RESTRICTED
WORLD TRADE G/ADP/Q1/JPN/2
G/SCM/Q1/JPN/2
ORGANIZATION 9August 1996
(96-3175)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
NOTIFICATION OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Replies ofJAPAN1
toquestions posed byCANADA2
Thefollowingcommunication,dated29July1996,hasbeenreceivedfromthePermanentMission
ofJapan.
_______________
NecessarynotificationsoflawsandregulationsandtheGuidelineareinthecourseofpreparation,
andwillbesubmitted bythenextmeeting oflegislation review.
General questions
1. Throughout theCustoms Tariff LawandtheCabinet Orders relating toAnti-dumping and
Countervail, onlytheMinister ofFinance ismentioned. Intheconduct ofaninvestigation,
arethere separate authorities toconsider theamount ofthedutyandtoconsider thequestion
ofmaterial injury?
TheMinistries consisting oftheinvestigating authorities (theMinister ofFinance, theMinister
ofInternational Trade andIndustry andanyMinister whohasjurisdiction overtheindustry) will
communicate toeachother andmake adetermination onanyimportant aspect ofinvestigations after
consultations stipulated inArticle 18oftheCabinet Order relating toADandinArticle 14oftheCabinet
Order relating toCVD.
2. DoesJapan haveanindependent agency charged withjudicial review asrequired inArticle 13
oftheA-DAgreement andArticle 23oftheSCM Agreement?
Thelitigation willbefiledtocourts. Administrative measures including anti-dumping and
countervailing measures arecovered byJapanese judicial review systems.
3. What isthelegal mechanism inJapanese lawfortheimplementation ofdecisions rendered
byaWTO panel?
1G/ADP/N/1/JPN/2+Corr.1-G/SCM/N/1/JPN/2+Corr.1.
2G/ADP/W/233-G/SCM/W/243.G/ADP/Q1/JPN/2
G/SCM/Q1/JPN/2
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Japan'slawsandregulations donothaveanyspecific provisions concerning implementation
ofadverse panel reports. Amendment tothelegislation and/or regulation maybemade onacase-by-case
basis, ifnecessary, responding totheWTO panel report.
4. TheAnti-Dumping Agreement allows duties tobecollected oneither aretrospective or
prospective basis. Willduties becollected based onnormal value orexport price?
Japan would impose thedutyonaprospective basis. Duties including ADduties would be
calculated onthebasis ofexport price.
Questions onSpecific Articles
Initiation standards
5. Articles 7.6and8.5oftheCustoms Tariff setoutthestandards fortheinitiation ofcountervail
andanti-dumping investigations, respectively. Dothesearticles allow theauthorities toinitiate
aninvestigation without having received awritten complaint fromthedomestic industry? If
so,whydidtheGovernment ofJapan notlimittheuseofthisprovision tospecial circumstances
only, asrequired under Article 5.6oftheAnti-Dumping Agreement andArticle 11.6ofthe
SCM Agreement?
Theauthorities maydecide toinitiate aninvestigation without having received awritten
application when there issufficient evidence with regard tothefactoftheimportation ofthe
subsidized/dumped product andthefactofmaterial injury etc.tothedomestic industry caused bysuch
importation, thecondition ofwhich corresponds tothatprovided intheprovisions ofArticles 11.6/5.6
oftheSCM/AD Agreement.
6. Article 5oftheCabinet Order Relating toAnti-Dumping Duty andArticle 3oftheCabinet
Order Relating toCountervailing Dutyrequires thatthecomplainants represent notlessthan
25percentofthedomestic industry. HowdoestheGovernment ofJapan intend toimplement
itsobligations under Article 5.4oftheAnti-dumping Agreement andArticle 11.4oftheSCM
Agreement? Inparticular, howwilltheGovernment ensure thattheapplication hasbeenmade
byoronbehalf ofthedomestic industry, i.e.,supported bythose domestic producers whose
collective output constitutes more than50percentofthetotalproduction ofthelikeproduct
produced bythatportion ofthedomestic industry expressing either support fororopposition
totheapplication?
