CHINA – CERTAIN MEASURES AFFECTING ELECTRONIC PAYMENT SERVICES
Document: Request for Consultations by the United States
Date: 20 September 2010
Document codes: WT/DS413/1; S/L/375
Complainant: U.S.
Respondent: China
Third parties: Australia, Ecuador, EU, Guatemala, Japan, South Korea, India
Dispute stage: Panel
Agreements cited: Art. XVI, XVI:1, XVI:2(a), XVII  Services (GATS)  Dispute Settlement Understanding (DSU)

CHINA – CERTAIN MEASURES AFFECTING
ELECTRONIC PAYMENT SERVICES

Request for Consultations by the United States

 The following communication, dated 15 September 2010, from the delegation of the United
States to the delegation of China and to the Chairman of the Dispute Settlement Body, is circulated in
accordance with Article 4.4 of the DSU.

 My authorities have instructed me to request consultations with the Government of the
People's Republic of China ("China") pursuant to Articles 1 and 4 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes ("DSU"), and Article XXII of the General
Agreement on Trade in Services ("GATS") with respect to certain restrictions and requirements
maintained by China pertaining to electronic payment services
1 for payment card2 transactions and the
suppliers of those services ("electronic payment services suppliers").

 In the financial services sector, as set out in China's GATS Schedule of Specific
Commitments on Services (the "Schedule")
3, China undertook both market access and national
treatment commitments with respect to:

• "Banking services as listed below: . . . All payment and money transmission services,
including credit, charge and debit cards, travellers cheques and bankers drafts
(including import and export settlement)";

1 "Electronic payment services" involve the services through which transactions involving payment
cards (as defined below) are processed and through which transfers of funds between institutions participating in
the transactions are managed and facilitated. Suppliers of electronic payment services supply, directly or
indirectly, a system that typically includes the following : the processing infrastructure, network, and rules and
procedures that facilitate, manage, and enable transaction information and payment flows and which provide
system integrity, stability and financial risk reduction; the process and coordination of approving or declining a
transaction, with approval generally permitting a purchase to be finalized or cash to be disbursed or exchanged;
the delivery of transaction information among participating entities; the calculation, determination, and
reporting of the net financial position of relevant institutio ns for all transactions that have been authorized; and
the facilitation, management and/or other participation in the transfer of net payments owed among participating
institutions.
2 A "payment card" includes a credit card, charge card, debit card, check card, automated teller
machine ("ATM") card, prepaid card, and other similar card or payment or money transmission product or
access device, and the unique account number associated with that card or product or access device.
3 Annex 9 of the Protocol on the Accession of the People’s Republic of China , WT/L/432,
23 November 2001 (the "Accession Protocol").

• "Other financial services as listed below: . . . provision and transfer of financial
information, and financial data processing and related software by supplier of other
financial services"; and

• "Advisory, intermediation and other auxiliary financial services on all activities listed
in subparagraphs (a) through (k), including credit reference and analysis, investment
and portfolio research and advice, advice on acquisitions and on corporate
restructuring and strategy."
4

 Despite those commitments, China appears to impose market access restrictions and
requirements on service suppliers of other Members seeking to supply electronic payment services in
China. It appears that China UnionPay ("CUP"), a Chinese entity, is the only entity that China permits
to supply electronic payment services for paymen t card transactions denominated and paid in
renminbi ("RMB") in China. Service suppliers of other Members can only supply these services for
payment card transactions paid in foreign currency.

 In addition to permitting only CUP to supply electronic payment services for payment card
transactions in China denominated and paid in RM B, China also requires all payment card processing
devices at merchant locations to be compatible with CUP's system, which gives CUP guaranteed
access to all merchants in China who accept payment cards. Electronic payment services suppliers of
other Members or their participating institutions, by contrast, must negotiate for access to merchants.
In addition, China requires that all payment cards, including "dual currency" cards, issued in China
for transactions denominated and paid in RMB bear the CUP logo. These and other requirements and
restrictions identified below appear to accord l ess favorable treatment to electronic payment services
suppliers of other Members than to Chinese suppliers of these services.

