G/STR/N/15/TPKM  
 
9 September 2014  
(14-5083)  Page: 1/9  
Working Party on State Trading Enterprises  Original: English  
 
STATE TRADING 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVII:4(A) OF THE  
GATT 1994 AND PARAGRAPH 1 OF THE UNDERSTANDING ON  
THE INTERPRETATION OF ARTICLE XVII 
SEPARATE CUSTOMS TERRITORY OF TAIWAN ,  
PENGHU , KINMEN AND MATSU 
The following communication, dated 5 September 2014,  is being circulated at the request of the 
Delegation of Separate Customs Territory  of Taiwan, Penghu, Kinmen and Matsu. 
 
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 G/STR/N/15/TPKM 
 
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 TABLE OF CONTENTS 
1   RICE ...................................................................................................................... ...... 3 
2   BANKNOTE PAPER ....................................................................................................... 4  
3   TRADE ..................................................................................................................... .... 6 
 
 G/STR/N/15/TPKM 
 
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 1  RICE 
1.1  Enumeration of State Trading Enterprises 
1.1.1  Identification of state trading enterprises 
Agriculture and Food Agency, Council of Agricult ure (hereinafter referred to as the "AFA").  
 
1.1.2  Description of products affected (inc luding tariff item number(s) encompassed in 
product description) 
RICE 
Products HS Number 
Rice in the husk 1006.10.00.00 
Husked (brown) rice 1006.20.00.00 
Glutinous rice 1006.30.00.10 
Other semi-milled or wholly-milled rice, whether or not polished or glazed 1006.30.00.90 
Broken rice 1006.40.00.00 
 
1.2  Reason and Purpose 
1.2.1  Reason or purpose for establishing and/or maintaining state trading enterprise 
Rice is the staple food and most important crop in the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu. The government regu lates the production, purchasing, warehousing, 
export and import of rice to ensure food security, market stability and income security of farmers.  
1.2.2  Summary of legal basis for granting th e relevant exclusive or special rights or 
privileges, including legal provisions and summa ry of statutory or constitutional powers 
Food Administration Act. 
 
1.3  Description of the Functionin g of the State Trading Enterprises 
1.3.1  Summary statement providing overvi ew of operations of the state trading 
enterprise 
The rice production in the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu is 
undertaken to maintain self-sufficiency. To ensure a stable food supply and maintain the income of farmers, the AFA purchases a portion of the rice paddies owned by farmers to serve as food 
security stock. Most of the rice produced enters the market freely.  
 The AFA imports rice to ensure the smooth op eration of supply and demand, and the price 
stabilization system. The quota on imported rice is set according to the minimum access 
opportunities in line with the TRQ notification to the WTO of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu.   
Rice importation, which is conducted through open bidding, is subject to both country-specific-
quotas and the global quota.  
1.3.2  Specification of exclus ive or special rights or privileges enjoyed by the state 
trading enterprise 
The AFA is in charge of agricultural policy and administration, food security and staple food price 
stabilization. According to the commitments made  by the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu for its TRQ notification to the WTO, in addition to importation by private sector traders, the AFA retains the exclusive right to import certain amounts of rice. G/STR/N/15/TPKM 
 
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1.3.3  Type of entities other than the state trading enterprise that are allowed to engage 
in importation/exportation and conditions for participation 
Food dealers who are registered importers can part icipate in the allocation of rice quotas for 
private imports.  
 
1.3.4  How import/export levels are esta blished by the state trading enterprise 
The AFA will import 65 per cent of the rice tariff quota. Rice importation by the AFA is conducted 
according to commitments made during accession to the WTO.  
 1.3.5  How export prices are determined 
This item is not applicable to the AFA.  
 
1.3.6  How the resale prices of imported products are determined 
The resale prices are determined on the basis of their import prices, management costs, domestic 
consumer prices of competing products and other economic factors.  
 1.3.7  Whether long-term contracts are nego tiated by the state trading enterprise. 
Whether the state trading enterprise is used to fulfil contractual obligations entered into 
by the government 
The AFA makes no long-term contracts for rice importation. Opportunities are provided to all 
qualified importers.  
 
1.3.8  Brief description of market structure 
Farmers and traders are free to sell their products in  the market. The price of rice is determined by 
market forces.  
 1.4  Statistical Information 
(See attached Tables I-III on Rice) 
 1.5  Reason why no Foreign Trade has taken Place 
Not applicable.  
 
