________________________________________________________________________

TREATIES AND OTHER INTERNATIONAL ACTS SERIES 07-1129

TRADE

Memorandum of Understanding

Between the

UNITED STATES OF AMERICA

and CHINA

Signed at Geneva November 29 2007

NOTE BY THE DEPARTMENT OF STATE

Pursuant to Public Law 89mdash497 approved July 8 1966 (80 Stat 271 1 USC 113)mdash

ldquo the Treaties and Other International Acts Series issued under the authority of the Secretary of State shall be competent evidence of the treaties international agreements other than treaties and proclamations by the President of such treaties and international agreements other than treaties as the case may be therein contained in all the courts of law and equity and of maritime jurisdiction and in all the tribunals and public offices of the United States and of the several States without any further proof or authentication thereofrdquo

CHINA

Trade

Memorandum of understanding signed at Geneva November 29 2007

Entered into force November 29 2007

Metn~rantlum ofUndcrstandmg Blaquow41cn theUailltl~ates ntAlllerica and the Pcopltgts Republic t)f Cid~ R~ding~~inMeastue8 (bullranting Jlefantl~

Reuuctitms or ExcmptionS from Tllites0r0ther Payro~ats

V1tercas the Vnt~ States of Amerlsa United State~) tiled request- thr cltmsuJtations yenith the Peoplc~s Eepublie f China t~Chirni olj 2 febnmry 2007 and 27 April 2007 ffursuant to Articles t and 4middot ~~fthe Vorld Tr1de Orgmiizatill (WTO) G1tderstatlding 1in Rules and Igtroredti~s Governing middotthe Settlement uf Disputes Artide XXUl ofthc VTO General Agreement oo Tariffs atld Iradi 1994 Arlidlgts 4 and 30 tlf the WTl) Agreement 01) Subsidies and tftuntcrvaifn1g Measures and Article ~ of the WrO Agreernent oo TrttdeRidated Jnveamptrnertt Measures regarding certain meaurcs granting refunds retluttfririS or excmptiun from tlXes or othL~ payments (I)SJ5amp~

Whereas tlie United Statesand Chinaheld cortst~(iw consultations i11 Geneva (in 20 lttarch 1md 22 June 2007

l During the contiultatiom t1cent Un~ WTCkonsistcncy ot tax preterences Jrov

(a the Cirttbull lt~f lhe 1ltiJtdry ffmiddot JfiMtNe ttnti the SJttJf lSininhmiddot1miinn ltll Taxrlttion Crmcffming tlm lvsut~ fTux Crellft Jb Er1JitfJitfse fIlttJfttlt itc tiir furdmse (f lJmnemeaJly ~itliJtJced Equipnumt by E111erpfisew wi1h F0ttltlz11 lnveslmenl mid FfJrc~i1 tilt~Jprisesbull CaiShuiZ 0001 No 49 issued ~1114 Jii~ 2000 U)ld1heCrtt4w oftfre tinisrmtiltm qf Taxation on PriwJng tmd Lfinf the 1lrkus1itf Ott lax Ctellit ~h Rnterprfse Jnco11Ie 1ax Jr Pz1rd1lSit qf Damttslhal6 Produtelti kqi1i1111t~11t hy l)rterpTise~ with FmCign hpestme111 uud F(rreigt1 ~1erpristts Gtm~mfa [2otONo 9tlissuoo ~~11 tftMay 2000~ and

(bJ the Circular on Printing cmtilsmitlg the lnterim MeasuffJi on Ctetlil and Eyenmpti1)1 cCf fmerpligte lrtt~fJl)1t Tax tltJr ltnfstmttnt in tlonustimlY Aoritt Epoundptipment for Tttdmalo~ittfi11 Renova(ion CaiShuili I19991 No 290 issuill by the Mit1istry tgtf Fhiance and the State Adm111istration of Taxation on 8 December 1999shy

