Goods subject to TRQs
- Document symbol
- G/LIC/N/3/CHN/18/Corr.1
- Original language
- English
- Published on
- 05/02/2020
Outline of Systems
Q1. Give a brief description of each licensing system as a whole and, with respect to each, reply to the following questions as relevant, placing all of the material with respect to a given system in sequence together, and using cross references as appropriate when elements which have already been described are also present in another system.
Certain goods are subject to import tariff-rate quotas.
Purposes and Coverage of Licensing
Q2. Identify each licensing system maintained and state what products, appropriately grouped, are covered.
2019 import tariff-rate quotas apply to commodities subject to import tariff-rate quotas as determined by the Protocol on Accession of the People’s Republic of China into WTO, including such 47 eight digit tariff line commodities as grain, cotton, sugar, wool, tops, fertilizer, etc.
Please see table in N3CHN18.
Q3. The system applies to goods originating in and coming from which countries?
The import licensing system in China does not differentiate the places of origin of products unless otherwise provided for in the free trade agreements entered into by China and relevant countries and regions.
Q4. Is the licensing intended to restrict the quantity or value of imports, and if not, what are its purposes? Have alternative methods of accomplishing the purposes been considered and if so which? Why have they not been adopted?
Import tariff-rate quotas are agreed following negotiations by China and other WTO members under the WTO agreements, which apply to the import of some commodities. It is a preferential tariff arrangement and not a quantitative restriction measure.
Q5. Cite the law, regulation and/or administrative order under which the licensing is maintained. Is the licensing statutorily required? Does the legislation leave designation of products to be subjected to licensing to administrative discretion? Is it possible for the government (or the executive branch) to abolish the system without legislative approval?
With respect to the import licensing procedures for commodities subject to tariff-rate quotas, under the Regulations on Administration of Import and Export of Commodities (Decree of the State Council [2001] No. 332), the currently effective rules are the Interim Measures for the Administration of Import Tariff-rate Quotas of Agricultural Products (Decree of the Ministry of Commerce and the National Development and Reform Commission [2003] No. 4) and the Interim Measures for the Administration of Import Tariff-rate Quotas of Fertilizers (Decree of the former Economic and Trade Commission and the General Administration of Customs [2002] No. 27, amended by Decree of the Ministry of Commerce [2018]No.7), in conformity with which, the Ministry of Commerce and the National Development and Reform Commission publishes every year in the form of announcements the volume, distribution means and application requirements of import tariff-rate quotas of commodities.
Procedures
Q6. For products under restriction as to the quantity or value of imports (whether applicable globally or to a limited number of countries or whether established bilaterally or unilaterally):
China has not maintained any restrictions on quantity that do not comply with WTO rules. In 2019, products subject to import tariff-rate quotas include corn, wheat, rice, sugar, cotton, wool, tops and fertilizer, whose tariff-rate quotas are applicable globally. Besides, in 2019, China imposes country-specific tariff-rate quotas on wool and tops from New Zealand pursuant to the Free Trade Agreement between New Zealand and China. China imposes country-specific tariff-rate quotas on wools from Australia pursuant to the Free Trade Agreement between Australia and China. Please see Answers 6.1-6.11.
Q6.I. Is information published, and where, concerning allocation of quotas and formalities of filing applications for licences? If not, how is it brought to the attention of possible importers? Of governments and export promotion bodies of exporting countries and their trade representatives? Is the overall amount published? The amount allocated to goods from each country? The maximum amount allocated to each importer? How to request any exceptions or derogations from the licensing requirement?
The tariff-rate quota granting authorities, i.e., the Ministry of Commerce and the National Development and Reform Commission, publish such information as the volume, application requirements and allocation principles of global quotas and country-specific quotas of the following year in the form of announcements, which are available on the government websites of the quota granting authorities. Announcements regarding allocation of tariff-rate quotas in 2019 include:
1) the Application Requirements and Allocation Principles of Grain Import Tariff-rate quotas in 2019 and the Application Requirements and Allocation Principles of Cotton Import Tariff-rate quotas in 2019, promulgated in the Announcement No. 12 [2018] by the National Development and Reform Commission.
2) the Implementing Rules on the Administration of Import Tariff-rate quotas on Wool and Tops in 2019 and the Detailed Rules on the Application and Allocation of Sugar Import Tariff-rate quotas in 2019 published by the Ministry of Commerce respectively in the Announcement No. 79 [2018] and in the Announcement No. 78 [2018], and the Volume, Allocation Principles and Application Procedures of Fertilizer Import Tariff-rate quotas in 2019 published in the Announcement No. 73 [2018] by the Ministry of Commerce.
3) the Announcement on Reallocation of Import Tariff-rate quotas on Agricultural Products in 2019 promulgated in the Announcement No. 19 [2019] by the National Development and Reform Commission and the Ministry of Commerce.
