chrome 20%, etc.
On 2 December 2010, the Customs Tariff Commission of the State Council announced "2011 Notice on Customs Tariff Implementation Policy", raising the provisional tariff rate from the previous 20% to 25% on ferro alloy with high rare earth product contents, while fragmentalising the H.S. Codes.
On 14 December 2011, NTC announced "2011 Notice on Customs Tariff Implementation Policy", raising tariff rate on a part of neodymium ferro boron (7202.99.11) from 0% to 20%.
- It is requested that GOC deregulates the export suppression measures on raw materials. - NTC Notice on Implementing 2011 Tariffs Bill (ShuiWeiHui [2010] No.26)
- Protocol on the Accession of the People's Republic of China, Article 11.3
- In June 2007, EU and USA filed request for WTO consultation on GOC's quantitative export restrictions and export tax levy on 9-items including bauxite, cokes, etc., alleging the GOC's measures are inconsistent with GATT Article 11 and Protocol on the Accession of The People's Republic Of China to WTO.
- Effective 20 August 2008, GOC has raised export duty from 25% to 40% on coal cokes, coking coal from 5% to 10% and steam coal from 0% to 10%.
- On 31 August 2009, National Development and Reform Commission (NDRC) released "2009 Product Catalogue for Import of Encouraged Technology and Products" (NDRC [2009] No. 1926), in which GOC encourages, by import interest subsidy, etc., import of 370-items or more of high-end technology and major equipment and 12-items of important natural resources and raw materials.
- Since 1 January 2010, MOF has revised export/import duties, continuing the levy of provisional export duty on resource related items such as rare earth, petroleum, and pulps, while imposing special export duty on chemical fertiliser.
- On January 2011, GOC reduced provisional import tariff rates on 600-odd items including resources and basic raw materials.
- The Customs Tariff Commission of the State Council (CTC) levies on 340-tariff lines provisional or special export tariff, while continuing to collect provisional export tariff on high energy/resources consuming, high polluting products (such as coal, oil, and chemical fertiliser), and non-ferro metals. GOC has raised provisional export tariff on some rare earth products (HS72029991)(ferro alloy of more than 10% rare earth contents) to ensure export restrictions on rare earth element. CTC has also taken measures to adjust the base/seasonal prices through the levy of the export tariff on chemical fertiliser.
- In July 2011, WTO Panel Report was published, holding the GOC's quantitative reservations on export of 9-items are inconsistent with the WTO Agreement.
- In March 2012, together with EU and USA, Japan filed request for WTO consultation on GOC's export restrictive measures (export quantitative restriction, export tax levy, and minimum export price). In June 2012, request was filed for WTO Panel setup.
- On 26 March 2014, WTO Panel Report was published, stating China's export measures cases (DS431/DS432/DS433) on the exportation of rare earths, etc. are not in conformity with the protocol of accession to WTO. In April 2014, China appealed the case to WTO Appellate Body.
-- The total texts of this case:
- Ministry of Finance (MOF) (1) repealed temporary export duty over 31 items such as steel cable, sulfuric acid, wheat and rice, (2) repealed special export duty on 27 items, including yellow white phosphorus, phosphoric mineral ore, and synthetic ammonium, (3) reduced the temporary export duty on 29 items of non-ferrous metals and their intermediary products, including steel in medium and light shapes, fluorinated chemical products, tungsten, and indium, and (4) made seasonal adjustments of export duty on urea, and phosphoric ammonium.
- 26 May 2009: Repeal of provisional export duty rates on cokes (2704.0010: 40%=>0%)
Effective January 2013, repeal of duty on some items (cokes 40%=>0%, metal manganese 20%=>0%, etc.)
- In response to WTO Panel Report, GOC repealed export levy on six items, namely, bauxite, cokes, fluorite, magnesium, manganese, and silicon metal from January 2013. As to yellow white phosphorus, and zinc, tax rates were reduced within the range prescribed in the WTO Accession Protocol. GOC has repealed export quantitative restrictions on bauxite, cokes, fluorite, silicon carbide, and zinc.
- On 7 August 2014, in the dispute instituted by Japan, USA, and EU against China, Report(s) adopted, with recommendation to bring measure(s) into conformity, in support of the Panel Report, stating "China's measures on levy of export tax, export quantitative restrictions, minimum export price, related to the exportation of rare earths, tungsten and molybdenum are not in conformity with the protocol of accession to WTO".
