WORLD TRADE  
ORGANIZATION  G/TBT/W/242 
21 September 2004 
 
 (04-3968) 
Committee on Technical Barriers to Trade Original:   English 
  
 
CHINA'S
 TRANSITIONAL  REVIEW  MECHANISM  
Communication from the European Communities  
  The following communication, dated 16 September 2004, is being circulated at the request of 
the Delegation of the European Communities. 
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1. The EC is transmitting comments and questions  well in advance of the meeting of the 
Technical Barriers to Trade Committee of 4 Novemb er 2004, in order for the Chinese authorities to 
reply and to complete any information that may be lacking. 
2. Once the information to be provided by China in accordance with paragraph 8 and paragraph 
IV.7 of Annex 1A of its accession protocol has been  received, the EC may come back with additional 
questions. 
3. The EC’s comments and questions relate to  the following priority items: the Chinese 
Compulsory Certification system (CCC), automo bile, cosmetics, pharmaceutical and foodstuff 
(labelling, standards for wine and spirits). 
4. It should be noted that some of the above-m entioned subjects are also covered in other 
committees but for different aspects,  for instance automobiles in the Market Access Committee or 
cosmetics in the SPS Committee. 
I. CCC SYSTEM 
5. This issue was raised at the last TRM. Th e EC welcomes developments since then, in 
particular the establishment of a fruitful dialogue with the competent Chinese authorities (the Chinese 
State General Administration for Quality Superv ision and Inspection and Quarantine – AQSIQ and 
the Chinese Certification and Accreditation Admi nistration – CNCA) and their willingness to discuss 
our concerns and to clarify certain issues.  
6. As a general remark, the EC would like to em phasise again that National Treatment should be 
ensured in the implementation of the CCC system, in particular as regards the administration of 
exclusions and exemptions. 
7. The EC main outstanding concerns relate to: G/TBT/W/242 
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 (i) The list of products subject to the CCC 
8. The system applies to 19 categories of industr ial products, covering around 132 items, some 
of which are low-risk products that could be subj ect to simplified procedures (such as the supplier 
declaration of conformity). Furthermore, it appear s that China will add additional industrial products 
to the list of products subject to CCC marking. 
9. In addition, subject to very limited exemptions, spare parts, components and sub-assemblies 
are also subject to mandatory certification, even when  they are intended for incorporation in a finished 
product and the latter will be tested and certified in Ch ina. By the same token, separate certificates for 
each and every component as opposed to one single cer tificate for the whole product are required in 
the case of products imported disassembled.  
10. In this context, the EC would be grateful  if China could consider the possibility of: 
• Reviewing the list of products subject to ma ndatory certification, in order to exempt 
low risk products; 
• Excluding from such lists spare parts and components of products  which are in any 
event subject to certification; 
• Accepting one single certificate for the whole product instead of requiring separate 
certificates for each and every component in the case of products imported disassembled. 
(ii) Fees 
11. Conformity assessment fees for foreign manufacturers are significantly inflated by factory 
inspections performed by a team of Chinese aud itors (initial inspection plus yearly follow-up 
inspections). Very often, manufacturers are requested  to make use of consultants agreed by CNCA to 
deal with the CCC procedure. The EC understands th at, several EC CABs have been authorised in 
certain cases to carry out the yearly follow-up fact ory inspections on behalf of China. However, the 
initial factory inspection must in all cases obligator ily be performed by a team of Chinese auditors. 
12. In addition, recognition of foreign test results  and certificates currentl y operates, on a purely 
voluntary basis and in any event of ten conditional on add itional testing by a Chinese test laboratory, 
only with respect to some electrical products covere d by the Certification Body scheme developed by 
the International Electrotechnical Commission (IEC) System for Conformity Testing and Certification 
of Electrical Equipment (known as IECEE/CB sche me). For those products to which IECEE/CB 
scheme cannot or does not yet apply, acceptance of the results of testing and certification done by 
CABs in the EC appear to be systematically re fused by the Chinese author ities, even when the EC 
standards used and the relating testing require ments are identical to the relevant Chinese 
requirements.  
13. Therefore, The EC would like to ask China: 
• To exempt companies from factory inspections, at least those which have been certified 
according to international standards (suc h as ISO 9001), or to outsource all factory 
inspections to certification bodies established in the country of the manufacturer, or to accept factory inspection reports made by the latter for purposes of compliance with the health and safety regulations of the country of export;  G/TBT/W/242 
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 • To fully accept tests results and certificates is sued by foreign CABs according to the 
same standards applied in China for a ll products subject to the CCC system.  
(iii) Double certification 
• Certain products covered by the CCC system (s uch as medical equipment and radio and 
telecommunication equipment) are subject to double certification, by the Ministry of Information Infrastructure (MII) for telecommunication equipment and by the State 
Drug Administration (SDA) for medical devices. 
14. It should be recalled that point 13 of the China’s WTO accession protocol clearly states that 
imported products shall not be subject to  more than one conformity assessment. 
• The double certification requirements should be abolished. This is a common issue also 
for other sectors (such as motor vehicle components and cosmetics). 
II. AUTOMOBILE 
15. Similar to the CCC system, this issue was raised  at the 2002 and 2003 TRM. There is an open 
dialogue with the Chinese authorities and the automoti ve issues will be discussed during a seminar in 
Beijing in September and in the context of th e EU-China regulatory dialogue in Brussels in 
November. The EC expects that ongoing di scussion will lead to concrete results. 
16. The main concerns in this area relate to: 
(i) Design, adoption and implementation of standards 
17. China is not yet a member of the 1958 UN Agreement on world harmonisation of vehicle 
construction regulations. In some cases Chinese notif ied standards state that they are based on UN 
Regulations, but in fact contain elements of the UN Regulations, sometimes with the addition of some 
elements drawn from other systems, resulting in confusing and sometimes contradictory requirements.
1 In many other cases, Chinese standards are virtually identical to those under the 1958 
Agreement, but are implemented in such a way as to  require duplicative, costly, and time-consuming 
testing and certifications. In addition, not all stak eholders and interested parties are involved in the 
development of new standards. Were China to join the 1958 Agreement, both its  industry and those of 
the many other member countries would benefit fro m reciprocal recognition of testing and from 
avoidance of duplicative measures wh ich increase barriers to trade. 
18. The CCC mark must be affixed on tires (car and truck), safety belts and safety glasses, 
although the Chinese standards are equivalent to th e UN regulations and, therefore, the UN approval 
marks should be accepted as an alternative to the CCC mark. 
• The EU strongly recommends that China accedes to the 195 8 UN Agreement and to as 
many of the existing Regulations under that Agreement as possible. 
                                                      
