WORLD TRADE  
ORGANIZATION  G/STR/N/11/TPKM 
7 February 2007 
 (07-0523) 
Working Party on 
State Trading Enterprises Original:   English 
 
 
 
STATE TRADING 
 
New and Full Notification Pursuant to Article XVII:4(a) of the  
GATT 1994 and Paragraph 1 of the Understanding on  
the Interpretation of Article XVII  
 
SEPARATE CUSTOMS TERRITORY OF TAIWAN,  
PENGHU, KINMEN AND MATSU 
 
 
 The following communication, dated 17 January 2 007, is being circulated at the request of the 
Delegation of the Separate Customs Territo ry of Taiwan, Penghu, Kinmen and Matsu. 
 
_______________ 
 G/STR/N/11/TPKM 
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TABLE OF CONTENTS 
 
Page
 
 
I. TOBACCO AND ALCOHOL .................................................................................................3  
II. RICE ........................................................................................................................... ...............5  
III. BANKNOTE PAPER ...............................................................................................................7  
IV. TRADE .......................................................................................................................... ............8  
  G/STR/N/11/TPKM 
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  I. TOBACCO AND ALCOHOL 
A. ENUMERATION  OF STATE  TRADING  ENTERPRISES 
1. Identification of state trading enterprises 
 Taiwan Tobacco and Liquor Corporation (hereinafter referred to as the "TTL"). 
 2. Description of products affected (includi ng tariff item number(s) encompassed in 
product description) 
Alcohol Products (2203, 2204, 2205, 2206, 2207, 2208). 
 Cooking Wine (2103).  Tobacco (2401, 2402, 2403). 
 
B. REASON
 AND  PURPOSE 
1. Reason or purpose for establishing and/ or maintaining state trading enterprise 
The TTL was established on 1 July 2002 to supe rsede the Taiwan Tobacco and Wine Board.  
Although the TTL is a state-owned enterprise, it w ill be privatized at some future date.   
 
2. Summary of legal basis for granting the relevan t exclusive or special rights or privileges, 
including legal provisions and summary of statutory or constitutional powers 
 No special rights or privileges are granted to the TTL.   
 C. DESCRIPTION
 OF THE  FUNCTIONING  OF THE  STATE  TRADING  ENTERPRISES 
1. Summary statement providing overview of op erations of the state trading enterprise 
The TTL manufactures and sells tobacco and alc ohol products according to the Tobacco and 
Alcohol Administration Act and the Tobacco and Alcohol Tax Act.   
 
2. Specification of exclusive or special rights or privileges enjoyed by the state trading 
enterprise 
The TTL does not enjoy any special rights or privileges.  The TTL operates on a commercial 
basis subject to the same acts, regulations, rul es, decrees, directives, administrative guidance, 
policies and measures applicable to other firm s within the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu, without any special rights or privileges.   
 3. Type of entities other than the state tradin g enterprise that are allowed to engage in 
importation/exportation and conditions for participation 
 Any entity approved by the Ministry of Fina nce can engage in importation/exportation.   
 
4. How import/export levels are established by the state trading enterprise 
The TTL imports and exports alcohol products according to the demand of the market.   
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  5. How export prices are determined 
The export prices of tobacco and alcohol products, including those of the TTL and private 
firms, are determined by the exporters according to the market mechanism.   
 
6. How the resale prices of imported products are determined 
The resale prices of imported tobacco and alcohol products are determined by the market 
mechanism.   
 
7. Whether long-term contracts are negotiated by  the state trading enterprise.  Whether 
the state trading enterprise is used to fulfil contractual obligations entered into by the 
government 
The TTL does not negotiate long-term contracts a nd is not required to fulfil any contractual 
obligations entered into by the government.   
 
