WORLD TRADE  
ORGANIZATION   
WT/DS413/R 
16 July 2012 
 (12-3729) 
 Original:   English 
 
 
  
 
 
 
  
 
CHINA – CERTAIN MEASURES AFFECTING 
ELECTRONIC PAYMENT SERVICES 
 
 
 
Report of the Panel 
 
 
 
  
  WT/DS413/R 
 Page i 
 
 
  TABLE OF CONTENTS 
 
Page 
I.  INTRODUCTION .................................................................................................................. .. 1 
A.  COMPLAINT OF THE UNITED STATES  .......................................................................................... 1  
B.  ESTABLISHMENT AND COMPOSITION OF THE PANEL  .................................................................. 1  
C.  PANEL PROCEEDINGS  .................................................................................................................. 1  
1.  General ....................................................................................................................... ................ 1  
2.  Preliminary ruling on the consistency with Article 6.2 of the DSU of the United 
States' request for the est ablishment of a panel ..................................................................... 2  
3.  Translation issues ............................................................................................................ .......... 2 
II.  FACTUAL ASPECTS .............................................................................................................. 3 
III. PARTIES' REQUESTS FOR FIND INGS AND RECOMMENDATIONS......................... 4  
IV.  ARGUMENTS OF THE PARTIES ........................................................................................ 5  
V.  ARGUMENTS OF THE THIRD PARTIES .......................................................................... 5  
VI.  INTERIM REVIEW ................................................................................................................ . 5 
VII. FINDINGS ...................................................................................................................... ......... 11 
A.  PRELIMINARY RULING UNDER ARTICLE  6.2 OF THE DSU ......................................................... 11  
B.  GENERAL ISSUES  ....................................................................................................................... 12  
1.  Burden of proof ............................................................................................................... ........ 12 
2.  Treaty interpretation ......................................................................................................... ..... 13 
C.  THE SERVICES AT ISSUE  ............................................................................................................ 14  
1.  Payment card transactions .....................................................................................................  15 
2.  The services at issue ......................................................................................................... ....... 19 
3.  Whether the services at issue cover the th ree-party model in addition to the four-
party model ................................................................................................................... ........... 22  
4.  Whether the services at issue include  the services supplied by issuer and 
merchant processors ........................................................................................................... .... 25 
5.  Whether the services at issue are integrated services .......................................................... 26  
D.  CHINA 'S SPECIFIC COMMITMENTS CONCERNING THE SERVICES AT ISSUE  ................................ 28  
1.  Order of analysis of the subsecto rs identified by the parties .............................................. 29  
2.  Interpretation of subsector (d) in China's Schedule ............................................................ 30  
(a)  Ordinary meaning .............................................................................................................. ....... 30 
(i)  Ordinary meaning of "payment",  "money" and "transmission" ............................................... 31  
Dictionaries and glossaries ................................................................................................... .... 31 
Industry sources .............................................................................................................. .......... 32 
The expression "payment and money transmission services " ................................................... 34  
Ordinary meaning of "all" ..................................................................................................... .... 35 WT/DS413/R 
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  Summary of findings on the ordinary meaning of "all payment and money 
transmission services" ........................................................................................................ ....... 36 
(b)  Context ....................................................................................................................... ............... 36  
(i)  The rest of s ubsector (d) ..................................................................................................... ...... 36 
The phrase "including credit, charge and de bit cards, travellers cheques and bankers 
drafts" ....................................................................................................................... ................. 37  
The reference to "(including im port and export settlement)" ................................................... 38  
Summary of findings on the phrase "includi ng credit, charge and debit cards, 
travellers cheques and bankers drafts (i ncluding import and export settlement)" .................... 40  
(ii)  Other elements of China's Schedule.......................................................................................... 40  
The subheading "Banking services as listed belo w" in the sectoral column of China's 
Schedule ...................................................................................................................... .............. 40  
The market access commi tment under mode 1 ......................................................................... 43  
(iii) The GATS Annex on Financial Services ................................................................................... 44  
The scope of subsector (xiv) in the Annex ............................................................................... 44  
Subsector (x) of the Annex .................................................................................................... ... 51 
Summary of findings on the GATS A nnex on Financial Services ........................................... 52  
(iv)  The structure of the GATS ..................................................................................................... .... 52 
(v)  Schedules of other WTO Members ............................................................................................ 57  
(c)  Object and purpose ............................................................................................................ ....... 58 
(d)  Conclusion .................................................................................................................... ............ 59  
3.  Recourse to supplementary means of interpretation ........................................................... 60  
E.  THE MEASURES AT ISSUE  .......................................................................................................... 61  
1.  The specific measures at issue that form pa rt of the United States' challenge .................. 62  
(a)  Chinese legal instruments as the basis for th e existence of the measures at issue .................... 62  
(b)  The repeal or replacement of certain Chinese legal instruments .............................................. 64  
2.  Evaluation of the existence of the measures at issue ............................................................ 66  
(a)  Requirements on issuers that payment card s issued in China bear the CUP logo 
("issuer requirements") ....................................................................................................... ...... 68 
(i)  Preliminary translation issue ................................................................................................. ... 69 
(ii)  Document No. 37 ............................................................................................................... ....... 72 
(iii) Document No. 57 ............................................................................................................... ....... 73 
(iv)  Document No. 129 .............................................................................................................. ...... 74 
(v)  Document No. 219 .............................................................................................................. ...... 74 
(vi)  Document No. 76 ............................................................................................................... ....... 75 
(vii) Document No. 17 ............................................................................................................... ....... 77 
(viii) Yin Lian/UnionPay logo use requirement s versus interoperability requirements .................... 78   WT/DS413/R 
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  (ix)  Conclusions and implications .................................................................................................. . 80 
(b)  Requirements that all ATM, and POS terminals in China accept CUP cards ("terminal 
equipment requirements") ...................................................................................................... ... 82 
(i)  Document No. 17 ............................................................................................................... ....... 83 
(ii)  Document No. 37 ............................................................................................................... ....... 83 
(iii) Document No. 57 ............................................................................................................... ....... 84 
(iv)  Document No. 153 .............................................................................................................. ...... 85 
(v)  Document No. 149 .............................................................................................................. ...... 85 
(vi)  Document No. 76 ............................................................................................................... ....... 87 
(vii) Conclusions and implications .................................................................................................. . 87 
(c)  Requirements on acquiring institutions to  post the CUP logo and be capable of 
accepting all payment cards bearing the CUP logo ("acquirer requirements") ......................... 88  
(i)  Document No. 153 .............................................................................................................. ...... 89 
(ii)  Document No. 149 .............................................................................................................. ...... 90 
(iii) Document No. 37 ............................................................................................................... ....... 90 
(iv)  Document No. 76 ............................................................................................................... ....... 90 
(v)  Conclusions and implications .................................................................................................. . 91 
(d)  Requirements pertaining to card-based electronic transactions in China, Hong Kong 
and Macao ("Hong Kong/Macao requirements") ..................................................................... 92  
(i)  Document No. 16 ............................................................................................................... ....... 93 
(ii)  Document No. 8 ................................................................................................................ ........ 94 
(iii) Document No. 219 .............................................................................................................. ...... 95 
(iv)  Document No. 254 .............................................................................................................. ...... 96 
(v)  Conclusions ................................................................................................................... ............ 97  
(e)  Requirements that mandate the use of CUP and/or establish CUP as the sole supplier 
of EPS for all domestic transactions denominated and paid in RMB ("sole supplier 
requirement") and prohibitions on the use of  non-CUP cards for cross-region or inter-
bank transactions ("cross-region/inter-bank prohibitions") ...................................................... 97  
(i)  Document No. 37 ............................................................................................................... ....... 99 
(ii)  Document No. 57 ............................................................................................................... ..... 100 
(iii) Document No. 16 ............................................................................................................... ..... 100 
(iv)  Document No. 8 ................................................................................................................ ...... 101 
(v)  Document No. 219 .............................................................................................................. .... 101 
(vi)  Document No. 254 .............................................................................................................. .... 102 
(vii) Document No. 103 .............................................................................................................. .... 102 
(viii) Document No. 153 .............................................................................................................. .... 103 
(ix)  Document No. 149 .............................................................................................................. .... 106 
(x)  Document No. 53 ............................................................................................................... ..... 108 WT/DS413/R 
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  (xi)  Document No. 49 ............................................................................................................... ..... 111 
(xii) Document No. 129 .............................................................................................................. .... 111 
(xiii) Document No. 76 ............................................................................................................... ..... 112 
(xiv) Document No. 17 ............................................................................................................... ..... 117 
(xv) Document No. 142 .............................................................................................................. .... 118 
(xvi) Conclusions on the instruments individually .......................................................................... 120  
(xvii) Collective assessment of the le gal instruments at issue .......................................................... 121  
Explicit and implicit legal operation of the in struments when considered collectively .......... 123  
Technical barriers imposed through the instruments .............................................................. 125  
Economic barriers imposed by the instruments ...................................................................... 126  
Conclusions on collective assessment .................................................................................... 127  
(f)  Overall conclusions on the evaluation of th e existence of the measures at issue ................... 128  
F.  THE UNITED  STATES ' CLAIMS UNDER ARTICLE XVI  OF THE GATS ....................................... 129  
1.  Whether China has made mode 1 or mode 3 market access commitments 
covering the supply of EPS ................................................................................................... 130 
(a)  Mode 1 commitments ............................................................................................................ . 130 
(b)  Mode 3 commitments ............................................................................................................ . 139 
2.  Whether the measures at issue are inconsistent with Article XVI of the GATS ............. 150  
(a)  Whether the relevant requirements fall within  the scope of Article XVI:2(a) of the 
GATS .......................................................................................................................... ............ 151  
(b)  Whether the issuer, terminal equipment a nd acquirer requirements are inconsistent 
with Article XVI:2(a) of the GATS ........................................................................................ 154  
(c)  Whether the requirements pertaining to RMB card-based transactions taking place in 
China, Macao and Hong Kong are inconsiste nt with Article XVI:2(a) of the GATS ............ 157  
(d)  Whether China's requirements, when consid ered jointly, are inconsistent with 
Article XVI:2(a) of the GATS ................................................................................................ 1 61 
(e)  Whether the measures at issue are inconsis tent with Article XVI:1 of the GATS ................. 162  
3.  Conclusions ................................................................................................................... ......... 163  
(a)  China's commitment under mode 1 in Sector 7.B(d) of its Schedule ..................................... 163  
(b)  China's commitment under mode 3 in Sector 7.B(d) of its Schedule ..................................... 163  
(i)  Issuer, terminal equipmen t, acquirer requirements ................................................................ 163  
(ii)  Hong Kong/Macao requirements ............................................................................................ 164  
G.  THE UNITED STATES ' CLAIMS UNDER ARTICLE  XVII  OF THE GATS ..................................... 164  
1.  Analytical approach and scope of Article XVII findings .................................................. 165  
2.  China's requirements cons idered individually ................................................................... 166  
(a)  Whether China has undertaken relevant  national treatment commitments ............................. 166  
(i)  Mode 1 commitments ............................................................................................................ .. 166  WT/DS413/R 
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  General ....................................................................................................................... ............. 166  
Whether China has mode 1 national treatm ent commitments that apply to China's 
relevant requirements ......................................................................................................... ..... 172 
(ii)  Mode 3 commitments ............................................................................................................ .. 173 
General ....................................................................................................................... ............. 173  
Whether China has mode 3 national treatm ent commitments that apply to China's 
relevant requirements ......................................................................................................... ..... 174 
(b)  Whether China's requirements affect the supply of services .................................................. 175  
(c)  Whether China's requirements accord  less favourable treatment ........................................... 176  
(i)  Issuer requirements ........................................................................................................... ...... 177 
Different treatment of like ser vices and service suppliers ...................................................... 177  
Less favourable treatment ..................................................................................................... .. 181 
(ii)  Terminal equipment requirements .......................................................................................... 184  
Different treatment of lik e services and suppliers .................................................................. 184  
Less favourable treatment ..................................................................................................... .. 185 
(iii) Acquirer requi rements ......................................................................................................... ... 186 
Different treatment of like EPS suppliers ............................................................................... 186  
Less favourable treatment ..................................................................................................... .. 187 
(d)  Overall conclusions ........................................................................................................... ...... 189 
(i)  Hong Kong/Macao requirements ............................................................................................ 189  
(ii)  Issuer requirements ........................................................................................................... ...... 189 
(iii) Terminal equipment requirements .......................................................................................... 189  
(iv)  Acquirer requi rements ......................................................................................................... ... 190 
3.  China's requirements considered jointly ............................................................................ 190  
VIII. CONCLUSIONS AND RECOMMENDATIONS .............................................................. 191  
 WT/DS413/R 
Page vi 
 
 
 LIST OF ANNEXES 
 
 
ANNEX A 
 
EXECUTIVE SUMMARIES OF THE FIRST WRITTEN 
SUBMISSIONS OF THE PARTIES 
 
Contents Page 
Annex A-1 Executive summary of the first written submission of the United States A-2 
Annex A-2 Executive summary of the first written submission of China A-11 
 
 
ANNEX B 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF, OF  
THE PARTIES AT THE FIRST SUBSTANTIVE MEETING 
 
Annex B-1 Executive summary of the opening or al statement of the United States at the 
first substantive meeting B-2 
Annex B-2 Closing oral statement of the United States at the first substantive meeting B-6 
Annex B-3 Executive summary of the oral statement of China at the first substantive 
meeting B-7 
 
 
ANNEX C 
 
WRITTEN SUBMISSIONS AND ORAL STATEMENTS, OR INTERGRATED 
SUMMARIES THEREOF, OF THE THIRD PARTIES 
 
Annex C-1 Integrated executive summary of the third party written submission and oral 
statement of Australia C-2 
Annex C-2 Third party oral statement of Ecuador at the first substantive meeting C-7 
Annex C-3 Integrated executive summary of the third party written submission and oral 
statement of the European Union C-10 
Annex C-4 Integrated executive summary of the third party written submission and oral 
statement of Japan C-13 
Annex C-5 Integrated executive summary of the third party written submission and oral 
statement of the Republic of Korea C-19  WT/DS413/R 
 Page vii 
 
 
  
ANNEX D 
 
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN 
SUBMISSIONS OF THE PARTIES 
 
Annex D-1 Executive summary of the second written submission of the United States D-2 
Annex D-2 Executive summary of the second written submission of China D-11 
  
ANNEX E 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF, OF  
THE PARTIES AT THE SECOND SUBSTANTIVE MEETING 
 
Annex E-1 Executive summary of the oral st atement of the United States at the second 
substantive meeting E-2 
Annex E-2 Executive summary of the oral stat ement of China at the second substantive 
meeting E-7 
 
 
ANNEX F 
 
REQUEST FOR A PRELIMINARY RULING 
 
Annex F-1 Executive summary of China's request for a preliminary ruling F-2 
Annex F-2 Executive summary of the United States' submissions in response to China's 
request for a preliminary ruling F-3  
Annex F-3 Executive summary of China's comm ents on the United States' submissions in 
response to China's request for a preliminary ruling F-12 
 
 
ANNEX G 
 
EXCERPT OF CHINA'S SCHEDULE 
 
Annex G-1 The People's Republic of China - Schedule of Specific Commitments, 
GATS/SC/135 - excerpt G-2 
 
 
ANNEX H 
 
TABLE OF TRANSLATIONS OF LEGAL MEASURES 
AND OTHER INSTRUMENTS 
 
Annex H-1 Table of translations of legal measures and other instruments referred to by the 
parties H-2 
 WT/DS413/R 
Page viii 
 
 
 ABBREVIATIONS OF MEASURES, CERTAIN EVIDENCE, AND OTHER SELECTED 
INSTRUMENTS REFERRED TO IN THIS REPORT1 
 
Short Titles Full Titles 
American Express 2010 Annual 
Report US SEC Form 10-K, American Ex press Company Annual Report, for 
the fiscal year ended November 30, 2010 (Exhibit US-7) 
BIS Red Book 2003 BIS Red Book 2003, Payment Systems in the United States (Exhibit 
US-11) 
CUP's Articles of Association The Articles of Association of China UnionPay Co., Ltd. (Exhibit US-
20, No Chinese Exhibit) 
Discover 2010 Annual Report US SEC Form 10-K, Discover Financial Services Annual Report, for 
the fiscal year ended November 30, 2010 (Exhibit US-8) 
Document No. 8 Announcement of the People's Bank of China on Providing  Clearing 
Arrangements for Banks That Handle Personal RMB Deposits, 
Exchanges, Bank Cards and Remittance in Macao (PBOC 
Announcement [2004] No. 8) (Exhibits US-46, CHN-62) 
Document No. 16 Announcement of the People's Bank of China on Providing  Clearing 
Arrangements for Banks That Handle Personal RMB Deposit, 
Exchanges, Bank Cards and Remittance in Hong Kong (PBOC 
Announcement [2003] No. 16) (Exhibits US-44, CHN-60) 
Document No. 17 Measures for the Administration of Bank Card Business (Yin Fa [1999] 
No.17) (Exhibits US-52, CHN-53) 
Document No. 37 Circular of the People's Bank of China on Promulgation of the  
"Opinions on Implementation of the Work in Bank Card 
Interoperability in 2001" (Yin Fa [2001] No. 37) (Exhibits US-40, 
CHN-54) 
Document No. 49 Circular of China Banking Regulatory Commission concerning 
Conduction of the Bank Card Business by Wholly Foreign-invested 
Banks and Chinese-foreign equity joint venture banks (Yin Jian Fa 
[2007] No. 49) (Exhibits US-62, CHN-68) 
Document No. 53 Circular of the State Administration of Foreign Exchange on 
Standardizing the Administration of Foreign Currency Bank Cards (Hui 
Fa [2010] No. 53) (Exhibits US-51, CHN-71) 
Document No. 57 Circular of the People's Bank of China on Uniform Use of 'Yin Lian'2 
Logo and its Holographic Label for Anti-counterfeiting (Yin Fa [2001] 
No. 57) (Exhibits US-41, CHN-55) 
Document No. 66 Circular of the State Administration of Foreign Exchange on Regulating 
the Management of Foreign Currency Bank Cards (Hui Fa [2004] No. 
66) (Exhibits US-45, CHN-61) 
                                                      
1 When the relevant exhibits were submitted by the United States and by China, this has been indicated. 
2 This is without prejudice to the parties' views on the correct tran slation of the long title of the 
instrument.  WT/DS413/R 
 Page ix 
 
 
 Short Titles Full Titles 
Document No. 76 
 Notice of Document No. 76 
 Business Practices Appendix of 
Document No. 76 Notice of the People's Bank of China in Relation to the Issuance of 
Business Practices for the Interoperable Service of Bank Cards and 
Appendix on Business Practices for the Interoperable Service of Bank 
Cards (Yin Fa [2001] No. 76)  (Exhibits US-56/US-63, CHN-56) 
Document No. 94 Opinions on Bank Card Interoperability Related Work in 2002 by the 
People's Bank of China (Yin Fa [2002] No.94) (Exhibits US-42, CHN-
57) 
Document No. 103 Certain Opinions of the People's Bank of China, the National Reform 
and Development Commission, the Ministry of Public Security, the 
Ministry of Finance, the Ministry of  Information Industry, the Ministry 
of Commerce, the State Administ ration of Foreign Exchange, on 
Promoting the Development of Bank Card Industry (Yin Fa [2005] No. 
103) (Exhibits US-1, CHN-65) 
Document No. 129 Circular of the People's Bank of China on Further Improving Bank Card 
Interoperability Related Work (Yin Fa [2003] No.129) (Exhibits US-53, 
CHN-59) 
Document No. 142 Notice of People's Bank of China, the China Banking Regulatory 
Commission, the Ministry of Public Security and the State 
Administration for Industry and Commerce on Strengthening the 
Security Management of Bank Cards and Preventing and Combating 
Bank Card Crimes (Yin Fa [2009] No. 142) (Exhibits US-55, CHN-69) 
Document No. 149 Opinions of the Standing Office of the People's Bank of China on the 
Circular on Strengthening the Safety Management of Bank Cards and 
Preventing and Fighting Crimes in Bank Cards by the People's Bank of 
China, the China Banking Regulatory Commission, the Ministry of 
Public Security and the State Administration for Industry and 
Commerce (Yin Ban Fa [2009] No. 149) (Exhibits US-50, CHN-70) 
Document No. 153 Guiding Opinions of the People's Bank of China on Regulating and 
Promoting the Development of Bank Card Acceptance Market (Yin Fa 
[2005] 153) (Exhibits US-49, CHN-66) 
Document No. 219 Notice of the People's Bank of China concerning Relevant Issues on 
Accepting and Using RMB Bank Cards in  Border Areas (Yin Fa [2004] 
No. 219) (Exhibits US-47, CHN-63) 
Document No. 254 Circular on Relevant Issues Concerning the Operation of Individual 
RMB Business by Mainland Banks an d Hong Kong/Macau Banks (Yin 
Fa [2004] No. 254) (Exhibits US-48, CHN-64) 
Document No. 272 Circular Regarding Issues Concerning Bank Card Interoperability 
Related Work by the People's Bank of China (Yin Fa [2002] No.272) 
(Exhibits US-43, CHN-58) 
Document No. 273 Notice of the People's Bank of China on the Relevant Issues concerning 
Strengthening the Administration of  Overseas Business Acceptance of 
Bank Cards (Yin Fa [2007] No. 273) (Exhibits US-54, CHN-67) WT/DS413/R 
Page x 
 
 
 Short Titles Full Titles 
FFIEC IT Examination Handbook Federal Financial Institutions Examination Council (FFIEC), "Retail 
Payment Systems, IT Examination Handbook" (February 2010) 
(Exhibit US-12) 
MasterCard 2010 Annual Report US SEC Form 10-K, MasterCard Incorp orated Annual Report, for fiscal 
year ended December 31, 2010 (Exhibit US-6) 
MasterCard 2009 Annual Report US SEC Form 10-K, MasterCard Incorp orated Annual Report, for fiscal 
year ended December 31, 2009 (Exhibit US-5) 
Notification of Approval of CUP's 
Business Licence Shanghai Municipal Administratio n for Industry and Commerce, 
Notification of Business Licence Approval and Issuance for China 
UnionPay Co., Ltd (March 19, 2002) (Exhibit US-29, No Chinese 
Exhibit) 
Visa 2010 Annual Report US SEC Form 10-K, Visa 2010 Annual Report (as of September 30, 
2010) (Exhibit US-4) 
Visa IPO Prospectus US SEC Amendment No. 4 to Form S-1 Registration Statement Under 
Securities Act of 1933, Visa Inc. IPO Prospectus, February 25, 2008, 
(Exhibit US-3) 
  WT/DS413/R 
 Page xi 
 
 
 TABLE OF CASES CITED IN THIS REPORT 
 
Short Title Full Case Title and Citation 
Argentina – Textiles and 
Apparel Panel Report, Argentina – Measures Affecting Imports of Footwear, Textiles, 
Apparel and Other Items , WT/DS56/R, adopted 22 April 1998, as modified by 
Appellate Body Report WT/DS56/AB/R, DSR 1998:III, 1033 
Australia – Apples Panel Report, Australia – Measures Affecting the Importation of Apples from 
New Zealand , WT/DS367/R, adopted 17 December 2010, as modified by 
Appellate Body Report WT/DS367/AB/R 
China – Publications and 
Audiovisual Products Appellate Body Report, China –  Measures Affecting Trading Rights and 
Distribution Services for Certain Publications and Audiovisual Entertainment 
Products , WT/DS363/AB/R, adopted 19 January 2010 
China – Publications and 
Audiovisual Products Panel Report, China –  Measures Affecting Trading Rights and Distribution 
Services for Certain Publications and Audiovisual Entertainment Products , 
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by Appellate 
Body Report WT/DS363/AB/R 
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of 
Various Raw Materials , WT/DS394/AB/R / WT/DS395/AB/R / 
WT/DS398/AB/R, circulated to WTO Members 30 January 2012 
China – Raw Materials Panel Reports, China – Measures Related to the Exportation of Various Raw 
Materials , WT/DS394/R / WT/DS395/R / WT/DS398/R / and Corr.1, 
circulated to WTO Members 5 July 2011 
EC – Approval and Marketing 
of Biotech Products Panel Report, European Communities – Measures Affecting the Approval and 
Marketing of Biotech Products , WT/DS291/R, WT/DS292/R, WT/DS293/R, 
Add.1 to Add.9, and Corr.1, adopted 21 November 2006, DSR 2006:III-VIII, 
847 
EC – Asbestos Appellate Body Report, European Communities – Measures Affecting 
Asbestos and Asbestos-Containing Products , WT/DS135/AB/R, adopted 5 
April 2001, DSR 2001:VII, 3243 
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R, adopted 25 September 
1997, DSR 1997:II, 591 
EC – Bananas III (Ecuador) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas, Complaint by Ecuador , WT/DS27/R/ECU, adopted 
25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R, 
DSR 1997:III, 1085 
EC - Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 
DSR 1998:I, 135 
EEC – Apples I (Chile) GATT Panel Report, EEC – Restrictions on Imports of Apples from Chile , 
L/5047, adopted 10 November 1980, BISD 27S/98 
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, 
DSR 1998:I, 9 
Japan - Alcoholic Beverages 
II Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 
1996, DSR 1996:I, 97 WT/DS413/R 
Page xii 
 
 
 Short Title Full Case Title and Citation 
Mexico – Telecoms Panel Report, Mexico – Measures Affecting Telecommunications Services , 
WT/DS204/R, adopted 1 June 2004, DSR 2004:IV, 1537 
Philippines – Distilled Spirits Appellate Body Reports, Philippines – Taxes on Distilled Spirits , 
WT/DS396/AB/R / WT/DS403/AB/R, adopted 20 January 2012 
Philippines – Distilled Spirits Panel Reports, Philippines – Taxes on Distilled Spirits , WT/DS396/R / 
WT/DS403/R, adopted 20 January 2012, as modified by Appellate Body 
Reports WT/DS396/AB/R / WT/DS403/AB/R 
Thailand – Cigarettes 
(Philippines) Appellate Body Report, Thailand – Customs and Fiscal Measures on 
Cigarettes from the Philippines , WT/DS371/AB/R, adopted 15 July 2011 
Thailand – Cigarettes 
(Philippines) Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from the 
Philippines , WT/DS371/R, adopted 15 July 2011, as modified by Appellate 
Body Report WT/DS371/AB/R 
Turkey - Rice Panel Report, Turkey – Measures Affecting the Importation of Rice , 
WT/DS334/R, adopted 22 October 2007, DSR 2007:VI, 2151 
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 
3779 
US – COOL Panel Reports, United States – Certain Country of Origin Labelling (COOL) 
Requirements , WT/DS384/R / WT/DS386/R, circulated to WTO Members 
18 November 2011  
US – Countervailing Measures 
on Certain EC Products Appellate Body Report, United States – Countervailing Measures Concerning 
Certain Products from the European Communities , WT/DS212/AB/R, 
adopted 8 January 2003, DSR 2003:I, 5 
US – Export Restraints Panel Report, United States – Measures Treating Exports Restraints as 
Subsidies , WT/DS194/R and Corr.2, adopted 23 August 2001, DSR 2001:XI, 
5767 
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border 
Supply of Gambling and Betting Services , WT/DS285/AB/R, adopted 20 April 
2005, DSR 2005:XII, 5663 (Corr.1, DSR 2006:XII, 5475) 
US – Gambling Panel Report, United States – Measures Affecting the Cross-Border Supply of 
Gambling and Betting Services , WT/DS285/R, adopted 20 April 2005, as 
modified by Appellate Body Report WT/DS285/AB/R, DSR 2005:XII, 5797 
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3
US – Gasoline Panel Report, United States – Standards for Reformulated and Conventional 
Gasoline , WT/DS2/R, adopted 20 May 1996, as modified by Appellate Body 
Report WT/DS2/AB/ R, DSR 1996:I, 29 
US – Section 301 Trade Act Panel Report, United States – Sections 301-310 of the Trade Act of 1974 , 
WT/DS152/R, adopted 27 January 2000, DSR 2000:II, 815 
US - Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp 
and Shrimp Products , WT/DS58/AB/R, adopted 6 November 1998, DSR 
1998:VII, 2755 
US – Tuna II (Mexico) Panel Report, United States – Measures Concerning the Importation, 
Marketing and Sale of Tuna and Tuna Products , WT/DS381/R, circulated to 
WTO Members 15 September 2011  WT/DS413/R 
 Page xiii 
 
 
 Short Title Full Case Title and Citation 
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton , 
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3 
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R, adopted 23 May 1997, 
and Corr.1, DSR 1997:I, 323 
U.S. – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") , WT/DS294/AB/R, adopted 9 
May 2006, and Corr.1, DSR 2006:II, 417 
 WT/DS413/R 
Page xiv 
 
 
 LIST OF ABBREVIATIONS USED IN THIS REPORT 
 
1993 Scheduling Guidelines 1993 Guidelines for the Scheduling of Specific Commitments under the 
GATS (Document MTN.GNS/W/164) 
2001 Scheduling Guidelines Guidelines for the Sc heduling of Specific Comm itments under the GATS, 
S/L/92, March 28, 2001 
ATM Automated Teller Machine 
BIN Bank Identification Number 
BIS Bank for International Settlements 
CBRC China Banking Regulatory Commission 
CPC 1991 United Nations Provisional Central Product Classification  
CUP China UnionPay Co., Ltd 
DSU Understanding on Rules and Procedures Governing the Settlement of 
Disputes 
EPS Electronic payment services  
EPS supplier Electronic payment services supplier 
FFI Foreign Financial Institutions 
GATS General Agreement on Trade in Services 
GATT General Agreement on Tariffs and Trade 
PBOC People's Bank of China 
POS Point-of-Sale 
RCBFCC Rural Credit Banks Funds Clearing Center 
RMB Renminbi 
Scheduling Guidelines 1993 Scheduling Guidelines and 2001 Scheduling Guidelines 
UNOG United Nations Office at Geneva 
WTO World Trade Organization  
WTO Agreement Marrakesh Agreement esta blishing the World Trade Organization 
  WT/DS413/R 
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 I. INTRODUCTION 
A. COMPLAINT OF THE UNITED STATES  
1.1 On 15 September 2010, the United States requested consultations with China pursuant to 
Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes 
(DSU) and Article XXII of the General Agreement on Trade in Services (GATS) with respect to the 
measures and claims set out below.3   
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL  
1.2 On 11 February 2011, the United States requested the establishment of a panel pursuant to 
Article 6 of the DSU with st andard terms of reference.4  At its meeting on 25 March 2011, the Dispute 
Settlement Body (DSB) established a panel pursuant to  the request of the United States in document 
WT/DS413/2, in accordance with Article 6 of the DSU.5  The Panel's terms of reference are the 
following: 
To examine, in the light of the relevant pr ovisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by the United States in document WT/DS413/2 and to make such findings as will assist the DSB in making 
the recommendations or in giving the rulings provided for in those agreements.
6 
1.3 On 23 June 2011, the United States request ed the Director-General to determine the 
composition of the panel, pursuant to Article 8.7 of the DSU.  On 4 July 2 011, the Director-General 
accordingly composed the Panel as follows: 
 Chairperson: Mr Virachai Plasai 
 
 Members: Ms Elaine Feldman 
   Mr Martín Redrado  
1.4 Australia, Ecuador, the European Union, Guatemala, India
7, Japan, and the Republic of Korea 
reserved their rights to participate in the Panel proceedings as third parties. 
C. PANEL PROCEEDINGS  
1. General 
1.5 On 5 July 2011, China submitted to the Panel a request for a preliminary ruling with respect 
to the consistency of certain aspects of the United St ates' panel request with Article 6.2 of the DSU.  
The Panel issued its preliminary ruling to the pa rties, with a copy to the third parties, on 
7 September 2011.  The Panel held a first substantiv e meeting with the parties on 26-27 October 2011.  
A session with the third parties took place on 27 Oct ober 2011.  The Panel held a second substantive 
meeting with the parties on 13-14 December 2011.  On 25 January 2012, the Panel issued the 
descriptive part of its Panel Report.  The Pane l issued its Interim Report to the parties on 
11 April 2012.  The Panel issued its Final Report to the parties on 25 May 2012. 
                                                      
3 WT/DS413/1. 
4 WT/DS413/2. 
5 See WT/DSB/M/294. 
6 WT/DS413/3. 
7 India filed its notification of interest to particip ate in the Panel proceedings  as a third party following 
the date of the Panel's composition.  The Panel included In dia in the list of third par ties after consultations with 
the parties. WT/DS413/R 
Page 2 
 
 
 2. Preliminary ruling on the consistency with Article 6.2 of the DSU of the United States' 
request for the establishment of a panel 
1.6 China submitted its request for a preliminary ruling to the Panel on 5 July 2011 (see 
Annex F-1).  After consultations with the parties,  the Panel decided to issue a preliminary ruling 
before the date of receipt of the United States' fi rst written submission.  The Panel noted that this 
approach would avoid delay in the proceedings.  The Panel provi ded the United States with an 
opportunity to submit written comments on China's request  and also invited the third parties to submit 
any written comments they might have in response to the views expressed by the parties.  The Panel also provided the parties with an opportunity to request a preliminary ruling hearing to discuss the 
matter.  As neither party requested a hearing on the preliminary ruling issue, the parties were given an 
opportunity to submit further written comments on the other party's initial written submissions. 
1.7 On 29 July 2011, the United States submitted a re sponse to China's request for a preliminary 
ruling (see Annex F-2).  China commented on the United States' submission on 25 August 2011.  The 
United States filed further comments on 30 August  2011.  None of the third parties submitted 
comments on the first set of submissions. 
1.8 The Panel issued its ruling to the parties,  with a copy to the third parties, on 
7 September 2011.  The Panel rejected China's preliminary objection of 5 July 2011.
8  After 
consulting the parties, the Panel requested the Chai rperson of the DSB to circulate the ruling to the 
WTO membership.  The ruling was circulated as document WT/DS413/4 on 30 September 2011.  The 
ruling forms an integral part of the findings in Section VII of this report. 
3. Translation issues 
1.9 The United States submitted translations of certa in measures at issue in this dispute in its 
response of 29 July 2011 to China's request for a preliminary ruling and also in its first written 
submission of 15 September 2011.   In a communication to the Panel on 22 September 2011, China 
identified a number of issues with these translati ons, alleging that the United States had incorrectly 
translated certain words or phrases, thereby affec ting the original meaning of the measures.   
1.10 In a communication to the parties on 12 October 2011, the Panel indicated that it would 
discuss the translation issues raised by China during th e first substantive meeting with the parties.  At 
that meeting the Panel asked the parties if they w ould be able to agree on a translation from the outset, 
or otherwise specify those translation issues on which they could not agree.  The Panel suggested that, 
if the parties were unable to agree,  an independent translator could be  selected in consultation with the 
parties to provide expert linguistic advice on the corr ect translation for outstanding issues.  The parties 
agreed to the selection of an independent translat or for any outstanding issues.  On 9 December 2011, 
the parties informed the Panel of the translation issues on which agreement had been reached as well 
as those that could not be resolved.   
1.11 At the second substantive meeting, the parties ag reed in principle to the Panel's suggestion to 
appoint, as the independent translator, UN Geneva's (UNOG) Conference Services Division.  At this 
time, the Panel further requested the parties to pr ovide a brief rationale setting out their views on 
outstanding translation issues to facilitate the indepe ndent translator's work. On 4 January 2012, the 
parties each submitted a brief rationale setting out  their views on outstanding translation issues. 
1.12 The Panel appointed UNOG as the independent translator on 26 January 2012.  This Report 
will hereinafter refer to the "inde pendent translator" when discussing advice provided by UNOG.  The 
independent translator provided advice to the Pa nel on the outstanding issues on 15 February 2012.  
                                                      
8 See WT/DS/413/4, para. 58.  WT/DS413/R 
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 This advice was promptly forwarded to the pa rties who submitted written comments thereon on 
24 February 2012. 
II. FACTUAL ASPECTS 
2.1 These proceedings concern a series of legal requirements relating to electronic payment 
services that the United States alleges are maintained by China.  According to  the United States, these 
legal requirements, alone or in combination, "affect electronic payment services for payment card 
transactions and the suppliers of those services".9  
2.2 According to the United States, "electroni c payment services" involve the following: 
services through which transactions involving payment cards (as defined below) are 
processed and through which transfers of f unds between institutions participating in 
the transactions are managed and facilitated.  Suppliers of electronic payment services supply, directly or indirectly, a sy stem that typically includes the following:  
the processing infrastructure, network, and rules and procedures that facilitate, 
manage, and enable transaction informati on and payment flows and which provide 
system integrity, stability and financial risk  reduction; the process and coordi nation of 
approving or declining a transaction, with approval generally permitting a purchase to 
be finalized or cash to be disbursed or  exchanged; the delivery of transaction 
information among participating entities; the calculation, determination, and reporting 
of the net financial position of relevant institutions for all tr ansactions that have been 
authorized; and the facilitation, management a nd/or other participation in the transfer 
of net payments owed among participating institutions.
10 
2.3 The United States definition of the term "payment card" includes the following:  
a bank card, credit card, charge card, deb it card, check card, automated teller machine 
(ATM) card, prepaid card, and other similar card or payment or money transmission 
product or access device, and the unique account number associated with that card or 
product or access device.11 
2.4 The United States challenges what it alleges to be the following legal requirements: 
 requirements that mandate the use of China UnionPay, Co. Ltd. (CUP) and/or establish 
CUP as the sole supplier of electronic payment services for all domestic transactions denominated and paid in China's domestic currency, renminbi (RMB); 
 requirements that payment cards issued in China bear the CUP logo; 
 requirements that all automated teller machines (ATM), merchant card processing 
equipment, and point-of-sale (POS) terminals in China accept CUP cards; 
 requirements on acquiring institutions to post the CUP logo and be capable of accepting 
all bank cards bearing the CUP logo; 
 broad prohibitions on the use of non-CUP cards for cross-region or inter-bank 
transactions; and  
                                                      
9 WT/DS413/2, p. 1. 
10 See WT/DS413/2, fn 1. 
11 See WT/DS413/2, fn 2. WT/DS413/R 
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  requirements pertaining to card-based electr onic transactions in Hong Kong, China and 
Macao, China.12 
2.5 The United States considers that these require ments are maintained through a series of 
instruments that are identified in th e request for establishment of a panel:13 
 Document No. 17; 
 Document No. 37; 
 Document No. 57; 
 Document No. 76; 
 Document No. 94; 
 Document No. 272; 
 Document No. 129; 
 Document No. 16; 
 Document No. 66; 
 Document No. 8;  Document No. 219; 
 Document No. 254; 
 Document No. 103; 
 Document No. 153; 
 Document No. 273; 
 Document No. 49; 
 Document No. 142; 
 Document No. 149; 
 Document No. 53; 
 The "'business specifications' and 'technical standards' that are identified in the 
instruments above, including in Document No. 17, Document No. 57, Document No. 
129, and Document No. 49"; and 
 
 any amendments to date or any re lated implementing measures "to date".14  
 
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS  
3.1 The United States requests that the Pane l find that each of the legal requirements 
identified in the request for the establishmen t of a panel (and enumerated in paragraph 2.4 
above) is inconsistent with China's obligations under Article XVI:1 and XVI:2(a) and Article XVII of 
the GATS.  The United States further requests, pursu ant to Article 19.1 of the DSU, that the Panel 
recommend that China bring its measures into  conformity with its WTO obligations. 
3.2 China requests that the Panel reject the United Stat es' claims in this dispute in their entirety. 
                                                      
12 United.States' request for the establishment of a panel, pp. 1-4; United States' submission in response 
to China’s request for a preliminary ruling, 29 July 2011 ("United States' response to China's request for a 
preliminary ruling"), para. 77; Panel’s preliminary ruling,  para. 15; and United States'. first written submission, 
paras. 29-31. 
13 See list "Abbreviations of measur es, evidence, and other instruments referred to in this Report", 
p. viii. 
14 See WT/DS413/2, p. 4.  WT/DS413/R 
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 IV. ARGUMENTS OF THE PARTIES 
4.1 The arguments of the parties are reflected in their executive summaries provided to the Panel 
in accordance with paragraph 16 of the Working Procedures adopted by the Panel (see List of 
Annexes, pages vi and vii).    
V. ARGUMENTS OF THE THIRD PARTIES 
5.1 The arguments of Australia, Ecuador, the Europ ean Union, Japan, and th e Republic of Korea, 
are reflected in their executive summaries provided in accordance with  paragraph 16 of the Working 
Procedures adopted by the Panel (see Annex C).  Gu atemala and India did not submit written or oral 
arguments to the Panel. 
VI. INTERIM REVIEW 
6.1 On 11 April 2012, the Panel submitted its In terim Panel Report to the parties.  On 
25 April 2012, the United States and China each subm itted written requests for the review of precise 
aspects of the Interim Report.  On 9 May 2012 , the United States submitted comments on China's 
requests for review.  China did not submit any co mments on the United States' requests for review.  
Neither party requested an interim review meeting. 
6.2 In accordance with Article 15.3 of the DSU, this section of the Report sets out the Panel's 
response to the parties' requests made at the interi m review stage.  The Panel modified aspects of its 
Report in the light of the parties' comments where it considered these appropriate, as explained below.  
References to sections, paragraph num bers and footnotes in this section relate to the Interim Panel 
Report, except as otherwise noted.   
6.3 Turning to the parties' requests, both parties ask ed the Panel to make certain changes of an 
editorial nature to improve clarity and accuracy .  Accordingly, the Panel made changes to 
paragraphs 7.35, 7.36, 7.58, 7.154, 7.208, 7.227, 7.311 , 7.522 and 8.1; footnotes 1, 12, and 91; and the 
"Table of Abbreviations of Measures, Evidence and Other Instruments Referred to in this Ruling".  
The Panel made additional editorial corrections and re visions in response to the parties' comments.   
6.4 Regarding footnote 30, the United States requests inclusion of a citation, as an example, to 
paragraphs 35-54 of its submission in response to Ch ina's request for a preliminary ruling, given the 
reference made in that footnote to submissions made by the United States.    
6.5 The Panel notes that footnote 30 supports a sec tion containing a description of technical and 
commercial aspects of payment card transactions based on information and evidence included in the 
parties' submissions.  This section contains a numbe r of references to the evidence presented by the 
parties.  In the Panel's view, in the specific cont ext of footnote 30, it is not necessary to add the 
citation requested by the United States. 
6.6 Regarding paragraph 7.14, China notes that, in describing the steps in a payment card 
transaction, the Panel states that "[t]he issuer au thorizes transactions at POS terminals, collects 
payment from the card holder, and transmits the funds to the payment card company's settlement bank 
for settlement of payment obligati ons incurred by the card holder " (emphasis added by China).  The 
italicized portion of this sentence, China argues, is  not accurate in all cases.  According to China, 
there are many payment card systems in which th e settlement of payment obligations takes place 
through a mechanism that is operated independently of a "payment card company".  China notes that 
this could include, for example, an inter-bank funds transfer system operated by the central bank, or a WT/DS413/R 
Page 6 
 
 
 clearing and settlement mechanism operated by a different company.15  On the basis of this argument, 
China requests that the Panel either (i) indicate that it is describing the operations of a particular 
"payment card company" (in this case, Visa); or (ii)  modify the sentence to reflect more broadly the 
variety of means by which inter-bank payments ar e effected (e.g., "transmits the funds through the 
relevant inter-bank payment channel for settlement …"). 
6.7 The United States considers that identifying a particular payment card company is not 
necessary.  Rather, China's alte rnative suggestion, as indicated in item (ii) of its comment on 
paragraph 7.14 (i.e., to "modify the sentence to re flect more broadly the variety of means by which 
inter-bank payments are effected"), may be an acceptable way to modify the sentence should the 
Panel consider it appropriate to do so. 
6.8 The Panel agrees with the United States that id entifying a particular payment card company is 
not necessary.  We accept, however, that it is useful to reflect more broadly the variety of means by 
which inter-bank payments are effected.  As a result, the Panel made appropriate changes to 
paragraph 7.14 along the lines of China's alternative suggestion. 
6.9 Regarding paragraph 7.24, China notes that the second sentence states: "Merchants submit 
transaction information for clear ing and payment to acquirers, which forward their transaction claims 
to the relevant payment card company ."(emphasis added by China)  China argues that, for the same 
reasons explained by China in relation to paragraph 7.14, the italicized portion of this sentence is not 
accurate in all cases.  In many systems, China argues, the acquiring bank will place a cleared 
transaction item directly into an inter-bank se ttlement mechanism that has no connection to a 
"payment card company".  More generally, according to China, the entirety of paragraph 7.24 is 
describing the particular type of  multilateral deferred net settlement  system operated by companies 
like Visa and MasterCard.  This is not the only type of settlement system for payment card transactions, contrary to the impression created by this paragraph.  China indicates that Australia's 
EFTPOS system is a case in point.  China explains that within that system, issuing and acquiring 
financial institutions exchange transaction items  directly with each other on a bilateral basis.
16   Once 
a day, financial institutions use these bilateral tran saction items to calculate their credit and debit 
positions in relation to all other financial institutions, and report these positions to the "Collator", 
which is operated by the Reserve Bank of Australia.17   The Collator then calculates the multilateral 
net positions of the financial institutions and tran smits these positions to Australia's high-value inter-
bank transfer system (known as RITS) for final settlement.18   Within this system, acquiring financial 
institutions do not "forward their transaction claims to the relevant payment card company."  In fact, 
according to the explanation provided by China in this specific request, there is no "payment card 
company" involved in the process at all.   
6.10 For these reasons, China requests that the Panel (i ) indicate that paragraph 7.24 is describing 
the typical model of operations for global network operators like Visa and MasterCard; or (ii) modify 
the paragraph to reflect more broadly the variety of back-end clearing and settlement mechanisms that 
are used in payment card systems.   
6.11 The United States indicates that it would not object to the inclusion of clarifying language that 
confirms that there are variations of both the "four-party model" and the "three-party model".  
However, the United States observes that a compan y-specific reference is unnecessary.  The United 
States submits that an accurate and acceptable refe rence would be to describe the process as a "typical 
                                                      
15 China refers to Exhibits CHN-101 (Australia), CHN-102 (Canada) and CHI-103 (France). 
16 China refers to Exhibit CHN-101, p. 31. 
17 China refers to Exhibit CHN-101, pp. 31-33. 
18 China refers to Exhibit CHN-101, n. 23.  WT/DS413/R 
 Page 7 
 
 
 four-party model".  The United States also acknow ledges that there may be more than one way in 
which the settlement component of a payment card transaction can be conducted. 
6.12 The Panel agrees with the United States that id entifying a particular payment card company is 
not necessary.  The Panel also notes that paragra ph 7.24 describes the typical back-end processing of 
payment card transactions in four-party and three-pa rty models.  Therefore, we consider that the 
sentence in question in paragraph 7.24 could be modified along the lines proposed by the United 
States.  As a result, we made relevant ch anges to the second sentence of paragraph 7.24. 
6.13 Regarding paragraph 7.28, the United States reque sts, for greater accuracy, that the Panel's 
reference in the second sentence to the United States'  definition of "payment cards" be modified to 
include the phrase "and the unique account number asso ciated with that card or product or access 
device" as is set forth in the United States' panel requ est, and as is referred to in paragraph 7.25 of the 
Interim Report. 
6.14 The Panel considers that the requested change  would be more faithful to the definition 
presented by the United States, which is referred to in paragraph 7.28, and therefore the Panel 
modified paragraph 7.28 accordingly. 
6.15 Regarding paragraphs 7.38 to 7.45,  China requests that the Panel clarify what the relevant 
service transaction would be in the case of three-part y models. In particular, China requests that the 
Panel indicate whether it considers that (i) the opera tors of three-party models supply the services at 
issue to themselves; (ii) the operators of thr ee-party models supply the services at issue to card 
holders and/or merchants; or (iii) the Panel h as some other understanding of the relevant service 
transaction in the case of three-party models. 
6.16 The United States considers that the particular  details China proposes to include regarding 
three-party models are not necessary to the Panel's analysis.  Nor has China offered any explanation 
as to why these "clarifications" are necessary. 
6.17 The Panel notes at the outset that, as pointed ou t by the United States, China did not offer any 
explanation as to why the requested clarifications are useful or necessary.  It is unclear to us what are 
the rationale and purpose of those purported clarific ations.  We recall that paragraphs 7.38 to 7.45 
address whether the services at issue cover the three-part y model in addition to the four-party model.  
These paragraphs of the Report should be read in conjunction with the previous sections on payment 
card transactions and the services at issue.  In particular, the main features of three-party models (in 
contrast with four-party models) are described in para graphs 7.18 to 7.24 of the Report.  In the Panel's 
view, it is clear from paragraphs 7.23 and 7.24 th at operators of three-party models supply their 
services directly to card holders and merchants.   For these reasons, the Panel does not find it 
necessary or appropriate to make the changes requested.  
6.18 Regarding paragraph 7.39, the United States requ ests that the Panel include a new footnote at 
the end of the first sentence.  The new footnote would refer to United States' responses to Panel 
question Nos. 25 and 74 and the United States' respon se to China's request for a preliminary ruling. 
6.19 The Panel notes that the United States' responses to Panel question No. 25, paragraphs 81-83, 
and No. 74, paragraphs 26-28, are referred to in footno te 80, at the end of paragraph 7.39.  As regards 
the requested reference to the United States' respon se to China's request for a preliminary ruling, in 
the Panel's view, the United States' arguments cited in paragraph 7.39 do not come from the 
paragraphs identified by the United States (paragraphs  40-41 and 54)''.  As a result, the Panel does not 
find it appropriate to add a new footnote to paragraph 7.39.  WT/DS413/R 
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 6.20 Regarding footnotes 94 and 97, the United States requests that, for completeness, a reference 
be included to paragraphs 11-14 of  its second written submission.   
6.21 In the Panel's view, paragraphs 11-14 of the United States' second written submission deal 
with whether EPS constitute a single integrated service,  with a view to substantiating its claim that 
EPS should be classified in subsector (d) of China' s schedule of specific commitments.   Having said 
that, we added a reference to those paragraphs in footnote 94, which contains a summary of the 
United States' arguments on that issue.  As regard s footnote 97, we note that the point made in the 
fifth sentence of paragraph 7.59, to which footnote 97 relates, was not made in paragraphs 11-14 of 
the United States' second written submission, but in pa ragraph 17 of that submi ssion.  For that reason, 
we modified footnote 97 to refer to paragraph 17 of the United States' second written submission. 
6.22 Regarding paragraph 7.61, the United States requests that the last sentence of this 
paragraph include a new footnote that refers to speci fied paragraphs of its submissions and responses 
to questions.   
6.23 The Panel notes that paragraph 7.61 addresses whether the services at issue are integrated 
services, regardless of their classification in Chin a's schedule of specific commitments.  The Panel 
also notes that paragraphs 35-54 of the United Stat es' response to China's request for a preliminary 
ruling, as well as paragraph 10 of the United States ' first written submission, are not related to the 
precise issue addressed in paragraph 7.61 of the Report .  We also note that the relevant paragraph of 
the United States' response to Panel question No. 26 is paragraph 84, which is quoted in footnotes 94 
and 97 of that section, and that the relevant para graph of the United States' second written submission 
is paragraph 17, which we added to footnote 97.  For these reasons, the Panel does not find it 
appropriate or necessary to introduce a footnote to paragraph 7.61 of the Report. 
6.24 Regarding paragraph 7. 75 and footnote 110 , the United States requests that the Report reflect 
that arguments put forward by the United States regarding the ordinary meaning of the service 
covered in China's subsector (d) also addresses the plain meaning of the phrase "including credit, 
charge and debit cards".  The United States requ ests the Panel to add a sentence reflecting this 
argument in either paragraph 7.75 or footnote 110. 
6.25 The Panel notes that the phrase "including cr edit, charge and debit cards" is discussed 
subsequently in the Report and therefore the Panel  included an appropriate reference in footnote 142.  
The Panel also added an additional reference to United States' arguments in footnote 110. 
6.26 Regarding footnotes 131, 152, 163, 181, 217 and 230, the United States  requests the Panel to 
include references to additional paragraphs in Un ited States' submissions that support the arguments 
cited by the Panel in the pa ragraphs concerned.   
6.27 The Panel included additional relevant refere nces in footnotes 131, 152, 163, 181, 217 
and 230. 
6.28 Regarding footnote 142, the United States request s that the citations include references to 
additional paragraphs in United Stat es' submissions that support the argument cited by the Panel, and 
also indicate that the United States made arguments regarding the ordinary meaning of this phrase.   
6.29 The Panel made appropriate a dditions to footnote 142.   
6.30 Regarding footnote 160, the United States requests that the Panel refer to and cite the United 
States' rebuttal regarding China's letters of credit argument.    WT/DS413/R 
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 6.31 The Panel  included in footnote 160 a reference to the United States' rebuttal argument on 
China's letters of credit argument. 
6.32 Regarding footnote 176, the United States requ ests that for completeness the Panel include 
the United States' arguments made in its second wr itten submission at paragraphs 103 to 115.   
6.33 The Panel does not find it necessary to reflect  the requested references to additional 
United States' arguments in this particular f ootnote, as these arguments are not specifically 
summarized in the paragraph to which footnote 176 is attached. 
6.34 Regarding footnote 210, the United States requests that the Panel include a citation to relevant 
United States' arguments made in its second written submission.   
6.35 The Panel does not find it necessary to refer to the United States' second written submission 
in relation to paragraph 7.157 as this paragraph summarizes the res ponse given by the United States to 
question No. 39(a) by the Panel.  However, the Panel modified footnote 210 so as to include a 
reference to the United States' complete response to Panel question No. 39(a).   
6.36 Regarding paragraph 7.209 (and also paragra phs 7.238, 7.299, 7.334 and 7.360), the 
United States notes that paragraph 7.209 identif ies the alleged requirements challenged by the 
United States.  The United States requests that new footnotes be added for each requirement to reflect 
the United States' arguments as set forth in its su bmissions.  The United States further requests that 
the Panel modify its description of the issuer, term inal equipment and acquirer requirements to reflect 
accurately the scope of the United States' claims  concerning these requirements.  Finally, the 
United States requests that the Panel make corres ponding changes to the subheadings that appear 
directly under paragraphs 7.238, 7.299, 7.334 and 7.360. 
6.37 The Panel added a new footnote at the beginning  of paragraph 7.209 to include appropriate 
references to the United States' submissions and clar ified in the first sub-paragraph that the short 
names for the requirements were chosen by the Panel.   We note that the concise descriptions given in 
paragraph 7.209 of the issuer, terminal equipmen t and acquirer requirements are those used by the 
United States in its own submissions, as is clear fro m the references included in the new footnote.  In 
the light of this, we decline the request to add fu rther elements to these d escriptions along the lines 
proposed by the United States.  We recall in this re gard that the precise scope of the United States' 
claims concerning the issuer, terminal equipment and acquirer requirements is discussed in 
Section VII.E.2(a)-(c) of the Interim Report.  As we did not modify the relevant descriptions in 
paragraph 7.209, but for one editorial change, we also did not make the consequential changes sought 
by the United States to paragraphs 7.238, 7.299 and 7.334 (except for one corresponding editorial 
change).  In the subheading following paragraph 7. 360, we added a missing word, as requested by the 
United States.    
6.38 Regarding paragraph 7.227, the United States re quests that the Panel include the concluding 
sentence from footnote 282 as the new last sentence in paragraph 7.227, and include a new footnote 
that refers to the United States'  response to Panel question No. 70. 
6.39 The Panel modified paragraph 7.227 and includ ed a new footnote to reflect the requested 
change. 
6.40 Regarding paragraph 7.228, the United States requests that the Panel modify the eigth 
sentence to replace the reference to measures "that are currently in fo rce", with a reference that the 
measures "were in force at the time of panel establis hment".  The United States submits that the Panel 
itself referred in paragraphs 7.227 and 7.228 to the time of the panel's estab lishment as the relevant 
point in time.  It submits further that the Appellate Body in its recent Report on China – Raw WT/DS413/R 
Page 10 
 
 
 Materials (paragraphs 260-261) confirmed that the date of panel establishment is the relevant point in 
time for a panel's analysis.   
6.41 The Panel incorporated the United States' suggested change.   
6.42 Regarding paragraph 7.289, the United States re quests that, at the end of the second sentence, 
the Panel add specified references to the Unite d States' panel request and written submissions. 
6.43 The Panel added a footnote to paragraph 7.289 to  include appropriate references to the United 
States' panel request and written submissions.  
6.44 Regarding paragraph 7.290, China comments that the Panel appears to e ngage in a substantive 
examination of Document No. 94.  China points out  that the Panel in paragraph 7.229 states that it 
declines to take Document No. 94 into account and will not consider it any further.  China submits 
that it is unclear, therefore, why the Panel engaged in  this analysis.  China suggests that the Panel omit 
any discussion of Document No. 94. 
6.45 The United States responds that the Panel's di scussion of Document No. 94 provides useful 
and important context for the Panel's analysis of the United States' claims.  The United States 
therefore requests that the Panel not omit this discussion. 
6.46 In the light of the parties' comments, the Pane l finds it appropriate to clarify the relationship 
of paragraph 7.290 with paragraph 7.229.  We therefore made changes to paragraph 7.290 that take 
into account more clearly and explicitly the Panel's statements in paragraphs  7.221-7.229.  We also 
made a consequential change to footnote 380 of the Interim Report. 
6.47 Regarding paragraphs 7.367, 7.368, 7.371, 7. 507(d) and 7.606, China requests that the Panel 
remove findings on the applicability of certain measures to the processing of RMB-denominated 
payment cards that are issued and used in Hong Kong, or issued and used in Macao.  China considers 
that the United States, in its pane l request, limited the scope of the relevant claims under Articles XVI 
and XVII of the GATS to (i) those RMB payment card transactions taking place in Macao or Hong 
Kong using payment cards issued in China, and (ii) those RMB payment card transactions taking 
place in China using payment cards issued in Chin a, Hong Kong, or Macao.  It considers that the 
panel request does not refer to those transac tions where the payment card is both issued and used in 
either Hong Kong or Macao.  China requests that the Panel modify the Report to find that this third 
category of transactions is not within the terms of reference, or, otherwise, to reflect in the Final 
Report China's position that these transactions are not within the Panel's terms of reference. 
6.48 The United States requests the Panel to reject Ch ina's request.  As an initial matter, the United 
States argues that China provides no legal basis under Article 6.2 of the DSU to support its request.  
In addition, the United States considers that there is  no basis to read language in its panel request as 
excluding transactions where the payment card is both issued and used in either Hong Kong or 
Macao. In this respect, the United States notes that its panel request specifies that "China … requires 
the handling by CUP of all RMB transactions in Macao or Hong Kong using payment cards issued in 
Mainland China, as well as any RMB transactions in Mainland China using RMB payment cards 
issued in Hong Kong, China or M acao, China".  In addition, the Unite d States notes the statements in 
its panel request that "China also requires that all cross-bank or inter-bank transactions involving 
payment cards be handled through CUP.  China prohibits the use of non-CUP payment cards for 
cross-region or cross bank or inter-bank transactions".   The United States also submits that its panel 
request identifies the particular instruments thro ugh which China implements the measures.    
6.49 The Panel recalls that the United States' panel request supplies a brief narrative description of 
the impugned measures.  As noted by the parties, the panel request states in relevant part that "China  WT/DS413/R 
 Page 11 
 
 
 … requires the handling by CUP of all RMB tran sactions in Macao or Hong Kong using payment 
cards issued in Mainland China, as well as any RMB transactions in Mainland China using RMB 
payment cards issued in Hong Kong, China or Macao, China".19   
6.50 Because the panel request refers only to RMB payment card transactions taking place in 
Macao or Hong Kong using payment cards issued in  China, and to RMB payment card transactions 
taking place in China using payment cards issued in Hong Kong, or Macao, the Panel modified its 
findings to clarify that they do not refer to tho se transactions where the payment card is both issued 
and used in either Hong Kong or Macao.  The panel request does not refer explicitly to the latter type 
of transactions, nor does it indicate, through the use of words such as "e.g.", "in particular", "inter 
alia", etc., that the types of transactions mentioned are but a subset of the relevant transactions.  The 
United States further argues that its panel request sp ecifies that China also requires that all cross-bank 
or inter-bank transactions be handled through CU P, and that China prohibits the use of non-CUP 
payment cards for cross-region or cross-bank or inte r-bank transactions.  Consistent with the fact that 
these alleged requirements are specified separatel y from the "Hong Kong/Macao requirements" in the 
panel request, the Panel considered  allegations of the United Stat es concerning cross-bank or inter-
bank transactions and cross-bank or inter-bank prohibitions separately from the alleged Hong 
Kong/Macao requirements.  Consequently, the Pa nel modified paragraphs  7.367 (including new 
footnote 469), 7.368, 7.371, 7.507(d), 7.578, 7.606, 7.621, 7.622 (including new footnote 804), 7.623, 
7.624, 7.627, 7.636, and 8.1(d) (iv); and footnote 800.  In doing so, we consider that our Report 
adequately reflects the United States' view that transactions where the payment card is both issued 
and used in either Hong Kong or Macao form part of its claims.20 
6.51 Regarding paragraphs 7.716, 7.727 and 7.740,  the United States requests that the Panel 
modify them so as to reflect that its claims and arguments concerning the issuer, terminal equipment 
and acquirer requirements explicitly  cover three-party models.  The United States notes that in the 
aforementioned paragraphs, the Panel states that the United States has not specifically addressed 
three-party networks in the context of issuer, te rminal equipment and acquirer requirements.  The 
United States further points out that the Panel in  paragraphs 7.38-7.45 recognized that the United 
States argued that the three-party model was include d in the services at issue.  Finally, the United 
States refers the Panel to certain arguments it made in the course of the proceedings.   
6.52 The Panel does not see any inconsistency between the statements in paragraphs 7.716, 7.727 
and 7.740, on the one hand, and paragraphs 7.38 -7.45, on the other.  There is no suggestion in 
paragraphs 7.716, 7.727 or 7.740 that the United States' claims concerni ng the issuer, terminal 
equipment and acquirer requirements fail to cover th ree-party models.  Having said this, for greater 
clarity and accuracy, we slightly modified paragraphs  7.727 and 7.740.  In pa ragraph 7.716, we added 
one of the arguments to which the United States ma de reference and made a ppropriate consequential 
changes.  Further consequential changes we re made to paragraphs 7.613 and 7.620. 
VII. FINDINGS 
A. PRELIMINARY RULING UNDER ARTICLE  6.2 OF THE DSU 
7.1 As noted in paragraphs 1.6-1.8 above, on 5 July 201121 China submitted a request for a 
preliminary ruling to the Panel with respect to the consistency of certain aspects of the United States' 
panel request with Article 6.2 of the Unders tanding on Rules and Procedures Governing the 
Settlement of Disputes (the "DSU").  China argued that the United States' panel request fails to 
provide a brief summary of the legal basis of the co mplaint sufficient to present the problem clearly in 
                                                      
19 WT/DS413/2, p. 2. 
20 See Interim Panel Report, paras. 7.364, 7.367, 7.369, 7.378, 7.396, 7.399 and 7.612. 
21 China's Letter of 5 July 2011. WT/DS413/R 
Page 12 
 
 
 two respects: first, by failing to explain how the de finition of "electronic payment services" relates to 
China's specific commitments in any of the thr ee subsectors identified in the panel request; and 
second, by failing to indicate which mode or modes of supply the United States considers to be at 
issue.22  China argued that these deficiencies are central to all of the United States' claims and should 
be addressed at the earliest opportunity in the interest  of due process before either party filed its first 
submission.  The United States requested the Panel to decline China's request to make findings in 
advance of either party filing its first submission.23  The United States further challenged the 
substance of China's request.24 
7.2 After consulting with the parties, the Panel decide d to issue a preliminary ruling to the parties 
on 7 September 2011, prior to receiving the United States' first written submission.  The Panel 
observed that this would take into account China's concerns regarding the implications of the ruling 
on the substance of the case without causing additional delays in the proceedings.  At the request of 
the Panel, the Chairperson of the DSB circulated  the ruling to the World Trade Organization (WTO) 
membership on 30 September 201125.   
7.3 As set out in further detail in its preliminary ruling, the Panel concluded that China had failed 
to establish that the United States' panel request is  inconsistent with Article 6.2 of the DSU on the 
grounds that it does not provide a brief summary of the legal basis sufficient to present the problem 
clearly.  The Panel found that the text of the panel request makes it clear that each of the requirements 
allegedly imposed by China is considered by the Un ited States to be in breach of Articles XVI:1 and 
XVI:2 and Article XVII of the General Agreement on Trade in Services (GATS).  The Panel also concluded that the United States' panel request cons idered as a whole does not need to explain further 
how the challenged measures are inconsistent with China's commitments under the relevant modes of 
supply.  Accordingly, the Panel rejected China's preliminary objection of 5 July 2011 in its entirety and stated that it would continue its considerati on of the case in accordance with the timetable that 
had been set for these proceedings. 
7.4 The Panel's preliminary ruling circulated as document WT/DS413/4 dated 30 September 2011 
forms an integral part of the present findings. 
B. G
ENERAL ISSUES  
1. Burden of proof 
7.5 The general rule on burden of proof in WTO dispute settlement is that a party claiming a 
violation of a provision of a covered agreement by  another Member must assert and prove its claim.26  
Moreover, any party that asserts a fact, whether cl aimant or respondent, is responsible for providing 
proof thereof. This conforms to the generally accepted canon of evidence in civil law, common law, 
and, in fact, in most jurisdictions, that the burde n of proof rests upon the party, whether complaining 
or responding, who asserts the affirmative of a par ticular claim or defence. If that party adduces 
evidence sufficient to raise a presumption that what is claimed is true, the burden then shifts to the 
other party, who will fail unless it adduces sufficient evidence to rebut the presumption.27 
7.6 Similarly, in WTO dispute settlement, once a complaining party has made a prima facie case, 
the burden of proof moves to the responding party, which must in turn counter or refute the claimed 
                                                      
22 China's request for a preliminary ruling. 
23 United States' Letter of 6 July 2011.   
24 United States' response to China's request for a preliminary ruling; Un ited States' comments to 
China's reply. 
25 WT/DS413/4. 
26 Appellate Body Report, US – Wool Shirts and Blouses , p. 16, DSR 1997:I, 323 at p. 337. 
27 Appellate Body Report, US – Wool Shirts and Blouses , p. 14, DSR 1997:I, 323 at p. 335.  WT/DS413/R 
 Page 13 
 
 
 inconsistency.28  The Appellate Body has stated that "a prima facie  case is one which, in the absence 
of effective refutation by the defending party, requires a panel, as a matter of law, to rule in favour of 
the complaining party presenting the prima facie  case."29  A prima facie case must be based on 
evidence and  legal argument put forward by the complaining party in respect of each  of the elements 
of the claim.30  The amount and type of evidence that will be required will necessarily vary from case 
to case.31 
7.7 Generally, the complainant in a given case initia lly bears the burden of proof to establish a 
prima facie  case of inconsistency of a measure with a provi sion of a WTO covered agreement.  In this 
dispute, therefore, the United States bears the initial burden to establish a prima facie  case that China's 
measures are inconsistent with the cited provi sions of Articles XVI and XVII of the GATS. 
2. Treaty interpretation 
7.8 Article 3.2 of the DSU directs panels to cl arify the existing provisions of the covered 
agreements "in accordance with customary rules of interpretation of public international law". It is 
well settled that the rules codifi ed in Articles 31 and 32 of the Vienna Convention on the Law of 
Treaties (Vienna Convention)  are such customary rules.32 These provisions read as follows: 
Article 31: General rule of interpretation 
1. A treaty shall be interpreted in go od faith in accordance with the ordinary 
meaning to be given to the terms of the treat y in their context and in the light of its 
object and purpose. 
2. The context for the purpose of the interpretation of a treaty shall comprise, in 
addition to the text, including its preamble and annexes: 
(a) any agreement relating to the treaty which was made between all the parties 
in connection with the conclusion of the treaty; 
(b) any instrument which was made by one or more parties in connection with 
the conclusion of the treaty and accepted by the other parties as an instrument related 
to the treaty. 
3. There shall be taken into account, together with the context: 
(a) any subsequent agreement between the parties regarding the interpretation of 
the treaty or the application of its provisions; 
(b) any subsequent practice in the appli cation of the treaty which establishes the 
agreement of the parties regarding its interpretation; 
(c) any relevant rules of international la w applicable in the relations between the 
parties. 
                                                      
28 Appellate Body Report, EC – Hormones , para. 98. 
29 Appellate Body Report, EC – Hormones, para. 104. 
30 Appellate Body Report, US – Gambling , para. 140. 
31 Appellate Body Report, US – Wool Shirts and Blouses , p. 14, DSR 1997:I, 323 at p. 335. 
32 Appellate Body Reports, US – Gasoline , p. 17, DSR 1996:I, 3 at pp. 15-16; India – Patents (US) , 
para. 45; and US – Shrimp , para. 114. WT/DS413/R 
Page 14 
 
 
 4. A special meaning shall be given to a te rm if it is established that the parties 
so intended. 
Article 32: Supplementary means of interpretation Recourse may be had to supplementary me ans of interpretation, including the 
preparatory work of the treaty and the circumstances of its conclusion, in order to 
confirm the meaning resulting from the application of article 31, or to determine the 
meaning when the interpretation according to article 31: 
(a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable.
33 
7.9 Article XX:3 of the GATS provides that WTO Members' "Schedules of specific commitments 
shall be annexed to this Agreement and shall form  an integral part thereof."  Consistent with 
Article 3.2 of the DSU, GATS Schedules must be in terpreted according to the "customary rules of 
interpretation of public international law".  In US – Gambling , the Appellate Body confirmed that: 
[T]he task of identifying the meaning of a concession in a GATS Schedule, like the 
task of interpreting any other treaty text, involves identifying the common intention  of 
Members. […] we consider that the meaning of the United States' GATS Schedule 
must be determined according to the rules c odified in Article 31 and, to the extent 
appropriate, Article 32 of  the Vienna Convention.34 (emphasis original) 
7.10 Accordingly, the Panel shall apply these princi ples in interpreting the relevant provisions of 
the covered agreements at issue in this dispute. 
C. THE SERVICES AT ISSUE  
7.11 The Panel begins its analysis with an examinati on of the services at issue.  We first consider 
the essential features of payment card transactions35, based on the parties' submissions.  Thereafter, 
we turn to the scope of the services at issue, addr essing in particular areas of disagreement between 
the parties, namely (a) whether the services at issu e cover the "three-party model" in addition to the 
"four-party model"; (b) whether the services at is sue include the services supplied by third-party 
processors; and (c) whether the services at issue are single/integrated services.  
                                                      
33 The Vienna Convention on the Law of Treaties (the "Vienna Convention"), done at Vienna, 
23 May 1969, 1155 U.N.T.S. 331; 8 International Legal Materials 679. 
34 Appellate Body Report, US – Gambling , para. 160. 
35 Both parties have used the expression "payment card transactions" when describing the transactions 
at issue in this dispute.  See, e.g. United States' response to China's request for a prelim inary ruling, para. 44 and 
China's first written submission, para. 15.  The Panel will also use this term in its Report.  WT/DS413/R 
 Page 15 
 
 
 1. Payment card transactions36 
7.12 A typical transaction involving the purchase of a good or a service entails a payment to the 
merchant by the consumer.  Transa ctions often involve payment cards.37  A "payment card" includes a 
bank card, credit card, charge card, debit card, ch eck card, automated teller machine (ATM) card, 
prepaid card, and other similar card or payment or money transmission product or access device, and 
the unique account number associated with that card or product or access device.38  Payment cards 
typically fall into one of three categories, depending  on the timing of the payment:  "pay later" cards 
(e.g. credit and charge cards); "pay now" cards (e.g . debit cards); and "pay before" cards (e.g. prepaid 
or stored-value cards). 39   
7.13 A "pay later" payment occurs after receiving th e goods or services, and typically involves the 
use of a credit card.  A credit card enables a cons umer to access a credit line account at a financial 
institution.  In general, credit cards have revolving credit arrange ments that allow card holders to 
make purchases and be billed later.  Most credit car d accounts allow the card holder to carry a balance 
from one billing cycle to the next and make a mini mum payment in each billing cycle, rather than 
requiring payment of the full balance.  A charge card is a specific kind of credit card that has a short-
term, fixed-period credit arrangement.  The balance on a charge card account is payable in full when 
the statement is received and cannot be rolle d over from one billing cycle to the next.40  A "pay now" 
payment, which typically involves the use of a debit card, occurs at the time of purchase of goods or 
services.  A debit card payment is linked to an exis ting transaction account at a financial institution.  
Debit cards are either online (i.e. PIN-based)41 or off-line (i.e. signature-based).  Debit card 
transactions are authorized in real time at the poi nt-of-sale (POS) terminal using the same electronic 
funds transfer networks that handle ATM transactions.42  The term "pay before" refers to payments for 
goods or services with prepaid or stored-value cards, loaded with funds before  the purchase of goods 
or services occurs.  The account associated with the prepaid debit card may be the liability of a 
financial institution.  Prepaid cards are generally issued to persons who deposit funds into an account 
                                                      
36 The information used to prepare this section comes from the parties' submissions.  More information 
about the technical and commercial aspects of payment card transactions is found in the submissions made by 
the United States than in the submissions made by China, which explains the frequent reference to the sources 
provided by the former.  We note in that regard that in  paragraph 15 of its first written submission, China states 
that "China does not substantially disagree with those desc riptions insofar as they go.  China will therefore try to 
avoid repeating what the United States has already desc ribed, to the extent that China agrees with those 
accounts".  
37 The Panel considers that information regarding the different types of cards and their functioning is 
relevant notably for the discussion of classification of th e services at issue (see Sec tion VII.D of this report). 
38 United States' request for the establishment of a panel, fn. 2; response to China's request for a 
preliminary ruling, para. 35.  The United States' res ponse to China's request for a preliminary ruling was 
incorporated into the United States' first written subm ission (See United States' first written submission, 
para. 9).  We note that China has used extensively the expression "payment card" in its submissions, and has not 
contested the definition provided by the United States in its request for the establishment of a panel. 
39 US SEC Amendment No. 4 to Form S-1 Registratio n Statement Under Securities Act of 1933, Visa 
Inc. IPO Prospectus, February 25, 2008, (Visa IPO Prospectus), Exhibit US-3, p. 128; US SEC Form 10-K, Visa 
2010 Annual Report (as of September 30, 2010), (Visa 2010 Annual Report), Exhibit US-4, pp. 6-7; US SEC 
Form 10-K, MasterCard Incorporated  Annual Report, for fiscal year en ded December 31, 2010, (MasterCard 
2010 Annual Report), Exhibit US-6, p. 6; and Federal Financial Institutions Examination Council (FFIEC), 
Retail Payment Systems, IT Examination Handbook (February 2010), (FFIEC IT Examination Handbook), 
Exhibit US-12, pp. 17, 20-21, and 24. 
40 FFIEC IT Examination Handbook, Exhibit US-12, p. 18; and BIS Red Book 2003, Payment Systems 
in the United States, (BIS Red Book 2003), Exhibit US-11, p. 440. 
41 PIN stands for Personal Identification Number. 
42 FFIEC IT Examination Handbook, Exhibit US-12, pp. 20-22; and BIS Red Book 2003, 
Exhibit US-11, p. 440. WT/DS413/R 
Page 16 
 
 
 of the issuer, while stored-value cards do not t ypically involve a deposit of funds as the value is 
prepaid and stored directly on the cards.43   
7.14 Payment card transactions involve several entities:  issuing institutions (or issuers), acquiring 
institutions (or acquirers), payment card companies44, and settlement banks.45  Issuers, usually banks, 
are the entities that make payment cards available to card holders.  Issuers solicit card holders and 
establish applicable card holder terms, including in dividual credit limits, fees, interest rates and 
payment schedules.  Payment cards commonly feature the logo or trademark of the issuer as well as 
the logo or trademark of the relevant payment car d company or network.  An institution seeking to 
issue cards must be capable of supplying card-b ased payment services or must use a payment card 
company to do so.46  Issuers agree to adhere to rules sp ecified by the payment card company that 
allow the payment card company to process transactions  that use the cards issued by the bank.  The 
issuer authorizes transactions at POS terminals, collects payment from the card holder, and transmits 
the funds through the relevant inter-bank payment channel for settlement of payment obligations 
incurred by the card holder.47 
7.15 Acquirers sign up merchants to accept payment cards for a specific payment card company.  
In other words, they "acquire" transactions fo r a specific payment card company and network.  
Acquirers, often banks, maintain me rchant accounts, handle relations with the merchant, receive all 
bank transactions from the merchant, ensure that pa yments are properly credited to the merchant, and 
provide the merchant with connectivit y to the relevant payment network.48  Like issuers, acquirers 
must be capable of supplying card-based payment se rvices or must use a payment card company to do 
so.49  Acquirers must adhere to specific standards, rules and procedures (typi cally set by the payment 
card company) governing the processing of transacti ons in the payment card network for which 
transactions have been acquired.  
7.16 Issuers and acquirers may choose to partially or  totally outsource the services they supply in 
connection with payment card transactions  to so-called "third-party" processors.50  Broadly speaking, 
these third-party processors can be categorized as merchant and issuer processors.  Merchant and 
issuer processors provide payment-related services on be half of acquirers and issuers, respectively.  In 
so doing, they interconnect to, and interact with, the payment card company (or network).  Third-party 
processors provide a potentially broad range of services.51 
                                                      
43 FFIEC IT Examination Handbook, Exhibit US-12, p. 24. 
44 Throughout this section (paras. 7.13-7.25) on paymen t card transactions, and only  for the sake of this 
section, the Panel refers to "payment card companies", defined by the Bank for International Settlement as "a 
company which owns trademarks of payment cards (credit, debit or prepaid cards) and may also provide a 
number of marketing, processing or other services to institutions issuing its cards." (BIS, Committee on 
Payments and Settlement Systems, A Glossary of Term s used in Payments and Settlement Systems, March 
2003, (« BIS glossary »), Exhibit US-68, p. 16).  We  are using this term, rather than "EPS suppliers" and 
"network operators" as done by the United States and China, respectively, in order not to prejudge the 
discussion in subsequent sections.  We are also using the term "payment card services" in this section to refer to 
the services supplied by these companies, and "payment  card networks" to refer to the infrastructure and 
networks owned and operated by payment card companies.  
45 Visa IPO Prospectus, Exhibit US-3, pp. 129-130.  
46 United States response to China's request for a preliminary ruling, para. 43.  
47 Visa IPO Prospectus, Exhibit US-3, pp. 129-130. 
48 Visa IPO Prospectus, Exhibit US-3, pp. 129-130. 
49 United States response to China's request for a preliminary ruling. para. 43. 
50 Visa IPO Prospectus, Exhibit US-3, p. 130; and China's first written submission, para. 30. 
51Visa IPO Prospectus, Exhibit US-3, p. 130 (under the title "Functions perfor med in connection with 
payment card transactions"); China's first written submissi on, paras. 31 and 32; and United States' response to 
Panel question No. 36(a), para. 93.    WT/DS413/R 
 Page 17 
 
 
 7.17 Payment card companies own, manage and promote payment brands, which they licence to 
their primary customers (i.e. issuers and acquirers ).  They approve card design, specifications and 
other requirements in connection with card issuance and acceptance.52  Payment card companies 
establish rules and standards for their product plat forms and payment networks, including eligibility 
for participation in the network, product platfo rm features and functionality, merchant acceptance 
standards, and dispute and arbitration processes.  They provide and operate the processing 
infrastructure and network necessary for the execution of payments via payment cards.  They typically 
transfer authorization and clearing data and he lp settle funds between issuers and acquirers.53  
Payment card companies also provide issuers and acquirers with certain guarantees, including for 
example, indemnification for any settlement loss that issuers or acquirers may suffer due to the failure 
of another issuer or acquirer to fu nd its daily settlement obligations.54  
7.18 There are two main business models used in card-based electronic payment transactions.  
These are often referred to as "open-loop", or "fou r-party" models, and "closed-loop", or "three-party" 
models.55  In the four-party model, different en tities handle the issuing of payment cards, the 
acquisition of transactions and the actual processing of  transactions.  Payment card companies in this 
model do not issue payment cards, nor do they acquire transactions with those payment cards.  
Payment card companies own and operate the netw orks that connect issuers and acquirers, and 
process transactions made in connection with paymen t cards.  In the four-party model, the payment 
card company does not interact directly with either the card holder or the merchant.56  It is the issuer 
and the acquirer that interact directly with, respectively, the card holder and the merchant.57  
Moreover, in four-party models, it is the issuer th at extends credit to the card holder, not the payment 
card company.58   
7.19 In the three-party model, the payment card company itself is responsible for issuing cards, 
handling the acquisition of transactions, and processing the transactions.  In recent years, certain 
payment card companies that operate three-party mode ls have also developed relationships with banks 
and other institutions, allowing them to issue these  cards and acquire transactions for these cards' 
networks, thereby emulating certain aspects of the four-party model.59  
7.20 The processing of transactions, whether in connec tion with four-party or three-party models, 
encompasses both (1) "front-end processing" (w hich serves to authenticate and authorize 
                                                      
52 United States' response to China's request for a preliminary ruling, para. 44. 
53 Visa IPO Prospectus, Exhibit US-3, p. 131; Visa 2010 Annual Report, Exhibit US-4, pp. 5 and 7-13; 
A Time of Change: A World of Opportunities, MasterCard 2009 Annual Report, Exhibit US-5, pp. 4 and 7-9; 
UBS Securities LLC, Visa 201: No Better Way to 'Play the Swipe ' (June 25, 2008), Exhibit US-10, pp. 28-30; 
and Bank for International Settlements (BIS) Committee on Payment and Settlement Systems (CPSS) Clearing 
and Settlement Arrangements for Retail Payments in Selected Countries , September 2000, Exhibit CHN-1, 
pages 2-6. 
54 Visa 2010 Annual Report, Exhibit US-4, pp. 30-31; and MasterCard 2010 Annual Report, 
Exhibit US-6, p. 38. 
55 Visa IPO Prospectus, Exhibit US-3, p. 128. 
56 Visa IPO Prospectus, Exhibit US-3, pp. 128-129; and MasterCard 2010 Annual Report, 
Exhibit US-6, pp. 4 and 7. 
57 Visa IPO Prospectus, Exhibit US-3, p. 129.  
58 Ibid. p. 128. 
59 Visa IPO Prospectus, Exhibit US-3, p. 128; US SEC Form 10-K, American Express Company 
Annual Report, for the fiscal year ended November 30, 2010, ("American Express 2010 Annual Report"), 
Exhibit US-7, pp. 4-11; and US SEC Form 10-K, Discover Financial Services Annual Report, for the fiscal year 
ended November 30, 2010, ("Discover 2010 Annual Report"), Exhibit US-8, pp. 1-4. WT/DS413/R 
Page 18 
 
 
 transactions), and (2) "back-end processing" (whi ch serves, essentially, to clear and settle 
transactions).60    
7.21 Front-end processing occurs at the time of the transaction.  A card-based payment transaction 
can be initiated either at a terminal (e.g. a merc hant's POS) or remotely via e-mail, telephone or 
internet.  When a card holder presents a payment card  to pay for a transaction, the merchant uses its 
POS terminal to transmit a request for authorization to its acquirer or a merchant (third-party) 
processor.  The acquirer or its third-party process or determines the type of transaction (debit or 
credit), and the particular payment card network th rough which the transaction should be routed, and 
then forwards that request to th e relevant payment card company. 
7.22 After the payment card company receives the authorization request, it undertakes several 
tasks.  Under a four-party model, it ascertains the t ype of transaction (e.g. credit or debit), determines 
various transaction parameters (e.g . location and type of merchant), identifies the issuer, and then 
routes the authorization request to the issuer.  At that point, the issuer identifies the card holder's 
account and decides whether to authorize the transac tion after confirming that the card is authentic, 
the account is in good standing, and the account li mit is not exceeded (in the case of a credit 
transaction) or that sufficient funds are available (i n the case of a debit transaction).  The issuer then 
authorizes or rejects the transaction based on these validations as well as the card holder's record.  The 
authorization (or rejection) information is sent back to the merchant via the payment card network.  If 
the acquirer and the issuer are one and the same, a transaction is referred to as an "on-us" transaction. 
If the transaction has been authorized, the paymen t card company receives the approved transaction 
information.  Then the payment card company returns the authorization information to the acquirer, or 
to the merchant processor or merchant, as the case ma y be.  Finally, when the merchant receives the 
authorization, it completes the sale. 
7.23 Under the three-party model, the payment card company, which is also the issuer and the 
acquirer, determines various tran saction parameters, identifies the card holder's account and decides 
whether to authorize the transaction.  The authori zation (or rejection) information is sent by the 
payment card company directly to the merchant.  
7.24 Back-end processing occurs at the time of the transaction or at a later point in time.  
Merchants submit transaction information for cleari ng and payment to acquirers, which forward this 
information to the appropriate en tity (e.g. a payment card company in the case of a typical "four-party 
model" transaction) for purposes of establishing ne t settlement positions.  The payment card company 
aggregates and processes all the information and prod uces a daily report of the net and debit positions 
of issuing and acquiring financial institutions.  Th e settlement bank relies on the report generated by 
the payment card company but does not perform any data processing itself.  The payment card company organizes this information by the respec tive card-issuing bank, and then forwards the 
transaction information to the participating entities sp ecifying those transactions that were cleared and 
the net amounts to be paid (by issuers) and receive d (by acquirers).  The transfer of money from the 
card holder to the issuer and from the acquirer to th e merchant is carried out in accordance with the 
contractual agreements between those parties.  Under the three-party model, there are no inter-bank 
transactions, because the payment card company act s as payment card network and processor, card 
issuer and merchant acquirer.  In this case, it is the payment card company that debits the card holder's 
account and credits the merchant's account.
 61   
                                                      
