For Christie Ho, a commercial officer with the US Consulate General in Shanghai, there is no doubt that "Shanghai Customs is WTO ready."
Shanghai Customs officers displayed a "positive" attitude when they resolved a tax dispute in which taxes that totaled roughly 200,000 yuan (US$24,096) a year had been improperly assessed against North-west Airlines, one of the largest US-based carriers, for 30 years, Ho said.
Despite a 1978 Sino-US bilateral treaty on civil aviation that declared all material and items used on American planes, including fuel, food and magazines, are duty free, Northwest has been taxed since 1979.
That means Shanghai Customs owed Northwest 6 million yuan for the 30 years when the duty was wrongly assessed, but the airline accepted reimbursement for one year because Customs' change in attitude was more important, said Kai Duell, Northwest's Shanghai-based manager.
Added Lu Peijun, Shanghai Cus-toms director, "Customs acts as a window to China for foreign enterprises. So Customs must act according to WTO protocol and rules."
Duell said it was only a few months ago that Northwest officials discovered that the carrier had been paying the tax it wasn't required to pay in China.
Duell and Ho visited Shanghai Customs' tariff division in an effort to resolve the problem. Ho said she didn't expect much from the first visit because she had dealt with Beijing Customs officers on the same issue for more than half a year.
"To our surprise, the officers in Shanghai were very helpful. They promised to carry out an investigation immediately," she said.
"Later, they even apologized to us. This showed the transparency of Customs, one of the WTO principles. Foreign companies already in Shanghai and those planning to invest here will find their attitude encouraging."
The investigation found that most of the articles used on Northwest flights were in fact duty free. But items officers weren't clear about were taxed.
"The case set a precedent for Customs," said Shao Xiaoping, tariff division director.
"If other foreign airlines have encountered the same problem, they can contact us and we will deal with it following the precedent," Shao said.
(eastday.com December 25, 2001)