- MOC repealed export quota on rare earth export with effect from 1 January 2015, in observance of the WTO ruling.
- On 14 April 2015, the customs tariff commission of the state council (CTC/SC) promulgated "Notice CTC/SC on adjusting the export tariffs on certain products", repealing the export duty levy on rare earth, tungsten and molybdenum in compliance with the WTO ruling. Reference: CTC/SC (No. 3 [2015])(in Chinese) at (
(20) Frequent changes in export taxation system - Due to the sudden decline in the export, GOC either repealed or reduced in stages the provisional tax rates (PTRs) on cokes and general iron and steel products in December 2008 and July 2009, while beginning June 2007, GOC had raised PTRs on 1 December 2008 and 1 July 2009. To curb exports.
On 1 January 2010, GOC repealed the 5% PTRs levied on 8-tariff lines of section (shape) steel (HS).
- It is requested that GOC avoids driving exporting enterprises into confusion by maintaining a stable export policy. - Customs Import and Export Tariff 2010
(21) Difficulty in the Customs Clearance Procedures for Return of Defective Products - It is difficult to settle the costs incurred on the Defective Products manufactured in PRC after they are exported from PRC (on account of returns, disposal at customers, the lot inspection to separate good from defective products). - It is requested that GOC streamlines the procedures.
(22) Suspended Export/Import Customs Clearance Permit - In September 2013, Shanghai Customs refused to discharge customs clearance to our member firm on a product sample for explanation and demonstration purposes. Member firm attempted to ship back to Japan the sample in question. However, this time, Shanghai Customs refused to permit export customs clearance on that sample product. Repeated attempt at export customs clearance is now pending.
Already 3-months have lapsed after filing application. Member firm's product is for use with industrial products, which are not the subject goods under regulation on the administration of the import and export of goods and yet customs clearance permit is unobtainable. The member firm has continued products shipment every month for more than 10-years. This is the first time the customs clearance is suspended at Shanghai Customs.
- It is requested that Shanghai Customs discharge customs clearance adequately with transparency.
(23) Customs Clearance Work Disallowed for Branch Operation - Branch office, being without juridical personality, is neither authorised to submit external trade notification to MOC, nor is able to engage in customs clearance service by its own name, nor is it empowered to register its exclusive customs clearance seal. They can only act on behalf of the general headquarters, requiring complex work for each customs clearance. - It is requested that GOC overhauls its legislation system by allowing branch office's filing of notification to MOC of external trade, etc. so that it can subjectively discharge the customs clearance operation. - Company Law of the People's Republic of China, Article 192
- Provisions for the Administration of Registration of Declaration Entities (03-31-2005), Articles Nos. 6, 8, 49, etc.
(24) Custom's Complex Import Cargo Inspection - While the paperless customs clearance introduced in 2013 has streamlined the customs clearance procedures, the cargo inspection rate has gone up (by 10% on air cargo and 20% on ocean cargo). As a result, it takes additional 2-days for completing the import customs formalities, while the appertaining additional costs for Inspection have gone up.
- Not much difference is noticeable in the inspection rate and the time for completing the inspection.
- While appreciating the customs policy for the shift from "By Clearance" to "By Company" control in administering the customs clearance by adoption of the company shading (grading) scheme, a Member Firm graded with the previous AA, or now Authorized Economic Operator (AEO) finds customs exercise of excessively frequent inspections or shipment by shipment inspection in PRC, vis-a-vis the customs of other countries, almost defeating the purpose of the highest corporate rating.
- It is requested that GOC:
-- reduces the cargo inspection rate,
-- streamlines the import procedures.

- It is requested that GOC:
-- clearly identifies the incentive measures enjoyed by Authorized Economic Operator (AEO), and
-- brings home to all the customs personnel at the window.
- Announcement No.19 of GAC - Announcement on Matters concerning Deepening the Pilot Program of Paperless Customs Clearance
(25) Delayed Import Customs Clearance - It takes too many days from the date of CIQ's random inspection to the day the inspection report becomes available. Because of this, Member Firm's Subsidiary (MFS) is unable to meet the Chinese (domestic) customers' emergency needs.