60 United States response to China's request for a pr eliminary ruling, paras. 49-53; and China's first 
written submission, para. 20.  China also makes refere nce to "back-end processing" (China's first written 
submission, para. 31). 
61 American Express 2010 Annual Report, Exhibit US-7, pp. 4-11; Discover 2010 Annual Report, 
Exhibit US-8, pp. 1-4; and China's first written submission, fn. 7.  WT/DS413/R 
 Page 19 
 
 
 2. The services at issue  
7.25 The United States' request for th e establishment of a panel specifies that the present dispute 
concerns "certain restrictions and requirements maintained by China affecting electronic payment 
services for payment card transactions and the suppli ers of those services (electronic payment services 
suppliers)" (footnotes omitted).62  It describes "electronic payment services" and a "payment card" as 
follows: 
"Electronic payment services" involve the services through which transactions 
involving payment cards (as defined below) are processed and through which transfers of funds between institutions par ticipating in the transactions are managed 
and facilitated.  Suppliers of electronic payment services supply, directly or 
indirectly, a system that typically includes the following:  the processing 
infrastructure, network, and rules and pro cedures that facilitate, manage, and enable 
transaction information and payment flows and which provide system integrity, 
stability and financial risk reduction; the process and coordinati on of approving or 
declining a transaction, with approval gene rally permitting a purchase to be finalized 
or cash to be disbursed or exchanged; the delivery of transaction information among 
participating entities; the calculation, determ ination, and reporting of the net financial 
position of relevant institutions for all transac tions that have been authorized; and the 
facilitation, management and/or other partic ipation in the transfer of net payments 
owed among participating institutions.
63 
A "payment card" includes a bank card, cred it card, charge card, debit card, check 
card, automated teller machine (ATM) card, prepaid card, and other similar card or 
payment or money transmission product or  access device, and the unique account 
number associated with that card or product or access device.64 
7.26 According to the United States, electronic paym ent services (EPS) are at the centre of all 
payment card transactions, and without these services the transactions could not occur.65  EPS provide 
an efficient, timely and reliable means to facilita te the transmission of funds from the holders of 
payment cards who purchase goods or services to the individuals or businesses that supply them.  EPS suppliers receive, check and transmit the informati on that the parties need to conduct the transactions, 
and manage, facilitate, and enable the transmission of funds between participating entities.  According 
to the United States, the rules and procedures established by the EPS supplier give the payment 
system stability and integrity, and enable it to efficiently handle net flows of money among the 
institutions involved in card payments.
66  EPS suppliers also provide their customers with certain 
guarantees to ensure the integrity of the electronic payment services, including, for example, instances 
where customers fail to honour payment cards or wher e issuers or acquirers fail to fund obligations.67  
In the United States' view, the processing infrastruct ure, network, and rules and procedures, which 
facilitate, manage, and enable transaction informati on and payment flows, a nd which provide system 
integrity, stability and financial risk reduction, are key components of electronic payment services. 68  
7.27 China submits that the services at issue, as d escribed in the United States' request for the 
establishment of a panel, relate to inter-bank pa yment card transactions, i.e. transactions where the 
                                                      
62 United States' request for the establishment of a panel, para, 1. 
63 Ibid. fn. 1. 
64 United States' request for the establishment of a panel, fn. 2. 
65 United States' first written submission, para. 25. 
66 United States' response to China's request for a preliminary ruling, para. 40. 
67 Ibid. para. 42.  
68 Ibid. para. 45. WT/DS413/R 
Page 20 
 
 
 financial institution that issues the payment card to  the card holder is unrelated to the financial 
institution that acquires the payment card transaction from the merchant.69  These financial institutions 
(i.e. issuers and acquirers) authorize, clear, a nd settle inter-bank payment card transactions by 
obtaining these services from the operators of inter-bank payment card networks.70  China considers 
that an inter-bank payment card network is a te lecommunications and data-processing infrastructure 
through which a network operator provides certain au thorization, clearing, and settlement services to 
participating financial institutions.71  According to China, the operator of the network is not a party to 
the payment card transaction (which, it argues, is wh y it is a "four-party" model, not a "five-party" 
model),72 but provides financial institutions with an ex ternal network for authorizing, clearing, and 
settling the payment card transactions to which they are parties.73  The services at issue are what 
payment card companies  describe as their "tra nsaction processing services", consisting of the 
operation of a "processing infrastructure" that is us ed to provide certain "core processing services" 
relating to the "authorization, clearing, and settle ment" of payment card transactions.  These are, in 
China's view, "network services", i.e. the service s that network operators  provide to financial 
institutions for the purpose of authorizing,  clearing, and settling inter-bank payment card 
transactions.74   
7.28 The Panel notes first that the services at issue are "electronic payment services for payment 
card transactions" or, in other words, electronic paym ent services for transactions with payment cards.  
We also note that the definition of services at issue provided by the United States includes 
transactions with payment cards, which the United States defines as including bank cards, credit cards, charge cards, debit cards, check cards, ATM cards, prepaid cards, and other similar cards or 
payment or money transmission products or access devices, and the unique account number 
associated with those cards or products or access devices.
75 
7.29 We also observe that the descriptions provided by the parties of the services involved in the 
processing of payment card transactions do not differ fundamentally.  We find confirmation of this 
observation in China's first written submission, where China states that "the United States has 
provided lengthy descriptions of the technical and commercial aspects of payment card transactions.  
China does not substantially disagree with  those descriptions, insofar as they go".76 
7.30 The Panel further notes that China acknowledged that the services at issue are determined by 
the United States' description in its request for the establishment of a panel and the scope of the 
challenged measures.77  Indeed, China does not challenge the f act that the five "elements" described 
by the United States in its panel request correspond to what EPS suppliers − as the United States calls 
them − or "network operators" − as China prefers to call them − do.  In analysing the five elements, 
China observes that:  
                                                      
69 China's first written submission, para. 18. 
70 Ibid. para. 22. 
71 Ibid. para. 22. 
72 Ibid.  para. 22. 
73 Ibid. para.22. 
74 Ibid. para. 73. 
75 United States' request for the establishment of a panel, fn. 2. 
76 China's first written submission, para. 15.  
77"The services at issue in this dispute are determin ed by two factors. (1) the U.S. definition of the 
services at issue, as set forth in its panel request; and (2) the scope and effect of the challenged measures. It is 
the overlap of these two factors that determines the servi ces at issue. The services at issue cannot be broader 
than the services that the United States has described in its panel request, and cannot be broader than the 
services that are actually affected by the challenged m easures".  (China's first written submission, para. 61).  WT/DS413/R 
 Page 21 
 
 
 [T]he first element of the "system" - "the processing infrastructure, network, and rules 
and procedures" - appears to correspond, at least in part, to what payment card 
companies describe as their telecommunicati ons and data-processing infrastructure; 
the second element of the "system" - "the process and coordination of approving or 
declining a transaction" - appears to co rrespond to what payment card companies 
describe as the authorization component of their core data processing services; 
the third and fourth elements of the "s ystem" - "the delivery of transaction 
information among participating entities" a nd "the calculation, determination, and 
reporting of the net financial position of rele vant institutions for all transactions that 
have been authorized" - appear to co rrespond to what payment card companies 
describe as the clearing component of their core data processing services; and 
the fifth element of the "system" - "the facilitation, management and/or other 
participation in the transfer of net paym ents owed among partic ipating institutions" - 
appears to correspond to what payment card companies describe as the settlement 
component of their core data processing services.78 
7.31 Moreover, both parties recognize that other institutions, such as issuers, acquirers and 
settlement banks, also participate in payment card transactions.79  
7.32 We observe that China did not request that any element of the definitions of the services at 
issue provided by the United States be eliminated from the dispute.  Indeed, while China emphasizes 
the clearing and settlement aspect of payment card transaction processing, it does not deny that the 
services at issue encompass other aspects of paym ent card transaction processing as well. In China's 
own words: 
However many other services might be at issue in this dispute, clearing and 
settlement services are plainly among them … Thus, while the United States makes 
heroic efforts to avoid using the terms "cl earing" and "settlement" in the narrative of 
its submissions, China believes it should be undisputed that the services at issue 
include clearing and settlement services.80    
7.33 We also note that the parties agree that the ser vices at issue, as described in the United States' 
request for the establishment of a panel, do not incl ude the services supplied by issuing and acquiring 
institutions.81 
7.34 However, before proceeding further, the Pane l would like to clarify two issues on which the 
parties differ, namely (i) whether the services at  issue relate only to "inter-bank payment card 
transactions"; and (ii) whether the payment card comp any is a party to the payment card transaction. 
7.35 Regarding the first question, we note China's argument that the services at issue relate to 
inter-bank payment card transactions, defined by Ch ina as transactions where the financial institution 
that issues the payment card to the card holder is unr elated to the financial institution that acquires the 
                                                      
78China's first written submission, para. 72. 
79 United States' response to China's request for a pr eliminary ruling, para. 43; and China's first written 
submission, para. 20. 
80 China's first written submission, para. 75. 
81 In its response to Panel question No. 43, the United States indicated that "[a]s a threshold matter, 
classification of issuing and acquiring services is not neces sary for the panel’s resolution of this dispute, as the 
U.S. claims do not pertain to this service". WT/DS413/R 
Page 22 
 
 
 payment card transaction from the merchant.82  As will become clear in the subsequent sections 
dealing with the third-party mode l and third-party processors, we do not agree with this argument by 
China.  In our view, the services at issue relate not only to inter-bank payment card transactions, as 
defined by China, but also to payment card tran sactions where the issuing financial institution is 
related to - or can indeed be the same as - the ac quiring financial institution.  This is the case, for 
example, of "on-us" payment card transactions, as well as transactions carried out under the three-
party model.   
7.36 Turning to the second question, China argues that the "operator of the network" (or the 
payment card company, as we have called it) is not  a party to the payment card transaction (which is 
why it is a "four-party" model, not a "five-party"  model); rather, the "operator of the network" 
provides financial institutions with an external network for authorizing, clearing, and settling the 
payment card transactions to which they are parties.83  We do not agree with this argument by China.  
In our view, as evidenced by the description of payment card tran sactions provided in paragraphs 7.13 
to 7.24 above, payment card companies or netw orks are indeed a party to the payment card 
transaction.  This is not only the case with networ ks operating under the "three-party" model, but also 
with other networks generally operating under th e "four-party" model. Among other things, these 
operators own the payment card brand; set rules, standards, and procedures by which issuers and 
acquirers must abide; and provide authorizati on, clearing and settlement services to issuers and 
acquirers.  More importantly, they guarantee the trans actions and get paid by issuers and acquirers for 
the services supplied. 
7.37 In concluding, we recall that the services at i ssue in this dispute are determined by the 
description in the United States' panel request.  In our view, the services at issue are therefore 
electronic payment services for all types of paymen t card transactions.  These are the services the 
Panel must focus on, regardless of th e labels used by the parties to re fer to them. Hereinafter, we will 
use the expression "electronic payment services for tr ansactions involving the use of various types of 
payment cards" (EPS) and "electronic payment service suppliers" (EPS suppliers) to refer to, 
respectively, the services at issue and the service su ppliers supplying those services.  We find support 
for this terminology in the fact that: (i) China does not deny that the dispute is about services related 
to "payment card transactions"; (ii) transactions with all types of payment cards are envisaged; (iii) 
these services are currently conducted exclusively th rough "electronic" means; and (iv) as will 
become clearer in the discussion on classification (S ection E below), the services at issue are, in our 
view, "payment services".  
3. Whether the services at issue cover the three-pa rty model in addition to the four-party 
model 
7.38 China argues that the definition of the service s at issue proposed by the United States is 
premised on a four-party model.84  The services at issue do not include the supply of services in three-
party models and, therefore, the Panel should not reach findings on the supply of services under this 
model. Focusing on the five elements described by the United States, China argues that the definition 
of the services at issue proposed by the Unite d States is based on the notion that there are 
"participating institutions" or "participating entities"  involved in the "system".  The essential feature 
of this "system", according to China, is to aut horize, clear, and settle payment card transactions 
among "participating institutions".  In a three-party m odel, China argues, there is no need to authorize, 
clear and settle payment card transactions among di fferent financial institutions, because the issuer 
and the acquirer are the same entity.  Because ther e are no inter-bank transactions in the three-party 
                                                      
82 China's first written submission, para. 18. 
83 Ibid. para. 22. 
84 China's second written submission, para. 104.  WT/DS413/R 
 Page 23 
 
 
 model, there is no need for the operator of a three-party payment card system to obtain network 
services from a network operator.85   
7.39 The United States argues that the services at issue cover services supplied in three-party 
models.  For the United States, three-party model transactions include both those EPS systems that 
perform the functions of issuer and acquirer intern ally and "on-us" transactions occurring in a four-
party system where the issuer and the acquirer are the same entity.  In a three-party transaction, the 
role of the EPS supplier may vary by circumstance,  but its activities would nevertheless fall within the 
definition of EPS provided in the panel request.  The United States submits that, in some markets and 
systems, three-party model transactions are proc essed over the EPS provider’s network in the same 
manner as transactions involving a different issuer an d acquirer.  Even if the transaction is processed 
internally and not over the EPS network, it is th e EPS provider that developed the payment product 
(card program), it is the EPS provider’s intellect ual property that enables the switching of the 
transaction and supports the electronic paymen t process, the transaction is governed by the EPS 
provider’s rules and procedures, and the transaction is secured by the EPS provider’s risk management and fraud protections.  According to the United States, the fact that certain payment card 
transactions may occur where the issuing institutio n and acquiring institution are the same does not 
change the definition or scope of the service being provided.  Even in three-party models, the United 
States argues, the EPS supplier still must conduct an authorization of the transaction, which includes 
providing information such as the merchant code, POS terminal ID, country codes of the issuer, 
acquirer, and merchant, transaction currency, etc.  The United States further submits that, in many instances, it "would be virtually impossible to distin guish "on-us" three-party transactions from four-
party transactions".
86 
7.40 Replying to a Panel question, Australia, th e European Union, Guatemala, and Korea 
submitted that the services at issue should be classifi ed in the same subsector irrespective of whether 
they are supplied under the three-party or the four-party model.87  According to the European Union, 
China's commitments refer to the ser vices, not to the participants in the transaction; Guatemala is of 
the view that the participants in the supply of  the service do not change the nature of the service.88 
7.41 The Panel recalls that the services at issue, as defined in the pane l request, consist of a 
"system" that "typically includes" five elements, namely  (i) the processing infrastructure, network, 
and rules and procedures that facilitate, manage, and enable transaction information and payment 
flows and which provide system integrity, stability and financial risk reducti on; (ii) the process and 
coordination of approving or declining a transaction,  with approval generally permitting a purchase to 
be finalized or cash to be disbursed or exchange d; (iii) the delivery of transaction information among 
participating entities; (iv) the calculation, determinat ion, and reporting of the net financial position of 
relevant institutions for all transactions that have been authorized; and (v) the facilitation, 
management and/or other participation in the tr ansfer of net payments owed among participating 
institutions.89  As noted above, China has not challenged  this description.  Moreover, China agrees 
that the definition of the services at issue propo sed by the United States includes EPS suppliers 
operating four-party models.90  
                                                      
85 China's second written submission, paras. 104-107. 
86 United States' response to Panel questions No . 25, paras. 81-83; and 74, paras. 26-28. 
87 Australia's response to Panel question No. 5; European Union's response to Panel question No. 5, 
para. 14; Guatemala's response to Panel question No. 5, para. 23; and Korea's response to Panel question No. 5. 
88 European Union's response to Panel question No. 5, para. 14, and Guatemala's response to Panel 
question No. 5, para. 23. 
89 United States' request for the establishment of a panel, fn. 1. 
90 China's second written submission, para. 104. WT/DS413/R 
Page 24 
 
 
 7.42 We consider important the use of the words "typ ically includes" in the panel request.    By 
describing the "system" being supplied as "typically " including a number of specified elements, the 
panel request provides certain general parameters of the system under consideration, rather than 
seeking to confine the Panel's examination to a "s ystem" that necessarily contains each and every 
element listed, and only those elements.91  We note that EPS suppliers  operating three-party models 
provide essentially all the elements of the "system"  referred to above, as well as other services, such 
as card issuing and transaction acquiri ng, which are not within this sy stem and are thus outside the 
scope of the services at issue.  In particular, three-party model EPS suppliers provide the processing 
infrastructure, network, and rules and procedur es that facilitate, manage, and enable transaction 
information and payment flows and which provide system integrity, stability and financial risk 
reduction; the process and coordina tion of approving or declining a transaction, with approval 
generally permitting a purchase to be finalized or cash to be disbursed or exchanged; the delivery of 
transaction information among participants in the transaction; the calculation, determination, and 
reporting of the net financial positi on of relevant participants in the transactions (e.g. total debit 
position of a card holder); and the facilitation, manageme nt and/or other participation in the transfer 
of payments among participants in the transaction.    We are aware that in a three-party model, the 
supply of the fourth and fifth elements of the system92 would usually involve individuals (e.g. card 
holders and merchants) rather than  "institutions".  However, in our view, that aspect does not change 
the nature of the EPS supplied.  Nor does this differe nce mean that the three-party model falls outside 
the broadly defined "system" under consideration.  In our view, EPS suppliers operating under three- 
and four-party models provide in essence the same services, as argued by the United States and some 
of the third parties. 
7.43 China also argues that the three-party model does not make it necessary to authorize, clear 
and settle payment card transactions among different financial institu tions, because the issuer and the 
acquirer are the same entity.  Theref ore, in China's view, there is no  need for the operator of a three-
party payment card system to obtain network services from a network operator.  We agree with the 
United States that the fact that a payment card transa ction is processed by a supplier that is also the 
issuer and the acquirer (meaning that there is ther efore no inter-bank transaction) does not change the 
fact that such supplier prov ides the services at issue.  
7.44 The Panel also notes the United States' argument that three-party model transactions include 
both those EPS systems that perform the functions of issuer and acquirer internally and "on-us" transactions occurring in a four-party system where the issuer and the acquirer are the same entity.  
The Panel observes that, depending on the identity of the issuer and acquirer, payment card 
transactions processed within − in principle − four-party models may resemble the processing of 
transactions within three-party models.  This is th e case of the "on-us" transactions within four-party 
models, in which the same bank is both the acquirer for the merchant and the issuer to the card holder.  
In such a case, the transaction is not processed ove r the network of the EPS supplier, but is handled 
solely by the bank concerned.  In such a case, balan ces are shifted on the books of that bank, and there 
are no inter-bank transactions.  This is very similar to the processing of payment card transactions by 
service suppliers operating under three-party models. It  would be virtually impossible, in the Panel's 
view, to distinguish between the processing of a three-party transaction and the processing of an "on-
us" four-party transaction, which, China agrees, are undoubtedly within the scope of the services at 
issue.  
                                                      
91 We note that, according to the Shorter Oxford English Dictionary , typically means symbolically, 
representatively, characteristically.  See Shorter Oxford English Dictionary , 6th ed., A. Stevenson (ed.) (Oxford 
University Press, 2007) ( Shorter Oxford English Dictionary ), Vol. 2, page 3393. 
92 Respectively, the calculation, determination, and re porting of the net financial position of relevant 
institutions for all transactions that have been auth orized; and the facilitation, management and/or other 
participation in the transfer of net paym ents owed among participating institutions.  WT/DS413/R 
 Page 25 
 
 
 7.45 For the above-mentioned reasons, the Panel fi nds that the services at issue include the 
services supplied under three-party models, in a ddition to the services supplied under four-party 
models.  
4. Whether the services at issue include the services supplied by issuer and merchant 
processors 
7.46 The parties disagree on whether services supplied by issuer and merchant processors fall 
within the issues to be decided in this dispute.   
7.47 China argues that issuer and merchant pro cessors are providers of outsourced technology 
services to the issuing and acquiring institutions, respectively.  Among other services, merchant 
processors provide the equipment necessary for the merchant to accept payment cards, route payment 
card transactions to the correct network, handle transaction authorizations, and undertake the back-
end processing necessary for the merchant to ob tain payment.  Among other services, issuer 
processors manage and provide the information t echnology necessary for the card issuer to interact 
with network operators for the purpose of authorizing,  clearing, and settling transactions that are made 
with the payment cards that it issues. China submits that the description of the services at issue by the 
United States makes no reference to these types of outsourced services.  China further argues that the 
panel request refers to a "system"  provided by "EPS suppliers", that allows for the authorization, 
clearing and settlement of inter-bank payment card tran sactions.  In China's view, issuer and merchant 
processors do not supply a "system".93  
7.48 The United States argues that issuers and acquire rs may choose to perform services related to 
the processing of transactions in-house or may c hoose to outsource these services to issuer and 
acquirer processors, that will then handle or transm it electronic payment information to or from an 
EPS supplier.  Issuer and acquirer processors are optional entities for card-based electronic payment 
transactions.  According to the United States, this is in contrast to an EPS supplier that provides 
necessary infrastructure and services for card- based electronic payment transactions.94   
7.49 The Panel recalls that the parties agree th at the services at issue do not encompass the 
issuance of payment cards and the acquisition of  payment card transactions, activities which are 
typically handled by banks.  Thus, we address on ly the question of whether or not the services 
supplied by issuer and merchant processors are included in the services at issue.  
7.50 We note that third-party processors have a very broad reach in terms of the services supplied.  
One global EPS supplier acknowledges that it faces "competition from transaction processors throughout the world, such as FirstData Corporation and Total Systems Services, Inc., some of which 
seek to enhance their networks that link issuers directly with point-of-sale devices for payment card 
transaction authorization and processing services. Certain of these transaction processors could potentially displace MasterCard as the pr ovider of these payment processing services".
95 
7.51 The Panel recalls that the definition of the ser vices at issue involves two particular elements 
relevant to third-party processors, i.e. "services through which transactions involving payment cards 
are processed", and "services through which the transmission of funds between institutions 
participating in the transactions are managed and facilitated".  Once they are accredited by payment 
card companies, as noted above, these third-party pr ocessors participate in the processing of payment 
card transactions.  As such, they provide "servi ces through which transactions involving payment 
cards are processed", including, for example, termin al operation, authorization routing, and electronic 
                                                      
93 China's second written submission, paras. 110-114. 
94 United States' response to Panel question No. 36(a), para. 93. 
95 MasterCard 2010 Annual Report, Exhibit US-6, p. 22. WT/DS413/R 
Page 26 
 
 
 data capture.  They also provide "services th rough which the transmission of funds between 
institutions participating in the transactions are managed and facilitated", including the preparation 
and submission of clearing files, settlement processing, card holder and merchant statement preparation, and  charge-back processing.
96   
7.52 We are therefore of the view that, due to th eir substantial involvement in the process, and 
considering the overlap between, on the one hand,  the services supplied by third-party processors, 
and, on the other hand, those supplied by el ectronic payment services suppliers (see discussion 
regarding the role of EPS suppliers, in paragraphs 7.12 to 7.24 above)97, third-party processors are 
part of the payment services loop. 
7.53 We turn now to the statement in the United St ates' request for the establishment of a panel 
those [s] uppliers of electronic payment services supply, directly or indirectly, a system that typically includes five elements
98.  A textual analysis of this phrase supports our conclusion that the services at 
issue include the services supplied by third-party processors.  We observe first that the definition 
refers to "suppliers" in the plural (not "a supplier", singular), and makes reference to "a system" in the 
singular (not "systems", plural).  This suggests, in  our view, that the services can be supplied by one 
or several suppliers, who, together, provide "a sy stem".  Secondly, the definition indicates that the 
suppliers supply "directly or indirectly" a system , which suggests that the supplier may supply the 
system "directly", meaning on its own, or "indirectly", meaning with the participation of other service 
suppliers.  Thirdly, as noted above, many of the services "typically" included in the system are 
supplied by third-party processors, some of whic h are seen by global EPS suppliers as competitors.99  
Therefore, we do not consider that there is a need for a service supplier to supply all five elements of 
the "system" described by the United States to be cons idered, in terms of the United States' request for 
the establishment of a panel, as a "supplier of electronic payment services".   
7.54 In the light of the foregoing analysis, the Pane l concludes that the services at issue include the 
services supplied by third-party processors. 
5. Whether the services at issue are integrated services 
7.55 The United States argues that electronic payment services for payment card transactions are 
one integral service – one that is  supplied and consumed as such.  Mo reover, the service is supplied as 
a coherent whole.  According to the United States , each component of the "system" is "critical to 
effectuate the payment card transaction and EPS supp liers provide the entire package of services to 
their customers, the institutions that are particip ating in the payment card transactions."  For the 
United States, each of the elements of the system is integrated and necessary to facilitate a payment 
card transaction and, as such, constitutes a single serv ice.  Indeed, without the entire system supplied 
by the EPS supplier, no issuer would be able indivi dually to offer a card that is as widely accepted by 
merchants, and no acquirer could offer merchants a service that can deliver such a large number of 
card holders.  It is necessary for each component element to work collectively for EPS to function 
properly.100 
                                                      
96 A "charge back" is a reversal of a payment card tr ansaction, typically initiated by the card issuer at 
the card holder's request. Charge backs can occur for a number of reasons, including fraud and processing 
errors. 
97 We recall that for the sake of neutrality at that stage of the report, paragraphs 7.12 to 7.24 made 
reference to "payment card companie s” instead of “EPS suppliers".  
98 United States' request for the establishment of a panel, fn.1 (emphasis added). 
99 MasterCard 2010 Annual Report, Exhibit US-6, p. 22; and Visa IPO Prospectus, Exhibit US-3, table 
in p. 130. 
100 United States' response to Panel question No. 26 , para. 84; United States' second written submission, 
paras. 11-14.  WT/DS413/R 
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 7.56 China argues that the services at i ssue do not have the nature of a single, integrated service.  
For China, the argument by the United States is a necessary con sequence of its position that all 
services that "manage", "facilitate", or relate to th e "processing" of a payment card transaction (or that 
are "essential", "integral", or "necessary") must  be classified as "payment services".  This 
interpretation, according to China, does not allow fo r "dividing" the services at issue.  While the 
United States identified five elements of a "syste m" that "[s]uppliers of electronic payment services 
supply", it is clear – China argues – that the United States perceives no distinction among these 
elements for the purpose of classifyin g the services at issue in this dis pute, or in relation to the case 
that it has decided to present.101   
7.57 The Panel notes that two different – albeit closel y related – issues arise.  One is whether the 
services at issue can be considered an integrated  service, which is supplied as such; the other is 
whether the services at issue should be classified under a single subsector or under more than one 
subsector in the classification system.  We shall exam ine here the first issue; the discussion related to 
the classification of the services at issue is found in Section E below. 
7.58 The Panel observes that the definition of the servi ces at issue refers to a "system" composed 
of several elements.  Those elements could be c onsidered, individually, as services in their own right , 
e.g. "the process and coordination of  approving or declining a tr ansaction", "the delivery of 
transaction information among participating entities", "t he calculation, determina tion, and reporting of 
the net financial position of relevant  institutions for all transactions that have been authorized", and 
"the facilitation, management and/or  other participation in the transfer of net payments owed among 
participating institutions."  In the Panel's view, all these elements show that "electronic payment 
services for payment card transactions" are made up of different services that may be individually 
identified.   
7.59 The United States argues, however, that the various  elements of the system are integrated and 
necessary to facilitate a payment card transaction a nd, as such, constitute a single service.  In our 
view, all elements of the system, together, are necessary for the payment card transaction to 
materialize.  None of the elements of the "sys tem", individually, would be sufficient to process a 
payment card transaction.  Each of them must be integrated into a whole.102  Indeed, we agree with the 
United States' argument that without the entire sy stem supplied by the EPS supplier, no issuer would 
be able individually to offer a card that is as widely accepted by merchants, and no acquirer could 
offer merchants a service that can deliver such a large number of card holders.103  From that 
perspective, considering the transaction from be ginning to end, electronic payment services for 
payment card transactions constitute an integrated service. 
7.60 A related question is whether "electronic payment services for payment card transactions", 
despite being made up of several services, are neve rtheless supplied as an "integrated" service, or 
whether those different service components can be supplied – and are in fact supplied – as separate 
services by different service suppliers.  China argu es that different "elements" or "components" of 
"electronic payment services" are routinely supplied as different services by different service suppliers 
in several countries.  One of the examples put forw ard by China to support this assertion is France, 
where, according to China, the authorization pro cess for payment card transactions is carried out by 
the network of " Groupement des Cartes Bancaires " (or CB), while the clearing and settlement of 
                                                      
101 China's response to Panel question No. 29, paras. 22-24. 
102 The Shorter Oxford English Dictionary , Vol. 1, p. 1402, defines "integrated" as:   "1 Combined into 
a whole; united; individual, … c Uniting several components previo usly regarded as separate". 
103 United States' response to Panel question No. 26, para. 84, United States' second written submission, 
para. 17. WT/DS413/R 
Page 28 
 
 
 transactions is handled by "C ompensationREtail" (or CORE).104  The United States argues that the 
fact that two separate entities may provide different elements of "electronic payment services" is not 
inconsistent with the fact that each of the elemen ts is integrated and necessary to facilitate payment 
card transactions, and as such constitutes a single ser vice.  In the United States' view, "electronic 
payment services" could not be effectuated through the provision of the service provided by STET 
only, or the service provided by CB only.  It is, in the United States' view, the combination that 
enables the payment card transaction to occur.   
7.61 We agree with the United States' view on this matter.  How the supply of "electronic payment 
services" is organized depends on different parame ters (e.g. the business models adopted by the 
entities participating in the payment card transacti on).  On the one hand, global electronic payment 
services suppliers provide all the components of th e "system" identified by the United States, thus 
supplying a final product that looks like a "single" service for the direct user (the issuing and 
acquiring institutions) and for the ultimate benefi ciaries of these services (the card holder and the 
merchant), and that in many countries that is the case.  On the other hand, there are jurisdictions 
where the different components of the "system" are supplied by different servi ce suppliers.  Further, 
as we saw previously, third-party processors may also intervene in the processing of payment card 
transactions.  In the Panel's view, therefore, the services at issue may as a factual matter be supplied 
by a single service supplier or by more than one service supplier acting in concert. 
7.62 We conclude therefore that the services at issue include both the instances in which these 
services are supplied as a single service by a single service supplier, and those instances in which different elements of the "system" described by the United States are supplied by different service 
suppliers. 
D. C
HINA 'S SPECIFIC COMMITMENTS CONCERNING THE SERVICES AT ISSUE  
7.63 The United States claims that, in sector 7.B, under the heading "Banki ng and Other Financial 
Services" of its GATS Schedule, China undertook market access and national treatment commitments 
with respect to subsector (d), which reads "[a] ll payment and money transmission services, including 
credit, charge and debit cards, travellers che ques and bankers draft (i ncluding import and export 
settlement)" (subsector (d)).  According to the Un ited States, subsector (d) includes the electronic 
payment services supplied in connection with "credit,  charge and debit cards", and other payment card 
transactions.105 
7.64 China argues that the United States has failed to pr ove that any of the services at issue, much 
less all of them, fall within subsector (d) of its Sc hedule. In China's view, the clearing and settlement 
services at issue fall under paragraph 5(a), subsector (xiv), of the GATS Annex on Financial Services 
(subsector (xiv)), which covers "[s]ettlement a nd clearing services for financial assets, including 
securities, derivative products, and other negot iable instruments", a subsector for which no 
commitments have been made in China's Schedule. China maintains that the fact that those clearing 
and settlement services do not fall within the scope  of subsector (d) defeats the United States' 
assertion that all of the services at issue fall within s ubsector (d).  According to China, the "payment 
services" referred to in subsector (d) encompass the issuance and acceptance by banks and other types 
                                                      
104 CORE is a payment processing network develope d and operated by the STET company (Systèmes 
Technologiques d’Echange et de Traitement).  Examples of European countries in which the national 
authorization network is independen t of the clearing and settlement mech anism for payment card transactions, 
Exhibit CHN-103, pp. 2 and 5. 
105 United States' first written submission, para. 13.  WT/DS413/R 
 Page 29 
 
 
 of financial institutions of payment instruments other than cash.  However, issuing and acquiring 
services are not part of this dispute.106 
7.65 Australia, the European Union and Korea s ubmit that the services at issue fall under 
subsector (d) of China's Schedule.107  According to Ecuador, an ex cessively broad interpretation of 
specific commitments in GATS schedules would constitute an unacceptable impairment of WTO 
Members' rights to define the scope and content of such commitments.108 
7.66 The Panel must determine whether, as claime d by the United States, China has undertaken 
specific commitments on the services at issue un der subsector (d) of its Schedule of Specific 
Commitments (China's Schedule).109 To do so, it will need to inte rpret China's Schedule as well as 
relevant provisions of the GATS. 
7.67 Article XX:1 of the GATS provides that each Me mber "shall set out in a schedule the specific 
commitments it undertakes", notably on market access and national treatment.  This schedule, 
according to Article XX:3, "shall form an integral part" of the GATS110, and is thus legally part of the 
WTO Agreement.111  For that reason, GATS schedules mu st be interpreted according to the 
"customary rules of interpretation of public interna tional law", as codified in Articles 31 and 32 of the 
Vienna Convention.112 
7.68 As a result, we will interpret China's Schedul e and other relevant treaty text in accordance 
with the ordinary meaning to be given to the terms of the Schedule in their context, and in the light of 
the object and purpose of the GATS and the WTO Agre ement.  The Panel will turn to supplementary 
means of interpretation pursuant to Article 32 of the Vienna Convention as appropriate. 
1. Order of analysis of the subsectors identified by the parties 
7.69 As a preliminary matter, the Panel must decide wh ether to start its interpretative analysis with 
subsector (d) of China's Schedule, or with subsect or (xiv) of the GATS Annex on Financial Services 
(Annex).   
7.70 China submits that, because clearing and settleme nt services for payment card transactions are 
encompassed by subsector (xiv) of the Annex, it is unnecessary for the Panel to examine the United 
States' assertion that those services are encompassed by subsector (d). According to China, the Panel 
should begin with an analysis of subsector (xiv) of the Annex – a subsector not listed in China's 
Schedule – because this subsector offers the more specific description of the clearing and settlement 
services at issue.  Referring to the rules of interp retation contained in the United Nations' Provisional 
Central Product Classification113 (CPC), China claims that the categ ory that provides the most specific 
                                                      
106 China's first written submission, paras. 78 and 96. 
107 Australia's third-party submission, para. 7; European Union's third-party submission, para. 23; and 
Korea's third-party su bmission, para. 11.  
108 Ecuador's third-party statement, para. 5. 
109 Schedule of Specific Commitments  of the People's Republic of China, GATS/SC/135 (14 February 
2002).  The relevant part of China's Schedule is contained in Annex G to this Report. 
110 Article XX:3 of the GATS provides: "Schedules of  specific commitments shall be annexed to this 
Agreement and shall form an  integral part thereof." 
111 Pursuant to Article II:2 (Scope of the WTO) of  the Marrakesh Agreement Establishing the World 
Trade Organization (WTO Agreement), the GATS, which is included in Annex 1B of the WTO Agreement, is 
an integral part of  that Agreement. 
112 DSU Art. 3.2. See also Appellate Body Report, US – Gambling , para. 160.  For the text of Articles 
31 and 32 of the Vienna Convention, see above, para. 7.8. 
113Provisional Central Product Classification, Statistical Papers, Series M No.77, United 
Nations (1991). WT/DS413/R 
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 description is to be preferred to categories providing a more general description.114  The United States 
did not offer specific arguments on this issue. 
7.71 The Panel notes, first, that this dispute con cerns the scope of China's GATS commitments.  
The issue before us is whether the United States can properly base its claims in respect of the services 
at issue on China's commitments under subsector (d).  For this reason, we believe that it would be 
incongruous for the Panel to begin its analysis by interpreting a subsector not relied on by the United 
States and not contained in China's Schedule.  Furtherm ore, under the approach proposed by China, 
the Panel would need to determine at the outset of its examination which of subsectors (d) and (xiv) is 
"more specific". In our view, the matter is not so obvious that we could confidently determine, 
without undertaking a detailed examination, that sub sector (xiv) is "more specific" in relation to the 
services at issue.   
7.72 For these reasons, we are not persuaded that we must, from the outset, follow the CPC rule of 
interpretation referred to by China and thus direct  our initial analysis away from the provisions of 
China's Schedule, in particular subsector (d).  Na turally, this neither prevents nor dispenses us from 
subsequently examining subsector (xiv) of the An nex as relevant context for the interpretation of 
China's Schedule.  The Panel will thus start its analysis by examining subsector (d) of China's 
Schedule. 
2. Interpretation of subsector (d) in China's Schedule 
7.73 The parties have different views on the scope of  subsector (d).  The United States argues that 
subsector (d) encompasses the services at issu e. China disagrees and submits that this 
subsector covers issuing and acquiring services, which are not among the services at issue.   
7.74 As explained above, we will interpret subsect or (d) as described in China's Schedule in 
accordance with customary rules of interpretation.  Therefore, we will first determine the ordinary 
meaning of relevant terms used to describe the services  contained in subsector (d).  We shall then turn 
to the context, which includes, inter alia , other elements of China's Schedule, the GATS itself, the 
GATS Annex on Financial Services, and the schedules of other WTO Members.115  Finally, we shall 
consider the object and purpose of the GATS and th e WTO Agreement.  As indicated above, we may 
turn to supplementary means of interpretation pursuant to Article 32 of the Vienna Convention as appropriate. 
(a) Ordinary meaning   
7.75 The United States argues that the services at issue fall within the ordinary meaning of 
"payment and money transmission services" as one type of "all" such services within subsector (d) of 
China’s Schedule.  According to the United States, the ordinary meaning of "payment" and "money 
transmission", as reflected in definitions from the Shorter Oxford English Dictionary  and specialized 
financial sources, demonstrates that subsector (d) covers the action of transferring money from one 
person to another.
116   
7.76 China argues that subsector (d) is listed in Ch ina's Schedule under the heading of "banking 
services".  Consistent with the ordinary meaning of  "banking services", all of the services listed under 
                                                      
114 China's first written submission, para. 89. 
115 In US – Gambling , a dispute about commitments included  in the GATS Schedule of the United 
States, the Appellate Body found that the context included:  (i) the remainder of the Member's Schedule; (ii) the 
substantive provisions of the GATS; ( iii) the provisions of covered agreements other than the GATS; and (iv) 
the GATS Schedules of other Members.  See Appellate Body Report, US – Gambling , para. 178. 
116 United States' response to China's request for a preliminary ruling, para s. 150-155; first written 
submission, para. 26;  and second written submission, paras. 19-32.  WT/DS413/R 
 Page 31 
 
 
 that heading are services that are typically provided  by banks, finance companies, and other types of 
financial institutions.  The banks are making a "payme nt" within the ordinary meaning of that term, 
i.e. they are engaging in "[a]n act , or the action or process, of paying  …".  Hence, according to China, 
the payment services referred to in subsector (d) encompass the issuance and acceptance by financial 
institutions of payment instruments other th an cash, but do not cover the services at issue.117 
7.77 Australia submits that the ordinary mean ing of the terms "all payment and money 
transmission services" encompasse s services which manage and facilitate the transfer of funds, 
whether for the purpose of payment for a good, service or debt, or for purposes unrelated to payment, 
from one person or place to another.118 
7.78 The Panel recalls that subsector (d) in  China's Schedule reads as follows: 
All payment and money transmission servi ces, including credit, charge and debit 
cards, travellers cheques and bankers draf t (including import and export settlement) 
7.79 We begin our textual analysis  of the phrase "all payment and money transmission services" by 
examining the terms "payment", "money" and "transmi ssion".  We shall then turn to the terms "all" 
and "services". 
(i) Ordinary meaning of "payment", "money" and "transmission" 
Dictionaries and glossaries  
7.80 The Panel observes at the outset that, for the purpose of determining the ordinary meaning of 
the terms of subsector (d), dictionary definitions of  those terms are a useful starting point.  However, 
such definitions are not always sufficient.  As the Appellate Body has explained:  
[I]n order to identify the ordinary meaning, a Panel may start with the dictionary 
definitions of the terms to be interpreted.   But dictionaries alone are not necessarily 
capable of resolving complex questions of interpretation, as they typically aim to 
catalogue all meanings of words – be those meanings common or rare, universal or 
specialized.119 
7.81 We first consider the term "payment" in subsector (d).  The Shorter Oxford English 
Dictionary  defines "payment" as "an act, or the action or process, of paying".120  In turn, the verb 
"pay" is defined as "give (a person) money etc. th at is due for goods received, a service done, or a 
debt incurred; remunerate.  Also, hand over or tr ansfer (money etc.) in return for something."121  This 
general definition of "payment" is consistent with  definitions in certain glossaries and specialized 
dictionaries submitted by the United States: (i) a "transfer of funds in any form between two 
parties";122 or (ii) the "transfer of money from one party to another with the assent of both parties".123  
We glean from these definitions that the three main elements in a payment are (i) there is a transfer, 
(ii) what is transferred is money, and (iii) the transferred money is due for goods, services or a debt 
incurred.  The Panel next considers the term "money". The Shorter Oxford English Dictionary  
provides the following general definition:  
                                                      
117 China's first submission, paras. 95-97. 
118 Australia's third-party submission, para. 10. 
119Appellate Body Report, US – Gambling , para. 164 (footnotes omitted, emphasis original). 
120 Shorter Oxford English Dictionary , Vol. 2, p. 2130. 
121 Ibid., p. 2129 . 
122 Banking Terminology , 3rd ed., (American Bankers Association,  1989) ( Banking Terminology ), 
Exhibit US-59, p. 262. 
123 John V. Terry, Dictionary for Business & Finance , 1990, Exhibit US-60, p. 240. WT/DS413/R 
Page 32 
 
 
 … A current medium of exchange in the form of coins and (in mod. use) banknotes; 
coins and banknotes collectively. … Any ob ject or material serving the same 
purposes as coins. … Property, wealth, possessions, resources, etc., viewed as convertible into coin or banknotes or having value expressible in terms of these.
124   
7.82 In glossaries and specialized dictionaries, the term "money" is defined as the following: (i) 
"[a]nything which is immediately a nd generally acceptable for the dischar ge of a debt or in exchange 
for a good or service"125;  (ii) "the means of facilitating the exchange of goods and services and the 
accumulation of financial wealth, commonly reco gnizable as banknotes, coins and bank deposits"126;  
(iii) "[a]nything that is generally acceptable as a mean s of settling debt. Money is said to have three 
main functions, being: a store of value; a means of exchange; and a means of debt settlement (cf. fiat 
money)".127 
7.83 As one might expect, the definitions found in specialized dictionaries and glossaries are more 
technical than the general definition found in the Shorter Oxford English Dictionary;  however, they 
are consistent with this definition.   The definitions suggest that "money" can be characterized  as (i) a 
generally acceptable means of exchange, (ii) that repr esents wealth, and (iii) is generally acceptable as 
payment. 
7.84 Finally, the Panel considers the term "transmission".  The Shorter Oxford English Dictionary  
defines this term as "[c]onveyance or transfer from one person or place to another; the action or 
process of passing from one person, organism, generati on, etc., to another, as by personal contact, 
stored information, genetic inheritance, etc."128  This definition suggests that the two main elements 
characterizing "transmission" are (i) a transfer, (ii) from one person or place to another.   
7.85 In sum, our analysis of definitions contained in dictionaries and glossaries suggests that the 
terms "payment", "money" and "transmission", when u sed in combination, refer to the transfer of a 
generally acceptable means of exchange from one pers on or place to another.  The money transferred 
may be due for goods or services received, or for se ttling a debt.  We continue our consideration of 
the ordinary meaning of the terms used in sub sector (d) with an examination of industry sources . 
Industry sources 
7.86 The United States argues that the description of the sector at issue drawn from industry 
sources is relevant to determining the ordinary me aning under Article 31 of the Vienna Convention.  
According to the United States, industry sources confirm the ordinary meaning of the service and 
demonstrate that EPS is a payment service that is one type of "all" "payment and money transmission 
service" falling within subsector (d).  The United St ates contends that, in many instances, the common 
meaning of a term corresponds to its usage within  a particular industry or sector and provides the 
basis for dictionary definitions.  Consequently, th e United States suggests, it is appropriate and may 
be helpful to look at how those involved in the service at issue understand the terms found in a GATS 
schedule.  The United States further submits that sector sources describe the suppliers of the services 
at issue in this dispute as supplying "electronic payment services" for "payment card" transactions and 
                                                      
124 Shorter Oxford English Dictionary , Vol. 1, p. 1821. 
125 D. Rutherford, Dictionary of Economics, Routledge , 1992, p. 305. 
126 G. Bannock & W. Manser, The Penguin International Dictionary of Finance , Penguin Books, 
3rd ed., 1999, p. 181. 
127 Peter Moles & Nicholas Terry, The Handbook of International Financial Terms, Oxford University 
Press, 1997. 
128 Shorter Oxford English Dictionary , Vol. 2, p. 3325.  WT/DS413/R 
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 as operating within the "global payments industry."  This confirms, according to the United States, 
that the services at issue are payment services falling under subsector (d) of China's Schedule.129 
7.87 China argues that the United States provides no support for the proposition that the manner in 
which certain service suppliers characterize their services is relevant, as a matter of treaty 
interpretation, to how those services should be classified in relation to a Member's schedule.  Thus, 
industry sources like company brochures, annual reports , or company websites are not relevant for the 
purpose of establishing the ordinary meaning of the terms at issue in this dispute, one reason being 
that they might be biased and self-serving.  Moreove r, China observes that th e United States has not 
pointed to a single panel or Appellate Body repo rt that uses industry s ources as a means of treaty 
interpretation.  China further argu es that, even if the industry sources cited by the United were legally 
relevant to the classification of the services at i ssue, they would support China's position that these 
services include clearing and settlement, among other possible services.  There are only a handful of 
references in these sources to the "payment industry"  or "payment systems", compared to far more 
numerous references to the telecommunications, da ta processing, and clearing and settlement services 
that these companies describe themselves as providing.130 
7.88 Ecuador submits that the industr y's characterization of a servi ce does not determine the nature 
of that service and the fact that one or several s uppliers describe the services they supply as "payment 
services" does not necessarily confer that character upon them.  The legal value of industry sources is 
therefore questionable.131 
7.89 The Panel begins by assessing whether it is a ppropriate to examine industry sources in 
addition to dictionaries for the purpose of determining the ordinary meaning of a term appearing in a 
GATS schedule.132  We acknowledge that, sometimes, industry sources may define a term in a way 
that might reflect self-interest and, thus, might be  "biased and self-serving", as argued by China.  To 
that extent, we see some merit in China’s concerns about relying on such sources, without more.  
Nevertheless, we see no basis to completely disr egard industry sources as potential relevant evidence 
of an ordinary meaning of a specific term in a pa rticular industry.  Indeed, we see no reason why a 
panel's search for the ordinary meaning of any term s hould always be confined to regular dictionaries.  
A panel's initial task in interpreting treaty provisi ons is to determine the ordinary meaning of the 
words used.  If industry sources can be shown to assist w ith this task in a particular dispute, we see no 
reason why a panel should not refer to  them.  As with a panel's consid eration of dictionary definitions, 
however, panels must be mindful of the limitati ons, such as self-interest, that industry sources may 
present and should govern their interpretive task accordingly.  
7.90 With these preliminary observations in mind, we now examine the relevance of the terms that 
appear in the industry sources referred to by the pa rties for purposes of the interpretation of the terms 
used in subsector (d).  We note that both parties refer to industry sources – sometimes the very same 
ones133 – but draw different conclusions from them. 134  The United States argues that the way industry 
                                                      
129 United States' first written submission, para. 26; and response to Panel question No. 82, para. 52. 
130 China's first written submission, paras. 117 and 118 ; and response to Panel question No. 82, paras. 1 
and 2. 
131 Ecuador's third-party statement, paras. 12, 13 and 15. 
132 We observe that, pursuant to Article 31(4) of the Vienna Convention, "[a] special meaning shall be 
given to a term if it is established that the parties so inte nded".  In the present dispute, no party is relying on this 
provision.  Hence, we shall not consider it. 
133 China submits in this regard that "[i]ronically, many of the materials that the United States 
references and includes as exhibits are materials that Chin a was already planning to cite – and, in fact, has cited 
above – for the proposition that the services at issue in this dispute include clearing and settlement services."  
China's first written submission, fn. 69. 
134 For example, both parties refer to MasterCard's 2010  annual report.  Our examination of this report 
indicates that, as argued by the Unite d States, it describes the company as providing "a global payment network" WT/DS413/R 
Page 34 
 
 
 sources describe their own services confirms that EPS is a payment service that is one type of "all" 
"payment and money transmission service" falling within subsector (d).  China has not relied on 
industry sources to shed light on the meaning of "all payment …".  In China's view, "[r]eading 
through the various corporate materials and other 'industry sources' that the United States cites as 
evidence, one is struck not by the handful of referenc es to the 'payment industry' or 'payment systems', 
but rather by the far more numerous references to the telecommunications, data processing, and 
clearing and settlement services that these co mpanies describe themselves as providing".135   
7.91 The Panel notes that industry sources cited in this dispute refer to payment transactions, 
electronic payments and the various types of cards specifically identified in subsector (d) of China's 
Schedule.136  We also note that the usage of these term s in industry sources is consistent with the 
definitions found in general dicti onaries and more specialized glossar ies that we examined in the 
preceding section.  We find, however, that industry sources do little to shed further light on the scope 
of subsector (d).  
The expression "payment and money transmission services " 
7.92 Having considered the ordinary meaning of "payment", "money" and "transmission", the 
Panel notes that these three elements must be ex amined in conjunction with the term "services", 
which they qualify.  Our understanding is that the phrase "payment and money transmission services" 
refers to, respectively, "payment services" and "m oney transmission services".  The parties and third 
parties in this dispute have the same reading.  What is  thus at stake in this dispute is the scope of the 
expressions "payment services " and "money transmission services" .   
7.93 The United States argues that EPS is the service through which transactions involving 
payment cards are processed and through which tran sfers of funds between institutions participating 
in the transactions are managed and facilitated.  It considers that EPS clearly fall within the ordinary 
meaning of "payment and money transmission services" as one type of "all" such services.137 
7.94 China submits that a service supplier that is me rely "managing" or "facilitating" the supply of 
this type of payment service, or "processing" paym ent transactions, is not itself a party to the payment 
transaction.  In China's view, the supplier is neither issuing nor accepting the payment instrument and 
is never in possession of the funds to be paid.  It  is not "paying" anyone, and is not providing a 
"payment service" within the ordinary meaning of that term.  China also submits that the United 
                                                                                                                                                                     
and operating in the "global payment industry".  The report also refers to various means of payment, including 
"credit cards, charge cards, debit cards (including … [A TM] cards), prepaid cards, …"  and indicates that the 
company provides "payment services and solutions".  We observe however that, as submitted by China, the 
same report also refers to MasterCard as providing "transaction switching", which includes "authorization, 
clearing and settlement".  MasterCard 2010 Annual Report, Exhibits US-6, pp. 4-10. 
135 China's first written submission, para. 118. 
136 Visa IPO Prospectus, Exhibit US-3, p. 128;  MasterCard 2009 Annual Report, Exhibit US-5;  
MasterCard 2010 Annual Report, Exhibit US-6, p. 6;  American Express 2010 Annual Report, Exhibit US-7, 
pp. 4-11;  Discover 2010 Annual Report, Exhibit US-8, pp. 1-4;  First Data Corp 10-K Annual Report (March 
10, 2011), Exhibit US-9;  UBS Investment Research, "V isa 201: No Better Way to 'Play the Swipe', June 25, 
2008, Exhibit US-10, pp. 28-30;  JCB Corporate Overview: JCB – A Leader in the Payments Industry (as of 
July 2011), Exhibit US-16;  JCB Smart Card Press Rel ease:  JCB International and Vital Processing Services 
Team Up to Introduce JCB Smart Card Capability in th e United States (November 2002), Exhibit US-17;  JCB 
History (2001-2009, JCB International Co., LTD), Exhibit US-18;  JCB System network:  Most Advanced 
Payment System Network, Exhibit US-19;  and CUP's Articles of Association, Articles 11-12, Exhibit US-20.  
See United States' response to China's request for a pr eliminary ruling, paras. 55-61 and 164-178;  and first 
written submission, para. 27. 
137 United States' response to China's request for a preliminary ruling, para. 147-155;  first written 
submission, paras. 25-26;  and second written submission, paras. 19-32.  WT/DS413/R 
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 States has not given a proper interpretation to subsector (d) because the United States has failed to 
acknowledge that network operators are not "p aying" or "transmitting money" to anyone.138 
7.95 The Panel observes that the GATS provides no definition of the word "service", although it 
defines related concepts, such as the supply  of a service and a service supplier . 139  Paragraph 5(a) of 
the GATS Annex on Financial Services defines a "f inancial service" as "any service of a financial 
nature offered by a financial service supplier of a Member", and contains a list of financial services 
that comprises "all payment and money transmission services, including …" under subsector (viii).  
7.96 It is clear to the Panel that the supply  of a "payment service" is not the same thing as the act of 
paying for goods or services.  Purchasers who, on their own account, pay merchants for goods or 
services received are not thereby providing a "payme nt service" to these merchants.  The payment in 
such case is what a purchaser gives in return fo r the good or service received, and not a separate 
service received by the merchant. Thus, "payment services" in our view are supplied, if at all, by a 
person or entity othe r than the payer or payee. Typically, wh en payment instruments other than cash 
are used, a third party intervenes between the payer and the payee, in order to facilitate or make 
possible the "act of paying". The same can be said about "money transmission services", since 
transmitting money normally involves the participation of  an intermediary to ensure that the money is 
transferred from one party to another.  
7.97 We consider, therefore, that whoever supplies a "payment service" does not "pay", but makes 
the payment between payer and payee, for exam ple by processing payment transactions involving the 
use of credit cards, debit cards, or other such in struments.  Similarly, when it comes to "money 
transmission services", the supplier of the service intervenes between the sender and the recipient 
(payer and payee) to ensure that the money is transmitted.  In our view, a "money transmission 
service" encompasses, among other situations, tho se where the supplier either transmits the funds 
from the payer's account to the payee's account (as in  the three-party model) or connects the parties 
involved in a payment transaction, and ensures that  payment instructions are executed and funds are 
transferred pursuant to the transaction (as in a fou r-party model). Hence, suppliers of "payment and 
money transmission services" are providing a "servi ce" that facilitates and enables payments and 
money transmissions.  For that reason, we agree with the United States that "payment and money transmission services" include those services that "man age", "facilitate" or "enable" the act, of paying, 
or transmitting money. 
Ordinary meaning of "all" 
7.98 As noted, subsector (d) begins with the word "a ll".  It is the only subsector in the financial 
services section of China's Schedule that does so.  Subsector (viii) of the GATS Annex on Financial 
Services, on which, according to China, s ubsector (d) of China's Schedule is based,140 also starts with 
the word "all".141 
7.99 Consistent with the principle of effective treaty interpretation, we consider that the word "all" 
before "payment and money transmission services" mu st be given meaning and effect.  In our view, 
the use of the term "all" manifests an intentio n to cover comprehensively the entire spectrum of 
"payment and money transmission services".  More partic ularly, this term indicates to us an intention 
to include all services essential to payment and money transmission, all means of payment and money 
                                                      
138 China's second written submission, para. 40. 
139 Article XXVIII(b) of the GATS defines the "supply of a service" as including "the production, 
distribution, marketing, sale and delivery of a service" and, pursuant to Article XXVIII(g) of the GATS, a 
service supplier means "any person that supplies a service".   
140 China's first written submission, para. 80. 
141 The Shorter Oxford English Dictionary , Vol. 1, p. 55 defines "all" as "the entire number of; the 
individual constituents of, without exception". WT/DS413/R 
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 transmission (i.e. paper-based, card-based and others ), and all associated business models (e.g. four-
party model, three-party model and any variations thereof).142 
Summary of findings on the ordinary meaning of "all payment and money transmission 
services" 
7.100  Our analysis of the ordinary meaning of the relevant text indicates that "payment and money 
transmission services" include those services that "man age", "facilitate" or "enable" the act of paying 
or transmitting money.  Finally, we concluded that th e use of the term "all" manifests an intention to 
cover comprehensively the entire spectrum of payment and money transmission services. 
7.101  Having determined the ordinary meaning of these terms, we shall turn now to the contextual 
elements of the phrase "all payment and money transmission services". 
(b) Context 
7.102  Pursuant to the rule codified in Article 31(2) of the Vienna Convention, the "context" within 
which a treaty provision shall be interpreted notably comprises the text of the treaty, including its 
preamble and annexes.  For the purpose of inte rpreting a Member's GATS schedule, the Appellate 
Body found in US – Gambling  that the context includes (i) the remainder of the Member's schedule; 
(ii) the substantive provisions of the GATS; (iii) th e provisions of covered agreements other than the 
GATS; and (iv) the GATS schedules of other WTO Members.143 
7.103  When looking at the remainder of a Member's  schedule as part of a contextual analysis, 
panels and the Appellate Body have consid ered several aspects.  For instance, in US – Gambling , the 
Appellate Body examined th e structure of the schedule.144  In China – Publications and Audiovisual 
Products , the Appellate Body considered such aspects as the contextual relevance of the sectoral 
heading at stake; market access, national treatment  and additional commitments under the subsector at 
stake; subsectors adjacent to th e services at stake; and commitments scheduled under another related 
sector.145 
7.104  In the present dispute, we therefore consider that our examination of the context should, as 
also reflected in the parties' arguments, cover the fo llowing elements:  (i) the rest of subsector (d); (ii) 
the headings in the sector at stake; (iii) market access, national treatment and additional commitments 
in the sector at stake; (iv) the structure of th e GATS; (v) the GATS Annex on Financial Services; and 
(vi) the schedules of other WTO Members.  We sha ll examine these different contextual elements in 
turn. 
(i) The rest of subsector (d)  
7.105  We recall that subsector (d) of China's Schedule reads as follows: 
[A]ll payment and money transmission services, including credit, charge and debit 
cards, travellers cheques and bankers draf ts (including import and export settlement) 
7.106  The phrase "[A]ll payment and money transmission services" in subsector (d) of China's 
Schedule is immediately followed by the phrase:  "inc luding credit, charge and debit cards, travellers 
cheques and bankers drafts (including import and e xport settlement)".  We observe that this phrase is 
                                                      
142 The Panel uses the term "essential" to refer to all component services which are needed to complete 
a payment transaction or money transmission. 
143 Appellate Body Report, US – Gambling , para. 178. 
144 Appellate Body Report, US – Gambling , para. 179. 
145 Appellate Body Report, China – Publications and Audiovisual Products , paras. 361-372.  WT/DS413/R 
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 similar to that found in subsector (v iii) of the Annex on Financial Services146, on which, according to 
China, subsector (d) is based.147  The only difference is the parenthetical addition "(including import 
and export settlement)" in subsector (d).  We sha ll examine first the phrase "including credit, charge 
and debit cards, travellers chequ es and bankers drafts" and shall th en turn to the parenthetical 
addition. 
The phrase "including credit, charge and debit cards, travellers cheques and bankers drafts" 
7.107  The United States argues that the explicit refere nce to credit, charge and debit cards accords 
with the recognition that EPS is integral to the processing of these types of cards and other payment 
card-based electronic payment transactions.  The United States observes that without EPS, payment 
card transactions could not occur.148 
7.108  China submits that, properly interpreted in its context, the "payment services" referred to in 
subsector (d) encompass the issuan ce and acceptance by financial institutions of payment instruments 
other than cash.  All of the specific types of pa yment instruments referenced in subsector (d) are 
methods of payment that allow the buyers and selle rs of goods and services to complete transactions 
without a direct transfer of cash.149 
7.109  The Panel first observes that the phrase "including  credit, charge and debit cards, travellers 
cheques and bankers drafts" refers  to payment and money transmission instruments, not to services.  
In our view, this phrase sets out various types of  instruments that require payment and money 
transmission services for them to work effectively.   We also note that the instruments listed are 
preceded by the word "including".  As explained by the panel in China – Publications and 
Audiovisual Products , "the word 'including' in ordinary usage indicates that what follows is not an 
exhaustive, but a partial, list of all covered items".150  In a similar vein, we consider that the phrase 
"including credit, charge and debit cards, travelle rs cheques and bankers drafts" in subsector (d) 
provides a non-exhaustive list of instruments used in connection with payment and money 
transmission services.151  In the Panel's view, the explicit refere nce to "credit, charge and debit cards" 
in subsector (d) of China's Sche dule sheds light on the type of services covered by the phrase "all 
payment and money transmission services" as it appears in China's Schedule.  It  notably suggests that 
the phrase covers payment and money transmission services that are essential for the use of the 
enumerated instruments. 
7.110  Turning to dictionary definitions, a "credit card"  is "a card issued by a bank, business, etc., 
authorizing the acquisition of goods and services on credit".152  A "charge card" is "a credit card, esp. 
for use at a particular store or chain of stores or for an account which must be cleared in full on receipt of a statement".
153  A "debit card" is defined as "giving the holder access (through a computer 
terminal) to an account in order to transfer funds to another's account when making a purchase, 
etc."154  These general definitions are confirmed by defi nitions found in more specialized glossaries, 
                                                      
146 In paragraph 5(a) of the Annex, subsector (viii) is defined as "[a]ll payment and money transmission 
services, including credit, charge and debit car ds, travellers cheques and bankers drafts". 
147 China's first written submission, para. 80. 
148 The United States also argues that  the ordinary meaning of the phrase "including credit, charge and 
debit cards" supports the position that EPS for payment card transactions fall within subsector (d) in China's 
Schedule.  United States' response to China's request for a preliminary ruling, para. 149 and 156-163; first 
written submission, paras. 25-26;  and second  written submission, paras. 19-23 and 33-37. 
149 China's first written submission, para. 96. 
150 Panel Report, China – Publications and Audiovisual Products , para. 7.294. 
151 In our view, these instrument s also include other types of cards, such as ATM cards.  
152 Shorter Oxford English Dictionary , Vol. 1, p. 555. 
153 Ibid. p. 385.  
154 Ibid. p. 615. WT/DS413/R 
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 such as the BIS Glossary of terms used in payment and settlement systems .155  Moreover, "credit, 
charge and debit cards" are commonly associated with EPS suppliers, which own and licence card 
brands.  Finally, we note that definitions of "trave llers cheques" and "bankers drafts" also identify 
them as payment and money transmission instruments involving transmission of money.156 
7.111  Accordingly, we find that the phrase "including  credit, charge and debit cards, travellers 
cheques and bankers drafts", which sheds light on the types of services covered by the phrase "all 
payment and money transmission services", refers to an illustrative list of payment and money 
transmission instruments.  Dictionary definitions  identify these instruments as instruments enabling 
the holder to make payments without cash and to tr ansfer money from one person or place to another.  
Consequently, the list confirms that "[a]ll paymen t and money transmission services" refers to those 
services that are essential to the processing and comple tion of transactions using payment cards.  The 
Panel considers that such transactions include not  only those involving, for instance, the use of a 
credit card at a POS terminal for the purpose of a good or service, but also those involving the use of a 
credit, debit or ATM card for the purpose of withdrawing cash from an ATM.  In the Panel's view, the latter constitutes a form of money transmission service.
157 
The reference to "(including import and export settlement)" 
7.112  The United States submits that the parenthetical phrase "(including import and export 
settlement)" does not appear in subsector (viii) of the GATS Anne x on Financial Services, but was 
added by China to the description of the services co vered by subsector (d).  According to the United 
States, the explicit use of "settleme nt" suggests that there is an elem ent of settlement and clearing that 
occurs as part of the payment service.158 
7.113  China submits that the term "import and export settlement" refers to the services that banks 
provide as payment intermediaries for import and expor t transactions through letters of credit. Unlike 
                                                      
155 The BIS defines a "credit card" as "a card indicating that the holder has been granted a line of credit. 
It enables the holder to make purchases and/or withdraw  cash up to a prearranged ceiling; the credit granted can 
be settled in full by the end of a specified period or can be settled in part, with the balance taken as extended 
credit. Interest is charged on the amount of any exte nded credit and the holder is sometimes charged an annual 
fee."  The same glossary defines a "debit card" as "card enabling the holder to have his purchases directly 
charged to funds on his account at a deposit-taking institution (may sometimes be combined with another 
function, e.g. that of a cash card or cheque guarantee card)."  Finally, the glossary defines a "travel and 
entertainment card" as "card issued by non-banks indicating that the holder has been granted a line of credit.  It 
enables him to make purchases but does not offer extended credit, the full amount of the debt incurred having to 
be settled at the end of a specified period.  The holder is usually charged an annual fee.  Also called charge 
card."   BIS  Glossary, Exhibit US-68, pp. 16, 19 and 50.  
156 A travellers cheque is "a cheque for a fixed amount of money which may be cashed or used in 
payment abroad, on the holder's signature", Shorter Oxford English Dictionary , Vo. 2, p. 3331.  A "bank draft" 
is defined as (i) "a check that a bank draws on itself, used when the payee does not wish to accept the credit of 
the customer as drawer. The customer purchases the bank draft with good funds, which gives the payee 
confidence that the check will be honoured. Also known as banker's check." The Palgrave Macmillan 
Dictionary of Finance, Investment and Banking  (Palgrave MacMillan, New York, 2010) ( The Palgrave 
Macmillan Dictionary of Finance, Investment and Banking ), p. 44; or as (ii) "a cheque drawn by a bank on itself 
or its agent.  A person who owes money to another buys the draft from a bank for cash and hands it to the 
creditor who need have no fear that it might be dishonour ed.  A bank draft is used if the creditor is unwilling to 
accept an ordinary cheque."  A Dictionary of Finance and Banking , Oxford Paperback Reference, 
Exhibit CHN-80, p. 34. 
157 In our view, the use of a credit, debit or ATM card to withdraw cash from an ATM constitutes a 
form of money transmission service, insofar as, for ex ample, the card issuing institution or card holder's bank 
authorizes the transmission of money fr om the card holder's bank account to the location of the ATM or, in the 
case of a credit card, a cash advance to the location of the ATM.  
158 United States' response to Panel question No. 83, paras. 54-58.  WT/DS413/R 
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 the case of payment cards, there is no third party th at provides clearing and settlement services to the 
financial institutions that are involved in an impor t/export transaction. The financial institutions deal 
with each other directly, and use the internati onal inter-bank payment system to complete the 
necessary transfer of funds. According to China, th e reference to "settlement" in subsector (d) in no 
way suggests that clearing and settle ment services are within the scope of this subsector, as there are 
no clearing and settlement services involved in an im port/export transaction.  China also submits that 
it is significant that subsector (d) does not  use the word "clearing".159 
7.114  The Panel notes that, as pointed out above in paragraph 7.106, the words in parenthesis – 
"including import and export settleme nt" – do not appear in subsector (v iii) of the Annex;   they were 
added by China to its Schedule.  Consistent with th e principle of effective treaty interpretation, these 
words must be given meaning. 
7.115  In our view, the terms "import and export" s uggest that the parenthetical phrase refers to 
payment services supplied in connection with interna tional trade transactions.  China appears to hold a 
similar view as it considers that the phrase refers to the services that banks provide as payment intermediaries for import and export transactions.
160  We observe that the parenthetical phrase 
qualifies inter alia  the expression "bankers drafts", which gene rally refers to a draft drawn by a bank 
on itself.161  Bankers' drafts are payment instruments used  in international trade transactions between 
importers and exporters.  Like other payment instrume nts listed in subsector (d), bankers' drafts must 
be settled in order to complete the transaction.162  In our view, the word "settlement" at the end of the 
phrase refers to the completed transaction.  Therefor e, the parenthetical phrase serves to confirm that 
payment services for transactions between importers  and exporters where payment occurs by means 
of bankers' drafts are covered by subsector (d) of China's Schedule.  
7.116  We note China's argument that the fact that subsector (d) does not  use the word "clearing" 
should be given interpretative significance.163  In the Panel's view, the fact that the word "clearing" is 
not mentioned in the bracketed language does not mean that no clearing is involved in situations 
where bankers' drafts are used.  Bankers' drafts, like any other type of cheque, are normally cleared 
before they are settled.  We also note that various sources suggest that clearing is usually a prior step 
to settlement:  the term "clearing" is defined as "[t]he system of settling payments due from one bank 
to another"164 or "[t]he exchange of mutual claims by fi nancial institutions with settlement of the net 
balance".165  Settlement marks the final stage in an import/export transaction completed through 
bankers' drafts.  Hence, in our view, "clearing" of  a bankers' draft is imp lied in the parenthetical 
phrase.   
                                                      
159 China's response to Panel question No. 83, paras. 1-3; and comments on United States' response to 
Panel question No. 83, para. 53. 
160 In response to Panel question No. 83, China submits that "[t]he term 'import and export settlement' 
refers to the services that banks provide as payment in termediaries for import and export transactions.  … They 
involve banks acting as trusted payment intermediaries to  allow the parties to an import/export transaction to 
avoid the use of cash."  China's response to Panel question No. 83, para. 1. 
161 See above fn. 156 for definitions of "bank draft". 
162 We note in this regard that the BIS definition cited above in fn. 156 likens bankers' drafts to 
cheques.   
163 China's comments on United States' response to Panel question No. 83, para. 53. 
164 Oxford Dictionary of Economics, 3rd ed., Oxford University Press,  2009, Exhibit CHN-4, p. 64. 
165 Banking Terminology , Exhibit CHN-3, p. 64-65, definition 2.  Another source defines "clearing" as 
"the process of transmitting, reconciling and, in some cases, confirming payment orders or security transfer 
instructions prior to settlement, possibly including the netting of instructions and the establishment of final 
positions for settlement."  BIS Glossary, Exhibits US-68; CHN-2, p. 13. WT/DS413/R 
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 7.117  We understand China's arguments to suggest that the language in parentheses applies 
primarily to letters of credit.166  We agree that letters of cred it are payment instruments used in 
international trade transactions and that payment services to complete transactions through letters of 
credit arguably can fall under subsector (d).  Thus the words "including import and export settlement" 
might also relate to letters of credit.  We observe, however, that letters of credit are not mentioned in 
the illustrative list under subsector (d).  Moreover,  a parenthetical phrase is a grammatical device 
often used to link the words in parent hesis to language that precedes them.167  Here, the parenthetical 
phrase follows a list of instruments that does not in clude letters of credit.  In our view, it is 
implausible that the parenthetical phrase relates primar ily to letters of credit, i.e. a payment instrument 
that has not even been included in the li st that precedes the parenthetical phrase.  
7.118  The Panel therefore concludes that the pare nthetical addition "(including import and export 
settlement)" in China's Schedule confirms that s ubsector (d) includes settlement, and by implication 
clearing, e.g. when bankers' drafts are used as pa yment instruments for transactions between importers 
and exporters.  We perceive no sound basis for assu ming that subsector (d) includes settlement, and 
where appropriate clearing, of transactions involvi ng the use of bankers' drafts, but that it would 
exclude settlement and clearing of transactions involving the use of the other  payment instruments 
listed in subsector (d).  In our view, the pare nthetical phrase merely seeks to make explicit – in 
relation to one particular type of transaction – something that the broad phrase "[a]ll payment and 
money transmission services …" already contains implicitly.   
Summary of findings on the phrase "including credit, charge and debit cards, travellers 
cheques and bankers drafts (incl uding import and export settlement)" 
7.119  Our examination of the phrase "including credit,  charge and debit cards, travellers cheques 
and bankers drafts" in subsector (d) as immediate context for interpreting the preceding words "[a]ll 
payment and money transmission services", led us to conclude that this phrase is an illustrative list 
which provides confirmation that the phrase "[a] ll payment and money transmission services" 
includes those services that are essential to the processing and completion of transactions using 
payment cards.  Moreover, the parenthetical a ddition "(including import and export settlement)" 
confirms that subsector (d) includes settlement, and by implication clearing, when bankers' drafts are 
used as payment instruments for transactions betw een importers and exporters.  The parenthetical 
addition also suggests to us that settlement and cl earing of transactions involving the use of other 
payment instruments listed in subsector (d) would likewise be classifiable under this subsector.   
7.120  We now proceed to examine whether other cont extual elements confirm or undermine these 
conclusions. 
(ii) Other elements of China's Schedule 
The subheading "Banking services as listed be low" in the sectoral column of China's 
Schedule 
7.121  China argues that subsector (d) is one of si x subsectors listed in China's Schedule under the 
heading "Banking services …".  According to China, the ordinary meaning of "banking services" is 
services provided by banks.  Consistent with this or dinary meaning, all of the services listed under the 
heading of "Banking services …" are services that  are typically provided by banks, finance 
                                                      
166 China's response to Panel question No. 83, para. 2.  United States' rebuttal arguments regarding 
China's letter of credit arguments are set out in United St ates' response to Panel question No. 83, paras. 54-58. 
167 The Shorter Oxford English Dictionary , Vol. 2, p. 2102 defines "parenthesis" as "a word, clause, 
sentence, etc., inserted (as an explana tion, qualification, aside, or afterthou ght) into a passage which is already 
grammatically complete, and usu. marked off by brackets, dashes, or commas."  WT/DS413/R 
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 companies, and other types of financial institutions .  China also submits that China's market access 
and national treatment inscriptions for mode 3 confirm that the services encompassed by 
subsectors (a) through (f) are services supplied by  banks and other financ ial institutions, which 
confirms that subsector (d) does not encompass services that are supplied to banks by non-bank 
service suppliers.  According to China, when inte rpreted in this context, the "payment services" 
referred to in subsector (d) en compass the issuance a nd acceptance by financial institutions of 
payment instruments other than cash.  China also submits that there is no indication in any Member’s 
commitments for subsector (viii) of the Annex that these services are provided by suppliers other than 
banks or other financial institutions.168 
7.122  The United States submits that the heading "Ba nking services…" does not have the effect of 
limiting the scope of the commitments to "banks " and other "regulated financial institutions". 
According to the United States, the definition of "f inancial institution" offered by China is far too 
narrow.  The United States also observes that, in addition to the explicit reference to "non-bank 
financial institutions" in China’s Schedule, there ar e other references to "foreign finance companies" 
in the market access column and to "foreign fina ncial leasing corporatio ns" in the additional 
commitments column.  The United States further argu es that, even if China's approach were correct, 
suppliers of payment card services would qualify b ecause they were formerly operated as associations 
of banks and, according to the United States, the na ture of the service that an entity supplies does not 
change merely because that entity assumes a new corp orate form.  The United States also submits that 
the characteristics and nature of the service contro l the classification of that service, and where the 
identity of the supplier is relevant, the sectoral d escription must clearly indicate that to be the case.169 
7.123  Australia, the European Union, Guatemala and Korea are of the view that the subheading 
"Banking services …" does not affect the scope of China's commitments under subsector (d).170 
7.124  The Panel notes that the heading "B. Banking a nd Other Financial Services …" in China's 
Schedule encompasses four categories, namely "Banking services as listed below", "Motor vehicle 
financing by non-bank financia l institutions", "Other financia l services as listed below", and 
"Securities".171  Subsector (d) is listed under the subhe ading "Banking services as listed below". The 
four categories are specific to China's Schedule: they are not present in the GATS Annex on Financial Services and do not appear in other WTO Members' GATS schedules.   
7.125  Turning first to the ordinary meaning of "banking ", this term is defined as (i) "the provision of 
payments facilities, credit, and capital to individuals, firms, and the government. …";
172  (ii) "the 
business of banks";173  and (iii) "the area of finance related to taking of deposits, granting of loans, 
and provision of other financial services, which may include investment, trading, and advisory".174  
                                                      
168 China's first written submission, paras. 95-98; and China's response to Panel question No. 60, 
paras. 108 and 109.  The Panel recalls that subsector (v iii) of the Annex corresponds to subsector (d) of China's 
Schedule. 
169 United States' second written submission, paras. 118-124; and response to Panel questions No. 60, 
paras. 151-153 and No. 61, paras. 154 and 155. 
170 Australia's third-party response to Panel question No. 9 (no paragraph numbering provided);  
European Union's third-party response to Panel question No. 9, para. 29;  Guatemala's third-party's response to 
Panel question No. 9, para. 34; and Korea's third-party's response to Panel question No. 9 (no 
paragraph numbering provided). 
171 See excerpt of China's Schedule in Annex G to this  Report.  We note that the last three subheadings 
are preceded by a hyphen.  We view the lack of a hyphen before "Banking services as listed below" as a 
typographical error.   
172 Oxford Dictionary of Economics , 3rd ed., Oxford University Press, 2009, Exhibit CHN-41, p. 26. 
173 Dictionary of Banking and Finance, 4th ed., A & C Black, 2010, Exhibit CHN-42, p. 30. 
174 The Palgrave Macmillan Dictionary of Finance, Investment and Banking , Exhibit CHN-47, p. 46. WT/DS413/R 
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 We observe that these definitions do not indicate th at "banks" are necessarily the exclusive providers 
of "banking" services.  
7.126  We also observe that all of the services listed in subsectors (a) to (f) under the subheading at 
issue are commonly supplied by banks, but non- bank financial services suppliers can also supply 
them.  For example, deposits (subsector (a)) can be taken by post offices; loans (subsector (b)) can be 
granted by post offices and finance companies;  leasing services (subsector (c)) can be supplied by 
leasing companies;  money can be transferred (subsector (d)) by post offices or other specialized 
suppliers;  guarantees (subsector (e)) can be granted by finance companies;  and foreign exchange 
(subsector (f)) can be traded by speci alised foreign exchange dealers a nd brokers.  Hence, in practice, 
different types of entities can supply the services listed in subsectors (a) to (f).  
7.127  Moreover, the commitments contained in th e market access column, which are relevant 
context for interpreting the subhead ing at issue, make reference to  "finance companies", which are 
non-bank entities.175  Finally, the additional commitment s column under the subheading "Banking 
services …" contains a reference to "financial leasing  corporations" which are also non-bank entities.  
With these considerations in mind, it is clear to us  that "banking services" as that term appears under 
the subheading at issue includes services supplied by banks and non-banks. 
7.128  China argues that "[c]onsistent with this ordi nary meaning [i.e. the ordinary meaning of 
banking services, which, according to China, refers to "services provided by banks"], all of the 
services listed under the heading of 'banking servi ces' are services that are typically provided by 
banks, finance companies, and other types of financial institutions ."176  In other words, China's 
argument amounts to saying that "services provided by banks" are "services provided by banks and 
non-banks".   
7.129  Moreover, as pointed out by the United States, when China wished to undertake a 
commitment with respect to a certain category of supplier only, it did so explicitly, such as in the 
subsector "[m]otor vehicle financi ng by non-bank financial institutions".177 
7.130  Furthermore, the Panel observes that, as evid enced by the arguments presented by both the 
United States and China, there is a close histor ical association between banks and EPS suppliers.  
Both parties have made reference to the fact that certain United States' EPS supp liers were operated as 
associations of banks until 2006, i.e. until we ll after China's accession to the WTO in 2001.178  If, as 
argued by China, the identity of the supplier is rele vant for purposes of classifying services, then those 
EPS suppliers were arguably providing "banking ser vices" as China defines that term (i.e. services 
supplied by banks) until they changed their corporate form in 2006.  The Panel has already indicated 
that it does not share China's narrow interpretation of  the term "banking services".  Having said that, 
the Panel agrees with the United States that the cl assification of a service should not change solely 
because the suppliers of that service modify their ownership structure or legal form.  Such an 
interpretative approach to classification would u ndermine the predictability, security and clarity of 
GATS specific commitments.    
7.131  We also find relevant in this respect eviden ce submitted by China (to which we referred in 
connection with determining whether the services in  question are supplied as integrated services)179 
                                                      
175 A "finance company" is defined as "a non-bank financial institution …" See The Palgrave 
Macmillan Dictionary of Finance, Investment and Banking , Exhibit CHN-88, p. 206.  
176 China's first written submission , para. 95 (emphasis added). 
177 United States' response to Panel question No. 60, para. 152. 
178 China's first written submission, para. 50 ("Prior to  their initial public offerings in 2006, Visa and 
MasterCard were operated as associations of banks … that issued and acquired payment cards under a common 
brand."); and United States' response to Panel question No. 60, para. 152. 
179 See para. 7.60 above.  WT/DS413/R 
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 demonstrating that, in France, for example, the au thorization system for payment card transactions is 
operated by CB,  an association of banks.  Moreover, clear ing and settlement of retail payments 
transactions, including payment card transactions, is operated by STET Inter-bank Payment Services, 
an institution created and still owned by five banks in France.  In our view, this is further evidence of 
the continuing link between banks and EPS.180 
7.132  Finally, as noted above, the heading "B.  Banking and Other Financial Services …" 
encompasses four subheadings, namely, "Banking servi ces as listed below", "Motor vehicle financing 
by non-bank financial institutions", "Other financia l services as listed below", and "Securities".  The 
subheadings "Banking services as listed below" and "Other financial services as listed below" group 
together, respectively, six and two subsectors.  We note that the pattern of market access and national 
treatment commitments under each of these four subh eadings is different.  Hence, in our view, the 
heading "Banking services as listed below" may also serve a practical purpose, which is to separate 
China's commitments that apply in the same way to subsectors (a) to (f) from its commitments that 
apply only to certain categories of services (motor vehicle financing by non-bank financial institutions) or to other services listed further dow n in China's Schedule (namely, other financial 
services … and securities).  As indicated, China h as undertaken different market access and national 
treatment commitments under the four subheadings in question.
  
