3. Turnover CalculationTurnover test criteria have been set by the State Council in the Thresholds Regulation. In the Notification Rule, the AMB clarify more details in order to make it more feasible in the daily implementation of the AML. “Turnover” is defined as the income gained from the goods sale or service provision by the undertakings concerned and deducting the relevant tax and additional fees. “China-wide” in article 3 of the Thresholds Regulation means that the buyers of the goods or services provided by the undertakings concerned are in the territory of China. In reply to the question about why the sentence on the calculation of the turnover from Hong Kong, Macao and Taiwan was ｄｅｌｅｔｅd in the final Notification Rule, Mr. Shang indicates at the Seminar that the exclusion of Hong Kong, Macao and Taiwan is the principle in the economic laws which should not be repeated in the Notification Rule[7]. We can infer that the turnover in above three areas will not be calculated in the China-wide turnover.

　　The Notification Rule also describes the scope of the undertakings whose turnover should be included into the turnover of the undertaking concerned[8]:

　　(1) the undertaking concerned itself;(2) the undertakings directly or indirectly controlled by the undertaking defined in (1);(3) the undertakings directly or indirectly controlling the undertaking defined in (1);(4) the other undertakings directly or indirectly controlled by the undertakings defined in (3);(5) the undertakings jointly controlled by at least two of the undertakings defined in above (1) to (4).

　　The turnover occurring among those undertakings from (1) to (5) will be excluded.

　　If there are the other undertakings jointly controlled by the undertakings concerned or by one undertaking concerned and one not concerned in the concentration, the turnover of these other undertakings with the third parties shall be included in the turnover of the undertakings concerned for once.

　　If there are the other undertakings jointly controlled by the undertakings concerned, the aggregate turnover of all the undertakings concerned shall not include the turnover occurring between these jointly controlled undertakings with their controlling undertakings concerned or the undertakings controlling or controlled by the controlling undertakings concerned.

　　We also have to note the situation discussed in the last paragraph of item 1 of this article, the turnover of all the concentration transactions in the two-year period shall be included if the aggregate turnover of those concentrations reach the Thresholds. The concentration arises on the date of the last concentration. And the two-year period is from the date of completion of the first transaction to the date of the agreement execution of the last transaction.

　　4. Notification to the AMBBeginning from this part, we will discuss the detailed procedural questions involved with the concentration, such as the notification to the AMB by the notifying parties, accepting and examining the notification by AMB, etc.

　　At first, the procedure begins from the notification by the notifying parties (“Initiation I”) or the investigation by the AMB on its own initiative (“Initiation II”). Regarding the Initiation II, we will discuss in the last paragraph of part 6 of this article. In this part, we only focus on the Initiation I to analyze the related questions involved with the notification to the AMB.

　　(1) Pre-notification consultationArticle 8 of the Notification Rule says that, prior to the notification, the undertaking concerned may apply in writing for consultation with the AMB to discuss the questions related to the concentration. These two lines of article are now playing very important role in the notification and examination procedures, especially for those questions that have not been prescribed in the laws, regulations and rules. For the undertakings concerned, good pre-consultation will be regarded as half success of the concentration deal. On the other hand, the pre-consultation may influence whether the AMB will accept the notification and how long it will take to give the appraisal of the concentration.