. /.  WORLD TRADE  
ORGANIZATION  G/VAL/W/147 
7 April 2005 
 (05-1454) 
Committee on Customs Valuation Original:   English 
  
  
NOTIFICATIONS UNDER ARTICLE 22 OF THE CUSTOMS  
VALUATION AGREEMENT 
 
Responses from China to questions posed  by the United States (G/VAL/W/145) 
 
 
    The following communication, dated 7 April 2005, is being circulated at the request of the delegation of the People's Republic of China. 
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 1. Question:  Please confirm whether China's valuation regime does not involve the use of reference prices, with additional confirmation that if  such practice might arise it would be corrected.   
 
Answer:  It is stipulated in Article 3, Chapte r II of Decree No. 95 of General Administration of 
Customs Administration of the People's Republic of China on the Rules of General Administration of 
Customs of the People's Republic of China Rega rding Determination on Customs Valuation of 
Imported and Exported Goods (G/VAL/N/1/CHN/1) th at “the customs value of the imported goods 
shall be determined by customs administration on the basis of the transactio n value, including the 
charges associated with the transport of imported goods and the cost of insurance and associated costs 
incurred prior to unloading of th e goods at the port within the cu stoms territory of the People's 
Republic of China.”  2. Question:  The United States had some reports from exporters about situations where China's 
customs was not treating software consistent with  its commitments.  Therefore, could the Chinese 
delegation confirm that the operation of China's customs valuation regime regarding software 
involves application of the decision regarding the valuation of software and, also that China's valuation regime does not involve a practice of adding royalty and sim ilar fees to the dutiable value of 
software.  
Answer:  China has applied the Decision of the Committee on Customs Valuation on Valuation 
of Carrier Media Bearing Software for Data  Processing Equipment since 11 December 2003 
(G/VAL/N/3/CHN/1). When determining the cust oms value of imported carrier media bearing 
software for data processing equipment according to   Decree No. 95 of General Administration of 
Customs Administration of the People's Republic of China on the Rules of General Administration of 
Customs of the People's Republic of China Rega rding Determination on Customs Valuation of 
Imported and Exported Goods, the customs value shall not include the value of the software provided 
that it is listed individually from the cost or the valu e of the carrier media. If the cost or value of the 
carrier media and the value of the software are not listed individually, but  the documentation which 
identifies the value or cost of the carrier media or  the value of the software can be provided by the 
importer, the above mentioned method of valuation shall also apply.  
 G/VAL/W/147 
Page 2  
 
  While royalties and license fees are involved in  the procedures of Customs valuation, they 
shall be determined according to Decree No . 95 of General Administration of Customs 
Administration of the People's Republic of China on the Rules of General Administration of Customs of the People's Republic of China Regarding Dete rmination on Customs Valuation of Imported and 
Exported Goods. 
 
 The basis of Customs valuation and the met hod of software valuation are both definitely 
prescribed in the above mentioned regulations and are strictly implemented in actual enforcement. If 
the importers have objections to the decisions  of Customs valuation, they may apply for 
administrative reconsideration or lodge a lawsuit in accordance with the Regulations of the People’s 
Republic of China on Import and Export Duties ( G/VAL/N/1/CHN/4). 
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