7.133  In sum, our analysis of the subheading "Ba nking services as listed below" leads us to 
conclude that this subheading is not indicative of  an intention to circumscribe the commitments under 
subsectors (a) to (f) to a certain category of services suppliers, namely banks.  Rather, this subheading 
indicates that the services concerned are typically su pplied by banks, or were typically provided by 
banks in the past.  This does not detract from the fact, however, that some of these services can be, 
and are, also provided by other types of financia l entities.  Additionally, and from a more practical 
point of view, this subheading may also serve to  separate commitments undertaken in respect of 
subsectors (a) to (f) from different commitments undertaken in respect of other subsectors listed 
further down in China's Schedule. 
7.134  We conclude therefore that the placement of subsector (d) under the heading "Banking 
services as listed below" does not contradict our view  explained above that subsector (d) encompasses 
services that are essential to the processing and completion of transactions using payment cards. 
The market access commitment under mode 1 
7.135  In its arguments concerning the scope of th e market access commitment undertaken by China 
under mode 1181, the United States submits that the wo rd "Unbound" in China's market access 
commitment under mode 1 is followed by the qua lifying phrase "except for the following," which in 
turn is further elaborated by two sentences that de scribe elements of the services within subsector (d) 
for which China has undertaken mode 1 commitments, namely: 
- Provision and transfer of financial info rmation, and financial data processing 
and related software by supplie rs of other financial services; 
- Advisory, intermediation and othe r auxiliary financial services on all 
activities listed in subparagraphs (a) thr ough (k), including credit reference and 
analysis, investment and portfolio researc h and advice, advice on acquisitions and on 
corporate restructuring and strategy. 
                                                      
180 See China's response to Panel question No. 75, para. 2 and Cartes Bancaires  2010 Annual Report, 
Exhibit CHN-106, p. 13. 
181 The Panel will use the term "mode 1" to refer to th e supply of a service that is "from the territory of 
one Member into the territory of any other Member",  as provided for in Article I:2(a) of the GATS. WT/DS413/R 
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 7.136  For the United States, China's mode 1 commitment must be understood as recognizing that 
elements of "payment and money transmission" servi ces include "provision and transfer of financial 
information" and "advisory, intermediation and othe r auxiliary services", to the extent that such 
elements are integral to the core service, and that the service of which they form a part is properly 
classified within "payment and money transmission" services and not in subsector (k) or (l) of China's 
Schedule.182 
7.137  China replies that, in an effort to "jam" a ll of the services at issue into the exception to 
China’s unbound mode 1 inscription for subsector (d),  the United States takes the position that all five 
of the "components" of the services at issue match the descriptions of subsectors (k) and (l). By doing 
so, the United States removes everything from the bask et of subsector (d) and, as a result, has nothing 
left in this subsector.183 
7.138  The Panel is of the view that the market access entry under mode 1 constitutes relevant 
context for the purpose of interpretin g the scope of subsector (d).  The Panel refers to its detailed 
discussion of China's market access commitment under m ode 1 in Section VII.F.1(a) below.  There, 
the Panel finds that this entry is properly unders tood as referencing China's mode 1 market access 
commitment for subsectors (k) and (l).  Hence, the context provided by the market access entry under 
mode 1 does not suggest an interpretation that is di fferent from that suggested by the other contextual 
elements examined so far.  In other words, the mode 1 market access commitment does not contradict 
our conclusion that subsector (d) encompasses services that are essential to the processing and 
completion of transactions using payment cards.  
(iii) The GATS Annex on Financial Services 
The scope of subsector (xiv) in the Annex 
7.139  Article XXIX of the GATS ( Annexes ) states that "[t]he Annexes to this Agreement are an 
integral part of this Agreement".  Pursuant to that provision, the GATS Annex on Financial Services 
is treaty text.  Moreover, it constitutes context for purposes of interpreting China's Schedule, which is 
itself an integral part of the GATS.  Paragraph 5 ( Definitions ) of the Annex contains several 
definitions and a classification of financial service s that WTO Members may use – and many of them 
did use – when scheduling their commitments on financ ial services. We recall that China stated that it 
scheduled its financial services commitments by refe rence to the definition of financial services set 
forth in the Annex.184 We shall therefore turn to the Annex as relevant context for the interpretation of 
China's Schedule.  
7.140  Subsector (xiv) in paragraph 5(a) of the A nnex, which falls under the heading "Banking and 
other financial services (excluding insurance)", states as follows: 
Settlement and clearing services for financia l assets, including securities, derivative 
products, and other negotiable instruments185 
7.141  China argues that the clearing and settlement servic es at issue in this dispute are classifiable 
under subsector (xiv) of the Annex, a subsector fo r which China undertook no commitments.  China 
                                                      
182 United States' response to Panel question No. 45, para. 118; and second written submission, 
paras. 103-108. 
183 China's second written submission, paras. 37 and 38. 
184 China's first written submission, para. 80. 
185 We note China's comment that "[b]ecause the proc ess of 'clearing' comes before the process of 
'settlement', China will refer to 'clearing and settlement services' even though item (xiv) refers to these two 
processes in the opposite order" (China's first written s ubmission, fn. 49).  Like China and for the same reason, 
we shall refer to "clearing and settlement services".  WT/DS413/R 
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 maintains that every definition of the term "financi al assets" points to the conclusion that it refers to 
"money and claims", including cash and any right to  receive cash.  Furthermore, the reference to 
"negotiable instruments" in subsector (xiv) unambi guously includes retail payment instruments, such 
as cheques and travellers' cheques.  It is China's vi ew that, as context, the illustrative list of examples 
confirms that the drafters of subsector (xiv) intend ed to use the term "finan cial assets" according to its 
common and ordinary meaning.186 
7.142  The United States replies that China's position is inconsistent with the ordinary meaning of 
"settlement and clearing services for financial assets"  and fails to recognize that subsector (xiv) 
constitutes a substantially different financial service th an the services at issue.  It argues that China's 
position also fails to interpret the term "financial ass et" within its immediate context, which is the full 
sentence in subsector (xiv).187 
7.143  Australia argues that subsector (xiv) covers  settlement and clearing services for financial 
assets, other than card based transactions.  Settlement and clearing services for financial assets are 
clearly distinct from the settlement and clearing activity that is part of payment and money 
transmissions, such as credit card transactions.188  The European Union submits that the clearing and 
settlement services involved in the trading (buying a nd selling) of "securities, derivative products and 
other negotiable instruments" are separate and di stinct from the "payment and money transmission 
services" which take place when there is a transfer of funds between different persons or entities, in 
order to settle "credit, charge or debit card" transactions".189  According to Korea, subsector (xiv) of 
the Annex addresses mainly paper-based financial asset transactions which, in and of themselves, 
represent or carry designated monetary value.  The term "financial assets" refers to an object or 
instrument that contains or represents some sort of monetary value to its owner, which can 
subsequently be sold or negotiated; this is not  the case for credit card or credit card transactions.190 
7.144  The Panel observes that the parties do not dispute that payment card transactions must be 
cleared and settled.  They disagree, however, where the clearing and settlement of payment card 
transactions should be classified.  We recall that our interpretation of subsector (d) thus far has led us 
to the view that this subsector includes t hose services that are essential to the processing and 
completion of transactions using payment cards.  We also concluded, in paragraph 7.118 above, that 
the parenthetical addition "(including import and e xport settlement)" confirms that subsector (d) 
includes settlement, and by implication clearing.  Co nsistent with this view, clearing and settlement of 
payment card transactions should a priori  be classified under subsector  (d), because they are essential 
services to complete a payment card transaction.  We  also recall that, although we decided to begin 
our analysis with subsector (d) of China's Schedule, we also said that we would turn to subsector (xiv) 
of the Annex before reaching a final co nclusion on the scope of subsector (d).191 
7.145  Starting with an examination of the ordinary meaning of the terms "clearing", "settlement" 
and "financial assets", the Panel notes the following definitions: 
Clearing: "process of transmitting, reconciling and, in some cases, confirming 
payment orders or security transfer instru ctions prior to settlement, possibly including 
                                                      
186 China's first written submission, paras. 79-89; respon se to Panel question No. 39(a), para. 47;  and 
second written submission, paras. 2-33. 
187 United States' response to Panel question No. 24, paras. 68-80; and second written submission, 
paras. 42-74. 
188 Australia's third-party submission, para. 17; and third-party response to Panel question No. 1 (no 
paragraph numbering provided). 
189 European Union's third-party submission, para. 27. 
190 Korea's third-party submission, para. 1; and third-party response to Panel question No. 15(a) (no 
paragraph numbering provided). 
191 See para. 7.72 above. WT/DS413/R 
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 the netting of instructions and the estab lishment of final positions for settlement"192 or 
"(a) the exchange of the payment instrume nt or of relevant payment information 
between the payer's and the payee's financial institutions, and (b) the calculation of claims for settlement".
193 
Settlement: "an act that discharges obliga tions in respect of funds or securities 
transfers between two or more parties"194 or "a transfer of funds to complete one or 
more prior transactions that were made s ubject to final settlement. Settlement is the 
point at which underlying claims and obligations are satisfied".195 
Financial assets: "[m]oney and claims, as distinct from physical assets such as land, 
buildings, or equipment.  Financial asset s include money, securities constituting a 
claim to receive money, such as bills or  bonds, and shares giving indirect ownership 
of the physical assets of companies.  The claims held as financial assets include the 
obligations of individuals, companies, and governments, domestic and foreign.  
Financial assets include shares in financ ial institutions, and derivatives such as 
options."196  Other definitions describe a "financial  asset" as "[a]n asset that is either 
cash, a contractual right to receive cash, or the right to exchange a financial 
instrument with another entity under pot entially favourable terms or an equity 
instrument of another entity";197 or "assets in the form of stocks, bonds, rights, 
certificates, bank balances, etc., as distingui shed from tangible, physical assets …".198  
Financial: "of or pertaining to revenue or money matters".199 
7.146  An examination of dictionary definitions and other specialized glossaries suggests that the 
ordinary meaning of the words "clearing" and "se ttlement" refers to activities that are relevant for 
both retail payment instruments and securities.  The ordinary meaning of the term "financial assets" 
encompasses virtually all financial instruments.  We al so observe that definitions of the terms used in 
subsector (xiv) may overlap with definitions of term s in subsector (d) – for instance, "settlement" and 
"payment" are almost synonymous. 200  It is difficult, therefore, to ascertain the scope of subsector (d) 
of China's Schedule and that of subsector (xiv) of the Annex based solely on the ordinary meaning of 
the terms used in these sector descriptions.  We al so recall that the Appellate Body has cautioned 
against using dictionary definitions in a mechanical manner.201 
7.147  Thus, while we agree with China that an inte rpretation of the term "financial assets" must 
begin with the ordinary meaning of the terms, our  interpretation cannot end there.  We recall that, 
pursuant to Article 31(1) of the Vienna Convention, the ordinary meaning of "financial assets" must 
be interpreted "in good faith in accordance with the or dinary meaning to be given to the terms of the 
treaty in their context  and in the light of its object and purpose" (emphasis added).  With this in mind, 
                                                      
192 BIS Glossary, Exhibits US-68 and CHN-2, p. 13. 
193 BIS (CPSS), Clearing and Settlement Arrangements for Retail Payments in Selected Countries, 
2000, Exhibit CHN-1, pp. 2-6. 
194BIS Glossary, Exhibits CHN-2 and US-68, p. 45. 
195 Banking Terminology , Exhibit CHN-5, p. 323, definition 3. 
196 A Dictionary of Economics,  3rd ed., Oxford University Press, 2009, Exhibit CHN-32, p. 167. 
197 A Dictionary of Accounting , Oxford University Press, 1999, Exhibit CHN-38, p. 161. 
198 Dictionary of Finan ce and Investment Terms , 8th ed., Barron's, New York, 2010, Exhibit CHN-34, 
p. 257. 
199Shorter Oxford English Dictionary , Vol. 1, p. 964. The Shorter Oxford English Dictionary  does not 
contain a definition for financial asset or for clearing. 
200 See, above in section VII.D.2(a) our analysis of the ordinary meaning of the terms used in 
subsector (d) of China's Schedule. 
201 Appellate Body Report, US – Gambling , para. 164.  WT/DS413/R 
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 we now turn to the phrase "including secur ities, derivative products, and other negotiable 
instruments", which follows immediately after the wo rds "settlement and clearing for financial assets" 
in subsector (xiv) and hence constitutes immediate context.   
7.148  The United States argues that illustrative lists ma y be more than merely non-exhaustive lists 
of examples.   They may also inform the overall scope of a provision and the meaning of a term that 
they illustrate.  An examination of each of th e items in the illustrative list in subsector (xiv) 
demonstrates that retail receipts, such as a claim on a payment card, are not the same type of financial 
asset as the items included in the illustrative lis t ("securities", "derivative products" and "other 
negotiable instruments").  According to the United States, the illustrative list of financial assets in 
subsector (xiv) indicates that the scope of those asset s is limited to tradable investment instruments, 
which supports the conclusion that the term "financial  assets" as used in subsector (xiv) is intended to 
be limited to these types of instruments.202 
7.149  China submits that the three examples in the illustrative list do not constitute an exhaustive 
list of what constitutes a "financial asset" under s ubsector (xiv).  Moreover, according to China, the 
United States tries to work backwards from these ex amples to limit the ordinary meaning of the term 
"financial assets" to what it calls "tradeable fina ncial instruments" or, alternatively, "tradeable 
investment instruments".  For China, the referenc e to "negotiable instruments" in subsector (xiv) 
unambiguously includes retail payment instruments su ch as cheques and traveller's cheques.  Like 
securities and derivatives, these are "financial assets " within the ordinary meaning of that term 
because they give rise to claims for payment.  More over, China contends that because subsector (viii) 
of the Annex provides examples of negotiable instru ments as types of "payment services", the drafters 
understood that the clearing and settlement of these instruments under subsector (xiv) is distinct from 
the issuance and acceptance of these instruments under subsector (viii).203 
7.150  The Panel is of the view that the list containe d in subsector (xiv) sheds light on the type of 
clearing and settlement services covered under that sub sector.  In this respect, we recall the view of 
the panel in China – Publications a nd Audiovisual Products that "the word 'including' in ordinary 
usage indicates that what follows is not an exha ustive, but a partial, list of all covered items".204  We 
find this statement to be correct in the specific cont ext of subsector (xiv), an d so, like the parties, we 
regard the list as illustrative.  Accordingly, we c onclude that this illustrative list is a non-exhaustive 
enumeration of the kinds of "financial assets", the clearing and settlement of which are classified 
under subsector (xiv).   
7.151  We observe that although the parties appear to concur that the illustrative list in item (xiv) 
informs the understanding of the term "financial assets", they reach different conclusions on the 
meaning and scope of that term.  For the United States , illustrative lists "may help to inform the 
overall scope of a provision and the mean ing of a term that they illustrate".205  For China, the 
reference to "negotiable instruments" in the illust rative list of subsector (xiv) "necessarily informs the 
understanding of the term 'financial assets'".206  
                                                      
202 United States' response to Panel question No. 42, para. 107; and second written submission, 
paras. 75-93. 
203 China's response to Panel question No. 39(c),  paras. 54-62; and second written submission, 
paras. 15-26.  It will be recalled th at subsector (viii) states as follows : "[a]ll payment and money transmission 
services, including credit, charge and debit cards, trave llers cheques and bankers drafts" and that China states 
that subsector (d) was based on subsector (viii).  See,  para. 7.106 above. 
204 Panel Report, China – Publications and Audiovisual Products , para. 7.294.  
205 United States' second written submission, para. 75. 
206 China's response to Panel question No. 39(a), para. 49. WT/DS413/R 
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 7.152  We now turn to the specific financial inst ruments listed in the illustrative list of 
subsector (xiv),  i.e. securities, derivative products , and other negotiable instruments,  and start with 
an examination of their ordinary meaning:   
Security:  "A document held by a credit as guarantee of his or her right to payment; a 
certificate attesting ownership of stock, shares, etc.; the financial asset represented by 
such a document.  Also (US), such a doc ument issued to investors to finance a 
business venture";207 or "A pledge of financial or physical property to be surrendered 
in the event of failure to repay a loan.  Any medium of investment in the money 
market or capital market, e.g. a money-mark et instrument, a bond, a share.  A term 
used to refer only to bonds, and shares,  as distinct from money-market assets."208 
Derivative product:  "An arrangement or in strument (such as a future, option, or 
warrant) whose value derives from and is dependent on the value of an underlying 
asset.";209  or "a financial contract the value of which depends on the value of one or 
more underlying reference assets, rates or  indices. For analytical purposes, all 
derivatives contracts can be divided into b asic building blocks of forward contracts, 
options or combinations thereof."210 
7.153  Definitions found in general a nd specialized dictionaries suggest that "securities" (i) are a 
medium of investment, (ii) attest ownership right s and (iii) grant financial returns.  Derivative 
products essentially share these same characteristics.   
7.154  We consider now the ordinary meaning of th e term "negotiable instruments".  The word 
"negotiable" is defined as follows: "[o]f a bill, draf t, cheques, etc.: transferable or assignable in the 
course of business from one person to another simply by delivery."211  A "negotiable instrument" is "a 
document of title that can be freely negotiated …"212 or "unconditional order or promise to pay an 
amount of money, easily transferable from one person to another".213  The characteristics of 
"negotiable instruments", as identified in speciali zed dictionaries, are that they (i) are easily 
transferable from one person to another,  and (ii) can be freely negotiated.   
7.155  In our view, the reference to "securities, deri vative products and other negotiable instruments" 
indicates that this subsector deals with financial as sets which have in common the characteristic of 
being "negotiable".   Many types of financial instruments are negotiable and some retail payment 
instruments listed under subsector (d) of China's Sc hedule, such as traveller's cheques and banker's 
drafts, may be negotiable.  In contrast, we observe, and the parties seem to agree,214 that plastic 
                                                      
207 Shorter Oxford English Dictionary , Vol. 2, p. 2733. 
208 The Economist, Dictionary of Business , by Graham, Davis, Trott, Un cles, Bloomberg Press, 2003, 
Exhibit US-69, p. 334. 
209 Shorter Oxford English Dictionary , Vol. 1, p. 653. 
210BIS Glossary, Exhibit US-68, p. 20. 
211 Shorter Oxford English Dictionary , Vol. 2, p. 1905. 
212 A Dictionary of Finance and Banking , Oxford Paperback Reference, Oxford, 2008, 
Exhibit CHN-39, p. 303. 
213 Dictionary of Finan ce and Investment Terms , 8th ed., Barron's, New York, 2010, Exhibit CHN-40, 
p. 469. 
214 The United States submits that "[p]ayment cards and the sales slips generated from payment card 
transactions do not meet th e internationally accepted crite ria for a negotiable instrume nt." United States' second 
written submission, para. 81.  China states that "[c]re dit, charge, and debit cards are more modern payment 
instruments, and their relationship to the concept of negotiability is more complicated.  It is clear that the cards 
themselves – the pieces of plastic – are not negotiable instru ments.  … The slip is a promise to pay, but, in many 
cases, that promise will be subject to the terms and co nditions of a contractual agreement (e.g. the cardholder 
agreement between the issuer and the cardholder).  In these circumstan ces, the promise to pay may not be  WT/DS413/R 
 Page 49 
 
 
 payment cards and sales slips signed in connection with payment card transactions are not negotiable 
instruments because they are neither transferable nor can they be traded on a market.  Hence, on this 
basis we consider that payment cards and sales s lips do not fall within the category of "other 
negotiable instruments" referred to in the illustrative list of subsector (xiv). 
7.156  China argues, however, that payment cards have "common features" with bankers' drafts and 
traveller's cheques in the sense th at each of these instruments gi ves rise to inter-bank claims for 
payment between acquiring banks and issuing banks, a nd that such claims need to be cleared and 
settled.  China concludes that, "since it is beyo nd any reasonable dispute that the clearing and 
settlement of negotiable instruments is encompassed by item (xiv), it would be arbitrary and illogical 
to conclude that clearing and settlement services fo r certain types of retail payment instruments are 
covered by item (xiv), while clearing and settle ment services for other types of retail payment 
instruments are covered by item (viii) ".215 
7.157  The United States submits that there are many types of negotiable instruments and, while 
some are used for payments (for example, cheque s), others are used as investment vehicles (for 
example, commercial paper).  The reference to "ne gotiable instruments" in subsector (xiv) does not 
include all such instruments.  In the United Stat es' view, subsector (xiv) only indicates that there are 
negotiable instruments that settle and clear lik e securities and derivative products.  However, 
subsector (xiv) cannot be read properly to mean th at all negotiable instruments are settled and cleared 
like securities and derivative products.  Thus, the United States considers that to the extent a 
negotiable instrument appears in subsector (viii), it  is not a negotiable instrument referred to in 
subsector (xiv).216 
7.158  The Panel observes that, according to China,  the clearing and settling of payment card 
transactions should be covered under subsector (xiv ) because payment cards have "common features" 
with other payment instruments listed in subsector (d) (for example, bankers' drafts and travellers' 
cheques), these "common features" being, in China' s view, that "(1) each is a type of payment 
instrument that is issued by banks; and (2) that  each of these instruments gives rise to inter-bank 
claims for payment between acquiring ba nks and issuing banks, which such [ sic] claims need to be 
cleared and settled."217  In other words, China's interpretati on brings the clearing and settlement of 
non-negotiable payment instruments, such as payment cards, within the scope of subsector (xiv).  
What appears to matter most, in China's view, is that clearing and settlement services for all financial 
instruments, whether negotiable or not, be classified in the same subsector.   
7.159  It is not clear to us, however, how this interp retative approach can be reconciled with the 
terms used in subsector (xiv).  First, we note that  subsector (xiv) does not refer to "all settlement and 
clearing services", in contrast to the "[a]ll payment and money transmission services" found in subsector (d).  Furthermore, we observe that  the illustrative list includes two specific terms – 
"securities and derivative products" – and a broa der, residual category – "other negotiable 
instruments".  The adjective "other"
218 ties "negotiable instruments"  back to "securities" and 
"derivative products", thereby establishing a nexus between these three categories of instruments. 
Reading the term "other negotiable instruments"  with reference to the terms "securities" and 
"derivative products" that precede it supports the conc lusion that the term "negotiable instruments" 
does not include any and all instruments that are "n egotiable".  We note in this respect that the 
                                                                                                                                                                     
"unconditional", which is usually a formal requirement of negotiability." China's response to Panel's question 
No. 39(a), para. 48. 
215 China's response to Panel question No. 39(a), paras. 49 and 50. 
216 United States' response to Panel question No. 39(a), paras. 99-100. 
217 China's response to Panel question No. 39(a), para. 49. 
218 "Other" (adj.) is defined as "4 Existing besides or distinct from that or those already specified or 
implied; further, additional. …". Shorter Oxford English Dictionary , Vol. 2, p. 2035. WT/DS413/R 
Page 50 
 
 
 illustrative list does not say " any other negotiable instruments" or "other negotiable instruments of any 
kind".  Thus, we consider that the term "other negotia ble instruments", read in its context, covers only 
those instruments that share essen tially the same characteristics as securities and derivative products.  
7.160  Turning to the term "securities", we noted above  that this term is defined as a means of 
investment attesting ownership rights and granting fi nancial returns.  We also noted that derivative 
products essentially share these same characteristics.  In our view, payment cards and other payment 
instruments listed in subsector (d) do not share these characteristics.  In particular, payment 
instruments are not a means of investment, do not grant ownership rights and do not yield financial returns.  Hence, we agree with the United States th at instruments listed in subsector (d), such as 
travellers' cheques, although pote ntially negotiable, are not among the negotiable instruments falling 
within subsector (xiv). 
7.161  Furthermore, we find convincing the arguments and factual evidence su bmitted by the United 
States that there are many practical differences between the systems used to clear and settle 
investment instruments of the kind referenced in subsector (xiv) and the systems used to clear and 
settle payment instruments, such as  those mentioned in subsector (d).
 219  These differences relate to 
the following: (i) the financial instruments involved and the value of typical transactions; (ii) the 
market participants involved in the transaction and related processing; (iii) the infrastructure needs for 
such processes to occur safely and e fficiently; and (iv) regulatory oversight and systemic risk to the 
financial system. The distinction between payment systems and securities infrastructure as distinct 
components of the market infrastructure is co mmon in many countries, including in China.220 
7.162  China does not contest the differences between clearing and settlement of payment 
instruments, on the one hand, and securities and derivatives, on the other hand.  China argues, 
however, that these differences are not relevant to the interpretation of the term "financial assets" and 
do not change the ordinary meaning of the term "ne gotiable instruments".  We disagree.  In our view, 
classification of services is not an abstract exerci se;  due regard should be had to market and 
regulatory realities.  A classification approach reflecting, and in accord with, those realities 
contributes to the clarity and, therefore, security  and predictability, of GATS specific commitments.  
Our reading of the scope of subsector (xiv) in the Annex and that of subsector  (d) in China's Schedule 
is consistent with these considerations, because it takes due account of (i) the way payment systems 
are generally organized and regulated, as well as ( ii) the essential differences between the settling and 
clearing of payment instruments and of securities and other negotiable instruments.   
7.163  In sum, we find that subsector (xiv) encompasses the clearing and settlement of financial 
instruments sharing essentially the same characteris tics as securities, derivative products and other 
negotiable instruments.  More particularly, we cons ider that subsector (xiv) covers the clearing and 
settlement of financial instruments which have inv estment attributes, grant ownership rights and yield 
financial returns.  Our conclusion is also based on the important practical differences between, on the 
one hand, the clearing and settlement of financial assets like securities and, on the other hand, the 
clearing and settlement of payment transactions.  Hen ce, it is our view that retail payment instruments 
listed in subsector (d) of China's Schedule are not "f inancial assets" within the meaning that term has 
in subsector (xiv) of the Annex and, therefore, tr ansactions based on the payment instruments listed in 
subsector (d), including payment cards, are not cleared and settled under subsector (xiv).   
                                                      
219 United States' second written submission, paras. 55 to 74 and Exhibits cited in those paragraphs. 
220 The Panel asked China whether China UnionPay was involved in any st age of the clearing and 
settlement of securities in China.  China replied "[n]o" .  China's response to Panel question No. 34, para. 35.  WT/DS413/R 
 Page 51 
 
 
 Subsector (x) of the Annex 
7.164  Subsector (x) in paragraph 5(a) of the A nnex on Financial Services reads as follows: 
(x) Trading for own account or for account of customers, 
whether on an exchange, in an over-the-counter market or 
otherwise, the following: 
(A) money market instruments (including cheques, bills, 
certificates of deposits); 
(B) foreign exchange; 
(C) derivative products including, but not limited to, 
futures and options; 
(D) exchange rate and interest rate instruments, including 
products such as swaps, fo rward rate agreements; 
(E) transferable securities; 
(F) other negotiable instruments and financial assets, 
including bullion. 
7.165  The United States argues that China's interpre tation of "financial asset" and "negotiable 
instruments" as they appear in subsector (xiv ) does not accord with how these terms are used 
elsewhere in the Annex.  The United States notes that these terms also appear in paragraph 5(a), 
subsector (x) of the Annex.  The illustrative list of  tradable assets under subsector (x) includes "other 
negotiable instruments and financial assets, includi ng bullion".  Thus, according to the United States, 
"negotiable instruments" and "finan cial assets" as used in subsector (x ) refer to tradable investment 
assets, rather than "[m]oney and claims."  This indi cates that "negotiable instruments" and "financial 
assets" are not retail payment vehicles like credit and debit cards.221 
7.166  China submits that the United States overlooks  the fact that subsector (x)(A) of the 
Annex explicitly refers to "cheques" as among the "n egotiable instruments" and "financial assets"  
included within this category.  According to Ch ina, "this fatally undermines the United States' 
insistence that the drafters of the Annex meant to  exclude cheques from the ordinary meaning of the 
terms 'financial assets' and 'negotiable instruments"'.222 
7.167  The Panel observes that subsector (x) of the Anne x contains a list of instruments that can be 
"traded for own account or for account of customer s, …".  The Panel has already observed that 
cheques are among those retail payment instruments th at are potentially negotiable.  In our view, the 
list in subsector (x) confirms this point.  Yet we do not consider that the fact that "cheques" are listed 
in subsector (x) as tradable instruments would s upport the view that clearing and settlement of 
cheques and other payment instruments should fall unde r subsector (xiv) of the Annex.  It is only if 
one assumes that the clearing and settlement of pot entially negotiable instruments of any kind falls 
under subsector (xiv) that this would be so, and we  have already explained that we are unable to 
accept this assumption.  Finally, we note that sub sector (x) does not refer to payment cards, which 
also supports our earlier conclusion that paymen t cards are not negotiable instruments.   
7.168  To conclude, we consider that the fact that s ubsector (x) in the Annex refers to cheques as a 
kind of tradable instrument does not invalidate our conclusion with respect to the scope of 
subsector (d) in China's Schedule. 
                                                      
221 United States' second written submission, paras. 94 and 95. 
222 China's opening statemen t at the second substantive meeting, para. 15. WT/DS413/R 
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 Summary of findings on the GATS Annex on Financial Services 
7.169  In our examination of subsector (xiv) of the Annex, we found that payment instruments listed 
in subsector (d) of China's Schedule, such as paym ent cards, are not "financial assets" within the 
meaning of that term as it is used in subsector (xiv) of the Annex.  Therefore, in our view, the clearing 
and settlement of transactions involving the use of the payment instruments listed in subsectors (d) of 
China's Schedule are not covered under subsector (xiv) of the Annex.  In our view, having regard to 
the broad phrase "[a]ll payment and money transmission services", clearing and settlement services 
concerning transactions using payment cards are prope rly classified under subsector (d).  As concerns 
subsector (x) in the Annex, we found that the fact that it refers to cheques as tradable instruments does 
not invalidate our conclusion with respect to the scope of subsector (d) in China's Schedule.   
7.170  Hence, our analysis of the context provided by the GATS Annex on Financial Services does 
not contradict our finding that subsector (d) of  China's Schedule encompa sses the services that are 
essential to the processing and completion of transactions using payment cards.   
(iv) The structure of the GATS 
7.171  We turn now to a consideration of the structur e of the GATS.  The United States submits that 
EPS fall within the ordinary meaning of "payment and money transmission services" as one type of 
"all" such services.  EPS are at the centre of all payment card transactions and without these services 
the transactions could not occur.  According to the United States, EPS involve the services through 
which transactions involving payment cards are pr ocessed and through which transfers of funds 
between institutions participating in the transacti ons are managed and facilitated.  Moreover, EPS are 
integral to the processing of credit, charge, deb it and other payment card-based electronic payment 
transactions, and without these services, payment card transactions could not occur.223 
7.172  China submits that the assertion by the United St ates that subsector (d) encompasses all of the 
services at issue is based on an interpretation of th is subsector that is "vastly overbroad."  This 
interpretation would lead to the conclusion that this subsector encompasses not only services supplied 
by banks, but also services supplied to banks.  More over, in China's view, services that "manage" or 
"facilitate" the supply of a service, or that relate to the "processing" of another service transaction, are 
not necessarily classifiable as that other service, but mu st be classified separately to the extent that 
they are distinct and separately identifiable services.  China points out that, pursuant to the 2001 Scheduling Guidelines, "input" services must be class ified and evaluated as distinct services.  China 
further submits that a schedule of specific co mmitments is based on taxonomy of distinct and 
mutually exclusive services.  Many of those ser vices could be said to "manage" or "facilitate" the 
provision of other services within the taxonomy, or relate to the "processing" of a distinct service 
transaction.  In China’s view, this system of classifying services would collapse if distinct and 
separately identifiable services could be classified under another sector or subsector merely because 
they "manage", "facilitate", or relate  to the "processing" of that service.
224 
7.173  The United States replies that it has described the entire pack age provided by an EPS supplier 
as "managing," "facilitating," or "enabling" the processi ng of payment card transactions in an effort to 
capture the "intrinsic linkage" between EPS and payment card transactions.  EPS do not "manage," 
"facilitate," or relate to the "processing" of a pa yment and money transmission service.  EPS are the 
service at issue.  EPS "manage," "facilitate," a nd relate to the "processing" of payment card 
transactions – which is one type of payment service falling within "all payment and money 
                                                      
223 United States' response to China's request fo r a preliminary ruling, para. 149; first written 
submission, paras. 25-26;  response to Panel question No. 26, paras. 84-86;  and second written submission, 
paras. 13-18. 
224 China's first written submission, paras. 102-108.  WT/DS413/R 
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 transmission services" in subsector (d).  Accord ing to the United States, EPS for payment card 
transactions constitute one integral, indivisible service .  They are sold in a bundle and the service is a 
coherent whole, and the service supplier and se rvice consumer are the same for the various 
component services.  Without this integrated servi ce, a payment card transaction could not happen.  
EPS for payment card transactions is a single service th at is "intrinsically linked" to payment card 
transactions and that, for purposes of classification, should be analysed as a whole.  The United States 
also submits that, if China's position were accepted – that a service must first be disaggregated into 
subcomponents and each subcomponent separately classified – it would render WTO Members' 
concessions meaningless for a wide range of services.225 
7.174  China further submits that network services are at most "inputs" to card issuance and 
acceptance services, and are better seen as altogeth er different services.  The services supplied by 
network operators relate to how fina ncial institutions interact with e ach other, not to how card holders 
and merchants interact with each other.  For China, the United States is trying to imply in 
subsector (d) a right of market access for a different set of service suppliers who provide input 
services (at most) at an entirely different level of trade.  This is not only inconsistent with the 
principle of mutual exclusivity, but with WTO Me mbers' express recognition that input services must 
be classified and evaluated as distinct services.  Ch ina also takes issue with the argument that EPS is 
"one integral, indivisible service" and notes that the United States shifted to the singular when 
referring to EPS.  In China's view, the evidence estab lishes that different "elements" or "components" 
of what the United States calls "electronic payment services" are routinely supplied as different services by different service suppliers.  Hence, th ese services are not "supplied and consumed as an 
integrated service".
226   
7.175  In the Panel's view, the arguments by the par ties raise three issues:  (i) the scope of 
subsector (d) as it relates to EPS; (ii) whether th e fact that different components of EPS can be 
supplied by different suppliers means that these diff erent components must be classified separately; 
and (iii) the relevance of the 2001 Scheduling Guidelines for interpreting subsector (d).  We shall 
examine these thr ee issues in turn. 
7.176  Turning to the scope of subsector (d) as it rela tes to EPS, we recall that, in China's view, the 
"U.S. interpretation of subsector (d) as encompassi ng 'any service' that is somehow associated with 
the use of payment cards" is "vastly overbroad an d inconsistent with well-established principles of 
interpreting Schedules of Specific Commitments".227 
7.177  In addressing this issue, the Panel must first ex amine the concept of "sector" under the GATS.  
The Panel recalls that, in US – Gambling , the Appellate Body referred to the definition of "'sector' of a 
service" contained in Article XXVIII(e)228 and explained that: 
                                                      
225 United States' second written submission, paras. 16 and 17. 
226 China's second written submission, paras. 52 and 53; opening statement at the second substantive 
meeting, para. 20; response to Panel question No. 75, paras. 1-3; and comments on United States' response to 
the Panel question Nos. 73-77, paras. 3-5 and 12. 
227 China's comments on United States' response to Panel question Nos. 73-77.  In this comment, China 
refers to United States' first written submission, para. 22.  We note that the United States referred to by China 
reads in fact:  "China’s commitments  pertain to 'all payment and money transmission services, including credit, 
charge and debit cards', indicating that  the scope of the commitment covers any service that is essential to  
'payment and money transmission' including 'credit, charge, and debit cards' payment transactions".  United 
States' first written submission, para. 22 (emphasis added). 
228 Article XXVIII provides that: 
 "(e) 'sector' of a service means, 
  (i) with reference to a specific commitm ent, one or more, or all, Subsectors of 
  that service, as specified in a Member's Schedule,  WT/DS413/R 
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 … the structure of the GATS necessarily im plies two things.  First, because the 
GATS covers all services except those supplied in the exercise of governmental 
authority, it follows that a Member may sch edule a specific commitment in respect of 
any service.  Second, because a Member's obligations regarding a particular service 
depend on the specific commitments that it has made with respect to the sector or 
Subsector within which that service falls,  a specific service cannot fall within two 
different sectors or Subsectors.  In other words, the sectors and subsectors in a 
Member's Schedule must be mutually exclusive .229 
7.178  We also recall that, when referring to Article  XXVIII(e)(ii) of the GATS, the panel in China – 
Publications and Audiovisual Products , found that: 
A description of a service sector in a GA TS schedule does not need to enumerate 
every activity that is included within the sc ope of that service, and is not meant to do 
so.  A service sector or subsector in a GATS schedule thus includes not only every 
service activity specifically named within it,  but also any service activity that falls 
within the scope of the definition of that  sector or subsector referred to in the 
schedule.230 
7.179  Hence, the definition of "sector of a service" contained in the GATS and the finding of the 
Panel in China – Publications and Audiovisual Products confirm that a "sector" may include "any 
service activity that falls within the scope of the definition of that sector", whether or not these 
activities are explicitly enumerated in the de finition of that sector or subsector.   
7.180  The Panel observes that, when a card holder pays for a good or a service with a credit card 
and the merchant accepts that form of payment, both the card holder and the merchant naturally 
expect that the transaction for which that payment card is used will be completed.  The completion of 
a transaction in which payment cards are used includes,  at a minimum, what we referred to as "front-
end processing" (which serves to authenticate and authorize transactions) and "back-end processing" 
(which essentially entails clearing and settlement of the transaction).231  In our view, there cannot be 
any "payment service" and "money transmission service"  if the payment is not effected and the money 
not transferred from the customer's account to the merchant's account.  In that sense and referring to 
the finding cited above, these activities, even though th ey are not explicitly listed in subsector (d), are 
necessarily included within the scope of the definiti on of that subsector because they must operate 
together for the payment and money transmission servi ce to be supplied.  The fact that they are not 
specifically listed under the subsector at issue does not matter, as stated by the panel in China – 
Publications and Audiovisual Products.   Hence, we agree with the United States' characterization of 
subsector (d) as encompassing "any service that is  essential to 'payment and money transmission'".232  
In the view of the Panel, the classification under a single entry, of a service made up of a combination 
of different services is not incompatible with the pr inciple of mutual exclusivity when these combined 
services result in a distinct service, wh ich is supplied and consumed as such.233 
                                                                                                                                                                     
  (ii) otherwise, the whole of that serv ice sector, including all of its Subsectors;" 
229 Appellate Body Report, US – Gambling , para. 180 (emphasis added).  The Appellate Body further 
explained that "[i]f this were not the case [i.e. if sectors and subsectors were not mutually exclusive], and a 
Member scheduled the same service in two different sect ors, then the scope of th e Member's commitment would 
not be clear where, for example, it made a full commitment in one of those sectors and a limited, or no, 
commitment, in the other." Ibid . fn. 219.  
230 Panel Report, China – Publications and Audiovisual Products , para. 7.1014. 
231 See paras. 7.20  to 7.24 above. 
232 United States' first written submission, para. 22. 
233 We note that our interpretation is supported by a rule of interpretation in the CPC prov.:    WT/DS413/R 
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 7.181  Finally, contrary to China's view234, we consider that the fact that the United States switched 
from plural to singular when referring to "EPS"  is immaterial for the purposes of services 
classification.235  In our view, in a normal hierarchical  classification scheme (like the CPC or the 
Annex on Financial Services), a service combining different services can be described simply as a 
"service", or as "services" in the plural.  In the latte r case, "services" refers to the sum of the different 
services classified by reference to the "service".   
7.182  We examine now whether the fact that differe nt components of the EPS can be supplied by 
different suppliers means that these different com ponents must be classified separately.  We recall 
that, according to the United States, "EPS for payment card transactions is a single, integrated service 
– one that is supplied and consumed as such".236 China submits that different "elements" or 
"components" of the services at issue are routinely supplied as different services by different service 
suppliers.  In particular, the network and auth orization components of the services at issue are 
frequently supplied by entities other than the entiti es that provide clearing and settlement services for 
the same transactions.  Hence, according to Chin a, the United States' assertion that the services at 
issue are "supplied and consumed as an  integrated service" is incorrect.237 
7.183  The Panel observes that the manner in which th e supply of integrated services such as the 
services at issue is organized depends on a numbe r of parameters, including the business models 
adopted by specific companies, the regulatory fra mework in the country concerned, and how the 
direct users of payment services (e.g. issuing and acquiring institutions) organize their supply in 
specific jurisdictions.238  Some companies may provide the various components of the services at 
issue, thus supplying a final product as a "packag e" for the direct users and for the ultimate 
beneficiaries of these services (i.e. the card holder, the issuer, the acquirer and the merchant).  There 
may, however, be other circumstances where the different components are supplied by different 
suppliers.239  The evidence submitted by China indicates, for instance, that, in the case of France, the 
authorization process, on the one hand, and cleari ng and settlement, on the other hand, are provided 
by two different entities.240 
7.184  Thus, the evidence before us suggests that, in  practice, the services essential to a payment 
card transaction to be completed may be supplied by  one or more service supplier(s).  As we have 
said, while some suppliers provide all the various co mponents of that service in an integrated manner, 
other suppliers may specialize in one segment of th at service.  In our view, the fact that some 
component services may be supplied by different supp liers is not a sufficient basis for classifying each 
or some of these services under different subsectors.  Indeed, as noted by the United States, "[i]t is the 
                                                                                                                                                                     
"1. When services are, prima facie , classifiable under two or more categories, classification shall be 
effected as follows, on the understand ing that only categories at the same  level (sections, divisions, groups, 
classes or subclasses) are comparable : (a) The category that provides the most specific description shall be 
preferred to categories providing a more general description; (b) Composite services consisting of a combination 
of different services which cannot be classified by refere nce to 1(a) shall be classified as if they consisted of the 
service which gives them their essential characte r, in so far as this criterion is applicable ."  Provisional Central 
Product Classification, Statistical Papers, Series M No.77, United Nations (1991), p. 20 (emphasis added). 
234 China's comments on United States' response to Panel question Nos. 73-77, paras. 4 and 5. 
235 China's comments on United States' response to the Panel question Nos. 73-77, para. 2. 
236 United States' second written submission, para. 11 (citing further references to United States' written 
submissions).  See also United States' second written submission, paras. 13-18. 
237 China's opening statement at the second substantive meeting, paras. 20 and 21; response to Panel 
question No. 75, paras. 1-3; and comments on the United States' response to Panel question Nos. 73 and 77, 
para. 12. 
238 See above section VII.C.1. 
239 See our discussion above in para. 7.60. 
240 China's response to Panel question No. 75, paras.  1-3, including the evid ence indicated therein. WT/DS413/R 
Page 56 
 
 
 combination that enables the payment card transaction to occur".241  Hence, the mere fact that separate 
suppliers provide one particular component of a service does not in itself imply that that component 
should be classified as a distinct service, or that the component is not part of an integrated service. In 
our view, what is relevant in rela tion to an integrated service is not whether it is supplied by a single 
supplier or by several suppliers, but rather whethe r the component services, when combined together, 
result in a new and distinct service, the integrated service.   
7.185  We note that China itself appear s to accept that some services, although supplied by different 
suppliers, are nonetheless classifiable under the same subsector.  Indeed, issuing and acquiring 
services could be considered as two "distinct and sep arately identifiable servi ces", to borrow China's 
terminology.  As evidenced by the arguments of  the parties, issuing and acquiring are different 
activities.242  Moreover, for any given payment card tran saction, the issuing and acquiring institutions 
are not necessarily the same entity; in the four-party model, they are often different entities.  
Nevertheless, China is not proposing to classify, respectively, issuing services and acquiring services 
under two separate subsectors, but argues instead that these two services fall under subsector (d).243   
7.186  We turn now to the third issue raised by the parties, namely whether the services at issue are 
inputs into a service classified under subsector (d).   We recall that, according to China, the 2001 
Scheduling Guidelines expressly recognize that a sp ecific commitment does not extend to input 
services that are separately classifi able within the relevant taxonomy of services.  In China's view, the 
services at issue are at most "inputs" to card issu ance and acceptance services, which, according to 
China, are classified under subsector (d) of its Schedule.244   
7.187  According to China, the 2001 Scheduling Guidelines are a supplementary means of 
interpretation falling under Article 32 of the Vienna Convention. 245  We understand, therefore, that 
China is not proposing that we rely on the 2001 Scheduling Guidelines as context in our interpretation of subsector (d) pursuant to Article 31 of the Vi enna Convention.  Regardless of whether the 2001 
Scheduling Guidelines may be considered as contex t or as supplementary means of interpretation, 
                                                      
241 Ibid. 
242 United States' response to China's request for a preliminary ruling, para. 43; and first written 
submission, para. 20. 
243 China submits that "China's actual  commitment in subsector (d) … was to allow foreign financial 
institutions to enter its market on a commercial presen ce basis to issue payment cards to cardholders and acquire 
payment card transactions from merchants".  China's firs t written submission, para. 8 (emphasis in the original). 
We recall that issuing and acquiring services are not at stake in this dispute and, hence, we do not need to 
determine where these services should be classified .  We accept China's position merely for the sake of 
argument on this issue. 
244 China's first written submission, paras. 106-108; and second written submission, paras. 51 and 52. 
Paragraph 25 of the 2001 Sc heduling Guidelines reads as  follows:  "[i]t is unders tood that market access and 
national treatment commitments apply only to the sectors or sub-sectors inscribed in the schedule.  They do not 
imply a right for the supplier of a committed service to  supply uncommitted services which are inputs to the 
committed service."  See also paragraph 17 of the 1993 Scheduling Guidelines. 
245 China' response to Panel question No. 58, para. 105 ("The Appellate Body in U.S. – Gambling  
found that the 1993 Guidelines constitute 'supplementary means of interpretation' under Article 32 of the Vienna 
Convention.  China sees no reason to depart from this  finding with respect to the 2001 Guidelines.")  In 
response to the same question, the United States submitted that "[w]ith respect to the 2001 Guidelines, there are 
questions that arise as to timing, such as whether th ey were actually available when China was negotiating its 
Services commitments". United States' response to Panel question No. 58, para. 145. We note that the third 
parties have different views as to whether the 2001 Scheduling Guidelines should be considered under 
Article 31 or 32 of the Vienna Convention.  Australia considers that the 2001 are relevant context pursuant to 
Article 31 of the Vienna Convention, while the Eu ropean Union and Guatemala view this document as 
belonging to supplementary means of interpretation pursua nt to Article 32.  Australia's third-party response to 
Panel question No. 6 (no paragraph numbering provided), the European Union's third-party response to Panel 
question No. 6,  para. 18; and Guatemala's third-party response to Panel question No. 6,  para. 24.  WT/DS413/R 
 Page 57 
 
 
 however, we are not persuaded by China's argument.246  China has provided no evidence to support its 
assertion that EPS are "input" services into issui ng and acquiring services.  Nor has it explained 
through argument why this is so:  it has merely pointed to a rule referring generally to "input" 
services.  It is unclear to us, for example, whet her it could be argued that issuing and acquiring 
services are "inputs" into EPS, as opposed to the other way around.247  In the absence of supporting 
evidence or explanation related to EPS as inputs, we  are unable to accept China's contention in this 
respect. 
7.188  To summarize our interpretation of subsector  (d) based on the structure of the GATS as 
context, we are of the view that the classification under a single subsector of a service made up of a 
combination of different services is not incompatible with the principle of mutual exclusivity if these 
services, when combined together, result in a distin ct service that is supplied and consumed as such.  
Moreover, the mere fact that separate suppliers provide one particular component of a service does 
not in itself imply that that component should be classified as a distinct service, or that the component 
is not part of an integrated service.  In our view, wh at is relevant in relation to the classification of an 
integrated service is not whether it is supplied by a single supplier or by several suppliers, but rather 
whether the component services, when combined toge ther, result in a new and distinct service, the 
integrated service.  This confirms our view that subsector (d) encompasses the services essential to the 
processing and completion of transactions using payment cards.   
(v) Schedules of other WTO Members 
7.189  China submits that other WTO Members consider the services encompassed by 
subsector (viii) to be limited to services that ar e supplied by banks and other types of financial 
institutions.  According to China, there is no indication in any WTO Member's commitments for 
subsector (viii) that these services are provided by  suppliers other than banks or other financial 
institutions.248   
7.190  The United State submits that a 1998 Background Note by the WTO Secretariat indicates 
with respect to credit card services that these are "either part of 'all payment and money transmission services'" or "they constitute an independent item."  Hence, WTO Members eith er treated "credit card 
services" as part of "all payment and money transmission services" or as a separate, independent 
entry; and no Member included "credit card services" in 7.B.j (item (xiv) of the annex) – "settlement 
and clearing services for financial assets, including  securities, derivatives, and other negotiable 
instruments".
249 
7.191  The Panel recalls that, in US – Gambling  and in China – Publications and Audiovisual 
Products , GATS schedules of other WTO Members were u sed by the panels and the Appellate Body 
as relevant context for the interpretation of a Memb er's Schedule.  As noted by the Appellate Body, 
"this is the logical consequence of Article XX:3 of the GATS, which provides that WTO Members' 
                                                      
246 China asserts that "[i]n many cases, services that  'manage' or 'facilitate' the provision of another 
service or that relate to its 'processing' could properly be  seen as 'inputs' to the provision of that service".  
China's first written submission, para. 107. 
247 We would observe that, when licensing its brand to a bank, an EPS supplier grants permission to 
that bank to issue a credit card under a trademark. It is  the availability of the card that will allow customers to 
make payments.  Hence, the final service, namely the payment service, is supplied by the EPS supplier, not by 
the bank.  From that point of view, it is at least argu able that issuing and acquiring services constitute input 
services into EPS.  As noted above, this discussion is  without prejudice to where is suing and acquiring services 
should be classified. 
248 China's first written submission, para. 99; and response to Panel question No. 60, para. 109. 
249 United States' response to Panel question No. 59, para. 150; and second written submission, 
paras. 40 and 41. The United States refers to the WT O Secretariat Background No te on Financial Services, 
S/C/W/72 (2 December1998), para. 13. WT/DS413/R 
Page 58 
 
 
 Schedules are 'an integral part' of the GATS."250  At the same time, the Appellate Body acknowledged 
that use of other WTO Members' schedules as c ontext must be tempered by the recognition 
that"[e]ach Schedule has its own intrinsic logic";  hence, Schedules of other WTO Members may be 
"of limited utility in elucidating the mean ing of the entry to be interpreted".251  Thus far, they have not 
figured as a central element in the contextual analysis of a disputed entry.     
7.192  We observe that the schedules of other WTO Members cited by China use different names to 
describe entities supplying services under subsector (d ).  These include "banks", "commercial banks", 
"financial institutions", "specialized fina nce companies" and "credit institutions".252  China did not 
submit evidence or make arguments as to the pr ecise nature of these differently named entities in 
China's and other WTO Members' schedules.  For that reason, it is not clear to us whether the 
schedules of other WTO Members cited by Ch ina do indicate that "all payment and money 
transmission services" can only be supplied by "banks and other types of financial institutions" within 
the meaning attributed by China to those terms.   Indeed, as noted above, each schedule has its own 
intrinsic logic and we are not in a position to dete rmine, without more, whether, and to what extent, 
the entities referred to in the schedules cited by Ch ina do coincide with "banks and other types of 
financial institutions".  Moreover, as we explain in  detail further below (see Section VII.F.1), we 
consider that China's commitments in subsectors (a ) to (f) apply to all foreign financial institutions 
and that the term "foreign financial institutions" as used in China's Schedule includes EPS suppliers. 
7.193  Hence, the context provided by the Schedules of other WTO Members does not point to an 
interpretation that is different from that suggested  by other elements of context examined above. 
(c) Object and purpose  
7.194  China argues that the United States' interpre tation of China's Schedule or items in the 
Annex on Financial Services is "plainly contrary to the object and purpose of the GATS", because it is 
"arbitrary, illogical, and completely unpredictable".  In China's view, the Un ited States' approach is 
contrary to the "security and predictability of WTO Members' specific commitments, which is an 
important object and purpose of the GATS".  For Ch ina, the United States' approach leads to an 
interpretation of China's Schedule and the Annex lis t in which "nothing means what it says", services 
are not clearly defined, and, as a result, it is "impossible to schedule and interpret specific commitments with any degree of security or predicta bility".  According to China, this approach is 
"manifestly contrary" to the object and purpose of the GATS and must be rejected.
253 
7.195  The United States submits that the "progressive lib eralization" called for in the Preamble of 
the GATS could never be achieved where, as under Ch ina's theory, a recognized, integrated service 
that is supplied and consumed as such, could not be classified in one subsector.  Moreover, regarding 
China's argument that the object and purpose of the GATS calls for greater "transparency," China's 
own theory would render WTO Members' servic es schedules "indecipherable and impossible to 
reconcile with the commercial reality of the services they are supposed to reflect".  The United States 
questions how transparency could be achieved where a Member could purport to liberalize a 
particular subsector through specific commitments, but then dismantle an integrated service that 
                                                      
250 Appellate Body Report, US – Gambling , para 182. 
251 Appellate Body Report, China – Publications and Audiovisual Products , para. 383. 
252 China referred to the schedules of Cambodia  (GATS/SC/140), FYR M acedonia (GATS/SC/138), 
India (GATS/SC/42), Jordan (GAT S/SC/128), Korea (GATS/SC/48), M acao (GATS/SC/50), Saudi Arabia 
(GATS/SC/141), Slovak Republic (GATS/SC/77), Venezuela (GATS/SC/92) and Vietnam (GATS/SC/142).  
China's first written submission, para. 99. 
253 China's second written submission, paras. 27-29.  WT/DS413/R 
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 would otherwise fall within that subsector and argue  that various pieces constitute separate "services" 
for which that Member has undertaken no commitments.254 
7.196  The Panel begins its consideration of the object and purpose of the GATS and the WTO 
Agreement by noting one of the key objectives liste d in the Preamble to the GATS, namely "the 
establishment of a multilateral framework of principles and rules for trade in services with a view to 
the expansion of such trade under conditions of transparency  and progressive liberalization " 
(emphasis added).  We note that, in US – Gambling , the Appellate Body found  that the purpose of 
transparency contained in the Pr eamble to the GATS supported the need for precision and clarity in 
scheduling GATS commitments, and underlined the importance of having schedules that are readily 
understandable by all other WTO Members, as well as by services suppliers and consumers.255  In that 
dispute, the Appellate Body also recalled that: 
… the security and predictability of "the  reciprocal and mutually advantageous 
arrangements directed to the substantial reduction of tariffs and other barriers to 
trade" is an object and purpose of the WTO Agreement ….  This confirms the 
importance of the security and predictab ility of Members' specific commitments, 
which is equally an object and purpose of the GATS.256   
7.197  We also recall that, in examining the principl e of progressive liberalization as an expression 
of the object and purpose of the GATS, the Appellate Body did not consider that this principle "… 
lends support to an interpretation that would constrain the scope and coverage of specific 
commitments that have already been undertaken by WTO Members and by which they are bound."257  
We are also aware that, in both US – Gambling  and China – Publications and Audiovisual Products , 
the Appellate Body observed that the objectives of the GATS did not provide specific guidance as to 
the correct interpretation of the entries at stake.258   
7.198  We find that our interpretation of the scope of China's commitment under subsector (d) is 
consistent with the objective of transparency b ecause it classifies under a single subsector services 
which, when combined together, result in a new a nd distinct service, the integrated service.  This 
integrated service is supplied and consumed as such.  Furthermore, by reconciling the classification of 
EPS with the commercial reality of those services,  our interpretation reinforces the predictability, 
security and clarity of GATS specific commitments.  Fo r those same reasons, our interpretation is also 
consistent with the objective of progressive libera lization contained in the Preamble to the GATS. 
7.199  Hence, our conclusion that subsector (d) of China's Schedule encompasses EPS is consistent 
with the object and purpose of the GATS and the WTO Agreement. 
(d) Conclusion 
7.200  The Panel has now completed its analysis of the scope of China's commitment in 
subsector (d) of its GATS Schedule on "all paym ent and money transmission services, including 
credit, charge and debit cards, travellers' che ques and bankers' drafts (including import and export 
settlement)" according to the rules of interpretation co dified in Article 31 of the Vienna Convention.   
                                                      
254 United States' opening statement at the second substantive meeting, para. 17. 
255 Appellate Body Report, US – Gambling , para. 188. 
256 Ibid. 
257 Appellate Body Report, China – Publications and Audiovisual Products , para. 394. 
258 "None of the objectives listed in the GATS pr eamble provides specific guidance as to the correct 
interpretation to be given to China's GATS Schedule entry 'Sound recording distribution services'". Appellate 
Body Report, China – Publications and Audiovisual Products , para. 393.  See also Appellate Body Report, US – 
Gambling , para. 189. WT/DS413/R 
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 7.201  Our analysis of the ordinary meaning of the terms "payment", "money" and "transmission", 
when used in combination, refers to the transfer  of money from one person or place to another.  The 
transferred money may be due for goods or servi ces, or for settling a debt.  When examining the 
expressions "payment services" and "money transmissi on services", we determined that "payment and 
money transmission services" can be characterized  as those services that "manage", "facilitate" or 
"enable" the act of paying, or transmitting money.  Finally, we observed that the use of the term "all" 
manifests an intention to cover comprehensivel y the entire spectrum of the "payment and money 
transmission services" encompassed under subsector (d ).  With regard to the phrase "including credit, 
charge and debit cards, travellers cheques and bankers drafts" in subsector (d), we concluded that this 
phrase constitutes an illustrative list that provides confirmation that the phrase "[a]ll payment and 
money transmission services" refers to those services that are essential to the processing and 
completion of transactions involving the use of paym ent cards.  Moreover, the parenthetical addition 
"(including import and export settlement)" confirms  that subsector (d) in cludes settlement, and by 
implication clearing, when bankers' drafts are u sed as payment instruments.  This, in our view, 
provides an indication that settlement, and therefor e clearing, of transactions involving the use of 
other payment instruments, such as those listed in subsector (d), is properly classified under 
subsector (d). 
7.202  When examining the remainder of China's Sc hedule, we found that neither the heading 
"Banking services as listed below", nor the inscripti ons under the mode 1 commitment, pointed to a 
different interpretation of the scope of subsector (d ).  Moreover, our analysis of the GATS Annex on 
Financial Services led us to the conclusion that s ubsector (xiv) of that Annex does not encompass the 
clearing and settlement of payment card instruments listed in subsector (d) of China's Schedule.  
Furthermore, our contextual interpretation of subsect or (d) based on the structure of the GATS led us 
to the view that the classification, under a single s ubsector, of a service made up of a combination of 
different services is not incompatible with the princi ple of mutual exclusivity if these services, when 
combined together, result in a distinct service, wh ich is necessarily supplied and consumed as such.  
Also, the mere fact that separate suppliers may pr ovide particular components of a service does not in 
itself imply that that component should be classified as a distinct service, or that the component is not 
part of an integrated service.  In addition, the ar guments submitted with respect to schedules of other 
WTO Members do not point to an interpretation differe nt from that suggested by other elements of the 
context.  Finally, we found that our interpreta tion of China's commitment under subsector (d) is 
consistent with the object and purpose of the GATS and the WTO Agreement.   
7.203  We recall that the panel request defi nes the services at issue as follows:  
[E]lectronic payment services involve the services through which transactions 
involving payment cards … are processed and through which transfers of funds 
between institutions participating in the transactions are managed and facilitated. 
7.204  Having regard to our examination of the scope of  subsector (d) in China's Schedule, the Panel 
finds that this subsector includes the services at issue.259 
3. Recourse to supplementary means of interpretation  
7.205  Pursuant to Article 32 of the Vienna Conventio n, a treaty interpreter may have recourse to 
supplementary means of interpreta tion "in order to confirm the meaning resulting from the application 
of Article 31, or to determine the meaning when the interpretation according to Article 31 leaves the 
meaning ambiguous or obscure or leads to a result which is manifestly absurd or unreasonable."   
                                                      
259 In our view, the services at issue are covered by subsector (d), whether they are provided in 
connection with payment cards that are used, for instance, at POS terminals to  purchase goods or services or in 
connection with payment cards that ar e used at ATMs to withdraw cash.  WT/DS413/R 
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 7.206  The parties to the dispute referred to the CPC as supplementary means of interpretation.260  
China also referred to the 2001 Scheduling Gu idelines as a source of interpretation under 
Article 32.261  The Panel considers that its interpretation of China's Schedule pursuant to Article 31 of 
the Vienna Convention does not leave the meaning ambiguous or obscure, nor does it lead to a result 
which is manifestly absurd or unreasonable. 
7.207  Accordingly, we do not find it necessary to reso rt to supplementary means of interpretation 
under Article 32 of the Vienna Convention.   
E. THE MEASURES AT ISSUE  
7.208  The United States has identified a series of six requirements, or measures, which it claims 
operate alone or in combination to impose ma rket access restrictions and national treatment 
limitations on service suppliers of other WTO Me mbers seeking to supply EPS in China.  The 
United States argues that these measures are maintained  through a series of legal instruments.  As will 
be discussed in detail in Sections VII.F and VII.G, the United States asserts that these six 
requirements are inconsistent with China's ob ligations under Articles XVI:1 and XVI:2(a), and 
Article XVII of the GATS. 
7.209  The United States has alleged the existence of the following requirements262: 
(a) Requirements that mandate the use of CUP and/or establish CUP as the sole supplier 
of EPS for all domestic transactions denominated and paid in Renminbi (RMB) 
(hereafter referred to by the Panel as "sole supplier requirements");  
(b) Requirements on issuers that payment cards issued in China bear the CUP logo 
("issuer requirements");  
(c) Requirements that all ATMs, merchant card processing equipment and POS terminals 
in China accept CUP cards ("terminal equipment requirements");   
(d) Requirements on acquiring institutions to post the CUP logo and be capable of 
accepting all payment cards bearing the CUP logo ("acquirer requirements"); 
(e) Prohibitions on the use of non-CUP cards for cross-region or inter-bank transactions 
("cross-region/inter-bank prohibitions"); and 
(f) Requirements pertaining to card-based elect ronic transactions in China, Macao, and 
Hong Kong ("Hong Kong/Macao requirements")263.   
7.210  The United States considers that these require ments are maintained through a series of 
Chinese legal instruments that are themselves identif ied in the United States' request for establishment 
of a panel.264 
                                                      
260 United States' response to Panel question No. 76, paras. 12 and 39. 
261 China's first written submission, paras. 102-108. 
262 The short descriptions of the relevant requirements provided below are identical or closely similar to 
those that appear in written submissions of the United St ates.  E.g., United States' response to China's request 
for a preliminary ruling, para. 77; first written submissi on, para. 12; and second written submission, para. 6. 
263 Consistent with the views taken by of the partie s, this Report refers to the separate customs 
territories of Hong Ko ng, China and Macao, China as Hong  Kong and Macao, respectively. 
264 WT/DS413/2, pp. 3-4. WT/DS413/R 
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 7.211  China contends that the United States has fail ed to demonstrate that the alleged measures 
operate in a manner that is incons istent with either Article XVI265 or XVII266 of the GATS.  China 
submits that the requirements identified by the United States as measures at issue in this dispute do not violate these WTO provisions, as the United States a lleges. Rather, it considers that the identified 
measures establish a national inter-bank netw ork for clearing and settling RMB payment card 
transactions and otherwise create uniform technical and commercial standards that allow this inter-
bank payment card network to function.
267  In the event that the Panel proceeded to consider the 
United States' claims, China argues that those cl aims must be based exclusively on the legal 
instruments specifically identified in the panel request.268   
7.212  The Panel will consider below the United St ates' claims that China imposes certain 
requirements that are inconsistent with its obliga tions under Articles XVI and XVII of the GATS.  In 
undertaking this task, we must first consider whether China in fact imposes the requirements 
mentioned above. This necessitates that we evalua te the precise content of the series of legal 
instruments that have been cited by the United Stat es.  Before turning to this assessment, however, we 
first address the status of three legal instruments that  China alleges have been repealed or replaced as 
well as China's concern that the United States' has broadened the scope of its challenge to include 
measures that are not specifically identified in the panel request.  
1. The specific measures at issue that form part of the United States' challenge 
(a) Chinese legal instruments as the basis for the existence of the measures at issue 
7.213  We explained above that the United States has identified a series of six requirements that it 
claims are inconsistent with Articles XVI and XVII of the GATS.  For each of these six requirements, 
the United States has identified an "illustrative list of instruments in which the particular measure is 
reflected."269   
7.214  In its rebuttal submission, China argues that th e United States has sought to improperly base 
its claims on measures that are not specifi cally identified in the panel request.270  Rather than focusing 
on those legal instruments, China is of the view that the United States has attempted to improperly 
shift the basis of its claims to target measures at  issue that exist "independently" of any particular 
legal instrument.271  Due to the manner in which the United States formulated its panel request, 
however, China argues that the United States may not sh ift its challenge so as to allege that the six 
requirements exist "independently" or as "unwritten  'rules or norms of general and prospective 
application'".272 China asserts that the United States has pr esented "no evidence wh atsoever" to meet 
the "high threshold" that a complaining party must  face when challenging an alleged unwritten rule or 
                                                      
265 China's second written submission, paras. 90-102. 
266 China's first written submission, paras. 151-16 0; second written submission, paras. 115-121. 
267 China's first written submission, para. 36. 
268 China's second written submission, paras. 83-89. 
269 United States' response to Panel question No. 5. 
270 China's second written submission, para. 89.  China took issue with the manner in which the 
United States identified the measures at  issue in this dispute in its second written submission, specifically in 
respect of the United States' claim under Article XVI:2(a) of the GATS.  See China's second written submission, 
paras. 83-89.  The United States has framed its claims under Articles XVI and XVII of the GATS in respect of 
the same measures and identical legal instruments.  Acco rdingly, the Panel considers it appropriate to address 
this issue generally in relation to all of the United States' claims.    
271 China's second written submission, para. 84; comm ents on the United States' response to Panel 
question Nos. 70-72, 86-96, 115-123, para. 62. 
272 China's second written submission, para. 88; comm ents on the United States' response to Panel 
question Nos. 70-72, 86-96, 115-123, paras. 63-70.  WT/DS413/R 
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 norm.273  Accordingly, China requests that the Panel limit  its evaluation of the Un ited States' claims to 
measures that are "specifically" identified in the pa nel request in accordance with the requirements of 
Article 6.2 of the DSU.274   
7.215  The Panel notes that Article 6.2 of the DSU requires that a complaining party identify the 
"specific measures at issue" among meeting other re quirements.  Moreover, Article XXVIII(a) of the 
GATS defines a "measure" for purposes of the GATS as "any measure by a Member, whether in the 
form of a law, regulation, rule, procedure, decisi on, administrative action, or any other form".   
7.216  In three narrative paragraphs in its panel request275, the United States describes those 
"requirements" or "measures" that it considers are inconsistent with China's obligations under 
Articles XVI and XVII of the GATS.  In addition, the panel request specifies a series of instruments 
described as those "through whic h China maintain s these measures."276  The United States has 
referred to these six requirements throughout the pr oceedings as well as the identified instruments.277  
For each of the alleged six requirements, the United States explained that it provided an "illustrative 
list of instruments in which the particular measure is reflected".278  The United States requested that 
the Panel make findings "with respect to each of the measures that the United States has 
challenged."279   
7.217  In the light of the formulation of the United St ates' panel request and explanations provided in 
submissions and in response to questions from the Panel, we understand the United States seeks 
findings on the six alleged requirements, namely th ose referred to in paragraph 7.209 above.  We 
further understand that the United States has submitted  the relevant legal instruments as evidence in 
support of the existence of the six alleged requirements.   
7.218  We note China's concern that the United States s ought to establish the existence of the alleged 
six requirements "independently" from the legal inst ruments appearing in the panel request.  We 
consider that the United States must establish th e existence of the alleged requirements on some 
concrete evidentiary basis and not simply by asserting their existence.  In its first written submission, 
its opening statement at the first substantive meetin g of the Panel, and in response to questions from 
the Panel following the first substantive meeting, the United States specified that the instruments 
identified in the panel request establish the basis for the United States' claims with respect to each of 
the six requirements.280  Thus, it is our view that the United States based its case on those legal 
instruments.  We will therefore consider the Unite d States' claims in light of these instruments. 
7.219  Finally, we consider this appro ach is consistent with the broad definition attributed to a 
measure under Article XXVIII(a) of the GATS.  In our view, the fact that the United States considers 
that a series of "instruments" "illustrate" or "refl ect" the existence of six alleged requirements does not 
prevent making findings on the six identified require ments as the "measures" at  issue in the sense of 
                                                      
273 China's second written submission, para. 88, citing Appellate Body Report, US – Zeroing (EC) , 
para. 198. 
274 China's second written submission, paras. 86 and 87. 
275 WT/DS413/2, pp. 2-3. 
276 WT/DS413/2, pp. 3-4. 
277 See, e.g. United States' first written submission, para. 4; second written submission, para. 6; opening 
statement at the second meeting of the Panel, pa ra. 38; response to Panel question Nos. 4 and 71. 
278 United States' response to Panel question No. 5. 
279 United States' response to Panel question No. 5 (emphasis original). 
280 United States' first written submission, paras. 55-72,  89-117 and fns. 40-45, 62-67, 81-84;  opening 
statement following the first substantive meeting, paras. 43-44, 48-51 and fns. 37-38, 42-45; response to Panel 
question No. 5, paras. 24-36. WT/DS413/R 
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 Article 6.2 of the DSU and Article XXVIII(a) of the GATS.  We also observe that this approach is 
consistent with the United States' request as to how the Panel should consider its case.281 
7.220  Accordingly, we will examine whether the lega l instruments identified in the United States' 
panel request establish the existence of the six alle ged requirements or measures at issue.  It is 
incumbent on the United States as the complaini ng party to demonstrate their existence.   
(b) The repeal or replacement of certain Chinese legal instruments 
7.221  China in its first written submission to the Panel submitted evidence that Document 
Nos. 94282 and 272283 were both repealed on 23 March 2010 and ceased to have  legal effect prior to 
the date of the Panel's establishment on 11 February 2011.284  In response to a question from the 
Panel, China pointed out that a third instrument, Document No. 66285, was replaced by Document 
No. 53 on 1 November 2010, also in advance of th e Panel's establishment.  China requests that the 
Panel should decline to make findings w ith respect to these three instruments.286  The United States 
referred to all of these legal instruments in its panel request287 and subsequently in its submissions to 
the Panel. 
7.222  The issue here is whether the Panel should cons ider certain instruments – Document Nos. 66, 
94 and 272 ‒ in its assessment of the United States' claims.  We consider it appropriate to address the 
status of these instruments first, before consider ing the United States' clai ms, since these instruments 
have been cited as evidence of the existence of five of the six alleged requirements at issue. 
7.223  The United States indicated in response to a qu estion from the Panel that it "does not contest 
that Document No. 53 indicates it will come into force simultaneously with the abolition of other 
instruments, including Document No. 66, and in this sense, [Document No. 53] may be considered to 
have replaced Document No. [66]".288  The United States does not specifically comment on the 
instruments that announced the re peal of Document Nos. 94 and 272.  Instead, the United States 
argues that "separate and apart" from Document Nos.  66, 94 and 272, the other identified instruments 
at issue adequately "establish a basis" for its claims.289  Thus, the United States has not rebutted 
evidence submitted by China concerning the repeal of Document Nos. 94 and 272, nor does the 
United States contest that Document No . 66 was replaced by Document No. 53.290  Having regard to 
the evidence submitted by China and the arguments of  both parties, we consider that Document Nos. 
94 and 272 were both repealed, and Document No. 66 was replaced by Document No. 53. 
                                                      
281 For further discussion on this, see paras. 7.230-7.232 below. 
282 Exhibits US-42; CHN-57. 
283 Exhibits US-43; CHN-58. 
284 China's first written submission, fn. 27, re ferring to PBOC Announcement [2010] No. 2, 
Exhibit CHN-15. 
285 Exhibits US-45; CHN-61. 
286 China's first written submission, fn. 27; response  to Panel question No. 21.  China refers to 
Article VIII of Document No. 53, which was submitted as Exhibit CHI-54, as evidence of the replacement of 
Document No. 66.  China's translation of Article VIII of  this document provides as follows: "This Circular shall 
come into force as of November, 1 2010.  The Circul ar of the State Administration of Foreign Exchange on 
Regulating the Administration of Foreign Currency bankcards [Hui Fa (2004) No. 66] … shall be abolished at 
this time".  The translation of Document No. 53 provided by the United States indicates similarly. 
287 WT/DS413/2, p 3. 
288 United States' response to Panel question No s. 4-6; response to Panel question No. 70. 
289 United States' response to Panel question No. 6.   
290 We noted in fn. 286 that both the United States' and China's translations of Document No. 53 
provide similarly that Document No. 53 replaces Do cument No. 66.  WT/DS413/R 
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 7.224  In US – Upland Cotton , the Appellate Body noted that "the  fact that a measure has expired 
may affect what recommendation a panel may make" but it is "not dispositive of the preliminary 
question of whether a panel can address claims in respect of that measure".291  In previous cases,  
panels have looked to Article 3.7 of the DSU to  determine whether it was appropriate to address 
claims in respect of such measures.  Article 3.7 of the DSU provides that "[t]he aim of the dispute 
settlement mechanism is to secure a positive solution to a dispute".  When deciding whether or not the 
aim of securing a positive solution warrants findings on m easures that expired before a panel's date of 
establishment, panels have taken into account th e particular circumstances of a given dispute.292  
These circumstances included such considerations as the timing of the withdrawal of a measure293, as 
well as the likelihood that the respondent would later reintroduce the measure.294   
7.225  In its panel request, the United States identif ied a series of requirements, which it claims 
impose market access restrictions and requireme nts on service suppliers of other WTO Members 
seeking to supply EPS in China.295  It indicates in its panel request that each of these "requirements" is 
"maintained through a series of instruments".296 The panel request thereafter identifies a list of 
instruments.  The United States subsequently ex plained that, for each of these "requirements", it 
identified an "illustrative list of instruments in  which the particular measure is reflected".297   
7.226  In deciding whether to take account of Docu ment Nos. 66, 94 and 272 for purposes of 
determining whether they support the existence of rele vant requirements, we co nsider it appropriate to 
determine whether addressing these legal instruments would conform with the aim of securing a 
positive solution to the present dispute.  
7.227  We note that Document Nos. 94 and 272 were re pealed more than ten months before the 
Panel's establishment on 11 February 2011, and mo re than six months before the date on which 
consultations were requested on 15 September 2010.   Document No. 66 was replaced on 1 November 
2010, three days after consultations were held, but fi ve months before the Panel's establishment.  We 
do not know the factors that influen ced China's decision to repeal Docu ment Nos. 94 or 272, and to 
replace Document No. 66, and the timing of these ac tions.  The United States has not expressed the 
view, or provided any indication, that any of these instruments stand to be reintroduced.  Rather, it has 
made clear that its case stands even without th ese instruments, as it tak es the position that the 
requirements are still maintained through other instruments.298  The United States also argued that 
foreign suppliers did not experience any "changes in  the market regarding restrictions, prohibitions, 
                                                      
291 Appellate Body Report, US – Upland Cotton , para. 272.  We note as well that in US – Certain EC 
Products , the Appellate Body did not disapprove of the decision by a panel to make a finding concerning a 
measure that no longer existed at the time of establishment of the panel.  Rather, the Appellate Body concluded 
that the panel erred in recommending that the Dispute Settlement Body request the responding party to bring 
into conformity with its WTO obligations a measure wh ich the Panel found to no longer exist.  See also 
Appellate Body Report, US – Countervailing Measures on Certain EC Products , para. 81.   
292 Appellate Body Report, US – Countervailing Measures on Certain EC Products , paras. 60-82; 
Panel Reports, EC – Approval and Marketing of Biotech Products , paras. 7.1648-7.1654; Argentina – Textiles 
and Apparel , para. 6.4-6.15; US – Gasoline , para. 6.19. 
293 Panel Reports, EC – Biotech , para. 7.1653; and Argentina – Textiles and Apparel , para. 6.1 and 
6.13. 
294 Panel Reports, Argentina – Textiles and Apparel , para. 6.14; and US – Gasoline , para. 6.19.  The US 
– Gasoline panel contrasted its decision with that taken by the GATT panel EEC – Apples (Chile I)  in1980, 
which ruled on a measure terminated be fore agreement on the Panel's terms of reference.  As noted by the US – 
Gasoline panel, the terms of reference in that case specifica lly included the terminated measure and, the dispute 
concerning a seasonal measure, there remained the pr ospect of its reintroduction. See GATT Panel Report, EEC 
– Apples (Chile I) . 
295 WT/DS413/2, pp. 2-3. 
296 WT/DS413/2, pp. 3-4. 
297 United States' response to Panel question No. 5. 
298 United States' response to Panel question No. 6. WT/DS413/R 
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 and other impediments on the supply of EPS for pa yment card transactions" following the entry into 
force of Document No. 53.299 
7.228  On the evidence before us, we have no reason to  assume that the three instruments will be re-
introduced.  Our determination therefore focuses on th ree elements that are clear.  First, Document 
Nos. 66, 94 and 272 were no longer in force at the tim e of the Panel's establishment.  In other words, 
they no longer had any legal effect.  Secondly, the United States has not put forward any claim or 
evidence that these instruments might be re-introdu ced by China.  Thirdly, we understand the United 
States to allege that China currently  maintains in place each of the relevant requirements even without 
these instruments being in effect.  For instance, th e United States alleges that the requirements exist 
independently of the content of Document Nos. 66, 94 and 272, such that "there would be no impact 
on [the United States'] claims relating to the six di stinct measures, comprised of instruments operating 
together"300, even if the Panel were to decline to take  into account Document Nos. 66, 94 and 272.  
Accordingly, in order to provide a positive solution to  this dispute, we consider that our task is to 
assess the existence of the particular measures in Chin a on the basis of those instruments that were in 
force at the time of panel establishment.  We do no t consider that in the particular circumstances of 
this case there is any need to go further and a ddress also Document Nos. 66, 94 and 272.  As 
indicated, the United States did not argue in this ca se that a decision by the Panel not to take these 
instruments into account would effectively deprive th e United States of the possibility to have one or 
more of the challenged requirements considered by the Panel. 
7.229   Therefore, for the foregoing reasons, the Pane l declines to take Document Nos. 66, 94 and 
272 into account in our analysis of the measures at issue.  Accordingly, we do not consider them 
further. 
2. Evaluation of the existence of the measures at issue  
7.230  The United States asks that the Panel assess th e six requirements both individually and in 
conjunction with each other to determine whether th ey give rise to a breach of Articles XVI and XVII 
of the GATS.  The United States argues that such an approach would be consis tent with past practice 
of panels and th e Appellate Body 301, and submits that doing so would help to "ensure the effective 
resolution of this dispute".302     
7.231  China recognizes in general that panels may need  to consider the overall conformity of a set 
of measures or legal instruments and how measures interact with each other based on the content of 
those instruments.303  In this dispute, however, China s ubmits that the United States has not 
established that the identified instruments are rela ted to each other as necessary to succeed with its 
challenge.  China submits that the identified instruments "in many cases have no demonstrable 
relationship to each other", because the instruments were issued "at different times, by different 
agencies, on different topics".304   In addition, China asserts that the United States' claims in relation 
to the first alleged requirement, i.e. "requirement s that mandate the use of CUP and/or establish CUP 
as the sole supplier of EPS for all domestic transactio ns denominated and paid in RMB", and the fifth 
alleged requirement, "broad prohibition on th e use of non-CUP cards", amount to "drawing a 
                                                      
299 See United States' response to Panel question No. 70. 
300 United States' response to Panel question No. 6, para. 23. 
301 United States' first written submission, para. 34, citing Appellate Body Report, EC – Asbestos , 
para. 64; Panel Report, US – Export Restraints . paras. 8.82-8.131. 
302 United States' first written submission, paras. 30 and 32. 
303 China's second written submission, fn. 48, refe rring to United States' first written submission, 
paras. 34 and 35; Panel Reports, US – Section 301 Trade Act ; Australia – Apples . 
304 China's second written submission, fn 48.  WT/DS413/R 
 Page 67 
 
 
 distinction without a difference".305  Accordingly, China addresses the United States' allegations 
concerning these requirements together in its submissions. 
7.232  The Panel notes that, in previous instances, pa nels and the Appellate Body have analysed 
measures or legal instruments not only on an in dividual basis, but have considered how certain 
measures or instruments operate collectively, in c oncert, or in combination, when evaluating the 
claims of a complainant.306  We see no reason at the outset to d ecline to consider the United States' 
request to consider the requirements both individually  and as they operate together.  As in previous 
cases, the need to do so depends on the particul ar circumstances of the matter before the Panel, 
including the content of the particular measures be fore the Panel, the interrelationship of those 
measures, and the result of the Panel's assessment of the measures considered  individually.  In our 
evaluation here, we will assess both the content and inte rrelationship of those instruments before us.   
7.233  We also note that there is overlap in terms of the particular legal instruments that are 
identified in respect of the six alleged requirements.   Specifically, as the United States clarified to the 
Panel307, each of the instruments identified in respect of the alleged issuer requirements, terminal 
equipment requirements, acquirer requirements, cross-region/inter-bank prohibitions and Hong 
Kong/Macao requirements, i.e. the second through si xth requirements listed in  paragraph 7.209 above, 
are also identified in connection with the alleged so le supplier requirement, i.e. the first requirement 
listed in paragraph 7.209 above.  In cases where the same instrument  is identified in respect of more 
than one requirement, the United States frequently refe rs to the same provisions of that instrument.  In 
view of the fact that the alleged sole supplier requirements incorporate every legal instrument cited in 
support of the other five requirements,  we consider it appropriate to be gin with a review of the issuer, 
acquirer and terminal equipment re quirements before turning to the sole supplier requirement.   
7.234  In addition, as pointed out by China, we not e that the United States' claim regarding the 
existence of a sole supplier requirement and its cl aim regarding the existenc e of cross-region/inter-
bank prohibitions address fundamentally the same concern, namely, whether the measures at issue 
require the processing of all domestic, RMB inter-bank payment card transactions over the CUP 
network, and not over the network of any other EPS supplier, including foreign ones.  The United 
States acknowledges that the "ultimate effect" of these two "requirements" is the same on foreign EPS 
suppliers, but explains that it seeks separate findings in this regard "to ensure that [the Panel's] 
findings reach the requirement irrespective of whethe r they are framed in terms of a mandate to use 
CUP or CUP cards, or a prohibition on the use of  non-CUP cards or a prohibition on the use of an 
EPS supplier other than CUP".308  Due to the similar nature of these two alleged measures, and 
because all of the legal instruments identified in connection with the alleged cross-region/inter-bank 
prohibitions are also identified in connection with  the sole supplier requirement, we will analyse the 
instruments identified in connection with the cross -region/inter-bank prohibitions in the context of our 
assessment of the alleged sole supplier requirement.  In doing so, we will bear in mind the distinction 
drawn by the United States' between whether the in struments are framed so as to mandate the use of 
CUP or non-CUP cards, or as a prohibition. 
7.235  We also recall our decision set out in paragr aphs 7.221 to 7.227 above not to consider 
Document Nos. 66, 94 and 272.  Therefore, these pa rticular instruments are not further considered 
below to assess whether the six alleged requirements exist.   
                                                      
305 China's second written submission, para. 96. 
306 See, e.g. Appellate Body Report, China – Raw Materials , paras. 250-255; Panel Reports, China – 
Raw Materials , para. 7.68; US – Tuna II (Mexico) , paras. 7.16-7.26. 
307 See United States' response to Panel question No. 4. 
308 United States' response to Panel question No. 2, para. 8. WT/DS413/R 
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 7.236  Finally, as discussed in paragraph 1.10 and Annex H to this Repor t, we recall that the parties 
indicated their disagreement on the correct transla tion of a number of aspects of the identified legal 
instruments.  As the complaining party, the Unite d States provided its own En glish language versions 
of provisions of these instruments. China at times submitted its own English la nguage versions of the 
same instruments.  At the Panel's request, the parti es undertook efforts to agree on a single translation.  
They succeeded in doing so in certain instances.  Fo r those occasions in which the parties were unable 
to agree on a single translation, the Panel, in cons ultation with the parties, appointed an independent 
translator – the United Nations Office at Geneva  (UNOG) – to provide expert linguistic advice to 
assist the Panel in determining the correct translati on.  In general, we will refer to the complaining 
party's translation, unless the parties specifically agr eed to a different translation, or if we elect to 
follow the advice of the UNOG translator.  In all cases, however, we have reviewed both parties' translations.  Where appropriate, we refer also to China's versions.  Any citation to the United States' 
translation, or UNOG's suggested translation, of a particular aspect of Chinese law, should not be 
construed to imply that it is an authoritative translation of China's instruments.   
7.237  Before proceeding to consider the relevant Chinese requirements, it is useful briefly to 
address the question of whether, as the United States contends
309, CUP is a supplier of the services at 
issue, i.e. an EPS supplier.  In support of its position, the United States points inter alia  to Article 12 
of CUP's Articles of Association and to the de finition of CUP's business scope contained in the 
Notification of Approval of CUP's Business Licence.310  The two provisions have nearly identical 
terms, which is why it is sufficient to set out Article 12.  It provides:    
Upon being registered according to law, the business scope of the Company is as 
follows:  (1) To establish and operate a si ngle nationwide inter-bank card information 
switching network; (2) to provide adva nced electronic payment technologies and 
specialized services in connection with the inter-bank bank card information 
switching; (3) to engage in bankcard t echnological innovation; (4) to manage and 
operate the brand of "UnionPay"; (5) to fo rmulate the code and technical standards 
for inter-bank card transactions, and to me diate and arbitrate any business disputes 
arising out of inter-bank transactions; (6) to organize trainings for the industry, business seminars and international excha nge programs, and to conduct related 
researches and consulting services; and (7) to conduct such other businesses as may 
be approved by the People's Bank of China. 
7.238  In addition, we note that China has not specifi cally contested that CUP provides the services 
at issue, i.e. EPS as defined in the United States' requ est for the establishment of a panel.  In the light 
of these elements, CUP can in our view properly be considered a supplier of the services at issue.  
(a) Requirements on issuers that payment cards i ssued in China bear the CUP logo ("issuer 
requirements") 
7.239  We turn first to address the issuer require ments.  The United States asserts that these 
requirements are imposed by specific provisions  of the following Chinese legal instruments:
311 
 Document No. 37 (Articles 1.2(i), 2 and 3) 
                                                      
309 United States' first written submission, paras. 1 and 3. 
310 United States' response to China's request for a pr eliminary ruling, paras. 70 and 72 (referring to 
Article 12 of CUP's Articles of Associ ation, Exhibit US-20, and the Notification of Approval of CUP's Business 
Licence, Exhibit US-29).  See also th e 2007 China Payment System Development Report, Exhibit US-15, p. 25. 
311 United States' response to Panel question No. 4, para. 17.  The United States also relies on 
Document Nos. 94 and 272.  As explained above at paragraphs 7.221-7.229 above, the Panel has decided not to 
consider the substance of  these documents.    WT/DS413/R 
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  Document No. 57 (Articles 1-6) 
 Document No. 129 (Article 3.2(ii)) 
 Document No. 219 (Article III) 
 Document No. 76 (Chapter I, Article 4) 
 Document No. 17 (Articles 5, 7-10 and 64) 
7.240  The United States submits that through these in struments, China maintains requirements on 
issuers that payment cards issued in  China bear the CUP logo.  More particularly, in the United States' 
view, China imposes requirements that any bank car ds issued in China fo r RMB purchases in China, 
as well as any dual currency cards issued in China,  must bear the CUP logo.  According to the 
United States, this means that issuers must have access to the CUP system, and must pay CUP for that 
access.312   
7.241  China responds that the instruments at issu e require all RMB-denominated payment cards 
issued in China to bear a common logo – the Yin Lian  logo – and to adhere to certain technical 
standards so as to be capable of being processed over the CUP network.313  These instruments allow a 
national inter-bank payment card netw ork to function.  China further submits that the United States 
fails to identify any aspect of the alleged issuer  requirements that would prevent the issuance of 
payment cards that are capable of being processed over multiple networks.314  China contends that 
there are many banks throughout the world that i ssue cards that are capable of being processed over 
more than one network.315  China also argues that nothing in the instruments at issue prevents issuers 
from placing the logos of EPS suppliers other than CUP on bank cards they issue, provided that they bear the Yin Lian  logo.
316   
7.242  The Panel will examine one by one the above -mentioned instruments relied on by the 
United States so as to determine whether they impo se the alleged issuer requirements.  Before doing 
so, however, we need to address a translation issue that arises in connection not only with the alleged 
issuer requirements, but also the alleged term inal equipment and acquirer requirements.    
(i) Preliminary translation issue  
7.243  According to the United States, the instrument s that impose the aforesaid requirements make 
frequent references to a logo that must be displaye d on bank cards issued in China or on terminal 
equipment operated in China.317  The United States is of the view that the logo in question is that of 
China UnionPay Co., Ltd. (¨"CUP") and accordingly refers to it as the "CUP logo".  In contrast, China 
argues that the relevant instruments refer to the " Yin Lian  logo", which China says indicates a bank 
card's interoperability.  In view of the parties' di sagreement, it is necessary to determine the correct 
translation of the Chinese characters that are used in  the relevant instruments to describe the logo in 
question.   
7.244  The United States argues that the correct English translation of the logo in all instances at 
issue is "CUP logo", because in ternet translation engines comm only translate the characters " Yin 
Lian" as "CUP" and because CUP itself refers to its logo as the "CUP logo" or the "CUP label", or in 
                                                      
