WORLD TRADE  
ORGANIZATION  G/TBT/W/326 
29 October 2009 
 (09-5383) 
Committee on Technical Barriers to Trade Original:   English 
  
 
CHINA'S
 TRANSITIONAL  REVIEW  MECHANISM  
Communication from the European Communities  
  The following communication, dated 28 October 2009, is being circulated at the request of 
the delegation of the European Communities
. 
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I. TRANSPARENCY AND PREDICTABILITY OF THE REGULATORY 
ENVIRONMENT 
1. The EC welcomes China's continued work on im proving transparency and predictability in 
rule-making and administrative procedures. It is en couraging to see that China uses public calls for 
comments on proposed legislation in important sectors;  however, there is a lack of predictability in 
the use of this procedure. China is requested to consistently call for public  consultations on all new 
draft laws and administrative measures that may ha ve a significant effect on trade, and to provide a 
reasonable period for comments on these drafts in orde r to allow stakeholders to adequately examine 
the proposals and give considered comments.  
2. In keeping with its WTO accession commitments Ch ina is asked to establish a single official 
journal for publishing all laws, regulations a nd other measures pertaining to or affecting, inter alia , 
trade in goods. 
II. CHINA COMPULSORY CERTIFICATION (CCC) SYSTEM   
3. On 3 July 2009, the General Administration for Quality Supervision, Inspection and 
Quarantine (AQSIQ) released a revised version of China's Compulsory Products Certification 
Management Regulation  (Circular 117/2009). The EC welcomes the clarifications of some aspects of 
the certification process, as well as the reinforcement of the confidentiality obligations of certification 
bodies.  
4. The EC also welcomes the launch by the Cer tification and Accreditation Administration in 
March 2009 of a simplification process aimed at  reducing administrative costs linked to CCC 
compliance, essentially focusing on the reduction of the number of key components to be tested and 
certified separately from the finished product. Th e EC encourages China to build on these positive 
steps in ensuring that the CCC system becomes mo re transparent and less burdensome for economic 
operators, and based on a risk-oriented approach.  
5. Despite the above positive steps, the CCC syst em remains a major obstacle for foreign 
companies exporting to China, due to the complexity, costs and length of the procedure. The EC notes G/TBT/W/326 
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  with concern that since the implementation of the CCC in 2003, there has been  a steady growth in the 
number of products and areas that are subject to CCC procedures, with an increased complexity of 
requirements. The process is particularly burdens ome for small and medium enterprises operating in 
China.  
6. The EC therefore reiterates its call for China to undertake a substantive review of the CCC 
process, taking into account the need for structural  simplification and the adoption of a risk-based 
approach, as well as improving the transparency of the process and reducing the administrative 
burdens associated with it.  
7. In particular, the EC asks China to review the current “one size fits all” approach based on 
comprehensive third-party testing a nd factory audits, which assigns the same high level of risk to all 
products within CCC scope, despite their evidently po sing very different levels of health and safety 
risks. Alternative approaches should also be consider ed, such as Supplier's D eclaration of Conformity 
for low-risk products such as low voltage and ICT products and offering a choice between quality 
assurance and product verification conformity assessment modules where third-party assessment is 
required. 
8. The EC also requests China to consider wider acc eptance of foreign test results via bilateral 
agreements between Chinese and foreign certificati on bodies and greater participation in existing 
multilateral schemes between international accredited laboratories.  
9. In the meantime, the EC invites China to give  positive consideration to the proposals for the 
short-term simplification of certain aspects of the current CCC system, as submitted to China both 
bilaterally and at the occasion of the last review.
1   
III. INFORMATION SECURITY TESTING AND CERTIFICATION 
10. The EC continues to have concerns about the 13 proposed implementing rules for compulsory 
certification of various information technology products in relation to information security 
requirements (ref. G/TBT/N/CHN/278-290).   
11. According to Circular No. 33/2009 issued jointly by AQSIQ, the Ministry of Finance and 
CNCA, the target date for the entry into force of the new requirements has been delayed until 1st May 
2010. Furthermore, the scope of the measures has be en reduced to public procurement only. The EC 
has welcomed this announcement by China.  
12. Despite this positive development, outstanding i ssues remain in a number of areas. The scope 
for public procurement in this case appears to extend well beyond what the EC would consider 
justified for national security protection, which w as cited by China as the legitimate objective to be 
achieved. The EC is also seriously concerned th at state owned enterprises (SOEs) in non national 
security-sensitive sectors (e.g. energy, telecommuni cations, banking, insurance) would fall under the 
scope of the requirements. The EC would appreci ate receiving confirmation from China in this 
Committee that SOEs will not fall under the scope of the Regulations.  
