 
  WORLD TRADE  
ORGANIZATION  G/ADP/Q1/CAN/13 
G/SCM/Q1/CAN/13 28 October 2004 
 
(04-4583) 
Committee on Anti-Dumping Practices  
Committee on Subsidies and Countervailing Measures Original:   English 
 
 
 
NOTIFICATION OF LAWS AND REGULATIONS UNDER  
ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS  
 
Replies to Questions Posed by the EUROPEAN COMMUNITIES1 
Regarding the Notification of CANADA2 
  
 The following communication, dated 27 October, is being circulated at the request of Canada. 
 
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Special Import Measures Act (SIMA) 
 
Q1. Article 15(d) of SIMA appears to allow a period as short as 60 days for the 
determination of normal value, with such period ending as much as one year before the sale of 
the like goods to an importer in Canada.  Is this  understanding correct?  How is this provision 
applied in practice? 
 
Reply
 
 
 Paragraph 15(d) of SIMA governs the selection of those home market sales that are used to 
establish the normal value for each  export sale of the product made during the period of investigation.  
For dumping determinations, the period  of investigation will normally be  12 months and will never be 
less than 6 months.  Therefore, in practice, th ere may be as many sixty-day periods selected under 
paragraph 15(d) of SIMA as there are sales to Cana da during the period of investigation, and these 
sixty-day periods will together cover a much longe r period of time.  The sixty-day period for each 
export sale will normally be the period which is the most contemporaneous to the date of the export 
sale in which there are sufficient hom e market sales to allow for a fair comparison under Article 2.4 of 
the Anti-dumping Agreement .  Selection of the same single sixty-day period for all sales to Canada 
would only occur in exceptional circumstances, when , among other things, home market pricing is 
constant during the period under investigation. 
 
Q2. Article 25(1)(c)(i) of SIMA seems always to require the deduction of AD duties when 
constructing the export price.  How is this consistent with the conditions laid down in 
Article 9.3.3 ADA? 
 
Reply  
  The application of subparagraph 25(1)(c)(i) of  SIMA is qualified by subsection 25(2) which 
provides that no deduction under that paragraph can be made when, in the absence of that deduction, 
                                                     
 
1 G/ADP/Q1/CAN/12-G/SCM/Q1/CAN/12 
2 G/ADP/N/1/CAN/4- G/SCM/N/1/CAN/4 G/ADP/Q1/CAN/13 
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 the constructed export price would be equal to or greater than the normal value.  Therefore, under 
section 25 of SIMA, Canadian authorities are required to take into account the elements enumerated 
in Article 9.3.3 and are required not to deduct an ti-dumping duties when movements in arms’ length 
prices in the Canadian market reflect the elimination of dumping.  
 
Q3. Article 51 of SIMA provides that an undertaking shall be terminated if the importer or 
exporter of the goods or the complainant requ ests so within 30 days after the notice of 
acceptance of the undertaking.  Could Canada pl ease clarify on what grounds (in the absence of 
a violation) such termination would be based? 
 
Reply
 
  For all practical purposes, for the reasons outlined by the European Communities, the 
acceptance of an undertaking cannot be considered final until the 30th day following the notice of 
acceptance of the undertaking.  No specific grounds need  to be provided by the parties requesting that 
the undertaking not be accepted.  
Q4. It would appear from Article 53 of SIMA that where an undertaking has been accepted 
following a preliminary determination but no defi nitive determination has been made, the only 
test for continuation of the undertaking is that it "continues to serve the purpose for which it is 
intended".  Is this correct?  In cases where th e undertaking is continued and thus remains in 
place for more than five years but is then termin ated at the request of the exporter or importer 
concerned, is the original investigation resumed under Article 51 or is a new investigation required? 
 Reply
 
  This question is subdivided in two questions.  The first question is with respect to the expiry 
review of an undertaking that was put in place follo wing a preliminary determination and that was not 
followed by final determinations.  We must first clar ify that an expiry review of the undertaking under 
section 53 will examine whether the undertaking mu st be terminated under section 52 (e.g., because it 
is being violated) and
 whether it continues to serve the purpo se for which it was intended.  However, 
we understand the question as a request for clarific ation with respect to the expression “continues to 
serve the purpose for which it is intended“.  This e xpression must be read in the context of the other 
provisions of the Special Import Measures Act concerning undertakings, not ably subsection 49(1). It 
can be concluded from these provisions that an u ndertaking is intended to protect the domestic 
industry from injurious dumping.  Therefore, in assessing whether an undertaking continues to serve 
its purpose, the authorities must first determine whet her this protection is still required, i.e.., whether 
there is a likelihood of continuation or resump tion of dumping and whether the continuation or 
resumption of dumping will cause or threaten to cause injury to the domestic industry.   With respect to the second question, it should first be clarified that, in cases where an 
undertaking is renewed for a further period of not mo re than five years pursuant to section 53 of the 
Act, the only way in which an undertaking can be te rminated is if any of the conditions outlined under 
the provisions of section 52 are met.  Section 52 of the Act does not provide for the termination of an undertaking at the request of the exporter or importer.   Depending on the reasons for termination (i.e., 
whether the undertaking is terminated under subsecti on 52(1) or (1.2)), the investigation is either 
resumed or terminated.   
 
Q5. It would appear that Article 76.01 of SIMA implements, inter alia , Article 11.2 ADA and 
that interim reviews are carried out entirely by the Tribunal without a provision to obtain a determination from the Commissioner as occurs in expiry reviews;  and that neither the  G/ADP/Q1/CAN/13 
 G/SCM/Q1/CAN/13 
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 Canadian International Tribunal Act (CITA) no r Special Import Measures Regulation (SIMR) 
lay down criteria for these reviews.  What criteria are used in interim reviews?  How is it ensured that these are consistent with Article 11.2 ADA? 
 Reply
 
  In carrying out an interim review under sec tion 76.01 of SIMA, the Tribunal is expressly 
authorized to review an order or finding or any asp ect thereof.  This would include any matter set out 
in Article 11.2 of the Anti-Dumping Agreement  or Article 21.2 of the Agreement on Subsidies and 
Countervailing Measures .  The nature of issues addressed in in terim reviews is likely to vary widely 
from one review to another (e.g., from a request to rescind the order to a request from a specific 
product exclusion from the scope of the order).  Th e relevant criteria obviously depend on the nature 
of these issues, and will therefore vary from case to case.  These criteria have not been legislated.  
However, the Tribunal is required under Canadian law to consider a ll relevant factors bearing upon 
the issues in play in the review. 
 
Regulations Exempting Goods of Chile from the Application of Anti-Dumping Measures  
 Q6. Could Canada please clarify how imports from Chile, which are exempted from the 
application of anti-dumping measures, would be  taken into account in the injury analysis? 
 Reply
 
  Of course, the precise way in which any imports that are not subject to the anti-dumping investigation would affect the issues in play in an  injury analysis would depend on the circumstances 
of each case.  However, imports from Chile would be taken into account in the same manner as any 
other non-subject imports. Such imports are consider ed by the Canadian International Trade Tribunal 
in its assessment of whether factors other than the dumping or subsidizing have caused injury, 
retardation or threat of injury. 
 
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