4) the implementing Rules for Administration on Country-specific Import Tariff Quotas of Wool and Tops from New Zealand and Wools from Australia in 2019 promulgated in the Announcement No. 103 [2018] by the Ministry of Commerce and the General Administration of Customs;
Import tariff-rate quotas are global quotas, of which, there are country-specific quotas on wool and tops imported from New Zealand and country-specific quotas on wool from Australia. The country specific tariff-rate quotas on wool and tops imported from New Zealand were 35,178 tons and 633 tons respectively in 2015. The country specific tariff-rate quotas on wool imported from Australia were 30,000 tons (clean fleece weight).
Q6.II. How is the size of the quotas determined: on a yearly, six-monthly or quarterly basis? Are there cases where the size of quota is determined on a yearly basis but licences are issued for imports on a six-monthly or quarterly basis? In the latter case, is it necessary for importers to apply for fresh licence on a six-monthly or quarterly basis?
The total size of tariff-rate quotas is determined on a yearly basis. Tariff-rate quotas on grain, cotton, and sugar are granted to end users before January 1 each year and are valid in a whole Gregorian calendar year. As to the goods that have been loaded before 31 December, the quota licenses can be extended to the end of February of the following year. The validity of quota certificates for holders of quotas on grain, cotton and sugar to handle customs clearance is the whole Gregorian calendar year.
Quotas on wool, wool tops and fertilizers are allocated to those who come first with the contract. The validity of quota certificates granted in 2019 to handle customs clearance is three months.
Q6.III. Are licences allotted for certain goods partly or only to domestic producers of like goods? What steps are taken to ensure that licences allocated are actually used for imports? Are unused allocations added to quotas for a succeeding period? Are the names of importers to whom licences have been allocated made known to governments and export promotion bodies of exporting countries upon request? If not, for what reason? (Indicate products to which replies relate.)
Quota holders shall return the un-used quota of the year within the prescribed time limit every year so that reallocation can be made. In order to ensure that allocated quotas are actually used for imports, any importer who has not used up its quota and failed to return the un-used quota within the prescribed time limit will be reduced of the tariff-rate quota in the following year.
Q6.IV. From the time of announcing the opening of quotas, as indicated in I above, what is the period of time allowed for the submission of applications for licences?
With respect to commodities subject to import tariff-rate quotas, except for quotas allocated to those who come first, the period of time allowed for the submission of applications for licenses is 15 days.
Q6.V. What are the minimum and maximum lengths of time for processing applications?
As for commodities subject to import tariff-rate quotas, except for quotas allocated to those who come first, the time for processing applications is two months upon expiry of the period for submission of applications.
Q6.VI. How much time remains, at a minimum, between the granting of licences and the date of opening of the period of importation?
As for commodities subject to import tariff-rate quotas, there should be at least one day between the granting of quota certificates and the date of opening of the period of importation.
Q6.VII. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
With respect to commodities subject to import tariff-rate quotas, applicants can file license applications with the organs authorized by the Ministry of Commerce for sugar, wool, tops and fertilizers or the National Development and Reform Commission for grain and cotton. Such organs will forward them to the Ministry of Commerce or the National Development and Reform Commission, which will then grant import tariff-rate quotas to the applicants through its authorized organ. After obtaining the tariff-rate quotas certificate, import tariff-rate quota holders are not required to apply for import licenses otherwise.
Q6.VIII. If the demand for licences cannot be fully satisfied, on what basis is the allocation to applicants made? First come, first served? Past performance? Is there a maximum amount to be allocated per applicant and, if so, on what basis is it determined? What provision is made for new importers? Are applications examined simultaneously or on receipt?
In the event import tariff-rate quotas cannot satisfy the total applications of eligible applicants, allocations of import tariff-rate quotas on grain, cotton and sugar will be made based on past performance, production and processing capacity, operation quantity and other related factors; import tariff-rate quotas on wool, tops and fertilizers will be allocated based on “first come, first served” principle.
Tariff-rate quota allocation department will publish the detailed rules on application for and allocation of import tariff-rate quotas, which provide the requirements for import quota applicants and new importers. New importers shall, like other applicants, submit quota applications of the following year between 15 October and 30 October of each year.
Upon submission of applications for import tariff-rate quotas, the quota administrative authority will make allocations within two months.
Q6.IX. In the case of bilateral quotas or export restraint arrangements where export permits are issued by exporting countries, are import licences also required? If so, are licences issued automatically?
Import tariff-rate quota application procedures (import licensing procedures) are required with respect to commodities subject to import tariff-rate quotas, irrespective of whether export permits are issued by exporting countries or not. Import tariff-rate quota applicants are not required to obtain commodity import licenses after they have obtained tariff-rate quota certifications for customs clearance.
Q6.X. In cases where imports are allowed on the basis of export permits only, how is the importing country informed of the effect given by the exporting countries to the understanding between the two countries?
Q6.XI. Are there products for which licences are issued on condition that goods should be exported and not sold in the domestic market?
There is no such requirement.
Q7. Where there is no quantitative limit on importation of a product or on imports from a particular country:
Q7.a. How far in advance of importation must application for a licence be made? Can licences be obtained within a shorter time-limit or for goods arriving at the port without a licence (for example, owing to inadvertency)?
Q7.b. Can a licence be granted immediately on request?
Q7.c. Are there any limitations as to the period of the year during which application for licence and/or importation may be made? If so, explain.
