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.
Article 19 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.
Article 20 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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