The World Trade Organization (WTO) today issued a dispute panel report in the case,
China — Certain Measures Affecting Electronic Payment Services (WT/DS413/R).
According to a related
release from the U.S. Trade Representative, the WTO panel agreed that China’s measures deny a level playing field to U.S. service providers, and that China had entrenched the market dominance of its own company, China Union Pay (CUP), and distorted competition in China to the detriment of U.S. providers.
The United States alleged that:
- China permits only a Chinese entity to supply electronic payment services for payment card transactions denominated and paid in Renminbi (RMB) in China.
- Service suppliers of other countries can only supply these services for payment card transactions paid in foreign currency.
- China requires all payment card processing devices to be compatible with that entity's system, and that payment cards must bear that company's logo.
- The Chinese entity has guaranteed access to all merchants in China that accept payment cards, while services suppliers of other countries must negotiate for access to merchants.
The United States alleged that China appears to be acting inconsistently with its WTO obligations. See
TaxNewsFlash-Trade & Customs 2011-55.
For more information, contact a professional with KPMG’s Trade & Customs practice:
Douglas Zuvich, (312) 665-1022
McLoughlin, (267) 256-2614
Todd R. Smith,
Luis A. Abad, (212) 954-3094
Amie Ahanchian, (202) 533-3247
Or your local KPMG Trade & Customs professional.
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The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.
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