. /.   WORLD TRADE  
ORGANIZATION  G/VAL/W/168 
23 May 2008 
 (08-2399) 
Committee on Customs Valuation Original:   English 
  
 
NOTIFICATIONS UNDER ARTICLE 22 OF THE CUSTOMS  
VALUATION AGREEMENT 
 
Questions from the United States to the People’s Republic of China 
 
regarding G/VAL/N/1/CHN/5  
 
 
 The following communication, dated 16 October 2007, is being distributed at the request of the delegation of the People's Republic of China. 
 
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 On 11 April 2008, China notified the Decree of  the Customs General Administration of the 
People’s Republic of China, No. 148 of 2006, on The Rules regarding Determination on Customs 
Value of Imported and Exported Goods.  The ru les were published on 8 March 2006 and came into 
effect on 1 May 2006.  This decree replaces the Rules of General Administration of Customs of the 
People’s Republic of China Regarding Determina tion on Customs Value of Imported and Exported 
goods promulgated in the form of Decree No.95 of the General Administration of Customs on 
31 December 2001 and the Customs Regulations of  the People’s Republic of China Regarding 
Determination on Customs Value of Royalties a nd License Fees Related to the Imported Goods 
promulgated in the form of Decree No.102 of the General Administration of Customs on 
30 May 2003.   
 
Questions :  We have the following comments/questi ons on China’s implementation of certain 
provisions of the Agreement on Implemen tation of Article VII of the GATT 1994 
(WTO Customs Valuation Agreement).   
 
1. Article 4 (Chapter I, General Provisions) states that Customs “shall not disclose such information outside Customs, unless otherwise provide d for by laws or administrative regulations.”  
Please clarify what laws or administrative regula tions require that confidential information be 
disclosed?  
2.   With regard to Article 6 (C hapter II, Section I), on what b asis does China require that the duty 
payer provide “sufficient information” in order to have the order of deductive and computed value be 
reversed?  Article 4 of the Customs Valuation Ag reement states only that “at the request of the 
importer, the order of application of Articles 5 and 6 shall be reversed.” 
 
3.   Articles 6(e) and 25 appear to be the pr ovisions related to the im plementation of Customs 
Valuation Agreement Article 7.  However, it seems that Article 6(e) and 25 do not fully incorporate 
the provisions of Customs Valuation Agreement Article 7 and the Note to Article 7.  For example, the 
definition of reasonable means does not appear to inco rporate the Note to Article 7, which states that 
the methods of valuation to be em ployed under Article 7 should be tho se laid down in Articles 1-6 but 
with a reasonable flexibility.  
 G/VAL/W/168 
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  4.   With regard to Related Parties, Articles 8 a nd 17 of the law appear only to allow test values to 
be used to establish the acceptability of transac tion value.  Under Customs Valuation Agreement 
Article 1 and the Note to Article 1, there are two tests that can be applied to determine whether a 
related party transaction value is acceptable:  circumstances of sale and test values.  Please clarify 
whether the sale test is permitted.  If so, where in Chinese law is this incorporated? 
 
5.   On what basis does China compel the duty payer to provide information?  What are the 
consequences if the duty payer does not provide the information?  Furthermore, could China explain 
why importers, according to Article 48, are only give n 5-10 days to submit information to allay the 
doubt of Customs over the truth of its customs declarations?    
6.   With regard to verification of informati on provided for the computed value method in Article 
24 (page 9 of G/VAL/N/1/CHN/5), China states that, “Customs may conduct on-site verification of the information”.  How does this comply with Ar ticle 6.2 of the Customs Valuation Agreement? 
 7.   With regard to Chapter III, Customs Value of Special Imported Goods (pages 9-12 of 
G/VAL/N/1/CHN/5), please clarify which products are covered by these provisions.   
 8.   Please provide references in China’s laws and regulations for China’s implementation of Article 11 of the Customs Valuation Agreement,  regarding appeals, and Article 13 regarding 
guarantees.  We would also appreciate if China w ould provide copies of such  laws and regulations. 
 
9.   Article 23(a) regarding deductions under the deductive value method appears to include 
profit, general expenses and commissions.  Unde r Customs Valuation Agreement Article 5, a 
deduction can be made either  for commissions or for profit and general expenses.  Could China 
explain whether Article 23(e) re quires deduction of profit, genera l expenses and commissions, or 
instead allows for deduction either of commi ssions or of profit and general expenses? 
 
Interpretative Notes
: 
  Based on the review of the Decree that the United States has undertaken, it appears that China 
has incorporated only some of the Interpretive Notes.  Many important provisions appear to be 
missing, such as circumstance of the sale value (Note to Article 1), the application of Article 7 (Note 
to Article 7), and some elements relating to genera l expenses and profit (Note to Articles 5 and 6), 
among others.   In view of the fact that th e Interpretive Notes are integral to the proper 
implementation of the Agreement, the inclusion of some, and the absence of other, interpretative notes 
in the Decree, regulations, or elsewhere raises conc erns.  Does China have any plans to incorporate 
them?  
 
 
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