8. Brief description of market structure 
The market structure governing tobacco and alcohol products in the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu is that of free competition.   
 D. STATISTICAL
 INFORMATION 
(See attached Tables I-III on Tobacco and Alcohol) 
 
E. REASON  WHY  NO FOREIGN  TRADE  HAS  TAKEN  PLACE 
 Not applicable. 
 
F. ADDITIONAL  INFORMATION 
 None. 
  G/STR/N/11/TPKM 
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  II. RICE 
A. ENUMERATION  OF STATE  TRADING  ENTERPRISES 
1. Identification of state trading enterprises 
Agriculture and Food Agency, Council of Agricultu re (hereinafter referred to as the "AFA"). 
 2. Description of products affected (includi ng tariff item number(s) encompassed in 
product description) 
Rice
 
 
Products HS Number 
Rice in the husk 1006.10.00.00 
Husked (brown) rice 1006.20.00.00 
Glutinous rice 1006.30.00.10 
Other semi-milled or wholly-milled rice, whether or 
not polished or glazed 1006.30.00.90 
Broken rice 1006.40.00.00 
 
 
B. REASON  AND  PURPOSE 
1. Reason or purpose for establishing and/ or maintaining state trading enterprise 
Rice is the staple food and the most important  crop in the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu.  The govern ment regulates the production, purchasing, 
warehousing, export and import of rice to ensure food security, market stability and the 
security of the income of farmers. 
 
2. Summary of legal basis for granting the relevan t exclusive or special rights or privileges, 
including legal provisions and summary of statutory or constitutional powers 
 Food Administration Act. 
 
C. DESCRIPTION  OF THE  FUNCTIONING  OF THE  STATE  TRADING  ENTERPRISES 
1. Summary statement providing overview of op erations of the state trading enterprise 
The rice production in the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and Matsu 
is to maintain self-sufficiency.  To ensure a stable food supply and maintain the income of 
farmers, the AFA purchases a proportion of the rice paddies owned by farmers to serve as 
food security stock.  Most of the ri ce produced enters the market freely. 
 
The AFA imports rice to ensure the smooth ope ration of the supply and demand, and price 
stabilization system.  The quota on imported rice is set according to the minimum access opportunities in line with the TRQ notification to  the WTO of the Separate Customs Territory 
of Taiwan, Penghu, Kinmen and Matsu. 
 G/STR/N/11/TPKM 
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   Rice importation is subject to a global qu ota and is conducted through open bidding. 
 
2. Specification of exclusive or special rights or privileges enjoyed by the state trading 
enterprise 
The AFA is in charge of the agricultural polic y and administration, food security and staple 
food price stabilization.  According to the commitments made by the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Mats u for its TRQ notification to the WTO, in 
addition to importation by private sector traders, the AFA retains the exclusive right to import 
certain amounts of rice.  
3. Type of entities other than the state tradin g enterprise that are allowed to engage in 
importation/exportation and conditions for participation 
Food dealers who are registered importers can participate in the allocation of rice quotas for 
private imports.  
4. How import/export levels are established by the state trading enterprise 
The AFA will import 65 per cent of the rice ta riff quota.  Rice importation by the AFA is 
conducted according to commitments made during the course of accession to the WTO.  
5. How export prices are determined 
None. 
 
6. How the resale prices of imported products are determined 
The resale prices are determined on the basis of their import prices, management costs, 
domestic consumer prices of competi ng products and other economic factors. 
 7. Whether long-term contracts are negotiated by  the state trading enterprise.  Whether 
the state trading enterprise is used to fulfil contractual obligations entered into by the 
government 
The AFA makes no long-term contracts for rice importation.  The opportunities are provided 
to all qualified importers. 
 
8. Brief description of market structure  
Farmers and traders are free to sell their produc ts in the market.  Th e price of rice is 
determined by market forces. 
 
D. STATISTICAL  INFORMATION 
 (See attached Tables I-III on Rice) 
 E. REASON
 WHY  NO FOREIGN  TRADE  HAS  TAKEN  PLACE 
 Not applicable. 
  G/STR/N/11/TPKM 
 Page 7 
 
 
  F. ADDITIONAL  INFORMATION 
None. 
 
III. BANKNOTE PAPER 
A. ENUMERATION  OF STATE  TRADING  ENTERPRISES 
1.  Identification of state trading enterprises 
 China Engraving and Printing Plant (CEPP). 
 
