G/STR/N/17/TPKM  
27 November  2018 
(18-7468) Page: 1/10 
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 2 2 November  2018, is being circulated at the request of the 
Delegation of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu.  
 
_______________  
 
 
  G/STR/N/17/TPKM  
- 2 - 
  TABLE OF CON TENTS  
1  RICE  ................................ ................................ ................................ .............................  3 
2  BANKNOTE PAPER  ................................ ................................ ................................ ........  4 
3  TRADE  ................................ ................................ ................................ ..........................  6 
 
  G/STR/N/17/TPKM  
- 3 - 
  1  RICE  
I. ENUMERATION OF STATE TRADING ENTERPRISES  
 
A. Identification of state trading enterprises  
 
Agriculture and Food Agency, Council of Agriculture (hereinafter referred to as the " AFA"). 
 
B. Description of products affected (including tariff item number(s) encompassed in 
product description)  
 
Rice 
Prod ucts 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  
 
II. REASON AND PURPOSE  
 
A. 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 regulates the production, purchasing, warehousing, export and 
import of rice to ensure food security, market stability and  income security of farmers . 
 
B. Summary of legal basis for granting the relevant exclusive or special rights or privileges, 
including legal provisions and summary of statutory or constitutional powers  
 
Food Administration Act.  
 
III. DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISE  
 
A. Summary statement providing overview 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 maint ain 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 ensu re the smooth operation of supply  and demand, and the price 
stabilization system. The quota o n 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, Peng hu, Kinmen and Matsu.  
 
Rice importation , which is conducted through open bidding,  is subject to both country -specific -
quotas and the global quota . 
 
B. Specification of exclusive 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 ad dition to importation by private 
sector traders, the AFA retains the exclusive right to import certain amounts of rice.  
 G/STR/N/17/TPKM  
- 4 - 
  C. Type of entities other than the state trading enterprise that are allowed to engage in 
importation/exportation and conditions for pa rticipation  
Food dealers who are registered importers can participate in the allocation of rice quotas for private 
imports.  
D. How import/export levels are established by the state trading enterprise  
The AFA will import 65 % of the rice tariff quota. Rice i mportation by the AFA is conducted according 
to commitments made during accession to the WTO.  
 