312 United States' first written submission, paras. 4 and 100; WT/DS413/2, p. 2.  
313 China's first written submission, para. 36; China' s response to Panel question No. 104(b), para. 51. 
314 China's second written submission, para. 93. 
315 China's response to Panel question No. 22(c), para. 18. 
316 China's response to Panel question No. 104(b), para. 51. 
317 The logo in question consists of a tricolour lozenge that contains the phrase "UnionPay" in English 
as well as the Chinese characters " Yin Lian ". WT/DS413/R 
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 certain instances as the "UnionPay logo".  The Unite d States further submits that contrary to China's 
suggestion, there is no reason to employ the transliteration " Yin Lian ".  The United States observes in 
this regard that the logo itself uses the English transl ation "UnionPay".  And it adds that in the case at 
hand the product of transliteration – " Yin Lian " – has no meaning in English.  The United States 
therefore considers that if the Panel does not translat e the logo as "CUP logo",  there is no basis for 
translating the logo into English as anything other than "UnionPay".318 
7.245  China argues that it is incorrect to translate the Chinese term " Yin Lian " as CUP.  The term 
"CUP" stands for China UnionPay and is an offici al abbreviation for the company "China UnionPay 
Co., Ltd." (CUP).  Also, the word "China" is not found in the relevant provisions that use the term 
"Yin Lian ".  China notes that the Yin Lian  logo was approved by the People's Bank of China (PBOC) 
in 2001 as a symbol of bank card interoperability.  China notes that CUP was not established until March 2002.  China further points out that the logo used by CUP consists of three parts: (1) the logo 
for bank card interoperability; (2) the Chin ese phrase for China UnionPay (Zhong Guo Yin Lian ); and 
(3) the English phrase "China UnionPay".  According to China, this logo is used as a trademark or 
company identity symbol.  China therefore suggests that the Panel use the term " Yin Lian " instead of 
CUP.
319 
7.246  The UNOG translator asked to advise the Panel points out that there is no ready means of 
distinguishing between " Yin Lian " when used as an idiomatic short form meaning "bank card network 
interoperability", and " Yin Lian " when used to stand for UnionPay  or even, again idiomatically, the 
company CUP.  The UNOG translator further observ es that the English term "UnionPay" is itself a 
convenient but necessarily approximate equivalent for " Yin Lian " in its application as a term for "bank 
card network interoperability".320  Moreover, the same term has been incorporated in the name of the 
relevant company.  As a result, in the view of  the UNOG translator, the use of the English term 
"UnionPay" as shorthand for the concept of inte roperability and for the company gives rise to 
confusion.  In the light of this ambiguity, the UNOG translator advises that the Panel use the 
compound form " Yin Lian /UnionPay", except where the Chinese u ses the fuller "China UnionPay" or 
"China UnionPay Co. Ltd.".321     
7.247  In considering this translation issue, we firs t note the Business Practices Appendix contained 
in Document No. 76, which in an annex defines the term "network logo" as "[t]he […] logo 
compris[ing] the uniform brand name for domestic bank cards (the Chinese characters " Yin Lian ") and 
the design symbolizing the united network, as regist ered with the trademark office.  All rights of 
ownership and use belong to the [United Association]…".322  Document No. 76 was promulgated by 
the PBOC and dates from 2001.323  In 2002, CUP obtained its bus iness licence.  According to that 
licence, the activities that are w ithin the company's business scope  include the establishment and 
operation of a single nationwide inter-bank card info rmation switching network, and the management 
and operation of the brand "UnionPay".324  Thus, the nationwide inter-bank network to which 
                                                      
318 United States' translation comments of 4 January 2012, pp. 1-2; comments on the UNOG evaluation 
of 24 February 2012, pp. 1 and 3. 
319 China's translation comments of 4 January 2012, pp. 1-3.  
320 The UNOG translator notes that the English equivalent of "UnionPay" bears only tangential relation 
to the original Chinese meaning and that a more appropriate choice would have been "BankCardNet". 
321 UNOG evaluation, pp. 3-4 and 16. 
322 See the UNOG translator's  linguistic advice as set out in Annex H.  Article 4.2 of Chapter I of the 
Business Practices Appendix contains a very similar definition. 
323 See also the press release by the People's Bank of China entitled "Central Bank Introduces Bankcard 
Network Logo" (Exhibit US-26). 
324 Exhibit US-29 uses the term "UnionPay".  Article 12 of CUP's Articles of Association. describes the 
company's business scope in the same terms as the No tification of Approval of CUP's Business Licence.  
According to the United States, CUP's Articles of Associa tion also date from 2002.  United States' response to 
Panel question No. 88(a), para. 71.   WT/DS413/R 
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 Document No. 76 and the Notification of Approval of CUP's Business Licence refer are one and the 
same.  As the parties have explained, CUP as of 2002 took over the responsibility of that network 
from the United Association.325  
7.248  We understand from the UNOG translator's evaluation that what the parties have referred to 
in their translations of Chinese instruments as the "CUP logo" or the " Yin Lian  logo" is generally the 
aforementioned network logo, except for certain inst ances where the Chinese original refers to CUP.  
Based on the UNOG translator's advice, we accept  that the network logo  that uses the Chinese 
characters " Yin Lian " symbolizes interoperability, as China contends.326  But the network logo is not a 
generic logo that indicates that a par ticular bank card is interoperable with a nationwide inter-bank 
payment card network in China.  Rather, as is cl ear from Document No. 76 and the Notification of 
Approval of CUP's Business Licence, the network  logo indicates that a particular bank card is 
interoperable with the specific network that  is currently operated by CUP.      
7.249  We understand from China that the company Ch ina UnionPay (CUP) has its own company 
logo, which incorporates the network logo.  To the right of that logo, the company logo adds the term "China UnionPay" in both Chinese and English.
327  To that extent, as noted by the UNOG translator, a 
distinction can, in principle, be made between th e network logo and the company logo.  However, as 
also confirmed by China in response to a ques tion from the Panel, CUP on its own CUP-branded 
cards issued in China does not use the full company logo, but only the network logo.328  Plainly, this 
blurs the distinction between the network logo and the company logo.  
7.250  In the light of the foregoing, we find persuasi ve the UNOG translator's suggestion that we 
refer to the network logo as the " Yin Lian /UnionPay" logo.  The suggested compound form usefully 
distinguishes the network from the company CUP.  In addition, the compound form reflects the fact 
that both terms appear on the network logo – " Yin Lian " in Chinese and "UnionPay" in English – and 
that the English term "UnionPay " "bears only tangential relation"329 to the meaning of the Chinese 
characters " Yin Lian ".  Consequently, throughout the remai nder of this Report, we will use the 
UNOG-suggested translation, except where the Ch inese original refers to CUP or where we 
summarize arguments put forward by the parties.   
7.251  Using the suggested translation helps to clarif y that, formally speaking, the relevant legal 
texts generally refer to the network logo as opposed to the company logo.  We hasten to recall, 
however, that it is CUP that currently operates the network in question, and that CUP appears to use 
only the network logo on its own CUP-branded cards.  As a result, it is virtually inevitable, in our 
view, that the average bank card user whose card di splays the network logo will associate that logo 
with CUP or the nationwide inter-ba nk network operated by CUP.  We therefore consider that as long 
as CUP is the company charged with operating the relevant nationwide inte r-bank network, it makes 
little practical difference whether the relevant Chinese instruments formally refer to the network logo 
or the CUP logo.  We will revert to this point further below.330 
                                                      
325 United States' second written submission, para. 160; response to Panel question Nos. 71, para. 7; 
115, para. 104; China's response to Panel question No. 99, para. 40.  
326 Specifically, China has said that the Yin Lian  logo designates that the RMB bank card on which the 
logo appears can be used on an inter-bank, interoperable basis.  China's response to Panel question No. 105(a), 
para. 54.  
327 China's response to Panel question No. 105(b), para. 55. 
328 China's response to Panel question No. 105(b) and (c), paras. 55-57.  Evidence submitted by China 
demonstrates that there are CUP-branded credit and debit cards that display only the network logo 
(Exhibit CHN-105). 
329 UNOG evaluation, p. 16. 
330 See, below para. 7.696. WT/DS413/R 
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 (ii) Document No. 37 
7.252  The Panel now addresses the Chinese legal instruments cited by the United States as sources 
of the alleged issuer requirements.  We begin with Document No. 37. 
7.253  In relation to Document No. 37, the United States refers the Panel to the text of Articles 1.2(i) 
and 2.331  In one footnote, the United States also cites Article 3 as a provision requiring the use of the 
CUP logo.332  Regarding Article 2, the United States observes that it prohibits the use of non-CUP 
cards for cross-region or cross-bank transactions.333   
7.254  China states that Document No. 37 establish es uniform technical standards for inter-bank 
payment cards.  It also establishes the Yin Lian  logo as the common logo for inter-bank payment cards 
that conform to these standards.  It requires comme rcial banks that issue inter-bank payment cards to 
use the Yin Lian  logo and to join the national inter-bank payment card network.334 
7.255  The Panel notes that the United States identified Articles 1.2(i), 2 and 3 of Document No. 37 
as the relevant provisions.  Article 1.2(i) imposes a requirement on all commercial banks to complete, 
by the end of 2001, the transformation of their in ternal bank card processing system according to the 
uniform standards and specifications for bank cards, and to make technical preparations for accepting 
bank cards bearing the Yin Lian /UnionPay logo.335  This provision does not impose a requirement that 
all bank cards issued in China must bear the Yin Lian /UnionPay logo.  Rather, it appears to require 
that all commercial banks, which include issuers,  be capable of processing transactions involving 
bank cards bearing the Yin Lian /UnionPay logo.     
7.256  Article 2.1(i) provides in relevant part that "bank cards issued by all commercial banks with 
inter-bank usability in China must bear the [ Yin Lian /UnionPay] logo" on the front of the cards.336  
Article 2.2(i) stipulates that by the end of 2003,  commercial banks had to replace all bank cards that 
did not conform to the Yin Lian /UnionPay logo use requirement.  As from 2004, bank cards not 
bearing the Yin Lian /UnionPay logo could no longer be used for cross-region or inter-bank 
transactions.   
7.257  Article 2.1(iii) states that all cards bearing the Yin Lian /UnionPay logo must abide by the 
unified technical specifications, and that all issu ers of bank cards must provide corresponding cross-
region and inter-bank services pursuant to the unified  business specifications.  Moreover, pursuant to 
Article 2.2(i), by the end of 2003  commercial banks had to replace all bank cards that did not conform 
to the unified requirements. These Articles do not requi re that all bank cards issued in China must 
bear the Yin Lian /UnionPay logo.  But they do impose requirements on issuers that relate to bank 
cards issued in China and bearing the Yin Lian /UnionPay logo.   
7.258  Regarding Article 3, the United States states that it requires the use of the Yin Lian /UnionPay 
logo.  We see nothing in Article 3 that would support this assertion.  We note, however, that 
Article 3.1 requires commercial banks that engage  in bank card business in China to join the 
nationwide bank card inter-bank exchange network.337 
                                                      
331 United States' first written submission, para. 94. 
332 United States' second written submission, fn. 201. 
333 United States' preliminary ruling submission, para. 106. 
334 China's first written submission, para. 45. 
335 See the UNOG translator's linguistic advice as set out in Annex H. 
336 Pursuant to Article 2.1(i), "special cards" are not subject to this requirement.  Articles 7 and 8 of 
Document No. 17 suggest that "special  cards" are one type of debit card.  
337 The United States has referenced Article 3.1 in the context of a discussion concerning applicable 
technical specifications.  United States' resp onse to Panel question No. 119, para. 118.  WT/DS413/R 
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 7.259  Based on the foregoing, we consider that Articles 2.1(i) and 2.2(i) require issuers to ensure 
that all bank cards issued in China for use in connection with domestic inter-bank  transactions bear 
the Yin Lian /UnionPay logo.  In contrast, Article 1.2(i) requires issuers to transform their processing 
systems so that they can process trans actions involving bank cards bearing the Yin Lian /UnionPay 
logo.  Article 2.1(iii) imposes requirements on issuers that appear intended to ensure that bank cards 
bearing the Yin Lian /UnionPay logo are interoperable, i.e. that  they can be used in domestic inter-
bank and cross-region transactions.  Article 3.1 requi res issuers to join the national inter-bank bank 
card network.   
(iii) Document No. 57 
7.260  The United States submits that Document No. 57  contains several requirements – set out in 
Articles 1-6 – that mandate that payment cards bear the CUP logo.338 
7.261  China argues that Document No . 57 elaborates on the requirements set forth in Document 
No. 37.  It requires payment cards issued for domestic inter-bank use to bear the Yin Lian  logo, and 
requires commercial banks that issue inter-bank paymen t cards to adhere to the business specifications 
for bank card interoperability contained in Document No. 76.339 
7.262  The Panel notes that the provisions of Document No. 57 identified as relevant by the 
United States are Articles 1 through 6.  Article 1 stipulates that bank cards issued by all commercial banks solely for domestic interoperable use must bear the uniform Yin Lian /UnionPay logo, and RMB 
credit cards must also bear the Yin Lian /UnionPay holographic anti-counterfeiting logo.
340  Article 2 
makes it mandatory for "dual-account" (i.e. dual curren cy) bank cards issued by all commercial banks 
in China for both domestic and foreign in teroperable use to bear the uniform Yin Lian /UnionPay 
logo.341  
7.263  Article 3 provides that bank cards issued for cross-region or inter-bank use must comply with 
the unified business specifications and technical stan dards.  It further stipulates that commercial banks 
must provide card samples to the PBOC that comply with the Yin Lian /UnionPay logo use 
requirements.  Neither of these two elements of  Article 3 imposes a requirement that bank cards 
issued in China bear the Yin Lian /UnionPay logo.  The former element – that bank cards must comply 
with the unified business specifications and tec hnical standards – nonetheless imposes a requirement 
on issuers that relates to bank cards bearing the Yin Lian /UnionPay logo.  Regarding the second 
element of Article 3 – that commercial banks must provide card samples to the PBOC that comply 
with the Yin Lian /UnionPay logo use requirements – the Unite d States asserts that this means that 
issuers must submit any cards to be  issued for approval by the PBOC.342  China responds that the 
United States misinterprets Article 3.343  We are not persuaded on the basi s of the text of Article 3 and 
in the absence of other evidence that this article confers on the PBOC the power to deny issuance of a 
bank card that complies with the logo use requirements of Document No. 57.    
                                                      
338 United States' first written submission, para. 93; second written submission, fn. 201. 
339 China's first written submission, para. 45. 
340 Credit card logos, like the Yin Lian /UnionPay bank card logo, appear in the lower right corner of the 
front side of the card.  They serve to identify the card's brand.  Holographic anti-counterfeiting logos also appear 
on the front side of the card, on the right-hand side, above the card logo.  They serve a security function.  We 
note that the United States' description of the issuer requirements makes no mention of the Yin Lian /Union Pay 
anti-counterfeiting logo.  United States' first written submission, para. 4.   
341 Regarding the translation of Articles 1 and 2, see the UNOG translator's linguistic advice as set out 
in Annex H. 
342 United States' response to Panel question No. 15, para. 57.   
343 China's second written submission, fn. 51.   WT/DS413/R 
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 7.264  Article 4 is concerned with the Yin Lian /UnionPay holographic anti-counterfeiting logo, 
which is different from the Yin Lian /UnionPay logo.  Also, Article 4 does not impose a requirement 
on issuers or require the use of the Yin Lian /UnionPay logo.        
7.265  Article 5 states in relevant part that commercial  banks must take the job of promoting  the use 
and acceptance of the Yin Lian /UnionPay seriously344, and that they were gradually to reduce the role 
of their own bank card brands in the market.  Article 6 provides inter alia  that as from 2002, no bank 
cards were allowed to bear a regional interoperability logo. 
7.266  Based on the above, we consider that Articles 1,  2, 5 and 6 impose a requirement that all bank 
cards, including dual currency cards, issued in Chin a for use in connection with domestic inter-bank 
transactions bear the Yin Lian /UnionPay logo.  Article 3 also im poses a requirement on issuers.  
However, it concerns ensuring that bank cards bearing the Yin Lian /UnionPay logo are interoperable, 
i.e. that they can be used in domestic  inter-bank and cross-region transactions.  
(iv) Document No. 129 
7.267  The United States submits that Article 3.2(ii) of Document No. 129 requires that all newly 
issued bank cards must bear the CUP logo and must conform to unified business specifications and 
meet technical CUP standards.345 
7.268  China does not specifically address Document No. 129.  
7.269  The Panel notes that Article 3.2(ii) relates to the "universal use of bank cards bearing the [ Yin 
Lian/UnionPay] logo".  It provides in relevant part that all RMB bank cards newly issued by 
commercial banks must conform to the unified busin ess specifications and technical standards, and 
must bear the unified Yin Lian /UnionPay logo.  It further states that commercial banks must formulate 
and submit to PBOC specific plans for replacement of remaining bank cards not bearing the Yin 
Lian/UnionPay logo.   
7.270  In the light of this, we consider that Article  3.2(ii) imposes a requirement that all RMB bank 
cards issued in China for use in connection with  domestic inter-bank transactions must bear the Yin 
Lian/UnionPay logo.  The Article further imposes a re quirement on issuers that seeks to ensure that 
bank cards bearing the Yin Lian /UnionPay logo are interoperable.   
(v) Document No. 219 
7.271  The United States argues that Article III of Do cument No. 219 provides for both the use of 
CUP to process authorized card transactions and also that no supplier of EPS can process a card 
transaction that is not authorized (i.e. cards not bearing the CUP logo).346 
7.272  China states that Article III regulates acquirers  in China's border areas and is designed to 
combat payment card fraud.  It requires that the acquiring agreement between an acquirer and 
merchant stipulate that the merchant must not use the Yin Lian  logo for purposes outside the scope of 
the agreement.347 
                                                      
344 The parties have provided no elaboration on the mean ing of this requirement, other than to confirm 
that it is a requirement.  United States' response to Pa nel question No. 123, para. 122; China's response to Panel 
question No. 123, para. 89. 
345 United States' first written submission, para. 95. 
346 United States' first written submission, para. 95; United States' response to China's request for a 
preliminary ruling, para. 107. 
347 Exhibit CHI-74.  WT/DS413/R 
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 7.273  The Panel notes that Article III is addressed  to RMB bank card acquiring institutions.348  It 
provides that the RMB card acquisition agreements that  such institutions concl ude with merchants are 
to stipulate, inter alia , that merchants must not use the Yin Lian /UnionPay logo or POS terminals for 
purposes outside the scope of the acquisition agreement.349  Thus, Article III is concerned with RMB 
bank card acquirers and the merchants with whom they  enter into acquisition agreements.  It is not 
concerned with issuers or the issuance of bank cards.  
7.274  In the light of this, we consider that Article  III does not impose a requirement on issuers that 
bank cards issued in China must bear the Yin Lian /UnionPay logo.   
(vi) Document No. 76 
7.275  The United States draws the Panel's attention to Chapter I, Article 4 of Document No. 76, 
which assigns to the "United Association" ownershi p of the "UnionPay" logo and gives it the use and 
management rights of the logo.  As the rights of th e United Association were eventually transferred to 
CUP, CUP has exclusive control over the UnionPay logo.  According to the United States, CUP can 
therefore refuse permission for the logo to appe ar on any bank cards that carry the logo of a 
competing EPS supplier. The United States argues th at if CUP does so, the bank cards carrying the 
logo of the competing supplier cannot be issued and the competing supplier is effectively barred from 
the market.350 
7.276  China points out that Document No. 76 sets forth detailed specifications concerning the 
technical and commercial aspects of inter-bank payment card transactions.351  China argues that the 
United States has failed to identify anything in th e instruments at issue that would give CUP the 
"negative" power to prevent banks from placi ng other logos on a bank card that bear the Yin Lian  
logo.352 
7.277  The Panel begins by recalling that CUP w as given the role of operating the "United 
Association" when CUP was established in 2002.353  We further observe that pursuant to Article 4.2 of 
Chapter I of the Business Practices Appendix of  Document No. 76, the United Association does 
indeed possess the ownership in and the use and management rights of the Yin Lian /UnionPay 
network logo.354  However, Article 4.2 must in our view be read together with the Article that follows 
it, Article 4.3.  Article 4.3 is entitled "Right to use the logo".  It stipulates that "Interoperating 
Members" "automatically obtain" the right to use the logo as from the date on which they officially 
engage in the inter-bank business upon approval by the United Association.355  Document No. 76 
makes clear that "Interoperating Members" include  issuing banks that participate in the bank card 
interoperating business.356  To become an "Interoperating Member", an issuing bank must be 
                                                      
348 As its title indicates, Document No. 219 concer ns "Relevant Issues on Accepting and Using RMB 
Bankcards in Border Areas" (Exhibit US-47).   
349 See the UNOG translator's linguistic advice as set out in Annex H. 
350 United States' response to Panel question No. 71, para. 7. 
351 China's first written submission, para. 45. 
352 China's response to Panel question Nos. 106, para. 58; 117, para. 81. 
353 See para. 7.247 above.   
354 We also recall that the Notification of Busine ss License Approval and Issuance (Exhibit US-29) 
makes clear that CUP's business scope includes the management and operation of the network brand 
"UnionPay/ Yin Lian ". 
355 The United States has provided two exhibits with translated versions of Document No. 76.  In this 
instance, we rely on Exhibit US-63.  The translation provided of Article 4.3 in Exhibit US-56 is slightly 
different.  It reads: "The members are automatically gran ted the rights to use the logo when they are approved 
by the Association to initiate the cross-bank business". 
356 Articles 2.3 and 5.2.3 of Chapter I as well as the Appendix (Definition of Terms and Phrases) of the 
Business Practices Appendix contained in Document No. 76.  WT/DS413/R 
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 approved as such by the United Association fo llowing an examination by a testing team.357  As we 
understand Article 4.3, once an issuing bank offici ally becomes an "Interoperating Member", it as a 
consequence has the right to use the network logo.358  We therefore fail to see how Article 4.2 could 
provide a basis for the United Association, or CU P, to refuse permission for the network logo to 
appear on bank cards bearing the logo of competing EPS suppliers.359  In other words, Article 4.2 in 
our view does not demonstrate that the logo use requirements enable CUP to prevent issuers from 
issuing bank cards of competing EPS suppliers.   
7.278  We observe as an additional matter that the Un ited States also refers to a provision of the 
CUP's Operating Regulations in support of its argument based on Article 4.2.360  The United States 
submitted the relevant provision of the Operati ng Regulations as part of its response to a Panel 
question that was posed after the second substantive meeting.361    According to the United States, the 
Operating Regulations prohibit the logo of a compe ting EPS supplier from appearing on the surface of 
"UnionPay Cards".362  China responds that the United States ' assertion that CUP does not licence the 
Yin Lian /UnionPay network logo for use on bank cards th at carry the logo of competing EPS suppliers 
is contradicted by the evidence on record.  Specifi cally, China points to the prevalence of dual logo 
cards that bear the Yin Lian /UnionPay network logo as well as the logo of other EPS suppliers.363   
7.279  We note that the relevant provision of the Oper ating Regulations, submitted very late in the 
proceedings, raises a number of questions that the Un ited States did not address.  For instance, it is not 
clear to us from the text of the relevant provi sion whether the bank cards on which other logos may 
not appear – referred to in the relevant provisions  as "UnionPay Cards" – are only CUP-branded bank 
cards (China UnionPay cards) or also perhaps an y bank card issued in China supported by a foreign 
EPS supplier and that in addition to the logo of th e foreign EPS supplier, would have to bear the Yin 
Lian/UnionPay network logo.  Nor do we have a re sponse from the United States to China's argument 
about the existence of dual logo bank cards that are i ssued in China.  Moreover, the United States, in 
its response to the Panel's question, has not tried to reconcile its interpretation of the Operating 
Regulations with Article 4.3 of the Business Practic es Appendix, which indicates that the right to use 
the Yin Lian /UnionPay logo is automatically granted to "Interoperating Members".  The United States 
merely asserts, without elaboration, that the Oper ating Regulations implemen t the mandate regarding 
the requirements in the Business Practices Append ix related to the use and non-use of the 
UnionPay/ Yin Lian  logo.364  For these reasons, we are not persuade d that the relevant provision of the 
                                                      
357 Articles 2.1, 2.3, 5.2.1, 5.3.1.1 and 5.3.4 of Chapter I of the Business Practices Appendix contained 
in Document No. 76.  
358 The United States itself appears to share this unde rstanding.  In response to Panel question No. 92 
(para. 86), it states in relation to acquirers that "[o] nce an acquiring institution has been approved as a member 
of CUP, the acquiring institution gains the right to the CUP logo" according to Article 4.3 of the Business 
Practices Appendix contained in Document No. 76. 
359 The United States' argument based on Article 4 is that CUP could refuse permission to use the 
network logo, not that CUP could bar an issuing bank from becoming an "Interoperating Member".  It is 
pertinent to note in this respect that according to the parties, several foreign bank s are currently members of 
CUP.  United States' response to Panel question No. 15, para. 108 (citing six foreign banks as examples); 
China's response to Panel question No. 115, para. 76; Exhibit CHN-105.  
360 United States' response to Panel question No. 94, para. 94 (citing Document No. 76 and the 
Operating Regulations together); and also response to Panel question Nos. 86, para. 64, and No. 117, para. 113. 
361 We note that the Operating Regulations date from April 2011, which is before this Panel was 
composed.  Also, the United States did not submit the entire text of the Operating Regulations, but only the 
relevant provision.   
362 The United States identifies Article 2.5.3.2 of  the Operating Regulations (Exhibit US-115). 
363 China's comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123, 
para. 67.  China also points out that the document in question was not identified in the request for establishment 
of a panel.  China's comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123, 
para. 68.   
364 United States' response to Panel question No. 86, para. 64.  WT/DS413/R 
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 Operating Regulations supports the United States' assertion that the logo use requirements allow CUP 
to prevent issuers from issuing bank cards of competing EPS suppliers.  
7.280  Finally, we note that in response to another question from the Panel concerning CUP's alleged 
power to refuse permission to use the network logo,  the United States asserts that CUP at times did 
not approve EPS suppliers' applications for new dua l-branded, dual-logo cards, and that it achieved 
this "essentially through the card approval process".365  According to the Un ited States, this is 
demonstrated in various press re ports that date from 2006 and 2007.366  We note, initially, that the 
United States provides no elaboration on what the relevant "card approval pr ocess" entails and what 
the governing rules and procedures are.367  Furthermore, and without entering into a discussion of the 
evidentiary value of these press reports, we observe  that the press reports do not refer to either 
Article 4 of the Business Practices Appendix or th e Operating Regulations, or another instrument 
cited by the United States in support of the issuer re quirements.  Nor do they indicate that CUP denied 
or prevented approval of a card programme specifi cally by refusing permission to use the network 
logo.368  In the light of this, the press reports in ques tion in our view do not assist the United States in 
demonstrating that by virtue of the logo use re quirements CUP can prevent issuers from issuing bank 
cards of competing EPS suppliers. 
(vii) Document No. 17 
7.281  The United States observes that the issuer requirements concern "bank cards" and that 
Document No. 17 defines that term.  According to  the United States, Document No. 17 in Articles 5 
and 7-10 defines "bank cards" as encompassing the range  of payment cards that are broadly used in 
card-based electronic payment transactions.369  The United States further asserts that Article 64 of 
Document No. 17 requires the use of the unified  standards of the Business Practices Appendix of 
Document 76, which are CUP-only.370 
7.282  China does not specifically address the provisions identified by the United States, except to 
note that Document No. 17 was issued in 1999 an d that subsequent instruments have established 
additional requirements.371  
7.283  The Panel notes that Articles 5 and 7-10 of Document No. 17 do not impose any 
requirements.  Rather, they provide legal definitio ns.  They notably indicate that the term "bank 
cards", which appears in several of the instrume nts at issue, comprises both credit cards and debit 
cards, and that the latter category includes cards for transferring accounts and stored-value cards 
(Articles 5 and 7).  It is further stipulated th at bank cards may be classified into both domestic 
currency cards – RMB cards – and foreign currency cards (Article 5).       
7.284  The United States' claims in this case concern EPS for "payment  card" transactions and not 
EPS for "bank card" transactions.372  However, "payment cards" as defined by the United States 
                                                      
365 United States' response to Panel question No. 117, para. 113. 
366 Exhibits US-119, US-120, US-121, US-122 and US-123. 
367 The only card approval process that we have been ma de aware of is that provided for in Article 3 of 
Document No. 57.  It states in relevant part that commercial banks must submit to PBOC a card sample which 
complies with the requirements of the Yin Lian /UnionPay logo as laid down in Document No. 57.  On its face, 
Article 3 does not provide for any involvement of CUP in the approval process. 
368 For example, one of the press reports indicates me rely that CUP refused th e request of a commercial 
bank for card issuance (Exhibit US-120). 
369 United States' response to China's request for a preliminary ruling, fn. 153. 
370 United States' second written submission, para. 170 and fn. 201. 
371 China's response to Panel question No. 122, para. 88. 
372 WT/DS413/2, p. 1. WT/DS413/R 
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 include bank cards, credit cards, debit cards and prep aid cards.  Thus, the term "bank card" as defined 
in Document No. 17 covers at least some important types of "payment card".  
7.285  The United States suggests that the definition of "bank cards" provided in Document No. 17 
is also applicable when this term appears in other instruments at issu e.  China has not asserted 
anything to the contrary.  We see nothing in Document Nos. 37, 57, 129, 219 or 76 to indicate that we 
should not take that definition into account in our analysis of these instruments.373   
7.286  As regards Article 64, it provides in relevant  part that a commercial bank in China, when 
issuing any variety of bank cards (other than those of an international credit card organization), must 
implement the technical standards prescribed by the State.374  In our view, Article 64 does not require 
that all bank cards issued in China must bear the Yin Lian /UnionPay logo.  Nor does Article 64 itself 
require the use of the unified standards set out in the Appendix on Business Practices contained in 
Document No. 76.  But we agree that the Business Practices Appe ndix includes technical standards 
prescribed by the State that are applicable to issuers.375  In the light of this, we consider that Article 64 
in conjunction with Document No. 76 requires issuer s to implement technical standards when issuing 
bank cards that must bear the Yin Lian /UnionPay logo.   
(viii) Yin Lian/UnionPay logo use requirement s versus interoperability requirements 
7.287  Before reaching overall conclusions, it is nece ssary to address an additional point that was 
made by the United States.  According to the United St ates, the fact that issuers in China are subject to 
Yin Lian /UnionPay logo use requirements means that th ey must have access to the CUP system and 
pay CUP for that access.  As this contention concer ns two distinct elements, we first consider the 
issue of access to the CUP system.   
7.288  In our view, the Yin Lian /UnionPay logo use requirements do not in and of themselves mean 
that issuers must have access to the CUP system.376  As the preceding analysis shows, however, China 
does maintain related requirements on issuers that ar e designed to ensure that  issuers join CUP and 
that the bank cards that must bear the Yin Lian /UnionPay logo meet uniform business specifications 
and technical standards and thus  be interoperable with CUP.377  The specific provisions and 
instruments that impose these require ments are the following: Articles 1.2(i), 2.1(iii), 2.2(i) and 3.1 of 
                                                      
373 Document No. 76 in Chapter 10 speci fically refers to Document No. 17.  
374 In response to a question from the Panel con cerning the reference to international credit card 
organizations, China has said that Document No. 17 dates from 1999 and that subsequent instruments have 
established that all RMB payment cards must have th e technical capability of being processed over the CUP 
network.   China's response to Panel question No. 122, para. 88.  We do not understand this response to mean 
that Document No. 17 does not require compliance with technical standards prescribed by the State that post-
date Document No. 17.  The United States similarly resp onded that Article 64 predat es the creation of CUP and 
that it does not mean that banks in China can issue RMB cards that carry only the logo of an international credit 
card organization.  United States' response to Panel question No. 122, para. 121.  
375 See, e.g. Articles 5.2.2 and 5.2.3 of Chapter I and paragraph 3 of the Notice. 
376 The United States appears to acknowledge this when  it states, in response to Panel question No. 119 
(para. 118), that Article 2.1 of Document No. 37 "requires that all cards bearing the UnionPay/ Yin Lian  logo 
(which, by virtue of measures described elsewhere, includes all cards issued in China for domestic use) 'must 
strictly abide by the unified technical specification and all bank card issuers must provide [...] services pursuant 
to the unified business specifications.'" 
377 The United States has itself distinguished these two requirements.  United States' response to Panel 
question No. 15, para. 57.  According to the United States, the uniform business specifications include relevant 
provisions of the Business Practices Appendix contained in Document No. 76.  With regard to the uniform 
technical specifications, the United States points out that they include a variet y of technical documents 
(including Document No. 76), some of which have been issued by CUP and some of which have been issued by 
the PBOC or other agencies.  United States' response to Panel question Nos. 15, para. 57; and 72, paras. 14 and 
15.  WT/DS413/R 
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 Document No. 37; Article 3 of Document No. 57; Ar ticle 3.2(ii) of Document No. 129; and Article 64 
of Document No. 17 in conjunction with Document No . 76.  Having regard to these provisions, it is in 
our view correct to say that issuers must have access to the CUP network.378   
7.289  The United States in response to a question from th e Panel referred to this category of issuer 
requirements as "interoperability requirements".379  As the United States has raised the element of 
access to the CUP system from the beginning in connection with the requirements on issuers that bank 
cards bear the Yin Lian /UnionPay logo380, we will proceed on the basis that there are two categories of 
issuer requirements for us to address: those that relate to the Yin Lian /UnionPay logo use and those 
that relate to interoperability.  
7.290  We now turn to the issue of payment for acc ess to the CUP network.  The United States 
alleges that in order to join the ne twork, issuers must pay fees to CUP.381  Here again, it appears that 
what triggers the alleged fees are not the Yin Lian /UnionPay logo use requirements per se, but rather 
the interoperability requirements imposed on issuers.   In response to a question from the Panel, the 
United States identifies two types of fee that may need to be paid to CUP: membership fees and 
testing fees.382  In support of its allegation, the United St ates refers the Panel to Article 3.1(iii) of 
Document No. 94.  That Article states in relevant part that CUP must "regulate fee charging methods 
and standards for inter-bank transactions at all city  centers".  We recall that Document No. 94 was 
repealed and ceased to have legal effect prior to th e date of the Panel's establishment.  As indicated 
above383, we therefore decline to take this document into account in our analysis of the measures at 
issue, which include the issuer requirements.  In an y event, even if Document No. 94 were relevant 
for our purposes, it is not clear that it supports the United States' allegation regarding fees payable for 
joining the CUP network.  The United States do es not address whether the fees referred to in 
Article 3.1(iii) are fees payable to CUP for access to  the network.  As the United States points out, 
Article 3.1(iii) is concerned with the regulatio n of inter-bank transactions, including fee-setting.384  
China has explained that inter-bank transactions of ten involve so-called interchange fees that are 
usually paid by acquirers to issuers.385   
7.291  The United States also relies on Articles 11 and 12 of CUP's Articles of Association.386  
However, these Articles do not mention any fees th at CUP charges issuers.  Additionally, the 
United States in response to a Panel question posed  after the second substan tive meeting submitted the 
previously mentioned CUP Operating Regulations.387  They include provisions on membership and 
testing fees payable to CUP.388  However, as also pointed out by China, the Operating Regulations are 
                                                      
378 China appears to agree that its instruments require that all inter-bank bank cards adhere to a 
common technical standard and that all issuers of such  c a r d s  i n  C h i n a  m u s t  b e  m e m b e r s  o f  C U P .   C h i n a ' s  
response to Panel question No. 22(c), para. 17. 
379 United States' response to Panel question Nos. 15, para. 55; 92, para. 88. 
380 WT/DS413/2, p. 2; United States' response to China's request for a preliminary ruling, paras. 102 
and 111; first written submission, paras. 12, 50 an d 100; and second written submission, para. 201. 
381 United States' response to Panel question No. 94, para. 96. 
382 United States' response to Panel question No. 93, para. 93. 
383 See paras. 7.221 et seq. above. 
384 United States' response to Panel question No. 93, pa ra. 91.  We also note that Article 2.4.1 of 
Document No. 76 refers to obligations to be met by Interoperating Members that include "abiding by relevant 
regulations governing interoperation fees".   
385 China's first written submission, para. 52.  We note  that the Visa IPO Prospectus (Exhibit US-3), at 
page 146, confirms China's explanation.  It also st ates that Visa sets default interchange rates in the 
United States and other regions, and that in certain jurisdictions interchange rates are subject to government 
regulation.  
386 Exhibit US-20. 
387 United States' response to Panel question No. 93, para. 93. 
388 The United States identifies Chapter 7 of the Operating Regulations (Exhibit US-116). WT/DS413/R 
Page 80 
 
 
 not identified as a relevant legal instrument in th e United States' request for the establishment of a 
panel.389  Moreover, unlike in the context of the l ogo use requirements where the United States also 
refers to the Operating Regulations, in the pr esent context the United States does not specifically 
contend that they implement a requirement containe d in one of the instruments cited by it in support 
of the issuer requirements.390  We note in this respect that th e provisions on membership and testing 
fees provided to us by the United States do not, by their terms, establish a link to any of the 
aforementioned instruments.391  In the absence of further explanation on the Operating Regulations, it 
is therefore not clear to us that its provisions on membership and testing fees are linked to any of the 
specific provisions and instruments cited by the Unite d States in support of the issuer requirements.  
We are therefore not persuaded that the Operati ng Regulations demonstrate what the United States 
asserts, i.e. that as a result of Document Nos. 37, 57, 129, 219, 76 or 17, issuers in China must pay 
fees to CUP for access to the CUP network.  
7.292  For these several reasons, the United States in our  view has not established that the issuer 
requirements entail, or are associated with, access fees payable to CUP. 
(ix) Conclusions and implications  
7.293  Having regard to the preceding analysis, we reach  the following conclusions in respect of the 
United States' assertions concerning the issuer require ments.  First, China maintains requirements on 
commercial banks as issuers of bank cards.  The term "bank cards" as defined in Document No. 17 
covers at least some types of what the Un ited States has defined as "payment cards".   
7.294  Secondly, all RMB bank cards issued in Chin a by commercial banks for use in domestic 
inter-bank RMB transactions must bear the Yin Lian /UnionPay logo on the front of the card.  This 
requirement is maintained through Articles 2.1(i) an d 2.2(i) of Document No. 37; Articles 1, 5 and 6 
of Document No. 57; and Article 3.2(ii) of Do cument No. 129.  Similarly, dual currency (dual 
account) bank cards issued by commercial banks in China for use inter alia  in domestic inter-bank or 
cross-region RMB transactions must also bear the Yin Lian /UnionPay logo on the front of the card.  
This requirement is imposed thr ough Article 2 of Document No. 57.  Additionally, all RMB credit 
cards must bear the Yin Lian /UnionPay holographic anti-counterfeiting logo.  This requirement is 
imposed by Article 1 of Document No. 57.   
7.295  Thirdly, China requires that issuers join CUP,  and that the bank cards which they issue and 
which must bear the Yin Lian /UnionPay logo meet uniform business specifications and technical 
standards.  These interoperability requirements are maintained through the following provisions: 
Articles 1.2(i), 2.1(iii), 2.2(i) and 3.1 of Docu ment No. 37; Article 3 of Document No. 57; 
Article 3.2(ii) of Document No. 129; and Article  64 of Document No. 17 in conjunction with 
Document No. 76.  
7.296  Finally, and in contrast, we have determined th at Article 4 of Document No. 57, Article III of 
Document No. 219 and Article 4.2 of Document No. 76, when considered individually, either do not 
impose requirements on issuers or do not constitute rele vant issuer requirements.  We find no basis to 
modify our conclusion when consid ering these provisions either togeth er or with the other provisions 
and instruments cited by the United States in connection with the issuer requirements.   
                                                      
389 China's comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123, 
para. 68.   
390 United States' response to Panel question Nos. 86, para. 64; and  93, para. 93.  We note that CUP's 
Articles of Association are not among the instrument s cited in support of the issuer requirements. 
391 Exhibit US-116.  We observe in this connection th at the Panel's question aske d the United States to 
indicate, "in any of the instruments before the Panel", th e specific provisions concerning access fees for issuers.  
The Operating Regulations were not among these instru ments at the time the question was put to the United 
States.    WT/DS413/R 
 Page 81 
 
 
 7.297  It remains for us to address an assertion made  by China regarding the implications of the 
issuer requirements.  China asserts that the Un ited States has not demonstrated that the issuer 
requirements would prevent the issuance in China of  bank cards that are capable of being processed 
over more than one network and that bear both the Yin Lian  logo and the logo of an EPS supplier 
other than CUP.  Thus, the issue to be addressed  is whether the issuer requirements would prevent 
commercial banks from issuing single or dual currenc y bank cards in China that could be used in 
domestic inter-bank RMB transactions and that woul d be capable of being processed over a network 
in China that is not the CUP network.   
7.298  We understand that it is technically possible fo r a single bank card to be capable of being 
processed over more than one network.392  We can therefore proceed  to consider the issuer 
requirements. We begin with the Yin Lian /UnionPay logo use element of these requirements.  The 
relevant provisions of Document Nos. 37, 57 and 129 concern the requirement to bear the Yin 
Lian/UnionPay logo.  They do not state that bank cards cannot be issued in China if they are capable 
of being processed over a network in China other than  that of CUP.  Nor do they say that bank cards 
can bear the logo of only one – CUP's – network.393  The United States contends, however, that the 
Yin Lian /UnionPay logo use requirement is incompatib le with logo use requirements of competing 
EPS suppliers.394  China responds that the United States h as cited no evidence of this incompatibility 
and points out that bank cards in China frequently bear more than one logo.395  China notably 
provided unrefuted evidence of the existence of dual-logo bank cards.396  For these reasons, we see no 
basis on which to conclude that the provisions in  question would prohibit the issuance of relevant 
cards that would be capable of being processed ove r more than one inter-bank network in China, 
provided these cards also bear the Yin Lian /UnionPay logo.397  We note that the United States itself 
appears to view the issuance of such car ds as a possible, if unlikely, scenario.398  Specifically, the 
United States has said that "[e]ven if a foreign s upplier of EPS was to convince an issuer to issue a 
card, [the issuer] requirements ensure that it will not be able to compromise CUP's prominent logo or 
obtain any market share to the certain exclusion of CUP."399  
7.299  Turning to the interoperability element of the issuer requirements, China submits that these 
requirements do not preclude issuers from being memb ers of networks other than the CUP network, 
and do not prevent bank cards from adhering at the sam e time to technical standards that are not those 
of CUP.400  In support of its view, China points to the issuance of dual-branded, dual-currency bank 
cards issued in China.401  To us, the existence of dual-brande d (dual-logo), dual-currency bank cards 
issued in China suggests that it is technically po ssible for bank cards simultaneously to comply with 
different sets of business specifications and technical standards.  Moreover, nothing in the relevant 
                                                      
392 The parties have, for instance, provided the example of dual-branded (dual-logo), dual-currency 
bank cards.  Additionally, China contends that it is tec hnically possible for POS terminals to give card holders 
or merchants a choice as to the network over which a payment card transaction will be processed.  China's 
response to Panel question No. 7, para. 61.  
393 We note that Exhibit CHN-112 shows examples of dual-branded (dual-logo), dual-currency bank 
cards issued in China. 
394 United States' response to Panel question No. 86, para. 62. 
395 China's comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123. , 
paras. 56 and 73.  
396 Exhibit CHN-112. 
397 We recall that we have already rejected relevant arguments developed by the United States on the 
basis of Article 4.2 of Document No. 76 and CUP's Operating Regulations.  See paras. 7.275 to 7.279 above.  
398 Para. 7.360 below addresses the United States' claim that the logo use requirements modify the 
conditions of competition to the detriment of EPS suppliers of other Members.    
399 United States' first written submission, para. 101.   See also first written submission, para. 80. 
400 China's response to Panel question Nos. 22(c), para. 18; 112, para. 73; and 119, para. 84. 
401 China's comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123, 
para. 56; response to Panel question No. 116, para. 78; Exhibit CHN-112. WT/DS413/R 
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 provisions of Document Nos. 37, 57, 129 or 17 (in conjunction with No. 76) indicates that issuers who 
are members of CUP may not join other networks in China, or that bank cards that meet CUP's 
uniform business specifications and technical stan dards must not, or cannot, simultaneously meet 
those of other networks.  The United States refe rs to paragraph 5 of the Notice of Document 
No. 76.402  It states that bank card business rules that are inconsistent with the Business Practices 
contained in Document No. 76 must be abolished as from the date of implementation of Document 
No. 76.  As we understand it, para graph 5 means that bank card business rules that differ from those 
of the Business Practices can be implemented, provided they do not conflict with the Business 
Practices.403  The United States has not demonstrated that any of the aforementioned provisions are 
inconsistent with central issuer-related bank car d business rules that have been adopted by EPS 
suppliers other than CUP.  Consequently, we find no basis to conclude that the issuer requirements 
that relate to interoperability would prevent the i ssuance of single or dual currency cards that would 
be capable of being processed over more than one inte r-bank network in China.  But if any such cards 
are issued by commercial banks in China, they must bear the Yin Lian /UnionPay logo. 
(b) Requirements that all ATM, and POS termin als in China accept CUP cards ("terminal 
equipment requirements") 
7.300  The requirements to which the Panel turns next are the alleged terminal equipment 
requirements.  The United States asserts that th ese requirements are maintained through specific 
provisions of the following Chinese legal instruments:404 
 Document No. 17 (Article 64) 
 Document No. 37 (Articles 1.2(i); 2.1(ii) and (iii)) 
 Document No. 57 (Articles 3, 5 and 6) 
 Document No. 153 (Article 2.2) 
 Document No. 149 (Article 2(5)(iii)) 
 Document No. 76 (Chapter II, Article 1.2) 
7.301  The United States submits that  through these instruments Ch ina requires that all ATMs, 
merchant card processing equipment and POS terminals in China be capable of accepting CUP 
cards.405   
7.302  China responds that the measures at issue requi re that all POS terminals used for domestic 
inter-bank transactions denominated in RMB in Ch ina be capable of accepting bank cards that bear 
the Yin Lian  logo and they must adhere to certain technical standards.406  These measures create 
uniform technical and commercial standards that a llow a national inter-bank payment card network to 
function.  China further submits that the United States fails to identify any aspect of the alleged 
terminal equipment requirements that would prevent the acceptance of payment cards that are capable 
                                                      
402 United States' second written submission, para. 163. 
403 Paragraph 5 does not say that any and all bank card business rules that differ from those contained 
in the Business Practices are to be abolished. 
404 United States' response to Panel question Nos. 4, para. 18; and 6, para. 32.  The United States also 
relies on Document Nos. 94 and 272.  As explained above at paras. 7.221-7.229, the Panel has decided not to 
consider the substance of  these documents.   
405 United States' first written submission, paras. 4 and 102; WT/DS413/2, p. 2.  
406 China's first written submission, para. 36; response to Panel question Nos. 22(c), para. 17; 101, 
para. 43.  WT/DS413/R 
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 of being processed over multiple networks.407  China observes in this resp ect that most POS terminals 
are capable of processing any type of bank card.408  
7.303  Below, the Panel will examine the above-listed instruments so as to determine whether they 
impose the requirements alleged by the United States.  It  is important to point out in this respect that 
the United States has described the terminal equi pment requirements as mandating that terminal 
equipment in China – ATMs and POS terminals used by merchants or other operators such as banks – 
be capable of accepting Yin Lian /UnionPay bank cards.  The alleged requirements are not about 
whether the Yin Lian /UnionPay logo must be posted on terminal equipment.409  The issue of the 
posting of the Yin Lian /UnionPay logo has been raised by the United States only in the context of its 
challenge to the alleged acquirer requirements.410   
(i) Document No. 17 
7.304  The United States submits that Document No . 17 mandates the use of unified, CUP-only 
standards.  It asserts that this in turn means th at any POS terminal must be capable of accepting CUP 
cards for any payment card transaction in China.411  
7.305  China does not address the specific requirem ent on which the United States relies. 
7.306  The Panel notes that the requirement referred to by the United States may be found in 
Article 64 of Document No. 17, which has been addressed earlier.412  Article 64 requires commercial 
banks in China to implement technical standards pr escribed by the State when issuing bank cards.  It 
makes no reference to terminal equipment, or to  acceptance of bank cards.  In the absence of any 
elaboration by the United States, it is not clear to us why and how Article 64, which on its face 
focuses on the activity of bank card issuance, "means  that any POS terminal must be capable of 
accepting CUP cards".413   
7.307  In the light of this, we do not consider that Article 64 of Document No. 17 imposes a 
requirement that all ATMs, merchant card processi ng equipment and POS terminals must be capable 
of accepting bank cards bearing the Yin Lian /UnionPay logo.   
(ii) Document No. 37 
7.308  The United States also refers the Panel to the te xt of Articles 1.2(i) and 2.1(ii) and (iii) of 
Document No. 37.414   
7.309  China states that Document No. 37 establishes uniform technical standards for POS terminals 
that accept inter-bank payment cards.415 
                                                      
407 China's second written submission, para. 93. 
408 China's response to Panel question No. 101, para. 43. 
409 In the context of the Chinese instruments be fore us, the two issues – the posting of the 
UnionPay/ Yin Lian  logo and the capability of terminal equipment to accept bank cards bear ing the logo – are not 
one and the same.  As will be clear from the analysis below and that concerning the alleged acquirer 
requirements, the relevant instruments address thes e two issues in separate requirements.      
410 See, e.g. United States' first written submission, paras. 4, 12, 102 and 111; WT/DS413/2, p. 2. 
411 United States' second written submission, para. 177. 
412 See para. 7.286 above. 
413 United States' second written submission, para. 177. 
414 United States' first written submission, paras. 103 and 105. 
415 China's first written submission, para. 45. WT/DS413/R 
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 7.310  The Panel notes that Article 1.2(i) does not specifically mention ATMs or POS terminals.416  
However, it requires commercial banks to make "technical preparations for accepting bank cards 
bearing the [ Yin Lian /UnionPay] logo".417  We note the references to "technical preparations" and 
"acceptance" of bank cards.  ATMs or POS term inals of commercial banks constitute technical 
equipment used for accepting bank cards.  In our assessment, these elements support the view that 
Article 1.2(i) requires, inter alia , that terminal equipment of commercial banks must be capable of 
accepting cards bearing the Yin Lian /UnionPay logo. 
7.311  Article 2.1(ii) prescribes in relevant part that  "[a]ll terminals (such as ATMs and POS) which 
join the nationwide bank card inter-bank processing network must be capable of accepting all bank 
cards bearing the [ Yin Lian /UnionPay] logo".  As regards Article 2.1(iii), as pointed out above, this 
provision is concerned with bank cards bearing the Yin Lian /UnionPay logo and the services to be 
supplied by issuers of bank cards pursu ant to the unified business specifications.418  In the absence of 
an explanation by the United States on how this provision lays down a requirement concerning 
terminal equipment , we are not persuaded that this is the case. 
7.312  Based on the foregoing, we consider that Articles 1.2(i) and 2.1(ii) require that all terminal 
equipment of commercial banks that join China's na tional inter-bank bank card network be capable of 
accepting bank cards bearing the Yin Lian /UnionPay logo.  China has clarified in response to a 
question from the Panel that there is terminal equipm ent in China that does not need to be connected 
to the national inter-bank network.  Such terminal equipment is used exclus ively for foreign currency 
transactions.419 
(iii) Document No. 57 
7.313  The United States also relies on Document No. 57, specifically its Articles 3, 5 and 6.420  
7.314  China argues that Document No. 57 requires pa yment cards issued for domestic inter-bank 
use to bear the Yin Lian  logo, and requires commercial banks th at issue inter-bank payment cards to 
adhere to the business specifications for bank card interoperability contained in Document No. 76.421 
7.315  As the Panel explained above, Article 3 provides that bank cards issued for domestic inter-
bank use must comply with the unified business specifications and technical standards.  It further 
provides that commercial banks must provide card samples to the PBOC that comply with the Yin 
Lian/UnionPay logo use requirements.422  Article 5 provides in relevant part that POS terminals must 
have the Yin Lian /UnionPay logo posted.  Article 6 ma ndates the abolition of regional bank card 
interoperability logos and requires that terminal e quipment such as ATMs and POS terminals not bear 
any regional bank card interoperability logo.423  In our view, none of these Articles imposes a 
requirement that terminal equipment in China be capable of accepting bank cards bearing the Yin 
                                                      
416 Article 1.2(i) was discussed above in connection with the issuer requirements.  See para. 7.255 
above. 
417 See the UNOG translator's linguistic advice as set out in Annex H. 
418 See para. 7.257 above. 
419 China's response to Panel ques tion No. 101, para. 43.  The United States has confirmed that there 
are a small number of POS terminals th at can only accept foreign-issued bank  cards and that are not required to 
be connected to the CUP network.  United States' comments on China's response to Panel question No. 101, 
para. 37. 
420 United States' second written submission, para. 179; response to Panel question Nos. 6, para. 32; 71, 
para. 8. 
421 China's first written submission, para. 45. 
422 See para. 7.263 above. 
423 Article 5 contains a corresponding requirement th at all POS terminals in the bank card acceptance 
market must have the UnionPay/ Yin Lian  logo posted.    WT/DS413/R 
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 Lian/UnionPay logo.  Article 3 deals with bank car ds.  Only Articles 5 and 6 mention terminal 
equipment.  Article 5 requires the posting of the Yin Lian /UnionPay logo on POS terminals, while 
Article 6 is concerned with regiona l interoperability logos that termin al equipment may not display.  
Neither Article 5 nor Article 6 addresses the issue of  whether terminal equipment in China must be 
capable of accepting bank cards bearing the Yin Lian /UnionPay logo.424  This is consistent with the 
title of Document No. 57, which is "Circular on Un iform Use of CUP Logo and its Holographic Label 
for Anti-Counterfeiting".425  As we have explained earlier the terminal equipment requirements as 
described by the United States are not concerned with the posting of the Yin Lian /Union Pay logo on 
such equipment.  
7.316  Based on the above, we consider that Articles 3, 5 and 6 of Document No. 57 do not impose a 
requirement that all terminal equipment in China be capable of accepting bank cards bearing the Yin 
Lian/UnionPay logo.   
(iv) Document No. 153 
7.317  The United States identifies Document No. 153 as another instrument that imposes a terminal 
equipment requirement.  According to the United States, the relevant provision is Article 2.2.426   
7.318  China does not specifically address Document No. 153 in connection with the alleged 
terminal equipment requirements.  
7.319  The Panel notes that Article 2 of Document No. 153 is entitled "Principles to be complied 
with in the merchant acquiring business".  Article 2.2 requires that POS terminals placed by acquirers 
or third-party service providers conform to the business specifications and technical standards of 
cross-network interoperability, be posted with the unified Yin Lian /UnionPay logo, and be capable of 
accepting all bank cards bearing the Yin Lian /UnionPay logo.   
7.320  In the light of this, we consider that Artic le 2.2 imposes a requirement that merchant POS 
terminals in China that have been placed by acquire rs or third-party providers be capable of accepting 
bank cards bearing the Yin Lian /UnionPay logo. 
(v) Document No. 149 
7.321  The United States submits that Document No. 149 contains a clear prohibition on accepting 
non-CUP cards.  According to the United States, Artic le 2(5)(iii) prevents acquirers and merchants 
from accepting prepaid bank cards that do not bear the CUP logo.427   
7.322  China argues that Article 2(5)(iii) relates to pr epaid cards issued by non-financial institutions, 
including cards issued by a retailer that are meant to be  used only at that retailer.  China states that the 
point of this provision is that these types of non-in teroperable payment cards should not be processed 
through the same POS terminals used to pro cess interoperable payment cards that bear the Yin Lian  
logo.  According to China, Article 2(5)(iii) is in tended to prevent payment card crimes.  Specifically, 
it seeks to prevent a situation in which someone tri es to use a prepaid card i ssued by a retailer, for 
example, to complete a transaction with someone othe r than that retailer.  China points out that this 
would be a form of fraud since the merchant that accepts the card is unlikely to be able to obtain 
payment from the retailer that issued the prep aid card.  China maintains, therefore, that 
                                                      
424 We recall in this connection that there are other provisions, e.g. in Document No. 37, that 
specifically require that terminal  equipment be capable of accepting bank cards bearing the UnionPay/ Yin Lian  
logo.   
425 Exhibit US-41, heading.   
426 United States' second written submission, para. 176. 
427 United States' second written submission, para. 175. WT/DS413/R 
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 Article 2(5)(iii) merely reflects the fact that all interoperable RMB payment cards must be capable of 
being processed over the CUP network and bear the Yin Lian  logo.  China also states that 
Article 2(5)(iii) does not prohibit accepting cards that bear the Yin Lian  logo and the logo of another 
network operator (i.e. dual-logo cards).428 
7.323  The Panel notes that Document No. 149 is about security management of bank cards and 
preventing and fighting crime in bank cards.429  Article 2(5)(iii) of Document No. 149 relates to 
access to bank card terminals, and to prepaid cards .  Prepaid cards are among the payment cards at 
issue in this dispute.  Moreover, according to linguistic advice provided by the UNOG translator, 
Article 2(5)(iii) concerns prepaid cards issued by "non-financial social enterprises".  The UNOG 
translator indicates that "non-financial social ente rprises" are social enterprises that are not financial 
institutions, such as charitable institu tions or social enterprises that provide prepaid debit cards to their 
clientele.430  China states that the relevant enterprises woul d also include retailers.  Even if this means 
that China argues for a broader category of non- financial enterprises, China's position does not 
contradict the fundamental point that the relevant prepaid cards are issued by non-financial  
enterprises.431     
7.324  Article 2(5)(iii) states that acquirers may not allow prepaid cards to be accepted at bank card 
terminal equipment (POS terminals) if these cards do not bear the Yin Lian /UnionPay logo or do not 
meet the PBOC 2.0 standard.  In our view, this Ar ticle is not about which pr epaid cards POS terminals 
must be capable of accepting.  Rather, the Article is about which prepaid cards such terminals must 
not accept.  This view is consistent with the purpo se of Document No. 149, which is to prevent bank 
card crime.  In the case of Article 2(5)(iii), as China has explained, the specifi c concern is to prevent 
fraud involving prepaid cards issued by relevant enterprises.   
7.325  In our view, the fact that prepaid cards without the Yin Lian /UnionPay logo are not allowed to 
be accepted at bank card POS terminals does not imply that all prepaid cards bearing the Yin 
Lian/UnionPay logo must be allowed.432  It implies merely that the relevant terminals may allow such 
cards to be accepted.433  We also note that no evidence other than the text of Article 2(5)(iii) itself has 
been provided to assist us in determini ng the legal effect of this provision.434 
7.326  As a result, we are not persuaded that Article 2(5)(iii) imposes a requirement that all merchant 
POS terminals be capable of accepting prepaid cards issued by relevant enterprises and bearing the 
Yin Lian /UnionPay logo.  
                                                      
428 China's response to Panel question Nos. 104(b), paras. 52 and 53; 110, para. 68; Exhibit CHN-74. 
429 Exhibit US-50, heading.  
430 UNOG evaluation, p. 13.  
431 This view also draws support from the fact that Ar ticle 2(5)(iii) refers to prepaid "cards" rather than 
to prepaid bank cards. 
432 We note that prep aid cards bearing the Yin Lian /UnionPay logo would appear to include dual-logo 
prepaid cards that at the same bear the logo of another EPS supplier. 
433 In response to a Panel question, the United States itself states that Article 2(5)(iii) "means that only 
CUP cards may be used at such terminals".  United States' response to Panel question No. 91, para. 85.   
434 Given this, it is important, in our view, not to re ad into Article 2(5)(iii)  more than it says, or 
necessarily implies, all the more so as  there are provisions of other Chinese instruments, notably Document Nos. 
37 and 153, which explicitly require that bank cards bearing the UnionPay/ Yin Lian  logo be accepted at relevant 
terminals.    WT/DS413/R 
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 (vi) Document No. 76 
7.327  The United States cites Document No. 76 as a further source of the alleged terminal 
equipment requirements.  The United States refers the Panel to Article 1.2 of Chapter II of the 
Business Practices Appendix.435 
7.328  China points out that Document No. 76 sets forth detailed specifications concerning the 
technical and commercial aspects of inter-bank payment card transactions.436 
7.329  The Panel notes that in accordance with Article  1.2 of Chapter II, the "Unified Network 
Logo"437 must be posted on the machines and equipment of any merchant in accordance with relevant 
regulations of interoperability, and must be posted on the merchant's cash register machines.  This 
requirement mandates the posting of the Yin Lian /UnionPay logo.  It does not address the issue of 
whether merchants' terminal equipment must be  capable of accepting bank cards bearing the Yin 
Lian/UnionPay logo.438  As mentioned above, the alleged terminal equipment requirements as 
described by the United States are not about the posting of logos.     
7.330  In the light of this, we do not consider that Article 1.2 of Chapter II imposes a requirement 
that all merchant terminal equipment be capable of accepting bank cards bearing the Yin 
Lian/UnionPay logo.   
(vii) Conclusions and implications 
7.331  Having regard to the preceding analysis, we ag ree that China maintains terminal equipment 
requirements with regard to bank cards for use in domestic inter-bank RMB transactions.  More 
specifically, in our view China requires that term inals (ATMs, merchant processing devices and POS 
terminals) in China that are part of the national bank card inter-bank processing network be capable of 
accepting all bank cards bearing the Yin Lian /UnionPay logo.439  This requirement is maintained 
through Articles 1.2(i) and 2.1(ii) of Document No . 37 (for terminal equipm ent of commercial banks) 
and also through Article 2.2 of Document No. 153 (for merchant terminal equipment).   
7.332  However, we are not convinced that Article 64 of Document No. 17, Articles 3, 5 or 6 of 
Document No. 57, Article 2(5)(iii) of Document No. 149, or Article 1.2 of Chapter II of the Business 
Practices Appendix contained in Document No. 76, when considered individually, require that all 
terminal equipment in China be capable of accepting bank cards bearing the Yin Lian /UnionPay logo.  
We find no basis to modify our conclusion when considering these provisions together, or with the other provisions cited by the United States in connec tion with the terminal equipment requirements.  
                                                      
435 United States' response to China's request for a preliminary ruling, para. 113. 
436 China's first written submission, para. 45. 
437 The Business Practices Appendix to Document No. 76 defines this term as meaning the uniform 
brand name for domestic bank cards (the Chinese characters yinlian ) and the design symbolizing the united 
network, as registered with the trad emark office.  See the UNOG's translat or's linguistic advice as set out in 
Annex H.  
438 As is clear from our findings so far, there are provisions of other Chinese instruments – such as 
Document Nos. 37 and 153 – which explicitly require that bank cards bearing the UnionPay/ Yin Lian  logo be 
accepted at relevant terminals.  Therefore, we are not  persuaded that we can infer that a logo posting 
requirement amounts at the same time to a requirement that terminal equipment be capable of accepting bank 
cards bearing the relevant logo.     
439 The terminals in question are those that are used  for domestic inter-bank RMB transactions.  China's 
response to Panel question No. 101, para. 43. WT/DS413/R 
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 7.333  Finally, we recall that Document Nos. 37 and 15 3 use the term "bank card".  The term "bank 
card" as defined in Document No. 17 covers at least  some types of "payment card", which is the term 
used by the United States in its requ est for the establishment of a panel.440 
7.334  Having reached these conclusions, we now c onsider China's argument concerning the 
implications of the terminal equipment requirement s.  According to China, the United States has not 
identified any aspect of the terminal equipment re quirements that would prevent the acceptance of 
bank cards that are capable of being processed ove r multiple networks.  China submits that POS 
terminals can accept bank cards that bear different logos.441  We also understand that modern ATMs 
and POS terminals are typically capable of accepti ng not just bank cards with the logo of one 
particular EPS supplier, but also bank cards with the logo of other EPS suppliers.  Furthermore, the 
relevant provisions of Document Nos. 37 and 153 do not state that the terminal equipment that must 
be capable of accepting bank cards bearing the Yin Lian /UnionPay logo must not be capable of 
accepting, at the same time, bank cards bearing th e logo of different EPS suppliers.  Hence, in the 
absence of other evidence, we see no basis for concl uding that the terminal equipment requirements 
would prevent the acceptance of bank cards that w ould be capable of being processed over an inter-
bank network in China other than that of CUP.442   
(c) Requirements on acquiring institu tions to post the CUP logo and be capable of accepting all 
payment cards bearing the CUP logo ("acquirer requirements") 
7.335  We now consider the alleged acquirer requireme nts.  The United States asserts that these 
requirements are maintained through specifi c provisions of the following Chinese legal 
instruments:443 
 Document No. 153 (Article 2.2) 
 Document No. 149 (Article 2(5)(iii)) 
 Document No. 37 (Article 1.2(i)) 
 Document No. 76 (Notice, paragraphs 2 a nd 3; Chapter I, Articles 2.1 and 5.2.1) 
7.336  The United States submits that through these inst ruments China requires that all acquirers in 
China post the CUP logo and be capable of accepting CUP cards.444   
7.337  China responds that the measures at issue require  POS terminals in China to adhere to certain 
technical standards and to bear a common logo indi cating their ability to be used for domestic inter-
bank transactions.445  These measures create uniform technical and commercial standards that allow a 
national inter-bank payment card netw ork to function.  China further submits that the United States 
                                                      
440 See para. 7.284 above. 
441 China's response to Panel question No. 22(c), para . 18; comments on the United States' response to 
Panel question Nos. 70-72, 86-96, 115-123, para. 73. 
442 We note that the United States itself appears to suggest that terminal equipment in China could in 
principle accept relevant bank cards. The United States points  out that "a foreign EPS [s upplier] must build that 
network [of merchants that accept its card] by mark eting itself to merchants and acquiring banks" 
(United States' first written submission, para. 110).  Simila rly, the United States observes that "[t]o the extent a 
foreign supplier of EPS was to create or secure access to a POS, then CUP would also gain as well because of 
the [terminal equipment] requirement" (United States' first written submission, para. 80).   
443 United States' response to Panel question No. 4, para. 19.  The United States also relies on 
Document Nos. 94 and 272.  As explained above at paras. 7.221-7.229, the Panel has decided not to consider the 
substance of these documents.   
444 United States' first written submission, paras. 4 and 111.  
445 China's first written submission, para. 36.  WT/DS413/R 
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 fails to identify any aspect of the alleged acquirer requirements that would prevent the acceptance of 
payment cards that are capable of being processed over multiple networks.446  
7.338  The Panel begins its analysis by noting that  the acquirer requirements as defined by the 
United States comprise two distinct elements (i) requirements that acquirers post the Yin 
Lian/UnionPay logo, and (ii) requirements that ac quirers be capable of accepting payment cards 
bearing the Yin Lian /UnionPay logo.  We gather from the specific provisions relied on by the 
United States that the second element includes allege d requirements that terminal equipment operated 
or provided by acquirers (ATMs and merchant POS terminals) must be capable of accepting payment 
cards bearing the Yin Lian /UnionPay logo.  To that extent, there is overlap between the acquirer and 
the above-discussed terminal equipment requireme nts.  The United States itself has pointed out, 
however, that there is a "significant degree of ove rlap" among the six categories of requirements it has 
distinguished.447  In addition, the United States has stat ed that the acquirer requirements include 
alleged requirements on acquirers to join CUP and to comply with business standards and technical 
specifications of inte r-bank interoperability.448  The United States has explained that these 
requirements concern the capabilities of acquirers th emselves, regardless of the type of terminal 
equipment located at merchants' places of business.449  Consequently, the alleged requirements that 
acquirers be capable of accepting Yin Lian /UnionPay logo payment cards appear to comprise both 
terminal equipment and interopera bility requirements.  With this in mind, we now proceed to 
determine whether the four instruments identifie d by the United States impose the alleged acquirer 
requirements.   
(i) Document No. 153 
7.339  The United States cites Article 2.2 of Document  No. 153 as one source of the alleged acquirer 
requirements.450   
7.340  China does not specifically address Document No. 153 in connection with the alleged 
acquirer requirements.  
7.341  As previously noted by the Panel451, Article 2.2 states that merchant POS terminals in China 
that have been placed by qualified merchant acquirers452 or third-party providers must: (i) conform to 
the business specifications and technical standards of cross-network interoperability, (ii) be capable of 
accepting bank cards bearing the Yin Lian /UnionPay logo, and (iii) be posted with the unified Yin 
Lian/UnionPay logo.453  Thus, Article 2.2 establishes a require ment that acquirers be capable of 
accepting bank cards bearing the Yin Lian /UnionPay logo (interoperability requirement (i) and 
terminal equipment requirement (ii)).  It also requires that acquirers post the Yin Lian /UnionPay logo 
on the POS terminals they provide to merchants (requirement (iii)).   
7.342  In the light of this, we consider that Article 2.2 imposes a requirement that qualified acquirers 
in China post the Yin Lian /UnionPay logo and be capable of ac cepting, through the merchant POS 
terminals they place with merchants, all bank cards bearing the Yin Lian /UnionPay logo.  
                                                      
446 China's second written submission, para. 93. 
447 United States' response to Panel question Nos. 4, para. 14; 1, para. 1. 
448 United States' second written submission, para. 181; response to Panel question No. 92, para. 90. 
449 United States' response to Panel question No. 1, para. 1. 
450 United States' first written submission, para. 112. 
451 See para. 7.319 above. 
452 According to Article 1.1 of Document No. 153, merchant acquiring institutions comprise financial 
institutions and qualified professional acquiring institutions.   
453 See para. 7.320 above. WT/DS413/R 
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 (ii) Document No. 149 
7.343  The United States submits that Article 2(5)(iii)  of Document No. 149 also sets forth acquirer 
requirements.454  
7.344  China argues that Article 2(5)(iii) simply refl ects the fact that all POS terminals must be 
capable of accepting prepaid payment cards that bear the Yin Lian  logo.  It does not prohibit accepting 
cards that also bear other logos.455  
7.345  As explained above456, the Panel is not persuaded that this Article requires  that prepaid cards 
bearing the Yin Lian /UnionPay logo  must be accepte d at any POS bank card terminals.457  As a result, 
we find that the United States has failed to demons trate that Article 2(5)(iii) imposes a requirement 
that acquirers be capable of accepting all prepaid ca rds that have been issued by the relevant non-
financial enterprises and bear the Yin Lian /UnionPay logo.   
(iii) Document No. 37 
7.346  The United States considers that acquirer requireme nts are also laid down in Article 2.1(i) of 
Document No. 37.  According to the United States , Article 2.1(i) requires all commercial banks to 
make technical preparations for accepting bank cards bearing the CUP logo, and requires acquirers to 
join CUP for accepting cards.458 
7.347  China states that Document No. 37 establishes uniform technical standards for POS terminals 
that accept inter-bank payment cards.  It also re quires commercial banks that acquire inter-bank 
payment cards to use the Yin Lian  logo and to join the national inter-bank payment card network.459 
7.348  The Panel notes that the United States has iden tified the wrong provision of Document No. 
37.  Article 2.1(i) imposes neither of the two a lleged requirements.  Howe ver, as explained above, 
Article 1.2(i) of Document No. 37 imposes an  interoperability requirement addressed to all 
commercial banks, which include acquiring banks460, and also a requirement that terminal equipment 
operated by acquiring banks and merchant terminal equipment provided by acquiring banks be 
technically capable of accepting cards bearing the Yin Lian /UnionPay logo.461  Moreover, Article 
3.1(i) requires that commercial banks, which in clude acquiring banks, join the national inter-bank 
exchange network, i.e. the CUP network.  
7.349  For these reasons, we agree that, by imposing a terminal equipment requirement (Article 
1.2(i)) and interoperability requireme nts (Articles 1.2(i) and 3.1(i)), Articles 1.2(i) and 3.1(i) require 
that acquiring banks be capable of  accepting all bank cards bearing the Yin Lian /UnionPay logo. 
(iv) Document No. 76 
7.350  The United States also relies on Document No. 76.  The United States asserts that in 
accordance with Document No. 76, any financial institutions seeking to acquire merchant bank card 
                                                      
454 United States' first written submission, para. 113. 
455 Exhibit CHN-74. 
456 See para. 7.323 above. 
457 See para. 7.323 above. 
458 United States' second written submission, para. 182. 
459 China's first written submission, para. 45. 
460 See para. 7.255 above. 
461 See para. 7.310 above.  WT/DS413/R 
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 transactions must join CUP and process transact ions according to CUP's rules and procedures, 
including the logo requirements and the unified CUP standards.462 
7.351  China points out that Document No. 76 sets forth detailed specifications concerning the 
technical and commercial aspects of inter-bank payment card transactions.463 
7.352  The Panel notes that in connection with the a lleged acquirer requirements, the United States 
has referred to the following provisions of Document No. 76: paragraphs 2 and 3 of the Notice; 
Articles 2.1, 5.2.1, 5.2.2 and 5.2.3 of Ch apter I of the Business Practices Appendix.464  Paragraph 2 
provides in relevant part that the Business Prac tices contained in Document No. 76 apply to all 
commercial banks participating in bank car d service in China.  Paragraph 3 states inter alia  that 
acquiring banks that have been participating in the bank card acceptance business must meet the 
relevant requirements of the Business Practices Ap pendix.  Articles 2.1 and 5.2.1 of Chapter I are 
among these requirements.  These Articles make clear  that commercial banks that conduct bank card 
business in China must join the United Association (i.e . CUP) before they can apply to participate in 
bank card interoperable service.  To qualify as interoperating banks, appl ying banks must meet 
technical specifications and business requirements laid  down in Articles 5.2.2 and 5.2.3 of Chapter I.  
In our view, the provisions identified by the United States mean that acquiring banks must join CUP 
and comply with United Association (CUP) business standards and technical specifications of inter-
bank interoperability.    
7.353  In the light of this, we consider that, togeth er, paragraphs 2 and 3 of the Notice, as well as 
Articles 2.1 and 5.2.1-5.2.3 of Chapter I of the Business Practices Appendix, impose a requirement that all acquiring banks must be capable of accepting bank cards bearing the Yin Lian /UnionPay logo. 
(v) Conclusions and implications 
7.354  Based on the above analysis, we conclude that  China imposes a requirement that acquirers 
post the Yin Lian /UnionPay logo.  This requirement is main tained through Article 2.2 of Document 
No. 153 (for all qualified acquirers).   In addition, we find that Ch ina maintains requirements that 
acquirers be capable of accepting all bank cards bearing the Yin Lian /UnionPay logo.  These 
requirements are maintained through Article 2.2 of  Document No. 153 (for all qualified acquirers); 
Articles 1.2(i) and 3.1(i) of Document No. 37 (for  acquiring banks); and para graphs 2 and 3 of the 
Notice as well as Articles 2.1 and 5.2.1-5.2.3 of Chapter I of the Business Practices Appendix, both of which are contained in Document No. 76 (for acquiring banks).   
7.355  Furthermore, and in contrast, we are not co nvinced that Article 2(5)(iii) of Document 
No. 149, considered on its own, imposes a requirement  that acquirers must be capable of accepting all 
bank cards that bear the Yin Lian /UnionPay logo.  We find no basis to modify our conclusion when 
considering this provision together with the other provisions cited by the United States in connection 
with the acquirer requirements.   
7.356  Finally, we recall that Document Nos. 153, 37  and 76 use the term "bank card".  The term 
"bank card" as defined in Document No. 17 covers at least some types of "payment card", which is the 
term used by the United States in its request for the establishment of a panel.
465 
                                                      
462 United States' second written submission, para. 182. 
463 China's first written submission, para. 45. 
464 United States' response to Panel question No. 71 , para. 11 (referring to second written submission, 
paras. 153-165); second written submissi on, paras. 155 and 157; response to Panel question No. 72, para. 17; 
response to Panel question No. 92, para. 86 (referring to business standards and technical specifications). 
465 See para. 7.284 above. WT/DS413/R 
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 7.357  As regards the implications of the acquirer re quirements, we note China's argument that the 
United States has not identified any aspect of the acquirer requirements that would prevent the 
acceptance of bank cards that are capable of be ing processed over multiple networks.  China submits 
that acquirers can accept bank cards that bear different logos.466   
7.358  We first consider the terminal equipment element of the acquirer requirements.  For the same 
reasons as those we have enunciated above in  connection with the terminal equipment 
requirements467, in the absence of other evidence we see no basis for concluding that these acquirer 
requirements would prevent the acceptance by acquirers of bank cards capable of being processed over an inter-bank network in China other than that of CUP. 
7.359  As concerns the interoperability element of th e acquirer requirements, we understand that it 
would be technically possible for acquirers simultane ously to comply with different sets of business 
standards and technical specifications.  Also, the relevant provisions of Document Nos. 153, 37 and 
76 do not indicate that acquirers that are members of  CUP may not join other networks in China, or 
that acquirers complying with CUP's uniform busines s standards and technical specifications must not 
simultaneously abide by those of other networks.  With regard to paragraph 5 of the Notice of 
Document No. 76
468, we note that the United States has not demonstrated that the relevant provisions 
are inconsistent with key acquirer-related bank card business rules of EPS suppliers other than CUP.  
As a result, there are no reasonabl e grounds to conclude that the acquirer requirements pertaining to 
interoperability would prevent the acceptance of bank  cards that are capable of being processed over 
more than one inter-bank network in China. 
7.360  We address, lastly, the Yin Lian /UnionPay logo element of the acquirer requirements.  
Document No. 153 does not say that terminal e quipment provided by acquirers must not post the 
logos of EPS suppliers other than CUP.  The United States contends, however, that the requirement to 
post the Yin Lian /UnionPay logo is incompatible with require ments of competing networks that do not 
use the Yin Lian /UnionPay logo.469  China responds that the United States cited no evidence in 
support of this contention and avers that mercha nts in China frequently post more than one logo.470  In 
the light of this, we have no basis, given the ab sence of evidence, to conclude that the acquirer 
requirement that mandates the posting of the Yin Lian /UnionPay logo prevents the posting of other 
EPS suppliers' logo, much less the acceptance by acqui rers of bank cards that are capable of being 
processed over an inter-bank network in  China other than that of CUP. 
(d) Requirements pertaining to card-based electronic transactions in China, Hong Kong and 
Macao ("Hong Kong/Macao requirements") 
7.361  The United States argues that China requires that CUP handle the clearing of all RMB bank 
card transactions in Hong Kong or Macao using bank cards issued in China, and that CUP handle the 
clearing of any RMB bank card transaction in China using bank cards issued in Hong Kong or 
Macao.471  It asserts that these requirements are refl ected in and imposed by the following Chinese 
legal instruments:  
 Document No. 16 (Article 6) 
                                                      
466 China's response to Panel question No. 22(c), para . 18; comments on the United States' response to 
Panel question Nos. 70-72, 86-96, 115-123, para. 73. 
467 See para. 7.334 above. 
468 See para. 7.299 above.  
469 United States' response to Panel question No. 86, para. 62. 
470 China's comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123, 
para. 56. 
471 United States' response to China's request fo r a preliminary ruling, para. 132; first written 
submission, para. 4; United States' second written submission, paras. 147 and 189.  WT/DS413/R 
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  Document No. 8 (Article 6) 
 Document No. 219 (Article 3) 
 Document No. 254 (Articles 3, 4 and 17) 
7.362  China rejects the view that this requirement or any of the identified legal instruments are 
relevant to the modes of supply at issue in this dispute, on the basis that the measures concern the 
clearing of RMB transactions taking place in either  Hong Kong or Macao, both of which are separate 
customs territories.  Therefore, China requests the Pa nel to reject the United States' claims concerning 
alleged Hong Kong and M acao requirements.   
7.363  The Panel will examine in this section whet her the above-mentioned instruments impose the 
alleged requirements.  We will address China's arguments regarding the status of Hong Kong and Macao as separate customs territories and the rele vance of the measures and the modes of supply at 
issue in the context of the United States' Artic le XVI claims in Section VII.F below.   
(i) Document No. 16 
7.364  The United States argues that Document No. 16 establishes CUP as the sole entity responsible 
for clearing any RMB bank card transaction taking place in Hong Kong using a bank card issued in 
China, and any RMB bank card transactions taking  place in Hong Kong or China using a bank card 
issued in Hong Kong.  Therefore, the United States considers this provision precludes foreign 
suppliers from processing these transactions.
472   
7.365  China argues that this measure relates to the clearing and settlement of RMB bank card 
transactions that take place in the separate customs territory of Hong Kong and, therefore, there is no 
"legal basis" for the claims advanced by the United States in relation to EPS services in Hong Kong 
under the modes of supply at issue.473  China considers its commitments relate only to the supply of 
services in China. 
7.366  The Panel notes that Document No.  16 governs "clearing arrangements" for various RMB-
related matters in Hong Kong, including individual  bank card matters.  Article 6 indicates that "[t]he 
clearance of individual RMB bankcards is organize d and handled by the clearing banks and [CUP]".  
This provision provides that Chinese residents ma y use individual RMB bank cards issued by the 
domestic banks to pay for expenses including shopp ing, meals and lodging in Hong Kong, or to 
withdraw small amounts of cash in Hong Kong dollars  from ATMs in Hong Kong.  In addition, RMB 
bank cards issued to Hong Kong individual residents by participating banks can be used to pay for 
individual expenses in China and to withdraw sm all amounts of RMB cash from ATMs in China.  
Article 1 of Document No. 16 specifies that PB OC in conjunction with the Hong Kong Monetary 
Authority will select and authorize "a licensed ba nk in Hong Kong" to serve as a clearing bank for 
related Hong Kong banks in handling RMB bank card ser vices. Pursuant to Article 2, this clearing 
bank will enter into "business clearing agreements" with  other banks that wish to participate in the 
RMB bank card business.   
7.367  Based on the text of Article 6, as identifie d by the United States, we understand that 
Document No. 16 expressly governs the clearance of RMB bank card transactions that take place in 
                                                      
472 United States' response to China's request for a pr eliminary ruling, para. 91; first written submission, 
paras. 55 and 58; response to Panel question No. 89, para. 81. 
473 China's second written submission, para. 97 (citing Exhibit CHN-74). WT/DS413/R 
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 Hong Kong. 474  Based on the second and third sentences of Article 6, this Article expressly covers 
transactions that involve either an RMB bank card i ssued in China and used in Hong Kong, or a bank 
card issued in Hong Kong that is used in China in  an RMB bank card transaction.  Article 6 explicitly 
requires that CUP, as the EPS supplier working in c onjunction with designated "c learing banks", is to 
handle the clearing of these RMB bank card transacti ons involving individual RMB bank cards issued 
in Hong Kong.  It is thus not possible, based on th e text of this instrument, for any clearing channel 
other than CUP ‒ be it a foreign-based channel or a domestic-based provider other than CUP ‒ to 
clear any of the aforementioned types of RMB bank card transactions.475  We note that China does not 
contest that the measure operates as contested by  the United States; rather, it disagrees as to the 
relevance of this provision in light of the status of Hong Kong as a separate customs territory. 
7.368  We therefore conclude that Article 6 of Do cument No. 16 requires that CUP and no other EPS 
supplier is to handle the clearing of RMB bank card transactions that involve an RMB bank card 
issued in China and used in Hong Kong, or an RM B bank card issued in Hong Kong that is used in 
China in an RMB bank card transaction.  
(ii) Document No. 8 
7.369  The United States argues that Document No. 8 est ablishes CUP as the sole entity responsible 
for clearing any RMB bank card transaction taking pl ace in Macao using a bank card issued in China, 
and any RMB bank card transaction taking place in Macao or China using a bank card issued in 
Macao.  Therefore, the United States considers this provision precludes foreign suppliers from 
processing these transactions.476 
7.370  China argues that this measure relates to th e clearing of RMB payment card transactions in 
the separate customs territory of Macao and, therefore, there is no "legal basis" for the claims 
advanced by the United States in relation to EPS  services in Macao under the modes of supply at 
issue.477  China considers its commitments relate only to the supply of services in China. 
                                                      