In this regard China has exphthlci that lttgal instrumUnLI pf~ll lk-ast equa1 legal stature w the circulars idet1tilied iti su~pavagrapfo a) and DJ alxwe win contain pmvisibullJns suning that thltsc cireulars are fl-pealed und will be issued by the iompetcm authorhlcs by 31 Decen1ber 2007 cfltct1ve no laur than t Januiry 2008 China co11fir111s that the tax preferences umkr the circulars identified in sulishyparagr~lphs a and (b) above wiU ncit be rdmtatcd

2 During the consultations the United States described its 1~onccrns aho~tt the WTO-c~1nsistency of tax preforences provided under

NOTE BY THE DEPARTMENT OF STATE

Pursuant to Public Law 89mdash497 approved July 8 1966 (80 Stat 271 1 USC 113)mdash

ldquo the Treaties and Other International Acts Series issued under the authority of the Secretary of State shall be competent evidence of the treaties international agreements other than treaties and proclamations by the President of such treaties and international agreements other than treaties as the case may be therein contained in all the courts of law and equity and of maritime jurisdiction and in all the tribunals and public offices of the United States and of the several States without any further proof or authentication thereofrdquo

CHINA

Trade

Memorandum of understanding signed at Geneva November 29 2007

Entered into force November 29 2007

Metn~rantlum ofUndcrstandmg Blaquow41cn theUailltl~ates ntAlllerica and the Pcopltgts Republic t)f Cid~ R~ding~~inMeastue8 (bullranting Jlefantl~

Reuuctitms or ExcmptionS from Tllites0r0ther Payro~ats

V1tercas the Vnt~ States of Amerlsa United State~) tiled request- thr cltmsuJtations yenith the Peoplc~s Eepublie f China t~Chirni olj 2 febnmry 2007 and 27 April 2007 ffursuant to Articles t and 4middot ~~fthe Vorld Tr1de Orgmiizatill (WTO) G1tderstatlding 1in Rules and Igtroredti~s Governing middotthe Settlement uf Disputes Artide XXUl ofthc VTO General Agreement oo Tariffs atld Iradi 1994 Arlidlgts 4 and 30 tlf the WTl) Agreement 01) Subsidies and tftuntcrvaifn1g Measures and Article ~ of the WrO Agreernent oo TrttdeRidated Jnveamptrnertt Measures regarding certain meaurcs granting refunds retluttfririS or excmptiun from tlXes or othL~ payments (I)SJ5amp~

Whereas tlie United Statesand Chinaheld cortst~(iw consultations i11 Geneva (in 20 lttarch 1md 22 June 2007

l During the contiultatiom t1cent Un~ WTCkonsistcncy ot tax preterences Jrov

(a the Cirttbull lt~f lhe 1ltiJtdry ffmiddot JfiMtNe ttnti the SJttJf lSininhmiddot1miinn ltll Taxrlttion Crmcffming tlm lvsut~ fTux Crellft Jb Er1JitfJitfse fIlttJfttlt itc tiir furdmse (f lJmnemeaJly ~itliJtJced Equipnumt by E111erpfisew wi1h F0ttltlz11 lnveslmenl mid FfJrc~i1 tilt~Jprisesbull CaiShuiZ 0001 No 49 issued ~1114 Jii~ 2000 U)ld1heCrtt4w oftfre tinisrmtiltm qf Taxation on PriwJng tmd Lfinf the 1lrkus1itf Ott lax Ctellit ~h Rnterprfse Jnco11Ie 1ax Jr Pz1rd1lSit qf Damttslhal6 Produtelti kqi1i1111t~11t hy l)rterpTise~ with FmCign hpestme111 uud F(rreigt1 ~1erpristts Gtm~mfa [2otONo 9tlissuoo ~~11 tftMay 2000~ and

(bJ the Circular on Printing cmtilsmitlg the lnterim MeasuffJi on Ctetlil and Eyenmpti1)1 cCf fmerpligte lrtt~fJl)1t Tax tltJr ltnfstmttnt in tlonustimlY Aoritt Epoundptipment for Tttdmalo~ittfi11 Renova(ion CaiShuili I19991 No 290 issuill by the Mit1istry tgtf Fhiance and the State Adm111istration of Taxation on 8 December 1999shy

