World Trade
Organization		
		
	G/SG/N/1/CHN/2/Suppl.3
20 October 2004	
	(04-4446)	
		
Committee on Safeguards	Original:  	English	

notification of laws, regulations and
administrative procedures relating
to safeguard measures

PEOPLE'S REPUBLIC OF CHINA

Supplement

	The following communication, dated 18 October 2004, is being circulated at the request of the Delegation of the People's Republic of China.

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	With reference to Article 12.6 of the Agreement on Safeguards, the Government of China notifies the Committee on Safeguards of the departmental rules related to the Agreement as following:  Regulations of the People’s Republic of China on Safeguards.

Regulations of the People’s Republic of China on Safeguards

(Promulgated by Decree No. 330 of the State Council of the People’s Republic of China on 26 November 2001, and revised in accordance with the Decision of the State Council on Amending the Regulations of the People’s Republic of China on Safeguards promulgated on 31 March 2004)

Chapter I	General Provisions

	Article 1  These Regulations are formulated in accordance with the relevant provisions of the Foreign Trade Law of the People’s Republic of China for the purpose of promoting the sound development of foreign trade.

	Article 2  When a product is imported in increased quantities and such increase has caused or threatens to cause serious injury (hereinafter collectively referred to as injury, except otherwise indicated) to a domestic industry that produces like or directly competitive products, an investigation shall be initiated and safeguard measures applied in accordance with the provisions of these Regulations.

Chapter II	Investigation

	Article 3  Any natural person, legal person or other organization related to a domestic industry (hereinafter collectively referred to as the applicant) may, in accordance with the provisions of these Regulations, make a written application to the Ministry of Commerce for applying safeguard measures.

	The Ministry of Commerce shall promptly examine the application made by the applicant and decide whether or not to initiate an investigation.

	Article 4  If the Ministry of Commerce decides to initiate an investigation without having received any written application for applying safeguard measures, it shall proceed only if it has sufficient evidence of injury to a domestic industry due to the increase in quantity of an import.

	Article 5  The Ministry of Commerce shall publish the decision to initiate an investigation.

	The Ministry of Commerce shall promptly notify the Committee on Safeguards of the World Trade Organization (hereinafter referred to as “the Committee on Safeguards”) of the decision to initiate an investigation.

Article 6 The Ministry of Commerce shall be responsible for the investigation and determination of the increase in quantity of an import and injury caused thereby.  The safeguards investigation of injury to a domestic industry involving agricultural products shall be conducted by the Ministry of Commerce jointly with the Ministry of Agriculture. 

	Article 7  The term “increase in quantity of an import” means an absolute increase in quantity of an import or relative increase compared with domestic production.

	Article 8  The following relevant factors shall be examined in the determination of injury to a domestic industry caused by the increase in quantity of an import:

(1)	the rate and amount of the increase of the import in absolute and relative terms;
(2)	the share of the domestic market taken by the increased import;
(3)	the impact of the import on the domestic industry, including the impact on the production, the level of sales, market share, productivity, capacity utilization, profits and losses, and employment of the domestic industry; and
(4)	other factors that may cause or have caused injury to the domestic industry.

	The determination of a threat of serious injury shall be based on facts and not merely on allegation, conjecture or remote possibility.

	When determining the injury caused by the increase in quantity of an import to a domestic industry, the injuries that are caused by factors other than the increase of imports shall not be attributed to the increase of imports.

	Article 9  During the period of an investigation, the Ministry of Commerce shall promptly publish a detailed analysis of the case under investigation and the relevant factors.

	Article 10  The term “domestic industry” means the domestic producers as a whole of the like or directly competitive products within the People’s Republic of China or those of them whose collective output of the like or directly competitive products constitutes a major proportion of the total domestic production of those products. 

	Article 11  The Ministry of Commerce shall, on the basis of objective facts and evidence, determine whether or not there exists a causal link between the increased imports of the product concerned and the injury to the domestic industry.

	Article 12  The Ministry of Commerce shall provide opportunities for importers, exporters and other interested parties to present their views and supporting arguments.

	The investigation may be conducted by means of sending questionnaires, holding public hearings, or by other appropriate means.

	Article 13  The Ministry of Commerce may treat the information collected during an investigation as confidential, if the information provider deems it necessary.

	If the request for confidentiality is justifiable, the information provided by the information provider shall be treated as confidential, and the information provider shall be required to provide non-confidential summaries thereof.

	No confidential information shall be disclosed without permission of the information provider. 

	Article 14  The explanations to the findings of an investigation on the increase in quantity of imports, injuries and the reasons therefore shall be published by the Ministry of Commerce.

	The Ministry of Commerce shall promptly notify the Committee on Safeguards of the findings and the relevant information.

	Article 15  The Ministry of Commerce may, on the basis of its findings, make a preliminary determination, or make a final determination directly.  The determinations shall be published by the Ministry of Commerce.  

Chapter III	Safeguard Measures

	Article 16  In critical circumstances where there is clear evidence of increase in quantity of an import, and such increase would cause injury to a domestic industry which it would be difficult to remedy without the application of safeguard measures, a preliminary determination may be made and provisional safeguard measures applied.

	Provisional safeguard measures shall take the form of tariff increases.