474 The Panel notes that the United States provided an English translation of Article 6 of Document 
No. 16.  See Exhibits US-44 and US-46; United States' response to Panel question No. 12.  China provided an 
English translation of the full text of Document No. 16 as Exhibit CHN-60.   
475 In response to Panel question No. 9, the Unite d States identified three scenarios in which it 
considers Document Nos. 8, 16, 219 and 254 operate together to ensure CUP's exclusivity in respect of card-
based RMB transactions taking place in  China, Macao and Hong Kong.  Thes e include: (i) the case of a Chinese 
national travelling to Hong Kong and making a purchase w ith a card issued in China;  (ii) the case of a Hong 
Kong or Macao national travelling to China and making a purchase with a card issued in Hong Kong or Macao; 
and (iii) the case of a Hong Kong or Macao national making an RMB purcha se in either of these territories with 
an RMB payment card issued in either  Hong Kong or Macao.  However, the Panel  considers only the United 
States' claim in the case of the first and second scenarios.  The United States' panel request provides a brief 
narrative description that explicitly covers these two scenar ios, but does not refer, either explicitly or implicitly, 
to a third scenario in which an RMB-denominated bank card is both issued and used in either Hong Kong or 
Macao.  We recognized above that, thr ough narrative paragraphs in its panel request, the United States described 
those "requirements" or "measures" that it considers ar e inconsistent with China's obligations under Articles 
XVI and XVII of the GATS.  Accordingly, the Panel cons iders that the two types of transactions that are 
specified in the relevant narrative paragraph fall within its  terms of reference.  In contrast, the third type of 
transaction – those involving cards is sued and used in Hong Kong or Macao – is nowhere specified in the 
relevant narrative paragraph.  For th is reason, we consider that the Hong  Kong/Macao requirements as described 
in the panel request do not include the third scenario.  Put differently, we consider that the United States' claim 
in respect of the third scenario falls outside our term s of reference.  We therefore reject this claim. 
476 United States' response to China's request for a pr eliminary ruling, para. 91; first written submission, 
paras. 55 and 58; response to Panel question No. 89, para. 81. 
477 China's second written submission, para. 97 (citing Exhibit CHN-74).  WT/DS413/R 
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 7.371  The Panel notes that the content of Document No . 8 is identical to that of Document No. 16, 
except that it concerns "clearing arrangements" for various RMB-related matters in Macao instead of 
Hong Kong.478 Taking this into account, for the same reasons as those set out in paragraphs 7.367 and 
7.368 above, we conclude that Article 6 of Document No. 8 requires that CUP and no other EPS 
supplier is to handle the clearing of RMB bank card transactions that involve an RMB bank card 
issued in China and used in Macao, or a bank card i ssued in Macao that is u sed in China in an RMB 
bank card transaction.  
(iii) Document No. 219 
7.372  The United States argues that Article 3 of Docu ment No. 219 prohibits EPS suppliers other 
than CUP from processing RMB card transactions based  on the fact that this provision mandates that 
merchants shall not authorize "third parties" to handle RMB card business or otherwise transfer such 
business to a third party.479  The United States additionally submits that this measure is applicable in 
"border areas", which includes Macao and Hong Kong.480 
7.373  China argues that this provision addresses RMB card fraud in connection with the acquiring 
of RMB card transactions in border areas within China and does not prohibit EPS suppliers from 
processing RMB card transactions as the United States al leges.  In addition, China argues that Hong 
Kong and Macao are not "border areas" within the m eaning of the term as it is used in Document 
No. 219.  It argues that this term refers to "regi ons within [China] that neighbour a foreign country 
(such as Russia) or region (such as Hong Kong or Macao)".481  China further notes that the only 
reference to CUP is the requirement that acquiri ng agreements require merchants not to use the Yin 
Lian logo for purposes outside the scope of the acquiring agreement.482 
7.374  The Panel notes, as reflected in the title of Document No. 219 ("Notice of the People's Bank 
of China concerning Relevant Issues on Accepti ng and Using Renminbi Bank Cards in Border 
Areas"), that Article 3 requires inter alia  that acquiring institutions handling RMB transactions in 
"border areas" enter into "card acquisition agreem ents" with merchants. In accordance with these 
agreements, merchants are prohibited from using sales documentation, the Yin Lian /UnionPay logo or 
POS for purposes falling outside the acquisition agreem ent.  Under Article 3, merchants are also 
prohibited from "entrust[ing] or transfer[ing] the handling of RMB card business to a third party", or 
otherwise falsely reporting transactions or using PO S terminals to fraudulently withdraw RMB cash.   
7.375  Based on these elements, the Panel understands that Article 3 contains various anti-fraud 
measures applicable in "border areas".  The fo cus on fraud, money laundering and other criminal 
concerns is further evident in other provisions of the document.  In our view, this focus informs the 
interpretation of the principal language in conten tion within this provision, namely that of 
"entrust[ing] or transfer[ing] the handling of RMB card business to a third party".  There is no textual 
basis elsewhere in the provision of Document No . 219 to conclude that EPS suppliers should be 
considered as a "third party" and thus be prevented from handling RMB bank card inter-bank 
information, clearing and settlement.  On this basis, we do not agree with the United States' interpretation that Article 3 of Document No. 219 prevents EPS suppliers other than CUP from 
handling RMB transactions in "border areas" in Chin a.  Like China, we consider this provision 
prohibits a merchant from outsourcing any aspect of its core acquisition  business to a third party, such 
                                                      
478 The United States provided an English translation of Article 6 of Document No. 16.  See Exhibits 
US-44 and US-46; United States' response to Panel question No. 12.  China provided an English translation of 
the full text of Document No. 16 as Exhibit CHN-62.   
479 United States' first written submission, para. 58; second written submission, para. 152; comments on 
China's response to Panel question No. 109, para. 51. 
480 United States' response to Panel question No. 16. 
481 China's second written submission, fn. 53. 
482 China's second written submission, para. 97 (citing Exhibit CHN-74). WT/DS413/R 
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 as a third-party "acquirer processor".  To that exte nt, we do not understand this provision to reserve 
certain transactions to CUP. 
7.376  Turning to the parties' arguments regarding the meaning of the term "border areas",  we noted, 
the title of this instrument makes clear that the scope of Article 3 relates to bank card acceptance in 
border areas.  The United States asserts that H ong Kong and Macao qualify as border areas within the 
meaning of this instrument.  However, the Unite d States has not provided any evidence in support of 
its assertions in this respect.  China has argued that "border areas" refers to regions within China that 
neighbour a foreign country such as Russia or a region such as Hong Kong or Macao.  .  Thus, it argues that Hong Kong and Macao are not border regions themselves.  To us, it is not readily apparent 
from the evidence before us, namely the text of  Document No. 219, that Hong Kong and Macao 
should be considered border areas for the purposes of Document No. 219.  In the absence of any 
supporting evidence on this issue, we consider we  lack the necessary elements to determine the 
precise scope of application  of Document No. 219  As noted, however, we are not persuaded that his 
provision reserves certain transactions to CUP. 
7.377  For the foregoing reasons, in the absence of a dditional evidence, we are unable to conclude 
that Article 3 of Document No. 219 prohibits EPS suppliers other than CUP from processing RMB 
card transactions taking place in Hong Kong or Macao  using RMB cards issued in either Hong Kong, 
Macao or China, or RMB card transactions taking place in China using RMB cards issued in Hong 
Kong or Macao. 
(iv) Document No. 254 
7.378  The United States argues that Document No. 25 4 establishes and maintains CUP as the sole 
EPS supplier that may handle the processing of RM B bank card transactions taking place in Hong 
Kong and Macao using bank cards issued in either  Hong Kong, Macao or China, or RMB bank card 
transactions taking place in China using RMB bank cards issued in Hong Kong and Macao.
483 
7.379  As with Document Nos. 16 and 8, China argues th at there is no "legal basis" for the claims 
advanced by the United States as this instrument relates to the clearing of RMB bank card transactions in the separate customs territories of Hong Kong and Macao.
484   
7.380  The Panel notes that United States refers to Articles 3, 4 and 17 of Document No. 254 in 
support of its claim.  Article 3 states that, "[w]here RMB bank cards issued by domestic banks are used for paying expenses or withdrawing cash in Hong Kong dollars or Macao  dollars in Hong Kong 
or Macao, the issuers shall process clearing in RMB with [CUP]". In addition, it provides that CUP 
shall process clearing in Hong Kong dollars or Macao  dollars with acquiring ba nks in Hong Kong and 
Macao after purchasing foreign exchange from d esignated foreign exchange banks.  Article 4 
provides that CUP shall handle clearing in RMB be tween issuers and acquiring banks "[w]here the 
RMB bank cards issued by Hong Kong or Macao par ticipating banks are used for paying expenses or 
withdrawing RMB cash in Mainland China".  Finally , Article 17 provides that banks in China shall 
clear all transactions with CUP and "shall not dire ctly carry out RMB transactions with the other 
Hong Kong or Macao Institutions". 
7.381  The Panel notes that, much like Document Nos. 16 and 8, Articles 3, 4 and 17 of Document 
No. 254 govern particular bank card transactions th at involve RMB bank cards issued in China and 
used in Hong Kong or Macao, and bank cards issu ed in Hong Kong or Macao and used in China in 
RMB-denominated transactions.  These transactions c oncern payments for consumption or tourism or 
                                                      
483 United States' response to China's request fo r a preliminary hearing, para. 93; first written 
submission, para. 58; second written submission, para. 147. 
484 China's second written submission, para. 97 (citing Exhibit CHN-74).  WT/DS413/R 
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 limited cash withdrawals.  In each case,  Articles 3, 4 and 17 specify that CUP is to handle clearing of 
these transactions through purchasing foreign curre ncy (Hong Kong dollars or Macao dollars) from 
designated foreign exchange banks and clearing with  the relevant acquirer in either Hong Kong or 
Macao, or in China.  As with Document Nos.  16 and 8, these provisions of Document No. 254 
expressly require that CUP is to handle the clearing of these RMB bank card transactions as the EPS 
supplier working in conjunction with issuers and acquirers. 
7.382  Based on the clear language in Articles 3, 4 an d 17, we therefore conclude that Document 
No. 254 requires that CUP and no other EPS supplie r is to handle the clearing of RMB bank card 
transactions that involve an RMB bank card issued in China and used in Hong Kong or Macao, or a 
bank card issued in Hong Kong that is used in China in an RMB payment card transaction. 
(v) Conclusions 
7.383  Based on the above analysis of Document Nos. 16, 8 and 254485, we conclude that China 
requires that CUP and no other EPS supplier sha ll handle the clearing of certain RMB bank card 
transactions that involve either an RMB bank card is sued in China and used in Hong Kong or Macao, 
or a bank card issued in Hong Kong or Macao that is used in China in an  RMB transaction.  These 
bank card transactions concern payment for e xpenses incurred through purchases, meals and 
accommodation, or limited cash withdrawals.  We recall from above486 that the term "bank cards" as 
defined in Document No. 17 covers at least some  types of what the United States has defined as 
"payment cards".  We further conclude that Article  3 of Document No. 219 does not require that CUP 
is the sole supplier to handle the clearing of these RMB bank card transactions.   We found that 
Article 3 is directed at third parties involved w ith the outsourcing of any aspect of a merchant's 
acquisition business, rather than EPS suppliers.   
7.384  Because we have already concluded that the iden tified provisions of Document Nos. 16, 8 and 
254 individually mandate the u se of CUP to process the clearing of the particular RMB bank card 
transactions discussed above, we do not consider it necessary to assess these instruments further in 
combination with each other.  Regarding the app licability or relevance of Document No. 219 to RMB 
matters taking place in Hong Kong or Macao, we find nothing in Docu ment Nos. 16, 8 or 254 that 
modifies our conclusions in respect of Docume nt No. 219.  Accordingly, we do not consider 
Document No. 219 further in respect of requirements pertaining to Hong Kong or Macao. 
(e) Requirements that mandate the use of CUP and/ or establish CUP as the sole supplier of EPS 
for all domestic transactions denominated and pa id in RMB ("sole supplier requirement") and 
prohibitions on the use of non-CUP cards for cr oss-region or inter-bank transactions ("cross-
region/inter-bank prohibitions") 
7.385  The United States asserts that China imposes meas ures that mandate the use of or establish  
CUP as the sole supplier of EPS for all domestic tr ansactions denominated and paid in RMB through 
the following Chinese legal instruments:487 
 Document No. 37 (Articles 1.2(i) , 2.1(i)-(iii), 2.2(i), and 3.1)  
 Document No. 57 (Articles 1, 2, 3, 5, and 6) 
                                                      
485 The Panel specifically refers to Article 6 of Document No. 16, Article 6 of Document No. 8 and 
Articles 3, 4 and 17 of Document No. 254.  See paras. 7.364-7.368, 7.369-7.371 and 7.378-7.382 above.  
486 See para. 7.283 above. 
487 United States' response to China's request for a pr eliminary ruling, para. 77; first written submission, 
para. 49; response to Panel question No. 4. The United States also relies on Document Nos. 94 and 272.  As 
explained above at paragraphs 7.221-7.229, the Panel has decided not to consider the substance of these 
documents. WT/DS413/R 
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  Document No. 16 (Article 6) 
 Document No. 8 (Article 6) 
 Document No. 219 (Article 3) 
 Document No. 254 (Articles 3,4, and 17) 
 Document No. 103 (Section II.5(1) and Section III) 
 Document No. 153 (Articles 1.2, 1.3, 2.2, 4, 5, and 6)  
 Document No. 149 (Article 2(5)(iii)) 
 Document No. 53 (Articles V.2, and VII.3) 
 Document No. 49 (Article 4) 
 Document No. 129 (Articles 3.2 and 3.4) 
 Document No. 76 (Notice, paragraph 5, Business Practices Appendix, Chapter I, 
Articles 1.1, 2.1, 4, and Chapter 10)  
 Document No. 17 (Article 64) 
 Document No. 142 (Articles 2.3, 4, 5, and 6) 
7.386  The United States argues that the preceding le gal instruments interact to establish and 
maintain CUP as the sole supplier in three ways: (i) certain instruments explicitly state that CUP must 
be used to process specific types of bank card tran sactions; (ii) certain instruments establish and/or 
require the use of business specifications and techni cal standards which mandate the use of CUP; and 
(iii) certain instruments implicitly recognize that CUP is the sole supplier of EPS services for RMB 
denominated transactions.488   
7.387  The United States argues that in the Notifica tion of Approval of CUP's Business Licence, 
China's State Council and the PBOC explicitly approved and authorized only CUP to "establish and 
operate a single nationwide inter-bank bank card information switching network".489  The United 
States argues that the use of the word "single" in this document, in addition to similar language appearing in CUP's Articles of Association, conf irms that CUP was established to operate an 
exclusive nationwide inter-bank car d information switching network.
490   
7.388  China rejects that the identified legal instrume nts operate to establish CUP as sole supplier for 
the clearing and settlement of all RMB dom estic inter-bank bank card transactions.491  Rather, China 
submits that the identified measures operate to  establish a common national network for processing 
RMB domestic inter-bank bank card transactions.  In its  view, this does not equate to establishing an 
exclusive provider of network services in China.492  Under a common network, China submits that 
inter-bank bank cards and POS devices must adhere to  certain technical standards.  However, it does 
not consider the above instruments preclude adheren ce to other technical standards.  Similarly, it 
argues that issuers that participate in the CUP network are not precluded from being members of other 
                                                      
488 United States' second written submission, para. 144. 
489 United States' first written submission, para. 46. 
490 United States' comments on China' s response to Panel question No. 121, para. 62; see also second 
written submission, para. 184 
491 China's second written submission, paras. 90-102. 
492 China's first written submission, para. 64; response to Panel question No. 121, para. 87.  WT/DS413/R 
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 networks.493  Thus, China argues, there is nothing in an y of these instruments that would prevent a 
foreign provider of network services from establishing a domestic clearing channel in China.494 
7.389  The Panel will examine the above-mentioned inst ruments to determine whether they impose 
the alleged requirements in respect of bank card tran sactions denominated and pa id in RMB.  In other 
words, in conducting our analysis, we need to asses s, not whether as a factual matter there is a single 
supplier operating in China, but whether the instrume nts in question require that CUP is the sole EPS 
supplier for RMB bank card transactions involving ba nk cards issued and used in China.  We first 
examine the instruments individually and thereafter, we  consider them in conjunction.  We recall also 
that certain of the instruments identified in connect ion with the sole supplier requirement have also 
been identified in relation to the other requirements that  are alleged in this dispute.  Where this is the 
case, we will refer to our preceding analysis as appropriate.  In addition, we recall495 that we will 
analyse the instruments identified in connection w ith the cross-region/inter-bank prohibitions in the 
context of our assessment of the sole supplier re quirement, bearing in mind the distinction drawn by 
the United States  between whether the instruments are framed so as to mandate the use CUP or CUP 
cards, or as a prohibition. 
(i) Document No. 37 
7.390  As discussed in paragraphs 7.253, 7.308, a nd 7.346 above, the United States submits that 
Document No. 37 establishes and entrenches CU P as the exclusive EPS supplier for inter-bank 
transactions by requiring the use of the CUP logo for inter-bank bank cards, requiring that all ATM 
and POS terminals in China accept CUP cards, and by requiring that acquiring banks be capable of 
accepting all bank cards bearing the CUP logo.496 
7.391  China responds497 that Document No. 37 requires the use of the Yin Lian /UnionPay logo as 
the common logo for inter-bank bank cards, ATMs and POS terminals, and otherwise, this document 
requires that commercial banks that issue and acquire inter-bank bank cards meet business and 
technical standards.  However, China argues that the identified provisions do not preclude banks from 
becoming members of other networks.498  As a general matter, in its view, the fact that bank cards and 
POS devices must adhere to certain technical standa rds does not preclude adherence to other technical 
standards.499 
7.392  The Panel concluded in paragra phs 7.256-7.259, 7.311, 7.312, and 7.349 above that Articles 
1.2(i), 2.1(ii) and 3.1 of Document No. 37 mandate the use of the Yin Lian /UnionPay logo and impose 
certain interoperability requirements.  As stated previously500, however, we see nothing in these 
requirements themselves or elsewhere in Document No . 37 that precludes bank cards issued in China 
from bearing logos of other EPS suppliers in addition to the Yin Lian /UnionPay logo, nor do the 
identified provisions prohibit the use of bank cards on other networks with the same or different 
technical/interoperability requirements, so long as th e cards meet CUP interoperability requirements.  
Therefore, we do not identify anything on the face of these provisions that establishes or maintains 
CUP as the exclusive EPS supplier for all RMB bank  card transactions involving bank cards issued 
and used in China.  In the ab sence of specific evidence demonstrating otherwise, we reject the 
assertion that this instrument on its own establis hes or maintains CUP as a sole supplier.   
                                                      
493 China's response to Panel question No. 22(c), paras. 17 and 18. 
494 China's response to Panel question No. 103, para. 45. 
495 See para. 7.234 above. 
496 United States' response to China's request for a preliminary ruling, para. 126; second written 
submission, paras. 186 and 187. 
497 See paras. 7.254, 7.297, 7.309, 7.334, 7.347 and 7.357 above. 
498 China's first written submission, para. 45; re sponse to Panel question No. 22(c), para. 18. 
499 China's response to Panel question No. 22(c), para. 18. 
500 See paras. 7.299, 7.334 and 7.358- 7.360 above. WT/DS413/R 
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 (ii) Document No. 57 
7.393  As discussed in paragraphs 7.260 and 7.265 above, the United States argues that Document 
No. 57 requires that all regional non-CUP logo  bank card interoperability  logos be gradually 
eliminated501, and that commercial banks promote the use of the CUP logo.502  In addition, it argues 
that Document No. 57 requires that newly issued bank cards with cross-region or inter-bank 
functionality comply with relevant technical sta ndards and with unified "Business Specifications for 
Interoperable Service of Bank Cards" in Document No. 76.503 
7.394  China states that Document No. 57 elaborates on requirements set forth in Document No. 37 
and discussed above, namely, it requires bank cards issued for domestic inte r-bank use to bear the Yin 
Lian/UnionPay logo, and requires that commercial banks  that issue and acquire inter-bank bank cards 
to meet business and technical standards.504  China disputes that these requirements preclude banks 
from becoming members of other networks.505 
7.395  The Panel concluded in paragraph 7.266 above that  Articles 1, 2, 5 and 6 of Document No. 57 
mandate the use of the Yin Lian /UnionPay logo and impose certain interoperability requirements. 
However, as mentioned above in respect of Document No. 37 and as stated previously506, we do not 
identify anything on the face of this document that precludes ba nk cards issued in China from bearing 
logos of other EPS suppliers in addition to the Yin Lian /UnionPay logo. Nor do the identified 
provisions prohibit the use of bank cards on ot her networks with the same or different 
technical/interoperability requirements, so long as th e cards meet CUP interoperability requirements.  
Therefore, we do not identify anything on the face of these provisions that establishes or maintains 
CUP as the exclusive EPS supplier for all RMB bank  card transactions involving bank cards issued 
and used in China.  In the ab sence of specific evidence demonstrating otherwise, we reject the 
assertion that this instrument on its own estab lishes or maintains CUP as a sole supplier. 
(iii) Document No. 16 
7.396  As discussed in paragraph 7.364 above, the Un ited States argues that Article 6 of Document 
No. 16 establishes CUP as the sole entity responsible for clearing and settling RMB bank card transactions taking place in Hong Kong using bank cards issued in China, and RMB bank card 
transactions taking place in Hong Kong or China usi ng bank cards issued in Hong Kong.  The United 
States considers this instrument demonstr ates that CUP is the sole supplier for all RMB bank card 
transactions involving bank cards issued and used in China.
507   
7.397  China maintains its position that this measur e relates to the clearing of RMB bank card 
transactions that take place in the separate customs territory of Hong Kong and, therefore, there is no 
"legal basis" for the claims advanced by the United States in relation to EPS services in Hong Kong 
under the modes of supply at issue.508  China considers its commitments relate only to the supply of 
services in China. 
7.398  The Panel recalls from paragraphs 7.364-7.368 above its conclusion that Article 6 requires 
that CUP and no other EPS supplier is to be involv ed in the clearing of RMB bank card transactions 
                                                      
501 United States' response to Panel question No. 2, para. 10; second written submission, para. 186. 
502 United States' response to Panel question No. 6, para. 36. 
503 China's comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123. 
504 China's first written submission, para. 45. 
505 China's comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123. 
506 See para. 7.299 above. 
507 United States' response to China's request for a pr eliminary ruling, para. 91; first written submission, 
paras. 55 and 58; response to Panel question No. 89, para. 81. 
508 China's second written submission, para. 97 (citing Exhibit CHN-74).  WT/DS413/R 
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 that involve either an RMB bank card issued in China and used in Hong Kong, or a bank card issued 
in Hong Kong that is used in Hong Kong or China in an RMB transaction.  As Document No. 16 is 
limited in scope to bank card transactions that invo lve bank cards issued in China and used in Hong 
Kong, or alternatively, bank cards issued in H ong Kong and used either in Hong Kong or China, we 
fail to see how this instrument establish es CUP as the sole supplier of EPS for all domestic 
transactions denominated and paid in RMB.  Theref ore, we do not consider that Article 6 establishes 
CUP as the sole supplier of EPS for all domestic transactions denominate d and paid in RMB.  Below, 
we further consider this instrument as it operates in relation to other identified instruments, in the 
context of the United States' assertion that the meas ures at issue establish CUP as the sole supplier of 
EPS for all domestic transactions. 
(iv) Document No. 8 
7.399  As discussed in paragraphs 7.369 above, the Un ited States argues that Article 6 of Document 
No. 8 also establishes CUP as th e sole entity responsible for clearing and settling RMB bank card 
transactions taking place in Macao using bank cards issued in China, and RMB bank card transactions 
taking place in Macao or China using bank cards issu ed in Macao.  The United States considers this 
instrument demonstrates that CUP is the sole supplier for all RMB bank card transactions involving 
bank cards issued and used in China.509 
7.400  China again maintains that this measure relat es to the clearing of RMB bank card transactions 
in the separate customs territory of  Macao and, therefore, there is no "legal basis" for the claims 
advanced by the United States in relation to EPS  services in Macao under the modes of supply at 
issue.510  China considers its commitments relate only to the supply of services in China. 
7.401  The Panel recalls its conclusion from paragraphs  7.369-7.371 that the content of Document 
No. 8 is identical to that of Document No. 16, except that it concerns "clearing arrangements" for 
various RMB-related matters in Macao, instead of  Hong Kong. Taking this into account, for reasons 
set out in paragraphs 7.367 and 7.368 above, we are unable to conclude that Document No. 8 
establishes CUP as the sole supplier of EPS for all domestic transactions denominated and paid in 
RMB.  As with Document No. 16, we further consid er below this instrument as it operates in relation 
to other identified instruments, in addressing the United States' claim that the measures at issue 
establish CUP as the sole supplier of EPS for all domestic transactions. 
(v) Document No. 219 
7.402  As discussed in paragraphs 7.372 above, the Un ited States argues that Article 3 of Document 
No. 219 prohibits processing of RMB card transactions  by EPS suppliers other than CUP based on the 
fact that this provision mandates that merchants shall not authorize "third parties" to handle RMB card 
business or otherwise transfer such business to a third party.511  The United States submits that this 
measure is applicable in "border areas", which sp ecifically refers to the "special administrative 
regions" of Macao and Hong Kong.512  
7.403  China maintains that this provision does not establish CUP as a sole supplier as the United 
States alleges, but rather, this provision addresses RMB card fraud in connection with the acquiring of 
RMB card transactions in border areas within China.  China asserts that the only reference to CUP is 
                                                      
509 United States' response to China's request for a pr eliminary ruling, para. 91; first written submission, 
paras. 55 and 58; response to Panel question No. 89, para. 81. 
510 China's second written submission, para. 97 (citing Exhibit CHN-74). 
511 United States' first written submission, para. 58; second written submission, para. 152; comments on 
China's response to Panel question No. 109, para. 51. 
512 United States' response to Panel question No. 16. WT/DS413/R 
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 the requirement that acquiring agreemen ts require merchants not to use the Yin Lian /UnionPay logo 
for purposes outside the scope of the acquiring agreement.513 
7.404  The Panel recalls from paragraphs 7.372-7.376  above its conclusion that Article 3 is 
concerned with RMB bank acquirers and the merc hants with whom they enter into acquisition 
agreements and, as such, it is not evident on its f ace that this provision prohibits processing of bank 
card transactions by EPS suppliers other than CUP.   Accordingly, we do not consider that this 
provision on its own establishes or maintains CU P as the exclusive EPS supplier for all RMB card 
transactions involving bank cards issued and used in China  
(vi) Document No. 254 
7.405  As discussed in paragraphs 7.378 above, the United States argues that Document No. 254 
establishes CUP as the sole entity responsible fo r processing RMB bank card transactions using bank 
cards issued in China and used in Hong Kong or  Macao, or RMB bank cards issued in Hong Kong 
and Macao and used in China.514 
7.406  China maintains that this measure relates to the clearing of RMB bank card transactions 
taking place in the separate customs territory of Ho ng Kong and Macao and, therefore, there is no 
"legal basis" for the claims advanced by the United States in relation to EPS services in Hong Kong 
and Macao under the modes of supply at issue.515   China considers its commitments relate only to the 
supply of services in China. 
7.407  The Panel recalls its conclusion from paragra phs 7.378-7.381 above that Articles 3, 4 and 17 
of Document No. 254 expressly require that CU P is to handle the clearing of RMB bank card 
transactions that involve RMB bank cards issued in  China and used in Hong Kong or Macao, and 
bank cards issued in Hong Kong or  Macao and used in China in an RMB transaction.  Due to the fact 
that Document No. 254 is limited in scope to bank card transactions that involve bank cards issued in 
China and used in Hong Kong or Macao, or alterna tively, bank cards issued in Hong Kong or Macao 
and used in China, we fail to see how this instru ment establishes CUP as the sole supplier of EPS for 
all domestic transactions denominated and paid in RMB.   Below, we further consider this instrument 
as it operates in relation to other identified instrume nts, in the context of the United States' assertion 
that the measures at issue establish CUP as the sole supplier of EPS for all domestic transactions 
denominated and paid in RMB. 
(vii) Document No. 103 
7.408  The United States argues that Section III of Document No. 103 provides explicit recognition 
by multiple Chinese government agencies of China' s awareness that any purported limitations on 
market access to the RMB "bank card industry" were to be eliminated by 2006.  Moreover, it argues 
that Document No. 103 sets out a requirement th at banks competing in the RMB bank card business 
use uniform business specifications and technical  standards that mandate the use of CUP. 516   
7.409  China considers this provision to reflect that i ssuers and acquirers would be permitted to enter 
the Chinese market beginning in 2006, but not EPS suppliers.  In general, China maintains that a 
requirement to comply with one set of business ru les and technical standards does not preclude a bank 
                                                      
513 China's second written submission, para. 97 (citing Exhibit CHN-74). 
514 United States' response to China's request for a pr eliminary ruling, para. 93; first written submission, 
para. 58; second written submission, para. 147. 
515 China's second written submission, para. 97 (citing Exhibit CHN-74). 
516 United States' response to China's request fo r a preliminary ruling, para. 100; first written 
submission, paras. 43, 44, 83; second written submission, para. 154.  WT/DS413/R 
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 card issuer from issuing cards that also comply w ith other rules and standards, which would enable 
that card to operate over other networks.517 
7.410  The Panel observes that Article III provides that  "[t]he RMB bankcard business opens fully to 
the outside world at the close of 2006, posing great er challenges to the China bankcard industry; the 
limited time remaining must be used to boost that  industry's competitiveness".  The United States also 
points to Section II.5(1), which provides that any newly issued RMB bank cards shall comply with 
applicable technical standards. 
7.411  The Panel takes note of the identified provisions of Document No. 103, including the 
statement that newly issued RMB bank cards shall comply with applicable technical standards.  
Following the advice we received from the UNOG translator518, we do not understand this provision 
to impose a normative mandate that establishes CUP as the sole supplier of EPS in China.  In the 
absence of further information, it is also not clear to us from reading the text of Document No. 103 
what is encompassed by the term "RMB bankcard bu siness" and specifically whether this term covers 
the provision of EPS, or whether it refers only to  other relevant business activities, such as issuing 
bank cards and acquiring bank card tr ansactions.  Concerning Section II.5(1), as we stated in respect 
of other instruments that impose interoperability requirements519, in the absence of evidence 
demonstrating otherwise, we cannot conclude that Section II.5(1) on its own maintains or establishes 
CUP as the sole supplier of EPS in respect of domestic  transactions denominated or paid in RMB.  
Accordingly, we are not persuaded that this instru ment alone maintains or establishes CUP as the sole 
supplier in China. 
(viii) Document No. 153 
7.412  The United States argues that Article 1.2 of Do cument No. 153 explicitly establishes CUP as 
the sole supplier of EPS for RMB bank card transacti ons in China through its invocation that "[CUP] 
is the domestic clearance organization" (emphasis added).  The United States submits that this 
conclusion is supported in other provisions of Docume nt No. 153. It argues that Article 1.3 prohibits 
EPS suppliers other than CUP from clearing RMB ba nk card transactions in China as this provision 
states that "[n]o third party service provider shall engage in bank card information exchange 
services".520  In addition, according to the United States , Article 5 establishes CUP as the only entity 
that is permitted to promote bank card acceptance521 and Article 6 prevents any "organizations" from 
interfering with bank card processing by CUP.522   Finally, it asserts that Articles 2.2 and 4 require 
that POS terminals and merchant acquirers comply  with the business specifications and technical 
standards for cross-network interoperabi lity, and inter-bank business, respectively.523 
7.413  China disputes the United States' translation of Ar ticle 1.2, arguing instead that this provision 
states that "[CUP] is a domestic clearing organiza tion" (emphasis added), and that, as such, it does not 
establish CUP as the sole supplier of EPS.  Even accepting the translation provided by the United 
States, China submits that Document No. 153  does not support the United States' claims.524  China 
                                                      
517 China's response to Panel question No. 22(c), pa ra.18; comments on the United States' response to 
Panel question Nos. 70-72, 86-96, 115-123, para. 56. 
518 See Annex H. 
519 See the Panel's discussion of Document Nos. 37 and 57 above. 
520 United States' response to China's request fo r a preliminary ruling, para. 88; second written 
submission, para. 148; response to Panel question No. 2, para. 8; response to Panel question No. 90, para. 84. 
521 United States' response to Panel question No. 6, paras. 25 and 27; response to Panel question 
No. 88(a), para. 76 (quoting the second and third paragraphs of Article 5 of Document No. 153). 
522 United States' second written submission, para. 150; response to Panel question No. 90, para. 84. 
523 United States' second written submission, para. 154;  response to Panel question No. 71(c), para. 9. 
524 China's comments on United States' response to Panel question Nos. 70-72, 86-96, 115-123, 
para. 78. WT/DS413/R 
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 argues that the context in Article 1.3 makes cl ear that Document No. 153 prohibits acquiring 
institutions from outsourcing their switching functions  to third-party service providers, but it does not 
prevent the establishment of other inter-bank card networks.525  In its view this is clear from the fact 
that this provision addresses secu rity of financial information526 as well as the fact that "third-party 
service providers" are clearly defined in the text.  China argues that the definition of third-party 
service providers in Document No. 153 refers to me rchant or acquirer "processors" at the point of 
interconnection between the acquirer and EPS suppliers, and not EPS suppliers themselves.527  Thus, 
China does not prevent the establishmen t of other inter-bank EPS networks.528  Finally, China argues 
that Article 6 is not relevant to the United States ' claims as it relates to use of bank cards outside 
China.  In particular, it asserts that Article 6 w as a response to efforts by international EPS suppliers 
to prevent acceptance of Yin Lian  bank cards outside of China, particularly dual logo cards.529  
Regardless, China contends that this provision only requires that Chinese issuers are capable of 
processing transactions over the CUP network, but do es not require them to process transactions over 
the CUP network.530   
7.414  The Panel recalls at the outset its conclusion in paragraphs 7.319, 7.341, and 7.342 above, that 
Articles 2.2 and 4 mandate the use of the Yin Lian /UnionPay logo and impose certain interoperability 
requirements.  We further note that Document No. 153, which was issued in 2005, set outs responsibilities directed at agencies to promote th e development of a bank card acceptance market in 
China.  Following the advice we received from the UNOG translator, Article 1.2 of this document, 
labelled "Regarding bank card clearance organizations",  specifies that CUP is "currently the domestic 
clearing organization" that specializes in the supply of EPS for RMB bank card inter-bank 
transactions.  CUP is designated to formulate specifi cations and standards for th is inter-bank network.  
Article 1.3 defines "third party service providers of  merchant acquiring business" as "the legal person 
enterprises which engage in non-core businesses of  the bank card acquiring business entrusted by 
merchant acquiring institutions on the basis of ma king their own operation decisions…"  Article 1.3 
states further that "[n]o third party service provider shall engage in bank card information exchange 
services".   
7.415  Article 1.3 further explains that the bank car d exchange system concerns the security of 
financial information and payment systems and is subject to strict access and management.  We 
further note that Article 3 sets out that merchant ac quiring institutions may "freely decide" whether to 
outsource to third party services providers their no n-core business such as "equipment placement and 
services, system construction and maintenance, and customer service and training".  Merchant 
acquiring institutions can choose third-party providers  that meet security management requirements 
and technical standards of PBOC.   
7.416  Article 5 expressly authorizes CUP to establis h branches in certain areas of China "in 
accordance with the company's overall plan to provi de bank card information exchange and clearance 
services".  This "engagement in inter-bank POS tran saction information transfer shall be directly 
managed and operated by [CUP], and shall not be indirectly managed or operated through 
authorization".  Finally, Article 6 of Document No. 153 provides that "Chinese issuing banks should 
support routing through the CUP network" and "[n] o organizations should set any obstacles or cause 
any interference". 
                                                      
525 China's second written submission, paras. 97 (c iting Exhibit CHN-74) and 98; response to Panel 
question No. 109, para. 65. 
526 China's response to Panel question No. 109, para. 65. 
527 China's response to Panel question No. 102, para. 44; response to Panel question No. 109, para. 66; 
comments on the United States' response to Panel question No. 90, para. 57. 
528 China's second written submission, paras. 97 (citing Exhibit CHN-74) and 98. 
529 China's response to Panel question No. 100. 
530 China's second written submission, para. 97 (citi ng Exhibit CHN-74); response to Panel question 
No. 100.  WT/DS413/R 
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 7.417  With this in mind, we address the United St ates' contention that Article 1.2 explicitly 
recognizes CUP as the sole supplier of EPS for RMB bank card transactions in China, and that 
Articles 1.3, 5 and 6 support this conclusion.   
7.418  Beginning with Article 1.2, as we noted above, it is not in dispute that this provision 
acknowledges that CUP was an EPS supplier for RMB bank card transactions before June 2005, the 
date on which Document No 153 was published.  Th rough the use of the term "currently", this 
provision refers to the situation as it existed at that  time, but does not, by its terms, impose a limitation 
going forward.531  As the parties' submissions highlight532, there was no nationwide EPS supplier 
operating in China before June 2005.  Article 1.2 a ppears to recognize this.  Against this background, 
it is at least understandable that Document No. 153 would have designated CUP to formulate the 
specifications regarding relevant inter-bank processing (as discussed in Article 1.2).  Taking this into 
account, it follows logically that CUP was authorized  to establish branches in certain areas of China 
(as discussed in Article 5, which states that "[a]fter being approved by PBOC, [CUP] may set up 
branches in regions where there is a market demand"), as well as expand RMB bank card acceptance 
in overseas markets (as discussed in Ar ticle 6).  China would not have been in a position to direct an 
entity or EPS supplier outside of China to do this.   
7.419  We do not consider the authority granted to CUP under Article 5 to set up new branches in 
China precludes other EPS suppliers from establishing a network in China.  In our view, this language 
instructs CUP to manage and operate the network th at it is tasked to establish, and CUP should not 
delegate this authority.   
7.420  In addition, we do not understand the guidan ce found in Article 6 that CUP expand RMB 
bank card acceptance in overseas ma rkets to mean that other suppliers of EPS are prohibited from 
establishing a network in China.  We note that Ar ticle 6 addresses setting up an international network 
for acceptance of RMB bank cards bearing the Yin Lian /UnionPay logo.  This provision indicates that 
Chinese-based issuing banks "should support" inte r-bank EPS processing for dual currency credit and 
debit card transactions that take place abroad a nd "should open the RMB accounts related transactions 
and settlements to the CUP network".  We note first th at, in certain respects, Article 6 employs the use 
of the term "should" differently from the use of th e word "shall" that appears elsewhere in Document 
No. 153.  This suggests that the guidance to support routing through the CUP network is not 
mandatory.  By stating that issuing banks "should support" this routing, the provision does not appear 
to prevent them from routing transactions through other networks.  Moreover, we do not read the 
guidance that "[n]o organizations should set any ob stacles or cause any interference" to mean that 
other suppliers of EPS are prohibited from establishing a network in China.  In our view, the fact that 
Article 6 provides that issuing banks should suppor t routing through the CUP network, and should 
open RMB accounts to the network, with the further guidance that other organizations should not 
interfere, does not preclude any bank or entity from additionally having rela tionships with other EPS 
                                                      
531 In stating this, we note that the advice provided  by the UNOG translator in dicates that the context 
provided by the Chinese text "strongly implies that th e situation (whatever it is) may change". See Annex H. 
532 United States' response to China's request for a preliminary ruling, paras. 64-71; citing Steve 
Worthington, The Chinese payment card market: an exploratory study , 21 Int'l J. of Bank Marketing, pp. 324, 
325, 327 (2003), Exhibit US-21; Pecht, Michael, Ch ina's Electronics Industry : The Definitive Guide for 
Companies and Policy (2006), pp. 82-83, Exhibit US-22; Strong Measures to be Taken to Achieve the Target of 
Commecting Bank-Card Networks This Year, PBOC (March 27, 2002), available at 
http://www.pbc.gov.cn/publish/english/955/1965/19655.html , Exhibit US-25; Marina Yu Zhang & Mark 
Dodgson, High Tech Entrepreneurship in Asia: Innova tion, Industry and Institutional Dynamics in Mobile 
Payments, Edward Elgar Publishing Limited (2007) , pp. 215-216, Exhibit US-30; China's first written 
submission, paras. 38-46. WT/DS413/R 
Page 106 
 
 
 suppliers or routing transactions th rough other networks.   We furt her do not understand this provision 
would prohibit another supplier of this se rvice from establishing a network in China.533   
7.421  Finally, we do not agree that Article 1.3 can be  read to prohibit the use of EPS suppliers other 
than CUP.  Article 1.3 refers to and defines "thi rd party service providers" as those entities that may 
engage in "non-core business of the bank card ac quiring business" as entrusted by merchant acquiring 
institutions.  We note in this respect that thir d-party providers are discussed separately from 
provisions addressing "bank card clearing organizati ons" (Article 1.2), suggesting that these entities 
are different in nature.  In addition, since the "m ain business" in which CUP specializes is the supply 
of EPS for RMB bank card transactions and not the ac quisition of bank card transactions (i.e. acquirer 
services), the fact that third-party service providers may only engage in the "non-core business of the 
bank card acquiring business" would seem to indicate that third-party providers would not handle any 
of those activities falling within the principal activities of CUP. 
7.422  We further consider that the language referred to  by the United States in Article 1.3 must be 
read in the light of Article 3 of Document No . 153, which addresses "Rules of merchant acquiring 
business' outsourcing".  As indicated above, this pr ovision indicates which is the "non-core business" 
that a merchant acquiring institution may outsource to a third party service provider.  These activities 
include "equipment placement and services, system  construction and maintenance, and customer 
service and training", none of which are primary activities in respect of RMB bank card inter-bank 
information routing and exchange.  Reading these provisions together, we understand that Document 
No. 153 seeks to prevent third party service provide rs of merchant acquiring business from addressing 
core aspects related to supply of EPS in such a wa y that would compromise the security of sensitive 
financial information exchange.  It would seem, th erefore that this provision seeks to limit the number 
of actors including third parties that work in conj unction with acquirers that have access to sensitive 
information, so as to prevent fraudulent misuse of information.  For these reasons, we are not 
convinced that Article 1.3 effectively bans other EPS suppliers – which are different from third party 
service providers of merchant acquiring business – fro m the marketplace in China, taking into account 
the focus of this provision. 
7.423  Accordingly, for the reasons set out above, we conclude that Articles 1.2, 1.3, 5 or 6 of 
Document No. 153 do not establish or maintain CUP as the sole supplier of EPS for RMB bank card 
transactions in China or otherwise prohibit the use of EPS suppliers other than CUP.  In concluding 
this, we take into account the refe rence in Article 1.2 that "[CUP] is currently the domestic clearing 
organization".  As we discuss further in paragraphs  7.431-7.441 below, we note that our conclusion is 
consistent with the reference to "domestic cleari ng channels" that appears in the plural form in 
Document No. 53.  It is pertinent to note in addition that Document No. 53 postdates Document No. 153. 
(ix) Document No. 149 
7.424  The United States argues that Article 2(5)(iii) of Document No. 149 prohibits acquirers from 
allowing "non-CUP" and "non-PBOC 2.0 prepayment cards" to be accepted at POS terminals.
534  In 
                                                      
533 According to China, Article 6 of Document No. 153 relates to the development of a payment card 
acceptance network outsid e of China for RMB cards that bear the Yin Lian /UnionPay logo and is therefore not 
relevant to this dispute.  China submits that Article 6 is a response to efforts by international EPS suppliers to 
prevent the acceptance of payment cards bearing the Yin Lian /UnionPay logo outside of China.  China's 
response to Panel question No. 100, paras. 41 and 42, citing Exhibits CHN-108 and CHN-109. 
534 United States' second written submission, para. 151; response to Panel question No. 71(c)(iii), 
para. 10; response to Panel question No. 72, para. 19; response to Panel question No. 91, para. 85.  WT/DS413/R 
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 its view, this provision effectively limits the number of suppliers of EPS in China, and establishes and 
maintains CUP's monopoly on EPS for RMB bank card transactions in China.535 
7.425  China argues, as indicated in paragraph 7.322  above, that Document No. 149 as a whole 
addresses RMB bank card crimes in respect of prepayment cards and that the purpose of 
Article 2(5)(iii) is to prevent the card holder fro m fraudulently using a non-interoperable card on an 
interoperable basis.536    In China's view, it does not prohibit the acceptance of cards bearing other 
logos in addition to the Yin Lian  logo.537 
7.426  The Panel observes, as indicated by the UNOG translator538, that Article 2(5)(iii) provides that 
"[n]o acquiring institutions may allow non-" Yin Lian /UnionPay" and non-PBOC 2.0 standard prepaid 
cards issued by non-financial social enterprises to be accepted at bankcard terminal equipment".  We 
understand this provision prevents acquire rs from allowing non-YinLian/UnionPay prepaid  cards 
issued by non-financial enterprises to access bank card terminals.539  In other words, this provision 
relates to access to terminal equipment by prepai d cards that were issued by relevant enterprises540 
and that do not bear the Yin Lian /UnionPay logo.  This provision is itself limited in focus to a narrow 
subset of bank cards.   
7.427  Setting aside this particular provision, we re call that Document No. 149 broadly relates to 
security management of bank cards and preventing bank card-related crimes.  This is reflected in the 
title of the instrument, which refers to "Strengt hening the Safety Management of Bank Cards and 
Preventing and Fighting Crimes in Bank Cards".  It  is also reflected in other references in the 
document.  Notably, Article 1 refers to the objective of "stabilizing the market order of bank cards".  
Article 2(4) addresses issues related to card holder iden tity fraud.  CUP is designa ted to participate in 
reporting on identity-related crimes.541 
7.428  In our assessment of Article 2(5)(iii) in paragra phs 7.323 and 7.325 above, we noted that this 
provision addresses specifically those cards that ma y not be accepted at bank card POS terminals, 
which we found to be consistent with the purpo se of preventing bank card-related crimes.  These 
include non-" Yin Lian /UnionPay" and "non-PBOC 2.0" prepaid cards.  We noted as well that the 
United States did not provide evidence other than the text of Article 2(5)(iii) to elucidate the legal 
effect of this provision.   
7.429  We have explained in Section VII.E.2(a) a bove that China imposes requirements on issuers 
that bank cards issued in China bear the Yin Lian /UnionPay logo, and furthermore, China requires that 
issuers become members of the CUP network, and th at the payment cards they issue in China meet 
certain uniform business specifications and technical st andards.  In addition, China requires acquirers 
to post the Yin Lian /UnionPay logo, become members of the CUP network and be capable of 
accepting all bank cards bearing the Yin Lian /UnionPay logo.  In our assessment of these instruments, 
we have explained that the requireme nt that a given bank card bear the Yin Lian /UnionPay logo would 
not preclude bank cards issued in China from bearin g logos of other EPS suppliers in addition to the 
Yin Lian /UnionPay logo.  Moreover, such a requirement would not preclude the use of a bank card on 
other networks with the same or different technical /interoperability requirements, so long as it was at 
the same time compatible with the CUP network.  
                                                      
535 United States' comments on China's response to Panel question No. 104, para. 41. 
536 China's comments on the United States' response to Panel question No. 91, para. 58. 
537 China's response to Panel question No. 110, para. 68. 
538 See Annex H. 
539 As noted above in paragraph 7.323, the exact nature of the relevant enterprises is not entirely clear.  
We understand, though, that the relevant prepaid cards are issued by non-financial  enterprises. 
540 As explained in fn. 430 above, "non-financial social enterprises" refer to entities that are not 
financial institutions. 
541 See, e.g. Article s 2(4)(xii)-(xiii). WT/DS413/R 
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 7.430  We see nothing on the face of Article 2(5)(iii) that would prevent acceptance at a bank card 
terminal of a prepaid card issued by a relevant enterprise that bears the logo of another EPS supplier 
and is interoperable with that supplier's network, provided the card also bears the Yin Lian /UnionPay 
logo and is interoperable over the CUP network.  In  our view, Article 2(5)(iii) is about access to bank 
card terminal equipment.  At that level, there is no exclusive access for CUP.  Article 2(5)(iii), by its 
terms, does not speak to the processing of the transacti ons that involve the use of the relevant prepaid 
cards.  In the absence of any argument and evidence on this, we have no basis for assuming that any 
transaction would have to be processed over the CUP network.  Therefore, the United States in our 
view has not demonstrated that Article 2(5)(iii) est ablishes or maintains CUP as the exclusive supplier 
in respect of prepaid cards. 
(x) Document No. 53  
7.431  The United States argues that the references to  "domestic clearing channels" and "domestic 
RMB card clearing organizations"  in Articles V.2 a nd VII.3 of Document No. 53, respectively, have 
the effect of guaranteeing that CUP processes al l RMB-denominated transactions in China that 
involve bank cards issued in China.  It considers this to be further evident when these provisions are 
read in conjunction with Article 1.2 of Docume nt No. 153, which refers to CUP as the "domestic 
clearing organization".542  The United States does not consider that the references to "domestic 
clearing channels" and "domestic RM B card clearing organizations" in their plural forms alters the 
fact that CUP exclusively processes all RMB bank card transactions.543  To the extent this language 
alone is not clear, the United States argues that a dditional language in Article  V.2 regarding payment 
of overdrafts in RMB provides further evidence that only CUP may process domestic RMB bank card 
transactions.544  Moreover, it considers that the requireme nt in Article VII.3 that bank card issuers 
report the bank identification numbers (BINs) of their cards "to the domestic RMB card clearing 
organization" facilitates and ensures that transacti ons will automatically be processed over the CUP 
network.545   
7.432  China argues that the purpose of  Document No. 53 is to require that RMB card transactions 
are cleared and settled in RMB to avoid unnecessary foreign exchange transactions in cases where a 
dual- or foreign-currency card is used in China.546  Setting aside the purpose of this document, China 
argues that the references to "domestic clear ing channels" and "domestic RMB card clearing 
organizations" do not establish that CUP will be the only domestic clearing organization in China 
going forward in time.547  It considers this to be clear, based on the fact that the terms appear in the 
plural, and because Document No. 53 does not expressly refer to CUP by name.548 
7.433  The Panel notes that Document No. 53 is en titled "Notice of the State Administration of 
Foreign Exchange on the Management of Foreign Curre ncy Bank Cards".  Article I of this document 
defines "foreign currency bank cards" as "domestic foreign currency cards … issued by domestic 
                                                      
542 United States' second written submission, para. 167; response to Panel question No. 6, para. 28  
543 United States' response to Panel question No. 88(b), para. 78. 
544 United States' first written submission, paras. 59 and 60; response to Panel question No. 15, 
paras. 58 and 59. 
545 United States' response to Panel question No. 1, pa ras. 58 and 59; response to Panel question No. 6, 
para. 28; response to Panel question No. 15, paras. 58  and 59; response to Panel question No. 87, para. 68; 
response to Panel question No. 95, para. 100; response to Panel question No. 116, para. 112; comments on 
Chinese replies to Panel question No. 106, para 48 (c iting CUP's Operating Regulations, Volume III, Rules on 
UnionPay Card, BIN and Logo, April 2011, Section 2.5.3.2, Exhibit US-115). 
546 China's second written submission, para. 99; response to Panel question No. 111, paras. 69 and 70; 
comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123, para.77. 
547 China's comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123, 
para.78. 
548 China's second written submission, paras. 97 (referencing Exhibit CHN-74) and 100.  WT/DS413/R 
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 financial institutions … and foreign bank cards … issued by overseas institutions … except … RMB 
cards issued by [domestic financial institutions and overseas institutions]".  Article II.3 states that 
"domestic cards are classified into foreign currency cards, which refers to those denominated in only 
one foreign currency, and home-fo reign currency cards, which refers  to those denominated in both 
RMB and one or more foreign currencies".549 
7.434  Article V.2 of Document No. 53 specifies that  "[d]omestic card transactions inside China 
shall be settled in RMB throug h domestic clearing channels…".550  It provides further that "[a]ny 
overdraft arising from domestic tran sactions shall be paid by the cardholder in RMB".  According to 
the translation advice provided by the UNOG translator551, Article V.3 in turn identifies two 
circumstances in which international bank card organizations may clear transactions involving 
domestically issued bank cards.  These are:  
(1) where domestic foreign currency card transactions occurring within China are 
cleared through an international bankcar d organization; and (2) "wrong hand-off" 
transactions, in which domestic dual-curren cy cards, which should be treated as RMB 
cards, are mistakenly identified by the acquiring financial institution as foreign 
currency cards and are thus handed off to an international bankcard organization for 
clearance. 
7.435  Article VII.3 provides that "[d]omestic RMB card clearing organizations shall do a good job 
in the RMB clearing of domestic transactions of  home-foreign currency cards".  As noted above552, 
home-foreign currency cards are dual-currency cards.  In addition, Article VII.3 requires that card 
issuers report the BIN of cards that are issued to "the domestic RMB card clearing organizations".  
7.436  Articles V.2, V.3 and VII.3, when read toge ther, make clear that domestically based EPS 
suppliers are to handle the clearing and settle ment of RMB payment transactions involving 
domestically issued RMB cards.  Article V.2 provides that " domestic  card transactions inside  China 
shall be settled in RMB through domestic  clearing channels" (emphasis added).  Article V.3 
characterizes "wrong hand-off" transactions as tho se cases in which domestic dual-currency cards are 
"mistakenly identified" as foreign currency cards a nd are thus handled by an "international bankcard 
organization".  Articles I and II.3 indicate that "f oreign currency bank cards" include single-currency, 
foreign currency cards issued by domestic ins titutions, as well as single-currency, foreign currency 
cards issued by overseas institutions.  Howeve r, "domestic cards" include dual-currency cards 
denominated in RMB and any other currency that ar e issued jointly by domestic financial institutions 
and overseas institutions.  These do not qualify as fore ign currency cards.  Thus, any transaction made 
in China with a card that is denominated in part or in whole in RMB should not as a rule be handled 
by an international bank card organization.  The requirement in Article VII.3 for issuers to report 
BINs appears directed at avoiding "wrong hand-off" transactions as described in Article V.2 that arise 
when dual-currency cards are mistakenly treated as foreign-currency-only cards, and are thereby 
cleared and settled by interna tional bank card organizations.553   
                                                      
549 We note that this dispute concerns ex clusively bank cards issued in China. 
550 United States' second written submission, para. 145; response to Panel question No. 87, para. 67. 
551 See Annex H. 
552 In paragraph 7.433, we note that Article II.3 defines "home-foreign currency cards" as "those 
denominated in both RMB and one or more foreign currencies". 
553 In stating this, we understand the United States ' position to be that an EPS supplier would sort 
through different transactions based on the card-specifi c BIN, enabling it to disti nguish between transactions 
that are initiated with a dual-currency card or a foreign-cu rrency card.  It considers that, when a transaction is 
initiated at a merchant POS terminal, the transaction w ill automatically be processed over the CUP network as 
the card's BIN will match the BIN transf erred to, and stored in, CUP's BIN ta ble.  See United States' response to 
Panel question Nos. 1, paras. 58 and 59; 6, para. 28; and  87, para. 68 WT/DS413/R 
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 7.437  Taking into account the operation of these prov isions together, we understand that any 
transaction made in China with an RMB bank card th at is issued in China or a card with an RMB 
component must be handled by a domestic clearing cha nnel.  It is evident on the face of Articles V.2, 
V.3 and VII.3 that a domestic clearing channel may not be an international bank card organization.  
China itself explains that an international bank car d organization or "interna tional network operator" 
should be distinguished from a "domestic  network" or "RMB clearing channel".554  Therefore, we 
understand a domestic clearing channel must be based in China in acco rdance with Document No 53.  
We further understand from China that Document No . 53 is directed at avoiding unnecessary foreign 
exchange transactions; this is why the relevant tr ansactions must be cleared through domestic RMB 
clearing channels, and not over the networks  of international bank card organizations. 
7.438  Setting aside the purpose behind this instrument, it is clear that foreign-based EPS suppliers 
are excluded from handling the clearing of RMB paym ent transactions involving domestically issued 
cards.  This would seem to be the case regardless of  whether it were possible for a foreign-based EPS 
supplier to clear such a transacti on abroad in RMB, i.e. without involving foreign exchange, since 
Article V.2 states that all such transactions " shall  be settled in RMB through domestic  clearing 
channels" (emphasis added). 
7.439  Nevertheless, we have not identif ied any language in Articles V.2, V.3 or VII.3 that specifies 
that CUP alone must be that domestic clearing chan nel, or that EPS suppliers of other WTO Members 
could not meet the definition of domestic clearing channels or domestic RMB card clearing 
organizations.  For one thing, th e language seems to acknowledge th e possibility of more than one 
domestic clearing channel, through the reference to "cha nnels" in the plural form.  In addition, there is 
no explicit indication in any of these provisions th at CUP specifically must process all RMB payment 
transactions involving domestically issued cards.555 
7.440  Turning to the United States argument that the reference to CUP in Article 1.2 of Document 
No. 153 confirms that CUP is the only entity that may process domestic RMB bank card transactions, 
we recall that Article 1.2 of Document No. 153 provides that "[CUP] is currently the domestic 
clearing organization specializing in RMB bank car d inter-bank information routing and exchange".556  
This document dates from June 2005.  We recall our  conclusion that, while CUP may have been the 
only domestic clearing channel operating in China in  2005, and may still be th e sole domestic channel 
operating in China that clears domestic RMB ba nk card transactions, the relevant language in 
Document No. 153 does not grant CUP the exclusive privilege to clear and settle RMB for transactions involving domestic foreign cu rrency and dual currency bank cards.   
7.441  Therefore, having addressed the foregoing aspects of Document No. 53, as well as the United 
States' argument regarding Document No. 153, we  conclude that Document No. 53 does not impose a 
                                                      
554 In response to Panel question No. 116, China expl ained that a number of "complex" factors affect 
the network over which a dual-logo card is processed.  Fo r international transactions, where the issuing bank is 
not located in the country in which the transaction occu rs, China explains that certain transactions will be 
permitted to be processed over "domestic" networks, while in other cases, they may need to be processed over 
an external network, such as "VisaNet".  See China's response to Panel question No. 116, para. 79 and fns. 39 
and 40. See also Visa International Operating Regulations, Core Principle 7.4, Exhibit CHN-113. 
555 We also recall that Document No. 53, which was promulgated on 11 October 2010 and entered into 
force on 1 November 2010, replaced Do cument No. 272.  We stated ab ove that we would not consider 
Document No. 272 in our analysis in part due to its repeal prior to the establishment of the panel.  See 
paras. 7.221-7.227 above.  We do not wish to make any findings in respect of Document No. 272 here, but find 
it pertinent to note that, differently from Document No. 53, Article 4.1 of Document No. 272 expressly required 
that all domestic RMB transactions involving domestic foreign currency and dual currency bank cards be 
handled through CUP.   
556 See also discussion in paras. 7.412-7.421 above.  WT/DS413/R 
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 requirement or otherwise maintain or establish CUP as the sole supplier of EPS in respect of domestic 
RMB bank card transactions. 
(xi) Document No. 49 
7.442  The United States argues that Document No. 49 requires that a wholly foreign-funded bank or 
a Chinese-foreign equity joint bank that plans to issue bank cards comply with the bank card business 
and technical standards formulated by the PBOC.  In  its view, this requirement to follow uniform 
business specifications and technical standards establi shes a mandate that CUP be used to process all 
RMB bank card transactions.557 
7.443  China did not specifically address Document No . 49.  In general, China argues that a 
requirement to comply with one set of business ru les and technical standards does not preclude a bank 
card issuer from issuing cards that also comply with other rules and standards that enable that card to 
operate over other networks.  China submits that many such cards exist around the world.558 
7.444  The Panel notes that Article IV, in a translati on agreed between the parties, requires a wholly 
foreign-funded bank or Chinese-foreign equity joint bank that plans to issue bank cards to abide by 
the business and technical standards formulated by the PBOC and to ensure that issued bank cards 
meet the general requirements regarding the network for bank card interoperability.559    
7.445  In our view, this provision intends to ensure inter alia  that bank cards issued in China can be 
used in domestic inter-bank transactions.  Similarly to what we have said above in respect of other 
instruments that impose interoperability requirements560, we do not identify an ything on the face of 
this document that requires that all cross-regi on or inter-bank transactions occur over the CUP 
network, or that prohibits the use of cards on othe r networks with different technical/interoperability 
requirements. Accordingly, in the absence of evid ence demonstrating otherwise, we cannot conclude 
that this instrument on its own mandates or establis hes CUP as the sole supplier of EPS in respect of 
domestic bank card transactions denominated or paid in RMB.   
(xii) Document No. 129 
7.446  The United States argues that Article 3.2 of Do cument No. 129 mandates that all RMB bank 
cards newly issued by commercial banks and posta l savings and remittance bureau comply with 
unified business specifications and technical standard s of the CUP network and bear the CUP logo.  
Based on adherence to these standards, the United States argues, therefore, that this provision 
mandates and establishes CUP as the sole supplier to  process all RMB bank card transactions issued 
and used in China.561  The United States notes as well that Article 3.4 of this document requires 
commercial banks to work with CUP to "imp rove procedures for dealing with errors".562  It submits 
that, if suppliers other than CUP were permitted in the market, then all other EPS suppliers would be 
subject to similar requirements.  The fact that othe r suppliers are not subject to the same requirements 
demonstrates that CUP is a sole supplier, in its view. 
                                                      
557 United States' second written submission, para . 154 (citing Article 4 of Document No. 49). 
558 China's response to Panel question No. 22(c), pa ra.18; comments on the United States' response to 
Panel question Nos. 70-72, 86-96, 115-123, para. 56. 
559 See Translation Issues in DS413,  Table I: Translation Issues Agr eed by China and the United States, 
dated 6 December 2011. 
560 See paras. 7.299, 7.334 and 7.358- 7.360 above; see also the Panel's discussion of Document 
Nos. 37, 57, 103 and 149 in this section of the Report. 
561 United States' second written submission, para. 154; response to Panel question Nos. 88(a), para. 73; 
119, para. 118. 
562 United States' second written submission, para. 168. WT/DS413/R 
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 7.447  China does not specifically refer to Document No. 129.  In general, China argues that a 
requirement to comply with one set of business ru les and technical standards does not preclude a bank 
card issuer from issuing cards that also comply w ith other rules and standards, which would enable 
that card to operate over other networks.  China submits that many such cards exist around the 
world.563 
7.448  The Panel concluded above564 that Article 3.2(ii) requires that all RMB bank cards issued in 
China must bear the Yin Lian /UnionPay logo and must be interope rable with the CUP network.  In 
addition, Article 3.4(i) provides that "[CUP] shall,  in conjunction with all commercial banks, further 
supplement and perfect error processing manage ment measures and implementation rules, 
establishing a scientific and effective error process ing procedures, clarify the responsibilities of the 
parties involved in error processing and specify the task assignment".   
7.449  We have indicated in respect of Document No. 129 above565, and in respect of other 
instruments at issue566 our view that the requirement to comp ly with logo and business and technical 
requirements for interoperability does not preclude ba nks from issuing cards that meet other technical 
or business requirements and also bear the logo of a foreign EPS supplier.  Similarly here, we 
consider the requirement to bear the Yin Lian /UnionPay logo and meet interoperability requirements 
does not on its own establish or maintain CUP as a so le supplier.  We find nothing on the face of this 
measure that would prevent cards from bearing th e logo of another EPS supp lier or operating over the 
network of another EPS supplier, so long as that card also bears the Yin Lian /UnionPay logo and is 
interoperable with the CUP network. 
7.450  We note that Article 3.4 refers to CUP by name , and directs CUP to work together with all 
commercial banks to develop and perfect erro r processing related to bank card transactions. 
Document No. 129 dates from July 2003.  As we have discussed above567, CUP may have been the 
only EPS supplier operating in China in 2003, and ma y today still be the sole EPS supplier operating 
in China, that clears domestic RMB-denominated ba nk card transactions for cards issued in China.  If 
this is the case, then this could explain the referen ce in Document No. 129 to CUP in its direction to 
work with commercial banks to handle error pro cessing.  That is, in referring to CUP, Document 
No. 129 does not exclude other suppliers; it merely re flects the fact that CUP was and perhaps still is 
the only supplier.  Moreover, if the CUP network was and is the only EPS supplier in China, any 
errors in bank card processing would occur on CUP's ne twork.  In other words, we have not identified 
any language in Articles 3.2(ii) and 3.4(i) of Document No. 129 that grants CUP the exclusive 
privilege to process RMB transactions on a continuing basis.  There is also no evidence before this 
Panel that other EPS suppliers were prevented from establishing alternative networks to process RMB 
transactions.  In the absence of add itional evidence, we are unable to conclude that Document No. 129 
mandates or establishes CUP as the sole supplie r of EPS in respect of domestic transactions 
denominated or paid in RMB.  
(xiii) Document No. 76 
7.451  The United States contends that Document No. 76 requires that all entities participating in the 
bank card business comply with a series of "business practices" and implement technical standards as 
set out in the Business Practices Appendix to Document  No. 76.  Consistent with the way that laws 
are typically written, the United States considers th at these rules and procedures must be followed to 
                                                      
563 China's response to Panel question No. 22(c), para. 18; comments on the United States' response to 
Panel question Nos. 70-72, 86-96, 115-123, para. 56. 
564 See para. 7.270 above. 
565 See para. 7.299 above.  
566 See the Panel's discussion of Document Nos. 37, 57, 103, 149 and 49 in this section of the Report. 
567 See para. 7.440 above.  WT/DS413/R 
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 the exclusion of other rules.568  It argues that all entities participating in the bank card business 
participate in the common network, process all RM B bank card transactions over the network, and 
process transactions according to uniform rules and procedures, including conforming to CUP logo 
requirements.569  The United States considers the net effect is to mandate the use of CUP for all RMB 
bank card transactions, and otherwise prohibit the use of EPS suppliers other than CUP.570  Moreover, 
the United States submits that CUP's own operating re gulations "implement the mandate in Document 
No. 76", and similarly prohibit logos of comp eting EPS suppliers from appearing on CUP cards.571   
7.452  According to the United States, a number of elements in Document No. 76 support the 
conclusion that CUP alone may handle RMB bank card tr ansactions.  It considers that references to a 
"countrywide", "unified logo" or "standardize[d]" system throughout Document No. 76 reinforce that 
CUP alone may process RMB transactions taking place in China.572  It argues that the reference to the 
establishment of a "unified" network in CUP's Artic les of Incorporation and Notification of Approval 
of CUP's Business Licence support this interpretation.573  It further submits that the "precise" ways in 
which Document No. 76 describes how transactions must be processed and how participating banks 
must organize themselves further supports the inte ntion that all issuers and acquirers must comply 
with uniform standards which are exclusive to CU P and necessitate that all RMB transactions will be 
processed by CUP.574 
7.453  In addition, the United States considers the fa ct that Chapter 10 of the Business Practices 
Appendix to Document No. 76 excludes applicati on of the business practices to foreign currency 
cards issued outside China, conversely demonstrat es that the business practices are intended to apply 
to all transactions involving domes tically issued cards in China.575  The United States also notes that 
paragraph 5 of the Notice to Document No. 76 re quires that all "bankcard business rules that are 
inconsistent with the Specif ications shall be abolished"576.  In its view, this limitation contradicts any 
assertions by China that bank cards may conform to ot her standards and rules, and consequently, that 
other EPS suppliers may process RMB transactions.577  Finally, the United States submits that 
Article 4 of the business practices assigns exclusive ow nership and management rights of the network 
logo to CUP.578  The United States argues that CUP is thus capable of protecting its exclusivity in the 
marketplace by refusing permission to use the CUP logo to issuers of cards carrying the logo of competing EPS suppliers.
579 
7.454  China agrees that Document No. 76 sets forth detailed rules and technical specifications 
pertaining to bank card interoperability.580  However, as repeated th roughout its submissions and 
reflected in preceding sections, China argues that compliance with one set of business rules does not 
preclude compliance with another set of business rules,  the latter of which would enable bank cards to 
                                                      
568 United States' second written submission, para. 163. 
569 United States' response to Panel question No. 88(a), para. 72. 
570 United States' second written submission, paras. 153, 159 and 161. 
571 United States' response to Panel question No. 8; comments on China's response to Panel question 
No. 104. 
572 United States second written submission, para. 164 (r eferring to Chapter I, Articles 1.1, 2.1 and 4.1 
of the Business Practices Appendix to Document No. 76); comments on China's response to Panel question 
No. 119, para. 60. 
573 United States' second written submission, para. 165. 
574 United States' second written submission, paras. 157-171. 
575 United States' response to Panel question No. 88(a), para. 74. 
576 United States' response to Panel question No. 88(a), para. 74; comments on China's response to 
Panel question No. 119, para. 69. 
577 United States' second written submission, para. 163. 
578 United States' response to Panel question No.15, para. 57. 
579 United States response to Panel question No. 71(b)(i), para. 7. 
580 China's first written submission, para. 45. WT/DS413/R 
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 operate over other networks.  Chin a considers that many bank cards in the marketplace are capable of 
operating over numerous networks.581 
7.455  The Panel concluded in paragra ph 7.330 above that Article 1.2 of Chapter II of the Business 
Practices Appendix does not impose a requirement that all merchant terminal eq uipment be capable of 
accepting bank cards bearing the Yin Lian /UnionPay logo.  The Panel further concluded in 
paragraphs 7.352 and 7.353 that pa ragraphs 2 and 3 of the Notice to Document No. 76 as well as 
Articles 2.1 and 5.2.1-5.2.3 of Ch apter I of the Business Practices Appendix do impose a requirement 
that all acquiring banks must be capable of accepting bank cards bearing the CUP logo.  We understand that Document No. 76 establishes clear busi ness and technical standards to facilitate the 
processing of transactions over the CUP network.  With this in mind, we assess the United States' 
contention that Document No. 76 requires that all domestic RMB transactions on domestically issued 
cards be processed over the CUP network. 
7.456  We begin with the United States' argument that  paragraph 5 of the Notice and Chapter 10 of 
the Business Practices Appendix to Document No. 76 support the United Stat es' allegation that only 
CUP may process domestic RMB transactions on dom estically issued cards, and that other EPS 
suppliers may not do so. The United States contends th at the requirement in paragraph 5 to abolish all 
business rules that are inconsistent with the Business Practices Appendix to Document No. 76 
following the entry into force of Do cument No. 76 effectively grants CUP sole supplier status.  Given 
the context provided by Articles 1.1 and 2.1 and elsewhere in Document No. 76, we understand 
paragraph 5 serves to ensure that entities particip ating in the bank card business do not apply business 
rules that are inconsistent with the Business Pract ices Appendix, thereby effectively preventing the 
establishment of a unified, interoperable network.  As we have indicated above
582, the United States 
has provided no evidence to demonstrate that it would not be possible for a bank card issuer to issue a 
card, or an acquirer or terminal equipment to accept a card, that is at the same time interoperable with 
the business rules of EPS suppliers of other WTO Members and the rules of  the Business Practices 
Appendix to Document No. 76.  In the absence of a ny such evidence, we are not persuaded that it can 
be inferred from paragraph 5 that all cross-region or inter-bank transactions must occur over the CUP 
network, or that it would not be technically or lega lly possible to issue and use cards in China on other 
networks that apply different business rules, while at the same time ensuring their consistency with 
the Business Practices Appendix.  Accordingly, we  cannot conclude that paragraph 5 mandates that 
CUP is the sole supplier of EPS in respect of dom estic transactions denominated or paid in RMB. 
7.457  We next turn to Chapter 10 of the Busi ness Practices Appendix, which provides that 
Document No. 76 does not apply to foreign currenc y cards issued outside China that are used in 
China.  The United States' claims are directed toward all RMB cards issued and used in China.  In our 
view, when read in isolation, it is not clear to us  that this statement means that Document No. 76 is 
applicable to all RMB-denominated payment cards is sued in China.  Regardless, we do not consider 
that this statement alone would support the conclusion that the bu siness and technical standards set 
out in the Business Practices Appendix must apply to all cards issued in China to the exclusion of 
other rules.  As we have already stated above583, we do not consider the requirement to bear the Yin 
Lian/UnionPay logo and meet business and technical  requirements for interoperability on its own 
establishes or maintains CUP as a sole supplier.  We  are thus not persuaded that the United States' 
reference to Chapter 10 su pports its allegations.   
7.458  We have found throughout Section VII.E.2(e) that the requirement to bear the Yin 
Lian/UnionPay and meet certain business and techni cal requirements for interoperability does not 
                                                      
581 China's response to Panel question No. 119, para. 84. 
582 See paras. 7.299 and 7.358- 7.360 above. 
583 See the Panel's discussion of Document Nos. 37, 57, 103, 149, 49 and 129 in this section of the 
Report.  WT/DS413/R 
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 preclude issuers from issuing bank cards that are also interoperable with the business and technical 
rules of EPS suppliers of other WTO Members.  In vi ew of this, we similarly reject the United States' 
contention that the "way" in which Document No. 76 is written as a regulation means that the rules 
and procedures in Document No. 76 must be fo llowed to the exclusion of other procedures.584  We 
therefore consider whether any other elements id entified by the United States in Document No. 76 
mandate the use of CUP for all RMB-denominated transactions.    
7.459  We next consider the United States' contenti on that references to a "unified logo" or 
"standardize[d]" system throughout Document No. 76 support the conclusion that CUP is intended to 
be a sole supplier of EPS services for RMB bank card transactions in China.  The United States argues 
that the use of the phrase "to set up and operat e a single nationwide inter-bank card information 
switching network" and particularly the word "single", that is used both in CUP's Articles of Association
585 and Notification of Approval of CUP's Business Licence586, confirm that CUP alone 
may supply EPS services for RMB transactions in China for those cards issued in China.  It argues 
that "China's decision early on to position CUP as the monopoly supplier of EPS in China is reflected 
in these foundational documents".587   
7.460  We first note that the Article 2.1 of the Bu siness Practices Appendix to Document No. 76 
provides that the "bank card united association" that was to be established pursuant to this document, 
(and that later became CUP) means a "countrywide  bank card united operational organization".  In 
discussing the meaning of "bank card interoperation" , Article 2.2 provides that bank card institutions 
and merchants should "link themselves with the countrywide… system to achieve the sharing of information …and interoperation".  Article 4.2 of the Business Practi ces Appendix states that the logo 
of the network consists of "the Chinese charact er of 'UnionPay' and a graph symbolising the united  
network" (emphasis added).   In our view, the re ferences to the establishment of a "countrywide" 
network, or the provision mentioning that the logo of the network should symbolize that the network 
is "united", reflects foremost an intention to establish a common, nationwide network.  Evidence on 
record indicates that, prior to 2001, when Docume nt No. 76 was issued, no EPS supplier had in place 
a nationwide, interoperable network.
588  The fact that a nationwide network did not exist in China 
previously meant that bank cards were not guarant eed to be usable throug hout China.  Hence, we 
understand the focus in Document No. 76 was to create a network that is "united" and "countrywide".  
In reaching this view, however, we do not agree with the United States that one can properly infer 
from this effort to create a nationwide network an in tention to create an exclusive network in China, 
wherein all other EPS suppliers except the associa tion that would later become CUP would be 
prohibited from operating.  We do not find the infe rence drawn by the United States is supported by 
the aforementioned references, nor do we find such  support elsewhere in Document No. 76.  As we 
explained above, we have found nothing in Document  No. 76 that prevents issuers from incorporating 
logos of other EPS suppliers, or issuing cards that  comply with the rules of other EPS suppliers, so 
long as those cards bear the Yin Lian /Union Pay logo and are interoperable with the CUP network. 
7.461  As noted, the United States also refers to the reference to the establishment of a "single" 
network in CUP's Articles of Association and Notif ication of Approval of CUP's Business Licence in 
support of its interpretation of what was intende d through Document No. 76, in particular the 
references to a "unified logo" or a "standardize[d]" system.  We note that the term "single" does not 
appear in Document No. 76 itself.  One meaning of the term "single" is "cons isting of only one part", 
                                                      
584 In this respect, we respond to the United States' argument as set out in paragraph 163 of its second 
written submission.  
585 See CUP's Articles of Association, Articles 11 and 12, Exhibit US-20. 
586 Notification of Approval of CUP's Business Licence, Ex hibit US-29.   
587 United States' response to Panel question No. 121. 
588 See United States' response to Ch ina's request for a prel iminary ruling, paras. 64-71; China's first 
written submission, paras. 38-46.  See also fn. 532 above.   WT/DS413/R 
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 as a limitation in number.589  However, we note that the term "s ingle" may also be understood to mean 
"undivided, united".590  In addition to the meaning of this te rm, we also note that the phrase "to set up 
and operate a single nationwide inter-bank card info rmation switching network" uses the indefinite 
article "a", and not the definite article "the", and to  that extent does not appear  to indicate an intention 
to limit the number of EPS suppliers in the marketplace to one.  Moreover, we note that Article 11 of 
CUP's Articles of Association specifies that the purpose of CUP is "to set up a unified, highly 
efficient and safe inter-bank card information exchange  network across the country".  In view of the 
different meanings of "single" and its use in CU P's foundational documents, we do not agree with the 
United States that these documents should inform th e conclusion that CUP is a sole supplier of EPS 
services for RMB bank card transactions in China.  Rather, we find the use of "single" in these 
identical phrases in CUP's Articles of Association and Notification of Appr oval of CUP's Business 
Licence is consistent with the stated objective in Ar ticles 1.1 and 2.1 of Document No. 76 to establish 
a "countrywide", "interoperable" bank card network in China.  In our view, therefore, the stated 
objective to establish a "single" network is not in dicative of an intention to create an exclusive 
network.   
7.462  Finally, we turn to the United States' contention that CUP's control of the ownership and 
management rights of the Yin Lian /UnionPay logo enables it to prohibit other EPS suppliers from 
operating in China.  We concluded in paragraph 7.277 above that Ar ticle 4.2 of the Appendix grants 
the United Association (now CUP) exclusive ow nership and use and management right of the Yin 
Lian/UnionPay logo.  However, we observed that, pursuant to Article 4.3 of the Business Practices 
Appendix, "Interoperating Members" (which include issuing banks) "automatically obtain" the right 
to use the logo from the date they officially e ngage in inter-bank business upon approval by the 
United Association/CUP.  Therefore, we stated591 that we were not persuaded that Article 4.2, when 
read together with Article 4.3, provides a basis for CUP to refuse permission for the logo to appear on 
bank cards bearing the logo of competing EPS supplie rs.  Rather, banks that already engage in the 
bank card business would be permitted to incor porate additional logos of EPS suppliers.   
7.463  In its responses to several of the Panel's qu estions following the second substantive meeting 
of the parties592, the United States submitted the text of CUP's Operating Regulations593 as well as 
reports from China's press594 in support of its allegation that CUP uses its control over the CUP logo 
to prevent other logos from appearing on the car ds and thereby limits the ability of other EPS 
suppliers to enter the Chinese market.  According to  the United States, CUP's Operating Rules state in 
relevant part: 
The following logos cannot appear on UnionP ay Card surface (including card face 
and card back). 
 Name/logo/trademark of credit card or debit card of the 
companies and their subsidiaries that are deemed to have 
competitive relationship with UnionPay by UnionPay Board of Directors … 
                                                      
589 Shorter Oxford English Dictionary , Vol. 2, p. 2843. 
590 Shorter Oxford English Dictionary , Vol. 2, p. 2843. 
591 See paras. 7.277-7.279 
592 United States' response to Panel question No. 11 7.  See also United States' response to Panel 
question Nos. 86 and 94. 
593 CUP's Operating Regulations, Volume III, Rule s on UnionPay Card, BIN and Logo, April 2011, 
Section 2.5.3.2, Exhibit US-115 
594 See Exhibits US-119, US-120, US-121, US-122, and US-123.  WT/DS413/R 
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 7.464  As we noted above595, CUP's Operating Regulations are not identified as a relevant legal 
instrument in the United States' panel request.  We  are unclear why the United States did not identify 
these regulations earlier.  We recall China's view that evidence on record does not support the United 
States' assertion that CUP does not licence the Yin Lian /UnionPay logo for use on cards that also carry 
the logo of other EPS suppliers.596  China submits Exhibit CHN-112 as evidence that a large number 
of cards in China are "dual logo" cards.597 
7.465  We set out reasons in paragraph 7.279 above why we are not convinced that the identified 
provisions of CUP's Operating Re gulations support the United States' assertion that the logo use 
requirements enable CUP to prevent an issuer fro m issuing bank cards of competing EPS suppliers.  
We noted that the Regulations, submitted very late  in the proceedings, raise a number of questions 
concerning their operation that the United States di d not address.  In particular, the Operating 
Regulations do not specify whether the bank cards on which other logos may not appear – referred to 
above – are only CUP-branded bank cards , or also bank cards issued in China that bear more than one 
logo.  We also took note of evidence submitted by China that numerous cards issued in China  – "one 
quarter of all bank cards issued in China in 2010" – carry the logo of other EPS suppliers.598  In our 
view, the United States failed to reconcile its interp retation of CUP's Operating Regulations with this 
evidence.  The United States also failed to explain its interpreta tion of the language taking into 
account that Article 4.3 of the Business Practices  Appendix to Document No. 76 indicates that the 
right to use the logo is automatically grante d to interoperating members to the CUP network.599  For 
these reasons, we reject the United States' conten tion that CUP's control of the ownership and 
management rights of the Yin Lian /UnionPay logo enables it to prohibit other EPS suppliers from 
operating in China. 
7.466  Accordingly, for the reasons set out above, we conclude that Document No. 76 does not 
establish CUP as the sole supplier of EPS for RMB- denominated transactions in China or otherwise 
prevent the use of EPS suppliers other than CUP.   
(xiv) Document No. 17 
7.467  The United States submits that Article 64 of Document No. 17 requires issuing banks to 
"implement technical standards prescribed by the State" when issuing bank cards.600  The United 
                                                      
595 See para. 7.291 above. 
596 See para. 7.278 above. 
597 China's comments on United States' response to Panel question Nos. 70-72, 86-96, 115-123, 
para. 67. 
598 Exhibit CHN-112. 
599 In respect of its claim that China limits EPS suppliers other than CUP from entering the Chinese 
market, the United States' asserts that CUP at times has not approved EPS suppliers' applications for new dual 
logo cards, as it argues is demonstrated in various press reports (Exhibits US-119, US-120, US-121, US-122, 
US-123).  Without entering into a discussion of the evid entiary value of these press reports, as explained in 
paragraph 7.280, we do not understand how the United States' assertion that CUP undertakes approval of 
applications to issue dual logo cards can be reconcile d with Article 4.3.  Also, the United States has not 
explained to us how its allegation that CUP restrains the issuance of dual branded cards to a "certain threshold 
percentage (e.g. 80%)" (stated in response to Panel question No. 117, para. 114) supports the contention that 
CUP is therefore the "sole supplier" of EPS for RMB tr ansactions.  In addition, we note the United States' 
argument in response to Panel question No. 94 (para. 95) that CUP has the authority to deny or delay the 
issuance of BIN numbers to competing EPS suppliers, thereby preventing EPS suppliers from competing in the 
Chinese market.  Like China, we note that the United States has not provided an y specific reference in the 
instruments at issue to substantiate its assertion.  We  are therefore unable to agree that the above elements 
support the United States' claim that China limits EPS suppliers other than CUP from entering the Chinese 
market. 
600 United States' second written submission, para. 154. WT/DS413/R 
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 States argues that "many" of the technical standa rds are developed by CUP, and as a result, the 
requirement to implement CUP standards "enhances CUP's position as sole supplier".601 
7.468  China does not specifically address the provision identified by the United States.  We recall 
that, in general, China maintains that a requireme nt to comply with one set of business rules and 
technical standards does not preclude a bank card issu er from issuing cards that also comply with 
other rules and standards, which would enable  that card to operate over other networks.602 
7.469  The Panel concluded in paragra ph 7.286 above that Article 64, when read in conjunction with 
Document No. 76, requires issuers to implement business and technical standards when issuing bank 
cards that bear the Yin Lian /UnionPay logo.603  It is not clear that "many" of the technical standards 
prescribed by the State are those standards developed by  CUP.  But even if it were, as we stated in 
respect of Document No. 17 above604, and in respect of other instruments that impose interoperability 
requirements605, we do not consider the requirement to comply with certain business and technical 
interoperability requirements alone precludes banks from issuing cards that meet other technical or 
business requirements that enable these cards to ope rate on another network.  Given our conclusions, 
we do not consider that Article 64 individually coul d be considered to mandate the use of CUP or 
establish CUP as the sole supplier of EPS for all dom estic transactions denominated and paid in RMB, 
and hence we do not agree with the United States  that Article 64 results in "enhanc[ing] CUP's 
position as sole supplier".   
(xv) Document No. 142 
7.470  The United States argues that Article II.3 of Document No. 142 requires that issuers of bank 
cards prioritize issuance of cards th at adopt the PBOC 2.0 Standards, a chip standard developed by the 
PBOC and CUP.  It submits that China "intends to require that all cards comply with this standard.606  
The United States submits that this standard is Ch ina-specific and incompatible with the "EMV" chip 
standard used by non-Chinese EPS suppliers.607 As a result, the United States argues that non-Chinese 
EPS suppliers have to redesign their chips to  allow their cards to be used in China.608  The United 
States considers that this requirement contributes to establishing CUP as a sole supplier in the processing of RMB bank card transactions.  In addition,  it notes that various provisions in Document 
No. 142 – notably Articles III, V and VI – desi gnate CUP to participate with other Chinese 
institutions in an effort to enhance bank card securi ty.  The United States submits that, if suppliers 
other than CUP were permitted in the market, then all other EPS suppliers woul d similarly be subject 
to the requirements set out in Articles III, V and VI of Document No. 142.  The fact that other 
suppliers are not so subject demonstrates  that CUP is a monopoly, in its view.
609 
                                                      
601 United States' response to Panel question No. 71(a), para. 6. 
602 China's response to Panel question No. 22(c), pa ra.18; comments on the United States' response to 
Panel question Nos. 70-72, 86-96, 115-123, para. 56. 
603 We concluded, however, that Article 64 does not require that all bank cards in China must bear the 
Yin Lian /UnionPay logo and that it does not require the use of the unified standards in all cases. 
604 See para. 7.299 above. 
605 See the Panel's discussion of Document Nos. 37, 57, 103, 149, 49, 129 and 76 in this section of the 
Report. 
606 United States' response to Panel question No. 94, para. 97. 
607 United States' response to Panel question No. 72, para. 17. 
608 United States' response to Panel question No. 94, para. 97 (citing Article 2.3 of Document No. 142); 
see also response to Panel question No. 88, para. 73. 
609 United States' second written submission, para. 168.  WT/DS413/R 
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 7.471  China contends that the United States provides no support for its assertion that EPS suppliers 
will need to significantly redesign their chip to  be allowed to operate in the Chinese market.610  
Setting this aside, as noted above611, China maintains that a requirement to comply with CUP's 
business rules and technical standards does not preclude  bank card issuers from issuing cards that also 
comply with other rules and standards that enab le that card to operate over other networks.   
7.472  The Panel notes that Article II.3 directs card issuer s to ensure that all cards issued meet the 
requirements of the "Bank Card Specifications (JR0052-2009)" and the "Technical Specifications on 
Bankcard Interoperability (JR-55-2009)".  The United  States suggests that this standard will be 
implemented at a future point in time.612   Issuers are directed to give  priority to the issuance of bank 
cards which adopt the "PBOC 2.0 Standards" to improve "the anti-counterfeiting ability of bank 
cards."  Article II.5 and Articles III.7 and III.8 dir ect card issuers to submit risk information on bank 
cards to the bank card information sharing system of CUP to aid in preventing bank card fraud.  
Article V.15 directs CUP, inter alia , to improve its "bank card risk prevention and control system", 
including setting up a "uniform national merchant information registration and risk prevention and 
control system"; and to "work out the business rul es and technical standards for inter-bank payment 
services … that are not specified in th e current networking business standards". 
7.473  We note the United States' assertion that the PBOC  2.0 standard is not compatible with the 
EMV chip standard used in other parts of the worl d, and that EPS suppliers will have to "significantly 
redesign their chips" to allow their cards to be u sed in China.  Although stating that this redesign 
would be a "significant" one, the United States does not provide explanation or evidence about what 
would be involved in such redesign.  Hence we have nothing on which to assess the significance, 
difficulty or otherwise of any redesign procedures ..  Nor does the United States assert that a redesign 
to conform to the PBOC 2.0 standard would be so  difficult such that EPS suppliers would opt not to 
enter the market.  In the absence of any suppor ting evidence, we are unable to accept the United 
States' assertion that a requirement to comply with th is standard in the future would ensure that CUP 
would remain in the market as a sole supplier.  In addition, the United States does not assert that 
compliance with the PBOC 2.0 standard would pr eclude simultaneous compliance with the EMV or 
any other standard, such that we  cannot conclude that a given car d would be prevented from operating 
over more than one network.   
7.474  We indicated above in respect of other instruments613 that the requirement to comply with 
technical/interoperability requirements does not precl ude banks from issuing cards that meet other 
technical requirements.  Thus, we are not persuaded that the initiative set out in Article II.3 to require 
compliance with PBOC 2.0 standards prevents cards  from complying with other standards such that 
they might operate over other networks.  Accordingly,  we are unable to conclude that a requirement to 
comply with PBOC 2.0 standards establishes or maintains CUP as a sole supplier.   
7.475  We note, finally, the United States' argument that the designation of CUP in Articles III, V 
and VI in Document No. 142 to participate with ot her Chinese institutions in an effort to enhance 
bank card security demonstrates that CUP is a sole su pplier.  We concluded in  paragraph 7.450 above 
that the mere fact that Document No. 129 designates card issuers or acquirers to work together with 
CUP, so as to develop error processing related to ba nk card transactions, does not by itself establish or 
                                                      
