WORLD TRADE
ORGANIZATIONG/RO/54
21 November 2002
(02-6467)
Committee on Rules of Origin
REPORT TO THE COUNCIL FOR TRADE IN GOODS
ON CHINA'S TRANSITIONAL REVIEW
1. The Committee on Rules of Origin, at its meeting on 15 November 2002, carried out the
transitional review of China pursuant to paragraph 18 of the Protocol on the Accession of the People'sRepublic of China (WT/L/432).
2. China's notification has been circulated in document G/RO/53, and questions on China's rules
of origin from the Separate Customs Territory of  Taiwan, Penghu, Kinmen and Matsu have also been
circulated in document G/RO/W/94.  The statemen ts made at the meeting of 15 November 2002 are
reflected in the minutes of the meeting (G/RO/M/42), paragraphs 4.1-4.10.  The relevant paragraphs
which reflect this discussion are annexed.G/RO/54
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ANNEX
4. Transitional review under paragraph 18 of the Protocol of Accession of the People's
Republic of China (WT/L/432, WT/ACC/CHN/49, G/RO/53 and G/RO/W/94)
4.1 The Chairman noted that that in accordance with paragraph 18 of the Protocol of Accession of
the People's Republic of China, the CRO was to re port to the Council for Trade in Goods on the
outcome of the Review which would then report to the General Council.  He drew attention to two
documents with regard to this Review.  The first was the notification of rules of origin by China
(G/RO/53).  The second was from the Separate Customs Territory of Taiwan, Penghu, Kinmen and
Matsu in document G/RO/W/94, containing questions to China.
4.2 The representative of China wished that his introduction of the implementation of China's
commitments with regard to rules of origin within  the framework of paragraph 18 of China's Protocol
of Accession would  help Members better understand the efforts and achievements China had made in
this respect after its accession to the WTO.  He  first drew attention to the fulfilment of the
transparency requirements.  With reference to Article 5.1 and paragraph 4 of Annex II of the
Agreement on Rules of Origin, the Chinese Government, in June 2002, had submitted to the CRO the
texts of the regulations and administrative measures in effect in China regarding non-preferential rules
of origin.  They were (1) Provisional Regulations concerning the Rules of Origin of the Customs
General Administration of the People's Republic of China;  (2) Proclamation concerning Change ofthe Rules of Origin for Petroleum Products of the Customs General Administration of the People's
Republic of China;  and (3) Proclamation of the Customs General Administration of the People's
Republic of China on the Establishment of Predetermination on Origin of Imports (No. 17, 2001).
The notification had been circulated by the Secretariat in document G/RO/53.  Apart from this, the
information regarding rules of origin of China could also be accessed through the China WTONotification and Enquiry Centre or the website of the General Administration of Customs of the
People's Republic of China, at www.customs.gov.cn.  With the notifications made and this Chinese
proclamation in place, the principle of transparency had been effectively ensured with regard to rules
of origin.
4.3 The second point concerned the implementation of China's commitments.  Since China's
accession to the WTO, continuous efforts had been made to align the rules of origin administration inChina with the WTO provisions and its accession commitments.  Thanks to those efforts China's laws,
regulations and administrative measures relating to ru les of origin had been in full conformity with the
WTO Agreement on Rules of Origin.  On 5 December 2001, the General Administration of Customs
of China promulgated the Proclamation on the Establishment of Predetermination of Origin for
Imports.  That regulation came into force on 11 December 2001.  The Proclamation providedstipulations on pre-assessment of the origin of an import upon request and outlined the terms under
which it would be provided.  It also stipulated that customs determination of origin was reviewable
through administrative or judicial procedures independent of the customs office issuing the
determination, which could decide the modification or reversal of the determination, and that customs
would keep information for origin determination confidential upon request.  These provisions were inline with Articles 2(h), (j), (k), 3(f), (h), (k) and Annex II, paragraph 3(d), (f), (g) of the Agreement on
Rules of Origin.
4.4 The third point concerned some explanations on China's rules of origin.  With regard to the
issue of a deadline to access and implement origin predetermination, Articles 4 and 5 of theProclamation concerning origin predetermination st ipulated that the customs should make an origin
predetermination decision within 150 days from the date of the acceptance of the written application
and all the necessary documents.  The decision should be persistently effective within the customs
territory provided that the rules of origin, the facts and conditions under which the rules had beenG/RO/54
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made remain unchanged.  The validity conditions maintained by China went beyond the provisions of
the Agreement on Rules of Origin, which only provided  for a three-year term of effectiveness for the
predetermination decision.  With regard to the issue of appeal against a customs origin decision, and if
a person concerned disagreed with the decision made by customs on the origin of an import, he was
entitled to apply for an administrative review or  file a lawsuit in accordance with Implementing
Measures of Customs Administrative Review Law of the People's Republic of China and the
administrative procedure law of the People's Republic of China.  With regard to the issue of
confidentiality of information for origin determination, Article 9 of the Proclamation concerning
origin predetermination stipulated that the customs should keep the information for origin
predetermination confidential upon request, and would not disclose such information without the
consent of the applicant unless the disclosure was required by judicial proceedings.