	Article 17  The proposal applying provisional safeguard measures shall be put forward by the Ministry of Commerce, and, on the basis of such a proposal, the State Council Tariff Commission shall make a decision which shall be published by the Ministry of Commerce.  The Customs shall implement the decision from the effective date set forth in the public notice.

	The Ministry of Commerce shall notify the Committee on Safeguards of the relevant information prior to the application of a provisional safeguard measure.  

	Article 18  The duration of application of a provisional safeguard measure shall not exceed 200 days from the effective date set forth in the public notice regarding the decision on the provisional safeguard measure.

	Article19  Where a final determination establishes the existence of increase in quantity of an import and the injury caused thereby to a domestic industry, safeguard measures may be applied.  The application of safeguard measures shall be in the public interest.

	Safeguard measures may take the form of tariff increases or quantitative restrictions, etc.

	Article20  Where a safeguard measure takes the form of tariff increases, the measure shall be proposed by the Ministry of Commerce, and, on the basis of such a proposal, the State Council Tariff Commission shall make a decision which shall be published by the Ministry of Commerce.  Where a safeguard measure takes the form of quantitative restrictions, a decision shall be made and published by the Ministry of Commerce.  The Customs shall implement the decision from the effective date set forth in the public notice. 

	The Ministry of Commerce shall promptly notify the Committee on Safeguards of the decision on the application of a safeguard measure and the related information.

	Article 21  Where a quantitative restriction is applied, the quantity of imports after restriction shall not be less than the average quantity of imports in the last three representative years, unless clear justification is given that a different level of the quantitative restriction is necessary to prevent or remedy serious injury. 

	Where a quantitative restriction is applied and it is necessary to allocate quantity among exporting countries (regions) or countries (regions) of origin, the Ministry of Commerce may consult with the exporting countries (regions) or countries (regions) of origin concerned in the allocation of quantity.

	Article 22  Safeguard measures shall be applied to a product being imported irrespective of its source country (region). 

	Article 23  Safeguard measures shall be applied to the extent necessary to prevent or remedy serious injury and to facilitate the adjustment of the domestic industry.
	Article 24  Prior to the application of a safeguard measure, the Ministry of Commerce shall provide adequate opportunities for consultations with those governments of countries (regions) having substantial interests as the exporters of the products concerned.

	Article 25  Where a final determination establishes that no safeguard measures shall be applied, the provisional duty that has been levied shall be refunded.

Chapter IV	Duration and Review of Safeguard Measures

	Article 26  The period of application of a safeguard measure shall not exceed four years.

	The period of application of a safeguard measure may be properly extended if the following conditions are met:

(1)	it has been determined in accordance with the procedures set forth in these Regulations that the safeguard measure continues to be necessary to prevent or remedy serious injury; 
(2)	there is evidence that the domestic industry concerned is undergoing adjustment;
(3)	the obligations of foreign-related notification and consultations have been fulfilled; and
(4)	the extended safeguard measure is not more restrictive than the initial one.

	The total period of application of a safeguard measure and any extension thereof shall not exceed ten years.

	Article 27  Where the period of application of a safeguard measure exceeds one year, the measure applied shall be progressively liberalized at regular intervals during the period of application.

	Article 28  Where the period of application of a safeguard measure exceeds three years, the Ministry of Commerce shall conduct a mid-term review of the measure during the period of its application.

	The substance of the mid-term review shall include, among other things, review of the effect of the safeguard measure on the domestic industry, and the adjustment of the domestic industry.

	Article 29  Where a safeguard measure takes the form of tariff increases, the Ministry of Commerce shall, on the basis of the findings of the review, put forward in accordance with the provisions of these Regulations a proposal for the retention, repeal or acceleration of the liberalization of the tariff increases, and in light of such a proposal, the State Council Tariff Commission shall make a decision which shall be published by the Ministry of Commerce; where a safeguard measure takes the form of quantitative restrictions or other forms, the Ministry of Commerce shall, on the basis of the findings of the review and in accordance with the provisions of these Regulations, make a decision on whether or not to retain, repeal or accelerate the liberalization of the quantitative restrictions and publish the decision.

	Article 30  Where a safeguard measure is applied again on the same import, the interval between the current measure and the previous safeguard measure shall not be less than the period of application of the previous safeguard measure, and shall be at least two years. 

	Notwithstanding the foregoing provision, a safeguard measure with duration of 180 days or less may be applied to the product if the following conditions are met:

(1)	at least one year has elapsed since the date of application of a safeguard measure to the import of the said import; and
(2)	such a safeguard measure has not been applied on the same product more than twice in the five year period immediately after the date of application of the measure.

Chapter V	Supplementary Provisions

	Article 31  Where any country (region) discriminatorily applies safeguard measures on the exports from the People’s Republic of China, the People’s Republic of China may, on the basis of the actual situations, take corresponding measures against that country (region).

	Article 32  The Ministry of Commerce shall be responsible for foreign-related consultation, notification and dispute settlement concerning safeguard measures.

	Article 33  The Ministry of Commerce may, in accordance with these Regulations, formulate specific implementing measures.

	Article 34  These Regulations shall be effective as of 1 January 2002.

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