Furthermore, in regard to food import, "No domestic sales are allowable without sanitary certificate," which scheme is unique to PRC. In the worst case, it takes 2-months to obtain the sanitary certificate. Pending the acquisition of sanitary certificate, the imported goods just sleep in the warehouse, incurring long term warehousing fees, and resulting in the loss of sales opportunities

- Products bearing China compulsory certificate, nevertheless, if selected as the goods being subject to CIQ inspection, other cargoes shipped together are also held at customs, pending completion of the CIQ inspection, which takes several weeks before completion. The review of the inspection system is necessary.
- It is requested that GOC reviews the CIQ Inspection system, expedites its internal workflow, and deregulates the requirements.
- It is requested that on Products bearing CCC label, GOC applies the import procedures under the same terms and conditions as the product inspected.
(26) Uniform weight description requirement on customs clearance documents - Customs requires weight description on electronic parts that are capable of being described in quantities, so that customs invoice must include description of the products not only in quantities but also in (gross and net) weight. Any discrepancies both in quantities and in weight from the invoice description form the basis for suspension of customs clearance. - It is requested that GOC determines quantitative or weight description per HS Code and product and administer accordingly either by quantity or weight.
(27) Disallowed Correction of Export Import Declared Prices after Customs Clearance - PRC customs takes an extremely rigid position on post-customs clearance change of contract prices, despite the fact that the post export/import change in contract prices or entry under provisional prices is a form of circumstances that could arise in international trade.
Moreover, customs clearance certificate is necessary for payment in foreign currency. Thus, there is no adequate means to effect payment in the circumstances where price changes in contract prices are inevitable.
- It is requested that GOC modifies the system that flexibly allows amended declaration so that Hygiene Certificate is issued within one-month. - Customs Law
- Regulation on Foreign Exchange Settlement, etc.
(28) Insufficient Confirmation in Issuance of ASEAN/China FTA Preferential Certificate Of Origin - On the Rules of Origin (ROO) certificate issued by Local Bureaux of Quality Supervision, Inspection and Quarantine (LBQSIQ) established by AQSIQ in each location, a party, purchasing the products for resale to ASEAN member states is apprehensive, if the ROO certificate LBQSIQ issues can withstand the scrutiny of the destination member state. Should LBQSIQ issues ROO certificate without sufficiently ascertaining the full satisfaction of the local contents requirement to facilitate the PRC export enterprises, such party would end up by having disputes with the local customs authority. Consequently, such party is unable to file application at ease for preferential tariff treatment on such product for resale to the ASEAN member states. - It is requested that the ASEAN ROO certificate issuing authorities and GOC harmonise the level of the confirmation points at the time of ROO certificate issuance. - ASEAN-PRC FTA (Revised Operational Certification Procedures (OCP) for the Rules of Origin of the ASEAN-China Free Trade Area)
- In PRC, General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) and China Council for the Promotion of International Trade (CCPIT) issue preferential/non-preferential certificate of origin. In addition, AQSIQ and CCPIT jointly promulgated "Notice on Exempting the Certificate of Origin Issuing Fees (COIF)" (CaiZong No.24 [2014] for export promotion, whereby COIF is exempted temporarily during 1 May to 31 December 2014. Since 2012, AQSIQ has discontinued collecting COIF.
(29) Complex, delayed import procedures under ASEAN/China FTA - The procedures are complex and time consuming to import goods into PRC under ASEAN-PRC FTA:
-- About additional one day is necessary for customs' confirmation and approval of certificate of origin.
- It is requested that GOC streamlines and abridges the time required for import customs clearance procedures.
- On 28 February 2015, Thai custom department promulgated notification, approving the interpretation of the "Third Country Invoice" as provided in ASEAN-China FTA (ACFTA) for enforcement from 1 March 2015. It has become possible to apply the third country invoices in plural intermediaries/countries.
(30) Information Leakage at Customs - There was a case of leakage on non-public information concerning export trade, whereby details of product, destination, model, price of each exporter, etc. have become obtainable (some offering such information for a price). It means a great risk to the business operation. - It is requested that GOC ensures prevention of leakage concerning confidential information of private entities.
(31) Undefined Period required for Customs Clearance of Pilot Production Sample - A member firm's subsidiary (MFS) in PRC faces the problem of uncertainty from time to time in clearing through the customs pre-production samples. It affects the product development schedule, despite the fact that MFS prepared the documents, using the form specified by the Customs. - It is requested that GOC clearly defines the work related to customs clearance.
(32) Restricted Triangular Trade - GOC restricts triangular trade only to business entities residing in the Bonded Zones.