In this regard China has exphthlci that lttgal instrumUnLI pf~ll lk-ast equa1 legal stature w the circulars idet1tilied iti su~pavagrapfo a) and DJ alxwe win contain pmvisibullJns suning that thltsc cireulars are fl-pealed und will be issued by the iompetcm authorhlcs by 31 Decen1ber 2007 cfltct1ve no laur than t Januiry 2008 China co11fir111s that the tax preferences umkr the circulars identified in sulishyparagr~lphs a and (b) above wiU ncit be rdmtatcd

2 During the consultations the United States described its 1~onccrns aho~tt the WTO-c~1nsistency of tax preforences provided under

CHINA

Trade

Memorandum of understanding signed at Geneva November 29 2007

Entered into force November 29 2007

Metn~rantlum ofUndcrstandmg Blaquow41cn theUailltl~ates ntAlllerica and the Pcopltgts Republic t)f Cid~ R~ding~~inMeastue8 (bullranting Jlefantl~

Reuuctitms or ExcmptionS from Tllites0r0ther Payro~ats

V1tercas the Vnt~ States of Amerlsa United State~) tiled request- thr cltmsuJtations yenith the Peoplc~s Eepublie f China t~Chirni olj 2 febnmry 2007 and 27 April 2007 ffursuant to Articles t and 4middot ~~fthe Vorld Tr1de Orgmiizatill (WTO) G1tderstatlding 1in Rules and Igtroredti~s Governing middotthe Settlement uf Disputes Artide XXUl ofthc VTO General Agreement oo Tariffs atld Iradi 1994 Arlidlgts 4 and 30 tlf the WTl) Agreement 01) Subsidies and tftuntcrvaifn1g Measures and Article ~ of the WrO Agreernent oo TrttdeRidated Jnveamptrnertt Measures regarding certain meaurcs granting refunds retluttfririS or excmptiun from tlXes or othL~ payments (I)SJ5amp~

Whereas tlie United Statesand Chinaheld cortst~(iw consultations i11 Geneva (in 20 lttarch 1md 22 June 2007

l During the contiultatiom t1cent Un~ WTCkonsistcncy ot tax preterences Jrov

(a the Cirttbull lt~f lhe 1ltiJtdry ffmiddot JfiMtNe ttnti the SJttJf lSininhmiddot1miinn ltll Taxrlttion Crmcffming tlm lvsut~ fTux Crellft Jb Er1JitfJitfse fIlttJfttlt itc tiir furdmse (f lJmnemeaJly ~itliJtJced Equipnumt by E111erpfisew wi1h F0ttltlz11 lnveslmenl mid FfJrc~i1 tilt~Jprisesbull CaiShuiZ 0001 No 49 issued ~1114 Jii~ 2000 U)ld1heCrtt4w oftfre tinisrmtiltm qf Taxation on PriwJng tmd Lfinf the 1lrkus1itf Ott lax Ctellit ~h Rnterprfse Jnco11Ie 1ax Jr Pz1rd1lSit qf Damttslhal6 Produtelti kqi1i1111t~11t hy l)rterpTise~ with FmCign hpestme111 uud F(rreigt1 ~1erpristts Gtm~mfa [2otONo 9tlissuoo ~~11 tftMay 2000~ and

(bJ the Circular on Printing cmtilsmitlg the lnterim MeasuffJi on Ctetlil and Eyenmpti1)1 cCf fmerpligte lrtt~fJl)1t Tax tltJr ltnfstmttnt in tlonustimlY Aoritt Epoundptipment for Tttdmalo~ittfi11 Renova(ion CaiShuili I19991 No 290 issuill by the Mit1istry tgtf Fhiance and the State Adm111istration of Taxation on 8 December 1999shy