4.5 He also stated that with regard to the issue of non-preferential rules of origin for exports,
China's existing non-preferential rules of origin for exports were promulgated on 8 March 1992 and
came into effect on 1 May 1992.  The rules applied for issuing a Chinese certificate of origin for
non-preferential exports upon request of exporters in cases that an importing Member had no
non-preferential rules of origin.  China's rules were not binding on the importing side, and there wasno origin declaration request by the customs for exports.  He hoped that the information provided to
the CRO prior to this meeting and explanations he  had just made would help Members to understand
the efforts and achievements made by China to implement the Agreement on Rules of Origin and its
commitment.  China had been playing an active and constructive role in the ongoing Harmonization
Work Programme (HWP) and had committed to fully adopting and applying non-preferential rules oforigin as soon as the HWP was completed.  China was of the view that agreed rules by the HWP
should serve as the basis and the standards for the TRM of China on rules of origin.  In the absence of
conclusion of the HWP, however, it was unlikely that the transitional review could be conducted in a
meaningful manner.  In that spirit, and taking account of the full conformity of China's regulatory
framework on rules of origin with the WTO Agreemen t, he suggested that after this review the TRM
of China's rules of origin be suspended until the harmonized rules of origin were agreed upon by the
HWP.
4.6 The representative of Chinese Taipei appreciated the hard work and obvious efforts of the
Chinese delegation in preparing the explanations made at this meeting and China's clarifications on
areas which were of much concern to them.  However, since they had heard only China's oral
presentation instead of in written form provided in advance, it would be very useful if a copy ofChina's oral presentation could be made available to all interested Members for further transparency
purposes.  As one of the major trading partners of China, Chinese Taipei felt very much obliged to
identify and address several important and equally legitimate concerns in areas where China might
have lapsed in its implementation of the Accession Protocol.  They strongly believed that China's
smooth implementation of its commitments was in the best interest of all Members, including China
itself.  Therefore, his delegation was pleased to attest to the smooth and successful proceedings of
China's first TRM exercise so far.
4.7 The representative of the United States thanked China for its presentation at this meeting, and
stated that this was an area in which China had a good story to tell.  China had notified the legislation
that was applicable well in advance and the clarifications that they had presented were helpful and
useful.  He seconded the request to obtain a copy of the statement.  That would assist them in
evaluating the information that had been put forward at this meeting.  With respect to the proposal to
temporarily suspend future transitional reviews in this Committee, he was not sure if that was
something that this Committee could do, a decision it could take on its own.  The best place to makethis proposal however would be in the General Council when all of the Committees' reviews were
looked at at the same time, and then the General Council would be in a position to make any
recommendations it deemed necessary.G/RO/54
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4.8 The representative of Egypt thanked the Chinese delegate for his statement and raised the
following question concerning the establishment of pr edetermination of origin of imports:  in order to
have a licence to export to China did he have to wait for 150 days from the date of acceptance of the
written application and all necessary documents, and in that case the authorities might say yes or no.
He thought this was a very long time and it could mean some barriers to trade between countries.
4.9 The representative of China stated that with re gard to the request by some Members to have a
copy of his statement in written form, he was prepared to facilitate the work of the CRO by submitting
a copy of his statement to the Secretariat so that it could be made available to those Members who
were interested.  With regard to the specific question raised by Egypt, it was pointed out that those
150 days provided for in the Proclamation concerning predetermination of origin of imports were
compatible with the provisions of Article 2(h) and paragraph 3(d) of Annex II of the Agreement onRules of Origin.
4.10 The representative of Pakistan thanked China for the detailed statement they had made and
the notification provided, and stated that China's re quest to suspend the review of the rules of origin
until the HWP was completed appeared to be reasonable.  Since the CRO was still in the process oftrying to work on various proposals in the HWP, which had been going on for about seven years, and
the CRO did not know when it would be completed, it appeared inappropriate to expect that China
would be able to conform their rules with wh at the CRO was still debating.  The CRO should
recommend China's request to the General Council.
4.11 The representative of New Zealand thanked the Chinese delegation for the information they
had provided and the additional explanation made at this meeting.  As concerned the issue of
suspending the TRM in future years with respect to rules of origin, it did not seem that there was any
expectation in the Committee that China would implement the HWP before its completion.  That
would seem to be somewhat of an unfair burden, especially when the result was not yet complete.However she supported what the US had said with respect to the role of the General Council in this
matter.  She also pointed out that the Agreement on Rules of Origin did contain provisions that were
wider than merely providing the mandate for the HWP, and that in the Agreement there were still
issues relevant for the TRM of China in future years without needing to touch on the HWP issues.
4.12 The representative of Cuba thanked the Chinese delegation for their information.  She
appreciated this exhaustive account.  It had shown that China was in conformity with the rules of
origin now.  She stated that it would therefore be appropriate for the CRO to come up with some kind
of comment or decision to the General Council .  Although she understood the concerns of the
delegations of New Zealand and the US, the basic thing in this Committee was the HWP and until that
was done the CRO could not really analyse whether China was in conformity with it.
4.13 The CRO took note of the statements made, and agreed  that the Secretariat prepare a short
factual report under the Chairman's responsibility, together with the minutes of the meeting for further
detail, to be sent to the Council for Trade in Goods.
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