G/VAL/W/315  
 
12 November 2018  
(18-7129) Page: 1/3 
Committee on Customs Valuation  Original: English  
 
NOTIFICATIONS UNDER ARTICLE 22 OF THE CU STOMS  
VALUATION AGREEMENT  
Questions from the United States to China regarding G/VAL/N/1/CHN/ 6 
The following submission, dated 9 November 2018, is being circulated at the request of the 
delegation of the United States.  
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Below please find questions from the United States regarding the notification from China in 
G/VAL/N/1/CHN/6.  
Question 1  
Article 4 of Chapter I  (General Provisions)  of The Rules of the General Administration of Customs of 
the Peop le's Republic of China Regarding Determination of Customs Value of Imported and Exported 
Goods  states, in part, that Customs "shall not disclose [confidential information] outside Customs, 
unless otherwise provided for by laws or administrative regulations ." 
In response to a previous question  from the United States , in G/VAL/W/184, China indicated that 
any information relating to the determination of customs value, which is by its nature confidential, 
shall not be disclosed to any third parties outside cust oms unless in some cases as provided by 
Article 30 of the Lawyer Law of the People 's Republic of China  or Article 45 of the Criminal Procedure 
Law of the People 's Republic of China . 
Does China provide procedures that a lawyer participating in litigation, t he People 's Court, the 
People 's Procuratorates, and the public security organs must follow to obtain access to confidential 
information?   
Or, do Articles 30 of the Lawyer Law and 45 of the Criminal Procedure Law provide for the automatic 
disclosure of the  confidential information to those persons? If so, in which circumstances is disclosure 
automatic?   
If there are procedures that must be followed, rather than automatic disclosure, can China please 
describe the procedures and identify the legal basis for those procedures?  
Question 2  
Article 6 (Chapter II, Section I) of The Rules of the General Administration of Customs of the People's 
Republic of China Regarding Determination of Customs Value of Imported and Exported Goods  
provides that the order of the ap plication of deductive value and computed value "could be reversed, 
provided that sufficient information has been submitted to the Customs. " 
Please explain how Article 6, which requires "sufficient information " in order to reverse the order of 
deductive an d computed value, reflects Article 4 of the CVA, which provides that the order of 
application of deductive value and computed value "shall be reversed " "at the request of the 
importer. " G/VAL/W/315  
 
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  Question 3  
Article 18 (Chapter II , Section IV) of The Rules of the General Administration of Customs of the 
People's Republic of China Regarding Determination of Customs Value of Imported and Exported 
Goods  states that "[h]aving examined the circumstances surrounding the sale, where it can be 
shown that the price of the i mported goods has been settled in a manner consistent with the normal 
business practice, Customs may determine that the price has not been influenced by the 
relationship. " 
Please explain how Article 18 implements Interpretative Note to Article 1, Paragraph  2(3) of the 
CVA, which provides:   
"Where the customs administration is unable to accept the transaction value without further 
inquiry, it should give the importer an opportunity to supply such further detailed information 
as may be necessary to enable it  to examine the circu mstances surrounding the sale.  In this 
context, the customs administration should be prepared to examine relevant aspects of the 
transaction, including the way in which the buyer and seller organize their commercial 
relations and the way in which the price in question was arrived at, in order to determine 
whether the relationship influenced the price.  Where it can be shown that the buyer and seller, 
although related under the provisions of Article 15, buy from and sell to each other as  if they 
were not related, this would demonstrate that the price had not been influenced by the 
relationship.  As an example of this, if the price had been settled in a manner consistent with 
the normal pricing practices of the industry in question or with the way the seller settles prices 
for sales to buyers who are not related to the seller, this would demonstrate that the price 
had not been influenced by the relationship.  As a further example, where it is shown that the 
price is adequate to ensure recover y of all costs plus a profit which is representative of the 
firm's overall profit realized over a representative period of time (e.g. on an annual basis) in 
sales of goods of the same class or kind, this would demonstrate that the price had not been 
influe nced. " 
Can China further explain their process for determini ng "circumstances of the sale?" Is there a legal 
test for this circumstance to pass? Can China further elaborate on what is meant by "normal business 
practice?"  
Question 4  
Article 22 (Chapter II, Section V) of The Rules of the General Administration of Customs of the 
People's Republic of China Regarding Determination of Customs Value of Imported and Exported 
Goods  states that, in the context of transaction value of identical or similar goods, "the transaction 
value of the identical or similar goods produced by the same manufacturer shall be used in the first 
place. " 
Can China explain the meaning of "in the first place " in this context , and explain how th e requirement 
to use the value of goods produced by the same manufacturer "in the first place" is consistent with 
Articles 2 and 3 of the CVA?  
Question 5  
Article 24(a) (Chapter II, Section V) of The Rules of the General Administration of Customs of the 
People's Republic  of China Regarding Determination of Customs Value of Imported and Exported 
Goods  provides for the deduction of "profit, general expenses (either direct or indirect) and 
commissions usually paid …" in the context of deductive value.  
Article 5 .1 (a)(i) of th e CVA provides for the deduction of "either  the commissions usually paid or 
agreed to be paid or the additions usually made for profit and general expenses in connection with 
sales in such country of imported goods of the same class or kind. " (Emphasis add ed). 
Can China please clarify Article 24(a), which appears to provide for the deduction of profit, general 
expenses, and commissions, in light of Article 5.1  (a)(i) of the CVA?  G/VAL/W/315  
 