In this regard China has exphthlci that lttgal instrumUnLI pf~ll lk-ast equa1 legal stature w the circulars idet1tilied iti su~pavagrapfo a) and DJ alxwe win contain pmvisibullJns suning that thltsc cireulars are fl-pealed und will be issued by the iompetcm authorhlcs by 31 Decen1ber 2007 cfltct1ve no laur than t Januiry 2008 China co11fir111s that the tax preferences umkr the circulars identified in sulishyparagr~lphs a and (b) above wiU ncit be rdmtatcd

2 During the consultations the United States described its 1~onccrns aho~tt the WTO-c~1nsistency of tax preforences provided under

Metn~rantlum ofUndcrstandmg Blaquow41cn theUailltl~ates ntAlllerica and the Pcopltgts Republic t)f Cid~ R~ding~~inMeastue8 (bullranting Jlefantl~

Reuuctitms or ExcmptionS from Tllites0r0ther Payro~ats

V1tercas the Vnt~ States of Amerlsa United State~) tiled request- thr cltmsuJtations yenith the Peoplc~s Eepublie f China t~Chirni olj 2 febnmry 2007 and 27 April 2007 ffursuant to Articles t and 4middot ~~fthe Vorld Tr1de Orgmiizatill (WTO) G1tderstatlding 1in Rules and Igtroredti~s Governing middotthe Settlement uf Disputes Artide XXUl ofthc VTO General Agreement oo Tariffs atld Iradi 1994 Arlidlgts 4 and 30 tlf the WTl) Agreement 01) Subsidies and tftuntcrvaifn1g Measures and Article ~ of the WrO Agreernent oo TrttdeRidated Jnveamptrnertt Measures regarding certain meaurcs granting refunds retluttfririS or excmptiun from tlXes or othL~ payments (I)SJ5amp~

Whereas tlie United Statesand Chinaheld cortst~(iw consultations i11 Geneva (in 20 lttarch 1md 22 June 2007

l During the contiultatiom t1cent Un~ WTCkonsistcncy ot tax preterences Jrov

(a the Cirttbull lt~f lhe 1ltiJtdry ffmiddot JfiMtNe ttnti the SJttJf lSininhmiddot1miinn ltll Taxrlttion Crmcffming tlm lvsut~ fTux Crellft Jb Er1JitfJitfse fIlttJfttlt itc tiir furdmse (f lJmnemeaJly ~itliJtJced Equipnumt by E111erpfisew wi1h F0ttltlz11 lnveslmenl mid FfJrc~i1 tilt~Jprisesbull CaiShuiZ 0001 No 49 issued ~1114 Jii~ 2000 U)ld1heCrtt4w oftfre tinisrmtiltm qf Taxation on PriwJng tmd Lfinf the 1lrkus1itf Ott lax Ctellit ~h Rnterprfse Jnco11Ie 1ax Jr Pz1rd1lSit qf Damttslhal6 Produtelti kqi1i1111t~11t hy l)rterpTise~ with FmCign hpestme111 uud F(rreigt1 ~1erpristts Gtm~mfa [2otONo 9tlissuoo ~~11 tftMay 2000~ and

(bJ the Circular on Printing cmtilsmitlg the lnterim MeasuffJi on Ctetlil and Eyenmpti1)1 cCf fmerpligte lrtt~fJl)1t Tax tltJr ltnfstmttnt in tlonustimlY Aoritt Epoundptipment for Tttdmalo~ittfi11 Renova(ion CaiShuili I19991 No 290 issuill by the Mit1istry tgtf Fhiance and the State Adm111istration of Taxation on 8 December 1999shy

In this regard China has exphthlci that lttgal instrumUnLI pf~ll lk-ast equa1 legal stature w the circulars idet1tilied iti su~pavagrapfo a) and DJ alxwe win contain pmvisibullJns suning that thltsc cireulars are fl-pealed und will be issued by the iompetcm authorhlcs by 31 Decen1ber 2007 cfltct1ve no laur than t Januiry 2008 China co11fir111s that the tax preferences umkr the circulars identified in sulishyparagr~lphs a and (b) above wiU ncit be rdmtatcd