Article 5oftheCabinet Order stipulates 25percentoftotalproduction asastanding requirement
forinitiating aninvestigation.
Further, astothe50percentsupport rule, theprovisions ofArticle 5.4oftheAgreement
aredirectly applied andthemanner tofindthedegree ofsupport isprovided forinArticle 5(2)of
theGuidelines.
7. Article 2oftheCabinet Order Relating toCountervailing Dutydefines domestic industry to
bedomestic producers whose collective output ofthelikeproducts constitutes amajor proportion
ofthetotaldomestic production ofthose products. Whyisthere nocomparable article inthe
Cabinet Order Relating toAnti-Dumping Duty? What isthedefinition ofmajor proportion?
Thedefinition ofdomestic industry isprovided forinArticle 4oftheCabinet Order relating
toAnti-Dumping Duty.G/ADP/Q1/JPN/2
G/SCM/Q1/JPN/2
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Thedifference between theCabinet Order relating toCountervailing Duty andtheCabinet
Order relating toAnti-Dumping Duty wascaused byatranslation error ("major proportion" isthe
correct translation inplace of"substantial proportion" ofArticle 4oftheCabinet Order relating to
Anti-Dumping Duty.
The"major proportion" isinterpreted as50percentinArticle 4(1)ofthe"Guidelines".
8. Article 7.1oftheCabinet Order onAnti-Dumping DutyandArticle 4.1oftheCabinet Order
onCountervailing Duty setouttherequired elements ofaproperly documented complaint.
Could theGovernment ofJapan explain whythelistofrequired elements doesnotinclude the
identity ofeachknown exporter orforeign producer andalistofknown persons importing
theproduct inquestion asgiven inArticle 5.2(ii) oftheAnti-Dumping Agreement and
Article 11.2(ii) oftheSCM Agreement?
Article 7.1.3 oftheCabinet Order relating toADandArticle 4.1.3 oftheCabinet Order relating
toCVD require theinclusion oftheinformation ontheidentity ofsuppliers defined astheexporters
orproducers concerned andareconsistent withArticle 5.2(ii) oftheADAgreement andArticle 11.2(ii)
oftheSCM Agreement.
TheAnnex totheGuidelines requires theinclusion oftheinformation ontheidentity ofimporter
oftheproduct concerned.
Undertakings
9. Articles 7.8and7.9oftheLawprovide forundertakings inthecaseofcountervail investigations
andArticles 8.7and8.8oftheLawprovide forundertakings inthecaseofanti-dumping
investigations.
(a) HowdoestheGovernment ofJapan intend toimplement itsobligations under Article 8.2
oftheAnti-Dumping Agreement andArticle 18.2oftheSCM Agreement, requiring
thatundertakings arenottobeaccepted prior toapreliminary affirmative
determination?
According toArticles 7.10and8.8oftheLaw, theGovernment shallnotaccept such
anundertaking until itcanbepresumed thatthere isthefactoftheimportation of
subsidized/dumped products andthefactofthematerial injury etc. This presumption
corresponds tothepreliminary affirmative determination referred toinArticle 8.2/18.2 ofthe
AD/SCM Agreement.
Therefore, itisconsistent withArticles 8.2/18.2 oftheAD/SCM Agreement.
(b) Article 7.9allows theGovernment toterminate acountervail investigation ifan
undertaking isaccepted. Article 8.8allows theGovernment tosuspend ananti-dumping
investigation ifanundertaking isaccepted. Article 8.1oftheAnti-Dumping Agreement
andArticle 18.1oftheSCMAgreement allow investigations tosuspended orterminated
intheevent ofanundertaking. Could theGovernment ofJapan explain whyanti-
dumping andcountervail investigations aretreated differently inthisrespect?
Thisdifference wascaused byatranslation error("suspend orterminate" isthecorrect
translation inplace of"terminate" ofArticle 7.9oftheLawand"suspend" ofArticle 8.8of
theLaw).G/ADP/Q1/JPN/2
G/SCM/Q1/JPN/2
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10. HowwilltheGovernment ofJapan ensure thatduties arenotcollected during thetermofan
undertaking, asrequired under Article 9.2oftheAnti-Dumping Agreement andArticle 19.1
oftheSCM Agreement?