2. Description of products affected (includi ng tariff item number(s) encompassed in 
product description) 
 Banknote paper (4802100020-6, 4802699010-9, 4802691010-6). 
 
B. REASON  AND  PURPOSE 
1. Reason or purpose for establishing and/ or maintaining state trading enterprise 
The purpose for maintaining this state trading en terprise is to stabilize financial markets and 
to prevent counterfeiting through the use of banknote paper. 
 2. Summary of legal basis for granting the relevan t exclusive or special rights or privileges, 
including legal provisions and summary of statutory or constitutional powers 
The sole right of printing currency is stipulat ed in Article 13 of the Central Bank of China 
Act. The sole importer of banknote paper is stipulated in Code 343 of Tariff Code. 
 
C. DESCRIPTION
 OF THE  FUNCTIONING  OF THE  STATE  TRADING  ENTERPRISES 
1. Summary statement providing overview of op erations of the state trading enterprise 
The CEPP was established by the Central Bank of  China, and is solely responsible for 
printing currency.   
 2. Specification of exclusive or special rights or privileges enjoyed by the state trading 
enterprise 
The CEPP has exclusive rights to print currency and to import banknote paper.   
 
3. Type of entities other than the state tradin g enterprise that are allowed to engage in 
importation/exportation and conditions for participation 
 No other entities are allowed to import banknote paper. 
 
4. How import/export levels are established by the state trading enterprise 
 The quantities imported are determined by the actual domestic need. 
 G/STR/N/11/TPKM 
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  5. How export prices are determined 
The CEPP does not produce banknote paper for export.   
 
6. How the resale prices of imported products are determined 
 The CEPP does not resell imported banknote paper. 
 
D. STATISTICAL
 INFORMATION 
 (See attached Tables I on Banknote) 
 E. REASON
 WHY  NO FOREIGN  TRADE  HAS  TAKEN  PLACE 
 Not applicable.   
 F. ADDITIONAL
 INFORMATION 
 None.   
 IV. TRADE 
A. ENUMERATION
 OF STATE  TRADING  ENTERPRISES 
1. Identification of state trading enterprises 
 Central Trust of China/Trading Department (hereinafter referred to as the CTC/TD). 
 
2. Description of products affected (includi ng tariff item number(s) encompassed in 
product description) 
 Twenty  items of agricultural and fishery products which are subject to TRQ (hereinafter 
referred to as TRQ products):  deer velvet, fr esh pears (excluding European pears), banana, 
red beans, liquid milk, peanuts, garlic bulbs , dried shiitake, dried day lily, young coconut, 
betel nuts, pineapples, mangoes, pomelos, pe rsimmons, dried longa ns and longan pulp, 
mackerel, carangid and sardines (herrings), and ri ce (including rice products).  For the tariff 
item numbers of specific products, see the attachment. 
 B. R
EASON AND PURPOSE  
1. Reason or purpose for establishing and/ or maintaining state trading enterprise 
The main purpose for establishing the CTC/TD is to conduct international trade and/or other 
related operations for the government. 
 
2. Summary of legal basis for granting the relevan t exclusive or special rights or privileges, 
including legal provisions and summary of statutory or constitutional powers 
 Rules Governing the Implementation of Tariff Quotas. 
  G/STR/N/11/TPKM 
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  C. DESCRIPTION  OF THE  FUNCTIONING  OF THE  STATE  TRADING  ENTERPRISES 
1. Summary statement providing overview of op erations of the state trading enterprise 
The CTC/TD, the only specialized trade ins titution owned by the government, carries out 
foreign trade operations entrusted by the government and provides trade services on a project-by-project basis. 
 
The CTC/TD is entrusted by the Ministry of Finance (MOF) to administer the allocation of tariff rate quota (TRQ) for 20 items of agricultural and fishery products as enumerated in Section I-B of the Schedule of C oncessions and Commitments on Goods. 
 
Rice and rice products have been subject to TRQ since 2003, when the CTC/TD was also 
entrusted by the Ministry of Finance (MOF) to administer the allocation of rice quota to the private sector. 
 