2 During the consultations the United States described its 1~onccrns aho~tt the WTO-c~1nsistency of tax preforences provided under

al Artiele 41 Qf ihePmvisi(gtns rifr~t)ifuit (mmdltJJJ the Nnpoundltgtun~gJJ111e111middotrf middot Fohbulliffil ltwesfne11t Gllq]a [1986] No 9$ middotiampsueumiddot ooTI October l~ middotmiddot

(1etei1mtlcr Stale Coutidl Pro1middotisi011s) Article 6 of the lmome Tctc Jmr olfhtfgtPeople s~epubih tfq1i11euro1 tJ11Jll1terprises with ftmign lfllYSiJJJe1 and Ft11(1gnmiddot J)ltfrprisectes Orbull Nltr 45 pro1r1ulgltltcd t)1b Q April l 99L middot ~reiflatkr -~Flfi)iCOme 1lt1~ Law) and Attiele 75 paru~fraph 1 sccfro~ 8 hf the ffeJes fdr lfte lmpltrliiitfiJn v the Jmmiddot1mfe Tux Lftw lt~l the Peopltr s RtJgtJ1blic of(~o m1 Efftef[irise~ with Flt~Jfig1J Jnwsrnrtlit ltll1(l ForeitPr Enhtrpt~i~~s Deere~ )Sq ~5 issttedmiddotby themiddot State Council on 30 Jutlcl Qt)J llCrcinafter ~nE 1ntfim1t1t1x lmplenumting Rules

(b) ArticltyenJ3 f the ~1ate ( ounl~il Ptm~iltdvns Article 6 of the pJE Income Titx Law aild middotArtkle 75~ parartPh l~ ~ction 7 of the Flt lmtotl~ Tax lftphmuntfng R11esantl

- ~ ~ i

fc Anwe 10 ~t~he State (~1Ji1tfillrotixifmgt Articles 6 and IO t)fJhc PIE luume 1tc Law and bullArtiele llnttUe flE hrltome Jt~Y lmpitmiddot1~f111i11gJliilt middot ~

C~iiiu confirms lnat~ ffiPtlVt fllm1arylt2pp~ the Errterpriit lru(Jtltt nu ltltct

efihe Pebple v Re1mblic of China Order Nq~ tj3 promu1Jcentntcd on Hi March 200T tht~inaftcr E~iirprL~ btltfraquom Talmiddotbull fc1wt)bull ~~ilS me ~te Jf1cotilJ tttx Lau ln

middot~di tiltgttigt Chil1t1 has middot~~~laincti~ hat legnlltillstruincnt~ t6 be is~oo by and made middot cittctixe middotit1xiltet tla11 1 Jaiu~ 20Pampt middot~- Ctmtainl)tttvisfons stnting thit+ r~FIEmiddot Income Tpound1x Jfiq1lei11e11li11g Riilei are ICfCalei middotWiththeaboHtionof1hc FlElamptltmle rttX Lpoundr4 1tUld die fcfE Jr~(1111( 1~1Xlmpttmi~~iirg ~tites Ar~i~ies 8 9 ~1na~middotO nfth~ Srttli ltmmdt JgtrmilJJrms wUl110 lo~be vaitf ~~hina hds turtbizt explained middot1bat in middota~~1rdancc with il~ $1hedllde ofadampUristfltJll~~ulattons a-vision Artjcks 8 9middot ~nd

middot l0 ltcf tht Srt11i (r(picil n)tfsim1s wI~l be eliMifiated by ~t legal iilStrumcnt ~1lt5 lltcr middot middot i bull _ -~ bull -laquo middot ~ middotmiddot bull bull deg ~

than l Januury 2f)~) middotmiddot~Th~ legal ~truments repealing tbc FlB l11Lv1tte middot 1hr lmplem~mingultraquoYilld Artjclces8 9amt~lQ of~middotStallt (~mlnd lr~gtvisions will pc is~ued iy the~t1ntp~at authbtrues and he t5f at~ equal legal stature to the legal

middot intruments peing rqrealefi CMrrt ct~irms tbai the tlx prefercucc~ under tl1c legal provisims ldtntifS~d in sub~Paragraiphs (a) (rt)tttld (cl abiwc will ttorbe reinstated