While aprice undertaking isineffect, anti-dumping dutywillnotbecollected.
Theprovisions ofArticle 9.2oftheADAgreement andArticle 19.3oftheSCM Agreement
aredirectly applied.
Subsequent Investigation
11. HowdoestheGovernment ofJapan intend toimplement itsobligations under Article 11.9of
theSCM Agreement andArticle 5.8oftheAnti-Dumping Agreement which require an
investigation tobeterminated iftheamount ofsubsidy ormargin ofdumping isdeminimis,
ifthevolume ofimports isnegligible oriftheinjury isnegligible?
Japan'slawsandregulations donothaveprovisions concerning "deminimis "margin/amount
andnegligible volume ofimport.
Therefore, theprovisions ofArticle 5.8oftheADAgreement andArticle 11.2oftheSCM
Agreement aredirectly applied.
Aninvestigation isimmediately terminated inthecases where theinvestigating authorities find
thatthemargin ofdumping/subsidy amount islessthatthedeminimis level orthatthevolume of
dumped/subsidized imports isnegligible.
12. HowdoestheGovernment ofJapan intend toimplement itsobligations regarding on-the-spot
investigations, asprovided forinAnnex IoftheAnti-Dumping Agreement andAnnex VIof
theSCM Agreement?
Theprovisions ofAnnex ItotheADAgreement andAnnex VItotheSCM Agreement are
directly applied.
13. HowdoestheGovernment ofJapan intend toimplement itsobligations regarding Article 6.1
oftheAnti-dumping Agreement andArticle 12.1oftheSCM Agreement? Inparticular, how
willtheGovernment ensure thatexporters orforeign producers aregiven atleast30daysto
reply toquestionnaires?
With regard tothetimelimit, noprovisions arelaidinthedomestic lawsandregulations.
Theprovisions ofArticles 6.1.1/12.1.1 oftheAD/SCM Agreement aredirectly applied andatleast
30daysareallowed forreplying tothequestionnaires.
14. Does theGovernment ofJapan intend toimplement rules onsampling asprovided forunder
Article 6.10oftheAnti-Dumping Agreement?
Inthecases ofsampling, theprovisions ofArticles 6.10and9.4oftheADAgreement are
directly applied.
15. HowdoestheGovernment ofJapan intend toimplement itsobligations under Article 6.8of
theAnti-Dumping Agreement andArticle 12.7oftheSCMAgreement regarding theuseofthe
factsavailable when making adecision?G/ADP/Q1/JPN/2
G/SCM/Q1/JPN/2
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Theprovisions ofArticle 6.8andAnnex 2totheADAgreement aswellasArticle 12.7of
theSCM Agreement aredirectly applied.
16. Article 5oftheCabinet Order Relating toCountervailing DutyandArticle 8oftheCabinet
Order Relating toAnti-Dumping Dutysetoutprocedures forproviding notice ofinitiation of
aninvestigation. Could theGovernment ofJapan explain whytheaddress towhich
representations byinterested parties should bedirected isnotlisted asarequirement inthe
notice tobepublished intheOfficial Gazette, asrequired under Article 22.2(v) oftheSCM
Agreement?
Article 5(1)ofthe"Guidelines" stipulates theaddress.
Determination ofDumping
17. Article 8.1oftheLawdefines dumping tobeasaleofproduct forexport ataprice lessthan
theprice ofthelikeproduct. Could theGovernment ofJapan explain whyithasnotadopted
thedefinition provided forinArticle 2.1oftheAnti-Dumping Agreement, i.e.,saleofaproduct
atlessthanitsnormal value?
There isnodifference inthemeaning between "asaleofproduct forexport ataprice less
thanthepriceofthelikeproduct intheordinary course oftradedestined forconsumption intheexporting
country oranyother similar priceprescribed byaCabinet Order" inArticle 8.1oftheCustoms Tariff
Lawandto"introduce aproduct intothecommerce ofanother country atlessthanitsnormal value"
inArticle 2.1oftheADAgreement.