2. Specification of exclusive or special rights or privileges enjoyed by the state trading 
enterprise 
The CTC/TD is entrusted by the MOF to admini ster the allocation of TRQs for 20 agricultural 
and fishery products.  This includes the alloca tion of tariff quotas and the issuance of tariff 
quota certificates.  The certificates serve as import licences.  All commercial terms of trade, including product specifications, origin, pricing and packaging, are at the sole discretion of 
the parties engaged in the transaction.  Moreove r, all products imported under the tariff rate 
quota should be distributed freely within the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu without further trade-based restrictions. 
 
3. Type of entities other than the state tradin g enterprise that are allowed to engage in 
importation/exportation and conditions for participation 
- Nineteen items of TRQ products, excluding rice and rice products:  Any enterprise 
registered as an importer/exporter in th e Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu is eligible to apply for a certificate under each quota 
allocation system. 
- Rice and rice products:  Any enterprise re gistered as an importer/exporter and food 
dealer in the Separate Customs Territory  of Taiwan, Penghu, Kinmen and Matsu is 
eligible to apply for a certificate under the quota allocation system. 
4. How import/export levels are established by the state trading enterprise 
The quantity imported is determined by  the demand of the domestic market. 
 
5. Whether long-term contracts are negotiated by  the state trading enterprise.  Whether 
the state trading enterprise is used to fulfil contractual obligations entered into by the 
government 
This item is not applicable to the CTC/TD. 
 
6. How the resale prices of imported products are determined 
 The resale prices are determined by importers subject to market forces. 
 G/STR/N/11/TPKM 
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  7. Whether long-term contracts are negotiated by  the state trading enterprise.  Whether 
the state trading enterprise is used to fulfil contractual obligations entered into by the 
government 
 There are no long-term contracts for TRQ products (including rice quotas).   
 8. Brief description of market structure 
Farmers and traders are free to sell their products  in the market.  The price is determined by 
market forces. 
 D. STATISTICAL
 INFORMATION 
Not available. 
 E. REASON
 WHY  NO FOREIGN  TRADE  HAS  TAKEN  PLACE 
 Not applicable. 
 
F. ADDITIONAL  INFORMATION 
 None.   
   G/STR/N/11/TPKM
 Page 11 
TABLE I 
 
STATE TRADING:  Taiwan Toba cco and Liquor Corporation 
STATISTICAL INFORMATION, IMPORTS 
 
(1HL=100L, 1CASE=10,000 Sticks) 
 
Description of product(s) 
(including HS number(s)) Total quantity 
imported Quantity imported by 
state trading 
enterprise Average import 
price(US) Average 
representative 
domestic sales price Mark-up National production 
1 2 3 4 5 6 7 
Year 2004 957,102 HL     3,779,607 HL 
Beer  (2203)  
Year 2005 969,894 HL     3,858,277 HL 
Year 2004 131,488 HL 344 HL US $2,677.99/HL    26,320 HL 
Wine (2204) 
Year 2005 165,676 HL 188 HL US$2,412.34/HL   39,157 HL 
Year 2004 63,294 HL 0    0 
Vermouth (2205) 
Year 2005 28,196 HL 0    0 
Year 2004 22,939 HL  US $25,628.68 /HL   126,026 HL Fermented cereal beverages  
Wine (2206) Year 2005 22,026 HL  US $26,574.74 /HL   104,709 HL 
Year 2004 350,111 HL     173,409 HL Undenatured ethyl alcohol 
(2207) Year 2005 339,965 HL     164,403 HL 
Year 2004 190,364 HL 358 HL    352,332 HL 
Spirits (2208) 
Year 2005 200,770 HL 267 HL    330,665 HL 
Year 2004 6,142,320 KG 6,142,320 KG US$5.79/KG    1,782,833 KG 
Tobacco (2401) 
Year 2005 10,434,286 KG 10,434,286 KG US$5.11/KG    3,568,661 KG  
Year 2004 2,223,844 CASE 54,877 CASE US$248.13/case   1,693,164 CASE 
Cigarettes (2402) 
Year 2005 2,603,813 CASE 47,139 CASE US$321.43/case   1,709,082 CASE  
  