 The instruments through which Chin a maintains these measures include:

– Measures for the Administration of Bank Card Business by the People's Bank of
China (Yinfa [1999] 17), issued on 27 January 1999;

– Circular of the People's Bank of China on Promulgation of Opinions on
Implementation of Joint Work in Bank Ca rd Interoperability in 2001 (Yinfa [2001]
37), issued on 19 February 2001;

– Circular on Uniform Use of CUP Logo and its Holographic Label for
Anti-counterfeiting by the People's Bank of China (Yinfa, [2001] 57), issued on 13
March 2001;

– Notice of Circulating the Bank Card Connection Business Standard by the People's
Bank of China (Yinfa [2001] 76), issued 29 March 2001;

– Opinions on Bank Card Interoperability Re lated Work in 2002 by the People's Bank
of China (Yinfa [2002] 94), issued on 5 April 2002;

– Circular regarding Issues concerning Bank Card Interoperability Related Work by the
People's Bank of China (Yinfa [2002] 272), issued on 29 August 2002;

4 Section II, 7 (Financial Services), B (Banking and Other Financial Services) of the Schedule
(circulated in WT/ACC/CHN/49/Add.2 and WT/MIN(01)/3/Add.2).

– Circular on Further Improving Bank Card Interoperability Related Work by the
People's Bank of China (Yinfa [2003] 129), issued on 2 July 2003;

– Announcement of Clearing Arrangements Provided by Banks in relation to
Individuals' Deposits, Exchanges, Bank Card and Remittance in RMB in Hong Kong
(PBOC Announcement [2003] 16), issued on 19 November 2003;

– Circular on Regulating the Administration of Foreign Currency Bank Cards by the
State Administration of Foreign Exchange Circular (Huifa [2004] 66), issued on 30
June 2004;

– Announcement of Clearing Arrangements Provided by Banks in relation to
Individuals' Deposits, Exchanges, Bank Cards and Remittance in RMB in Macao
(PBOC Announcement [2004] 8), issued on 3 August 2004;

– Notice of the People's Bank of China con cerning Relevant Issues on Accepting and
Using Renminbi Bank Cards in Border Areas (Yinfa [2004] 219), issued on 21
September 2004;

– Circular regarding Issues concerning Indi vidual RMB Business Handled by Banks in
Mainland China and Banks in Hong Kong a nd Macao by the People's Bank of China
(Yinfa [2004] 254), issued on 28 October 2004;

– Some Opinions of the People's Bank of China, the National Reform and Development
Commission, the Ministry of Public Security, the Ministry of Finance, the Ministry of
Information Industry, the Ministry of Commerce, the Station Administration of
Taxation, China Banking Regulatory Commission and the State Administration of
Foreign Exchange on Promoting the Deve lopment of Bank Card Industry Some
Opinions of the People's Bank of China, the National Reform and Development
Commission, the Ministry of Public Security, the Ministry of Finance, the Ministry of
Information Industry, the Ministry of Commerce, the Station Administration of
Taxation, China Banking Regulatory Commission and the State Administration of
Foreign Exchange on Promoting the Deve lopment of Bank Card Industry (Yinfa
[2005] 103), issued 24 April 2005;

– Guiding Opinions of the People's Bank of China on Regulating and Promoting the
Development of Bank Card Acceptance Market (Yinfa [2005] 153), issued on
16 June 2005;

– Notice of the People's Bank of China on the Relevant Issues concerning
Strengthening the Administration of Oversea Business Acceptance of Bank Cards
(Yinfa [2007] 273), issued on 6 August 2007;

– Notice of the China Banking Regulatory Commission on the Issues Concerning
Wholly Foreign-funded and Chinese-forei gn Equity Joint Banks in Conducting the
Bank Card Business (Yin Jian Fa [2007] 49), issued 6 June 2007;

– Notice of the People's Bank of China, the China Banking Regulatory Commission,
the Ministry of Public Security and the State Administration for Industry and
Commerce on Strengthening the Safety Ma nagement of Bank Cards and Preventing
and Combating Bank Card Crimes (Yinfa [2009] 142), issued 27 April 2009; and

– The Opinions of the Standing Office of the People's Bank of China on the Circular on
Strengthening the Safety Management of Bankcards and Preventing and Fighting
Crimes in Bank Cards by the People's Bank of China, the China Banking Regulatory
Commission, the Ministry of Public Security and the State Administration for
Industry and Commerce (Yinfa [2009] 149), issued 1 August 2009;

as well as any amendments, related measures, or implementing measures.

 China therefore appears to be acting inconsis tently with its obligations under Articles XVI
and XVII of the GATS.

 The measures cited in this request for consu ltations also appear to nullify or impair the
benefits accruing to the United States directly or indirectly under the cited agreements.

 We look forward to receiving your reply to the present request and to fixing a mutually
convenient date for consultations.