13. The EC is also concerned with the implemen tation of the Multi-Layer Protection Scheme 
coordinated by the Ministry of Public Security  and the Ministry of Industry and Information 
Technology and the Regulation of Commercial Encrypti on Codes administered by the Office of State 
Commercial Cryptography Administration (OSCCA). The EC requests China to clarify the rationale for these measures and their relationship with the CCC regulations for information security. The EC 
                                                     
 
 1 G/TBT/W/300.  G/TBT/W/326 
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  also urges China to notify any implementing meas ure laying down equipment-related requirements 
pursuant to the relevant transparen cy provisions of the TBT Agreement  
14. According to the OSCCA Regulation of Commercial Encryption Codes, the production and 
distribution of information technology products who se core function is encryption is reserved for 
approved Chinese companies. By the same token, onl y products domestically made are eligible for 
certification by OSCCA. Hence, foreign manufactur ers are currently unable to export encryption 
products to China for commercial purposes under th e terms of the Regulation. Foreign-owned 
companies established in China are equally deni ed access to the OSCCA business license and product 
certification. Both SOEs and the Chinese Governme nt are required to only purchase OSCCA-certified 
encryption products.   
15. The EC requests China to urgently revise the OSCCA regulation in order to ensure equal 
market access opportunities between domestic and foreign / foreign-owned companies based on 
technical standards and conformity assessment proce dures aligned with international practice, without 
disclosing confidential information or taking over Chinese encryption codes. The EC also asks that 
the licensing procedures be made completely transp arent, in order to allow foreign operators to 
operate in a predictable environment.  
16. The EC appreciates China's continued willi ngness to maintain an open channel of 
communication on these issues with concerned WTO members and affected stakeholders. In the 
meantime the EC urges China to follow internatio nal practice to ensure continued and fair market 
access.  
IV. STANDARDIZATION  
A. PARTICIPATION OF FOREIGN -OWNED COMPANIES ESTABLISHED IN CHINA IN DOMESTIC 
STANDARDISATION WORK  
17. In January 2009, the Standardisation Administ ration of China (SAC) announced that foreign-
owned companies established in China would be allowed to participate as voting members in 
Technical Committees responsible for the promulgati on of national standards, pending the approval of 
the Technical Committee Chair. The welcomes th is announcement and encourages China to ensure 
effective access of foreign-owned companies to dom estic standardisation work, including as regards 
the so-called industry standards.  
B. IMPLEMENTATION OF INTERNATIONAL STANDARDS – NATIONAL DEVIATIONS  
18. The EC notes with appreciation China’s achieve ments with regard to the adoption rate of 
international standards and its commitment to th e continuous alignment of  its domestic technical 
regulations and standards with inte rnational standards. However, the EC has noticed that, on several 
occasions in the recent past, China has decided to  put in place Chinese-specific national compulsory 
standards in various sectors, even in those cases wh ere relevant international standards were readily 
available, without providing adequa te justification with regard to its reasons from departing from the 
international standard. One example would be the case of sulphur dioxide levels in wines 
(G/TBT/CHN/197) raised by the EC in the TBT Co mmittee on several occasions. In this instance, the 
EC would like to remind China of its obligation to comply with Article 2.4 of the TBT Agreement.  
19. Lastly, concerns remain as to the availability of information regarding deviations of Chinese 
standards from corresponding international standards and the reasons for such deviations.  The EC 
urges China to make information on those national deviations more readily available to economic 
operators and give justif ications for deviations. G/TBT/W/326 
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  C. V
OLUNTARY STANDARDS RENDERED MANDATORY THROUGH CONFORMITY ASSESSMENT 
PROCEDURES  
20. A further source of concern for the EC is the practice whereby standards initially developed as 
"Voluntary Industrial Standards" are later made mandatory, typically by referencing them in 
mandatory conformity assessment procedures wit hout any prior warning being given to the 
participants in the standard-making process about this policy change.  By the same token, no 
notification in accordance with the provisions of the TBT Agreement is generally given.  
21. As an example, please see the standard on a Unified Charger for Mobile Telecommunications 
Terminal Equipment  (YD/T 1591-2006), which had been de veloped and initially adopted in 
December 2006 as a “Voluntary Industrial Standard” but was later rendered mandatory (as of 14 June 
2007) on all mobile phones and chargers manufactured  in China in the framework of the Network 
Access License procedure operated by the then  Ministry of Information Industry.   
22. The EC takes the view that the practice of re ndering voluntary industrial standards mandatory 
trough regulatory type approval without any prior notification according to the TBT Agreement is 
inconsistent with the transparency obligations to be observed in the preparation, adoption and 
publication of technical regulations pursuant to th e WTO TBT Agreement. The EC is of the opinion 
that, if a standard is made mandatory, it should ta ke the form of a national technical regulation and 
should  therefore be notified under the TBT Agreement. 
V. OTHER CONCERNS  
23. The following is a non-exhaustive  list of concerns currently being raised by the EC with 
China in the framework of bilatera l regulatory cooperation mechanisms: 
A. ICT  PRODUCTS  
24. In addition to the issues related specifically  to information security products presented in 
Section III, the EC is concerned with China's te ndency to favour home-grown standards featuring 
unique Chinese technologies, the overly detailed tec hnical specifications for mobile phone features 
and components, the difficulties in placing on the Chinese market innovative products having 
multimode capabilities, and the multiple and partia lly overlapping certification procedures managed 
by different authorities.  