Q7.d. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
Q8. Under what circumstances may an application for a licence be refused other than failure to meet the ordinary criteria? Are the reasons for any refusal given to the applicant? Have applicants a right of appeal in the event of refusal to issue a licence and, if so, to what bodies and under what procedures?
Eligibility of Importers to Apply for Licence
Q9. Are all persons, firms and institutions eligible to apply for licences: (If not, is there a system of registration of persons or firms permitted to engage in importation? What persons or firms are eligible? Is there a registration fee? Is there a published list of authorized importers?) a) under restrictive licensing systems? b) under non-restrictive systems?
On commodities subject to import licenses, automatic import licensing and import tariff-rate quotas, save for that commodities under state-trading administration need to be imported by agents of state-trading enterprises. Any person or firm who satisfies the legal business qualifications and requirements may apply for a license for the importation of such commodities. There is a published list of state-trading enterprises.
Documentational and Other Requirements for Application for Licence
Q10. What information is required in applications? Submit a sample form. What documents is the importer required to supply with the application?
Information required in an application for import tariff-rate quotas on agricultural products is detailed in the Application Requirements and Allocation Principles of Grain Import Tariff-rate quotas in 2019 and the Application Requirements and Allocation Principles of Cotton Import Tariff-rate quotas in 2019 promulgated in the Announcement No. 12 [2018] by the National Development and Reform Commission, and the Detailed Rules on the Implementing Rules on the Administration of Import Tariff-rate quotas on Wool and Tops in 2019 and the Application and Allocation of Sugar Import Tariff-rate quotas in 2019 published by the Ministry of Commerce respectively in the Announcement No. 79 [2018] and Announcement No.78 [2018].
Information required in an application for import tariff-rate quotas on fertilizer is detailed in the Volume, Allocation Principles and Application Procedures of Fertilizer Import Tariff-rate Quotas in 2019 published in the Announcement No. 73 [2018] by the Ministry of Commerce.
Q11. What documents are required upon actual importation?
Documents required to be provided for actual import of agricultural products subject to import tariff rate quotas are detailed in Chapter II of the Interim Measures for the Administration of Import Tariff-rate Quotas of Agricultural Products (Decree of the Ministry of Commerce and the National Development and Reform Commission [2003] No. 4).
Documents required to be provided for actual import of fertilizer subject to import tariff-rate quotas are detailed in Article 13 of the Interim Measures for the Administration of Import Tariff-rate Quotas of Fertilizer (Decree of the former National Economic and Trade Commission and the General Administration of Customs [2002] No. 27).
Q12. Is there any licensing fee or administrative charge? If so, what is the amount of the fee or charge?
No.
Q13. Is there any deposit or advance payment requirement associated with the issue of licences? If so, state the amount or rate, whether it is refundable, the period of retention and the purpose of the requirement.
No.
Conditions of Licensing
Q14. What is the period of validity of a licence? Can the validity of a licence be extended? How?
The validity of a certificate for import tariff-rate quota of agricultural products is one year, effective in the year, which can be extended but only to February the next year. The certificate for import tariff-rate quota of agricultural products allocated to those who come first shall be effective for three months upon issuance in 2019 and no later than 31 December 2019, while whose validity can be extended to no later than February of the following year.
The certificate for import tariff-rate quota of fertilizer in 2019 shall be three months upon issuance and no later than 31 December 2019.
Q15. Is there any penalty for the non-utilization of a licence or a portion of a licence?
With respect to commodities subject to import tariff-rate quotas, the quota holders shall return the tariff-rate quotas not used in the year within a specified time limit every year so that reallocation can be made. In order to ensure that all allocated tariff-rate quotas are used for imports, anyone who has not used up the tariff-rate quota allocated in the year and failed to return the remaining quota within the specified time limit will be reduced of the volume of the tariff-rate quota in the following year.
The quota licensing administration will urge the Issuing Authorities for tariff-rate quotas of fertilizer to remind enterprises whose writing-off rate is less than 25% in the first quarter to timely return the quota not used, to warn and caution enterprises whose writing-off rate is less than 25% in the second quarter, and to reduce 50% of the tariff-rate quota volume, cease granting new Certificate for Import Tariff-rate Quotas of Fertilizer or take other measures against enterprises whose writing off rate is less than 25% in the third quarter.
Q16. Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?
Tariff-rate quota certificates are non-transferable.
Q17. Are any other conditions attached to the issue of a licence? a) for products subject to quantitative restriction? b) for products not subject to quantitative restriction?
There is no other condition.
Other Procedural Requirements
Q18. Are there any other administrative procedures, apart from import licensing and similar administrative procedures, required prior to importation?
Inspection and quarantine certifications issued by the quality inspection authority shall be provided for commodities listed in the statutory inspection catalogue before import.
Q19. Is foreign exchange automatically provided by the banking authorities for goods to be imported? Is a licence required as a condition to obtaining foreign exchange? Is foreign exchange always available to cover licences issued? What formalities must be fulfilled for obtaining the foreign exchange?
China does not maintain limitation on international payment under commodity trading.