- Shanghai is unable to operate as the hub for settlement of commerce destined to Southeast Asian countries, as the triangular trade is not authorised unless the enterprise is registered in bonded zone.
- It is requested that GOC deregulates the restriction on triangular trade.
- It is requested that GOC further liberalises its national policy.
- Regulations relative to FFEs Investment.
(33) Cumbersome and Delayed Temporary Import Procedures - Material impact on production schedule from time to time ensues due to the 100% cargo inspection requirement for temporary import of samples and equipment, which takes about 2-weeks to complete.
- GAC has suspended import customs clearance on the products returned to a manufacturer in PRC for correction of defects after import into Japan, the reason for suspension being the change in the name of the manufacturer before and after the company's reorganisation into a wholly owned entity that has accompanied the change in the company name. Import licence into PRC is unavailable under the law due to the change in the company name of the applicant before and after the reorganisation.
- It is requested that GOC:
-- streamlines the import procedures, and
-- cuts down the time required for completion of customs clearance.

- It is requested that GAC flexibly process the application for the import licence, where no practical change has taken place in substantive business, address of the applicant, etc., even where the applicant bears a different company name, due to the reorganisation into a wholly owned company.
- On 14 July 2014, the Shanghai Entry-Exit Inspection and Quarantine Bureau promulgated "China (Shanghai) Pilot Free Trade Zone (CSPFTZ) Administrative Provisions on the Sanitation and Quarantine of Entry/Exit Special Articles (Trial)", initiating the new quarantine and inspection scheme in CSPFTZ for medicinal special materials (described in Chinese as "Entry/Exit Special Articles").
Shanghai Customs announced the 7-new customs clearance schemes, including selectable duty rate to further simplification of customs clearance procedures in CSPFTZ, for enforcement from 30 June, 2014.
Shanghai Customs, following the announcement and implementation during 22 April through 1 May of the 7-new customs clearance schemes, announced and implemented the additional 7- new customs clearance schemes: ((1) Reduction in submission documents during cargo carry in/out, (2) Harmonised application form of registration during cargo carry in/out, (3) Warehousers' information processing and management, (4) En block processing of procedures for customs clearance/reporting on plural shipments, (5) En bloc collection of customs duty, (6) Customs duty rates made selectable, (7) Electronically automated entry/exit), implemented from 30 June.
(34) Complex and Delayed Export Inspection - A member firm subsidiary (MFS) files application for inspection under Law on Import and Export Commodity Inspection on Export Commodity only after completion of the total production lot, followed by containerisation and shipment. The whole procedures are quite burdensome for MFS that ships a large volume of products.
- The Law of the People's Republic of China on import and export commodity inspection is ambiguous in regard to the purpose, contents, and the number of days required completing the inspection. It is difficult for the concerned parties to manage delivery dates.
- Concerning export of spinach seeds, China Plant Quarantine (CPQ) carries out quarantine inspection of Sobane Mosaic Virus (SoMV). In the case of positive finding, CPQ directs disposition the total lot by scrapping. This is not the general disease, infection of which gives no material economic damage. If not scrapped, the spinach seeds found with SoMV can be sold in other countries without problems.
- It is requested that GAC introduces administration system based on creditability of the applicant, so that it allows filing of application for commodity inspection after shipment.
- It is requested that GOC introduces a scheme whereby companies authorised by the commodity inspection bureau may file commodity inspection after shipment.
- It is requested that GOC removes SoMV from the list of plant disease subject to quarantine inspection.
- Law on Import and Export Commodity Inspection
(35) Increased Burden to Trade Firms by the Change in Export Invoices Issuance System - Since January 2013, Taxation Bureau has changed the export invoice system in such a way that the workload has increased to exporters that issue a large volume of export invoices. - It is requested that Taxation Bureau issues export invoice in accordance with the international norm.
(36) Vexatiously complex AFR scheme, delaying the procedures - Advance Filing Rules (AFR) applied to cargoes destined to Japan prolongs the lead-time from 2 to 5 days maximum for the cargo arrival in Japan, and increases the cost of completing the governmental procedures, and advancing the production schedule, etc. - It is requested that GOC reviews the Advance Filing Rules (AFR).
(37) Delayed Issuing of Export Customs Clearance Completion Notice - Delays are frequent in issuing Notice of Customs Clearance Completion (NCCC), which is necessary for filing VAT refund application. Such delays consequently prolong the receipt of the VAT refund. - It is requested that GOC issues NCCC immediately upon completion of the NCCC formalities.
