G/VAL/W/347  
 
23 October 2019  
(19-6954) Page: 1/2 
Committee on Customs Valuation  Original: English  
 
NOTIFICATIONS UNDER ARTICLE 22 OF THE CU STOMS  
VALUATION AGREEMENT  
CHINA 
Replies from China to Questions from the United States  
contained in document G/VAL/W/332  
The following submission, dated 21 October 2019, is being circulated at the request of the delegation 
of China.  
 
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Question  
We thank China for its replies to Question 3. Could China please clarify where 
Interpretative Note to Article 1, Paragraph 2(a) is implemented in China's customs law? 
That Note provides that the circumst ances of sale should not be examined in every case, 
and the transaction value shall be accepted provided that the relationship between the 
buyer and seller did not influence the price.  Article 14 of the WTO Customs Valuation 
Agreement (CVA) states that th e Interpretative Notes at Annex I, as well as Annexes II 
and III, form an integral part of the CVA, and that the articles of the CVA are to be read 
and applied in conjunction with their respective notes.    
Answer:  
China would like to thank the United State s for its concerns about our Customs valuation rules - 
Decree No. 213. Regarding the follow -up question posed by the United States, we wish to provide 
our replies as follows.  
The principles contained in Paragraph 2(a) of the Interpretative Note to Article 1, the circumstances 
of sale should not be examined in every case and the transaction value shall be accepted provided 
that the relationship between the buyer and seller did not influence the price , are reflected in 
Article s 44, 17 and 18 of Decree No. 213 . 
Article 44 of Decree No. 213 provides that "Where the Customs has doubts about the truth or 
accuracy of the value declared by the duty payer, or considers the relationship between the buyer 
and seller did influence the price, Customs shall issue Notice t o Query Declared Value by Customs 
of People's Republic of China (hereinafter referred as Notice to Query Declared Value; see Annex II 
of the said Rules) and notify the duty payer or his agent of the grounds for doubts in written form. 
The duty payer or his  agent shall, within five working days from the date of receipt of Notice to 
Query Declared Value, provide related documents or other evidence in writing that could 
demonstrate the truth or accuracy of the declared value or the declared value not being inf luenced 
by the relationship between the buyer and seller."  
Therefore, not every case regarding related party transactions is examined for valuation purposes 
in China. Such examination will be conducted only when Customs has reasons to doubt that the 
relationship between the buyer and seller influenced the price. In that case, a query process will be 
initiated and the importer is required to provide related documents or other evidence for Customs 
examination.  G/VAL/W/347  
 
- 2 - 
 
  When examining related party transactions, China  Customs will first apply Article 17 which provides 
for the use of test values and conduct price comparison in this regard. If the importer can 
demonstrate that the transaction value closely approximates to the one of the test values as set out 
in Article 17, it would be deemed that no influence exist and the value is acceptable for Customs 
valuation purposes.  
If the importer cannot provide any test value, Customs will then consider the examination of 
circumstances surrounding the sale as specified in Artic le 18. Based on examination, the transaction 
value shall be accepted provided that the relationship between the buyer and seller did not influence 
the price.  
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