  G/STR/N/11/TPKM 
Page 12 TABLE II 
 
STATE TRADING:  Taiwan Toba cco and Liquor Corporation  
STATISTICAL INFORMATION, EXPORTS 
 
(1HL=100L, 1CASE=10,000 Sticks) 
 
Description of product(s) 
(including HS number(s)) Total quantity 
exported Quantity exported by 
state trading enterprise Average 
procurement price Average 
representative 
domestic sales price Average export 
price(US) National production 
1 2 3 4 5 6 7 
Year 2004 4,673 HL 228 HL   US $1,151.82 /HL 3,779,607 HL 
Beer  (2203)  
Year 2005 4,786 HL 240 HL   US $1,242.13 /HL 3,858,277 HL 
Year 2004 56 HL    0 26,320 HL 
Wine  (2204) 
Year 2005 9 HL 1 HL   US $4,902.8 /HL 39,157 HL 
Year 2004 3 HL  0   0 0 
Vermouth ( 2205)  
Year 2005 0 HL   0   0 0 
Year 2004 7,845 HL 656 HL   US $3,355.83 /HL 126,026 HL Fermented cereal 
beverages Wine 
(2206)  Year 2005 8,098 HL 456 HL   US $3,337.72 /HL 104,709 HL 
Year 2004 883 HL 0   0 173,409 HL Undenatured ethyl 
alcohol (2207) Year 2005 101 HL 0   0 164,403 HL 
Year 2004 24,647 HL 17,257 HL   US $171.24 /HL 352,332 HL 
Spirits  (2208)  
Year 2005 24,500 HL 16,517 HL   US $215.73 /HL 330,665 HL 
Year 2004 2,378,105KG 1,196,491 KG   US $0.67 /KG 1,782,833 KG 
Tobacco (2401) 
Year 2005 5,958,960 KG 6,375,597 KG   US $0.67 /KG 3,568,661 KG  
Year 2004 43,029 CASE 43,029 CASE   US $201.39 /case 1,693,164 CASE  
Cigarettes (2402) 
Year 2005 49,761 CASE  49,761 CASE   US $212.47 /case 1,709,082 CASE  
 
  
   G/STR/N/11/TPKM
 Page 13TABLE III 
 
STATE TRADING:  Taiwan Toba cco and Liquor Corporation  
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES  
 
(1HL=100L, 1CASE=10,000 Sticks) 
 
Description of product(s) 
(including HS number(s)) Domestic purchases by state 
trading enterprise National production Domestic sales by 
state trading enterprise National 
consumption 
1 2 3 4 5 
Year 2004  3,779,607 HL 3,758,077 HL  
Beer  (2203)  
Year 2005   3,858,277 HL 3,616,967 HL  
Year 2004   26,320 HL 26,708 HK  
Wine  (2204) 
Year 2005   39,157 HL 31,677 HL  
Year 2004   0   
Vermouth ( 2205)  
Year 2005   0   
Year 2004   126,026 HL 123,752 HL  
Fermented cereal beverages Wine 
(2206)  Year 2005  104,709 HL 100,759 HL  
Year 2004  37 HL 173,409 HL 79,477 HL  
Undenatured ethyl alcohol ( 2207)  
Year 2005  36 HL 164,403 HL 169,493 HL  
Year 2004  5,918 HL  352,332 HL 297,762 HL  
Spirits  (2208)  
Year 2005 156 HL  330,665 HL 221,165 HL  
Year 2004  0 1,782,833 KG 1,196,491 KG  
Tobacco (2401) 
Year 2005  0 3,568,661KG 6,229,437 KG  
Year 2004   1,693,164 CASE  1,755,869 CASE  
Cigarettes (2402) 
Year 2005   1,709,082 CASE  1,637,429 CASE   
  G/STR/N/11/TPKM 
Page 14 TABLE I 
 
STATE TRADING:  Agriculture and Food Agency, Council of Agriculture, Executive Yuan 
STATISTICAL INFORMATION, IMPORTS 
 
Description of product(s) 
(including HS number(s))Total quantity imported 
(1000Mt) Quantity imported by 
state trading enterprise 
(1000Mt) Average import price Average representative 
domestic sales price Mark-up National production 
(brown rice) 
(1000Mt) 
1 2 3 4 5 6 7 
2002 122.6 94    1,460.7 
2003 173.9 94    1,338.3 Rice 
2004 201.9 94    1,164.6 
Note :  The imported rice is only for processing  into rice products and re-export totally. 
 