B. AUTOMOBILES  
25. The EC has concerns about China's app lication of the CCC scheme for automotive 
components. The EC believes that the goals of en suring safety, health, and environmental protection 
would be well achieved through harmonisation under the United Nations 1958 Agreement on Motor 
Vehicles (under the Economic Commission for Europe, UNECE).   
C. ACTIVE PHARMACEUTICAL INGREDIENTS  
26. The EC recalls its concerns about the r outine multi-sampling and testing practice mandated 
for each imported batch of active pharmaceutical ingredients (APIs) by the State Food and Drug 
Administration (SFDA) regulations and the method of  establishing standards that foreign APIs have 
to meet. The EC would like China to inte nsify cooperation on quality assurance and Good 
Manufacturing Practices which should lead to mu tual acceptance of quality certificates and the 
abandonment of import testing. The EC believes th at China’s legitimate objectives could be better 
fulfilled by relying on international practices.   G/TBT/W/326 
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  D. PHARMACEUTICAL PRODUCTS  
27. Registration periods in China may take 3 years on average or even more for vaccines, due to a 
number of cumbersome, lengthy and costly requirem ents relating in particular to clinical trial 
approvals. This results in the most innovative drugs  being made available to Chinese patients with a 
significant delay. The EC therefore invites China to  expedite work towards the simplification of the 
clinical trial process, as well as of the overall regi stration process for new drugs .In this regard, the EC 
would like to highlight the importance of adoptin g International Conference on Harmonisation of 
Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH)-compatible practices.  
E. C
OSMETICS : PRE-MARKET APPROVAL PROCEDURE FOR NON -SPECIAL USE IMPORTED 
COSMETICS  
28. The EC recalls the concerns raised in the l ast transitional review with respect to the pre-
market approval procedures for non-special use import ed cosmetics, which delay their time to market 
by 4-6 months, when compared to domestic non-specia l use cosmetics.  The EC reiterates its request 
for China to u nify the notification system currently in force for imported and domestic non-special use 
cosmetics.  The EC considers that the simplification of procedures should be only a first step towards 
lifting all ex-ante approvals for imported cosmetics 
F. COSMETICS : STANDARDS  
29. The EC recalls its request for Ministry of Health and AQSIQ to develop a single hygiene 
standard for cosmetics that would replace the two st andards that are being separately enforced by the 
Ministry of Health (the Hygiene Standard for Cosmetics 2007) and AQSIQ (the already outdated 
Standard for Cosmetics (GB 7916-1987) issued in 1987). 
G. MEDICAL DEVICES : REGISTRATION AND RE -REGISTRATION PROCEDURES  
30. The EC refers to the concerns raised in the last two transitional reviews regarding the 
duplicative mandatory (re-)registration requirements enforced by SFDA and AQSIQ offering no 
additional safety benefit for patients and users.  
H. MEDICAL DEVICES : REPROCESSING AND REPROCESSED MEDICAL DEVICES  
31. The EC reiterates its request for China to treat  new or fully refurbished medical devices alike.  
The EC believes that the ban on refurbished produ cts is not justified on health and safety grounds. 
The EC welcomes the fact that work has starte d in relevant Ministries towards establishing a 
regulatory framework for refurbished medical devi ces that should facilitate their placing on the 
Chinese marketing. The EC would appreciate it if Ch ina could provide an update on the state of play. 
I. TEXTILES : STANDARDS  
32. The EC reiterates its request for China to, whenever revising or producing new textile 
standards, refrain from introducing technical chan ges/national deviations in Chinese standards as 
compared with existing ISO standards. 
33. The EC would like to recall its request fo r China to refrain from rendering compulsory 
qualitative aspects of textile/clothing products (e.g. leve ls of colour fastness) which should be left to 
market operators to decide upon without state intervention. G/TBT/W/326 
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  J. T
EXTILES : CONFORMITY ASSESSMENT PROCED URES AND MARKET SURVEILLANCE 
MECHANISMS FOR TEXTILES AND FOOTWEAR  
34. The EC would like to recall its request for China to progressively replace systematic import 
commodities inspections for textiles, clothing and footwear with ra ndom import commodities 
inspections, and for China to accept suppliers’ declar ations of conformity a nd EU test reports as 
assurance of conformity with applicable requirements. 
K. TEXTILES : LABELLING REQUIREMENTS  
35. The EC reiterates its request for China to  simplify labelling requirements for textiles and 
footwear products. This would mean also no require ments for any form of prior approval registration 
or certification of labels as a condition for allowing the textile and footwear goods to be placed on the 
market. The EC notes that China is interested in the WTO proposal on an understanding on the 
simplification of labelling requirements at intern ational level (TN/MA/W/93). Joining the proponents 
of this proposal would allow China to show its leader ship in the work of fac ilitating trade in a sector 
of great importance to developing countries. 
L. TOXIC CHEMICALS  
36. The EC refers to the concerns raised in the last two transitional reviews with respect to the 
"Regulations for Environmental Management on the First Import of Chemicals and the Import and 
Export of Toxic Chemicals”, in force since 1 January 2006.  Chin a has repeatedly indicated in this 
Committee that the Regulations were being revised a nd that foreign stakeholders could participate in 
the process. The EC would appreciate if China could give an update on the status of the revision. 
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