China sets licensing regime for textiles under safeguard quotas

China sets licensing regime for textiles under safeguard quotas    China has announced a provisional licensing regime for 2006 textile and apparel exports, subject to safeguard quotas, for the European Union and, pending agreement in negotiations to be held later in October, for the United States.
   The system for next year provides that textile and apparel licenses be partly based on a public bidding process and partly on past export performance.
   An entity's quota allocations based on export performance, referred to as 'permitted applying quantity,' will be calculated according to a formula under which 70 percent of an exporter's permitted applying quantity will be based on its shipments during any prior safeguard period, and 30 percent on its post-quota era shipments during periods when safeguards were not in effect.
   Under the tentative allocation formula, as much as 21 percent of an entity's amount over allocation may be due to export shipments of that particular category to third countries during the safeguard period.
   If an enterprise's permitted applying quantity under the formula is less than the minimum company allocation for all categories of 2004 pieces, it will receive no allocation under the formula, with those amounts being distributed to qualifying enterprises.
   New regulations that are part of the regime follow the principles of 'one license, one approval' and 'one license for one customs declaration.' Licenses issued will be usable for six months, after which they will expire, unless the holder can obtain a three-month extension under a new certificate.
   Unused licenses must be returned to the Ministry of Commerce no later than 60 days before the end of the permitted year. Holders of provisional textile export licenses who have not finished 80 percent of their permitted applying amount in the effective period — and failed to return the balance — will receive as-yet-unspecified penalties in subsequent years.
   This regime comprises the working fundamentals that China is expected to tender during its ongoing negotiations with the United States.