1 For example, in the case of notification G/TBT/N/CHN/26 on frontal impact protection for 
passengers, the standard is claimed to be based on an earlier version of UN Regulation 94, but with additions from an unrelated Japanese standard which tests frontal  impact in a different way. The result is an unclear 
‘hybrid’ test which will require additiona l, different, and duplicative testing. G/TBT/W/242 
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 (ii) Notification, adoption and implementation of technical regulation 
19. China has issued a relatively large number of TBT notifications relating to the automobile 
industry (five in 2004), some of which are lengthy  and constitute fundament al legislation for the 
industry, covering basic provisions of vehicle constr uction, safety, and fuel consumption. The EU has 
identified a number of areas of concern about these notifications. 
20. Concerning notification of technical regula tion, updates of “implementation rules for 
compulsory certification of motor vehicles” are a nnounced with short notice and are enforced without 
sufficient lead time. Official English translations are not always available and not always in time. 
21. Concerning implementation of notified regulati ons, apparently it varies depending on the 
implementing agency. In some instances it appears that there may be three or four agencies or 
organisations involved in a gi ven regulation from its drafting through to its implementation
2, and the 
differing definitions or interpretations applied by each of them may result in possibly unintentional 
obstacles to trade. 
• The EU would be grateful if all Chinese authorities involved in not only the drafting 
but also the implementation of regulations could be involved in the notification and 
dialogue processes with the industrial stakeholders. 
III. COSMETICS 
22. The main concerns in this area relate to: 
(i) Registration of cosmetic products 
23. Currently importers have to file an applicati on with the Ministry of Health to obtain a pre-
market registration, which is le ngthy (6-9 months), onerous (bet ween $ 1300 and $ 3200) and requires 
the disclosure of confidential data (formula or manufacturing process). On the other hand, domestic 
producers simply notify the local authorities two months after the launch of the product. 
24. In addition, AQSIQ requires a pre-import regist ration for imported cosmetics. This procedure 
is expensive, takes time and, for products marketed outside Beijing, it must be repeated at local level. 
• The EC asks China to ensure that, in line with its WTO commitments, the 
discrimination between domestic and fo reign products be ceased forthwith. 
• The EC would appreciate it, if China coul d phase out the current double registration 
system for imported cosmetics (Ministry of Health and AQSIQ). 
(ii) Labelling of cosmetic products 
25. For the time being, new products are required to b ear a label that gives a literal translation of 
the original label. However, sometimes the Chin ese authorities oppose the assertions and advertising 
on the label. With specific reference to the adve rtising, there are several provisions sometimes 
contradicting each other. 
                                                      
