WTO adopts panel report on China UnionPay case

GENEVA - The World Trade Organization (WTO) adopted Friday a panel report on China's measures affecting electronic payment service, a dispute raised by the United States, at its Dispute Settlement Body (DSB) meeting.

The US requested consultations with China on September 15, 2010, claiming that China acted inconsistently with its obligations by permitting only China UnionPay to supply electronic payment services for payment card transactions denominated and paid in RMB in China.

China said at the DSB meeting that it welcomes the panel's rejection of the unfounded "monopoly" claims by the United States.

However, "China is troubled, in particular, by the Panel's approach to the classification of the services at issue in this dispute," the Chinese delegation said at the meeting.

The report, circulated on July 16, said the panel rejected the US claim that China maintains China UnionPay as an across-the-board monopoly supplier for the processing of all domestic RMB payment card transactions due to insufficient evidence.

However, it concluded that China acted inconsistently with its market access commitment in maintaining the company as a monopoly supplier for the clearing of certain types of RMB-denominated payment card transactions.

It also found that certain requirements of China, including that all payment cards issued in China must work with the China UnionPay network and to bear its logo; and all terminal equipment in China must be capable of accepting cards with the logo, are inconsistent with its national treatment obligations.