(38) Air Cargo Export Control - Shanghai Pudong Airport exercises its own unique control on export procedures for airfreight cargoes. - It is requested that GOC:
-- repeals the requirement for issuance of non-dangerous goods certificate on liquid (valve oil, grease), and
-- replaces it with MSDS, which is the International Standard.
- It is requested that GOC:
-- repeals the requirement for issuance of non-dangerous goods certificate on goods, in which lithium battery is built in, and
-- replaces it with IATA certification for shipping dangerous goods by air.
(39) Restricted Change in Customs Declaration and Its Nebulous System - Practical procedures are nebulous and restricted upon occurrence of changes in the vessel name and flight name, due to suspension of service by air/sea-carrier or logistics, after the grant of customs' permission of export customs declaration. Such changes are by right legitimate. However, frequent occurrence of such changes is susceptible of prompting customs summons and cautions. - It is requested that GAC:
-- permits changes without fail, and
-- repeals penalty provisions.
- Provisions related to changes in the Customs Declaration contents.
(40) Irrational Country of Origin Decision / Its Marking Requirement on Products Manufactured in and Exported from PRC - In regard to country of origin on products and parts exported from PRC to other countries, General AQSIQ and General Administration of Customs (GAC) compel their own requirements, which are different from the legislative provisions, frustrating import customs clearance in third countries on products and parts exported from PRC.
Where the final production process takes place in PRC on products and parts, whose production processes are performed in more than 2-countries, GAQSIQ and GAC from time to time disapprove origin marks put on such products and parts in accordance with the governing laws and regulations of respective countries and filed by a member firm, unless declaration and marking show they originate from PRC. The declaration and marking as directed by GAQSIQ/GAC could amount to false declaration/marking under the customs legislation in importing countries. The member firm is compelled to show an exceptional description, such as "Made in XX, Further Processed in China"). As a result, the member firm must put much time and effort for negotiation with PRC GAQSIQ/GAC as well as the Customs in importing countries. From time to time, it causes much delay to start the import.
- It is requested that the PRC Central Government will thoroughly ensure that local AQSIQ and Customs Administration refrain from demanding markings inconsistent with or not written in the Treaty. - Provisions on the Substantial Transformation of Criteria in Non-Preferential Rules of Origin (GAC [2011] No.122) (promulgated on 6 December 2004 and enforced on 1 January 2006.)
(41) Complex Product Registration Procedures - The procedures are complex for product registration of medical equipment for import / sales in PRC.
- The product registration procedure is complex, relative to import and domestic sales of medical equipment.
- The prolonged period of new product registration delays the shipment lead time.
- It is requested that GOS obviates the need for renewal of registration once the product is registered, as it is done in Japan.
- It is requested that GOC repeals the renewal requirement for Product Registration, obviating the need for further renewal, the same as Japan.
- It is requested that GOC expedites e customs clearance procedures.
(42) Disunity of Customs Unit Rules - Customs in the comprehensive bonded zone of Suzhou industrial park seeks the use of the same "commodity unit" both ways, namely, "out of the bonded zone warehouse" and "in to the customer's warehouse." Otherwise in bond delivery application online gets rejected for manual handling that delays the process by 1-2 days. Due to the absence of a clear cut GAC official guideline, each local custom has a free hand to decide its own unit. Consequently, different units are used at points of despatch and receipt of the cargoes, prolonging the lead-time from the warehouse. - It is requested that GOC holds its demand for harmonisation of the commodity unit in and out of the warehouse, pending completion of the statewide harmonisation of the commodity unit in-and-out of warehouse.
(43) Insufficient Lead Time from GAC Notice Publication to Implementation - Occasionally, the lead-time is too short from GAC notice publication to its implementation so that delivery problems arise in practical business. (E.g. Beijing airport customs notice of 20 November 2014 disallowed description of plural invoices on a single B/L or a single airway bill, while it used to be possible to include plural invoices on either of them.) After the change, at the beginning, due to the problems of adjusting the system operation and co-ordination, export of goods had to be suspended, recording on the book the goods in concern as returned goods.
- More often than not, new customs rules come into force with extremely short notice after announcement. On an extreme case, new rules come into force on the very day of the announcement. It compels preparation of the requisite process change, etc., at an extremely short notice.
- It is requested that GOC allows a reasonable period for preparation on the part of affected enterprises (including the degree of difficulty in preparation). - GAC Notice