610 China's comments on the United States' response to Panel question Nos. 70-72, 86-96, 115-123, 
para. 69. 
611 See, e.g. China's response to Panel question No. 22(c), para.18; comments on the United States' 
response to Panel question Nos. 70-72, 86-96, 115-123, para. 56. 
612 As we noted, the United States ar gues that "China intends to require that all cards comply with the 
new chip standard…"  See United States' response to Panel question No. 94, para. 97. 
613 See the Panel's discussion of Document Nos. 37, 57, 103, 149, 49, 129, 76 and 17 above. WT/DS413/R 
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 maintain CUP as a sole supplier.614  We consider our conclusions in that context to be relevant here 
and conclude similarly.  Document No. 142 entere d into force in 2009.  Given CUP's position in the 
Chinese marketplace, the fact that CUP is identified by name may simply reflect the prevailing market 
situation in China at that time.  Hence, Document  No. 129 designates CUP to participate in reducing 
bank card-related crimes.  Apart from this specific role, there is no language in Document No. 142 
that grants CUP the exclusive privilege to pr ovide RMB inter-bank information exchange and 
processing on a continuing basis.  In the absence of  additional evidence, we are unable to conclude 
that references to CUP in Document No. 142 have  the effect of mandating or establishing CUP as the 
sole supplier of EPS in respect of domestic tran sactions denominated or paid in RMB.   
(xvi) Conclusions on the instruments individually  
7.476  Based on the above analysis, the Panel concludes that none of the identified legal instruments 
considered individually mandates or establishes CUP as sole supplier of EPS in respect of domestic 
RMB bank card transactions or otherwise prohibits the use of EPS suppliers other than CUP.   
7.477  Specifically, we concluded that certain provisions  in Document Nos. 17, 37, 49, 57, 76, 129, 
142, 149 and 153 require that all bank cards issued in China, including dual currency bank cards, for 
use in connection with domestic inter-bank transactions bear the Yin Lian /UnionPay logo.  In various 
respects, these documents further require, inter alia , that terminal equipment operated by acquirers 
and merchant terminal equipment provided by acquirers be technica lly capable of accepting all bank 
cards bearing the Yin Lian /UnionPay logo.  Finally, these documen ts require that acquirers themselves 
be capable of accepting bank cards bearing the Yin Lian /UnionPay logo.  We found, however, that 
nothing in the cited provisions of these instrument s precludes the issuance or acceptance of bank cards 
that would operate on any inter-bank networks other than that of CUP, or precludes the use, or the 
acceptance at terminals, of bank cards bearing logos of other EPS suppliers, so long as those cards 
also bear the Yin Lian /UnionPay logo and are also interoperabl e over the CUP network.  Accordingly, 
we found that the cited provisions of these inst ruments do not establish or maintain CUP as the 
exclusive EPS supplier for all RMB bank card transacti ons, where a bank card is issued and used in 
China.  We similarly concluded that Document  No. 103 does not establish or maintain CUP as the 
sole supplier. 
7.478  We further concluded that Document No. 153 does not grant CUP the exclusive privilege to 
provide EPS in relation to RMB bank card transactions taking place in China on the basis that it refers 
to CUP as the domestic clearing channel, or becau se it regulates third-party service providers.  We 
similarly concluded that Document No. 53 does not require that CUP alone may serve as a domestic clearing channel to process RMB transactions.   
7.479  Finally, in our analysis of Document Nos.  16, 8 and 254, we recalled our previous 
conclusions
615, that China requires that CUP and no other EPS supplier is to handle the clearing of 
certain RMB bank card transactions that involve either  an RMB bank card issued in China and used in 
Hong Kong or Macao, or a bank card issued in Hong Ko ng or Macao that is used in either of these 
territories, or in China in an RMB transaction.   We additionally recalled our conclusion that 
Document No. 219 does not establish or maintain CUP as sole EPS supplier for RMB transactions in 
respect of the clearing of these  RMB card transactio ns in Hong Kong, Macao and China, specifically, 
or in relation to RMB transactions in China generally.616   
                                                      
614 See also para. 7.440. 
615 See paras. 7.383-7.384 above. 
616 See paras. 7.372-7.377 and 7.402-7.404.  WT/DS413/R 
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 7.480  As we explained, Document Nos. 16, 8 and 254617 establish CUP as the exclusive EPS 
provider for RMB bank card transactions concerning  Chinese, Hong Kong or  Macao nationals who 
travel in China, Hong Kong or Macao.  In this section of the Report, we specifically address the 
question of whether legal instruments at issue in th is dispute explicitly establish or maintain CUP as 
sole supplier in respect of all RMB bank card transactions in China.  As Document Nos. 16, 8 and 254 
are limited in scope to bank card transactions that involve bank cards issued in China and used in 
Hong Kong or Macao or, alternatively, payment ca rds issued in Hong Kong or Macao and used in 
China, we explained above that we do not see how  any of these instruments establish CUP as sole 
supplier of EPS for all domestic transactions occurring throu ghout China that are denominated and 
paid in RMB.  As these measu res pertain to transactions concerning Chinese, Hong Kong or Macao 
nationals who travel in China, Hong Kong or Macao , we thus do not consider them as a direct 
indication of the establishment or mainte nance of CUP as the sole supplier for all RMB transactions 
taking place in China.618   
7.481  Therefore, in respect of the various instrument s identified in connection with the alleged sole 
supplier requirements, we are unable to conclude that  any of the legal instruments, when considered 
individually, maintains or establishes CUP as the exclusive EPS supplier for RMB bank card 
transactions, or otherwise prohibit the u se of EPS suppliers other than CUP.   
(xvii)  Collective assessment of the legal instruments at issue 
7.482  We recall that the United States has requested the Panel to consider the "measures" at issue in 
this dispute both individually and in combination wi th each other.  It submits that these measures, or 
six requirements, reflected or embodied in the various  legal instruments affect "every element of the 
electronic payment system and all of the key particip ants", including issuers, acquirers, merchants and 
EPS suppliers themselves.619  In particular, it argues that all entities participating in the bank card 
business in China participate in the CUP networ k, process all RMB bank card transactions over the 
network, and process transactions according to un iform rules and procedures, including conforming to 
logo requirements.620  The United States considers that the ne t effect of these measures is to "create a 
system in which CUP is the only entity that can  supply EPS for RMB transactions", or that the 
measures "ensure and conso lidate CUP's monopoly position"621.   
7.483  The United States maintains that the various legal instruments interact to establish and 
maintain CUP as the sole supplier in three principal ways: (i) certain instruments explicitly state that 
CUP must be used to process specific types of bank card transactions; (ii) certain instruments 
establish and/or require the use of business specifica tions and technical standards which mandate the 
use of CUP; and (iii) certain instruments implic itly recognize that CUP is the sole supplier of EPS 
services for RMB denominated transactions.622  It argues that the various requirements "ensure CUP's 
privileged position", both "e xplicitly" and "effectively".623   
7.484  The United States argues that no EPS supplier other than CUP benefits from issuer 
requirements, terminal equipment requirements and acquirer requireme nts.  The United States argues 
that because of the need to fulf il these requirements, issuers and acquirers must have access to the 
                                                      
617 The Panel specifically refers to Article 6 of Document No. 16, Article 6 of Document No. 8 and 
Articles 3, 4 and 17 of Document No. 254.  S ee paras. 7.372-7.377 and 7.402-7.404 above. 
618 The Panel addresses below, at paras. 7.482 and 7.57 6, whether this requirement is inconsistent with 
Articles XVI and XVII of the GATS. 
619 United States' first written submission, para. 48. 
620 United States' response to Panel question No. 88(a), para. 72. 
621 United States' first written submission, para. 63; second written submission, paras. 153, 159, and 
161. 
622 United States' second written submission, para. 144. 
623 United States' first written submission, para. 46 WT/DS413/R 
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 CUP system, and must pay for that access.624  It contends that it is thus "economically unviable" for 
any foreign supplier of EPS to participate in the market.625  The United States explains: 
Document Nos. 37, 57, 94, 272, 129, and 219 contain requirements that banks that 
issue payment cards in China must bear th e CUP logo at a specified position, and that 
all ATMs and POS terminals must be capable of processing cards that bear the CUP 
logo.  No foreign suppliers are eligible fo r this privilege.  As banks and processing 
parties are already required to provide CUP such access (as well as pay for it), it 
makes no economic sense for such banks to pa y for the additional privilege of using a 
foreign EPS.  In other words, these types of privileges do not simply discriminate 
against foreign suppliers in the market place; they effectively deny them access 
altogether.626 
7.485  The United States submits that the requirement to  pay fees to join CUP's network "creates an 
unlevel playing field with other suppliers, even  in those small areas where other suppliers are 
permitted to operate (e.g . dual currency cards)."627  Elsewhere, the United States argues that each of 
the six requirements help "entrench CUP's positi on as the sole service supplier in the market".628  It 
explains, "[t]hese requirements gave CUP automati c and universal acceptance of its RMB payment 
card products by banks and merchants in China and permitted and supported CUP becoming the sole 
supplier of EPS in China".629   
7.486  As we noted above, China maintains that the six alleged requirements do not operate in such a 
way as to establish CUP as sole supplier for the clearing and settlement of all RMB domestic inter-
bank bank card transactions.630  Rather, China submits that the identified measures establish a 
common national network for processing RMB domestic inter-bank bank card transactions.631  China 
further submits that the above instruments do not preclude adherence to other technical standards, 
such as the rules and operating procedures of othe r EPS suppliers.  Similarly, it argues that issuer 
banks are not prevented from being memb ers of other EPS suppliers' networks.632  Thus, it maintains 
that there is nothing in any of these instrume nts that would prevent a foreign EPS supplier from 
establishing a domestic clearing channel in China.633 
7.487  Taking into account the United States' argumen ts, we understand the United States considers 
that the six requirements, as reflected in the legal instruments at issue, operate together in several 
respects to establish and maintain CU P as the sole or exclusive EPS supplier. 634  First, the United 
States maintains that various legal instruments work together in ways to explicitly or implicitly restrict entry into the Chinese market
.  Second, the United States' arguments suggest that it considers 
that certain instruments work together in ways th at impose technical barriers to entry.  Third, the 
                                                      
624 United States' first written submission, paras. 50-52. 
625 United States' first written submission, para. 66. 
626 United States' first written submission, para. 69. 
627 United States' response to Panel question No. 94, para. 96.. 
628 United States' second written submission, paras. 173, 180, and 183; response to Panel question 
No. 86, para. 63; 92, para. 88. 
629 United States' second written submission, para. 190. 
630 China's second written submission, paras. 90-102. 
631 China's first written submission, para. 64; response to Panel question No. 121, para. 87. 
632 China's response to Panel question No. 22(c), paras. 17, 18. 
633 China's response to Panel question No. 103, para. 45. 
634 In this respect, we note that the European Payments Council, "SEPA Cards Framework," refers to 
"technical", "legal" and "commercial" barriers when discussing requirements or regulations governing co-
branding or limiting international EPS suppliers to offe ring services only for transactions outside of the SEPA 
area.  See United States' response to Panel question No. 73; European Payments Council, "SEPA Cards 
Framework," Version 2.1, 16  December 2009, Section 1.2,  Exhibit US-110, page 4.  WT/DS413/R 
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 United States considers that the measures operate together in a way that makes it "economically 
unviable" to enter the market.  We address each of these three arguments in turn. 
7.488  As an initial matter, the parties dispute whethe r CUP is currently the only EPS supplier in the 
market.  China contends that the Rural Cred it Banks Funds Clearing Center (RCBFCC) operates 
throughout China as a second EPS supplier for RM B bank card transactions, and processes inter-bank 
bank card transactions independently of CUP.635  In reference to the Center's website and related 
materials, the United States considers that the RCBF CC is a "clearing and settlement center used by 
rural commercial banks in China",636 but that rural commercial banks using the RCBFCC "issue bank 
cards bearing the CUP logo and transactions using these cards are processed by CUP."637 As bank 
cards issued by rural commercial banks for use on the RCBFCC network must carry the CUP logo, 
issuers of these cards must be members of CUP, wh ich entails following all a pplicable CUP rules and 
regulations.   
7.489  The website reference provided by the United States is entirely in Chinese.  However, as the 
United States contends, the RCBFCC website contains  a series of images of bank cards, each of 
which includes a depiction of the CUP logo.  In this  respect, it would appear that bank cards depicted 
on the RCBFCC website also conform to the issuer requi rements at issue in this dispute.  However, 
we cannot be sure of this as we have not been pr ovided with evidence explaining the origin of this 
site, its date, or its contents.  Nor are we able to  verify China's assertion that the RCBFCC is a second 
EPS supplier operating in China because we do not have  access to a version of the website in an 
official WTO language.  Accordingly, we reach no findings in respect of the RCBFCC that would 
inform or alter our analysis. 
Explicit and implicit legal operation of the instruments when considered collectively 
7.490  As reflected in our discussion above, China's inst ruments affect all aspects of the market for 
bank card transactions and affect all entities in the process, including issuers, acquirers, merchants, 
EPS suppliers and potentially third parties involved in the handling of bank card transactions.  Our 
analysis above also confirms that requirement s imposed by the instruments are mandatory.  
7.491  However, as we stated before, with the excep tion of RMB bank card transactions involving 
Hong Kong and Macao nationals that travel to Chin a, and Chinese nationals that travel to Hong Kong 
or Macao, we found that the United States had faile d to identify anything in the identified legal 
instruments that explicitly grants CUP the exclusiv e privilege to supply EPS in respect of all RMB 
bank card transactions taking place in China.  In addi tion, the United States did not point to anything 
in the identified provisions of the instruments at i ssue that prevents issuers from incorporating logos 
of other EPS suppliers, in addition to the Yin Lian /UnionPay logo, or issuing cards that comply with 
the rules of other EPS suppliers, so long as those cards also bear the Yin Lian /UnionPay logo and are 
also interoperable with the CUP network.  In th is sense, despite the fact that the measures are 
mandatory and may lead to opportunities for CUP that  other suppliers do not enjoy, we found that the 
United States did not identify anything on the face of these instruments that legally prohibits EPS 
suppliers other than CUP from operating in China's market. 
7.492  The United States maintains that, in the even t that the instruments individually do not 
demonstrate that CUP is a sole supplier, collectively,  the instruments operate in this way.  Primarily, 
the United States bases its collective assessment on references to the text of the instruments 
themselves.  For instance, in response to questi on No. 87 from the Panel, the United States argues: 
                                                      
635 China's response to Panel question No. 114, para. 75; comments on United States' response to Panel 
question Nos. 70-72, 86-96, 115-123, fn. 43. 
636 United States' response to Panel question No. 88(b), para. 79. 
637 Ibid. WT/DS413/R 
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 The logo requirements work in conjunction with one another and are reinforced and 
complemented by the mandate to conform to  CUP's rules and procedures contained in 
Document No. 76.  These requirements work together to reinforce CUP's monopoly over payment card transactions in China by  ensuring that only CUP cards can be 
issued for RMB denominated accounts, that  all merchants accept those cards when 
they are presented for purchases, and that  the transactions will be processed in 
accordance with CUP's rules and procedures.  Consequently, no other supplier of EPS 
may conduct domestic RMB transactions in China.
638 
7.493  As set out in our assessment of the instrume nts individually, we found that none of the 
instruments, such as Document No . 76, individually supports the proposition that "only CUP cards 
can be issued for RMB denominated accounts".  Having concluded as such, we find no basis to conclude that merely reading the various instrume nts together, as the United States seems to suggest 
that we do, leads us to modify our conclusions  regarding the United States' assertion.  Beyond 
asserting that particular cited provisions of instru ments or requirements "work together", we find no 
explanation that varies from that provided in the United States' assessment of the instruments 
individually.
639  In other words, in relying on the texts of the provisions and without more, the United 
States has not in our view established that the pr ovisions taken together e ffectively create a monopoly 
in favour of CUP. 
7.494    We recall the United States' view that the stated purpose set out in both CUP's Articles of 
Association640 and in the Notification of A pproval of CUP's Business Licence 641 "to set up and 
operate a single nationwide inter-bank card informat ion switching network" and particularly the word 
"single", confirms that CUP alone may supply EPS services for RMB transactions in China for those 
cards issued in China.  In view of the different me anings of "single" and its use in CUP's foundational 
documents, we concluded in paragra ph 7.461 above that the references to the establishment of such a 
"single" network does not establish that CUP is the sole supplier of EPS services for RMB bank card 
transactions in China.  Rather, we explained that th is statement is consistent with the objective stated 
elsewhere in Document No. 76 to establish a "countrywide", "interoperable" bank card service in 
China.   
7.495  We note as well that the United States has identi fied certain instruments that pertain to 
transactions involving Hong Kong and Macao, in arguing  that the legal instruments at issue in this 
dispute explicitly establish or maintain CUP as a sole supplier in respect of all RMB bank card 
transactions.  We explained in pa ragraph 7.473 above that these instruments do not establish CUP as 
the sole supplier of EPS for all domestic RMB bank card transacti ons occurring throughout China, 
since the measures are lim ited in scope to bank card transactions  that involve bank cards issued in 
China and used in Hong Kong or Macao, or alterna tively, bank cards issued in Hong Kong or Macao 
and used in China. 
                                                      
638 United States' response to Panel question No. 87, para. 69. 
639 We note that, in response to question No. 115, the United States similarly argues the following: 
The requirement on issuing banks to issue on ly cards that carry the CUP logo, when 
combined with the requirements on acquiring  banks to be capable of accepting CUP cards 
(as discussed in response to question No. 92), and the mandate to use CUP processing 
rules (as discussed in response to question No. 86) establishes CUP's monopoly over RMB 
denominated cards.  No other EPS supplier can establish a competing interoperative bank 
card network. 
United States' response to Panel question No. 115, para . 107.  Again, in a stat ement such as this, which 
serves as a mere recitation of the requirements individually, we find no support for the conclusion that no other 
EPS supplier can establish itself in China. 
640 See CUP's Articles of Association, Articles 11 and 12, Exhibit US-20. 
641 Notification of Approval of CUP's Business Licence, Ex hibit US-29.    WT/DS413/R 
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 7.496  Finally, we note the United States' refrain that  its interpretation of various provisions is 
"consistent" with the fact that CUP's network is the exclusive network for all RMB bank card 
transactions.  In support of this view, the United Stat es has referred to the fact that certain provisions 
at issue refer singularly to CUP.  For instance, it asserts that Article 5 of Document No. 153 expressly 
authorizes CUP to establish bran ches in certain areas of China "i n accordance with the company's 
overall plan to provide bank card information exch ange and clearance services".  It submits that 
Article 3.4 of Document No. 129 requires commer cial banks to work with CUP to "improve 
procedures for dealing with errors".  It also considers that Articles II I, V and VI of Document No. 142 
direct CUP to participate with other Chinese instituti ons in an effort to enhance bank card security.  In 
respect of instances such as thes e, in our assessment above, we stated how references to CUP, or 
recognition of CUP's role, do not necessarily confirm th at CUP operates exclusively in China.  Rather, 
we indicated that these references may inform a di fferent interpretation.  In the absence of further 
evidence that would eliminate reasonable alternative interpretations, we consider the United States has 
not met its burden to establish that the instruments ope rate collectively in this way, so that we should 
conclude in favour of the United States' in terpretation.   The Appellate Body in US – Carbon Steel  has 
explained: 
The party asserting that another party's munici pal law, as such, is inconsistent with 
relevant treaty obligations bears the burde n of introducing evidence as to the scope 
and meaning of such law to substantiate th at assertion.   Such evidence will typically 
be produced in the form of the text of the relevant legislation or legal instruments, 
which may be supported, as appropriate, by ev idence of the consistent application of 
such laws, the pronouncements of domestic courts on the meaning of such laws, the 
opinions of legal experts and the writings of recognized scholars.  The nature and extent of the evidence required to satisfy  the burden of proof will vary from case to 
case.
642 
7.497  In the absence of evidence othe r than the texts of the instruments, such as on how the relevant 
provisions have been applied or opinions of legal experts, we consider the United States has not met 
its burden to establish that the net, or combined, legal effect of these instruments is to preclude EPS 
suppliers other than CUP from operating in Ch ina's market for RMB bank card transactions. 
Technical barriers imposed through the instruments 
7.498  The United States has also alleged that the ru les and standards imposed under certain of the 
instruments at issue make it technically difficult fo r foreign EPS suppliers to operate in the market, 
thereby effectively "entrenching" CUP as the sole supplier.643  We explained in paragraph 7.477 
above that nothing in the identified provisions in Do cument Nos. 17, 37, 49, 57, 76, 129, 142, 149 and 
153 impose technical barriers that cannot be met by EPS suppliers other than CUP so as to completely 
prevent those EPS suppliers from entering and operating in the market for RMB bank card 
transactions in China.  In particular, we found that nothing in the identified provisions of the 
instruments at issue prevents i ssuers from issuing cards that comply with the rules of other EPS 
suppliers, so long as those cards are also interoperable with the CUP network.   
7.499  In addition to the requirements just mentioned,  the United States, asserts that Document No 
142 requires that all RMB bank cards incorporate the PBOC 2.0 standard which, in the United States’ 
view, would force EPS suppliers to significantly redesign their chips in order to allow their cards to be 
used in China.  Allegedly, this  is because the PBOC 2.0 and EMV chip standards are incompatible.644  
                                                      
642Appellate Body Report, US – Carbon Steel , para. 157. 
643 See, e.g. United States' second written submi ssion, paras. 153-165; response to Panel question 
No. 106, para. 47. 
644 United States' response to Panel question No. 94, para. 97. WT/DS413/R 
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 As we noted in paragraph 7.473 above, the Unite d States does not provide any evidence to indicate 
that the redesign would be so "significant" so as to  effectively "lock" EPS suppliers out of the market 
entirely.645  Accordingly, in the absence of any evidence that an EPS supplier would not be able to 
take such steps to make its cards compatible with th is standard due to costs or other reasons, or that 
competing standards are inherently incompatible, we consider that the United States has failed to 
establish that the need to comply with this standard would ensure that CUP  is the sole supplier.  We 
consider this to be the case even when we assess this, in the light of  current evidence, together with 
other elements identified in the instruments.  
Economic barriers imposed by the instruments 
7.500  Lastly, we address the United States' contention that the instruments in question make it 
"economically unviable" for any foreign EPS supp lier to participate in that market, thereby 
entrenching CUP as the sole supplier in the mark et for RMB bank card transactions.  The United 
States argues that, because issuers and acquirers are required to join the CUP network, and pay for 
that access, it makes "no economic sense" for these en tities to additionally pay to use the services of a 
foreign EPS supplier.  In other words, we unders tand the United States to argue that foreign EPS 
suppliers have no incentive to enter the market beca use potential customers (i.e. issuers and acquirers) 
would not demand their services since they are obl iged already to pay for the services of CUP. 
7.501  In response to questions from the Pane l following the second substantive meeting646, the 
United States referred to the text of CUP's Opera ting Regulations, which set out one-time membership 
fees and testing fees.  We explained in paragra ph 7.291 that CUP's Operating Regulations were not 
identified in the United States' panel request and do not  constitute measures at issue in this dispute.  
We further explained that the United States faile d to establish a link between these regulations and 
any of the legal instruments under discussion.  That concern aside, we observe that the cited provisions of CUP's Operating Regulations provide insufficient information  on membership fees and 
testing fees to enable us to ascertain the additiona l costs or indeed the total costs that would be 
incurred by an issuer seeking services from particular  EPS suppliers.    Even if there are no additional 
costs, we do not have information on how significan t any CUP fees are relative to the profits that 
issuers and acquirers may earn in the marketplace.  Nor has the United States explained what fees 
participating institutions would incur if they wished  to join the networks of other EPS suppliers.  In 
the absence of such evidence, we are unable to gauge whether those costs are significant enough to 
discourage issuers.  Despite asserting that the member ship and testing fees have this "discouraging" 
effect, the United States has not provided evidence that  issuers, acquirers or merchants are or would  
in fact be unwilling to join the network of ot her EPS suppliers and pay additional fees required for 
such access.  Due to the variety of  factors that might influence the decision of an EPS supplier to enter 
the market for RMB payment transactions, we cannot merely accept the assertion that the mere 
imposition of the fees in question has had or will ha ve the effect of preventing foreign EPS suppliers 
from entering and establishing themselves in China.  We also note that there is evidence on record 
that a number of "dual-branded, dual logo" cards  exist in the Chinese market, as noted by China
647, 
which suggests that EPS suppliers have in fact been willing to enter the market in some form.  In the 
absence of other evidence, the fact that these cards exist in the market  suggests that the fees have not 
dissuaded issuers or acquirers from seeking the services of other EPS suppliers. 
7.502  We additionally note that, while it is foreseeable  that there may be a cost associated with 
complying with the technical and business standards imposed by Document Nos. 17, 37, 49, 57, 76, 
129, 142, 149 and 153, the United States has not provided evidence of the costs of compliance, 
                                                      
645 Ibid. 
646 See United States' response to Panel question Nos. 86, 94 and 117. 
647 Exhibit CHN-112. See China's comments on the United States' response to Panel question 
Nos. 70-72, 86-96, 115-123, para. 67 and fn. 38; Exhibit CHN-112.  WT/DS413/R 
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 beyond suggesting that compliance might prove difficu lt or burdensome.  In the absence of concrete 
evidence, we are again not persuaded that the cost  associated with these or other business or technical 
requirements has dissuaded or would in the futu re dissuade issuers or acquirers from seeking the 
services of other EPS suppliers, thereby effectiv ely establishing or maintaining CUP as the only 
supplier in the market.  
7.503  We have pointed out that the instruments in  question place CUP in a unique position in the 
Chinese EPS market.  Through the issuer requirements, CUP is effectively assured that every card that 
might be issued by an EPS supplier other than CUP is effectively a "CUP" card, i.e. a card that is 
capable of operating over the CUP network.  In other words, only dual-logo cards that bear the Yin 
Lian/UnionPay logo in addition to the logo of another EPS supplier may be issued.  At the same time, 
the acquirer requirements oblige all acquiring instituti ons to be capable of acquiring transactions from 
cards bearing the Yin Lian /UnionPay logo, and terminal equipm ent requirements mandate that all 
merchants be capable of accepting these cards. Even though the relevant instruments would not 
prevent acquirers or merchants from accepting ot her cards, CUP has a significant foothold in the 
market.  The fact that CUP does not have to inv est in promoting its brand to issuing institutions 
(because issuer requirements are mandatory), and do es not have to invest in persuading banks to 
acquire transactions for the CUP brand (because ac quirer requirements are also mandatory) further 
solidifies CUP's privileged position.   
7.504  Nevertheless, in the absence of specific lega l provisions designating a company as the single 
supplier in a market, the United States in our view  needs to provide eviden ce to sustain the assertion 
that the instruments produce economic effects that are so significant that they preclude other EPS 
suppliers from operating in the market.648  In the present case, we have no evidence, e.g. economic 
analyses of profitability, price-cost margins, or demand elasticity, including in comparison with other 
markets, that would allow us to assess whether ind eed the instruments at issue make it economically 
unviable for other EPS suppliers to establish themselves and operate in China. We note that parties in 
previous disputes have submitted economic anal yses and econometric studies when alleging actual 
economic and trade effects of particular measures, and to support allegations that those effects are 
attributable to the measures.649  Additional information on th e conduct of CUP (e.g. price 
discrimination or evidence that CUP charges differe nt customers different prices for the same service) 
could have assisted us in our analysis, but no su ch information was submitted.   We are aware that 
relevant data may be difficult to obtain.  However, given the lack of concrete evidence, we are unable 
to conclude that CUP is the sole supplier.  Assertion without more is simply not enough. 
Conclusions on collective assessment 
7.505  Accordingly, for the reasons set out here and above, we find that the United States has not 
substantiated its claim that the instruments at i ssue collectively mandate the use of CUP or establish 
CUP as the sole supplier of EPS for all domestic  RMB bank card transactions.  The United States 
carries the burden to demonstrate that the measures operate together to establish or maintain CUP as 
                                                      
648 In competition policy enquiries, for instance, monopol y power is found to exist if (i) the firm has a 
high share of a relevant market and (ii) there are en try barriers – perhaps ones creat ed by the comp any's conduct 
itself – that allow the company to exercise substantial mark et power for an appreciable period of time.  See U.S. 
Department of Justice (2008) "Competition and Monopoly: Single-Firm Conduct Under Section 2 of the 
Sherman Act". In assessing the existence of a monopoly,  competition authorities typically evaluate a company's 
market share and the durability of market power, i.e.  the ability to price substantially above the competitive 
level for a significant period of time without  erosion of the position by new entrants. 
649 For instance, the panel in US – COOL  noted in this respect that the function of panels does not 
exclude, but may in fact require, the review of eco nomic and econometric eviden ce and arguments. See Panel 
Reports, US – COOL , para. 7.452 and paras. 7.507-7.546.  See also Thailand – Cigarettes (Philippines) , 
paras. 136-138; and Philippines – Distilled Spirits , para. 7.55, 7.109-7.113; and Appellate Body Report, 
Thailand – Cigarettes (Philippines) , paras. 136-138. WT/DS413/R 
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 the exclusive supplier.  That is, the United States must demonstrate that CUP is the only supplier 
permitted to operate in the Chinese market.  It is not clear to us, in the absence of any concrete 
evidence, that the consequence of the instruments in question is to reduce the number of suppliers in 
the market to one.  As we explained, in our view, the United States has failed to demonstrate that the 
instruments impose a legal barrier to entry, explicit or otherwise.  We also found that the United 
States has failed to demonstrate that the technical requirements that must be met to operate in China 
preclude other EPS suppliers from operating in the ma rket.  Finally, we explained that we did not 
have sufficient evidence before us to accept the United States' allegation that the operation of the 
instruments makes it "economically unviable" to en ter the market, such that no other EPS supplier 
would be willing to enter the market. 
7.506  In reaching this conclusion, we are uncertain wh ether CUP currently operates in the market as 
the sole supplier for RMB bank card transactions.  Although it is possible that this is the case, 
including for reasons unrelated to the instruments we have addressed above,  we are not persuaded 
based on the arguments of the United States and the ev idence before the Panel that the instruments in 
question establish or maintain CUP as the only EPS supplier in the market. 
(f) Overall conclusions on the evaluation of the existence of the measures at issue 
7.507  The Panel concluded above, as reflected in various legal instruments, as follows that: 
(a) China, through Document Nos. 37, 57 and 129, imposes requirements on issuers that 
bank cards issued in China bear the Yin Lian /UnionPay logo, and furthermore, China, 
through Document Nos. 17, 37, 57, 76 and 129, requires that issuers become members of the CUP network, and that the bank cards they issue in China meet 
certain uniform business specifications and technical standards; 
(b) China, through Document Nos. 37 and 153, imposes requirements that all terminals 
(ATMs, merchant processing devices and POS terminals) in China that are part of the 
national bank card inter-bank processing ne twork be capable of accepting all bank 
cards bearing the Yin Lian /UnionPay logo; 
(c) China, through Document No. 153, impo ses requirements on acquirers to post the Yin 
Lian/UnionPay logo and furthermore, China, through Document Nos. 37, 76 and 153, 
imposes requirements that acquirers join the CUP network and comply with uniform 
business standards and technical specifications of inter-bank interope rability, and that 
terminal equipment operated or provided by acquirers be capable of accepting bank 
cards bearing the Yin Lian /UnionPay logo;  
(d) China, through Document Nos. 16, 8 and 254, imposes requirements that CUP and no 
other EPS supplier handle the clearing of certain RMB bank card transactions that involve either an RMB bank card issued in  China and used in Hong Kong or Macao, 
or an RMB bank card issued in Hong Kong or  Macao that is used in China in an 
RMB-denominated transaction;  
(e) The United States failed to establish that China, through Document Nos. 37, 57, 16, 
8, 219, 254, 103, 153, 149,  53, 49, 129, 76, 17 and/or 142,  imposes requirements that 
mandate the use of CUP or establish CUP as the sole supplier of EPS for all domestic transactions denominated and paid in RMB; and 
(f) Having regard to our assessment of the in struments in connection with the sole 
supplier requirement, the United States fail ed to establish that China, through  WT/DS413/R 
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 Document Nos. 37, 57, 153, 219 and/or 76,  imposes broad prohibitions on the use of 
"non-CUP" cards for cross-region or inter-bank transactions. 
F. THE UNITED  STATES ' CLAIMS UNDER ARTICLE XVI  OF THE GATS 
7.508  The United States argues that the six alleged re quirements imposed by China on the supply of 
EPS are inconsistent with Article XVI of the GA TS.  The United States submits that China made 
mode 1 and mode 3650 commitments in its Schedule coveri ng the supply of EPS, wherein China 
committed not to maintain any limitations on th e number of foreign EPS suppliers.  Through the 
imposition of these six requirements, the United St ates asserts, China established and maintains a 
monopoly structure to ensure that CUP is the exclusive supplier of EPS for all RMB bank card 
transactions in China whenever a bank card is issued in China and used in China.651 It further argues 
that the measures are not justified by any limitations , conditions or qualifications on market access in 
China's Schedule.  As a result of this, the Unite d States considers that the measures at issue are 
inconsistent with China's obligations u nder Articles XVI:1 and XVI:2(a) of the GATS.652 
7.509  China argues that the United States has failed to  prove that China made relevant market 
access and national treatment commitments under subsector  (d) in relation to mode 1 and mode 3, and 
therefore requests the Panel to dismiss the United St ates' claims.  According to China, claims under 
Article XVI are limited to the sectors and sub sectors in which the responding Member has made 
market access commitments.653  Even if the Panel were to conclude that China made specific 
commitments in respect of the particular services and suppliers at issue, China contends that the 
United States has failed to demonstrate that the a lleged measures maintain or adopt limitations on the 
number of service suppliers in the form of monopo lies or exclusive service suppliers to prove its 
claim under Article XVI of the GATS.654   
7.510  Article XVI of the GATS, entitled "Marke t Access", provides in relevant part: 
1.  With respect to market access through the modes of supply identified in 
Article I, each Member shall accord se rvices and service suppliers of any other 
Member treatment no less favourable than  that provided for under the terms, 
limitations and conditions agreed and specified in its Schedule. 
2.  In sectors where market-access comm itments are undertaken, the measures 
which a Member shall not maintain or adopt either on the basis of a regional 
subdivision or on the basis of its entire te rritory, unless otherwise specified in its 
Schedule, are defined as: 
(a)  limitations on the number of service suppliers whether in the 
form of numerical quotas, monopolies, exclusive service suppliers or 
the requirements of an economic needs test 
7.511  The Panel recalls that in the United States' view , the measures at issue are inconsistent with 
Articles XVI:1 and XVI:2(a) of the GATS.  In the specific context of Article XVI:2(a), the Appellate 
                                                      
650 The Panel will use the term "mode 3" to refer to th e supply of a service that is "by a service supplier 
of one Member, through commercial presence in the terr itory of any other Member", as provided for in 
Article I:2(c) of the GATS. 
651 United States' second written submission, paras. 137- 143; see also response to China's request for a 
preliminary ruling, Sections V.B to V.I; first written submission, paras. 12, 31, 37-72, and 79-92; opening 
statement at the first meeting of the Panel, para. 43; response to Panel question Nos. 4, 6, 17 and 23. 
652 See, e.g. United States' first written su bmission, paras. 37-40 and 70-72.   
653 China's first written submission, paras. 123 and 124; second written submission, para. 81. 
654 China's second written submission, paras. 90-102. WT/DS413/R 
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 Body in US – Gambling  explained that a complaining party must do two things to establish a prima 
facie  case of violation.  First, it must establish that a responding party has undertaken relevant market 
access commitments in its GATS Schedule and th ereafter, it must "identify[] with supporting 
evidence, how the challenged laws constitute imperm issible 'limitations'" falling within the meaning 
of one of the subparagraphs of Article XVI:2.655  This same approach was followed by the panel in 
China – Publications and Audiovisual Products .656 
7.512  We see no reason to depart from this approach an d therefore, we begin by addressing whether 
China made market access commitments under mode 1 or  mode 3 in respect of the services at issue.  
Only if we determine that China has made a commi tment will we consider whether the requirements 
at issue impose limitations that are inconsistent with Article XVI of the GATS. 
1. Whether China has made mode 1 or mode 3 market access commitments covering the 
supply of EPS 
7.513  Consistent with Appellate Body guidance, we begin our analysis under Article XVI by 
determining whether China has undertaken rele vant market access co mmitments in its GATS 
Schedule for subsector (d) and the two modes of supp ly relied on by the United States, i.e. modes 1 
and 3.  As China's Schedule contains different en tries for these two modes, we first address China's 
mode 1 market access entry.   
(a) Mode 1 commitments 
7.514  The United States argues that China has undertak en mode 1 market access commitments with 
respect to subsector (d) in its Schedule. Under mode 1, the word "Unbound" is followed by the 
qualifying phrase "except for the foll owing," which in turn is further elaborated by two sentences that 
describe elements of the services within subsector (d).   According to the United States, China's 
mode 1 commitment must be understood as recogn izing that "payment and money transmission" 
services include aspects of "provision and transf er of financial information" and "advisory, 
intermediation and other auxiliary services" to the ex tent that such aspects are integral to the core 
service, and that such aspects are properly classifi ed within "payment and money transmission" 
services and not in subsector (k) or (l).  In the Unite d States' view, the fact that there are elements of 
"provision and transfer of financial informati on, and financial data processing" and "auxiliary, 
intermediation, and advisory services" embedded in  the core "payment and money transmission" 
services is not inconsistent with the principle that sectors must be scheduled in a mutually exclusive 
manner.657 
7.515  China recalls its view that the services at  issue are not properly classifiable under 
subsector (d) of its Schedule.  China submits that its  market access entry for subsectors (a) through (f) 
repeats, verbatim, the descriptions of subsectors (k) and (l), which appear  under the heading of 
"[o]ther financial services as listed below".658  In China's view, the identical language in the same 
Schedule cannot have two different meanings. The mean ing of this portion of China's Schedule is that 
                                                      
655 Appellate Body Report, US ‒ Gambling , para. 143. 
656 Panel Report, China – Publications and Audiovisual Products , para. 7.1354. 
657 United States' first written submission, para. 41; and response to Panel question Nos. 45, para. 118 
and 46(b), para. 127. 
658 China notes that there is a minor difference consis ting of a plural form in the mode 1 entry, which 
refers to "suppliers of other financial services" while subsector (k) states "by supplier of other financial 
services". In China's view, the latter appears to be a typographical error.  China's response to Panel question 
No. 50, fn. 50.  WT/DS413/R 
 Page 131 
 
 
 China undertook no market access commitments under mode 1 with respect to subsectors (a) through 
(f), including subsector (d).659 
7.516  China states that there are two possible ways of reading the "except" language in the mode 1 
market access entry.  The first is as a cross-re ference to China's mode 1 market access commitment 
for subsectors (k) and (l).  The second is as a d escription of the exception to China's unbound market 
access entry for subsectors (a) through (f) in mode 1.   According to China, the "embedded services" 
theory proposed by the United Stat es is contrary to the principle of mutual exclusivity and runs afoul 
of the principle of effective treaty interpretation.  China argues that, in order to give effect to its 
unbound market access entry for subsectors (a) through (f), it is critically important to distinguish 
between those activities that are unbound in mode 1 and those activities that fall within the exception.  
If the United States has met its burden of proving that the services at issue in this dispute are 
classifiable under subsector (d), then, in Chin a's view, the United States cannot simultaneously 
maintain that China undertook mode 1 market access  commitments in respect of those services.  For 
China, the services at issue cannot be covered in s ubsector (d), and also in subsectors (k) and (l).660 
7.517  Australia submits that the commitment at issue is unclear, but is not unbound.661  According 
to the European Union, China is unbound under mode  1 for subsectors (a) to (f), except for parts of 
the subsectors described in the two hyphens; Chin a has then committed the actual service of 
"provision and transfer of financial information"  and "advisory, intermedia tion and other auxiliary 
services" as stand-alone services under subsectors (k) an d (l).  The European Union is of the view 
that, if China had intended this entry to be a cross -reference, it should have been explicitly set out in 
the Schedule.662  Guatemala submits that the two subsectors listed, respectively, under the mode 1 
entry at issue and under subsectors (k) and (l) c over the same services, but refer to different 
commitments.  According to Guatemala, th ere is no cross-reference among the subsectors.663 Japan is 
of the view that, by inscribing "unbound except for the following", China intended to make no 
commitment and that the question to be addr essed is whether EPS corres pond to "provision and 
transfer of financial information […]".664  Korea submits that the two subsectors committed under 
mode 1 of subsector (d) relate only to the services described under the latter subsector.  In contrast, 
subsectors (k) and (l) are separate and distinct subsect ors which are not confined to subsector (d).  For 
Korea, China's cross-reference argument is misp laced because subsectors (a) to (f) on the one hand 
and subsectors (k) and (l) on the other are found under different subheadings.665 
                                                      
659 China's first written submission, paras. 126 and 127.   
660 China's response to Panel question No. 50(a), para. 76; and second written submission, paras. 58-62. 
661 Australia's third-party response to Panel question No. 11.  
662 European Union's third-party response to Panel que stion No. 4, para. 13; and third-party response to 
Panel question No. 11, para. 34. 
663 Guatemala's third-party response to Panel question No. 4, para. 20; and third-party response to Panel 
question No. 11, para. 36. 
664 Japan's third-party response to Panel question No. 23, para. 3. 
665 Korea's third-party response to Panel question No. 4; and third-party response to Panel question 
No. 11. WT/DS413/R 
Page 132 
 
 
 7.518  The relevant section of China's Schedule is reproduced below (emphasis added): 
[…] 
 
B. Banking and Other Financial Services 
        (excluding insurance and securities) 
 
        Banking services as listed below: 
 
(a) … 
(b) … 
(c) … 
  
 
(1) Unbound except for the following: 
- Provision and transfer of financial 
information, and financial data processing 
and related software by suppliers of other 
financial services; 
- Advisory, intermediation and other auxiliary 
financial services on all activities listed in 
subparagraphs (a) through (k), including 
credit reference and analysis, investment and 
portfolio research an d advice, advice on 
acquisitions and on corporate restructuring 
and strategy. 
(2) [...] 
(d) All payment and money transmission 
services, including credit, charge and debit 
cards, travellers cheques and bankers 
drafts(including import and export 
settlement); 
(e) … 
(f) … 
 (3) […] 
 
4) […] 
 - Motor vehicle financing by non-bank 
financial institutions  
1) Unbound except for the following: 
- Provision and transfer of financial 
information, and financial data processing 
and related software by suppliers of other 
financial services; 
- Advisory, intermediation and other auxiliary 
financial services on all activities listed in 
subparagraphs (a) through (k), including 
credit reference and analysis, investment and 
portfolio research and advice, advice on 
acquisitions and on corporate restructuring 
and strategy.  
(2) […] 
(3) […] 
(4) […] 
  WT/DS413/R 
 Page 133 
 
 
  
- Other financial services as listed below: 
 
(k) Provision and transfer of financial 
information, and financial data processing 
and related software by supplier of other 
financial services; 
(l) Advisory, intermediation and other auxiliary 
financial services on all activities listed in 
subparagraphs (a) through (k), including 
credit reference and analysis, investment and 
portfolio research an d advice, advice on 
acquisitions and on corporate restructuring 
and strategy. 
 
- Securities  
 
 
(1) None  
(2) […] 
(3) […] 
(4) […] 
 
 
 
 
 
 
 
 
(1) […] (2) […] 
(3) […] 
(4) […] 
 
7.519  The Panel notes that the mark et access entry under mode 1 contains the term "Unbound", 
which is qualified by the words "except for the following".  In GATS schedules, the term "Unbound" means that, for a given sector and mode of supply, a Member undertakes no commitment.
666  The 
qualifying phrase "except for the following" suggest s that there follows an exception to the general 
"Unbound" entry.  The expression "Unbound except for the following" is then followed by the 
descriptions of two services listed in the two hyphens.  These services are (i) "[p]rovision and transfer 
of financial information, and fi nancial data processing and related software by suppliers of other 
financial services"; and (ii) "[a]dvisory, intermedia tion and other auxiliary financial services on all 
activities listed in subparagraphs (a ) through (k), including credit refe rence and analysis, investment 
and portfolio research and advice, advice on acquisitions  and on corporate restructuring and strategy".  
The descriptions of these two services are nearly identi cal to the descriptions of subsectors (k) and (l) 
that, in the case of China's Schedule, appear under the subheading "[o]ther financial services as listed 
below"; the only difference is that the description in  the first hyphen under the mode 1 entry at issue 
refers to "suppliers" in the plur al, whereas the description in subsector  (k) uses the singular form of 
the same term.667  The mode 1 market access commitment assu med by China for subsectors (k) and (l) 
is full ("None"). 
                                                      
666 Paragraph 46 of the 2001 Scheduling Guidelines stipulates:  "…, the Member remains free in a 
given sector and mode of supply to introduce or mainta in measures inconsistent with market access or national 
treatment.  In this situation, the Member must record  in the appropriate column the word:  UNBOUND. […]."  
See also paragraph 27 of the 1993 Scheduling Guidelines.  Moreover, in US – Gambling , the Appellate Body, 
when examining the term "None" scheduled in the entry at i ssue in that dispute, found that "[t]his notation is the 
opposite of the notation 'Unbound', which means that a Member undertakes no specific commitment."  
Appellate Body Report, US – Gambling , fn. 257 (emphasis original). 
667 We agree with China that the singular form of the term "supplier" in subsector (k) appears to be a 
typographical error (see fn. 658 above).  We note, first, that this singular form results in a grammatically 
incorrect phrase.  In addition, subsector (xv) of the GATS Annex on Financial Services, on which China said its 
Schedule is based (China's first written submission, para. 80),  refers to "suppliers" in the plural.  The French and 
Spanish versions of subsector (xv) of the Annex on Financia l Services also use the plural form for this particular 
term, as do the French and Spanish versions of China's Schedule.  WT/DS413/R 
Page 134 
 
 
 7.520  The Panel observes that WTO Members commonl y use the inscription "Unbound except for" 
in their GATS schedules.  China has made use of it in other sectors listed in its Schedule.668  
Moreover, China employs this inscription for its mo de 4 commitments as well, as have most other 
WTO Members.669  What is particular about and sets apart the mode 1 entry in question, however, is 
the fact that the two services referred to are textua lly nearly identical to subsectors (k) and (l) for 
which China has undertaken specific commitments.  Pursuant to Article  31 of the Vienna Convention, 
the Panel will examine the ordinary meaning of the te xt of the relevant mode 1 entry in its context and 
in the light of the object and purpose of the GATS and the WTO Agreement. 
7.521  We turn first to an examination of the ordina ry meaning of the terms used to describe the 
services that fall within the first hyphen.  The descrip tion reads: "[p]rovision and transfer of financial 
information, and financial data processing and related software by suppliers of other financial 
services " (emphasis added).  As there is no comma after "related software", the question arises 
whether the phrase "by suppliers of other financial services" relates only to the phrase "financial data 
processing and related software" which immediatel y precedes the reference to suppliers of other 
financial services, or whether that reference al so qualifies the phrase "provision and transfer of 
financial information".  In addressi ng this question, we note that the description of subsector (xv) of 
the GATS Annex , on which China's Schedule is based,  does not contain a comma after the equivalent 
of "related software".  However, the equally authen tic French and Spanish versions of subsector (xv) 
of the Annex, which are relevant context for interp reting China's Schedule, shed useful light on this 
issue.  In both of these versions, a comma has been added after the phrase "related software".670  The 
French and Spanish versions of China's Schedule also include that comma.  Moreover, we fail to 
discern a plausible rationale for why the services described as "financial data processing and related 
software" would warrant a reference to the suppliers  of such services that was not equally warranted 
in the case of the services described as "provision a nd transfer of financial information".  For these 
reasons, we consider that the phrase "by suppliers of  other financial services" in the mode 1 entry at 
issue qualifies both the phrase "financial data processing and related software" and the phrase 
"provision and transfer of financial information". 
7.522  We turn now to the word "other" in the phrase "b y suppliers of other financial services".  The 
ordinary meaning of the word "oth er" suggests that the services provided by the relevant suppliers are 
different from the services listed in the sectoral column with respect to subsectors (a) to (f).671  In 
other words, a distinction appears to be made be tween two different categories of financial services 
suppliers: (i) the suppliers of financial services list ed under subsectors (a) to (f) in the sectoral column 
of the Schedule, and (ii) the suppliers of "other  financial services" which undertake the "provision and 
transfer of financial information, and financial da ta processing and related soft ware" to other suppliers 
of financial services.  If the phrase "provision and tr ansfer of financial information […]" concerned 
suppliers providing the financial services at issue in  subsectors (a) to (f), or components thereof, it 
would be incongruous to refer to a category of suppliers supplying "other" financial services.  
Conversely, if there were an intention to re fer to services other than those classifiable under 
subsectors (a) to (f), it would be necessary to make  this intention clear, a nd the word "other" would 
serve that purpose.  In our view, therefore, a textual analysis of the entry in the first hyphen supports 
                                                      
668 See, for instance, China's mode 1 commitments with respect to "Retailing services (excluding 
tobacco)" ("Unbound except for mail order") and "Environmental services" ("Unbound except for 
environmental consultation services"). 
669 We also recall in this regard paragraph 45 of the 2001 Scheduling Guidelin es and paragraph 26 of 
the 1993 Scheduling Guidelines. 
670 The French version reads "[f]ourniture et transfer t d'informations financières, et traitement de 
données financières et logiciels y relatifs, par les fournisseurs d'autres services financiers", and the Spanish 
version "[s]uministro y transferencia de información financiera, y procesamiento de datos financieros y soporte 
lógico con ellos relacionado, por proveedores de otros servicios financieros".  
671 "Other" is defined, inter alia , as "[e]xisting besides or distinct from that or those already specified or 
implied; further, additional. […]", Shorter Oxford English Dictionary , Vol. 2, p. 2035.  WT/DS413/R 
 Page 135 
 
 
 the view that "suppliers of other financial servi ces" supply services that are not simply integral 
components of the services listed in the sectoral column (or, to use the United States' terms, an 
element "embedded" in a "core" service), but rath er services that are separate and distinct from the 
services classifiable in subsectors (a) to (f).   
7.523  We now examine the ordinary meaning of the terms used to describe the services that fall 
within the second hyphen, "[a]dvisory, intermediation and other auxiliary financial services on all 
activities listed in subparagraphs (a) through (k) , including credit reference and analysis, investment 
and portfolio research and advice, advice on acquis itions and on corporate restructuring and strategy" 
(emphasis added).  First, that the reference to "and other auxiliary … services" suggests to us that the 
services covered in this hyphen are considered "a uxiliary".  The ordinary meaning of the word 
"auxiliary"672 indicates that these services are separate and different from the services falling within 
subsectors (a) to (f), rather than "embedded"673 in them.  Furthermore, the second hyphen uses the 
phrase "auxiliary financial services on all activities listed in s ubparagraphs (a) through (k) " 
(emphasis added).  This clear textual distincti on between, on the one hand, the services listed in the 
sectoral column and, on the other hand, services that are "auxiliary" to them reinforces our view that 
auxiliary services cannot properly be considered to  be the same as the services described in the 
sectoral column under subsectors (a) to (f), or integral  components thereof.  As an additional matter, it 
is noteworthy that the second hyphen refers to servi ces which are "auxiliary" to all activities "listed in 
subparagraphs (a) through (k) " (emphasis added).  China's sect oral column concerning "banking 
services" lists only subsectors (a) through (f), not (a ) through (k).  If the second hyphen were intended 
to set out services that are "embedded" in their en tirety in services listed in the sectoral column with 
respect to subsectors (a) to (f), it would have referre d to "activities listed in subparagraphs (a) through 
(f)", for China has not listed any othe r subsectors under "[b]anking services".674   
7.524  Therefore, our analysis of the ordinary mean ing of the terms used to describe the services 
under the mode 1 entry at issue does not allow us to conclude that these services are "elements" of "all 
payment and money transmission services" in subsector  (d), as contended by the United States.  It 
suggests, to the contrary, that these services are sep arate and distinct from the services listed in the 
sectoral column with respect to subsectors (a) to (f).  To that extent, the text in the two hyphens is 
consistent with the view that th is entry refers to the full market access commitment on mode 1 for 
subsectors (k) and (l).675   
7.525  We turn now to an examination of relevant c ontextual elements, which include the remainder 
of China's Schedule and the Annex.  The first element we take note of is China's sectoral 
commitments under mode 4, which generally read "[u]nbound, except as indicated in horizontal 
commitments".  These inscriptions are found under both the market access and national treatment columns, and refer to the horizontal section of Ch ina's Schedule where the scope of China's mode 4 
commitments is defined.
676  Hence, these mode 4 entries tell us that, as a general matter, China's 
Schedule does contain cross-references to another part  of the same Schedule.  We recognize, however, 
                                                      
672 "Auxiliary" is defined, inter alia , as "[h]elpful; giving support or succour; […] Subsidiary, 
additional, ancillary; […]", Shorter Oxford English Dictionary , Vol, 1, p. 158. 
673 "Embed" (verb), is defined, inter alia , as "[p]lace or secure within something else, esp. within a 
larger or firmer entity; cause to be wholly contained within." Ibid . p. 816.   
674 While the reference to "subparagraphs (a) through (k)" may reflect an error, we must not lightly 
assume that this is the case.  Neither party has s uggested that the second hyphen contains an error. 
675 China's response to Panel question No. 50(a), para. 76. 
676 As noted above, the technique of cross-referencing mode 4 commitments is acknowledged in the 
2001 Scheduling Guidelines.  See fn. 669 above. WT/DS413/R 
Page 136 
 
 
 that the mode 1 entry at issue does not specifically refer to commitments undertaken under 
subsectors (k) and (l).677   
7.526  Continuing our contextual analysis, we note the United States' argument that the limitations 
inscribed in the market access and national treatment  columns "cannot change the scope of the sector 
description itself".678  Hence, according to the United States:  
China's mode 1 commitment must be understood as recognizing that 'payment and 
money transmission' services include aspects of 'provision and transfer of financial 
information' and 'advisory, intermediation an d other auxiliary services' to the extent 
that such aspects are integral  to the core service, and that such aspects are properly 
classified within 'payment and money transm ission' services and not in subsector (k) 
or (l).679 
7.527  The Panel observes that subsectors (k) and (l) in China's Schedule are relevant contextual 
elements for the interpretation of the mode 1 entry at  issue.  As noted above, the descriptions of these 
two subsectors are almost identical to the descrip tions of the services in the two hyphens.  Thus, 
although the United States submits that limitations  in the market access and national treatment 
columns cannot modify the scope of the sector descrip tion, it appears to us that the United States' 
proposed approach to interpreting the excepted la nguage in the mode 1 entry at issue would do 
precisely that.  By carving out elements of the ser vices listed in the two hyphens on the grounds that 
these elements are "aspects" of th e services described under subsector (d ), the United States' approach 
would correspondingly remove these same elements  from subsectors (k) and (l) which are committed 
in the sectoral column of China's Schedule. 
7.528  We now consider the United States' view that th ere are "elements" of the services listed in the 
two hyphens that are "embedded" in the "core"  "payment and money transmission services". In 
considering this argument, we determine first whet her it is possible to identify clearly, on the one 
hand, the "core" service and, on the other hand, the "elements" of, respectively, "provision and 
transfer of financial information" and "advisory , intermediation and other auxiliary services" that, 
according to the United States, are included in the "cor e" service under subsector (d).  We note that, in 
a response to a question by the Panel, the United States provided a chart illustrating, for each of the 
five components referred to in its panel request, the "aspects of EPS" which, according to the United 
States, are covered by the mode 1 market access commitment.680  In the United States' view, these 
"aspects" include such elements as the provision of the underlying physical network and wiring; fraud 
protection; authorization routing, authorizati on decision solutions, global clearing management, 
exception handling solutions, automated calculation of  the net financial position of a sender/receiver 
of financial transactions based on the desired cu rrency and settlement service option selected by each 
party; and, the creation and execution of the transf er order for each financia l institution participating 
in the value day payment activity.  Moreover, when asked by the Panel to indicate those services that 
would fall within subsector (d), but would fall outside  the mode 1 commitment, the United States 
cited the establishment of settlement accounts as "an example of an aspect of the service at the 'back 
end' of EPS processing … that falls outside China's mode 1 commitment".681  As evidenced by this 
response, the United States was able to provide on e example of what it considers to be a "core" 
                                                      
677 We note, however, that the services described in the second hyphen reference "activities listed in 
subparagraphs (a) through (k)". 
678 United States' response to Panel question No. 45, para. 118; second written submission para. 107. 
679 United States' response to Panel question No. 45, para. 118.  Therefore, according to the United 
States, the services in the two hyphens are "an integral part" of the provision of "payment and money 
transmission services", while subsectors (k) and (l) encomp ass services "that facilitate but are not integral to" 
the provision of "payment and money transmission services".  Ibid . paras. 118 and 119. 
680 United States' response to Panel question No. 46(a), para. 121.  
681 United States' response to Panel question No. 77, para. 43.  WT/DS413/R 
 Page 137 
 
 
 service that falls within subsector (d), but falls out side of the two services described under mode 1.  
This contrasts with its detailed description of the "e lements" of the two services that, according to the 
United States, are "embedded" in the "core" service. 
7.529  In the Panel's view, these responses by the United States reveal the difficulty entailed by the 
United States' approach.  It is rather counter-int uitive that, under the taxonomy provided by the United 
States, the "core" appears largely to coincide with the "embedded elements".  In other words, were we 
to accept the United States' position, subsector (d) w ould appear to be composed overwhelmingly of 
the services described in subsectors (k) and (l).682 Moreover, in the case of subsector (d), these 
services would be "integral to a core service", while , in the case of subsectors (k) and (l), the same 
services would be supplied "independently", as the United States put it.683  In our view, the result of 
the approach proposed by the United States is di fficult to reconcile with the Appellate Body's 
clarification that a specific service cannot fall within two different sectors or subsectors.684 
7.530  Furthermore, in response to a question from th e Panel, the United States submits that the 
GATS framework itself recognizes the interrelated na ture of financial services. According to the 
United States, this "interrelated nature" is illustra ted by the fact that the GATS Annex on Financial 
Services covers (i) services that are "auxiliary" to "the activities listed in subparagraphs (v) through 
(xv)" in subsector (xvi), as well as (ii) "provision and transfer of financial information" provided by suppliers of "other financial services" in subsector (xv).
685  In the United States' view, "whether an 
aspect of a service falls into one of these separate subsectors as an independent service or whether it 
falls into one of the other subsectors depends on how  central that aspect is to the provision of the 
service described".686   
7.531  We recall that the Annex is relevant context for the interpretation of China's Schedule and 
that subsectors (xv) and (xvi) of the Annex corr espond to, respectively, subsectors (k) and (l) in 
China's Schedule.  We agree that various financ ial services subsectors listed in the Annex may be 
"interrelated" in practice.  As we have said, the reading proposed by the United States is in our view 
difficult to reconcile with the principle that sectors and subsectors must be mutually exclusive.  In 
view of this principle, the fact that the financia l services described in subsectors (xv) and (xvi) of the 
Annex may be "interrelated" with other financial ser vices in the Annex does not mean that they can be 
properly classified as those other services.  By the same token, it may well be that the services in 
subsectors (k) and (l) in China's Schedule are "interrelated" with the services committed under 
subsectors (a) to (f).  However, this does not mean  that the services in subsectors (k) and (l) – or 
aspects thereof – are classifiable under subsectors (a) to (f).  Furthermore, the United States has not 
provided a principled basis for evaluating how "centr al" an aspect of a service is to the provision of a 
                                                      
682 We recall that the United States' panel request (WT/DS413/2) also referred to subsectors (k) and (l) 
of China's Schedule.  However, in the course of thes e proceedings, the United Stat es did not put forward any 
claims on the basis of commitm ents in these subsectors. 
683 As we explained above in Section VII.D, paragrap h 7.188, the mere fact that separate suppliers 
provide one particular component of an integrated service does not in itself imply that that component should be 
classified as a distinct service.  While in our view  a composite service may consist of component services 
supplied by one or more supplier(s), all these components belong to the "integrated" service and are classified as 
such.  To that extent, those same component services are not classifiable under other subsectors even when 
supplied "independently". 
684 The Appellate Body found that "[b]ecause a Member's obligations regarding a particular service 
depend on the specific commitments that it has made with respect to the sector or subsector within which that 
service falls, a specific service cannot  fall within two different sectors or Subsectors.  In other words, the sectors 
and subsectors in a Member's Schedule must be mutually exclusive ."  Appellate Body Report, US – Gambling , 
para. 180 (emphasis added). 
685 United States' response to Panel question No. 46(b), para. 128. 
686 Ibid. WT/DS413/R 
Page 138 
 
 
 particular service described in a schedule, nor has it explained what degree of centrality would 
warrant classifying that aspect as one or other service. 
7.532  The United States additionally refers to paragr aph 8 of the Understanding on Commitments in 
Financial Services in support of its view that a service may include elements of "provision and 
transfer of financial informati on, and financial data processing". 687  According to the United States, 
this provision means that "the provision and transf er of financial information and data processing is 
central to the supply of many different financ ial services, and, according to the Understanding, 
signatory WTO Members cannot frustrate their commit ments by, for example, blocking the ability to 
communicate and process information."688  We observe, first, that, as acknowledged by the United 
States, China is not a party to the Understanding.689  Hence, paragraph 8 of the Understanding is not 
applicable to China.  Second, we do not question that, in many, if not most cases, "transfers of 
information or the processing of financial inform ation, including transfers of data by electronic 
means" may be an important part in the provision of  financial services.  However, even if paragraph 8 
of the Understanding on Financial Services were rele vant to this dispute, we do not see how this 
provision could detract from our interpretation, whic h is based on the text of the entry in the first 
hyphen and which led us to the c onclusion that "suppliers of othe r financial services" supply services 
that are separate and distinct from the se rvices classifiable in subsectors (a)-(f). 
7.533  To sum up our analysis so far, we note that, unlike China's mode 4 commitments, the mode 1 
commitment at issue does not refer explicitly to another section of China's Schedule.  Our textual 
analysis led us to the view that the services descri bed in the two hyphens are distinct from the services 
listed in the sectoral column under subsector (a) thro ugh (f), and that they invol ve different suppliers.  
Therefore, the services referred to in the two hyphe ns cannot constitute "elements" of the services 
encompassed under subsector (d).  Furthermore, th e interpretation proposed by the United States is 
difficult to reconcile with the principle that a speci fic service must not fall within two different sectors 
or subsectors.     
7.534  Based on the preceding analysis, we consider that  the mode 1 entry at issue does not result in 
a market access commitment under mode 1 for "all payment and money transmission services".  In 
our assessment, China's mode 1 ma rket access entry concerning s ubsectors (a) to (f) should be 
understood instead as referencing China's mode 1 market access commitment for subsectors (k) and 
(l), which, as noted above, is fully bound.  To our minds, the meaning and effect of this entry is to 
indicate that, although there are no mode 1 commitments for subsectors (a) to (f), there are 
commitments under mode 1 for services falling within subsectors (k) and (l), which services are often 
provided in connection with services classified under s ubsectors (a) to (f).  In other words, it is our 
view that in this particular instance, the phrase "except for the following" has not been used to 
undertake a market access commitment under mode 1 for subsectors (a) to (f).  Rather, it serves to 
alert the reader to other relevant content in China's Schedule – in this case, the full mode 1 
commitment undertaken by China under subsectors (k) and (l) of its Schedule.   
7.535  Our interpretation of the mode 1 entry at issue must also be considered in the light of the 
object and purpose of the GATS and the WTO Agreem ent.  We identified the relevant object and 
purpose of the agreements in Section VII.D.2(c) a bove.  We consider that our conclusion that the 
                                                      
687 Paragraph 8 of the Understanding on Commitment in Financial Services stipulates: "No Member 
shall take measures that prevent transfers of informati on or the processing of financial information, including 
transfers of data by electronic mean s, or that, subject to importation rules consistent with international 
agreements, prevent transfers of equi pment, where such transfers of information, processing of financial 
information or transfers of equipment are necessary for the conduct of the ordinary business of a financial 
service supplier". 
688 United States response to Panel question No. 46(b), para. 131; and second written submission, 
paras. 114 and 115. 
689 Ibid.  WT/DS413/R 
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 entry at issue references China's market access entr y commitments for subsectors (k) and (l) is not 
inconsistent with the object and purpose of those tw o agreements.  In giving the words contained in 
the two hyphens the meaning they can be reasonably understood to bear in their context, our interpretation ensures security and pr edictability of specific commitments. 
7.536  From a strictly legal perspective, it may see m unusual to reference services classifiable under 
subsectors (k) and (l) in an entry that concerns s ubsectors (a) to (f).  However, as explained above, we 
do find it difficult to read the mode 1 entry at  issue as creating a market access commitment for 
subsector (d).  We consider that, on balance, our read ing is the better reading of this particular entry.  
As we have said, the services listed in the two hyphe ns are often supplied in connection with services 
listed under subsectors (a) to (f).  To that extent  and taking a broader perspective, it is not 
unreasonable to read in the words used in their contex t a desire on the part of the negotiators to clarify 
that, although China was not prepared to make  any mode 1 market access commitments for services 
classifiable under subsectors (a) to (f), it did make unqualified market access commitments for other 
relevant services.   
7.537  We consider that our interpretation of the mode 1 entry at issue pursuant to Article 31 of the 
Vienna Convention does not leave the meaning ambi guous or obscure, nor does it lead to a result 
which is manifestly absurd or unreasonable.  Acco rdingly, we do not find it necessary to resort to 
supplementary means of interpreta tion under Article 32 of the Vienna Convention.  We also note that 
the parties did not provide any evidence of the ne gotiating history that could help to confirm our 
interpretation of this entry.
690   
7.538  Based on the above considerations, we conc lude that China has no market access 
commitments under mode 1 with respect to th e services encompassed under subsector (d) of its 
Schedule. 
(b) Mode 3 commitments 
7.539  The Panel now examines what market acce ss commitments China has undertaken in 
subsector (d) and mode 3, and if so, whether th ese commitments apply to EPS suppliers of other WTO 
Members.  The Panel notes that China's Schedule c ontains a relevant entry in the column entitled 
"Limitations on market access".691 
7.540  The United States argues that under the mark et access commitments for mode 3, China 
scheduled certain limitations rega rding geographic coverage, potentia l clients, and licensing, all of 
which were to be eliminated within five years after China's accession, i. e. in December 2006.  
Therefore, since December 2006, China's Sche dule provides no market access limitations under 
mode 3 with respect to EPS.692 
7.541  China argues that its market access commitments for subsector (d) and mode 3 are limited to 
foreign financial institutions (FFIs) and did not expi re five years after China's accession.  As regards 
the heading "clients" in its mode 3 market access en try, China submits that no limitations expired in 
December 2006.  Rather, it is on that date that Ch ina's commitment became e ffective.  China argues 
that as of that date, FFIs were to "be permitted" to  provide relevant services "to all Chinese clients".  
China made no commitment to permit entities that ar e not FFIs to provide these services, at any point 
in time.  Referring to another heading in its mode 3 entry concerning "licen sing", China observes that 
its commitment to eliminate existing non-prudentia l measures was similarly limited to FFIs.  And 
with regard to the qualifications for engaging in local currency business that are also specified under 
                                                      
690 See notably China's response to Panel question No. 50(b), para. 79.  
691 For the text of the entry, see Annex G to this Report. 
692 United States' first written submission, para. 19. WT/DS413/R 
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 the heading "licensing", China intended that only FF Is meeting these qualifications would engage in 
local currency business.693  
7.542  China notes that the term "financial instituti ons" has been widely used by various WTO 
Members in their Schedules, without a definition of the term.694  China further points out that its 
mode 3 market access entry pervasively refers to FFI s, and that it does not refer to "financial service 
suppliers" or "foreign service suppliers".695  China submits that consistent with the principle of 
effective treaty interpretation, th is difference in terminology must be given effect.  According to 
China, the ordinary meaning of the term "FFIs"  is narrower than the term "financial service 
suppliers".  In China's view, financial institutions  are banks and other types of regulated financial 
institutions.  According to China, dictionary defin itions reflect that there are two essential attributes of 
a financial institution: (1) that it collects funds fro m the public (whether as deposits or investments), 
and (2) that it is subject to some  type of regulation or supervision.696  China observes that this general 
definition is consistent, inter alia , with the definition given to the term "foreign financial institutions" 
in its own domestic financial service regulations.697  China considers that in the particular context of 
China's Schedule, the term "FFIs" refers  to foreign banks and finance companies.698    
7.543  China additionally points out that limiting its commi tments to FFIs is consistent with the fact 
that the services classifiable under subsectors (a) to (f) are core banking and finance services provided 
by regulated financial institutions.  China adds that the United States' position on FFIs would have 
absurd consequences.  For example, it would mean that non-bank foreign service suppliers could enter 
the Chinese market and begin accepting deposits or ma king loans, while foreign banks – the types of 
entities that actually supply these services – would need  to establish a branch or subsidiary in China 
and engage in foreign currency business for thr ee years before obtaining a bank licence.  Also, non-
FFIs would then have had a right of market access since 2001, which is the date of China's accession 
to the WTO.  China observes that like other WTO Members, it plainly did not intend  entities that are 
not financial institutions subject to comprehensive supervision by their home countries to enter the 
Chinese market to provide these types of banking services.699     
7.544  China argues, lastly, that the United States faile d to demonstrate that EPS suppliers of other 
WTO Members are FFIs.  China contends that they are not FFIs under any understanding of the term and notes that they go out of their way to disavow any such status.
700  China considers that the United 
States has therefore failed to demonstrate that Ch ina's commitments are relevant to the services and 
service suppliers at issue.701  
7.545  The United States responds that China's mode 3 market access commitments are not limited 
to FFIs.  Although China includes certain limitations w ith regard to FFIs, this does not mean that its 
commitments are limited to FFIs.  It would have been necessary to impose such a limitation explicitly 
                                                      
693 China's first written submission, paras. 134-136. 
694 China provides relevant excerpts from the Schedules of Angola, Australia, Côte d'Ivoire, El 
Salvador, Guatemala, Honduras, Korea, Malta and Singapore in Exhibit CHN-85. 
695 China notes, however, that the te rm "foreign service supplier" appear s approximately thirty different 
times throughout China's Schedule.  China's response to Panel question No. 63, para. 116. 
696 China's first written submission, paras. 140-142; re sponse to Panel question Nos. 49, para. 71; 51, 
para. 80; and 52(a), para. 82. 
697 China refers to the Regulations of the People's Republic of China on Administration of Foreign-
Funded Banks of 2006, Exhibit CHN-45. 
698 China's response to Panel question No. 49, para. 72. 
699 China's first written submission, para. 143;  second written submission, paras. 71-73. 
700 China refers e.g. to MasterCard Worldwide Terms of Use and to Visa Gift Card Holiday Guide,  
Exhibit CHN-84.  See China's response  to Panel question No. 49, para. 72. 
701 China's first written submission, paras. 145 and 1 46; response to Panel question Nos. 49, para. 72; 
and 53, para. 95.  WT/DS413/R 
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 by prefacing the commitments with language like "unbound except" or "the service may only be 
supplied by ...".  The United States argues that the only limitations China may impose are prudential 
authorization criteria and the now defunct restri ctions on geographic sc ope and use of domestic 
currency as well as on-going requirements applicable to banks.  Nothing in China's Schedule supports 
the view that China may condition the supply of a service on the aforementioned criteria and 
restrictions listed in the market access column and in addition require that another Member's service 
supplier meet unspecified criteria to be  recognized as a "financial institution".702 
7.546  The United States further argues that even if China's commitments were somehow limited to 
FFIs, the definition of that term offered by Chin a is much too narrow.  The United States notes that 
many dictionary definitions of the term "financi al institutions" are much broader.  In the United 
States' view, EPS suppliers of other WTO Me mbers would qualify as financial institutions.703  The 
United States also points out that in 2002 CUP was re ferred to by the PBOC as a joint-stock "financial 
institution" that provides an inter-bank bank car d information switching network and associated 
specialized services.704  The United States further notes that  a CUP executive during a press event 
similarly referred to CUP as a "financial institu tion for offering cross-bank information exchange 
network and specialized services for bankcards".705   
7.547  Australia submits that, although China included certain limitations with respect to foreign 
financial institutions, this does not mean that its  commitments are limited to foreign financial 
institutions.  If this were the case, China woul d have included the word s "unbound except", or 
"otherwise unbound" in its Schedule, as it has with respect to mode 1.  According to Australia, a Member wishing to limit the service suppliers that are permitted to provide a particular service must 
explicitly inscribe such a limitation in its schedule.
706  The European Union argues that there is no 
"chapeau " along the lines of "unbound except for the fo llowing" preceding the limitations listed under 
subsector (d), mode 3 in China's Schedule.  This is different from the text preceding the limitations on 
market access for modes 1 and 4, which clearly state "Unbound except …".  In the European Union's 
view, therefore, anything that is not explicitly in cluded in the scheduled limitation (which has already 
run its course), would fall under China's commitment to provide market access.707  Japan submits that 
the absence of any "Unbound except …" or similar language with respect to  the market access and 
national treatment commitments under mode 3 strongly indicates that China's commitments are not 
limited to "financial institutions".708 
7.548  The Panel notes that both parties agree th at China has market access commitments in 
subsector (d) and mode 3 that apply to FFIs.  The parties disagree, however, on whether these 
commitments are limited to FFIs and on whether EPS suppliers are FFIs.  As it is common ground 
(and we agree with the parties on this) that Chin a has commitments that apply to FFIs, we first 
determine whether, for the purposes of China's co mmitments concerning subsector (d) and mode 3, 
EPS suppliers of other WTO Members are FFIs.  The firs t point to be noted is that the term "FFIs" is 
not defined in China's Schedule.  Nor is it define d in the GATS or any of its annexes.  However, 
section C of the relevant mode 3 market access entry in China's Schedule makes it clear, in our view, 
that the term includes, at a minimum, foreign ba nks and foreign finance companies.  Section C is 
entitled "Licensing" and specifies that FFIs that me et certain conditions "are permitted to establish a 
subsidiary of a foreign bank or a foreign finance co mpany in China".  This implies that foreign banks 
                                                      
702 United States' second written submission, paras. 116 and 121-123. 
703 United States' second written submission, paras. 117 and 124. 
704 Paragraph 2 of the Reply of PBOC on the Opening of CUP, Exhibit US-27. 
705 "China Unionpay Executive Met the Press", Answer to Question 5 of 26 March 2002, 
Exhibit US-101. 
706 Australia's third-party submission, para. 24-25; third-party statement, para. 10. 
707 European Union's third-party submission, para. 36. 
708 Japan's third-party statement, para. 9; response to Panel question No. 23(b), para. 4. WT/DS413/R 
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 and finance companies are considered FFIs for the purposes of China's Schedule.  If a foreign finance 
company were not an FFI, it could not "establish a subsidiary of ... a foreign finance company in 
China".  Finance companies are de fined as "non-bank financial instituti on[s] that provide[] credit to 
customers that are either purchasing or leasing a product".709  We thus deduce from the relevant 
mode 3 entry itself that, for purposes of China's Sc hedule, FFIs include at least foreign banks and 
foreign finance companies.  We also understand th at the latter are a type of non-bank financial 
institution.   
7.549  To determine whether EPS suppliers of othe r WTO Members constitute non-bank FFIs, we 
must first ascertain the ordinary meaning of the te rm "FFIs".  We note that the parties have submitted 
several dictionary definitions of the term "financial institutions".  It emerges from these materials that 
the term "institutions" refers to organizations, companies or other entities.710  The definitions provided 
to us also confirm that banks and fina nce companies are financial institutions.711  We further observe 
that some of the definitions before us are quite  narrowly drawn, e.g. one dictionary describes a 
financial institution as any organization "… that collects funds ... and invests these funds or lends 
them on to borrowers".712  Other dictionaries or reference sources define the covered activities more 
broadly and suggest that the term is not limited to  banks and finance companies.  Specifically, these 
sources state that a financial institution is (a) "[a] n organization whose core activity is to provide 
financial services or advice in relation to financial products"713; (b) "[a] firm that handles financial 
transactions or gives financial advice" or "[ a]n establishment responsible for … facilitating 
transmission of funds"714; or (c) "[a] business organization[] that offer[s] a broad base of financial 
services or specialize[s] in specific functions, pr oducts or services, e.g., commercial banks, … and 
others that deal in money or equivalents".715   
7.550  We find that  some of the above-quoted dictiona ry definitions are sufficiently broad to capture 
EPS suppliers.  Indeed, looking at these particular de finitions, we consider that EPS suppliers can be 
reasonably described as (a) organizations whose core activity is to provide specific financial services; 
(b) establishments that handle financial transactio ns and facilitate the transmission of funds; or 
(c) business organizations that specialize in specifi c financial service functions or financial services, 
or that deal in money equivalents (electronic retail payment instruments).  
7.551  As always, the ordinary meaning to be given to a treaty term must fit the specific context 
within which that term appears.  We recall in this re spect that the term "FFIs" appears in an entry that 
relates to China's commitments concerning certain  financial services, specifically those classified 
under subsectors (a) to (f).  This fact, together with the aforementioned dictionary definitions, 
                                                      
709 The Palgrave Macmillan Dictionary of Finance, Investment and Banking , Exhibit CHN-88, p.206.  
This dictionary also states that finance companies "generate[] revenues based on the differential between [their] 
own rate of borrowing and the rate at which [they] lend to customers".  China further explains that the principal 
difference between a bank and a finance company is that a bank has a licence to borrow money in the form of 
demand deposits and other repayable funds from the public, while a finance company borrows money from 
other sources.  China's response to Panel question No. 53, fn. 58. 
710 E.g. Oxford Dictionary of Finance and Banking, Exhibit US-76; Webster's New World, Finance and 
Investment Dictionary, Exhibit CHN-90; Black's Law Dictionary, 9th Edition, (West Publishing 2010) (Black's 
Law Dictionary), Exhibit CHN-91.   
711 E.g. A Dictionary of Finance , Exhibit CHN-48, which refers to banks and finance houses.  A 
"finance company" is defined as "a non-bank financial institution […]", The Palgrave Macmillan Dictionary of 
Finance, Investment and Banking , Exhibit CHN-88.   
712 A Dictionary of Finance , Exhibit CHN-48.  Similar definitions are provided in Barron's Dictionary 
of Finance and Investment Terms, Exhibit CHN-49; and Webster's Finance and Investment Dictionary, 
Exhibit CHN-90. 
713 Oxford Dictionary of Finance and Banking, Exhibit US-76. 
714 Banking Terminology , Exhibit US-113. 
715 The Dictionary of Banking, Exhibit US-114.  WT/DS413/R 
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 suggests to us that in the specific context of Chin a's Schedule, "FFIs" are any foreign organizations, 
companies or other business entities that provide fi nancial services classified under subsectors (a) to 
(f).   
7.552  China argues that financial institutions are,  in addition, regulated, or supervised, 
organizations.716  In support of this assertion, China s ubmitted a dictionary definition and legal 
definitions contained in certain free trade agreements  to which the United States is a party, e.g. the 
North American Free Trade Agreement (NAFTA).717  Regarding the definitions provided in free trade 
agreements, we note that they are not applicable to  all WTO Members or even the two parties to the 
present dispute.  Moreover, they are definitions that were agreed on by the parties to that agreement.  
The parties' agreement need not necessarily accord w ith the ordinary meaning of the term "financial 
institutions".  As concerns the dictionary definition718, we note that other definitions provided to us do 
not suggest that financial institutions are by defin ition regulated organizations.  We do not dispute that 
financial institutions are commonly subject to so me domestic regulation or supervision.  We 
understand that the extent to which this is the case varies depending on the country and the type of 
financial institution and may even vary over time for a given country and type of financial institution.  
In our view, the existence, nature and extent of any regulation and supervision reflect policy choices, 
and we do not consider that regul ation or supervision is a defi ning characteristic of financial 
institutions.  We are therefore unable to  accept China's argument on this point. 
7.553  Other evidence placed on the reco rd includes US and Chinese domestic legal documents.  The 
United States submitted a law of the United States, Section 5312(a)(2)(L) of the United States' Code.
719  That section, which relates to reporting re quirements on monetary transactions, bank secrecy 
and money laundering, provides a legal definition of  the term "financial institution".  Among the 
entities listed is "an operator of a credit card system ".  Thus, Section 5312(a)(2)(L) characterizes EPS 
suppliers that process credit card transactions as "f inancial institutions".  China has pointed out, 
however, that another United States law, the Hiri ng Incentives to Restore Employment Act, defines 
"financial institutions" more narrowly as includi ng essentially all entities accepting deposits, holding 
financial assets for the account of others or enga ged in the business of investing or trading in 
securities.720 
7.554  China also refers the Panel to documents  issued by the China Banking Regulatory 
Commission (CBRC) in 2003, i.e. af ter China's accession to the WTO.721  The documents indicate 
that CBRC rescinded the "financial institution" licen ce that had been issued to CUP when it was 
                                                      
716 China's first written submission, para. 140. 
717 The Palgrave Macmillan Dictionary of Finance, Investment and Banking , Exhibit CHN-46.  The 
free trade agreements cited by China are: the North American Free Trad e Agreement, Exhibit CHN-50; the 
United States – Australia Free Trade Agreement, Exhi bit CHN-51; and the Korea – United States Free Trade 
Agreement, Exhibit CHN-52.  According to China, a standa rd definition of "financial institution" found in these 
agreements is a "financial intermediary or other enterpri se that is authorized to do business and regulated or 
supervised as a financial institution under the law of the Party in whose territory it is located".  China's first 
written submission, fn 82. 
718 The Palgrave Macmillan Dictionary of Finance, Investment and Banking , Exhibit CHN-46, defines 
"financial institution" as "[a] regulated organization that  provides a range of banking and investment services" 
(Exhibit CHN-46, p. 207). 
719 31 U.S.C. 5312(a)(2)(L), Exhibit US-102. 
720 United States Hiring Incentives to Restore Employment Act, H.R. 2847, 111th Congress §1471 
(2010), Exhibit CHN-94. 
721 Transfer of Regulatory Function with Respect to China UnionPay (2003), Exhibit CHN-97, and 
Notice regarding relevant issues on the transfer of th e regulatory responsibilities of China UnionPay Co., Ltd. 
(2003), Exhibit CHN-97. WT/DS413/R 
Page 144 
 
 
 established in 2002.722  The regulatory responsibility over CUP was to be transferred in December 
2003 from the "non-bank financial institution regula tory department" of CBRC to PBOC.  The reason 
provided for this transfer of regulatory functions was that th e business scope of CUP "does not 
include financial services" and that it "t herefore is not a fi nancial institution".723  We note as an initial 
matter that these documents concern CUP, not EPS suppliers of other WTO Members.724  
Furthermore, they suggest that CUP was considered, and authorized as, a non-bank financial 
institution before its financial ins titution licence was revoked in 2003.  Fi nally, we recall that the basis 
for rescinding CUP's licence as a financial institutio n was the CBRC's view that CUP did not provide 
the specific financial services that are regulated a nd supervised by the CBRC, i.e. China's banking 
regulator.725   
7.555  China further draws the Panel's attention to its Regulations on Administration of Foreign-
Funded Banks which define a "foreign financial institution" as "a financia l institution that is registered 
outside the People's Republic of China and ap proved or licensed by the financial regulatory 
authorities of the country or region where it originated".726  This definition is provided for the 
purposes of these particular Regulations, and the Regula tions talk about FFIs in the specific context of 
establishment of foreign-funded banks.727   
7.556  In considering the above-men tioned United States and Chinese legal documents, we observe 
that they emanate from, and reflect the particular  objectives and needs of, the domestic legal systems 
of the United States and China.  It is therefore im portant to be cautious when interpreting the treaty 
term "FFIs" that we do not attribute undue we ight to these documents for the purposes of our 
interpretative task.  In particular, as regards the legal definitions provi ded in some of these documents, 
we consider that it would be inappropriate to dr aw, from these context-specific definitions, general 
conclusions as to the meaning and scope of the term "FFIs" as it appears in China's Schedule.  At any 
rate, these various documents do not suggest to us th at there is anything inherently questionable about 
conceiving of EPS suppliers as non-ba nk financial institutions.   
7.557  Evidence submitted by the parties shows that cer tain EPS suppliers – specifically those that 
have adopted a four-party business model – re fer to their clients as financial institutions.728  This is not 
surprising, as issuers and acquirers are often banks.  In contrast, these EPS suppliers do not appear to 
refer to themselves as financial institutions.729  We have said above that industry sources may 
                                                      