~ c

i Dunt1g the~ C()nsuhation ihe Untlt~ Stutes ~eseribccf iismiddot cltgtncen1s ahout the VT(Mmiddotonsisterny of tac~ and oilierpreLtfenccs provided under

middot(a) Article ofthe FJEnefgtme Ttf8 1~qw Atticlc 73 paragraph l section 6 of the FIE lnltJJ)JJlt 1nx Jinplemehling Ries and S~1ttfltn Xlfl of the Cc1tc1logue of Encinwagt(f ~t~1Cig11 lnves1in~~n1 lnthrstries Hierdnatlcr Ammiddottturagetl Catalog1u ) witlUn t1ie Cu1alogue for l11 CiuiltJano tf middot Forei~1 nvesfmmt f1ulushig~ Order L2004J No 24 issued by the Natitinal l)evcloPJncnr and Reft~ro1 Cmnnission and the Ministry of Commerce 011 30 Navember2004 (hereinafter CatolDWt) and middot

(b) the Circular ltf the State (ouncil Concerning the Alf11srmcm n the middot lLtafi(JH PolhT (f lmpotted Equipment GuoFa 119971 ~o 37 issued on 29 Dc1embcr 1997 and Sectkm XIfl or the Encouruged ( awlogue middot~-

1n thi rCgarii(middothina bltis~~xplqinedmiddott~at~ ipaccoraancc xvhhit~middotc9qm1nic arid middot~middotsocial demiddoteioptn~flt~ it revis~the Cttiflortte on 3 lOctobtr21JH which r~viskm wiil Iakc dtect middotas ofmiddotmiddot 1 Decembermiddot 200t middotChina continns that Sectic)n XU or the

111cm1rafopoundfdCt11t1(1ffue daled 30Nt1~middotedioor~OA will not be reinstated

4 During lic middotton$ult~ions the United Statesmiddot de~crib~d its concerns about thq0

yTO-cltmistericy lf the E1iitrprise incqmc TC1x Lmv~ includ1tlArticlcs 25 28 31 fill( 57 lhtfeqf Chrna+iHlS explained thar tliese provisibns d~1 not provide frgtr the

middotbull ofieri11g of anymiddot jpcome middottllx preforence contingcnt upon the use of domestic over iu1pt1rtdd goods tfr tpon eltpert performance middot China b~middott t~utb~r explmicroi1Jcd ihat

1lotwid1smnrlillEttbe fact th~t Article 51 tlf~~ E11te1priie lntome 1at Law imth6rizcs rtlc conh1t1atitiraquo qf certain ioetitn~ tax pretbrooces beyond 1middot1a11uary 2008 it wiU ncgtt middot blimplec11Cnted v~JlppUcd so usgtm intr9~~1c~ Qr pcnnit tht es1Jith)filltion of the in~x~me middot tax prcl~ret1ccs being rcpeaedmiddotmiddotmiddotby viltnfAlfthc attiufiS d~~tribed in par~graphs 1 bull lhrougli3 of n1~5 Mc~nmanrlttn1 of lfaderstanding~ middotJhe~ litnitatkms will middotmiddotoe made c~plicit iuiiermiddotfof~lttth~1ritnH~ lcgul)neas~res anamiddotil4x~middoteftectiv~ i~ t~r tlmn I

January 2008 middot middot middot middot middot bull middotmiddot middot middot middot middot middot middot

5 middotmiddotnuring the c~11JsitUati)ns tho Jjnited $t~tes describoomiddoti1i~middotnJccms ab~jtmiddot the bull r~~~ttnnsisteilQ~ 0 rtfiexcroptltiu ft)r d~~middot tnreigu~hi~esttd ~ntcrpriseS from

~i1yn11m~ 10 th~~ State lt)r workcf tllowanceS p~bullidtCl un4~r Artidc 3 of Stale middotmiddot ftrnr1imiddotiTJgtrv~LvlctJ1~middot middot