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  Question 6  
Article 25(b) (Chapter II, Section V) of The Rules of the General Administration of Customs of the 
People's Republic of China Regarding Determination of Customs Value of Imported and Exported 
Goods  provides for the addition of "the profit and general expenses (either direct or indirect) of the 
goods of the same class or kind as the imported goods being valued which are sold for export to the 
Customs territory of the People 's Republic of China. " 
Can China explain the meaning of "either direct or indirect " expenses in the context of Article 25(b)?  
Can China also explain how  Article 25(b) implements  CVA Article 6 .1(b)?  Article 6.1(b)  requires that 
the profit and general expenses to be applied under the computed value method be based on "equal 
to that usually reflected in sales of goods of the same class or kind as the goods being valued which 
are made by producers in the country of exportation  for export to the country of importation " 
(emphasis added).  
Question 7  
Articles 26 and 27 (Chapter II, Section V) of The Rules of the General Administration of Customs of 
the People's R epublic of China Regarding Determination of Customs Value of Imported and Exported 
Goods  appear to be related to Article 7 of the CVA.  
Can China explain how Articles 26 and 27 implement the Interpretative Note to Article 7 of the CVA?   
How do Articles 26 and 27 reflect that , as explained in the Interpretative Note to Article 7,  customs 
values determined under Article 7 of the CVA "should, to the greatest extent possible, be based on 
previously determined customs values "? 
How do Articles 26 and 27 reflect t hat, as explained in the Interpretative Note to Article 7, "[t]he 
methods of valuation to be employed under Article 7 should be those laid down in Articles 1 through 
6 but a reasonable flexibility in the application of such methods would be in conformity w ith the aims 
and provisions of Article 7. "? 
Question 8  
Article 52 of The Rules of the General Administration of Customs of the People's Republic of China 
Regarding Determination of Customs Value of Imported and Exported Goods  provides that "[t]he 
duty paye r who dissents from the decision made by the Customs on the Customs valuation of goods 
in question shall pay duties and taxes first according to relevant administrative decisions made by 
Customs, and may submit an appeal for administrative reconsideration …" 
Article 11 of the CVA provides for the right of appeal of a determination of customs value without 
penalty.  Please  confirm that duty payers  in China  may appeal Customs ' determinations without 
penalty .   
Paragraph 3 of Article 11 of the CVA also provides that "[n]otice of the decision on appeal shall be 
given to the appellant and the reasons for such decision shall be provided in writing. The appellant 
shall also be informed of any rights of further appeal ."  Can China please identify  where this provision 
is implemented in China 's customs law?  
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