WORLD TRADE
ORGANIZATIONG/VAL/W/111
31 October 2002
(02-5998)
Committee on Customs Valuation Original:  English
COMMITTEE ON CUSTOMS VALUATION
TRANSITIONAL REVIEW UNDER ARTICLE 18 OF THE PROTOCOL
OF ACCESSION OF THE PEOPLE’S REPUBLIC OF CHINA
The following communication, dated 29 October 2002, has been received from the Permanent
Mission of China.
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Information Required in Annex 1A
The use of valuation methods, other than the stated transaction value
China committed itself to the full application of the WTO Agreement on Customs Valuation,
including valuation methodologies set forth in Articles 1 through 8 thereof, upon its accession. In
addition, China would apply the provisions of the two decisions taken by the Committee on Customs
Valuation concerning the treatment of interest ch arges in the customs value of imported goods and
valuation of carrier media bearing software for data processing equipment as soon as practicable, butin any event no later than two years from the date of accession, as referred to in paragraph 143 of the
Working Party Report on Accession of China.
Since the accession to the WTO, China has been implementing the commitments seriously.
The Customs Authorities in China has been applying principles and procedures that entirely comply
with the WTO Agreement on Customs Valuation to imported goods.
In this regard, China would like to provide the following information to the Committee on
Customs Valuation, as required by Annex 1 to the Protocol of Accession of China.
I. Valuation legislation
In light of the requirement of the WTO that the legislation of Members should embody the
basic principles and contents of the Agreement on Customs Valuation, China has made great efforts to
improve its relevant legislation in the following aspects.
1. The revised Customs Law of the People’s Republic of China came into force on 1
January 2001. It requires that the principle of “transaction value” be applied to the valuation
of imported and exported goods, by providing in Article 55 that the customs value of
imported and exported goods shall be determined by the Customs on the basis of transaction
value.
2. The General Administration of Customs of China (GACC) pr omulgated the newly
revised Rules regarding Determination on Customs Value of Imported and Exported Goods inG/VAL/W/111
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Decree No. 95, 2001 on 31 December 2001, which entered into force on 1 January 2002. In
accordance with the text and the explanatory notes of the Customs Valuation Agreement,
China has amended its provisions on valuation methods and procedure in an all-round way
and has made them fully conform to the norms of the Customs Valuation Agreement. In this
context, the following two points are to be noted.
(1) Article 1 through 8 of the Agreement stipulates that the customs value of imported
goods shall be the transaction value. When declared value can not be accepted as
transaction value when determining the customs value, the Customs Authorities shall
apply the following valuation methods in sequential order: 1) transaction value ofidentical goods method; 2) transaction value of similar goods method; 3) deductive
method; 4) computed value method and 5) fallback method. (See Articles 3 through
11 of the above-mentioned Rules).
(2) With a view to balancing the rights and obligations between the Customs and
importers when determining customs value, the Rules provides clearly for the right of
obtaining information on the issue, the right of goods release with guarantee
provided, the right of appeal on the importers’ side, vis-à-vis the right of verifying
declared value as well as the obligation to keep the information in confidence on the
Customs’ side, according to Article 10, 11, 13, 16 and 17 of the Customs ValuationAgreement. (See Article 38, 39, 37, 36 and 32 of the Rules).
3. With a view to fulfilling the obligation of notification, and in conformity with the
requirement of Article 22 of the Customs Valuation Agreement, China submitted both in
Chinese and English translation of the above mentioned Rules to the Committee in June 2002,
and the replies to the checklist of issues as well.
II. Implementation and application
Statistics show that the rate of applying tr ansaction value in determining customs value in
China from January to September this year amounted to 94.89%. The formula used is: the Rate = (the
total number of dutiable imports declared – the number of reassessed dutiable imports  declared)/the
total number of dutiable imports declared.
In cases where the declared value could not be accepted as transaction value, the Customs
Authorities in China has reassessed the customs valu e strictly in accordance with the principle and
procedure of the Customs Valuation Agreement.
III. Transparency
Fulfilling the commitments it made upon accession to the WTO and to meet the requirement
of Article 12 the Customs Valuation Agreement, China published the Customs Law and the Rules
Regarding Determination on Customs Value of Impor ted and Exported Goods. Besides, an official
journal, “Gazette of China Customs” is also to be established in the near future. Interested parties may
also visit the web-site of the General Administration of Customs of China for information
(http://www.customs.gov.cn) .G/VAL/W/111
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IV. Other related issues
As to the Decision on Treatment of Interest Charges in the Customs Value of Imported Goods
and the Decision on Valuation of Carrier Media Bearing Software for Data Processing Equipment,
which were adopted by the Committee on Customs Valuation, China is making preparations for theirapplication by 11 December 2003.
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