TABLE II 
 
STATE TRADING:  Agriculture and Food Agency, Council of Agriculture, Executive Yuan 
STATISTICAL INFORMATION, EXPORTS  
 
Description of product(s) 
(including HS number(s))Total quantity exported 
(1000Mt) Quantity exported by 
state trading enterprise 
(1000Mt) Average procurement 
price Average representative 
domestic sales price Averages export price National production 
(brown rice) 
(1000Mt) 
1 2 3 4 5 6 7 
2002 121.9 0    1,460.7 
2003 69.7 0    1,338.3 Rice 
2004 75.7 0    1,164.6 
 
TABLE III 
 
STATE TRADING:  Agriculture and Food Agency, Council of Agriculture, Executive Yuan 
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES 
 
Description of product(s) 
(including HS number(s)) Domestic purchases by state 
trading enterprise 
(paddies) 
(1000Mt) National production 
(brown rice) 
(1000Mt) Domestic sales by state trading 
enterprise 
(brown rice) 
(1000Mt) National supply 
(brown rice) 
(1000Mt) 
1 2 3 4 5 
2002 399 1,460.7 204 1,332.3 
2003 488 1,338.3 216 1,329.2 Rice 
2004 262 1,164.6 295 1,322.4 
  
   G/STR/N/11/TPKM
 Page 15TABLE I 
 
STATE TRADING:  China Engraving and Printing Works 
STATISTICAL INFORMATION, IMPORTS 
 
unit:  ream 
Description of product(s) 
(including HS number(s))Total quantity imported Quantity imported by 
state trading enterprise Average import price Average representative 
domestic sales price Mark-up National production 
1 2 3 4 5 6 7 
2003 27,860 27,860    0 
2004 35,592 35,592    0 Banknote Paper 
(4802) 2005 142,080 142,080    0 
 
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TRQ Products Tariff Item Number 
Deer velvet 05079020 
Fresh pears (excluding 
European pears) 08082019 
Bananas 08030000 
Red beans 07102910, 07133200, 11061010, 20049010, 20060011, 20055110, 
20060025, 20055910, 20060025, 21069097 
Liquid milk 04011010, 04012010, 04013010, 04011020, 04012020, 04013020, 
04029910, 04029920, 04029992, 04039059, 04039029, 04039090, 04039040, 18069053, 19019025, 18069055, 19019027 
Peanuts 12021000, 20081111, 20081191, 12022000, 20081112, 20081192, 
20081942, 12089011, 12089021, 15081000, 15089000 
Garlic bulbs 07032010, 07032090, 07129040 
Dried shiitake 07123030 
Dried day lily 07129050 
Young coconut 08011900 
Betel nuts 08029030 
Pineapples 08043000 
Mangoes 08045020 
Pomelos 08054020 
Persimmons 08109030 
Dried longans and longan Pulp 08134010 
Mackerel 03026400, 03026993, 03037400, 03037993, 03056940, 16041510, 
03042060, 03053010 
Carangid 03026992, 03037992, 16041920, 03042050 
Sardine (Herrings) 03024000, 03035000, 03042042, 03055941, 03056100, 16041210, 
03026100, 03037100, 03042041, 03055950, 03054950, 16041310, 03056300, 16041600, 16041320 
Rice and Rice Products 16601000, 10062000, 10063000, 10064000, 11023010, 11023090, 
11031400, 11032910, 11041910, 11042920, 11081910, 18069071, 19023020, 19041020, 19042011, 19042021, 19021110, 19021910, 19022010, 18069061, 19049010, 18069092, 19019091, 21069098 
 
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