1.6  Additional Information 
None. 
 
2  BANKNOTE PAPER 
2.1  Enumeration of State Trading Enterprises 
2.1.1  Identification of state trading enterprises 
Central Engraving and Printing Plant (CEPP).  
 2.1.2  Description of products affected (inc luding tariff item number(s) encompassed in 
product description) 
Banknote paper (4802100020-6, 4802699010-9, 4802691010-6).  
 G/STR/N/15/TPKM 
 
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 2.2  Reason and Purpose 
2.2.1  Reason or purpose for establishing and/or maintaining state trading enterprise 
The purpose for maintaining this state trading enterprise is to stabilize financial markets and to 
prevent counterfeiting through the use of banknote paper.   
2.2.2  Summary of legal basis for granting th e relevant exclusive or special rights or 
privileges, including legal provisions and summa ry of statutory or constitutional powers 
The sole right of printing currency is stipulated in Article 13 of the Central Bank of China Act. The 
sole importer of banknote paper is stipulated in Code 343 of Tariff Code.  
 2.3  Description of the Functionin g of the State Trading Enterprises 
2.3.1  Summary statement providing overvi ew of operations of the state trading 
enterprise 
The CEPP was established by the Central Bank of China and is solely responsible for printing 
currency.  
 
2.3.2  Specification of exclus ive or special rights or privileges enjoyed by the state 
trading enterprise 
The CEPP has exclusive rights to print currency and to import banknote paper.  
 2.3.3  Type of entities other than the state trading enterprise that are allowed to engage 
in importation/exportation and conditions for participation 
No other entities are allowed to import banknote paper.  
 2.3.4  How import/export levels are esta blished by the state trading enterprise 
The quantities imported are determined by the actual domestic need.  
 2.3.5  How export prices are determined 
Not applicable because the CEPP does not produce banknote paper for export. 
 2.3.6  How the resale prices of imported products are determined 
Not applicable because the CEPP does not resell imported banknote paper.  
 
2.4  Statistical Information 
(See attached Tables IV on Banknote).  
 
2.5  Reasons why no foreign Trade has taken Place 
Not applicable.  
 
2.6  Additional Information 
None. 
 G/STR/N/15/TPKM 
 
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 3  TRADE 
3.1  Enumeration of State Trading Enterprises 
3.1.1  Identification of state trading enterprises 
Bank of Taiwan (hereinafter referred to as the BOT).  
 
3.1.2  Description of products affected (inc luding tariff item number(s) encompassed in 
product description) 
Sixteen items of agricultural products which are subj ect to tariff rate quota (hereinafter referred to 
as TRQ): deer velvet, fresh pears (excluding European pears), bananas, red beans, liquid milk, 
peanuts, garlic bulbs, dried shiitake, dried day lilies, young coconuts, betel nuts, pineapples, mangoes, pomelos, dried longans and longan pulp, and rice (including rice products). For the tariff item numbers of specific products, see the attachment.  
 
3.2  Reason and Purpose 
3.2.1  Reason or purpose for establishing and/or maintaining state trading enterprise 
The BOT merged with the Central Trust of China (CTC) on 1 July 2007 and consequently 
succeeded to the CTC's operations entrusted by the Ministry of Finance (MOF) to administer the allocation of TRQs.  
 
3.2.2  Summary of legal basis for granting th e relevant exclusive or special rights or 
privileges, including legal provisions and summa ry of statutory or constitutional powers 
Rules Governing the Implementation of Tariff Quotas.  
 
3.3  Description of the Functionin g of the State Trading Enterprises 
3.3.1  Summary statement providing overvi ew of operations of the state trading 
enterprise 
The BOT is entrusted by the MOF to administer the allocation of tariff rate quotas (TRQs) for 16 
items of agricultural products as enumerated in Section I-B of the Schedule of Concessions and 
Commitments on Goods.  
 Rice and rice products have been subject to TRQs since 2003.   
3.3.2  Specification of exclus ive or special rights or privileges enjoyed by the state 
trading enterprise 
The BOT is entrusted by the MOF to administer the allocation of TRQs for 16 agricultural products. 
This includes the allocation of tariff quotas and the issuance of tariff quota certificates. The 
certificates serve as import licences. All commercial terms of trade, including product specifications, origin, pricing and packaging, are at the sole discretion of the parties engaged in 
the transaction. Moreover, all products imported under the tariff rate quota should be distributed 
freely within the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu without further trade-based restrictions.   
3.3.3  Type of entities other than the state trading enterprise that are allowed to engage 
in importation/exportation and conditions for participation 
- Fifteen items of TRQ products, excluding rice and rice products: Any enterprise 
registered as an importer/exporter in the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu is eligible to apply for a certificate under each quota allocation system.  G/STR/N/15/TPKM 
 
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 - Rice and rice products: Any enterprise registered as an importer/exporter and 
food dealer in the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu is eligible to for a certificate under the quota allocation system.  
3.3.4  How import/export levels are esta blished by the state trading enterprise 
The quantity imported is determined by the demand of the domestic market.  
 