E. How export prices are determined  
This item is not applicable to the AFA . 
 
F. 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.  
 
G. Whether long -term contracts are negotiated 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 . 
 
H. 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.  
 
IV. STATISTICAL INFORMATION  
(See attached Tables I -III on Rice)  
 
V. REASON WHY NO FOREIGN TRADE HAS TAKEN PLACE  
Not applicable.  
 
VI. ADDITIONAL INFORMAT ION 
None.  
2  BANKNOTE PAPER  
I. ENUMERATION OF STATE TRADING ENTERPRISES  
 
A. Identification of state trading enterprises  
Central Engraving and Printing Plant (CEPP).  
 
B. Description of products affected (including tariff item number(s) encompassed in 
product description)  
Banknote paper (4802100020 -6, 4802699010 -9, 48026 91010 -6). 
 G/STR/N/17/TPKM  
- 5 - 
  II. REASON AND PURPOSE  
A. Reason or purpose for establishing and/or maintaining state trading enterprise  
The purpose for maintaining this state trading enterprise is to stabilize financia l markets and to 
prevent counterfeiting through the use of banknote paper.  
B. Summary of legal basis for granting the relevant exclusive or special rights or privileges, 
including legal provisions and summary of statutory or constitutional powers  
The sole right for CEPP to import  banknote paper is stipulated in Code 343 of Tariff Code.  
III. DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISE  
A. Summary statement providing overview of operations of the state trading enterprise  
The CEPP was established by the central bank  and is solely responsible for printing currency.  
B. Specification of exclusive or special rights or privileges enjoyed by the state trading 
enterprise  
The CEPP has exclusive rights to print currency and to import banknote paper.  
C. 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.  
D. How import/export levels are established by the state  trading enterprise  
The quantities imported are determined by the actual domestic need.  
E. How export prices are determined  
Not applicable because  the CEPP does not produce banknote paper for export.  
F. How the resale prices of imported products are determined  
Not applicable because t he CEPP does not resell imported banknote paper.  
IV. STATISTICAL INFORMATION  
(See attached Tables I V on Banknote ) 
V. REASONS WHY NO FOREIGN TRADE HAS TAKEN PLACE  
Not applicable.  
VI. ADDITIONAL INFORMATION  
None.  G/STR/N/17/TPKM  
- 6 - 
  3  TRADE  
I. ENUMERATION OF STATE TRADING ENTERPRISES  
A. Identification of state trading enterprises  
Bank of Taiwan  (hereinafter referred to as the BOT). 
B. Description of products affected (including tariff item number(s) encompassed in 
product description)  
Sixteen  items of agricult ural products which are subject to tariff rate quota  (hereinafter referred to 
as TRQ): deer velvet , fresh pears (excluding European pears), banana s, red beans, liquid milk, 
peanuts, garlic bulbs, dried shiitake, dried day lil ies, young coconut s, 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.  
II. REASON AND PURPOSE  
A. 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 TRQ s. 
B. Summary of legal basis for granting the relevant exclusive or special rights or privileges, 
including legal provisions and summary of statutory or constitutional powers  
Rules Governing the Implementation of  Tariff Quotas.  
III. DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRIS E 
A. Summary statement providing overview of operations of the state trading enterprise  
The BOT  is entrusted by the MOF to administer the allocation of tariff rate quota s (TRQs) for 16 
items of agricultural products as enumerated in Section I -B of the Sche dule of Concessions and 
Commitments on Goods.  
Rice and rice products have been subject to TRQ s since 2003.  
B. Specification of exclusive or special rights or privileges enjoyed by the state trading 
enterprise  
The BOT  is entrusted by the MOF to administer t he 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 M atsu without further trade -based 
restrictions.  G/STR/N/17/TPKM  
- 7 - 
  C. 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 produ cts: 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.  
- 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.  
D. How import/export levels are established by the state trading enterprise  
The q uantity imported is determined by the demand of the domestic market.  
E. How export prices are determined  
This item is not applicable to the BOT. 
F. How the resale prices of imported products are determined  
The resale prices are determined by importers and subject to market forces.  
G. Whether long -term contracts are negotiated 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 ). 
H. Brief description of market structure  
Farmers and traders are free to sell their products in the market. The price is determined by market 
forces.  
IV. STATISTICAL INFORMATION  
Not available.  
V. REASON WHY NO FOREIGN TRADE HAS T AKEN PLACE  
Not applicable.  
VI. ADDITIONAL INFORMATION  
None.  
  G/STR/N/17/TPKM  
- 8 - 
 
TABLE I  
STATE TRADING: AGRICULTURE AND FOOD AGENCY, COUNCIL OF AGRICULTURE  
STATISTICAL INFORMATION, IMPORTS  
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 rice)  
(1,000 Mt)  
1 2 3 4 5 6 7 
Rice 2015 152.9  94.0    1,260.4  
2016 150.8  94.0    1,264.1  
 
 
TABLE II  
STATE TRADING: AGRICULTURE AND FOOD AGENCY, COUNCIL OF AGRICULTURE  
STATISTICAL INFORMATION, EXPORTS  
Description of product(s) 
(including HS number(s))  Total quantity 
exported  
(1,000  Mt) Quantity exported by 
state trading 
enterprise  
(1,000 Mt)  Average procurement 
price  Average representative 
domestic sales price  Average 
export price  National 
production  
(brown price)  
(1,000 Mt)  
1 2 3 4 5 6 7 
Rice 2015 93.3 0    1,260.4  
2016 104.6  0    1,264.1  
 
   
  G/STR/N/17/TPKM  
- 9 - 
 
TABLE III  
STATE TRADING: AGRICULTURE AND FOOD AGENCY, COUNCIL OF AGRICULTURE  
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES  
Description of product(s) 
(including HS number(s))  Domestic purchases by  
state trading enterprise  
(paddies)  
(1,000 Mt)  National 
production  
(brown rice)  
(1,000 Mt)  Domestic sales by state  
trading enterprise  
(brown rice)  
(1,000 Mt)  National 
consumption  
(brown rice)  
(1,000 Mt)  
1 2 3 4 5 
Rice 2015 363 1,260.4  459.2  1,217.8  
2016 398 1,264.1  430.6  1,188.5  
 
 
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)  2016 58,050  58,050     0 
2017 92,547  92,547     0 G/STR/N/17/TPKM  
- 10 - 
  TRQ Products  Tariff Item Number  
Deer velvet  05079020  
Fresh pears (excluding 
European pears)  08083090 
Banana s 08031010, 08031020, 08039010, 08039020  
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  
Peanut s 20081111, 20081191, 20081112, 20081192, 20081942, 12089011, 
12089021, 15081000, 15089000 , 12023010, 12024100, 12023020, 
12024200  
Garlic bulb s 07032010, 07032090, 07129040  
Dried shiitake  07123 920 
Dried day lily  07129050  
Young coconut  08011900 , 08011200  
Betel nuts  08028000 
Pineapples  08043010, 08043020  
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, 21 069098  
 
 
__________