722 Regarding the "financial institution" licence from 2002, we note paragraph 2 of the Reply of PBOC 
on the Opening of CUP, Exhibit US-27.  It provides that "China UnionPay Co., Ltd. is a joint-stock financial 
institution that provides an inter-bank bankcard information switching network and specialized services in 
connection therewith". 
723 It remains unclear on what definition of "financial services" the CBRC based this assessment. 
724 Nonetheless, as we have explained above in Section VII.E of this Report, CUP in our view is an 
EPS supplier.  
725 We understand that CUP is now subject to the supervision and regulation of another financial 
agency, the PBOC.  We also recall that we have found a bove in Section VII.D that, fo r the purposes of China's 
GATS Schedule, the services provided by EPS suppliers are financial services and are properly classified under 
subsector (d) of that Schedule.   
726 Article 3 of the Regulations of the People's Repu blic of China on Administration of Foreign-Funded 
Banks, Exhibit CHN-45. 
727  See Article 2 of the Regulations of the Peopl e's Republic of China on Administration of Foreign-
Funded Banks.  Article 3, which sets out the definition,  opens with the phrase: "A foreign financial institution 
referred to in these Regulations shall mean …".  Also , Article 3 provides exactly the same definition for 
"foreign banks", except that it defines these as commercial banks rather than financial institutions. 
728 See, e.g. Visa 2008 IPO Prospectus, Exhibit US-3, pp. 128-129; MasterCard 2010 Annual Report, 
Exhibit US-6, p. 4; MasterCard Worldwide Terms of Use and Visa Gift Card Holiday Guide, Exhibit CHN-84.  
729 China has submitted print-outs from the websites of two EPS suppliers of the United States that 
have adopted the four-party model (Exhibit CHN-84).  In these print-outs, the EPS suppliers state that they are  WT/DS413/R 
 Page 145 
 
 
 sometimes shed useful light on the ordinary meaning of terms.730  In this instance, we do not consider 
that much weight can be attributed to the EPS industr y's usage of the term "financial institutions".  We 
would not find it unusual if companies in a given i ndustry did not claim to be subject to what often 
amounts to burdensome regulation as financial ins titutions, unless it is important for business reasons 
to be considered a financial institution (as in the case of banks, for instance).  Moreover, what 
ultimately matters are the views of regulators.  Hence, it was open to the drafters of China's Schedule 
to bring EPS suppliers of other WTO Members within the ambit of the Schedule term "FFIs" even if 
EPS suppliers did not refer to themselves as financial institutions.  For these reasons, we consider that 
the EPS industry's usage of the term "financial institutions" does not demonstrate that, despite the 
broad ordinary meaning of the term "FFIs", EPS suppliers of other WTO Members are not FFIs for 
the purposes of China's mode 3 entry.   
7.558  At the end of our analysis of the ordinary meaning of the term "FFIs", we thus remain of the 
view that the term "FFIs" as it appears in Chin a's Schedule is reasonably susceptible of meaning any 
foreign institutions that provide financial services classifiable under subsectors (a) to (f).  This would 
notably include EPS suppliers of other WTO Members.   But our analysis so far has shown that the 
term "FFIs" likewise bears the narrower meaning ar gued for by China, according to which the term 
covers only foreign banks and finance companies providing these services.   
7.559  We therefore need to examine further and in  more detail whether the relevant context 
confirms or puts in doubt either of the above-noted  ordinary meanings.  We begin this task by noting 
that the relevant mode 3 entry lists  temporary or permanent (i) geographic restrictions (section A), (ii) 
client limitations on local currency business (sec tion B), and (iii) licensing requirements, including 
general authorization criteria731 and qualifications for en gaging in local currency business (section C).  
These elements are applicable to all FFIs.  We perceive no basis to conclude that it would be 
unreasonable to impose these limitations on EPS suppliers of other WTO Members.   
7.560  Additionally, we note that the licensing requirements in section C include minimum asset 
requirements.  They apply to FFIs wishing to establis h "a subsidiary of a foreign bank or a foreign 
finance company in China", "a branch of a foreign bank in China" or "a Chinese-foreign joint bank or 
a Chinese-foreign joint finance comp any in China".  Or, to put it differently, these requirements apply 
to foreign banks or finance companies that wish to establish in China in one of  the specified forms of 
commercial presence.732  As noted above, these requirements confirm that foreign banks and finance 
companies are FFIs.  But if the term "FFIs" encomp assed solely foreign banks and finance companies, 
it would have been simpler and more natural, in our view, for section C to refer to FFIs wishing to 
establish a "subsidiary in China" rather than "a su bsidiary of a foreign bank or a foreign finance 
company in China", and to "a Ch inese-foreign joint venture enterp rise in China" rather than "a 
Chinese-foreign joint bank or a Chinese-foreign joint finance company in China".  Conversely, if the 
term "FFIs" included, but was not limited to, fo reign banks and finance companies, it would have 
been necessary to specify to which type of FFI th e relevant asset requirements applied.  For this 
reason, we consider, first, that the asset requireme nts support the view that foreign banks and finance 
companies are not the only institutions covered by the term "FFIs".  Secondly, and contrary to China's 
contention, the asset requirements do not indicate, in  our view, that only fo reign banks and finance 
                                                                                                                                                                     
not financial institutions and do not issue payment cards.  China further provided a submission by one of these 
suppliers to Canada's Competition Tribunal in which a si milar statement is made (Exhibit CHN-84, para. 11).   
730 See para. 7.89 above. 
731 Among these are prudential author ization criteria.  China has stated that the term "prudential 
regulation" is generally understood to relate only to the regulation of deposit-taking financial institutions (e.g. to 
capital adequacy requirements).  China's response to Panel question No. 55, para. 100.  
732 It appears to us that in order to establish a subsidiary "of a foreign bank", for instance, the FFI must 
be a foreign bank.    WT/DS413/R 
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 companies may establish a commercial presence in Ch ina to provide the services under subsectors (a) 
to (f).733 
7.561  It should also be recalled that China's mode 3 market access entry relates to services that 
appear under the subheading "Banking services...".  As  we have determined in Section VII.D above 
that subsector (d) covers EPS, the subheading "Banking services" in our view does not support 
China's contention that the term "FFIs" covers foreign banks and finan ce companies, but not EPS 
suppliers of other WTO Members.    
7.562  We also note that China's Schedule under "Ba nking and Other Financial Services" contains a 
separate subsectoral description which reads "mot or vehicle financing by non-bank financial 
institutions".  The parties agree that the non-bank fi nancial institutions referred to in this description 
cover finance companies and/or other t ypes of non-bank financial institutions.734  China has explained 
that scheduling this commitment separately ensured th at non-bank financial institutions would be able 
to provide motor vehicle financing immediatel y upon China's accession to the WTO in December 
2001, without the limitations on market ac cess inscribed for subsectors (a) to (f).735  In our view, 
China's explanation concerning the separate commitme nt relating to motor vehicle financing by non-
bank financial institutions is consis tent with the view that FFIs incl ude non-bank financial institutions.  
China's explanation would appear to imply that if China had wished to subject motor vehicle 
financing by non-bank financial institutions to the li mitations inscribed for subsectors (a) to (f), China 
would have classified it under "Banking services" (subsect ors (a) to (f)).  We recall in this respect that 
China's mode 3 commitments concerning sub sectors (a) to (f) apply to FFIs.     
7.563  We further find relevant China's mode 3 mark et access entry concerning subsectors (k) and 
(l).  This entry is also part of the commitments concerning "Banking and Other Financial Services".  It 
specifies that "[b]ranches of foreign institutions are permitted".  While this entry refers to "foreign 
institutions", thus omitting the word "financial", we attach no particular significance to this omission 
as the entry relates to subsectors listed under the heading "other financial services".  We recognize 
that some of the services falling within subsectors (k ) and (l) are provided by e.g. banks – such as 
advice on acquisitions and on corporate restructuri ng.  But we do not consider that the services 
described in subsectors (k) and (l) are exclusively provided by banks and/or finance companies.  For 
instance, the United States has noted that subsector  (k) includes such information services supplied by 
financial news providers li ke Reuters and Bloomberg.736  Similarly, subsector (l) includes the services 
provided by what are known as credit rating agencies.737   
7.564  Also worthy of note are China's financial ser vices commitments in the subsectors concerning 
insurance and securities services.  The relevant en tries use the terms "foreign insurance institutions" 
and "foreign securities institutions", respectively.  Accordingly, the referen ce to foreign "institutions" 
is not unique to China's commitments in the sub sector concerning banking services.  China's Schedule 
does not provide much guidance as to the meaning and coverage of the term "foreign securities 
institutions".  In contrast, it is clear from the Sche dule that the term "foreign insurance institutions" is 
used broadly to cover not just foreign life an d non-life insurers, but also insurance brokers.738  
Moreover, whereas outside the context of China's Sc hedule the term "financial institutions" is often 
                                                      
733 China's response to Panel question Nos. 52(a), para. 87, and 80, para. 16.  
734 United States' response to Panel question No. 84(a), para. 59; China's response to Panel question 
No. 84(a), para. 32.       
735 China's response to Panel question No. 84(b), para. 33.  
736 United States' response to Panel question No. 45, para. 119.  Subsector (k) refers inter alia  to 
"[p]rovision and transfer of financial information". 
737 Subsector (l) refers inter alia  to "credit reference and analysis, investment and portfolio research 
and advice". 
738 See notably section D of China's mode 3 market  access entry concerning insurance and insurance-
related services.  WT/DS413/R 
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 used to refer narrowly to banks and finance companie s (as some of the dictionary meanings indicate), 
the terms "insurance institutions" and "securities institutions" to our know ledge are less commonly 
encountered.  They do not suggest a narrow meaning.739  To us, the use of parallel terms – financial 
institutions, insurance institutions and securities in stitutions, respectively – in China's financial 
services commitments provides further support for the view that the word "institution" may be 
understood to refer notably to compan ies that provide the relevant services.740  We note that the EPS 
suppliers of other WTO Members to which the pa rties have referred in these proceedings are all 
companies.   
7.565  Finally, China refers the Panel to the GATS Schedules of eight other WTO Members.741  As 
they are all integral parts of the GATS, they also fo rm part of the relevant context.  The excerpts from 
other WTO Members' Schedules that China has provided to us use the term "foreign financial institutions" or "financial institutions", and do not o ffer a formal definition of either term.  Several 
Schedules provide confirmation that  banks and finance companies w ould be considered financial 
institutions for the purposes of these Schedules.  We  note, though, that the excerpts provided do not 
specifically indicate that EPS suppliers are financial institutions, or that they are not.
742  In the light of 
this, we do not find these other Schedules to be par ticularly instructive.  As we have explained, the 
term "FFIs" in our view can refer to a variety of  foreign institutions, including, but not limited to, 
banks and finance companies.  Therefore, the fact that in some WTO Members' Schedules this term 
might possibly have been used in a narrower sense do es not demonstrate that it would be improper, in 
the context of China's Schedule, to give it the me aning its words are capable of bearing.  As the 
Appellate Body has observed, each Schedule has "its own intrinsic logic" and must be interpreted on 
its own merits.743 
7.566  To sum up, the preceding contextual considerati ons either support or do not contradict the 
view that the term "FFIs" covers any foreign ins titutions that provide financial services classifiable 
under subsectors (a) to (f).  Thus, on the basis of the ordinary meaning of the term "FFIs" read in the 
specific context provided by China's Schedule, we se e no reason to construe that term in such a way 
that it would exclude EPS suppliers of other WTO Members.  
                                                      
739 We note that while e.g. the above-mentioned Oxford Dictionary of Finance and Banking , 
Exhibit US-76, and the Barron's Dictionary of Finance and Investment Terms , Exhibit CHN-49, contain an 
entry for "financial institution", they do not contain entries for either "insurance institution" or "securities 
institution".   
740 It is pertinent to note that section D of China's mode 3 market access commitments concerning 
insurance services specifically states that the qualifica tions for establishing a "foreign insurance institution" 
include the requirement that the investor be a foreig n insurance company with 30  years of establishment 
experience in a WTO Member.  Thus, this particular entry appears to indicate that only companies can be 
foreign insurance institutions.  We further note that one of the dictionaries that has been referred to by China has 
an entry concerning "insurance company" th at says "[s]ee insurer".  The word "i nsurer" is in turn defined as "[a] 
regulated institution that accepts the risks of insureds or cedants through the insu rance mechanism …".  See The 
Palgrave Macmillan Dictionary of Finance, Investment and Banking , pp. 272-273.    
741 "Use of the term 'financial institution" in other WTO Members' Schedules" (Exhibit CHN-85).  The 
eight WTO Members are: Angola, Australia, Côte d'Ivoi re, Honduras, Korea, Malta, Singapore and Venezuela. 
742 In contrast, Brazil's Schedule, which was not provided to us by China, contains the following 
definition: "Financial institutions subject to this commitment are classified as commercial bank, investment 
bank, consumer finance company, financial leasing company, brokers and dealers".  See the horizontal note on 
financial services of Brazil's Schedule (GATS/SC/13).  Th is definition appears to imply that EPS suppliers are 
not financial institutions for the purposes of Brazil's Sche dule.  We note, however, that unlike Brazil, China has 
not included a definition of the term "FFIs" in its Schedu le.  China itself has stated that in the absence of an 
explicit definition in its Schedule, treaty terms must be  interpreted in accordance with customary rules of 
interpretation of public international law.  China' s response to Panel question No. 54, para. 97.    
743 Appellate Body Report, US – Gambling , para. 182.  WT/DS413/R 
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 7.567  The result of our interpretative analysis so far n eeds to be considered al so in the light of the 
object and purpose of the GATS and the WTO Agreement .  We have previously identified relevant 
objects and purposes of these two agreements.744  With specific reference to the term "FFIs", we do 
not consider that interpreting that term so as to  include EPS suppliers of other WTO Members would 
be at variance with the object and purpose of either the GATS or the WTO Agreement .  In our view, 
the purpose of ensuring the security and predictab ility of commitments is served by giving the words 
used in China's Schedule the meaning that they ar e fairly capable of bearing in their context. 
7.568  As an additional matter, we note that China h as adverted to the importance of avoiding any 
interpretation of its mode 3 market access entry that would produce what it considers unreasonable 
results.  Essentially, China submits that any interp retation of the entry in question must take full 
account of the fact that China was allowed to maintain geographic, client and non-prudential 
limitations for the first five years after its accession to  the WTO, and that it is still allowed to impose 
prudential authorization criteria and qualificati ons requirements for engaging in local currency 
business.  Under our interpretation of the term "FFIs", foreign non- bank financial in stitutions other 
than finance companies were, and are, subject to the same limitations as foreign banks and finance 
companies (which China accepts are FFIs).  Our in terpretation therefore steers clear of a result 
whereby, e.g. for the first five years, non-bank financial institutions other than finance companies 
could enter China's market without being subjected  to the aforementioned limitations, while foreign 
banks and finance companies would have faced these limitations.  
7.569  China further appears to suggest that any interp retation of the term "FFIs" that would cover 
institutions other than foreign banks and finance companies would mean that non-bank foreign service 
suppliers with little industry experience could en ter the Chinese market and begin accepting deposits 
or making loans.  That is not the case, however.  As indicated above, in accordance with section C of 
China's mode 3 market access entry, China may impose prudential authorization criteria.  
Additionally, as confirmed by the preamble to the GATS, China retains the right to regulate, and to 
introduce new regulations on the supply of services to meet domestic policy objectives.  Articles VI:1 
and VI:5 of the GATS further confirm that even in sectors in which a WTO Member has undertaken 
specific commitments, that WTO Member may, subj ect to certain disciplines, apply measures of 
general application affecting trade in services,  including e.g. non-di scriminatory licensing, 
qualification and technical requirements.  Finally , paragraph 2(a) of the GATS Annex on Financial 
Services provides that, notwithstanding any other pr ovisions of the GATS, a WTO Member may take 
measures for prudential reasons, including for the prot ection of e.g. investors and depositors, or to 
ensure the integrity and stability of the financial system.        
7.570  For all these reasons, we conclude that the term  "FFIs" as it appears in China's commitments 
concerning banking services covers foreign companies that supply financial services classifiable 
under subsectors (a) to (f).745  Accordingly, it is our view th at, as used in China's relevant 
commitments, the term "FFIs" covers foreign banks, foreign finance companies, as well as other foreign non-bank financial institu tions, including EPS suppliers.  
7.571  Having found that EPS suppliers of other Me mbers are FFIs for the purposes of China's 
market access commitments, there is no need to  go on to determine whether China has any market 
access commitments in subsector (d) and mode 3 th at would apply to any foreign service suppliers 
that are not FFIs. We thus proceed to examine Ch ina's current market access commitments in respect 
of FFIs that provide their services through mode 3.      
                                                      
744 See paras. 7.196-7.197 above.  
745 It is not necessary in this dis pute to determine whether, for the purposes of China's Schedule, the 
term "FFIs" covers only companies, or whether they also include other organizations and entities.  WT/DS413/R 
 Page 149 
 
 
 7.572  We note that the claims put forward by the United States in the present dispute concern the 
provision of EPS for domestic RMB payment card transactions in China.746  Consequently, it would 
appear that for purposes of China's mode 3 entry,  the relevant business in which EPS suppliers of 
other WTO Members would engage in China is local currency (RMB) business.747  China's mode 3 
entry expressly states that for local currency business, and after expiry of the phase-out period of five 
years, FFIs – which in our view include EPS suppliers of other WTO Members – may provide their 
services to all Chinese enterprises and natural pe rsons, without being subject to geographic 
restrictions or non-prudential authorization criteria restricting their ownership, operation or juridical 
form.748 The enterprises and natural persons that EPS s uppliers serve are issuers, acquirers, merchants 
and private or corporate card holders.749   
7.573  Significantly, China's mode 3 entry does not set out any limitations on the number of service 
suppliers in the form of a monopoly or exclusive service suppliers.750  The entry nonetheless specifies 
that China's market access commitment is subject to  a limitation concerning qualifications for FFIs to 
engage in local currency business.751  Pursuant to the limitation in question, prior to applying for 
authorization to engage in local currency busin ess, FFIs must have three years of business operation 
in China and be profitable for two consecutive years.   In other words, as also pointed out by China752, 
FFIs must engage in foreign currency business thr ough commercial presence in China before they can 
apply for authorization to conduct local currency business.  
7.574  It should be added that, as a general matter,  China's Schedule might possibly set out 
additional relevant limitations on market access in th e section that concerns horizontal commitments.  
Neither party argues that this is the case, howev er.  Having reviewed these horizontal commitments, 
we consider that they do not modify the result we  have reached on the basis of the mode 3 entry in 
question.  
7.575  Accordingly, we come to the conclusion th at in respect of services classified under 
subsector (d) and provided by FFIs – which we c onsider include EPS provided by EPS suppliers of 
other WTO Members – China has made a commitment on market access concerning mode 3.  That 
commitment is not subject to any limitations on the nu mber of service suppliers.  But it is subject to a 
limitation with regard to the qualifications that FFI s must meet to be permitted to engage in local 
                                                      
746 The United States alleges, for instance, that Ch ina refuses to allow EPS suppliers of other WTO 
Members "to process payment card tran sactions in China denominated and paid in China's domestic currency, 
Renmimbi ('RMB')". United States' first written submission, para. 3. 
747 The Panel asked the United States whether its Artic le XVI claims that are based on China's mode 3 
market access entry related to foreign or local currency business.  The Un ited States did not provide a direct 
answer to the question.  It pointed out that whether the purchase is RMB-denominated or whether the payment   
card is RMB-denominated, a payment car d transaction would, in its view, be processed by CUP when the card 
is issued and used in China.  United States' response to Panel question No. 65, para. 168.  China, for its part, 
understands the United States to be claiming a right of  market access to engage in local currency business.  
China states that although the United States in its vi ew avoided answering Panel question No. 65, the subject 
matter of this dispute is what the United States calls "domestic transactions denominated and paid in RMB", 
which China understands to be part of local currency business.  China's second written submission, para. 69. 
748 See sections A, B and C of the relevant mode 3 market access entry.  We also note that China's 
mode 3 national treatment entry further specifies that with  the expiry of the phase-ou t period of five years, 
China may no longer maintain any limitations on national treat ment in respect of FFIs.  As stated in the relevant 
entry, FFIs may do business, without restrictions or need for case-by-case approval, with foreign invested 
enterprises or non-Chinese natural pers ons, or with Chinese clients.   
749 The enterprises or persons with which EPS supp liers do business vary according to the type of 
network EPS suppliers use (four-party vs. three-party model). 
750 We do not understand the parties to argue otherwis e.  E.g. United States' second written submission, 
para. 116; China's first written submission, paras. 133-139. 
751 See section C of the relevant mode 3 market access entry. 
752 China's response to Panel question No. 52(a), para. 86.  WT/DS413/R 
Page 150 
 
 
 currency (RMB) business.  As a consequence, China is obligated to give EPS suppliers of other WTO 
Members access to its market, through commercial presence, so that they may engage in local 
currency business in China, subj ect to such suppliers meeting the aforementioned qualifications 
requirement.      
2. Whether the measures at issue are inconsistent with Article XVI of the GATS 
7.576  The United States asserts that China made re levant commitments in its Schedule not to 
maintain any limitations on the number of EPS supp liers of other WTO Members in respect of the 
services at issue .  As a result of these commitments, the Unite d States considers the measures at issue 
are inconsistent with China's obligations under Articles XVI:1 and XVI:2(a) of the GATS.753  In 
respect of Article XVI:2(a), the United States claims  that each of the six requirements establishes and 
maintains CUP as both a "monopoly" supplier and an "e xclusive service supplier" within the meaning 
of Article XVI:2(a) of the GATS for all RMB bank card transactions.754   
7.577  China asserts that the United States has failed to demonstrate that the measures at issue 
maintain or adopt limitations on the number of service suppliers that are inconsistent with 
Article XVI:1 or XVI:2(a) of the GATS.755  China argues that the lega l instruments which form the 
basis of the United States' claims establish a common national network for processing domestic inter-
bank bank card transactions.  In its view, th is does not equate to a "monopoly" network.756  It submits 
that there is nothing in the instruments that w ould prevent the issuance or acceptance of bank cards 
bearing more than one logo and capable of being processed over multiple networks.757  Moreover, it 
considers the fact that bank cards, POS devices and AT Ms must adhere to certain technical standards 
does not preclude their adherence to other technical standards.758  Finally, in respect of requirements 
identified in relation to Hong Kong and Macao, Ch ina argues that its own obligations under the 
covered agreements do not extend to separate custom s territories, and therefore there is no "legal 
basis" for the claims advanced by the United Stat es relating to services in Hong Kong or Macao under 
the modes of supply at issue in this dispute.759 
7.578  The Panel recalls its conclusions that certain Chinese legal instruments require that bank cards 
issued in China bear the Yin Lina/UnionPay logo , and furthermore, China, requires that issuers 
become members of the CUP network, and that th e bank cards they issue in China meet certain 
uniform business specifications and technical standards.760  We found that China also imposes 
requirements that all terminals (ATMs, merchant processing devices and POS terminals) in China that 
are part of the national bank card inter-bank pr ocessing network be capable of accepting all bank 
cards bearing the Yin Lian /UnionPay logo.761  We also concluded that China requires acquirers to post 
the Yin Lian /UnionPay logo, become members of the CUP network and be capable  of accepting all 
bank cards bearing the Yin Lian /UnionPay logo.762   In addition, we found that certain instruments 
mandate that CUP and no other EPS supplier handle the clearing of certain RMB bank card 
transactions that involve either an RMB bank card is sued in China and used in Hong Kong or Macao, 
                                                      
753 United States' first written submission, para. 61. 
754 United States' first written submission, para. 65; response to Panel question No. 64, para. 165. 
755 China's response to Panel question No. 22; second written submission, para. 90. 
756 China's first written submission, paras. 54, 92-93, and 101; opening statement at the first meeting of 
the Panel, para. 20; response to Panel question No. 22; comments on United States' response to Panel question 
Nos. 70-72, 86-96, 115-123, paras. 72 and 73. 
757 China's second written submission, para. 93; comments on United States' response to Panel question 
Nos. 70-72, 86-96, 115-123, para. 73. 
758 China's response to Panel question No. 22. 
759 China's response to Panel question No. 18, paras. 1-5. 
760 See Section VII.E.2(a) above. 
761 See para. 7.239 above. 
762 See Section VII.E.2(c) above.  WT/DS413/R 
 Page 151 
 
 
 or an RMB bank card issued in Hong Kong or Macao that is used in China in an RMB transaction.763  
We did not conclude, however, that there is a gene ral requirement that mandates the use of CUP or 
otherwise establishes CUP as the sole supplier of  EPS for all domestic RMB bank card transactions 
that take place in China.764  Similarly, we did not conclude that  there are broad prohibitions on the use 
of "non-CUP cards" for cross-region or inter-bank transactions.   
7.579  As we have concluded that there is no require ment that establishes CUP as the "sole supplier" 
(i.e. the alleged "sole supplier requirements"), and that there are no broad prohibitions on the use of 
non-CUP cards for cross-region or inter-bank tr ansactions (the alleged "cross-region/-bank 
requirements"), we do not address the United States' claims under Article XVI in respect of these two 
alleged "requirements".  By contrast, we have conc luded that China maintains in place certain issuer, 
terminal equipment and acquirer re quirements (the "issuer requirements", "terminal requirements" and 
"acquirer requirements", respectively), and that CU P enjoys exclusivity as th e EPS supplier in respect 
of transactions concerning Chinese nationals trave lling in Hong Kong or Macao, and  Hong Kong or 
Macao nationals travelling in China (the "Hong K ong/Macao requirements"). Therefore, we consider 
below whether these four requirements are inconsiste nt with China's obligations under Article XVI of 
the GATS, as claimed by the United States.   
7.580  With this in mind, we recall our conclusion above765 that China has not undertaken any 
market access commitments under mode 1 in Sector 7.B( d) of its Schedule in respect of the services at 
issue in this dispute.  In light of this finding , the Panel further finds that the issuer, terminal 
equipment, acquirer and Hong Kong/M acao requirements are not inconsistent with Article XVI of the 
GATS.   
7.581  In addition, we concluded above766  that China has undertaken a market access commitment 
under mode 3 in Sector 7.B(d) of its Schedule in respect of the services at issue in this dispute.  In light of this finding, we therefore proceed to consid er whether the issuer, terminal equipment, acquirer 
and Hong Kong/Macao requirements ar e inconsistent with any of Chin a's market access obligations in 
respect of this commitment.  Additionally, in the li ght of the United States' assertion that each of the 
four requirements at issue maintains limitations on the number of service suppliers in the form of a 
"monopoly" and "exclusive service supplier" within the meaning of Article XVI:2(a) of the GATS, 
we begin our assessment under Article XVI:2(a) of the GATS. 
(a) Whether the relevant requirements fall within the scope of Article XVI:2(a) of the GATS 
7.582  The United States argues that each of the requ irements at issue is inconsistent with 
Article XVI:2(a) of the GATS because they limit the number of foreign suppliers of EPS for bank 
card transactions.  The United States considers these measures establish and maintain CUP as both a 
"monopoly" supplier and an "exclusive service supplier"  within the meaning of Article XVI:2(a) of 
the GATS for all RMB bank card transactions.
767  In accordance with statements by the Appellate 
Body in US ‒ Gambling , the United States submits that the terms "monopolies" and "exclusive service 
suppliers" should be interpreted to include not only limitations that are "in the form" of monopolies or 
exclusive service suppliers, but also those that are "in effect" such limitations.768   
7.583  China argues that the Appellate Body made clear in US ‒ Gambling  that the scope of 
Article XVI:2(a) extends only to "quantitative" or "quantitative-type measures" and therefore, 
                                                      
763 See paras. 7.361-7.383 above. 
764 See paras. 7.385-7.504 above. 
765 See para. 7.538 above. 
766 See paras. 7.539-7.575 above. 
767 United States' first written submission, para. 65; response to Panel question No. 64, para. 165. 
768 United States' response to Panel question No. 67; see also second written submission, 
paras. 132-136.   WT/DS413/R 
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 Article XVI does not extend to measures that "merely have the effect of limiting the number of 
services suppliers".769  China argues that, if Article XVI we re understood to encompass measures that 
"have the effect" of limiting the number of servi ce suppliers, then measur es that are permitted under 
other provisions of the GATS would need to be consid ered to fall within the scope of Article XVI due 
to their limiting effect.  China argues that the subj ect matter of Article XVI would thus "begin to 
overlap" with other GATS disciplines, and this woul d inappropriately "blur the distinction" between 
different disciplines and would "intrude upon" Members' rights.770  Furthermore, China disagrees with 
the United States that the terms "monopoly" and "exclu sive service suppliers" should be interpreted to 
have the same meaning.771 
7.584  The Panel will consider the scope of Article  XVI:2(a) of the GATS before assessing the 
United States' particular claims.  We first note that the parties provided several definitions and 
explanations of the terms "monopoly" a nd "exclusive service suppliers".   
7.585  Article XXVIII(h) of the GATS defines "monopoly supplier of a service" as "any person, 
public or private, which in the relevant market of the territory of a Member is authorized or 
established formally or in effect by that Member as the sole supplier of that service".  Article VIII:5 
states: "The provisions of this Article shall also apply to cases of exclusive service suppliers, where a 
Member, formally or in effect, (a) authorizes or  establishes a small number of service suppliers and 
(b) substantially prevents competition among those suppliers in its territory" (emphasis added). 
7.586  Referring to dictionary definitions772 and the meaning given to the term "monopoly supplier 
of a service" in Article XXVIII(h) of the GATS, the United States emphasizes that a monopoly supplier is a single or sole supplier that has an excl usive right to operate in a market.  China similarly 
refers to the definition in Artic le XXVIII(h) in arguing that a monopol y encompasses a sole supplier.  
Regarding "exclusive service suppliers", the United States observes that they are not granted sole 
access, but rather, more than one exclusive service supplier will be granted rights to operate in a 
market that protects them from competition.  China appears to agree, based on Article VIII:5 of the 
GATS, that the term "exclusive service suppliers" en tails a small number of service suppliers that are 
protected from competition.   
7.587  As a general textual matter, the definitions of the term "monopoly" provided by the United 
States support the view that the notion of a monopoly service supplier may overlap with that of an 
exclusive service supplier.  However, Article XV I:2(a) of the GATS draws a distinction between 
these two terms.  We must give meaning to all terms and cannot therefore assume that the terms mean one or the same thing.
773  Taking into account the different meaning given to these terms in the text of 
the Articles VIII:5 and XXVIII(h) of the GATS, and the distinction made in Article XVI:2(a), we 
consider that a monopoly supplier is a sole supplier au thorized or established formally or in effect by 
a Member, whereas an exclusive service supplier is on e of a small number of suppliers in a situation 
where a Member authorizes or establishes a small numbe r of service suppliers, either formally or in 
effect, and that Member substantially prevents  competition among those suppliers.  We have not 
identified anything in the definitions provided by the parties, or elsewhere, that would lead us to 
                                                      
769 China's response to Panel question No. 67 (quoting Appellate Body Report, US ‒ Gambling , 
para. 248). 
770 See China's response to Panel question No. 67 (citing Panel Report, US ‒ Gambling , para. 6.305). 
771 China's response to Panel question No. 66. 
772 As also pointed out by the United States, a monopoly can be defined as "exclusive possession or 
control of the trade in a commodity or service … the condition of having no competitor in one's trade or 
business…" or as "an exclusive privilege to carry on a business, traffic, or service granted by a government". 
See United States' first written submission, para. 65, citing New Shorter Oxford English Dictionary  (1993), 
p. 1819. 
773 See Appellate Body Report, US – Gasoline , p. 23, DSR 1996:I, 3, at p. 29.  WT/DS413/R 
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 conclude differently.  Thus, for the purposes of Article XVI:2, we do not consider that a monopoly 
supplier is at the same time an exclusive service supplier. 
7.588  Due to the formulation of the United States' panel request and its subsequent 
argumentation774, we understand the United States to claim th at, in the event that the Panel was to 
determine that CUP operates as the sole supplie r in the Chinese market, then CUP constitutes a 
monopoly within the meaning of Article XVI:2(a).  We  note, in this respect, the United States alleges 
specifically that CUP is the "sole supplier" of EPS for RMB bank card transactions.775  In the event 
that the Panel was to determine that CUP is one of a small number of EPS suppliers, then we 
understand it is the United States' view that CUP opera tes as an exclusive service supplier within the 
meaning of that provision.  Thus, whether the requirements at issue establish CUP as the sole supplier 
of EPS services, or whether they establish CUP as one of a small number of EPS suppliers and substantially prevent competition
776, the United States considers that the requirements are inconsistent 
with Article XVI:2(a).  We will assess the United St ates' claims with this understanding in mind. 
7.589  We next address the parties' arguments concer ning the scope of Article XVI:2(a), namely, 
whether Article XVI:2(a) extends to cover measures that impose "quantitative" or  "quantitative-type" 
limitations, and whether it should be interpreted to include not only limitations that are "in the form" 
of monopolies or exclusive service suppliers, but also  those that are "in effect" such limitations. 
7.590  As noted by both parties, the Appellate Body in US ‒ Gambling  considered the meaning of 
the terms "monopoly" and "exclusive service suppliers " that appear in Article XVI:2(a).  It stated: 
[T]he reference, in Article XVI:2(a), to limitations on the number of service suppliers 
"in the form of monopolies and exclusive service suppliers" should be read to include 
limitations that are in form  or in effect , monopolies or exclusive service suppliers.777 
(emphasis original) 
7.591  Looking at the remaining context of Article XVI :2(a), the Appellate B ody concluded that the 
thrust of Article XVI:2(a) is not on the "form" of  a measure, but on its "numerical, or quantitative, 
nature", stating: 
This is not to say that the words "in the form of" should be ignored or replaced by the 
words "that have the effect of".  Yet, at  the same time, they cannot be read in 
isolation.  Rather, when viewed as a whole, the text of sub-paragr aph (a) supports the 
view that the words "in the form of" must be read in conjunction with the words that 
precede them—"limitations on the  number   of service suppliers"—as well as the 
words that follow them, including the words " numerical  quotas". (emphasis added)  
                                                      
774 See, e.g. United States' first written submission, pa ra. 65.  The United States argues that the "types 
of privileges afforded CUP by the measures, including the ability to set prices, fall within the definition of both 
'monopoly' and 'exclusive service supplier'". 
775 The United States specifically alleges in this dispute that China maintains certain measures, 
including requirements that mandate the use of CUP and/or establish CUP as the sole supplier  of EPS for all 
domestic transactions denominated and paid in RMB.  Th e United States also consid ers that CUP is the sole 
supplier for transactions pertaining to the particular RM B card-based transactions taking place in China, Macao 
and Hong Kong at issue in this dispute.  See, e. g. United States' first written submission, para. 4.   
776 In respect of whether CUP would constitute an exclusive service provider,  we recall that China 
asserts that a second domestic RMB clearing organizatio n, the RCBFCC, currently supplies EPS in the Chinese 
market. See China's response to Panel question Nos. 98 , 113 and 114.  The United St ates disputes that the 
RCBFCC handles the processing of RMB payment card transac tions.  As we explained above, we are unable to 
verify China's assertion that the RCBFCC is a second EPS supplier operating in China, or the United States' 
contention in this regard.  See paras.  7.488 and 7.489 above. 
777 Appellate Body Report, US – Gambling , para. 230. WT/DS413/R 
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 Read in this way, it is clear that the thrust of sub-paragraph (a) is not on the form  of 
limitations, but on their numerical , or quantitative , nature.778 (emphasis original) 
7.592  Therefore, as these statements reflect, whether a limitation is "in the form of" a monopoly or 
exclusive service supplier within the meaning of  Article XVI, turns notably on whether it is 
"numerical" or "quantitative" in nature.  We unde rstand the Appellate Body to mean that even a 
measure that is not, for instance, called a "quota" can fall within the scope of Article XVI:2(a), if it is 
quantitative in its thrust and therefore, limits th e supply of a service as a quota would do. Regarding 
the form of such a measure, it may be any t ype of government-imposed law or regulation.779   
7.593  Accordingly, we consider that in our Article XVI :2 analysis of the four requirements at issue 
we must focus, not on whether they formally or explicitly institute a monopoly or an exclusive service 
supplier, but on whether they constitute a limita tion that is numerical and quantitative in nature .   More 
particularly, we must examine whether they are of such a nature that they limit to one, or a small 
number, the number of authorized EPS suppliers in China. 
7.594  With the foregoing considerations in mind, we  proceed to consider whether the issuer, 
terminal equipment, acquirer and Hong Kong/Macao requirements constitute such "limitations on the 
number of service suppliers" "in the form of" a monopoly or an exclusive service supplier as those 
terms are used in Article XVI:2(a) of the GATS. 
(b) Whether the issuer, terminal equipment and acquirer requirements are inconsistent with 
Article XVI:2(a) of the GATS 
7.595  The United States argues that, in accordance w ith its GATS Schedule, China committed not 
to maintain any limitations on the number of foreig n service suppliers of EPS.  We recall that the 
United States argues that the imposition of variou s requirements "ensure CU P's privileged position", 
both "explicitly" and "effectively".780  Specifically, the United States argues that no EPS supplier 
other than CUP benefits from requirements impos ed on issuers and acquirers of bank cards, or 
terminal equipment requirements.  Due to the n eed to fulfil these requirements, the United States 
argues that issuers and acquirers must have acce ss to the CUP system, and must pay for that access.781  
It contends that it is thus "economically unviable" fo r any foreign supplier of EPS to participate in the 
market.782  This is so, it argues, because it does not  make "economic sense" for banks and processing 
entities to pay for the privilege of using a foreign EPS supplier in addition to what it pays to have 
access to CUP's network.783  Broadly, it argues that each of these requirements help "entrench CUP's 
position as sole service supplier in the market".784  In addition, it argues that the collective effect of 
these requirements establish CUP as the sole entity able to provide EPS for bank card transactions in 
                                                      
778 Appellate Body Report, US – Gambling , para. 232. 
779 Regarding the "effect" of a measur e, unlike Article XVI:2(a) of the GATS, we note that Article XV 
of the GATS, entitled "Subsidies" refers to the "distortive effects on trade in services" that subsidies may have.  
Article XV:2 indicates that a Member  may request consultations with another Member in instances where it 
considers itself to be "adversely affected" by a subsidy of that other Member.  Thus, this provision contemplates 
the "effect" a measure may have.  Article XVI:2(a)  does not expressly refer to the "effects" that arise from a 
limitation such as a monopoly or exclusive service provider. 
780 United States' first written submission, para. 46 
781 United States' first written submission, paras. 50-52. 
782 United States' first written submission, para. 66. 
783 United States' first written submission, para. 69. 
784 United States' second written submission, paras. 173, 180 and 183.  WT/DS413/R 
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 China.785  In this respect, it argues that the requi rements gave CUP automatic and universal 
acceptance of its RMB bank cards by banks and merchants.786   
7.596  China contends that none of these three re quirements "have anythi ng to do with the 
maintenance or adoption of a limitation on market access 'in the form of' of a monopoly or exclusive 
service supplier arrangement".787  In addition, as discussed in Section VII.E.2(b) above, China argues 
that the United States failed to identify any aspect of these alleged requirements that would prevent 
the issuance or acceptance of bank cards that are capable of being processed over multiple networks, 
and therefore, it failed to establish that these m easures impose "quantitative" or "quantitative-type" 
limitations on market access such that they would violate Article XVI:2(a) of the GATS.788   
Accordingly, China requests the Panel to rej ect the United States' claims under Article XVI. 
7.597  The Panel concluded in Section VII.E.2(a) above  that, China, through Document Nos. 37, 57 
and 129 imposes requirements on issuers that bank cards issued in China bear the Yin Lian /UnionPay 
logo, and furthermore, China, through Document Nos. 17, 37, 57, 76 and 129 requires that issuers 
become members of the CUP network, and that th e bank cards they issue in China meet certain 
uniform business specifications and technical sta ndards.  In reaching findings on these issuer 
requirements, we further indicated that none of the legal instruments reflecting these requirements 
indicates that issuers who are members of CUP may not  join other networks in China (with the result 
that the bank cards issued work over those other networks), or that bank cards that meet CUP's 
uniform business specifications and technical stan dards must not, or cannot, simultaneously meet 
those of other networks.789 
7.598  We further concluded in Section VII.E.2(b) above that China, through Document Nos. 37 and 
153, imposes requirements that all terminals (ATMs,  merchant processing devices and POS terminals) 
in China that are part of the national bank card inter-bank processing network must be capable of 
accepting all bank cards bearing the Yin Lian /UnionPay logo.  In reaching findings on these terminal 
equipment requirements, we further indicated that  none of the legal instruments reflecting these 
requirements indicates that terminal equipment that must be capable of accepting bank cards bearing 
the Yin Lian /UnionPay logo could not also be capable of accepting, at the same time, bank cards 
bearing the logo of different EPS suppliers.  Hence, we saw no basis to conclude that the terminal 
equipment requirements would prevent the acceptance of  bank cards that would be capable of being 
processed over an inter-bank network in  China other than that of CUP.790 
7.599  Finally, we concluded in Section VII.E.2(c) above that China, through Document No. 153, 
imposes requirements on acquirers to post the Yin Lian /UnionPay logo and furthermore, China, 
through Document Nos. 37, 76 and 153, imposes re quirements that acquirers join the CUP network 
and comply with uniform business standards and technical specifications of inter-bank 
interoperability, and that terminal equipment opera ted or provided by acquirers be capable of 
accepting bank cards bearing the Yin Lian /UnionPay logo.  In reaching findings on these acquirer 
requirements, we further concluded that none of  the legal instruments reflecting these requirements 
indicates that acquirers may not also accept bank car ds that would be capable of being processed over 
an inter-bank network in China other than that of CUP.791   
                                                      
785 For further explanation on the United States' ar guments concerning the co llective effect of the 
requirements at issue, see paras. 7.482-7.506 above. 
786 United States' second written submission, para. 190. 
787 China's second written submission, para. 92. 
788 China's second written submission, para. 93. 
789 See paras. 7.297-7.299 above. 
790 See para. 7.334 above. 
791 See paras. 7.359-7.360 above. WT/DS413/R 
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 7.600  It is clear from our conclusions as to the na ture of these requirements that none of them 
imposes a limitation on the supply of EPS services that is quantitative in nature, i.e. they do not 
require that CUP shall be established and main tained as a "monopoly" or an exclusive service 
supplier.  In addition, in view of our conclusions , we find that none of the provisions in the legal 
instruments that reflect these three requirements im poses an express limitation on the number of EPS 
suppliers that is numerical or quantitative in natu re, be it in the form of a monopoly or exclusive 
service supplier.  As we explained, we perceive  no limitation on the number of EPS suppliers that 
could support the issuance of bank cards bearing their own logo.  Similarly, we see no limitation on 
the number of EPS suppliers resulting from the fact that  terminal equipment in China must be capable 
of accepting all bank cards bearing the Yin Lian /UnionPay logo.  Finally, we see no limitation on the 
number of EPS suppliers that arises from the fact that acquirers must post the Yin Lian /UnionPay logo 
and be capable of accepting all bank cards bearing the Yin Lian /UnionPay logo.    
7.601  We also recall that, in our evaluation of the ex istence of a "sole supplier" requirements above, 
we assessed the instruments at i ssue in this dispute not only individually, but also together.792  We 
consider our conclusions above equally relevant to  our assessment here.   
7.602  As is clear from our assessment above, we c oncluded that the United States did not identify 
anything in the requirements that would lead us to  conclude that the issuer, terminal and acquirer 
requirements considered alone or in combination, have the "effect" of limiting the number of services 
suppliers so as to maintain or establish CUP as  a monopoly or exclusive service provider.  As 
explained above, we noted that the imposition of  these requirements places CUP in a unique position 
and may grant CUP certain advantages in the EPS ma rket.  Despite this, we nevertheless concluded 
that the United States has not identifi ed anything in the instruments, when considered individually or 
together, that would explicitly establish CUP as the sole supplier of all RMB bank card transactions.  
In addition, we indicated that the fact that the various measures (such as Document Nos. 17, 37, 49, 
57, 76, 129, 142, 153) mandate compliance with CU P business and technical standards does not mean 
that issuers or acquirers are prevented from operating over other networks.  We explained that the fact 
that the stated objective for CUP is to establish a "countrywide", "unified" or single network is not 
indicative of an intention to create an exclusive network.   
7.603  We further concluded that the United Stat es has not submitted evidence beyond mere 
assertions to support its conclusion that the rul es and requirements imposed under certain of the 
instruments at issue make it technically difficult fo r foreign EPS suppliers to operate in the market, 
thereby effectively "entrenching" CUP as the sole s upplier.  We found that the United States did not 
submit any evidence to support its assertion that, due to  costs or other reasons, such as the fact that 
competing standards are inherently incompatible , other EPS suppliers would not enter the market. 
7.604  Finally, we rejected the United States' assertion th at the collective "economic" effect of the 
imposition of the requirements is to entrench  CUP's status as a sole supplier in China.793  In reaching 
this conclusion, we noted that the United States did not establish that the economic effect of any of the 
requirements was to prevent foreign EPS supplie rs from entering and establishing themselves in 
China.  Finally, we noted that we have no direct evidence to assess whether the instruments at issue 
make it economically unviable for other EPS suppliers to establish themselves and operate in China.   
7.605  Accordingly, we are unable to conclude that the imposition of issuer, acquirer and terminal 
equipment requirements imposes a limitation on the num ber of EPS suppliers in China in the form of 
a monopoly or exclusive service supplier. For these reas ons, we are unable to conclude that the issuer, 
                                                      
792 See paras. 7.385-7.481 and 7.482-7.506 above. 
793 See paras. 7.500-7.504 above.  WT/DS413/R 
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 terminal equipment and acquirer requirements, consid ered either separately or in combination, are 
inconsistent with Article XVI:2(a) of the GATS.794   
(c) Whether the requirements pertaining to RMB ca rd-based transactions taking place in China, 
Macao and Hong Kong are inconsistent with Article XVI:2(a) of the GATS 
7.606  In Section VII.E.2(a) above, we concluded that , as reflected in various legal instruments, 
certain instruments mandate that CUP and no othe r EPS provider handle the clearing of certain RMB 
bank card transactions that involve either an RMB bank card issued in China and used in Hong Kong 
or Macao, or an RMB bank card issued in Hong Kong or Macao that is used in in China in an RMB 
transaction.795  These bank card transactions concern paym ent for expenses including shopping, meals 
and accommodation, or small cash withdrawals from ATMs.   
7.607  The United States argues that this requirement establishes and maintains CUP as a 
"monopoly" supplier or an "exclusive service supplier"  within the meaning of Article XVI:2(a) of the 
GATS in respect of the services at issue.  On the basis that China made  specific market access 
commitments not to maintain any limitations  on the number of foreign EPS suppliers, the 
United States considers these requirements are inconsistent with Ch ina's obligations under 
Article XVI:2(a) of the GATS. 
7.608  China contends that there is no legal basis fo r the claims advanced by the United States in 
relation to EPS services in Hong Kong or Macao under the modes of supply at issue.  Pursuant to 
Article XVI:2 of the GATS, China argues that a Member's schedule only implicates the provision of 
services in the territory of that Member. 796  China submits that Hong Kong and Macao are separate 
customs territories for purposes of the covered WT O agreements, and that each maintains their own 
rights and obligations in respect of these agreements. In considera tion of their status, China argues 
that its own obligations under the covered agre ements therefore do not extend to Hong Kong and 
Macao.  Accordingly, it requests th at the Panel reject these claims.797   
7.609  As an initial point, the Panel notes that the f our legal instruments identified in connection 
with this requirement –  Document Nos. 8, 16, 21 9 and 254 – were also identified in connection with 
the alleged "sole supplier" requirements.  In a ddition, Document No. 219 was also identified in 
connection with cross-region/inter-bank prohibitio ns.  The United States argues that these four 
instruments "entrench"798, or enforce, the existence of the sole supplier requirement and cross-
region/inter-bank prohibitions .  Because we found above799 that no "sole supplier" requirement has 
been demonstrated in respect of the supply of EPS for all domestic RMB bank card transactions 
taking place in China, and that there are no cro ss-region/inter-bank prohib itions, we do not reach 
conclusions on these instruments in respect of either  of these "requirements".  Rather, our analysis 
focuses on these instruments as they concern RMB bank card-based transactions taking place in 
China, Macao and Hong Kong.  We therefore address the United States' Article XVI claims in this 
respect only. 
                                                      
794 We consider in Section G, whether these sa me requirements are inconsistent with China's 
obligations under Article XVII of the GATS. 
795 See paras. 7.361-7.383 above.  We recall our conclusion above that Document No. 219 does not 
require that CUP be the sole supplier of EPS services in respect of RMB car d-based transactions taking place in 
China, Macao and Hong Kong.  See, sp ecifically, paras. 7.372-7.376 above. 
796 China's second written submission, para. 95. 
797 China's first written submission, fn. 27; response to Panel question No. 18, paras. 1-5; second 
written submission, para. 95. 
798 United States' second written submission, paras. 141 and 190. 
799 See paras. 7.385-7.481 and 7.482-7.506. WT/DS413/R 
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 7.610  The Panel finds it useful to begin with China's contention that there is no legal basis for the 
claims advanced in relation to Hong Kong and Macao  due to their status in the WTO as separate 
customs territories.  The WTO status of Hong Kong and Macao per se  is not in question in this 
dispute, nor is the fact that each of these territori es maintains its own rights and obligations in respect 
of the WTO Agreements.  What is at issue is whet her or not the particular requirements in question 
relate to China's WTO obligations.   
7.611  We understand that China invokes the language in Article XVI:2 to support its contention that 
its WTO obligations do not extend to Hong Kong or Macao.  Pursuant to Article XVI:2 of the GATS, 
a Member's market access commitments impose lim itations on certain measures that a Member may 
maintain or adopt "either on the basis of a regional subdivision or on the basis of its entire territory, 
unless otherwise specified in its Schedule".  On it s face, we understand this language to indicate 
merely that a measure of a Member may be subject to obligations under Article XVI not only in cases 
where it is applicable or enforced across the entire territory of a Member, but also in cases where it is 
applicable or enforced in only a pa rt of that Member's territory.   
7.612  The United States identifies different scenarios in which it considers Document Nos. 8, 16 
and 254 operate together to ensure CUP's exclusiv ity in respect of the RMB card-based transactions 
taking place in China, Macao and Hong Kong.  In the case of a Chinese national travelling to Hong 
Kong and making a purchase, according to the United States, CUP would mandatorily provide 
services to the issuing bank in China and the acqui ring bank in either Hong Kong or Macao.  Hence, 
EPS suppliers of other WTO Members would be prohibited from establishing a local presence in 
China to supply EPS services to either the issuing ba nk located in China or the acquiring bank located 
in either Hong Kong or Macao.800  In a situation where either a Hong Kong or Macao national travels 
to China and makes a purchase, th e United States argues that CUP would also mandatorily provide 
services to the issuing bank in either Hong Kong or  Macao as well as the acquiring bank in China.  
Here again, the United States submits that a fore ign EPS supplier would be prohibited from providing 
services to either the issuing or acquiring bank.801  Finally, the United Stat es contends that a foreign 
EPS supplier is prohibited from providing its services from China to an issuing or acquiring bank 
even, for instance, where the issuing bank is located in Hong Kong and issues a card to a Hong Kong 
national who then makes a purchase in Hong Kong.802 
7.613  In our discussion of the services at issue above803, we indicated that the clearing and 
settlement of a given bank card transaction involves participation by various actors.  Under a four-
party model, typically a card holder, an acquirer,  an issuing bank/institution and an EPS supplier 
would all be involved in a transaction.804  Under a three-party model or other similar variations, at a 
minimum, a card holder  and an EPS supplier would be involved in a given transaction.  
7.614  We also found above805 that China's Schedule contains a mode 3 market access commitment 
that covers the supply of EPS.  This includes the supply of EPS provided under both the three-party 
                                                      
800 United States' response to Panel question No. 9, para. 46.  We recall our conclusion in 
paragraphs 7.538 above that China ha s no market access commitment under mode 1 in respect of the services at 
issue. 
801 United States' response to Panel question No. 9, para. 47. 
802 United States' response to Panel question No. 9, para. 48.   
803 See paras. 7.14-7.24 above. 
804 In the case a card holder uses a payment card to make a purchase, a merchant would be involved in 
the transaction.  If a card holder us es a payment card to withdraw cash, for instance from an ATM, a merchant 
would not be involved.  In either case, an acquiring institution would be involved in the transaction, either 
having supplied a POS terminal to the merchant or by servicing the ATM.  As discussed in paras. 7.46-7.54 
above, third party "processors" may also  participate in the transaction.   
805 See paras. 7.539-7.575 above.  WT/DS413/R 
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 and four-party models.  This commitment requi res that foreign EPS suppliers are permitted to 
establish operations in China and supply their services from within China to the relevant customers.   
7.615   It is clear to us from Document Nos. 8, 16 and 254, and as illustrated through the examples 
presented by the United States, that both actors located in China and actors outside of China, in either 
Hong Kong or Macao, would be involved in the typ es of transactions which are governed by these 
three instruments.  In the first two scenarios descr ibed in paragraph 7.612, at least one of the actors 
involved in the transaction – be it the issuer or acqui rer – will be located in China.  As we understand, 
in the third example outlined above, the United States  contends that the RMB bank card holder, issuer 
of such a card, acquirer and merchant would all be located outside of China, in either Hong Kong or 
Macao, while the EPS supplier and settlement bank would be located in China.   
7.616  The issue arises whether the supply of servi ces through commercial presence under China's 
mode 3 commitment includes the supply of servi ces to all actors under these three scenarios, 
including actors located outside of China, in either  Hong Kong or Macao.  In  assessing this issue, we 
note that the supply of a service through commercial pr esence (mode 3) is defined in Article I:2(c) of 
the GATS as the supply of a service "by a service supplier of one Member, through commercial 
presence in the territory of any other Member".  "Commercial presence" is defined in Article XXVIII, 
as follows: 
(d) "commercial presence" means any type of  business or professional establishment, 
including through  
 (i) the constitution, acquisition or maintenance of a juridical 
person, or  
(ii) the creation or maintenance of a branch or a representative 
office,   
within the territory of a Member for the purpose of supplying a  
service 
7.617  As the panel noted in its report in Mexico – Telecoms , this definition is silent with respect to 
any other territorial requirement (as is the case in cross-border supply under mode 1) or the nationality 
of the service recipient (as is the case in cons umption abroad under mode 2).  The definition of 
services supplied through commercial presence addresses only the location of the foreign  service 
supplier, not that of the recipient of the relevant service, nor the nationality of the recipient.  It 
indicates that for purposes of the GATS a service is s upplied through mode 3 if a service supplier of a 
Member supplies its service through commercial presence in the territory of another Member.806  The 
definition does not state that a foreign service supplier may supply its services only to recipients that 
are in the territory of the Member in which th e service supplier has established a commercial presence 
and are nationals of that Member.  Nor does the de finition state that a foreign service supplier may not 
supply its services to recipients that are outside the territory of the Member in which the service 
supplier has established a commercial presence.  Ta king into account the absence of any territorial 
qualification as to the location of the recipient of a service, the panel in Mexico – Telecoms concluded 
that Mexico's commitment under mode 3 covered the supply of basic telecommunications services at 
issue both within Mexico and from Mexico into any other country.807 
                                                      
806 Panel Report , Mexico – Telecoms , para. 7.375. 
807 In reaching this view, the panel in Mexico – Telecoms also took into accoun t the fact that the 
Chairman's Note for Scheduling Basic Telecommunications  Services Commitments makes specific reference to 
"local, long distance and international services", as well as the fact that Mexico did not exclude international WT/DS413/R 
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 7.618  We agree with the reasoning of the panel in Mexico – Telecoms.   Nothing in the GATS 
suggests that the supply of a service through commerc ial presence in the territory of a Member does 
not extend to the "export" of services from that Memb er's territory to a recipient in the territory of 
another Member or to a foreign recipient located in the "exporting" Member's territory.  A foreign 
service supplier may therefore, subject to any limitations set out in the Member's schedule, supply a 
committed service to a foreign recipient wherever located, and of whatever nationality or origin.808   
7.619  In view of our interpretation, and in the absen ce of a specific mode 3 limitation in China's 
Schedule that restricts the supply of EPS from within  China into the territory of other WTO Members, 
we consider that China's commitment under mode  3 covers not only the supply of EPS to clients 
within China, but also the supply of EPS to clie nts located in the territory of other WTO Members.809   
7.620  Having concluded that China's mode 3 commit ment for EPS covers the supply of EPS into 
the territory of any other WTO Member, we do not agr ee with China that there is no legal basis for the 
claims advanced in relation to Hong Kong and Macao .  Having so concluded, we therefore turn to 
consider whether China has fulfilled its obligations in  Section 7.B(d) of its Schedule to ensure that 
EPS suppliers of any other Member may supply thei r services from China to issuers and acquirers, in 
a four-party model, or to the card holder and me rchant, in a three-party model or other similar 
variations, in order to comply with its oblig ations under Article XVI:2(a) of the GATS. 
7.621  We recall again, the measures require that only CUP handle the processing of the relevant 
transactions taking place in Hong Kong or Macao, or China. These transactions include situations in 
which (i) a Chinese national travels to Hong Kong or Macao and initiates an RMB bank card transaction with a card issued in China; and (ii) a Hong Kong or Macao national travels to China and 
initiates an RMB bank card transaction there with a card issued in either Hong Kong or Macao. 
7.622  In the light of our understanding of what th e supply of EPS under mode 3 may entail, we 
conclude that China's mode 3 commi tment for EPS is applicable to the two scenarios described in the 
preceding paragraph.
810  Due to the requirement that only CU P handle the processing, in the event a 
foreign EPS supplier established itself in China through commercial presence, that foreign EPS 
supplier would be prevented from providing its services with respect to any such transaction.  This 
would be the case despite the fact  that China committed to allow foreign EPS suppliers to provide 
these services, subject to their meeting the qualifica tions requirements specified in China's mode 3 
market access entry.   
                                                                                                                                                                     
services in the sector column, or else where in its schedule, from the scope of services that commercial agencies 
may supply.  The panel concluded that the Chairman's No te was an important part of  the circumstances of the 
conclusion of the negotiations of the GATS, and should be given considerable weight in its assessment.  See 
Panel Report, Mexico – Telecoms , paras. 7.376-7.377. 
808 This means, for example, that a mode 3 commitment on data processing services would allow a 
foreign company established in the territory of a Member  to supply data processing services to a consumer 
located in the territory of another Member.  Similarly, a mode 3 commitment on "hotel services" would allow a 
foreign-owned hotel established in the territory of that Member to supply hotel services to foreign tourists.   
809 It is useful to note that the supply of EPS from China into the territory of another Member could 
potentially be subject to market access or national treatment  limitations in China and/or that other Member.  For 
instance, the supply of services c ould be limited by the mode 3 market access commitments of China.  Or it 
could be limited by the mode 1 (cross-border supply) commitments of the other Member.   
810 We recall, in footnote 475 above, we explained that we would  address the United States' claim only 
in relation to Document Nos. 8, 16 and 254  in (i) the case of a Chinese national travelling to Hong Kong and 
making a purchase with a card issued in China; (ii) the case  of a Hong Kong or Macao  national travelling to 
China and making a purchase with a card issued in Hong Ko ng or Macao.  We stated that we would not consider 
a third scenario involving a Hong Kong or Macao national making an RMB purchase in either of these 
territories with an RMB payment card issued in either Hong Kong or Macao because we consider that the 
United States' claim in respect of the third scenario falls ou tside our terms of reference.  WT/DS413/R 
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 7.623  We recall that we need to determine whether th e requirements at issue impose a limitation on 
the number of EPS suppliers, be it in the form of a monopoly or exclusive service suppliers.  As we 
have explained in this section, Document Nos. 8, 16 and 254811 mandate that only CUP handle the 
processing of RMB bank card transactions that involve  either an RMB bank card issued in China and 
used in Hong Kong or Macao, or a bank card issued in Hong Kong or Macao th at is used in China in 
an RMB transaction.  Thus, the Hong Kong/Macao requirements limit the number of suppliers of EPS 
to one, namely to CUP.  Plainly, this limitation is  of a numerical and quantitative nature.  We recall 
that a monopoly supplier is a sole supplier authori zed or established formally or in effect by a 
Member.  Due to the exclusivity th at CUP enjoys as the sole EPS supplier in respect of the relevant 
transactions, we conclude that with regard to  these transactions CUP is a monopoly within the 
meaning of Article XVI:2(a) of the GATS.812 
7.624  Therefore, and for the foregoing reasons, we find that the Hong Kong/Macao requirements 
impose a limitation on the number of service suppliers  in the form of a monopoly within the meaning 
of Article XVI:2(a) of the GATS for the supply of EPS for RMB bank card transactions that involve 
either an RMB bank card issued in China and used  in Hong Kong or Macao, or an RMB bank card 
issued in Hong Kong or Macao that is used in Ch ina in an RMB-denominated transaction.  This 
limitation on the number of suppliers is imposed even in respect of EPS suppliers of other WTO 
Members that meet the qualifications requirements sp ecified in China's mode 3 market access entry.  
Because China has not "otherwise specified in its Sche dule" that it may maintain such a limitation, we 
conclude that the Hong Kong/Macao requirement s imposed by China are inconsistent with 
Article XVI:2(a) of the GATS.  
(d) Whether China's requirements, when consid ered jointly, are inconsistent with 
Article XVI:2(a) of the GATS 
7.625  The Panel recalls that the United States requ ested that the Panel consider the Chinese 
requirements at issue not only individually, but also  in conjunction with each other, as it considers the 
requirements at issue are not just WTO-inconsistent when analysed individua lly, but operate together 
in a manner that is also WTO-inconsistent.813 .  The United States argues that this would help to 
ensure the effective resolution of this dispute.814 
7.626  We concluded above that we would not address the United States' claims under Article XVI 
in respect of the sole supplier requirement or  cross-region/inter-bank-bank prohibitions, as we 
concluded on the evidence before us that Chin a does not maintain in place either of these 
"requirements".  Having concluded that China maintain s in place certain issuer requirements, terminal 
equipment requirements, acquirer requirements and Hong Kong/Macao requirements, however, we 
considered whether these four requirements ar e inconsistent with China's obligations under 
Article XVI of the GATS, as claimed by the United States.  Ultimately, we concluded above815 that 
the United States failed to establish that the issu er, terminal equipment a nd acquirer requirements, 
considered either separately or in combination, are inconsistent with Article XVI:2(a) of the GATS.  
Separately, we concluded that the Hong Kong/Macao requirements impose a limitation on the number 
of service suppliers in the form of a monopoly within the meaning of Article XVI:2(a) of the GATS.  
Because China has not "otherwise specified in its Sche dule" that it may maintain such a limitation in 
                                                      
811 The Panel specifically refers to Article 6 of Document No. 16, Article 6 of Document No. 8 and 
Articles 3, 4 and 17 of Document No. 254.  S ee paras. 7.372-7.377 and 7.402-7.404 above. 
812 In our view, the relevant markets in which CUP is a monopoly within the meaning of 
Article XXVIII(h) of the GATS are the s upply of EPS for RMB bank card trans actions that involve a bank card 
issued in China and used in Hong Kong or Macao, and for RMB bank card transactions that involve a bank card 
issued in Hong Kong or Macao that is used in China in an RMB-denominated transaction. 
813 United States' first written submission, para. 29; response to Panel question No. 4. 
814 United States' first written submission, para. 32 
815 See paras. 7.600-7.605 above. WT/DS413/R 
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 respect of its mode 3 market access commitm ent, we concluded that the Hong Kong/Macao 
requirements imposed by China are inconsistent with Article XVI:2(a) of the GATS.816 
7.627  In the light of the United States' request , we consider whether an assessment of the 
requirements in conjunction with each other would m odify our conclusions.  We have noted above on 
various occasions817 that the Hong Kong/Macao requirements are limited in scope to bank card 
transactions that involve bank cards issued in  China and used in Hong Kong or Macao, or 
alternatively, bank cards issued in Hong Kong or Macao and used in China.   Due to their limited 
scope, we do not see how consideration of the Hong Kong/Macao requirements in conjunction with 
the issuer, terminal equipment and acquirer requireme nts would lead us to conclude that the issuer, 
terminal equipment and acquirer requirements impose a type of limitation that is inconsistent with 
Article XVI:2(a) of the GATS.  In other words,  it is not clear to us how combining the Hong 
Kong/Macao requirements with any of the other requi rements would have the effect of converting any 
of the other requirements into the type of measur e referred to in Article XVI:2(a).  We therefore 
conclude that the United States has not establis hed that the Hong Kong/Macao, issuer, terminal 
equipment and acquirer requirements, when consider ed in conjunction, give rise to a separate and 
independent breach of Article XVI:2(a) of the GATS.    
(e) Whether the measures at issue are inconsistent with Article XVI:1 of the GATS 
7.628  We recall that the United States has raised cl aims in respect of both Articles XVI:1 and 
XVI:2(a) of the GATS.  Several panels have discu ssed the relationship between Articles XVI:1 and 
XVI:2.  The panel in US – Gambling  found "[t]he ordinary meaning of the words, the context of 
Article XVI, as well as the object and purpose of the GATS confirm that the restrictions on market 
access that are covered by Article XVI are only those listed in paragraph 2 of this Article".818  On this 
basis, finding that the measures at issue were incons istent with Articles XVI:2(a) and (c), the panel in 
that dispute did not consider it necessary to reach findings in respect of Article XVI:1 of the GATS.  
The Appellate Body in that dispute did not speci fically address what is required to establish a 
violation of Article XVI:1.819   
7.629  In China – Publications and Audiovisual Products , the panel concluded similarly to the panel 
in US – Gambling , as follows: 
Paragraph 1 of Article XVI sets out the general principle that a Member must accord 
to services and service suppliers of other Members treatment no less favourable than 
that specified under the "terms, limitations a nd conditions" contained in its schedule.  
Paragraph 2 is more specific.  It defines,  in six sub-paragraphs, the measures that a 
Member, having inscribed a specific sectoral commitment, must not adopt or 
maintain "unless otherwise specified in its  Schedule".  The six types of measures 
form a closed or exhaustive list, as indi cated by the wording of the chapeau to 
paragraph 2 ("the measures … are defined as").  Under Article XVI, a Member 
undertakes a minimum standard of treatment, and is thus free to maintain a market 
                                                      
816 See para. 7.624 above. 
817 See paras. 7.398, 7.401, 7.407, 7.480 and 7.491 above. 
818 Panel Report, US ‒ Gambling , paras. 6.318, 6.298-6.299. 
819 Appellate Body Report, US ‒ Gambling , para. 256.  On appeal, the Appellate Body noted that 
Antigua conditionally appealed whether the measures at st ake were also inconsistent with Article XVI:1 of the 
GATS, "in the event the Appellate Body were to agree with the United St ates' argument that GATS 
Articles XVI:2(a) and (c) only apply to limitations that are in form specified  exactly and expressly in terms of 
numerical quotas."  Having upheld the panel's interpretation of sub-paragraphs (a) and (c) of Article XVI:2, the 
Appellate Body decided to "leave the issue of the relationship between the first and the second paragraphs of 
Article XVI for another day" (Appellate Body Report, US ‒ Gambling , para. 256).    WT/DS413/R 
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 access regime less restrictive than set out in its schedule, as confirmed in paragraph 1 
which refers to a standard of "no less favourable" treatment.820 
7.630  Bearing the approaches of these panels in mind, we similarly do not consider it necessary to 
proceed in our analysis under Article XVI:1.  We  first recall our finding above that the issuer, 
terminal equipment and acquirer requirements ar e not among the measures which Article XVI:2 says 
a Member may not maintain, and more specifically that they do not constitute market access 
limitations within the meaning of Article XVI:2(a) of the GATS.  That being so, as the United States 
has directed its arguments toward alleging a ma rket access limitation of the type described in 
Article XVI:2(a), it is difficult to see how the relevant  requirements could be subject to Article XVI:1.  
In any event, in the absence of an y meaningful attempt by the United States to demonstrate that the 
issuer, terminal equipment and acquirer requirement s, taken either individually or together, are 
separately inconsistent with Article XVI:1, we cons ider that the United States has failed to meet its 
burden to present a prima facie  case in respect of its Article XVI:1 claim.   
7.631  In addition, we recall our finding above that  the Hong Kong/Macao requirements imposed by 
China pursuant to Document Nos. 8, 16 and 254821 are inconsistent with Article XVI:2(a).  In the light 
of this finding, there is in our view no need to  offer additional findings on these requirements under 
Article XVI:1 and we therefore decline to consider this claim further. 
3. Conclusions  
7.632  Having completed its analysis, we recall our ma in conclusions on the United States' claims 
under Article XVI of the GATS.   
(a) China's commitment under mode 1 in Sector 7.B(d) of its Schedule 
7.633  The Panel finds that China has not undertaken  a market access commitment under mode 1 in 
Sector 7.B(d) of its Schedule in respect of the ser vices at issue.  Therefore, the Panel concludes that 
the issuer, terminal equipment, acquirer and H ong Kong/Macao requirements are not inconsistent 
with Article XVI of the GATS in this respect. 
(b) China's commitment under mode 3 in Sector 7.B(d) of its Schedule 
7.634  The Panel finds that China has undertaken a market access commitment under mode 3 in 
Section 7.B(d) of its Schedule in respect of the ser vices at issue in this disp ute.  That commitment is 
not subject to a limitation on the number of service suppliers in the form of monopolies. 
(i) Issuer, terminal equipment, acquirer requirements 
7.635  The Panel finds that the United States failed to establish that the issuer, terminal equipment 
and acquirer requirements are inconsistent with Ar ticle XVI:2(a) of the GATS, as these requirements 
do not impose a limitation that falls within the scope of Article XVI:2(a).  The Panel further finds that 
the United States failed to meet its burden to present a prima facie  case in respect of its Article XVI:1 
claims concerning the issuer, terminal equipment and acquirer requirements.   
                                                      
820 Panel Report, China ‒ Publications and Audiovisual Products , para. 7.1353. 
821 The Panel specifically refers to Article 6 of Document No. 16, Article 6 of Document No. 8 and 
Articles 3, 4 and 17 of Document No. 254.  S ee paras. 7.372-7.377 and 7.402-7.404 above. WT/DS413/R 
Page 164 
 
 
 (ii) Hong Kong/Macao requirements 
7.636  The Panel finds that China, through Document Nos. 8, 16 and 254822, imposes a limitation on 
the number of service suppliers in the form of  a monopoly for CUP concerning the supply of EPS for 
RMB bank card transactions that involve either an RMB bank card issued in China and used in Hong 
Kong or Macao, or an RMB bank card issued in H ong Kong or Macao that is used in China in an 
RMB transaction.  That limitation on the number of service suppliers is imposed even in respect of 
EPS suppliers of other WTO Members that meet the qualifications requirements specified in China's 
mode 3 market access entry.  Accordingly, we find that the Hong Kong/Macao requirements imposed 
by China are inconsistent with Article XVI:2(a) of the GATS.  In the light of this finding, the Panel 
exercised judicial economy with respect to the Un ited States' claims under Article XVI:1 of the GATS 
regarding the Hong Kong/Macao requirements. 
G. THE UNITED STATES ' CLAIMS UNDER ARTICLE  XVII  OF THE GATS 
7.637  The Panel now turns to assess the United States' claims under Article XVII of the GATS.  The 
United States claims that each of the challenge d Chinese requirements (measures) are inconsistent 
with Article XVII in view of commitments taken by  China under subsector (d) and modes 1 and 3.  
Article XVII is entitled "National Treatment" and provides as follows: 
1. In the sectors inscribed in its Sche dule, and subject to any conditions and 
qualifications set out therein, each Member shall accord to services and service 
suppliers of any other Member, in respect of all measures affecting the supply of 
services, treatment no less favourable than that it accords to its own like services and service suppliers. 
2. A Member may meet the requirement of paragraph 1 by according to services 
and service suppliers of any other Member, either formally identical treatment or 
formally different treatment to that it accords to its own like services and service 
suppliers. 
3. Formally identical or formally differe nt treatment shall be considered to be 
less favourable if it modifies the conditions of competition in favour of services or 
service suppliers of the Member compared to like services or service suppliers of any 
other Member.  (footnote omitted) 
7.638  As noted, the United States claims that all six of  China's requirements at issue are inconsistent 
with Article XVII both individually and in conjunction with each other.  It bases these claims on 
national treatment commitments which it alleges we re assumed by China under subsector (d) and 
modes 1 and 3.  The United States submits that these requirements treat foreign suppliers of EPS 
services less favourably than CUP.
823 
7.639  China requests the Panel to dismiss the Unite d States' claims under Article XVII in their 
entirety.  With regard to its national treatment commitments, China argues th at the United States 
failed to demonstrate that these commitments are relevant to the services and service suppliers at issue.  More specifically, China contends that the United States failed to demonstrate that EPS 
suppliers of other WTO Members are "foreign financ ial institutions" within the meaning of China's 
GATS Schedule.
824  As concerns China's national treatment  commitments in mode 1, China submits 
                                                      
822 The Panel specifically refers to Article 6 of Document No. 16, Article 6 of Document No. 8 and 
Articles 3, 4 and 17 of Document No. 254.  S ee paras. 7.372-7.377 and 7.402-7.404 above. 
823 United States' first written submission, para. 76; second written submission, para. 215. 
824 China's first written submission, para. 146.  WT/DS413/R 
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 that the United States improperly bases its claims under Article XVII on the same aspects of the same 
requirements that are the foundation of the Unite d States' claims under Article XVI of the GATS.825  
China argues that it reserved the right to introdu ce market access limitations for subsector (d) and 
mode 1, including limitations under Article XVI:2 that  might be seen as discriminatory.  China is of 
the view that its right to introduce such measures cannot be taken away by a finding that the exact 
same aspects of the requirements at issue are inconsis tent with Article XVII.  According to China, this 
would defeat the choice that it made by leaving market access unbound in mode 1.826   
7.640  The Panel begins its assessment of the United States' Article XVII claims by setting out its 
analytical approach and determining the scope of its Article XVII findings. 
1. Analytical approach and scope of Article XVII findings 
7.641  As has been pointed out by th e United States, the panel in China – Publications and 
Audiovisual Products  effectively applied a three-part test  to assess whether a Member's measure is 
inconsistent with Article XVII.827  The United States suggests that  we follow the same analytical 
approach.828  We find it appropriate to do so, noting also that China has not specifically opposed the 
United States' suggestion.  Accordingly, in order to  sustain its claim that China's measures are in 
breach of Article XVII, the United States as the co mplaining party needs to establish all of the 
following three elements: 
 (i) China has made a commitment on national treatment in the relevant sector and 
mode of supply, regard being had to  any conditions and qualifications, or 
limitations829, set out in its Schedule; 
 
 (ii) China's measures are "measures affecti ng the supply of services" in the relevant 
sector and mode of supply; and 
 
 (iii) China's measures accord to services or  service suppliers of any other Member 
treatment less favourable than that Chin a accords to its own like services and service 
suppliers. 
 7.642  We separately examine these three elements below.  The Chinese requirements we will 
review in this section include the issuer require ments, the terminal equipment requirements and the 
acquirer requirements.  As concerns the remaining three requirements at issue, we recall our conclusion that the United States has not establishe d the existence of the alleged sole supplier 
requirements or the alleged cross-region/inter-bank prohibitions.  We consequently do not examine 
these requirements under Article XVII.  Furthermore,  as we have determined above that the Hong 
Kong/Macao requirements are inconsistent with Artic le XVI of the GATS in respect of foreign EPS 
suppliers supplying EPS through mode 3, in the interest of judicial economy we refrain from 
                                                      
825 China's first written submission, para. 148. 
826 China's first written submission, para. 159. 
827 The panel in China – Publications and Audiovisual Products  at one point in its report distinguished 
four elements.  But elsewhere in its report, the panel combined two of the four elements into one, thus 
effectively applying a three-pa rt test.  See Panel Report, China – Publications and Audiovisual Products , 
paras. 7.1272, 7.942 and 7.956. 
828 United States' first written submission, paras. 74 and 75. 
829 Regarding the term "limitations", we note that Article XX:1 of the GATS  refers specifically to 
"terms, limitations and conditions" to market access, and "conditions and qualifications" to national treatment.  
This accords with the wording of Articles XVI:2 (o n market access), XVII:1 (on national treatment) and 
XX:1(b) (on schedules of specific commitments).  For si mplicity, we adopt the term "limitations", which is used 
in the column headings in China's Schedule (and those of other Members), and throughout the 1993 and 2001 
Scheduling Guidelines. WT/DS413/R 
Page 166 
 
 
 determining whether these requirements are also inco nsistent with Article XVII for mode 3 suppliers.  
We do, however, examine whether the Hong Kong/ Macao requirements are inconsistent with 
Article XVII in respect of foreign EPS supp liers supplying EPS through mode 1.   
7.643  Having clarified which requirements are to be the subject of our Article XVII findings, we 
can commence our three-part analysis of the relevant requirements.   
2. China's requirements considered individually 
(a) Whether China has undertaken relevant national treatment commitments  
7.644  The first element of our three-part analysis  is to determine whether China has made 
commitments on national treatment in the relevant s ector and modes of supply, regard being had to 
any limitations set out in its Schedule.  The Pane l recalls that the United States in this case has 
identified subsector (d) as the relevant inscribed sector, and modes 1 and 3 as the relevant modes of 
supply.  We first consider whether China h as undertaken national treatment commitments under 
mode 1.     
(i) Mode 1 commitments 
General 
7.645  The United States argues that China has made  a full national treatment commitment for 
subsector (d) in mode 1, having inscribed "None " (no limitations) for this mode in the national 
treatment column of its Schedule.830   
7.646  China responds that the United States improperly bases its national treatment claims on "the 
same aspects of the same measures" that are the foundation of its market access claims under 
Article XVI of the GATS.831  In China's view, the measures de scribed in Article XVI:2 cannot 
simultaneously be subject to Article XVII, without wholly disregarding the basis upon which market 
access and national treatment commitments were scheduled.832  For China, the United States' 
approach is contrary to the "order of preced ence" that Article XX:2 establishes in favour of 
Article XVI, as well as the principle of effectiveness of treaty interpretation ( effet utile ).833  According 
to China, Article XVI governs "all aspects" of the measures described in Article XVI:2(a)-(f), 
including any respect in which such a measure is potentially discriminatory.834  Articles XVI and 
XVII are thus "mutually exclusive" in their respective spheres of application.835  To interpret these 
provisions otherwise would make it impossible for Chin a to remove a national treatment 
inconsistency, while leaving in place its market access limitation.836  It would defeat entirely the 
policy choice that China made by leaving market access unbound in mode 1.837 
7.647  The United States disagrees with China's argument that the inscription of "Unbound" for 
market access in mode 1 affects the scope of its national treatment commitment for that mode.838  
Article XVI:2, for the United States, does not extend to restrictions that are discriminatory.839  A 
                                                      
830 United States' first written submission, paras. 20 and 77. 
831 China's first written submission, paras. 148 and 150. 
832 China's first written submission, para. 150. 
833 China's first written submission, para. 156. 
834 China's first written submission, para. 156. 
835 China's first written submission, para. 156. 
836 China's second written submission, para. 119. 
837 China's first written submission, para. 159. 
838 United States' second written submission, para. 194. 
839 United States' response to Panel question No. 69, para. 196.  WT/DS413/R 
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 measure limiting the number of foreign suppliers onl y would not, for example, limit "the number of 
services suppliers" under Article XVI:2(a), since th e measure is silent as to how many domestic 
persons can supply the service.840  As for Article XX:2, the United States argues that it is simply a 
scheduling rule that exists becau se measures may be inscribed in a Member's schedule that are 
inconsistent with both Articles XVI and XVII.841  For the United States, Article XX:2 does not make 
Articles XVI and XVII "mutually exclusive" in thei r respective spheres of application, as argued by 
China.842  Thus, an "Unbound" inscription for market access, combined with a "None" for national 
treatment, "carves out" only overall quantitative limita tions, not limitations that discriminate against 
foreign suppliers.843 
7.648  According to the European Union, an inscrip tion of "Unbound" in the market access column 
of a schedule logically implies that a Member has re tained the right to impose any of the limitations 
under Article XVI:2, and that those limitations, in accordance with Article XX:2, extend to its 
national treatment obligations under Article XVII, de spite the absence of limitations scheduled under 
this provision.844  Japan, Australia and Ecuador agree th at China's unbound entry for market access 
allows it to maintain market access limitations that are discriminatory.845  Guatemala, on the other 
hand, argues that the inscription of "Unbound" for market access means that China must respect any 
national treatment commitments that it has made under Article XVII.846 
7.649  The Panel notes that the parties disagree on the scope of China's national treatment 
commitment in mode 1, as it applies to the meas ures at issue.  Their disagreement focuses on the 
effect, if any, of China's market access inscription of "Unbound" on the scope of its national treatment 
commitment, the entry for which is inscribed as "None".847  To resolve this issue, we begin by 
examining Article XX:1 of the GATS, which sets out the basic rule fo r a Member inscribing 
commitments in its schedule: 
1. Each Member shall set out in a schedule the specific commitments it 
undertakes under Part III [including Articles XVI and XVII] of this Agreement. With 
respect to sectors where such commit ments are undertaken, each Schedule shall 
specify: 
(a) terms, limitations and conditions on market access; (b) conditions and qualifications on national treatment; 
 ...  
7.650  We observe that Article XX:1 requires a Memb er to inscribe, for the sectors it has committed 
in its Schedule, the limitations ("terms, limitations and conditions") it intends to maintain for market 
access, and the limitations ("conditions and quali fications") it wishes to maintain for national 
treatment.  Each inscription of a limitation (or absen ce thereof) is normally entered in the appropriate 
market access or national treatment column of the Schedule by inscribing "None" (no limitations), 
                                                      
840 United States' response to Panel question No. 69, para. 196. 
841 United States' second written submission, para. 195. 
842 United States' second written submission, para. 195. 
843 United States' second written submission, para. 196. 
844 European Union's response to Panel question No. 7(a), para. 22.  
845 Japan's response to Panel question No. 24; Australia's response to Panel question No. 7(a) and 7(b); 
Ecuador's oral statement, para. 17. 
846 Guatemala's response to Panel question No. 7(a), para. 28. 
847 Since we have found that China's market access inscription of "Unbound, except …" amounts to 
unbound market access, for the sake of simplicity we use the term "Unbou nd" in this part of the Report. WT/DS413/R 
Page 168 
 
 
 "Unbound" (no commitment), or the measure or measures that limit the commitment.848  This 
terminology and usage is drawn from the Scheduling Guidelines.849 
7.651  In the light of the basic rule set out in Article XX:1, supplemented by the Scheduling 
Guidelines, we now examine the relevant entries in China's Schedule.  We start with China's 
inscription for national treatment in mode 1.  We recall that China has inscribed the term "None" in 
the column entitled "Limitations on National Treatment ".  Although no specific definition exists in the 
GATS of the term "None", its ordinary meaning is clear  when read in conjunction with the title of the 
column in which the term appears.  It indicates th at China has undertaken "no" limitations – in other 
words, a full commitment – with respect to nationa l treatment in this mode, unless otherwise inferred 
from its Schedule.850  Hence, as regards the supply of services  in subsector (d) through mode 1, the 
entry of "None" in the national treatment column suggests that China would be committed to providing full national treatment.  This national treatment would extend to "all measures affecting the 
supply of services", the scope of Article XVII as defined in that provision. 
7.652  We continue our analysis by examining Chin a's inscription for market access in mode 1, 
which we have found in paragraph 7.538 to amount to "Unbound".   Although there is no specific 
definition in the GATS of this term, we note that a general dictionary meaning of the term "bound" is 
to be "compelled or obliged".
851  This sense is supported by a speci alized legal dictionary, which gives 
a meaning of "constrained by a contractual or other obligation".852  Thus the term "unbound" would 
indicate an absence of constraint or obligation.853  In the same vein, the Scheduling Guidelines 
instruct a Member wishing to retain the freedom to introduce measures inconsistent with market 
access or national treatment to record the term "Unbound" in its GATS Schedule.854  Since we have 
found subsector (d) to be unbound for market access, th is suggests that China is under no constraint or 
obligation to grant market access within the terms of  Article XVI:2.  Unlike Article XVII, however, 
the scope of the market access obligation does not  extend generally to "all measures affecting the 
supply of services".  Instead, it applies to six caref ully defined categories of measures of a mainly 
quantitative nature.  The issue thus arises whether th e scope of these measures, and thus the extent of 
China's absence of obligation with respect thereto, extends to discriminatory measures in the sense of 
Article XVII.   
                                                      