3.3.5  How export prices are determined 
This item is not applicable to the BOT.  
 
3.3.6  How the resale prices of imported products are determined 
The resale prices are determined by importers and subject to market forces.  
 
3.3.7  Whether long-term contracts are nego tiated by the state trading enterprise. 
Whether the state trading enterprise is used to fulfil contractual obligations entered into 
by the government 
There are no long-term contracts for TRQ products (including rice quotas).  
 3.3.8  Brief description of market structure 
Farmers and traders are free to sell their produc ts in the market. The price is determined by 
market forces.   3.4  Statistical Information 
Not available. 
 3.5  Reason why no Foreign Trade has taken Place 
Not applicable. 
 3.6  Additional Information 
None.  
 G/STR/N/15/TPKM 
 
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  TABLE I 
STATE TRADING: AGRICULTURE AND FOOD AGENCY, COUNCIL OF AGRICULTURE, EXECUTIVE 
YUAN STATISTICAL INFORMATION, IMPORTS 
Description of 
product(s) 
(including HS 
number(s)) Total 
quantity 
imported 
(1000 Mt) Quantity 
imported by 
state trading 
enterprise 
(1000 Mt) Average 
import 
price Average 
representative 
domestic sales 
price Mark-
up National 
production 
(brown 
rice) 
(1000 Mt) 
1 2 3 4 5 6 7 
Rice 2011 131.7 72.9    1,347.8 
2012 156.8 103.5    1,368.2 
TABLE II 
STATE TRADING: AGRICULTURE AND FOOD AGENCY, COUNCIL OF AGRICULTURE, EXECUTIVE 
YUAN STATISTICAL INFORMATION, EXPORTS 
Description of 
product(s) 
(including HS 
number(s)) Total 
quantity 
imported 
(1,000 
Mt) Quantity 
imported by 
state trading 
enterprise 
(1,000 Mt) Average 
import 
price Average 
representative 
domestic sales 
price Mark-
up National 
production 
(brown 
price) 
(1,000 Mt) 
1 2 3 4 5 6 7 
Rice 2011 19.2 0    1,347.8 
2012 24.8 0    1,362.2 
TABLE III 
STATE TRADING: AGRICULTURE AND FOOD AGENCY, COUNCIL OF AGRICULTURE, 
EXECUTIVE YUAN 
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES 
Description of 
product(s) (including 
HS number(s)) Domestic purchases 
by state trading 
enterprise 
(paddies) 
(1000 Mt) National 
production 
(brown rice) 
(1000 Mt) Domestic sales by 
state trading 
enterprise 
(brown rice) 
(1000 Mt) National 
supply 
(brown 
rice) 
(1000 Mt)  
1 2 3 4 5 
Rice 2011 390 1,347.8 201.7 1,246.1 
2012 456 1,368.2 328.1 1,279.4 
TABLE IV 
STATE TRADING: CENTRAL ENGRAVING AND PRINTING PLANT 
STATISTICAL INFORMATION, IMPORTS 
unit: ream 
Description of 
product(s) 
(including HS 
number(s)) Total 
quantity 
imported Quantity 
imported by 
state trading 
enterprise Average 
import 
price Average 
representative 
domestic sales 
price Mark-
up National 
production 
1 2 3 4 5 6 7 
Banknote 
Paper 
(4802) 2012 73,134 73,134    0 
2013 88,401 88,401    0 G/STR/N/15/TPKM 
 
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  TRQ Products Tariff Item Number 
Deer velvet 05079020 
Fresh pears (excluding 
European pears) 08083090 
Bananas 08031000, 08039000 
Red bean 07102910, 07133200, 11061010, 20049010, 20060011, 20055110, 
20060025, 20055910 
Liquid milk 04011010, 04012010, 04011020, 04012020, 04029910, 04029920, 
04029992, 04039059, 04039029, 04039090, 04039040, 18069053, 19019025, 18069055, 19019027, 04014010, 04014020, 04015010, 04015020 
Peanuts 20081111, 20081191, 20081112, 20081192, 20081942, 12089011, 
12089021, 15081000, 15089000, 12023010, 12024100, 12023020, 
12024200 
Garlic bulbs 07032010, 07032090, 07129040 
Dried shiitake 07123920 
Dried day lily 07129050 
Young coconut 08011900, 08011200 
Betel nuts 08028000 
Pineapples 08043000 
Mangoes 08045020 
Pomelos 08054020 
Dried longans and longan Pulp 08134010 
Rice and Rice Products 10061000, 10062000, 10063000, 10064000, 11029011, 11029019, 
11031930, 11032010, 11041910, 11042920, 11081910, 18069071, 19023020, 19041020, 19042011, 19042021, 19021110, 19021910, 
19022010, 18069061, 19049010, 18069092, 19019091, 21069098 
 
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