. /.  WORLD TRADE  
ORGANIZATION  G/LIC/Q/CHN/16 
16 August 2005 
 
 (05-3647) 
Committee on Import Licensing Original:   English 
  
 
TRANSITIONAL REVIEW MECHANISM 
PURSUANT TO PARAGRAPH 18 OF THE PROTOCOL ON THE ACCESSION 
OF THE PEOPLE'S REPUBLIC OF CHINA  
 
Questions from the UNITED STATES to CHINA
 
 
  The following communication, dated 16 August 2005,  is being circulated at the request of the 
Delegation of the United States.  
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 Iron Ore
 
 1. On 1 May 2005, after Chinese steel producers negotiated contracts with major foreign iron 
ore suppliers, the Government of China imposed new automatic import licensing procedures for iron 
ore.  China began requiring licences for all import shipments of iron ore, reportedly even those for 
which contracts had been concluded before 1 May.  Qualification rules reportedly restrict licences to 
48 traders and 70 steel producers, but our understanding is that no list of criteria or list of qualified 
companies has been published.  
 
(a) When does China intend to notify these new import licensing procedures to the 
Committee? 
 
(b) What are the qualifications for receiving a licence to import iron ore?   
 
(c) Why did China impose qualifying criteria on enterprises seeking licences? 
 
(d) Has China previously imposed qualifying criteria in connection with an automatic 
licensing regime for imports other than iron ore?  If so, please explain. 
 
(e) What fees are associated with the licences?   
 
(f) How long does China envision maintaining these new import licensing procedures?   
 Steel Industry Policy
 
 
2. On 20 July 20 2005, China released The Steel and Iron Industry Development Policy .  The 
policy explicitly bans the import of "outdated"  second-hand steel-manufacturing equipment and 
espouses an import substitution policy that "encourages"  the use of domestically produced equipment 
and domestic technologies.  Equipment and technology  imports must meet the requirements of being 
either "technologically advanced" or of fulfilling a demand that domestic production is unable to 
meet. 
 G/LIC/Q/CHN/16 
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(a) What legal effects does such an industrial policy have in China? 
 
(b) When will China issue regulations or rul es, if any, to implement this policy?   
 
(c) Please explain how China plans to impose a ban on second-hand steel-manufacturing 
equipment as stipulated in this policy. 
 
(d) Please explain how China plans to impose qualifying criteria for the import of new 
equipment as stipulated in this policy. 
 
(e) When does China plan to notify the Co mmittee of the procedures for implementing 
this policy? 
 AQSIQ Licensing for Inspection of Imports
 
 
3. The United States remains concerned about  the quarantine import inspection permit 
procedures provided for in State General Administ ration of Quality Supervision and Inspection and 
Quarantine (AQSIQ) Ordinance 7, Administrative Measures for the Entry-Exit Inspection and 
Quarantine for Grains and Feed Stuff  (effective 1 March 2002), as well  as AQSIQ Decree No. 25, 
Administrative Measures for Entry Animal and Plant Quarantine  (effective 1 September 2002).  
Specifically, pursuant to Ordinance 7, AQSIQ requires that importers obtain an import inspection 
permit prior to signing an import contract for grain or  feed.  Port quarantine authorities may return or 
destroy any cargoes without a prior import inspection permit.  This import inspection permit is in addition to other import licences, including a TRQ import certificate (in the case of TRQ commodities like wheat) and a safety certificate (in the case of certain commodities), and it does not replace inspection at the port.  Similar procedures apply under Decree No. 25, pursuant to which importers are 
required to obtain a quarantine permit for a wide rang e of animal and plant products before an import 
contract can be signed.  Previously, China has ta ken the position that AQSIQ’s import permits are not 
import licences, but instead fall under the umbrella of sanitary and phytosanitary measures.  Please explain why AQSIQ’s import permits are not import licences.  
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