848 Occasionally, Members use variations of thes e basic inscriptions. A common example is the 
inscription "Unbound except …", an ex ample of which is found in China's market access inscription for mode 4 
in subsector (d). 
849 1993 Scheduling Guidelines, paras. 24, 25, and 27; 2001 Scheduling Guidelines, paras. 42, 44, and 
46.  The original 1993 Scheduling Guidelines were upda ted and formally agreed in  a 2001 Decision by the 
Council for Trade in Services.  Th e 1993 Scheduling Guidelines are cons idered a supplementary source of 
interpretation for the GATS.  See Appellate Body Report, US – Gambling, para. 196. 
850 The interpretation of "None" as meaning a full commitment has been confirmed, in the context of a 
market access commitment, by the Appella te Body (Appellate Body Report, US – Gambling, para. 215). 
851 Shorter Oxford English Dictionary , Vol.1, p. 236.  
852 Black's Law Dictionary , p. 210. 
853 We note as additional context that the term "u nbound" is also used in connection with GATT 1994 
goods schedules to indicate, with respect  to a particular tariff line, absence of obligation.  See, for example, 
usage in China's WTO goods schedule (Schedule CLII, People's Republic of China, Part I – Most-favoured-
nation Tariff, Section II – Other Products) in which "bound rate of duty" is indicated in one column, and "Base 
rate of duty U/B" in another. The structure of a WTO goods schedules is described generally in a Secretariat 
Note on "Preparation of the Uruguay Round Schedules of Concession on Market Access", 
MTN.GNG/MA/W/25 of 22 December 1993. 
8541993 Scheduling Guidelines, para. 11; 2001 Scheduling Guidelines, para. 18. See also Appellate 
Body Report, US – Gambling , fn. 257, which states: "This notation is the opposite of the notation 'Unbound', 
which means that a Member undertakes no specific commitment."  WT/DS413/R 
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 7.653  On this matter, the United States takes the position that discriminatory quantitative 
restrictions are not within the scope of Article XVI:2.855  The Panel, in assessing the scope of the six 
categories of measures in Article XVI:2, observes at the outset that subparagraph (f), concerning 
foreign equity limitations, is expressly discriminatory, and that the limitation on joint ventures in 
subparagraph (e) is inherently so since this busin ess form is very likely applicable only to foreign 
service suppliers.  Nonetheless, while the wordi ng of subparagraphs (e) and (f) suggests that 
discriminatory measures are not completely excluded from the scope of Article XVI:2, it does not, in 
the Panel's view, indicate whether the other four  subparagraphs also extend to discriminatory 
measures. 
7.654  Pursuing our examination of the scope of Article XVI:2, we note that the wording of the 
quantitative measures described in subparagraphs (a )-(d) contains nothing that would suggest that 
measures having discriminatory aspects are for this reason excluded.  This view finds contextual 
support in the wording of Article XX:2 (examined in  paragraph 7.657 below), which is premised on 
the existence of measures "inconsistent with both Articles XVI and XVII", and thus on the existence 
of measures within the scope of Article XVI:2 that  have discriminatory aspects.  Since nothing in the 
generality of the wording of Article XX:2 indicates th at it applies only to measures within the scope 
of subparagraphs (e) and (f), which are expressly or  inherently discriminatory in nature, we view 
Article XX:2 as a further indication that measures w ithin the scope of any of the subparagraphs of 
Article XVI:2 can have discriminatory aspects.  This view is also supported by the Scheduling 
Guidelines, in which the generality of the discussion  on measures inconsistent with both Articles XVI 
and XVII reflects the view that, overall, Article XVI:2 extends to measures with discriminatory 
aspects.856  For these reasons, the Panel finds that the obligations in Article XVI:2 can extend to 
measures that are also within the scope of Article  XVII.  With respect to China's inscription of 
"Unbound" for market access in mode 1, our fi nding would therefore suggest that China may 
introduce or maintain any measures falling within Article XVI:2, including those that may be 
discriminatory within the meaning of Article XVII. 
7.655  The Panel notes, however, that its analysis of the scopes of Articles XVI and XVII leads to an 
apparent ambiguity in China's inscriptions in m ode 1 for market access and national treatment.  On 
the one hand, China's full national treatment commi tment under Article XVII ex tends to "all measures 
affecting the supply of a service", which would app ear to include measures within the scope of its 
unbound market access commitment.  On the othe r, China's unbound market access commitment 
under Article XVI would appear to extend to measur es that are also discriminatory, and within the 
scope of its full national treatment commitment.  The United States argues that China's full national 
treatment commitment implies that measures inconsistent with both Articles XVI and XVII are subject to China's obligations under Article XVII.  China, on the other hand, argues that its absence of 
market access commitment mean s that such measures are not subject to any obligations it may have 
under Article XVII.  
7.656  In resolving this difference of view, the Pane l considers that the main issue is not an 
ambiguity over the scope of Article XVI and the scope  of Article XVII.  The main issue is rather a 
lack of clarity about the scope of the  inscriptions "Unbound" and "None" when applied, in China's 
Schedule, to measures that conflict with both mark et access and national treatment obligations.  In 
considering this more specific question, we observe  that the basic scheduling rule in Article XX:1, 
referred to above, does not determine how a Member  should inscribe a limitation in such a case.  
Instead, we note that a special scheduling rule in Ar ticle XX:2 aims to resolve this lack of clarity: 
                                                      
855 United States' second written submission, para. 196. 
856 1993 Scheduling Guidelines, para. 11; 2001 Scheduling Guidelines, para. 18. WT/DS413/R 
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 Measures inconsistent with both Articles XVI and XVII shall be inscribed in the 
column relating to Article XVI.  In this case the inscription will be considered to 
provide a condition or qualification to Article XVII as well. 
7.657  The wording of Article XX:2 indicates that it a pplies when a measure is (a) inconsistent with 
both Article XVI and Article XVII, and (b) inscrib ed in the market access column of a Member's 
Schedule.  As long as these two requirements are me t, then the inscription under market access will 
provide a "condition or qualification" or, in th e simpler usage we adopt, a "limitation", to 
Article XVII as well.  In other words, the si ngle inscription of a measure conflicting with both 
Articles XVI and XVII in the market access column  of a schedule provides a limitation for both 
discriminatory and non-discrimina tory aspects of the measure. 
7.658  The Panel draws several inferences from the wording of Article XX:2.  First, the provision 
confirms the basic point that measures exist that ar e inconsistent with both market access and national 
treatment obligations.  In that sense, the scope of Article XVI and the scope of Article XVII are not 
mutually exclusive, as China appears to argue.  Bo th provisions can apply to a single measure.  As 
Article XX:2 makes clear, a single measure can contain or give rise to two simultaneous 
inconsistencies:  one with respect to a market ac cess obligation, the other with respect to a national 
treatment obligation.  To maintain or introdu ce such a measure, the normal rule for inscribing 
commitments in Article XX:1 might suggest that a Member needs to enter an explicit limitation in 
both the market access and national treatment column s.  In such cases however, the special rule in 
Article XX:2 provides a simpler requirement: a Me mber need only make a single inscription of the 
measure under the market access co lumn, which then provides an implicit limitati on under national 
treatment. 
7.659  Secondly, the Panel observes that the wording of  Article XX:2 indicates that what is inscribed 
in the market access column is a "measure" which,  in the situation of conflict contemplated by 
Article XX:2, must encompass aspects that are incons istent with both Articles XVI and XVII.  In this 
way, a single inscription under Article XVI of  a "measure" will provide a limitation as well under 
Article XVII.   
7.660  The United States argues that the term "Unbound" cannot be viewed as the inscription of 
"measures" and therefore cannot provide a conditio n or qualification to Article XVII through the 
operation of Article XX:2.857  In contrast, China says that the term "Unbound" is "simply a shorthand 
device for inscribing all measures, present or futu re" that are inconsistent with Article XVI:2.858  The 
Panel notes that Article XX:2 states that " [m]easures  inconsistent with bot h Articles XVI and XVII 
shall be inscribed ..." (emphasis added).  We see nothing in the text of Article XX:2 that would 
constrain the latitude of a Member to inscribe th e "measures" excluded from Article XVI:2 either 
individually or collectively.  In our view, it would be incongruous if an inscription of "Unbound" had 
an effect different from that of inscribing individu ally all possible measures within the six categories 
foreseen under Article XVI:2.  To take a different  interpretation would be to elevate form over 
substance.  In our assessment, ther efore, an inscription of the term "Unbound" in the market access 
column should be viewed as an inscription of "m easures", specifically of all those defined in 
Article XVI:2, which a Member may not maintain or  adopt, unless otherwise specified in its schedule.  
For this reason, we find that Article XX:2 does apply to situations where a Member has inscribed 
"Unbound" in the market access colu mn of its schedule.  In the Panel's view, the inscription of 
"Unbound" in the market access column of China' s Schedule has the equivalent effect of an 
inscription of all possible measures falling within Article XVI:2.   
                                                      
857 United States' response to Panel question No. 69, para. 173. 
858 China's response to Panel question No. 69, para. 125.  WT/DS413/R 
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 7.661  Having found that the special scheduling rule in  Article XX:2 applies to China's inscription of 
"Unbound", the Panel must now consider what eff ect this has on the scope of China's national 
treatment commitment.  The Panel recalls that Article XX:2 provides, in the case of measures 
inconsistent with both Articles XVI and XVII, that th e measure inscribed in the market access column 
encompasses aspects inconsistent with both market access and national treatment obligations.  
Consequently, an "Unbound" inscription in the market access column encompasses inconsistencies 
with Article XVII as well as those arising from Ar ticle XVI.   The inscription of "Unbound" will 
therefore, in the terms of Article XX:2, "provide a condition or qualification to Article XVII as well", 
thus permitting China to maintain measures that ar e inconsistent with both Articles XVI and XVII.  
With an inscription of "Unbound" for subsector (d) in mode 1 under Article XVI, and a corresponding 
"None" for Article XVII, China has indicated that it  is free to maintain the full range of limitations 
expressed in the six categories of Article XVI:2, whether discriminatory or not. 
7.662  The Panel recalls that China's overall argument is  that the United States improperly cites "the 
same aspects of the same measu res" to support claims that  China both maintains a monopoly 
inconsistent with Article XVI:2(a) and violates its national treatment commitment under 
Article XVII.859  China submits that Article XVI "governs all aspects of the measures identified in 
Article XVI:(a)-(f), including the maintenance of a monopoly", and that this is in accordance with 
Article XX:2 and necessary to give effect to Chin a's "Unbound" entry in the market access column.860  
Our findings respond to China's argument on this point, in that they imply that a measure that is 
inconsistent with both Articles XVI and XVII, and th at is inscribed in the market access column of 
China's Schedule, could not be found to be in br each of China's full national treatment commitment. 
The relevant measure would not be subject to Ch ina's full national treatment commitment as it would 
be covered by the market access limitation.   
7.663  In the present case, we consider that our inte rpretation of the meaning of "Unbound" when 
inscribed in the market access column of a schedule gives full meaning to that term.  By inscribing 
"Unbound" under market access, China reserves the right  to maintain any type of measure within the 
six categories falling under Article XVI:2, regardless of its inscription in the national treatment 
column.  We observe, however, that our interpreta tion also gives meaning to the term "None" in the 
national treatment column.  Due to the inscription of "None", China must grant national treatment 
with respect to any of the measures at issue that are not inconsistent with Article XVI:2.  China's 
national treatment commitment could thus have prac tical application should China, for example, 
choose to allow in practice the supply of services fr om the territory of other WTO Members into its 
market, despite the fact that it has not undertaken any market access commitmen ts in subsectors (a) to 
(f) of its Schedule. 
7.664  We point out that our conclusion on the re lationship of the inscription "Unbound" under 
Article XVI with that of "None" under Article XVII preserves the freedom of WTO Members, when 
taking services commitments, to choose the combination of market access and national treatment limitations, if any, that they wish to maintain.  Our conclusion does not narrow the range of options 
available to WTO Members to limit their market access and national treatment commitments.  It 
focuses solely on how to interpret through scheduli ng rules, notably Article XX:2, the inscriptions 
that a WTO Member has chosen to enter in its sch edule.  We emphasize as well that we do not find 
that either of Articles XVI or XVII is substantivel y subordinate to the other. We find simply that 
Article XX:2 establishes a certain scheduling  primacy for entries in the market access column, in that 
a WTO Member not wishing to make any commitm ent under Article XVI, discriminatory or non-
discriminatory, may do so by inscribing the term  "Unbound" in the market access column of its 
schedule.   
                                                      
859 China's first written submission, para. 150. 
860 China's first written submission, paras. 149-159. WT/DS413/R 
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 7.665  For all these reasons, the Panel finds that  China's market access entry concerning 
subsector (d) and mode 1 allows it to maintain a ny measures in that subsector and mode that are 
inconsistent with both Articles XVI and XVII. 
Whether China has mode 1 national treatment co mmitments that apply to China's relevant 
requirements  
7.666  Having considered the mode 1 market access and national treatment entries in China's 
Schedule, we address whether China has mode 1 national treatment commitments that apply to 
China's relevant requirements.  We first examin e the Hong Kong/Macao requirements.  At the outset 
of our examination we recall that we have alre ady found above at paragraph 7.624 that these 
requirements are inconsistent with Article XVI :2(a) because China has undertaken market access 
commitments in mode 3 for subsector (d) and because these requirements constitute limitations on the 
number of service suppliers in the form of a monopoly – a limitation not included in China's schedule.  
The question arises whether these sa me requirements constitute limitati ons on the number of service 
suppliers only with regard to mode 3 or whether they also limit the number of service suppliers with 
regard to mode 1. 
7.667  We recall that the instruments that impose the Hong Kong/Macao requirements – Document 
Nos. 8, 16 and 254 – mandate that only CU P handle the processing of RMB payment card 
transactions that involve either an RMB payment card issued in China and used in Hong Kong or 
Macao, or an RMB card issued in Hong Kong or Macao a nd used in China.  Therefore, it is clear to us 
that in respect of such transactions EPS supp liers of other WTO Members are precluded from 
providing their services on a cross-border basis to consum ers (i.e. issuers or acquirers), that are based 
in China.  In the light of this, the Hong Kong/M acao requirements in our view constitute limitations 
on the number of service suppliers in the form of a monopoly, including with regard to EPS suppliers 
of other WTO Members that would supply their services on a cross-border basis to Chinese 
consumers (mode 1 supply).  In other words, we consider that these requirements impose an 
Article XVI:2(a)-type limitation on market access through mode 1.   
7.668  As such, the Hong Kong/Macao requirements are covered by China's market access entry for 
mode 1 and subsector (d).  We have  determined above that due to the inscription of "Unbound" in that 
entry and Article XX:2, China is allowed to ma intain the full range of limitations expressed in 
Article XVI:2, whether discriminatory or not.  More  particularly, Article XX:2 makes clear that even 
if the Hong Kong/Macao requirements, in addition to being market access limitations, are also 
"measures affecting the supply of services" within the meaning of Article XVII:1 and result in EPS 
suppliers of other WTO Members being treated less favourably than like Chinese services and service 
suppliers when supplying through mode 1, the in scription of "Unbound" in China's market access 
entry provides "a condition or qualification to Artic le XVII".  In turn, Article XVII:1 states that a 
Member's national treatment obligations apply "subject  to any conditions and qualifications set out [in 
its Schedule]".  Accordingly, despite the inscrip tion of "None" in its national treatment column 
concerning subsector (d) and mode 1, China has no obligation in respect of the Hong Kong/Macao 
requirements to accord to EPS supplied through m ode 1, and EPS suppliers of other WTO Members 
supplying through mode 1, treatment no less favourable than that it accords to its own like services 
and service suppliers.  
7.669  For these reasons, we conclude that the Hong Kong/Macao requirements, to the extent that 
they affect the cross-border supply of EPS (mode 1) , are not inconsistent with China's obligations 
under Article XVII:1 of the GATS. 
7.670  With respect to the issuer, terminal equipment and acquirer requirements, we have previously 
found that, contrary to the United States' assertion,  these requirements are not subject to Article XVI 
because they do not impose any market access limitations  of the type specified in Article XVI:2(a).   WT/DS413/R 
 Page 173 
 
 
 As a result, the inscription of "Unbound" in Chin a's market access column does not apply to these 
requirements.  We recall, however, that China has inscribed in its national treatment column a full 
national treatment commitment in mode 1 for subsec tor (d).  The issuer, terminal equipment and 
acquirer requirements are covered by this commitment if they are "measures affecting the supply" of 
EPS through mode 1.  We will address this issue further below.861 
(ii) Mode 3 commitments 
General 
7.671  The Panel must now examine whether Ch ina has undertaken national treatment 
commitments in subsector (d) concerning mode 3.  China's Schedule in the column entitled 
"Limitations on national treatment" contains a relevant entry.  It reads as follows:  
(3) Except for geographic restrictions an d client limitations on local currency 
business (listed in the market access co lumn), foreign financial institution [ sic] may 
do business, without restrictions or need  for case-by-case approval, with foreign 
invested enterprises, non-Chinese natura l persons, Chinese natural persons and 
Chinese enterprises.  Otherwise, none.862 
7.672  The United States notes that this entry provides for no national treatment limitations 
concerning subsector (d) and mode 3 other than the geographic and client limitations inscribed in the 
mode 3 market access column.  The United States ar gues that because those market access limitations 
expired in December 2006, there are no longer any national treatment limita tions with regard to 
subsector (d) and mode 3.  In the United States' vi ew, China must therefore provide national treatment 
within the meaning of Article XVII to forei gn EPS suppliers supplying  services on a commercial 
presence basis.863 
7.673  China responds that its mode 3 national treat ment commitments for subsector (d) mirror the 
corresponding limitation on market access inscribe d by China in its Schedule for the same 
subsector and mode.  Thus, China submits that its mode 3 national treatment commitments are limited 
to "foreign financial institutions".  In other words,  China contends that the only types of entities that 
may provide relevant services on a commercial presen ce basis are foreign financial institutions.864  
China argues that contrary to the United States' assertion, this limitati on of its commitments to foreign 
financial institutions did not expire five years after China's accession to the WTO.  China also 
contends that the United States failed to demonstr ate that EPS suppliers of other WTO Members are 
foreign financial institutions.865 
7.674  The Panel observes that China's national treatme nt entry concerning mode 3 ends with the 
phrase "otherwise, none".  This indicates that there are no limitations on China's national treatment 
commitment concerning subsector (d) and mode 3 other than those set out in the preceding sentence 
of the entry.  Having regard to that sentence, we note that it refers to geographi c restrictions and client 
limitations on local currency business conducted by fore ign financial institutions that are listed in the 
corresponding mode 3 market access column of Chin a's Schedule.  However, these restrictions and 
limitations were only in effect until December 2006.866  As a consequence, under the terms of the 
                                                      
861 See paras. 7.680 et seq. below. 
862 For the geographic restrictions and client limitations  on local currency business that are listed in the 
market access column of China's Schedule, see Annex G. 
863 United States' first written submission, paras. 20 and 77. 
864 China's first written submission, para. 137. 
865 China's first written submission, paras. 131-132. 
866 The relevant restrictions and limitations expired five years af ter China's accession to the WTO. WT/DS413/R 
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 entry in question, foreign financial institutions  must no longer face any limitations on national 
treatment.   
7.675  The next issue we consider is whether EPS suppliers of other WTO Members constitute 
foreign financial institutions within  the meaning of the entry in ques tion.  We recall that we addressed 
the same question in the context of our analysis  of China's market access commitments concerning 
subsector (d) and mode 3.  We determined there that EPS suppliers of other WTO Members – i.e. 
WTO Members other than China – can be properl y considered foreign financial institutions.867  We 
find no basis to conclude differently in the contex t of the present inquiry.  Indeed, we note that the 
mode 3 national treatment limitations specifically re fer to the mode 3 market access limitations.   
7.676  In our view, the entry at issue therefore suppor ts the conclusion that China has committed to 
allow EPS suppliers of other WTO Members to carry out local currency business868 in China with 
issuers, acquirers, merchants and card holders869, without restrictions that would constitute limitations 
on national treatment, except for any national tr eatment limitations inscribed by virtue of 
Article XX:2 in the mode 3 market access column c oncerning subsector (d).  A relevant limitation that 
is inscribed in the market access co lumn concerns qualifications for foreign financial institutions to 
engage in local currency business.870  
7.677  We are mindful that there are limitations on national treatment contained in the section of 
China's Schedule that sets out horizontal commi tments.  However, we discern nothing in the 
horizontal section of China's Schedule that would lead  us to modify the conclusion we have reached 
on the basis of the columns on national treatment limitations and market access limitations.    
7.678  For all these reasons, we conclude that, with regard to EPS provided by suppliers of other 
WTO Members, China has made a commitment on national treatment concerning mode 3.  That 
commitment is subject to a limitation concerning qua lifications to engage in local currency business.  
China is therefore obligated to accord national tr eatment to like EPS and EPS suppliers of other WTO 
Members in respect of local currency (RMB) business , subject to such suppliers meeting the aforesaid 
qualifications requirement.  
Whether China has mode 3 national treatment co mmitments that apply to China's relevant 
requirements 
7.679  With respect to the issuer, terminal equipm ent and acquirer requirements, we found earlier 
that these requirements are not subject to Article  XVI because they do not impose any market access 
limitations of the type specified in Article XVI:2(a).  However, in our view these requirements are 
covered by China's aforementioned national treatme nt commitment for mode 3, provided they are 
"measures affecting the supply" of EPS throug h mode 3.  We address this issue below.871    
                                                      
867 See para. 7.570 above. 
868 As explained at para. 7.572 above, we understand that for the purposes of the requirements at issue 
the relevant business in which EPS suppliers of other WTO Members would engage is local currency (RMB) 
business.  
869 We recall that the enterprises or persons with wh ich EPS suppliers do business vary according to the 
type of network that EPS suppliers use (four-party vs. three-party model). 
870 Pursuant to the entry in question, prior to applying for authorization to engage in local currency 
business, foreign financial institutions must have three y ears of business operation in China and be profitable for 
two consecutive years.   
871 See paras. 7.680 et seq. below.  WT/DS413/R 
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 (b) Whether China's requirements affect the supply of services  
7.680  The second element of our Article XVII inquiry calls for an analysis of whether China's 
requirements (measures) affect the supply of services.872  We recall that in this particular Article XVII 
inquiry, we are concerned with EPS services provide d by service suppliers of other WTO Members 
through modes 1 and 3, because the United States bases its Article XVII claims on China's relevant 
commitments under these two modes of supply.   
7.681  The Appellate Body has provided the following re levant clarification regarding the meaning 
of the term "affect":     
[T]he term "affecting" [as it appears in Artic le I:1 of the GATS] reflects the intent of 
the drafters to give a broad reach of the GATS.  The ordinary meaning of the word 
"affecting" implies a measure that has "an effect on", which indicates a broad scope 
of application.  This interpretation is furthe r reinforced by the c onclusions of previous 
panels that the term "affecting" in the c ontext of Article III of the GATT is wider in 
scope than such terms as "regulating" or "governing".873  
7.682  Accordingly, we need to determine whethe r the Chinese requirements to be examined 
regulate or at least have an effect on the supply of  EPS services by service suppliers of other Members 
through modes 1 and 3. 
7.683  Turning now to the requirements to be  examined under the second element of our 
Article XVII inquiry, we recall that in respect of  the Hong Kong/Macao requirements we have already 
reached the conclusion that they are not inconsistent with Article XVII to the extent that they affect 
the cross-border supply of EPS.  We do not, therefore,  need to examine these requirements further.  In 
contrast, we do need to determine whether the i ssuer, terminal equipment and acquirer requirements 
affect the supply of EPS. 
7.684  The United States submits that these three require ments affect the supply of EPS by foreign 
suppliers because they directly regulate the terms on  which they may be provided in China.  The 
United States argues that they are requirements that promote CUP's position in the marketplace by 
imposing certain requirements on every key player in a card-based electronic payment transaction, 
including issuers, merchants and acquirers.874  More specifically, the United States notes that, due to 
the issuer requirements, bank cards in China used for RMB purchases in China, as well as dual 
currency cards issued in China, must bear the CUP logo, while no foreign EPS supplier is afforded a 
similar privilege.875  Similarly, the United States argues th at as a consequence of the terminal 
equipment and acquirer requirements, all terminal equipment must accept CUP cards and acquirers in 
China must post the CUP logo and accept all bank car ds bearing that logo.  According to the United 
States, no foreign EPS supplier is afforded a similar privilege.876  
7.685  China does not specifically address the issue of whether the requirements at issue affect the 
supply of services.   
                                                      
872 To recall, Article XVII states that WTO Members must provide national treatment "in respect of all 
measures affecting the supply of services". 
873 Appellate Body Report, EC – Bananas III , para. 220.  As indicated, the Appellate Body made this 
statement in relation to the term "affecting" as it appear s in Article I:1 of the GATS.  We find the statement to 
be equally relevant and persuasive when looked at in th e context of our Article XVII analysis, not least in view 
of the Appellate Body's explicit reference to Article  III of the GATT, which is the GATT-equivalent of 
Article XVII of the GATS. 
874 United States' first written submission, paras. 79 and 81. 
875 United States' first written submission, para. 80. 
876 United States' first written submission, para. 80. WT/DS413/R 
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 7.686  The Panel notes that the issuer, terminal equipment and acquirer requirements are addressed, 
inter alia , to issuers, merchants and acquirers, but not to EPS suppliers.  However, all three 
requirements explicitly relate to one – and only on e – EPS supplier, CUP.  As noted by the United 
States and as further explained by our findings below concerning the issue of less favourable 
treatment, these requirements have an effect on the terms on which CUP can supply its services in the 
Chinese market.  We have not been made aware of any parallel requirements that would specifically 
relate to EPS suppliers other than CUP.  Therefor e, due to the fact that the three requirements in 
question have an effect on the terms on which CUP can supply its services, they also have a 
consequential effect on the terms on which CUP's potential competitors, which include EPS suppliers 
of other Members, can supply their services in Ch ina, e.g. on a cross-border basis or through 
commercial presence.  In the light of this, we c onclude that the issuer, terminal equipment and 
acquirer requirements "have an effect" on, and he nce affect, the mode 1 and 3 supply of EPS by 
suppliers of other Members.  In other words, we consider that the three requirements at issue each 
constitute "measures affecting the [mode 1 and 3]  supply of services" within the meaning of 
Article XVII:1.  
(c) Whether China's requirements acco rd less favourable treatment  
7.687  It remains for us to address the third and last element of our Article XVII inquiry.  This 
involves determining whether China's requirements (mea sures) accord to servic es or service suppliers 
of any other Member "treatment less favourable" th an that China accords to its own "like services and 
service suppliers".  We note that the GATS provi des no definition of the phrase "like services and 
service suppliers".  In contrast, as regards the c oncept of "less favourable treatment", Article XVII:3 
provides useful clarification.  It states that forma lly identical or different treatment is deemed less 
favourable "if it modifies the conditions of competit ion in favour of services or service suppliers of 
the Member compared to like services or service su ppliers of any other Member".  We deduce from 
this that, subject to all other Article XVII conditions  being fulfilled, formally identical or different 
treatment of service suppliers of another Member c onstitutes a breach of Article XVII:1 if and only if 
such treatment modifies the conditions of competition to their detriment.   
7.688  The only requirements at issue in respect of  which we reach the third element of our 
Article XVII inquiry are the issuer, terminal equipmen t and acquirer requirements.  In respect of these 
requirements, the United States alleges that on their face they confer an advantage, or privilege, on 
CUP that is not afforded EPS suppliers of another Member.877  We therefore understand the United 
States to allege that China provides formally diffe rent treatment to CUP, on the one hand, and like 
EPS suppliers of other Members, on the other hand , and that the different treatment modifies the 
conditions of competition to the detriment of the latter. 
7.689  Accordingly, our examination of the third Ar ticle XVII element will proceed in two steps 
for each of the relevant requirements.  First we w ill analyse whether, and if so, how the requirements 
provide for different treatment between CUP and "lik e" EPS suppliers of other Members.  We note in 
this respect that these requirements are not addr essed to CUP, but at such entities as issuers or 
acquirers.  Then we will examine whether any different treatment of like services and service 
suppliers that we might find amounts to less favourable treatment.  
                                                      
877 United States' first written submission, paras. 80 and 109; second written submission, 
paras. 201-203 and 207.  WT/DS413/R 
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 (i) Issuer requirements 
Different treatment of like services and service suppliers 
7.690  The United States points out that the issuer requirements mandate that any payment cards 
used only for RMB purchases in Chin a, as well as any dual currency cards  issued in China, bear the 
CUP logo.  The United States submits that no other EPS provider is afforded such a privilege.878 
7.691  The United States argues in addition that the issuer requirements, as well as the other 
requirements at issue in this dispute, provide dispar ate treatment solely according to the identity of the 
EPS supplier: CUP or not CUP.  In the United Stat es' view, it is evident from China's own documents 
that China was concerned about the potential competition its domestic supplier of EPS would face 
from foreign suppliers of EPS as a result of China' s WTO commitments.  The United States considers 
that it is therefore unsurprising that the require ments at issue are mean t to favour the domestic 
Chinese entity and accordingly discriminate on that b asis.  The United States further observes that 
outside of its protected Chinese home market, CUP is being described by other EPS suppliers as an 
active competitor in the global market for card-b ased electronic payment transactions.  The United 
States also points out that CUP's Articles of Associa tion are explicit that the company is "[T]o provide 
advanced electronic payment technologies and specia lized services in connection with the inter-bank 
card information switching."879  To the United States, it is clear that CUP provides services for 
payment card transactions "like" those provided by foreign suppliers of EPS for payment card transactions and that the basis for the differential treatment by China is ultimately one of origin.  
Referring to the panel report in China – Publications and Audiovisual Products
880, the United States 
submits that the "like service suppliers" requirement of Article XVII is therefore satisfied.881    
7.692  China does not specifically address whether th e issuer requirements result in different 
treatment of CUP and its services, on the one hand, and "like" services and service suppliers of other 
Members, on the other hand.  China considers that  it is unnecessary to resolve this question.  In 
China's view, the United States' claims under Artic le XVII should be dismissed because the United 
States did not distinguish its national treatment claims from its market access claims.882   
7.693  The Panel first addresses the issuer requirements that relate to the Yin Lian /UnionPay logo 
use.  These requirements mean that bank cards issu ed by commercial banks in China must bear the 
Yin Lian /UnionPay logo.  In contrast, there is nothing in  the record to indicate that bank cards must 
bear the logos of other EPS suppliers.  Thus, the requirements in question give rise to formally 
different treatment between CUP and its network, on the one hand, and other EPS suppliers and their 
networks, on the other.      
7.694  As concerns the other relevant type of  issuer requirements – those relating to 
interoperability – we recall that they require issuer s in China to join CUP, and bank cards issued in 
China to be interoperable with the CUP network.   The parties have not made us aware of any 
comparable requirement whereby issuers would have  to join other networks and bank cards would 
need to be interoperable with them.  We conseque ntly determine that the relevant requirements also 
result in formally different treatment  between CUP and other EPS suppliers. 
                                                      
878 United States' first written submission, para. 80. 
879 Article 12 of CUP's Ar ticles of Association. 
880 Panel Report, China – Publications and Audiovisual Products , para. 7.975. 
881 United States' first written submission, paras. 82-87. 
882 China's response to Panel question No. 124, para. 91. WT/DS413/R 
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 7.695  The question we need to consider next is wh ether the issuer requirements accord different 
treatment to "like services and service suppliers".  We note in this regard the United States' reliance 
on the following statement by the panel in China – Publications and Audiovisual Products :  
When origin is the only factor on which a measure bases a difference of treatment 
between domestic service suppliers and fore ign suppliers, the "like service suppliers" 
requirement is met, provided there will, or can, be domestic and fo reign suppliers that 
under the measure are the same in all mate rial respects except for origin.  We note 
that similar conclusions have been reached by previous panels.  We observe that in 
cases where a difference of treatment is not ex clusively linked to the origin of service 
suppliers, but to other factors, a more deta iled analysis would probably be required to 
determine whether service suppliers on either side of the dividing line are, or are not, 
"like".883 
7.696  The United States argues that the basis for the di fferential treatment resulting from the issuer 
requirements, as well as the other Chinese requirements at  issue in this dispute, is "ultimately one of 
origin".884  We are not persuaded.  As an initial matter, we recall that some of the relevant provisions 
of the instruments through which these requirements are maintained refer to the network logo – the 
Yin Lian /UnionPay logo – as opposed to the logo of the company China UnionPay (CUP).  For 
reasons we have stated earlier, however, we consid er that it makes no significant practical difference 
whether the relevant Chinese instruments formally re fer to the network logo or the CUP logo, as long 
as CUP remains the company charged with operati ng the relevant nationwide inter-bank network.885  
We also accept, of course, that CUP is a Chin ese EPS supplier.  But the issuer requirements do not 
provide for different treatment between Chinese EPS s uppliers, on the one hand, and EPS suppliers of 
other Members, on the other.  Rather, they disti nguish between CUP, including via the references to 
the network logo, and all other EPS suppliers.  The "all other" category comprises actual or potential 
EPS suppliers of other Members as well as actual or potential Chinese EPS suppliers.  Indeed, the 
United States itself has stated that  the treatment of EPS suppliers varies "according to the identity of 
the EPS supplier: CUP or not CUP."886   
7.697  According to the panel in China – Publications and Audiovisual Products , in a case "where a 
difference of treatment is not exclusively linked to th e origin of service suppliers, but to other factors, 
a more detailed analysis [of 'likeness'] would probab ly be required."  As our case fits this situation, 
consistent with the view expressed by that panel,  we undertake a more detailed analysis of the 
likeness issue.  
7.698  We address first the reference in Article XVII  to "like services".  As there is a particular 
framework for analyzing the "lik eness" of products in the context of Article III of the GATT 1994887, 
we requested the parties to provide their views on any relevant criteria for establishing the "likeness" 
of services in the context of Article XVII.  Neither  party provided the Panel with such criteria, 
however, or suggested a particular analytical framework.888  In approaching this matter, we do not 
assume that without further analysis we may simp ly transpose to trade in services the criteria or 
analytical framework used to de termine "likeness" in the context of the multilateral agreements on 
trade in goods.  We recognize important dissimilari ties between the two areas of trade – notably the 
                                                      
883 Panel Report, China – Publications and Audiovisual Products , para. 7.975 (original footnote 
omitted). 
884 United States' first written submission, para. 87. 
885 See para. 7.251 above.  
886 United States' first written submission, para. 82. 
887 E.g. Appellate Body Report, EC – Asbestos , para. 102. 
888 United States' response to Panel question No. 124, para.124; China's response to Panel question 
No. 124  para. 91.  WT/DS413/R 
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 intangible nature of services, their supply through four different modes, and possible differences in 
how trade in services is conducted and regulated.   
7.699  We thus begin our interpretative analysis by c onsidering the ordinary meaning of "like".  
The dictionary defines the adjective "like" as "[ h]aving the same characteristics or qualities as some 
other person or thing; of approximately identical shape, size, etc., with something else; similar".889  To 
us, this range of meanings suggests that for services to be considered "like", they need not necessarily 
be exactly the same, and that in view of the references to "approximately" and "similar", services 
could qualify as "like" if they ar e essentially or generally the same.890  The aforementioned definition 
highlights another point: something or someone is lik e in some respect, such as – in the terms of the 
definition – the "shape, size, etc." of a thing or pers on.  To determine in what respect services need to 
be essentially the same for them to be "like", we turn to consider the context of the phrase "like 
services".  
7.700  We note that Article XVII:1 requires that a Member accord to services of another Member 
"treatment no less favourable" than that it accords to  its own like services.  Article XVII:3 clarifies in 
relevant part that a Member would be deemed to  provide less favourable treatment if it "modifies the 
conditions of competition in favour of services … of [that] Member compared to like services … of 
any other Member".  We deduce from these provisi ons that Article XVII seeks to ensure equal 
competitive opportunities for like services of other Me mbers.  These provisions further suggest that 
like services are services that are in a competitive relationship with each other (or would be if they 
were allowed to be supplied in a particular market).   Indeed, only if the foreign and domestic services 
in question are in such a relationship can a me asure of a Member modify the conditions of 
competition in favour of one or other of these services.   
7.701  Furthermore, we note that Article XVII is applicable to all services891, in any sector, and that 
services – which are intangible – may be provided th rough any of the four modes of supply.  As well, 
Article XVII refers to "like services and service supplie rs".  In the light of this complexity, "like 
services and service suppliers" analyses should in our view take into account the particular 
circumstances of each case.  In other words, we co nsider that determinations of "like services", and 
"like service suppliers", should be made on a case-by-case basis.892   
7.702  In the light of the above, we consider that  a likeness determination should be based on 
arguments and evidence that pertain to the compe titive relationship of the services being compared.893  
As in goods cases where a panel assesses whether a pa rticular product is a "like product", the 
determination must be made on the basis of the evidence as a whole.894  If it is determined that the 
services in question in a particular case are essentia lly or generally the same in competitive terms, 
those services would, in our view, be  "like" for purposes of Article XVII.895  
                                                      
889 Shorter Oxford English Dictionary , Vol. 1, p. 1601. 
890 We note in this regard that another panel based a likeness determination on a finding that the 
services at issue were "virtual ly the same".  Panel Report, EC – Bananas III (Ecuador) , para. 7.322. 
891 Except for services supplied in the exercise of governmental authority.  See Article I:3(b) of the 
GATS. 
892 For a similar view with regard to "like products" determinations in the context of Article III of the 
GATT 1994, see Appellate Body Reports, EC – Asbestos , para. 101; and Japan – Alcoholic Beverages II , 
DSR 1996:I, 97, at p. 113.  
893 This is also consistent with the approach taken in the goods context.  See Appellate Body Reports, 
EC – Asbestos , paras. 99 and 103; and Philippines – Distilled Spirits , fn. 211. 
894 See Appellate Body Report, EC – Asbestos , para. 103. 
895 It is important to note that even if relevant serv ices are determined to be "like" and a measure of a 
Member is found to result in less fa vourable treatment of "like" servi ces of another Member, it may still be 
possible to justify that measure under one of the general exceptions set out in Article XIV of the GATS. WT/DS413/R 
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 7.703  With the foregoing observations in mind, we  turn to assess whether EPS supplied by CUP 
are like those supplied by EPS suppliers of other Member s.  To that end, we must review any relevant 
evidence.  To begin with, evidence submitted by th e United States indicates that CUP is perceived by 
other global EPS suppliers as a competitor in the global marketplace.896  Additional evidence 
submitted by the United States indicates that CUP and EPS suppliers of other Members provide a 
data-processing infrastructure.897  Both CUP and EPS suppliers of other Members also provide 
services in connection with inter-b ank bank card information switching.898  Specifically, both 
categories of suppliers are engaged in the authorization899 and clearing900 of payment card transactions 
and also facilitate their settlement901.  They are further involved in any related transfer of data and 
information.902  Moreover, both CUP and EPS suppliers of other Members establish common 
standards, rules and procedures that enable tran saction information and data processing for the 
purpose of processing payment card transactions.903  Finally, CUP and EPS suppliers of other 
Members mediate or arbitrate any business disputes arising out of payment card transactions.904  Thus, 
evidence placed on record by th e United States shows that CUP an d EPS suppliers of other Members 
offer essentially the same description of their busin ess scope and of the specific services that they 
provide.   
7.704  While the evidence provided by the United States is  not extensive, it is sufficient to raise a 
presumption that the services supplied by CUP and th ose supplied by EPS suppliers of other Members 
are essentially the same in competitive terms.  Ch ina has not adduced any evidence to rebut the 
United States' assertion, nor has China asserted that  the services supplied by CUP, on the one hand, 
and by foreign EPS suppliers, on the other, are not "like" services.905  Moreover, evidence submitted 
                                                      
896 Visa IPO Prospectus, Exhibit US-3, p. 147; MasterCard 2009 Annual Report, Exhibit US-5, p. 20.  
We understand that there ar e currently no EPS suppliers of other WTO Members providing EPS in China for 
domestic inter-bank RMB transactions.  We also note that the 2007 China Payment System Development Report 
of the PBOC compares CUP's inter-bank transaction volu me to that of Visa, Master Card and American Express 
(2007 China Payment System Development Report, Financial Service Report of the People's Bank of China, 
No. 5, 2008, Exhibit US-15, p. 59).  Moreover, we note that American Express, in its 2010 annual report, 
indicates that it "competes in the global payment industry with other card networks, including, among others, 
Visa, MasterCard, Diners Club International … and Discover…" (American Express 2010 Annual Report, 
Exhibit US-7, p. 13). 
897 Article 12 of CUP's Articles of Association;  MasterCard 2009 Annual Report, Exhibit US-5, p. 7; 
and Visa IPO Prospectus, Exhibit US-3, p. 138. 
898 Article 12 of CUP's Articles of Association; Visa IPO Prospectus, Exhibit US-3, p. 135; and 
MasterCard 2009 Annual Report, Exhibit US-5, pp. 78. 
899 Article 2.4.A of Chapter III of the Business Practices Appendix of Document No. 76; MasterCard 
2010 Annual Report, Exhibit US-6, p. 8; and Visa IPO prospectus, Exhibit US-3, p. 136. 
900 Article 2.4.B of Chapter III, and Article 1.4.1 of Chapter IV, of the Business Practices Appendix of 
Document No. 76; MasterCard 2010 Annual Report, Exhibit US-6, p. 9; and Visa IPO prospectus, Exhibit US-3, 
pp. 136-137.   
901 Article 2.4.B of Chapter III, and Articles 1.4.3 and 2 of Chapter IV, of the Business Practices 
Appendix of Document No. 76; MasterCard 2010 Annual Report, Exhibit US-6, p. 9; and Visa IPO prospectus, 
Exhibit US-3, pp. 136-137.  
902 Article 12 of CUP's Articles of Association; Article 3 of Chapter I, and Article 1.2 of Chapter III, of 
the Business Practices Appendix of Document No. 76; Visa IPO prospectus, Exhibit US-3, pp. 130-131. 
903 Article 12 of CUP's Articles of Association; MasterCard 2010 Annual Report, Exhibit US-6, pp. 4 
and 18; and Visa IPO prospectus, Exhibit US-3, p. 131. 
904 Article 12 of CUP's Articles of Association; Visa IPO prospectus, Exhibit US-3, pp. 129 and 131; 
and Visa 2010 Annual Report, Exhibit US-4, p. 8. 
905 China notes that the creation of CUP reflected a desire to "establish alternatives to the global 
networks".  China's first written submission, para. 54.  Similarly, China states that CUP operates China's 
national inter-bank payment card network.  In establishing a nationwide network, China wanted to achieve the 
network effects associated with inter-bank payment cards, "but without having the Chinese market taken over by 
the same [global] network operators that had come to dominate other markets".  China's first written submission, 
paras. 54, 44 and 57.  Finally, China states that the United States has not identified anything in the instruments  WT/DS413/R 
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 by China regarding the existence of dual-lo go bank cards – i.e. bank cards bearing the Yin 
Lian/UnionPay logo and the logo of an EPS supplier of  another Member and that are interoperable 
with the networks of both suppliers – lends s upport to the view that EPS supplied by CUP and 
suppliers of other Members are closely competitive services.906  Furthermore, in the particular 
circumstances of this case, we do not see how our conclusion on "likeness" of services could be 
different depending on whether EPS suppliers of other Members supply EPS through mode 1 or 
through mode 3.  In the light of this, we consid er that EPS supplied by CUP are like EPS supplied by 
EPS suppliers of other Members.  
7.705  Turning now to the issue of "likeness" of ser vice suppliers, we note that in a different 
dispute, a panel has found that entities may be cons idered like service suppliers if, and to the extent 
that, they provide like services.907  We agree that the fact that service suppliers provide like services 
may in some cases raise a presumption that they are "like" service s uppliers.  However, we consider 
that, in the specific circumstances of  other cases, a separate inquiry in to the "likeness" of the suppliers 
may be called for.  For this reason, we consider that "like service suppliers" determinations should be 
made on a case-by-case basis.  
7.706  In the present case, we have already found th at CUP and EPS suppliers of other Members 
provide like services.  Furthermore, the evidence be fore us indicates that CUP and EPS suppliers of 
other Members describe their business scope in very si milar terms, and that CUP is perceived by EPS 
suppliers of other Members as a competitor in th e global marketplace.  This suggests that these 
suppliers compete with each other in the same busin ess sector.  Also, in the particular circumstances 
of this case, we see no basis for reaching a diffe rent conclusion on "likeness" of service suppliers 
depending on whether EPS suppliers of other Me mbers supply EPS through mode 1 or through 
mode 3.    
7.707  Additionally, we recall that in our case the treatment in China of EPS suppliers varies 
according to the identity of the EPS  supplier or its network, namely  according to whether or not the 
EPS supplier is CUP or the network is that of CUP.  We consider that the fact that EPS suppliers of 
other Members are not CUP, and that their networks are not that of CUP, does not render EPS 
suppliers of other Members or their networks "unl ike" CUP or its network.  In our view, to accept 
otherwise would make it easy to circumvent the national treatment obligation and would deprive 
Article XVII of any useful effect.  
7.708  Based on these elements and considerations, a nd in the absence of an y evidence from China 
suggesting that CUP is different fro m EPS suppliers of other Members, we consider that for purposes 
of this case CUP and EPS suppliers of other Member s are "like" suppliers of EPS, at least to the 
extent that they provide "like" services.   
7.709  In the light of our findings above, we thus come to the conclusion that the issuer 
requirements result in different treatment of " like" EPS and EPS suppliers of other Members. 
Less favourable treatment 
7.710  In relation to the "less favourable treatment" c ondition, the United States argues that due to 
the issuer requirements, issuing banks may not u se the CUP logo unless they have access to the CUP 
                                                                                                                                                                     
at issue that prevents other EPS suppliers from processing inter-bank payment card transactions, and that there 
is nothing in these instruments that establishes a "monopoly".  China's opening statement at the first meeting of 
the Panel, para. 20. 
906 "Dual-logo bankcards bearing the Yin Lian  logo and the logo of an international network operator", 
Exhibit CHN-112. 
907 Panel Report, EC – Bananas III (Ecuador) , para. 7.322. WT/DS413/R 
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 network, paid CUP for that access, and meet CUP's technical standards.  The United States considers 
that issuing banks have no reason to seek an alte rnative EPS supplier, as any issuing bank is required 
to have access to the CUP system and to pay for that access.  According to the United States, the 
issuer requirements have three competitive effects – they guarantee CUP an income stream from 
every credit card issued for domestic use within China,  they give issuers an incentive to control costs 
by using CUP as their exclusive supplier, and they provide free branding to CUP.  The United States 
submits that, in contrast, foreign suppliers of EPS ar e forced to secure such  access and promote their 
brand on their own.  The United States contends th at even if a foreign su pplier of EPS were to 
convince an issuer to issue a card, these requirement s ensure that it will not be able to compromise 
CUP's prominent logo or obtain any market share to the certain exclusion of CUP.  In its view, the 
value, if any, of co-branding or having a non-CUP supplier of EPS is extremely limited in any event, 
because only CUP can handle inter-bank or cro ss-region card-based electronic transactions.908  
7.711  China does not specifically address whether th e issuer requirements accord less favourable 
treatment to like EPS and EPS suppliers of other Members.  China contends, however, that the 
requirement that all RMB-denominated cards bear the Yin Lian  logo does not require banks to 
purchase network services from CUP.  China further states that CUP charges for network services on 
a transaction-by-transaction basis.909 
7.712  The Panel first addresses the Yin Lian /UnionPay logo element of the issuer requirements.  
To recall our earlier finding, China requires that RMB bank cards, and dual cu rrency bank cards, that 
are issued in China by commercial banks and usab le in domestic inter-bank RMB transactions must 
bear the Yin Lian /UnionPay logo on the front of the card.910  We have also found no basis on which to 
conclude that the provisions in question would proh ibit the issuance of relevant cards that would be 
capable of being processed over a network in China th at is not that of CUP.  As a result, any EPS 
supplier of another Member that wishes to have a commercial bank in China issue a bank card on its 
network would have no ch oice but to accept that the Yin Lian /UnionPay logo feature prominently on 
the front of that card.  Holders of the relevant bank card would thus be c onstantly reminded of the 
availability of CUP, a competing EPS supplier, and it s network.  There is a further way in which CUP 
benefits from the Chinese requirements that  bank cards issued in China bear the Yin Lian /UnionPay 
logo.  As a consequence of these requirements, issuers must give publicity to the Yin Lian /UnionPay 
logo by putting it on all cards that they issue, and they must do so for free, whereas EPS suppliers of 
other Members are not entitled to have their logo put on CUP-branded cards.  The attention that is 
drawn in this way to the CUP network raises its profile.911  Based on these elements, we consider that 
China's requirements that RMB and dual currency bank cards bear the Yin Lian /UnionPay logo 
modify the conditions of competition in favour of CUP.  Pursuant to Article XVII:3, these 
requirements can therefore be considered to r esult in like EPS suppliers of other Members being 
treated less favourably than CUP. 
7.713  We now consider the interoperability element of  the issuer requirements.  The United States 
asserts in this context that issuers must have acc ess to the CUP network and must pay fees to CUP for 
that access.  The United States also refers to a guaranteed income stream for CUP from every credit 
card that is issued.  However, the United States has not established that the issuer requirements entail, 
or are associated with, access fees payable to CU P, let alone their level and other modalities.912  Nor 
                                                      
908 United States' first written submission, paras. 80 and 100-101. 
909 China's response to question No. 104(b), para. 51. 
910 In the case of credit cards issued solely for dom estic use in China the CUP anti-counterfeiting logo 
must also be displayed. 
911 We note that according to one global EPS supp lier, brand recognition is one of the principal 
competitive factors in the global payments industry.  See American Express 2010 Annual Report, Exhibit US-7, 
p. 13.   
912 For instance, it is not clear  whether fees would need to be paid for every bank card that is issued or 
whether access fees would have to be paid by issuers for access to CUP independently of the number of bank  WT/DS413/R 
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 has the United States provided evidence to substa ntiate its assertion that the issuer requirements 
guarantee CUP an income stream from each and every credit card issued in China.  In contrast, we 
agree that issuers in China must  have access to the CUP network, and that bank cards that must 
display the Yin Lian /UnionPay logo must also be interoperable with CUP.  Accordingly, we confine 
our analysis to these particular requirements.  We  recall in this connection that these requirements do 
not appear to prevent issuers who are members of CU P from joining other networks in China, or that 
bank cards that meet CUP's uniform business specifi cations and technical standards must not, or 
cannot, simultaneously be interoperabl e with other EPS suppliers' networks. 
7.714  In effect, these interoperability requirements guarantee that all commercial banks that issue 
bank cards for use in domestic inter-bank RMB tran sactions in China are members of CUP.  They 
further guarantee that all bank cards that are issued  for such use by commercial banks – CUP cards as 
well as non-CUP cards – are capable of being processed over CUP's network.  In contrast, EPS 
suppliers of other Members have to c onvince issuers to join their networks.913  They might be 
unsuccessful in that endeavour, or at least they migh t fail to achieve the same level of membership of 
relevant issuing banks.914  And even if they could achieve the same level of membership, unlike CUP, 
EPS suppliers of other Members would need to expend time and effort in the process.915  Moreover, if 
issuers in China were to issue relevant bank cards that are interoperable with the networks of EPS 
suppliers of other Members, those bank cards woul d also need to be interoperable with the CUP 
network.  In contrast, in cases where CUP-branded ba nk cards are issued, they would not need to be 
interoperable with networks of  EPS suppliers of other Members.916  Based on these elements, we 
consider that the interoperability requirements in  question modify the conditions of competition in 
favour of CUP.  By virtue of Article XVII:3, they  thus result in like EPS suppliers of other Members 
being treated less favourably than CUP.   
7.715  In the particular case of the issuer requireme nts, we do not see how our  conclusions on the 
issue of less favourable treatment could be aff ected by whether a like EPS supplier of another 
Member provides its services under mode 1 or mode 3.   In our view, the conditions of competition of 
EPS suppliers of other Members are adversely modifi ed irrespective of whethe r the relevant services 
are provided under mode 1 or 3.  In  relation to mode 3, it is nonetheless necessary to add that the 
issuer requirements result in less favourable treatment  of like EPS suppliers of other Members even if 
these suppliers meet the qualifications for engaging in local currency business that are stipulated in 
China's mode 3 limitation. 
7.716   We observe, finally, that with regard to thr ee-party networks, the United States argues that, 
due to the issuer requirements, three-party EPS suppl iers are not able to issue their own branded bank 
                                                                                                                                                                     
cards they issue on that network.  This information would also be important for any assessment of the United 
States' assertion that the alleged access fees give issuer s an incentive to control co sts by using CUP as their 
exclusive supplier.  We add in this regard that, in our understanding, it is not uncommon for issuing banks to 
issue bank cards on the networks of different EPS suppliers' networks, to meet bank clients' demand.  See, e.g. 
MasterCard 2009 Annual Report, Exhibit US-5, p. 21.   
913 We recall in this respect that issuers play an esse ntial part in the business model of EPS suppliers.  
They issue the bank cards that are used in transactions that will be processed over a particular EPS supplier's 
network.   
914 Evidence submitted by the United States suggests th at a relevant factor in this regard is the 
economic attractiveness to ba nk card issuers of an EPS supplier's netw ork.  See American Express 2010 Annual 
Report, Exhibit US-7, p. 13; Discover 2010 Annual Report, Exhibit US-8, p. 10.   
915 Evidence provided by the Unite d States indicates that the succes s of marketing and promotional 
campaigns is a relevant competitive factor for EPS su ppliers.  See American Express 2010 Annual Report, 
Exhibit US-7, p. 13. 
916 We note in this regard that according to one EPS supplier, one of the main competitive factors in the 
global payments industry is the number of cards in force and the amount of spending on these cards.  See 
American Express 2010 Annual Report, Exhibit US-7, p. 13.   WT/DS413/R 
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 cards.917  As also indicated by the United States, th ree-party EPS suppliers ordinarily issue cards 
directly to card holders.918  We note that the issuer requirements concern commercial banks as issuers 
and bank cards issued by such banks.  We consider that to the extent that EPS suppliers, such as those 
that implement a three-party model, use institutions  authorized as commercial banks in China to issue 
bank cards, or are themselves authorized as commerc ial issuing banks, the issuer requirements result 
in less favourable treatment of such EPS suppliers.  
(ii) Terminal equipment requirements 
Different treatment of like services and suppliers 
7.717  The United States recalls that under the terminal equipment requirements all ATMs, 
merchant card processing equipment and POS terminals must accept cards bearing the CUP logo.  
According to the United States, ther e is no equivalent requirement fo r other cards, and no foreign EPS 
supplier is afforded a similar privilege.919   
7.718  The United States further argues that the termin al equipment requirements, as well as the 
other requirements at issue in this dispute, provide disparate treatment solely according to the identity 
of the EPS supplier: CUP or not CUP.  The Unite d States considers that CUP provides services for 
payment card transactions "like" those provided by foreign suppliers of EPS for payment card 
transactions and that the basis for the differential treatment by China is ultimately one of origin.  
Referring to the panel report in China – Publications and Audiovisual Products , the United States 
submits that the "like service suppliers" requirement of Article XVII is therefore satisfied.920  
7.719  China does not specifically address whether the terminal requirements result in different 
treatment of CUP and its services, on the one hand, and "like" services and service suppliers of other 
Members, on the other hand.  China considers that it is unnecessary to resolve this question because 
the United States national treatment claims in its  view should be dismissed in their entirety.921    
7.720  The Panel notes that pursuant to the terminal  equipment requirements,  terminal equipment 
that joins the national bank card inter-bank pro cessing network must be capable of accepting bank 
cards bearing the Yin Lian /UnionPay logo.  In contrast, the record does not indicate that China 
imposes a requirement whereby terminal equipment must be capable of accepting bank cards bearing 
the logos of other EPS suppliers.  In the light of this, we determine that the terminal equipment 
requirements result in formally different treat ment between CUP and other EPS suppliers.   
7.721  The next issue for us to examine is whethe r the terminal equipment requirements accord 
different treatment to "like services and service suppliers".  As with the issuer requirements, the 
terminal equipment requirements in our view draw a distinction between CUP and other EPS 
suppliers that is not based on origin, but on the iden tity of the EPS supplier, or the network it operates.  
Therefore, as in the context of our analysis of th e issuer requirements, we consider it appropriate to 
undertake a more detailed analysis of the likeness i ssue than the one that was conducted by the panel 
in China – Publications a nd Audiovisual Products.   We recall that we have already conducted such an 
analysis above.  Thus, for the reasons set out in pa ragraphs 7.698 - 7.708 above, we consider that for 
purposes of this case EPS supplied by CUP are "lik e" EPS supplied by EPS suppliers of other 
                                                      
917 United States' response to Panel question No. 25, para. 82. 
918 Ibid., para. 81. 
919 United States' first written submission, paras. 80 and 109. 
920 United States' first written submission, paras. 82-87.  
921 China's response to Panel question No. 124, para. 91.   WT/DS413/R 
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 Members, and that CUP and EPS suppliers of other Me mbers are "like" suppliers of EPS, at least to 
the extent that they provide "like" services.922   
7.722  In the light of the above, we conclude that the terminal equipment requirements result in 
different treatment of "like" EPS and EPS suppliers of other Members.  
Less favourable treatment 
7.723  The United States argues that the terminal equipment requirements modify the conditions of 
competition in favour of CUP.  CUP is guaranteed  access to all merchants in  China who accept credit 
cards, while foreign EPS must market themselves to each POS terminal user.  The United States 
observes that the main value that an EPS supplier has to offer issuing banks and card holders is the 
ability to use a card at a large number of locations, and the larger the network of merchants that use 
the card, the greater the attractiveness of the EPS su pplier to its customers.  The United States argues 
that the terminal equipment requirements give CU P automatic and universal acceptance of its bank 
cards by banks and merchants.  In contrast, in Ch ina a foreign EPS supplier must build that network 
by marketing itself to merchants and acquiring banks.   The United States notes in this respect that 
EPS suppliers must ordinarily invest heavily and in cur substantial expense to build acceptance of their 
payment products by merchants, often in vi gorous competition with other suppliers of EPS.923  
7.724  China does not specifically address whether th e terminal equipment requirements accord 
less favourable treatment to like EPS and EPS suppliers of other WTO Members.   
7.725  The Panel recalls that pursuant to the termin al equipment requirements all terminals in 
China that are part of the national bank card inter-bank processing network must be capable of accepting all bank cards bearing the Yin Lian /UnionPay logo.  This guarantees that all bank cards that 
bear the Yin Lian /UnionPay logo can be accepted by commercial bank and merchant terminal 
equipment in China and processed over CUP's netw ork.  As regards EPS suppliers of other WTO 
Members, we recall that the terminal equipment requirements do not appear to preclude terminals 
from accepting at the same time bank cards that would be capable of being processed over a network 
in China other than that of CUP.  Consequently , EPS suppliers of other WTO Members could seek to 
obtain access to the terminals that must be capable of accepting bank cards bearing the Yin 
Lian/UnionPay logo.  These terminals could then pr ocess transactions also over their networks.  
However, EPS suppliers of other WTO Members may not be able to get access to all these terminals 
because, unlike in the case of bank cards bearing the Yin Lian /UnionPay logo, commercial banks, 
acquirers and merchants could refuse access.
924  Also, even if the same level of access to terminal 
equipment could be achieved by EPS suppliers of ot her WTO Members, they would need to expend 
time and effort, which is not the case for CUP.925  As pointed out by the United States, the level of 
access to bank and merchant terminals that an EPS supplier has is an important determinant of its 
attractiveness to issuers as well as bank car d users and thus of its competitive position.926  Based on 
                                                      
922 As we indicated earlier, in the particular circumst ances of this case, we see no basis for reaching a 
different conclusion on "likeness" of services or service suppliers depending on whether EPS suppliers of other 
WTO Members supply EPS through mode 1 or through mode 3. 
923 United States' first written submission, paras. 10 2 and 110; second written submission, para. 207; 
response to Panel question No. 15, para. 56. 
924 Evidence submitted by the United States suggests th at a relevant factor in this regard is the 
economic attractiveness to merchants of participating in  an EPS supplier's network.  See American Express 
2010 Annual Report, Exhibit US-7, p. 13.   
925 As noted earlier, EPS suppliers suggest that the success of marketing and promotional campaigns is 
a relevant competitive factor for them.  See American Express 2010 Annual Report, Exhibit US-7, p. 13. 
926 We note in this regard that according to evid ence submitted by the United States the quantity and 
quality of establishments where bank cards can be used  ranks among the principal competitive factors in the 
global payments industry.  See American Express 2010 Annual Report, Exhibit US-7, p. 13.   WT/DS413/R 
Page 186 
 
 
 these elements, we consider that the terminal equipment requirements modify the conditions of 
competition in favour of CUP.  Having regard to Article XVII:3, they therefore accord to like EPS 
suppliers of other WTO Members less favourable treatment than to CUP.  
7.726  In the particular case of the terminal equipm ent requirements, we do not consider that our 
conclusions on the issue of less favourable treatme nt are affected by whether a like EPS supplier of 
another WTO Member provides its services under mode 1 or mode 3.  In our view, the conditions of 
competition of EPS suppliers of other WTO Members are adversely modified irrespective of whether 
the relevant services are provided under mode 1 or 3.   In relation to mode 3, it is nonetheless 
important to add that the terminal  equipment requirements result in less favourable treatment of like 
EPS suppliers of other WTO Members even if these s uppliers meet the qualifications for engaging in 
local currency business that are stipulat ed in China's mode 3 limitation. 
7.727  Finally, we note that the United States has not specifically addressed how the terminal 
equipment requirements affect three-party networks.  It is clear to us, however, that EPS suppliers 
operating such networks would find themselves in substantially the same position as EPS suppliers 
operating four-party networks as regards the issue of access to terminal equipment in China.  We 
therefore consider that our finding of less favourable  treatment applies to EPS suppliers, regardless of 
whether they adopt a three- or a four-party model or some variation of either model.  
(iii) Acquirer requirements 
Different treatment of like EPS suppliers 
7.728  The United States notes that under the acquirer requirements all acquiring institutions in 
China must post the CUP logo and accept all bank car ds bearing that logo.  According to the United 
States, no foreign EPS supplier is afforded a similar privilege.927     
7.729  The United States further argues that the acquirer requirements, as well as the other 
requirements at issue in this dispute, provide dispar ate treatment solely according to the identity of the 
EPS supplier: CUP or not CUP.  The United States considers that CUP provides services for payment 
card transactions "like" those provided by foreign suppliers of EPS for payment card transactions and 
that the basis for the differential tr eatment by China is ultimately one of origin.  Referring to the panel 
report in China – Publications and Audiovisual Products , the United States submits that the "like 
service suppliers" requirement of Article XVII is therefore satisfied.928  
7.730  China does not specifically address whether th e acquirer requirements result in different 
treatment of CUP and its services, on the one hand, and "like" services and service suppliers of other 
WTO Members, on the other hand.  China considers that it is unnecessary to resolve this question 
because the United States national treatment claims in  its view should be dismissed in their entirety.929    
7.731  The Panel recalls that pursuant to the acquirer requirements acquirers must (i) post the Yin 
Lian/UnionPay logo and (ii) be capable of accepting bank cards bearing the Yin Lian /UnionPay logo.  
The latter requirements relate both to terminal equipm ent and interoperability.  In contrast, the parties 
have not made us aware of any requirements whereb y acquirers would have to post the logos of other 
EPS suppliers or be capable of accepting bank cards b earing their logos.  We therefore consider that 
the acquirer requirements result in formally different treatment between CUP and other EPS suppliers. 
                                                      
927 United States' first written submission, para. 80. 
928 United States' first written submission, paras. 82-87.  
929 China's response to Panel question No. 124, para. 91.   WT/DS413/R 
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 7.732  We now address whether the acquirer requirements accord different treatment to "like 
services and service suppliers".  As with the issuer and terminal equipment requirements, the acquirer 
requirements in our view draw a distinction between  CUP and other EPS suppliers that is not based on 
origin, but on the identity of the EPS supplier, or th e network it operates.  Therefore, as in the context 
of our analysis of the issuer and terminal equi pment requirements, we consider it appropriate to 
undertake a more detailed analysis of the likeness i ssue than the one that was conducted by the panel 
in China – Publications a nd Audiovisual Products.   We recall that we have already conducted such an 
analysis above.  Thus, for the reasons set out in pa ragraphs 7.698 - 7.708 above, we consider that for 
purposes of this case EPS supplied by CUP are "lik e" EPS supplied by EPS suppliers of other WTO 
Members, and that CUP and EPS suppliers of other WTO Members are "like" suppliers of EPS, at 
least to the extent that they provide "like" services.930   
7.733  Based on the foregoing considerations, we concl ude that the acquirer requirements result in 
different treatment of "like" EPS and EP S suppliers of other WTO Members.  
Less favourable treatment 
7.734  The United States argues that the acquirer requirements distort the competitive relationship 
between CUP and foreign EPS suppliers for the same r easons as the terminal equipment requirements.  
The United States adds that acquirers have important  relationships with merc hants, often providing 
POS terminal and processing equipment to merchants so that they can process payment cards.  
Acquirers also maintain merchants' accounts, ha ndle relations with merchants, and ensure that 
payments are properly credited to merchants.931 
7.735  China does not specifically address whet her the acquirer requirements accord less 
favourable treatment to like EPS and EPS suppliers of other Members.   
7.736  The Panel first addresses the acquirer requirement s that relate to terminal equipment.  
Pursuant to these requirements, terminal equipm ent operated by acquiring banks and merchant 
terminal equipment provided by acquirers must be  technically capable of accepting cards bearing the 
Yin Lian /UnionPay logo.  We also recall our view that these requirements would not prevent the 
acceptance by acquirers, or merchants, of bank cards that would be capable of being processed over a 
network in China other than that of CUP.  To th at extent, the analytical starting point for these 
acquirer requirements is not substan tially different from that for the terminal equipment requirements 
we have examined earlier.932  Consequently, our considerations in paragraphs 7.717 to 7.727 above 
concerning the terminal equipment requirements ar e applicable, with the necessary modifications, to 
the acquirer requirements in question.  Accordingly, on the basis of the factual situation described in 
this paragraph and the considerati ons set out in paragraphs 7.728 to 7.734, we consider that the 
acquirer requirements that relate to terminal e quipment modify the conditions of competition in 
favour of CUP.  That being the case, we also cons ider that they result in like EPS suppliers of other 
Members being treated less favourably than CUP. 
7.737  We now proceed to address the interoperabilit y element of the acquirer requirements.  
Pursuant to these acquirer requirements, acquirers must join CUP and comply with uniform business 
standards and technical specifications of inter-ba nk interoperability.  We also recall that these 
requirements do not appear to prevent acquire rs from complying with business standards and 
                                                      
930 As we indicated earlier, in the particular circumst ances of this case, we see no basis for reaching a 
different conclusion on "likeness" of services or service suppliers depending on whether EPS suppliers of other 
WTO Members supply EPS through mode 1 or through mode 3. 
931 United States' second written submission, para. 203. 
932 The main difference is that in th is case, we are concerned only with those terminals that are operated 
or provided by acquirers.   WT/DS413/R 
Page 188 
 
 
 technical specifications adopted by EPS suppliers of  other Members.  Thus, if EPS suppliers of other 
Members wish acquirers to join their networks and to be able to accept bank cards that are 
interoperable with their networks, they must take the initiative.  It is uncertain, however, whether any 
such initiative would result in the same level of membership of relevant acquirers and the same 
number of acquirers meeting the business standards and technical specifications of EPS suppliers of 
other Members, because acquirers are not required to respond favourably.  And even if EPS suppliers 
of other Members could achieve the same result, they would need to invest time and effort.933  We 
note in this respect that acquirers are important  to EPS suppliers because they acquire merchant 
transactions and provide merchants with terminal  equipment that can process transactions over a 
particular EPS supplier's network.  Based on these elements, we consider that the acquirer 
requirements that relate to interoperability modify the conditions of competition in favour of CUP.  In 
view of Article XVII:3, we further determine that they result in like EPS suppliers of other Members 
being treated less favourably than CUP. 
7.738  The final element of the acquirer requirements to be examined is the Yin Lian /UnionPay 
logo element.  Pursuant to this requirement, acquirers must post the Yin Lian /UnionPay logo on 
merchant terminals.  We also recall that this requi rement does not appear to prevent the posting of the 
logo of competing EPS suppliers.  Thus, while the Yin Lian /UnionPay logo is automatically posted, 
EPS suppliers of other Members who wish acquirers to  post their logo need to invest time and effort 
to achieve this.  In our view, the posting of an EPS  supplier's logo on merchant terminals is relevant 
inasmuch as it alerts card holders to the option of using their bank card rather than paying in cash, for 
instance.  The logo may thus generate additional transactions that the EPS supplier whose logo is 
posted can process.  Also, since merchant termin als are frequently capable of accepting bank cards 
with a variety of logos, the fact that one EPS s upplier's logo is posted while another's is not might 
mislead holders of cards bearing the latter's logo, in the sense that the absence of a particular logo 
might suggest that cards bearing that logo would not be accepted.  As a result, such cards might either 
not be used by card holders or car d holders might not seek to get such bank cards in the first place.  
Based on these elements, the requirement that acquirers must post the Yin Lian /UnionPay logo in our 
view modifies the conditions of competition in fav our of CUP.  In accordance with Article XVII:3, 
the requirement can thus be considered to result in  like EPS suppliers of other Members being treated 
less favourably than CUP. 
7.739  In the particular case of the acquirer require ments, we do not see how  our conclusions on 
the issue of less favourable treatment could be a ffected by whether a like EPS supplier of another 
Member provides its services under mode 1 or mode 3.   In our view, the conditions of competition of 
EPS suppliers of other Members are adversely modifi ed irrespective of whethe r the relevant services 
are provided under mode 1 or 3.  In  relation to mode 3, it is nevertheless important to add that the 
acquirer requirements result in less favourable treatment of like EPS suppliers of other Members even 
if these suppliers meet the qualifications for engaging in local currency business that are stipulated in 
China's mode 3 limitation. 
7.740   We also observe that the United States has not specifically addressed how the acquirer 
requirements affect three-party networks.  As described by the United States, these networks 
ordinarily serve merchants directly.  As regards th e acquirer requirements that relate to terminal 
equipment and the logo posting, we do not see how EPS suppliers of other Members would be 
impacted differently, depending on whether they oper ate a three- or a four-party network or some 
variation of either type of netw ork.  With regard to the intero perability element of the acquirer 
requirements, we consider that to the extent that  EPS suppliers, such as those that implement a three-
party model, operate as acquiri ng banks in China, the interope rability element of the acquirer 
requirements results in less favourab le treatment of such EPS suppliers. 
                                                      
933 As noted earlier, EPS suppliers suggest that the success of marketing and promotional campaigns is 
a relevant competitive factor for them.  See American  Express 2010 Annual Report (Exhibit US-7), p. 13.  WT/DS413/R 
 Page 189 
 
 
 (d) Overall conclusions 
7.741  As we have completed our analysis of the three Article XVII elements, we can come to 
overall conclusions on the United States' claims that the Hong Kong/Macao requirements as well as 
the issuer, terminal equipment and acquirer require ments are inconsistent with Article XVII.   
(i) Hong Kong/Macao requirements 
7.742  We found above that the Hong Kong/Macao requirements impose an Article XVI:2(a)-type 
limitation on market access through mode 1 and that they are therefore subject to China's "Unbound" 
market access entry for that mode and subsector (d ).  We further found that Article XX:2 indicates 
that even if the Hong Kong/Macao requirements are also "measures affecting the supply of services" 
within the meaning of Article XVII:1 and result in EPS suppliers of other Members being treated less 
favourably than like Chinese services and service s uppliers when supplying through mode 1, the 
inscription of "Unbound" in China's market access en try provides "a condition or qualification to 
Article XVII".  We determined on that basis that China has no obligation in respect of the Hong 
Kong/Macao requirements to accord national treatme nt to EPS supplied through mode 1, and EPS 
suppliers of other Members supplying through mode 1.   For these reasons, we conclude that the Hong 
Kong/Macao requirements, to the extent that they affect the cross-border supply of EPS (mode 1), are 
not inconsistent with Article XVII:1 of the GATS.934   
(ii) Issuer requirements 
7.743  We also found that the issuer requirements (relating to both the Yin Lian /UnionPay logo and 
interoperability elements) are subject to commitm ents set out in China's mode 1 and 3 national 
treatment entries concerning subsector (d); that th ey are measures affecting the supply of services; and 
that they result in like EPS and EPS suppliers of  other Members being treated less favourably than 
CUP and its EPS, irrespective of whether the rele vant services are provided under mode 1 or 3 and 
even in cases where those other suppliers would meet  the qualifications for engaging in mode 3 local 
currency business.  For these reasons, we conclude th at the issuer requirements are inconsistent with 
Article XVII:1 of the GATS.  The issuer requirements that relate to the Yin Lian /UnionPay logo use 
are maintained through Articles 2.1(i) and 2.2(i) of Document No. 37; Articles 1, 2, 5 and 6 of 
Document No. 57; and Article 3.2(ii) of Document No . 129.  Those that relate to interoperability are 
maintained through Articles 1.2(i), 2.1(iii), 2.2(i) and 3.1 of Document No. 37; Article 3 of Document 
No. 57; Article 3.2(ii) of Document No. 129; and Article 64 of Document No. 17 in conjunction with 
Document No. 76.   
(iii) Terminal equipment requirements 
7.744  We further found that the terminal e quipment requirements (relating to both the Yin 
Lian/UnionPay logo and interoperability elements) are subject to commitments set out in China's 
mode 1 and 3 national treatment entries concerning subsector (d); that they are measures affecting the supply of services, and that they result in like EPS  and EPS suppliers of other Members being treated 
less favourably than CUP and its EPS, irrespectiv e of whether the relevant services are provided 
under mode 1 or 3 and even in cases where those other suppliers would meet the qualifications 
stipulated in China's Schedule for engaging in m ode 3 local currency business.  For these reasons, we 
conclude that they are inconsistent with Article XVII:1 of the GATS.  These requirements are 
maintained through Articles 1.2(i) and 2.1(ii) of Do cument No. 37 and also Article 2.2 of Document 
No. 153.   
                                                      
934 We recall that we exercised ju dicial economy in respect of the United States' claim that the Hong 
Kong/Macao requirements are also inconsis tent with Article XVII to the extent  that they affect the supply of 
EPS through commercial presence in China (mode 3). WT/DS413/R 
Page 190 
 
 
 (iv) Acquirer requirements 
7.745  Finally, we found that the acquirer require ments (relating to both the posting of the Yin 
Lian/UnionPay logo and the capability of accepting bank cards bearing the Yin Lian /UnionPay logo ) 
are subject to commitments set out in China's m ode 1 and 3 national treatment entries concerning 
subsector (d); that they are measures affecting the supply of services, and that  they result in like EPS 
and EPS suppliers of other Members being treated less favourably than CUP and its EPS, irrespective 
of whether the relevant services are provided under m ode 1 or 3 and even in cases where those other 
suppliers would meet the qualifica tions stipulated in China's Schedule for engaging in mode 3 local 
currency business.  For these reasons, we conclude that  they are inconsistent with Article XVII:1 of 
the GATS.  The acquirer requirement that relates to the posting of the Yin Lian /UnionPay logo is 
maintained through Article 2.2 of Document No. 153 .  The requirements that relate to the capability 
of acquirers to accept bank cards bearing the Yin Lian /UnionPay logo (terminal equipment and 
interoperability elements) are maintained through Ar ticle 2.2 of Document No. 153; Article 1.2(i) of 
Document No. 37; and paragraphs 2 and 3 of the Notice as well as Articles 2.1 and 5.2.1-5.2.3 of 
Chapter I of Document No. 76.   
3. China's requirements considered jointly 
7.746  The Panel now addresses the United States' requ est that the Chinese requirements at issue 
should be considered not only individually, but al so when operating in conjunction.  The United 
States argues that this would help to ensure  the effective resolution of this dispute.935   
7.747  According to the United States, the requirements at issue are not just WTO-inconsistent when 
analysed individually, but operate together in  a manner that is also WTO-inconsistent.936  The United 
States submits in this respect that the effect of the requirements at issue is to distort competition in 
China's market for EPS.  The Unite d States submits that these requireme nts maintain CUP as the sole 
entity able to provide the full range of EPS.  Th e United States further observes that under these 
requirements, banks in China must join CUP in order to issue bank cards or acquire bank card 
transactions, and only cards bearing the CUP logo  can be issued as RMB denominated cards.  
According to the United States, these requirements al so mean that all banks that wish to acquire 
merchant transactions or operate ATMs and all me rchants that wish to accept bank cards must join 
CUP and process transactions in accordance with CU P's rules and procedures.  In the United States' 
view, these requirements gave CUP significant leverage  and automatic and universal acceptance of its 
RMB payment card products by banks and mercha nts in China and permitted and supported CUP 
becoming the sole EPS supplier in China.  The Unit ed States points out that no foreign EPS supplier 
enjoys any of these advantages.937 
7.748  In considering the United States' request, the Pane l recalls that it found above that the issuer, 
terminal equipment and acquirer re quirements are each inconsistent with Article XVII:1 for modes 1 
and 3.  We further found that the Hong Kong/ Macao requirements are inconsistent with 
Article XVI:2(a) for mode 3, and not inconsistent with Article XVII:1 for mode 1 (due to the absence 
of a national treatment obligation covering these requi rements).  In our view, these findings help to 
secure a positive solution to this dispute.  That being so, we see no need to determine whether the 
same requirements, when considered in conjunc tion with each other, would give rise to an 
independent breach of Article XVII:1 for mode 1 or  3.  We therefore decline to offer a separate 
                                                      
935 United States' first written submission, para. 32. 
936 United States' first written submission, para. 29; response to Panel question No. 4. 
937 United States' second written submission, para. 207; response to Panel question No. 71, para. 7.  WT/DS413/R 
 Page 191 
 
 
 conclusion on whether the issuer, terminal equi pment, acquirer and Hong Kong/Macao requirements, 
when considered jointly, are also inconsistent with Article XVII:1.938 
VIII.  CONCLUSIONS AND RECOMMENDATIONS 
8.1 For the reasons set forth in this Report, the Panel concludes as follows: 
(a) In respect of the United States' panel request: 939 
(i) the Panel finds that China has failed to  establish that the United States' panel 
request is inconsistent with Article 6.2 of the DSU on the grounds that it does 
not provide a brief summary of the legal basis sufficient to present the 
problem clearly.   
(b) In respect of the services at issue: 
(i) the Panel finds that the services at issu e as defined by the United States in its 
request for the establishment of a panel are classifiable under Sector 7.B(d) of 
China's Schedule, which reads "[a]ll payment and money transmission 
services, including credit, charge and debit cards, travellers cheques and bankers draft (including im port and export settlement)". 
(c) In respect of repealed or re placed Chinese legal instruments: 
(i) the Panel finds that Document Nos. 94 and 272 were repealed prior to the 
date of establishment of the panel and,  therefore, do not figure in the Panel's 
findings or recommendations; and 
(ii) the Panel finds that Document No. 66  was replaced by Document No. 53 
prior to the date of establishment of the panel and, therefore, does not figure 
in the Panel's findings or recommendations. 
(d) In respect of China's measures at issue: 
(i) the Panel finds that China, through Document Nos. 37, 57 and 129, imposes 
requirements on issuers that bank cards issued in China bear the Yin 
Lian/UnionPay logo, and furthermore, China, through Document Nos. 17, 37, 
57, 76 and 129, requires that issuers become members of the CUP network, 
and that the bank cards they issue in  China meet certain uniform business 
specifications and technical standards;  
(ii) the Panel finds that China, through Document Nos. 37 and 153, imposes 
requirements that all terminals (ATMs, merchant processing devices and POS terminals) in China that are part of the national bank card inter-bank 
                                                      
938 This approach is consistent with that followed by the panel in Turkey – Rice.  The panel in that case 
found two Turkish measures to be individually inconsistent with Turkey's WTO obligations.  The panel then 
stated that "[i]n the light of these findings, and under the guidance of the principle of judicial economy, we do 
not see the need to reach a separate conclusion on these measures considered jointly, for the resolution of this 
dispute" (Panel Report, Turkey – Rice , para. 7.281).  We further note that the United States itself has drawn our 
attention to this particular statement.  See United States' first written submission, fn 49. 
939 The Panel's conclusions incorporate those set forth in its preliminary ruling, which is contained in 
document WT/DS413/4 circulated on 30 September 2011 and which forms an integral part of this Report. WT/DS413/R 
Page 192 
 
 
 processing network be capable of accepting all bank cards bearing the Yin 
Lian/UnionPay logo; 
(iii) the Panel finds that China, through Document No. 153, imposes requirements 
on acquirers to post the Yin Lian /UnionPay logo, and furthermore, China, 
through Document Nos. 37, 76 and 153, imposes requirements that acquirers 
join the CUP network and comply with uniform business standards and 
technical specifications of inter-ban k interoperability, and that terminal 
equipment operated or provided by ac quirers be capable of accepting bank 
cards bearing the Yin Lian /UnionPay logo; 
(iv) the Panel finds that China, through Document Nos. 16, 8 and 254, imposes 
requirements that CUP and no other EPS supplier handle the clearing of certain RMB bank card transactions that  involve either an RMB bank card 
issued in China and used in Hong Kong or Macao, or an RMB bank card 
issued in Hong Kong or Macao that is used in China in an RMB-denominated 
transaction;  
(v) the Panel finds that the United States fa iled to establish that China, through 
Document Nos. 37, 57, 16, 8, 219, 254, 103, 153, 149, 53, 49, 129, 76, 17 and/or 142, imposes requirements that mandate the use of CUP and/or 
establish CUP as the sole supplier of EPS for all domestic RMB payment 
card transactions; and 
(vi) the Panel finds that the United States fa iled to establish that China, through 
Document Nos. 37, 57, 153, 219 and/or 76, imposes broad prohibitions on the 
use of "non-CUP" cards for cross-region or inter-bank transactions. 
(e) In respect of the United States' cl aims under Article XVI of the GATS: 
(i) in relation to the United States' claims  concerning China's Sector 7.B(d)  
mode 1 market access commitment, the Panel finds that the issuer, terminal 
equipment, acquirer and Hong Kong/Macao  requirements are not inconsistent 
with Article XVI of the GATS, as China has not undertaken a market access commitment under this mode and in this sector in respect of the services at 
issue in this dispute; 
(ii) the Panel finds that the United States failed to establish that the issuer 
requirements are inconsistent with Artic le XVI:2(a) of the GATS, in respect 
of China's Sector 7.B(d) mode 3 market access commitment, as these 
requirements do not impose a limitation that falls within the scope of Article XVI:2(a); 
(iii) the Panel finds that the United States failed to establish that the terminal 
equipment requirements are inconsistent  with Article XVI:2(a) of the GATS, 
in respect of China's Sector 7.B(d)  mode 3 market access commitment, as 
these requirements do not impose a limitation that falls within the scope of 
Article XVI:2(a); 
(iv) the Panel finds that the United States  failed to establish that the acquirer 
requirements are inconsistent with Artic le XVI:2(a) of the GATS, in respect 
of China's Sector 7.B(d) mode 3 market access commitment, as these  WT/DS413/R 
 Page 193 
 
 
 requirements do not impose a limitation that falls within the scope of 
Article XVI:2(a); 
(v) the Panel finds that the Hong Kong/Macao requirements are inconsistent with 
Article XVI:2(a) of the GATS because, contrary to China's Sector 7.B(d) 
mode 3 market access commitments, they maintain a limitation on the 
number of service suppliers in the form of a monopoly; 
(vi) the Panel finds that the United Stat es failed to establish that the Hong 
Kong/Macao, issuer, terminal equipmen t and acquirer requirements, when 
considered jointly, give rise to a sep arate and independent breach of Article 
XVI:2(a) of the GATS; 
(vii) the Panel finds that the United States failed to present a prima facie  case that 
the issuer, terminal equipment or acquirer requirements, considered either 
individually or jointly, are inconsistent with Article XVI:1 of the GATS in 
respect of China's Sector 7.B(d) mode 3 market access commitment; and 
(viii) the Panel exercised judicial economy with  respect to the United States' Sector 
7.B(d) mode 3 market access claims under Article XVI:1 of the GATS 
regarding the Hong Kong/Macao requirements. 
(f) In respect of the United States' cl aims under Article XVII of the GATS: 
(i) the Panel finds that the issuer re quirements are inconsistent with 
Article XVII:1 of the GATS, because contrary to China's Sector 7.B(d) mode 1 and mode 3 national treatment commitments, these requirements fail 
to accord to services and service supplie rs of any other Member treatment no 
less favourable than China accords to  its own like services and service 
suppliers; 
(ii) the Panel finds that the terminal e quipment requirements are inconsistent 
with Article XVII:1 of the GATS, because contrary to China's Sector 7.B(d) 
mode 1 and mode 3 national treatment commitments, these requirements fail 
to accord to services and service supplie rs of any other Member treatment no 
less favourable than China accords to  its own like services and service 
suppliers; 
(iii) the Panel finds that the acquirer re quirements are inconsistent with 
Article XVII:1 of the GATS, because contrary to China's Sector 7.B(d) 
mode 1 and mode 3 national treatment commitments, these requirements fail 
to accord to services and service supplie rs of any other Member treatment no 
less favourable than China accords to  its own like services and service 
suppliers; 
(iv) the Panel finds that the Hong Kong/Macao  requirements are not inconsistent 
with Article XVII:1 of the GATS, as China has no Sector 7.B(d) mode 1 
national treatment obligation in respect of these requirements;  
(v) the Panel exercised judicial economy with  respect to the United States' Sector 
7.B(d) mode 3 national treatment cl aims under Article XVII:1 of the GATS 
regarding the Hong Kong/Macao requirements; and WT/DS413/R 
Page 194 
 
 
 (vi) the Panel declined to conclude separat ely on whether the issuer, terminal 
equipment, acquirer and Hong Kong/Macao  requirements, when considered 
jointly, are also inconsistent with Article XVII:1 of the GATS. 
8.2 Under Article 3.8 of the DSU, in cases where th ere is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie  to constitute a case of 
nullification or impairment.  We conclude that, to th e extent that the measures at issue are inconsistent 
with the GATS, they have nullified or impaired benefits accruing to the United States under that 
agreement. 
8.3 Pursuant to Article 19.1 of the DSU, we reco mmend that the Dispute Settlement Body request 
China to bring its measure into conform ity with its obligations under the GATS.  
 
__________