2 A policy may be developed by the National Development and Reform Commission, for example, for 
which regulations are drafted by AQSIQ or CNCA, which is applied to imported goods by the Customs authorities, who understand a particular product defin ition or other aspect of the regulation differently from 
CNCA. It is thus very difficult for industry to obtain clear guidance on how to comply with regulations.  G/TBT/W/242 
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 • The EC requests China to reconsider its legi slation on labelling and advertising in order 
to achieve transparency, compliance with global practice and a rule-based system. 
(iii) BSE issues 
26. The EC has already made specific comments in  the SPS Committee with regard to restrictive 
measures adopted in relation to BSE emergency. In this context, fruitful dialogue between China and 
the EC has already brought about the de facto  removal of BSE-related trade impediments. However, 
some burdensome administrative requirements to expor t EU products to China are still in place. Given 
the well established fact that European cosmetic  products are safe and abide by the WTO guidelines 
with respect to BSE, 
• the EC asks the Chinese authorities to consider lifting the administrative requirements 
for cosmetic products originating from the EU. 
IV. PHARMACEUTICAL 
27. With regard to pharmaceuticals, the main issues at stake are: 
(i) Active pharmaceutical ingredients (API): requirements 
28. The issue of API was raised at the last TRM. However, the statement by China replying to the 
submissions by other WTO members was not satisfactory regarding the issue of APIs. 
29. The requirements and specifications, including test methods, for the drug import registration 
certificate (IDC) applications for APIs issued by the State Food and Drug Administration (SFDA) are 
not the same as the ones in the Chinese Pharmacopoe ia, but in some cases stricter than those for 
domestic Chinese products. 
30. Article 15.5 of the Chinese “Provision Governing Import Drugs” stating that drugs should not 
be approved for import registration if their ‘qualit y index’ was lower than the one for the same 
products of another company that already holds an IDC has been repealed. Ho wever, in practice there 
is still discrimination against foreign producers.  Domestic producers only have to meet the 
requirements established in the Chinese Pharmacopoeia, whilst EU exporters have to meet at least the 
same standards of other APIs previously registered. Thus, standards for IDCs are continuously rising.  
• The EC would be grateful if China could en sure that the national authorities implement 
the newly enacted rules in conformity with the obligations under Article 2.1 of the TBT 
Agreement. In particular, China should ensure  that APIs imported from the territory of 
any WTO Member should be accorded treatment  no less favourable than that accorded 
to domestically produced APIs. 
(ii) Active pharmaceutical ingredients (API): registration 
31. Companies face additional difficulties and long waiting periods to obtain an IDC. In this 
context, the EC would be grateful if China could: 
• ensure that the relevant procedures are unde rtaken and completed as expeditiously as 
possible according to Articles 5.2.1 of the TBT Agreement; 
• ensure that information requirements ar e limited to what is necessary and 
confidentiality of information is respected  in a manner that legitimate commercial G/TBT/W/242 
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 interests are protected at both national and lo cal levels according to Articles 5.2.3 and 
5.2.4 of the TBT Agreement; 
• ensure that the Port Drug Inspection Fee co mplies with the requirements of Article 
5.2.5 of the TBT Agreement in terms of reflecting the real cost of certification and do not discriminate between dom estic and imported products. 
(iii) Active pharmaceutical ingredients (API): transparency 
32. When applying for an IDC for a new API, the exporter does not know the internal 
specifications required by the State Drug Administration (SDA) for each product. Those specifications are frequently changing (getting st ricter) without any external communication or 
consultation about the changes, creating a clear lack of legal certainty. 
• China is requested to ensure consistency of standards used for APIs in the IDC 
requirements and to respect the transparency ob ligations set in Article 2.9 and 5.6 of the 
TBT Agreement in order to allow for comment s and to enable interested parties to 
become acquainted with new technical requirements. 
(iv) Monitoring period for products manufactured in China for the first time 
33. As regards the monitoring period stipulated by Section 4 (Art. 70-79) of the Drug Registration 
Regulation, the regulation provides a period up to five years of de facto  market exclusivity for drugs 
that are produced in China for the first time, re gardless of whether and for how long the drug may 
already have been marketed in/imported into China. 
34. The EC acknowledges the need to ensure a hi gh level of drug safety by implementing a 
pharmacovigilance scheme. However, the Chinese measures potentially prevent the access of the 
originator’s (normally the non-Chinese competitor) drugs from serving the Chinese market since the 
monitoring period grants a market exclusivity to th e company which is the first to manufacture the 
product in China, irrespective of the fact that  the product may be already imported by another 
(presumably foreign) company. This legal provisi on inherently discriminates against (non-Chinese) 
importers. 
• China is requested to ensure that its legi slation is amended in a way that products 
imported from abroad can enter the Chinese market although a product containing the 
same active ingredient is manufactured in Ch ina for the first time. China has to put in 
place legislation which ensures that any pharmaceutical product imported from the 
territory of any WTO Member is accorded treatment no less favourable than that accorded to domestica lly produced products. 
V. FOODSTUFF (LABELLING, STANDARDS FOR WINE AND SPIRITS) 
35. The EC notes that some improvement has b een made on food labelling. However, many 
issues still remain open and require further clarificat ion, notably as regards registration procedures for 
labelling. In this context, the EC would ask China to: 
• apply transparent criteria for the appr oval of labels. In particular, the date of 
manufacture  indication for wines and spirits s hould follow international practice and 
the listing of ingredients/additives should in clude exemptions for one single ingredient 
spirits drinks;  G/TBT/W/242 
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 • allow economic operators to decide how to present the required Chinese-language 
information on the product label(s) as long as the objective of consumer information is 
met, for instance requiring mandatory information in Chinese to be of a minimum size 
for purposes of legibility, but not linking the size of characters in foreign language to 
the size of Chinese words; 
• guarantee that only the trademark owner/producer  could apply for the label, in order to 
protect products against counterfeiting. 
 
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