18. HowdoestheGovernment ofJapan intend toimplement itsobligations under Article 2.4of
theAnti-Dumping Agreement, inparticular subparagraph 2,toensure thatafaircomparison
ismade between theexport price andthenormal value?
Japan'slawsandregulations donothaveprovisions concerning thisbasis forcomparison.
Therefore, theprovisions ofArticle 2.4.2 oftheADAgreement aredirectly applied.
19. Article 2oftheCabinet Order Relating toAnti-Dumping Dutysetsoutdifferent methods for
thecalculation ofnormal value. TheCabinet Order doesnotprovide anyspecific rules on
howthecalculation istobecarried out,particularly when thecostofproduction method is
used. HowwilltheGovernment ofJapan ensure thatitsobligations under Article 2.2ofthe
Anti-Dumping Agreement aremet?
Japan'slawsandregulations donothaveprovisions concerning theconcrete calculation method
fortheconstructed normal value.
Therefore, therelevant provisions oftheADAgreement aredirectly applied.
20. Article 2.1(3) allows forprices tobecalculated fromthecosts ofproduction oftheimported
product plusnormal profit andadministrative, selling andgeneral costs forthelikeproduct,
produced inthecountry oforigin. HowwilltheGovernment ofJapan ensure thatthese costs
arebased onactual data, asrequired under Article 2.2.2 oftheAnti-Dumping Agreement?
Japan'slawsandregulations donothaveprovisions concerning thedatausedinthecalculation.G/ADP/Q1/JPN/2
G/SCM/Q1/JPN/2
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Theprovisions ofArticle 2.2.2 oftheADAgreement aredirectly applied.
21. Article 4.7oftheLawallows forcurrency conversion tobemade based ontheforeign exchange
rateonthedateofimport declaration.
(a) Could theGovernment ofJapan explain howthisisconsistent withArticle 2.4.1 of
theAnti-Dumping Agreement which requires thattherateofexchange onthedateof
salebeused?
(b) Does theGovernment ofJapan intend toimplement other elements ofArticle 2.4.1 of
theAnti-DumpingAgreement,e.g.,useofexchangerateinforwardmarkets,fluctuations
inexchange rates?
Article 4.7oftheLawisapplied justfortheimposition ofanti-dumping duty, notfor
thecalculation ofdumping margin.
Japan'slawsandregulations donothave provisions concerning theconversion of
currencies inthecalculation ofthedumping margin.
Therefore, theprovisions ofArticle 2.4.1 oftheADAgreement aredirectly applied.
Subsidies
22. Does theGovernment ofJapan intend toimplement anylawsorregulations regarding the
calculation oftheamount ofsubsidy? Does theGovernment intend toapply thebenefit to
recipient approach asprovided forinArticle 14oftheSCM Agreement?
Withregard tothecriteria forCVD amount, theprovisions ofArticle 14oftheSCM Agreement
aredirectly applied.
23. Does theGovernment ofJapan intend toimplement anylawsorregulations regarding the
treatment ofinputs intheproduction process asprovided forinAnnex IIoftheSCMAgreement?
Japan'sdomesticlawsandregulationsdonotprovideforthetreatmentofinputsintheproduction
process.
Therefore, theprovisions ofAnnex IItotheSCM Agreement aredirectly applied.
Injury
24. Articles 7.1and8.1oftheCustoms Tariff Lawallow foranti-dumping andcountervailing duties
tobeapplied where material injury isfound. There is,however, nomention ofhowmaterial
injury istobeassessed ineither theLawortheCabinet Orders. HowdoestheGovernment
ofJapan intend toimplement itsobligations under Article 3oftheAnti-Dumping Agreement
andArticle 15oftheSubsidies andCountervailing Measures Agreement?
Japan'slawsandregulationsdonothaveprovisionsconcerningtheassessmentofmaterialinjury.
Therefore, theprovisions ofArticle 3oftheADAgreement andArticle 15oftheSCM
Agreement aredirectly applied.