Chmal~s e~pj~iued thlrl~ al the ti1ue the St~tc Ct)t1~ilpmmulgatcd the Stall r~nuncfl Pravi1ltim1sbull bull ttrtitJe middotl L of the Stutcent Ca1111ci bulliletlttlt1iilt11ir middotin Lt1bo1middot

middot )AtmltfHint imicro$inn~Fltgt1Jl~1t Jqilf YentuJ-es(~~Fa [l9~0J N~ 199 (26 J~)i 1980 required fotcigninvcstcd en~rl-middottO mtkC ScUCh payments tothe State Chjna ha~middotbull cimtinned ho~vev~r tb~t( becaqs~ tliil reiJ~iT~t11cnt was ~fiiuinated hY~ middotfhe Stt1lpound middotmiddot inmcil IJtcisilm on 4hrAition qJmiddot G~etuii1f~JlltJ)jl1isirative JItgyfations btunuiguted

nrior to rIt Inpoundlcf2000 Clvdt-r No~J19 (60trtoher 2001) tlw excbull1upfion provided middot under Artide 3of the it1tlf Coumif Proviltftn18 is no longurbperalive thina confirms bull Jhat Artite gtf amphe Stlt1tlt~ Cmmcil Prcwi~trmf may no lltgtnger scrvias alegal basis kl

~empt fimH~tirinvcsred ntciprises frlt)ilJ making payn1enL required byChinest law middotmiddotmiddot middot rcgtllation (ii tgtth1r Qftidal measure middotmiddot middot middot middot middot middot middot middot middotmiddot

6 During the ~msultat11MJS the United Slates de~~libcd in ct1nccrns abtlut the WTQcon~i~ency f tlUiHWd-ltl tax (YAl) refunds ptovided under Jlw ( itculat ltf Jhc mte AlimirriftrttJion e~t1i1xai(m on Pimiddotiirlint and Issuing the interim klearnremiddot(ir 1n AdmittistraLhm tf fox Kefilnd fiJ EIHltlJlfKes with Fontign Jnvestmtllf jiJJ rhc Purcfu1se tl Dornesthqlv Prpditced Eqt1irm1ent GuoShuif-a l1999] No l 71 issitcd on 20 September 1999 middota11d the Cintiltw ciftne Stare Adminiwra1ion lt~l 1poundtxa1ian and iVational Vtlelopinent anti Reform Co11i1tii~sio11 an Pmiddotrinting and ltqtinf( the b11erim MeaWts Jigtr he Idminislratiltm cf Tax ltefimd j(Jr the Purchase tf Domesticai~i1-PrmlucedEquipflte11t in Foreign lnves1mer1t frltiecls GuoShuifa 12006] No ll L iss-i1cd bullin ~4 lnly 2006

3

bull

in this rcganl~ China ht1s stated tha thcentsc circulars do not create a preference either in labull or ~n a dejucttgt basis for th~ us( of domestic ~wet imported goods in connectic1n with purchases of uollestiealy-pr~iltcltl equipment when viewed in relatit1n to i00 (lreular of the $tatL Council Cigtncltltfi1ig the f~JUifllJenl ill the fotafian PoliltJ t~f Jmptftiltl Eq11ifJt1tttnt GuoPa f1997) Nt) lJ issued on 29 Deccmhcr 1997 in cont1ecticm with pmcent~ t1f imported equipment China ha$ confi1111ed that in implenienting tbemiddotabtementig~ leg~l instntmeuts as well alt1 at1y llCV CgltJ inStfmllllli5 that aJlCCt me $Jtati0ll of the abQcVcent~mcntiOlleU legal instrttmllt$ it wilt ensure that impp1middotted eqtt~lCnt recciVeY VAT treatment under terms and conditrons no less favorable ~ thosc appltcaile to ck)lliestitatl~produccd eqnipm~nt

7 nre Ur11ted States and China agree to e~uumjcatc in a timely manner with respect io the nnpkmcntation of the at1kms d~Tibed a~~~ indvding provisinn of related new legalittsirumems

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