RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/IG/W/33
10 April 2001
(01-1828)
Committee on Anti-Dumping Practices
Informal Group on Anti-CircumventionOriginal:  English
TOPIC 2 – WHAT IS BEING DONE BY MEMBERS CONFRONTED
BY WHAT THEY CONSIDER TO BE CIRCUMVENTION?
Replies of the UNITED STATES to Questions from EGYPT1
Regarding UNITED STATES Anti-circumvention Law and Practice
The following communication, dated 9 April 2001, has been received from the Permanent
Mission of the United States.
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Q1. How has the United States been able to justify its procedures within the provisions of
Articles 1 and 18.1 of ADA.
Reply
The anti-circumvention procedures of the United States are fully consistent with Articles 1
and 18.1, as well as with all other provisions of the AD Agreement.  As noted in the Ministerial
Decision on Anti-Circumvention, in negotiating the AD Agreement, Members were unable to agree
on specific text addressing the problem of circum vention.  As a result, the provisions of GATT 1994
and the AD Agreement contain no specific guidance or limitation on the conduct ofanti-circumvention inquiries; thus, such inquiries are not addressed by Articles 1 and 18.1.
Nevertheless, the United States is fully in agreement with the Ministerial Decision regarding the
desirability of the applicability of uniform rules in this area as soon as possible.
Q2. Article 18.4 of the ADA provides that:  "each Member shall take all necessary steps of a
general or particular character, to ensure, not la ter than the date of entry into force of the WTO
Agreement for it, the conformity of its laws, regulations and administrative procedures with the
provisions of this Agreement as they may apply for the Member in question".
Would the United States explain how its an ti-circumvention procedures are consistent
with the above-mentioned Article.
Reply
Because the AD Agreement contains no specific text addressing the problem of
circumvention, as recognized by the Ministerial Decision, the laws, regulations and administrative
procedures of the United States in this area are fully consistent with Article 18.4.
                                                     
1 G/ADP/IG/W/26.G/ADP/IG/W/33
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Q3. Footnote (2) of the afore-mentioned US paper states that "the United States law
provides that an anti-circumvention determinat ion, to the maximum extent practicable, be
made within 300 days after initiation of an inquiry".
Would the United States explain in more detail the rationale for this timeframe?
Reply
The United States anti-dumping statute at 19 U. S.C. § 1677j(f) provides that, to the maximum
extent practicable, circumvention inquiries should be completed within 300 days from the date of
initiation of the inquiry.  This requirement is also reflected in the regulations at 19 C.F.R.
§ 351.225(f)(5).  It has been the experience of the United States that this time frame provides an
appropriate balance between the need to complete the inquiry in an expeditious manner and the needto gather the relevant facts and reach an accurate determination.  The United States would welcome
comments from other members regarding their experience of the appropriate time frame for
conducting such inquiries.
Q4. According to United States procedures, an anti-circumvention inquiry normally is
initiated as the result of an application submitted by the appropriate US industry.  How are the
provisions of Article 5.4 of the WTO/ADA applied, or to be more precise, how does the
Department of Commerce examine the standing of an applicant and how does it determine the
eligibility of the applicant and his/her application?
Reply
By its terms, Article 5.4 applies prior to initiation of an anti-dumping investigation, and not to
inquiries undertaken after such an investigation has been completed and injurious dumping has been
found to exist. Regarding the eligibility of the applicant for a circumvention inquiry, the regulations at19 C.F.R. § 351.225(c)(1) require that an application be filed by an “interested party,” which in turn is
defined in the statute at 19 U.S.C. § 1677(9), and includes such parties as domestic producers, unions
and trade and business associations.  The application must be served on all persons who have
participated in any segment of the proceeding.  19 C.F.R. § 351.225(n).  We are unaware of any cases
undertaken after adoption of amendments to the US anti-dumping law made in response to the ADAgreement in which an argument was made that the applicant did not constitute an interested party
within the definition of the statute.  In one inqui ry initiated prior to enactment of US legislation
implementing the Uruguay Round AD Agreement, the Department terminated an anti-circumvention
inquiry when it became apparent that the party reque sting the inquiry did not meet the definition of an
interested party.  See, Industrial Belts and Components and Parts Thereof, Whether Cured or
Uncured, From Japan; Termination of Circum vention Inquiry of Anti-dumping Duty Order , 59 Fed.
Reg. 23693 (6 May 1994).
Q5. Would the United States explain what is the form of measures finally applied (i.e.
additional duties, new duties or other).
Reply
An anti-circumvention inquiry does not necessarily result in any duties being assessed against
the product in question.  Upon an affirmative finding of circumvention the United States will require a
security on the circumventing imports, in the form of a cash deposit.  Under the retrospective system
of the United States, the amount of anti-dumping duties to be assessed on such imports is calculatedonly after a subsequent administrative review is conducted, and is based on the level of dumping
during the period in question.G/ADP/IG/W/33
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Q6. In cases of assembling industries, Egypt requests answers to the following questions:
First:  are the parts or components entering into a final product - the latter which has
been subject to anti-dumping duties during an initial investigation - liable to new
anti-circumvention duties?
Reply
As a preliminary matter, in many cases the petitioning industry will include parts or
components in the original application, and they are explicitly covered by the finding of dumping and
material injury.  Where the original investigation did not explicitly address this issue, the Department
of Commerce has the discretion, under very specific circumstances set forth in 19 U.S.C. § 1677j(a),
to find that imported parts or components of a product subject to anti-dumping duties havecircumvented the anti-dumping duty order and should be subject to duties.  First, a party must be
engaged in assembly or completion of a product in the United States which, if imported in assembled
or completed form, would be subject to the anti-dumping duty order.  Second, the product must be
assembled or completed from parts or components imported from the country subject to the
anti-dumping duty order.  Third, the process of assembly or completion must be minor orinsignificant, and the value of the parts or components a significant portion of the total value of the
completed product.  In determining whether the new assembly or completion process being performed
in the United States is minor or insignificant, the United States looks at the level of investment, the
level of research and development, the nature of the production process, the extent of the production
facilities and the portion of the total value of the finished product attributable to the process.  Indetermining whether a finding of circumvention is appropriate under those circumstances, the
administering authority will look at factors such as the pattern of trade, including sourcing patterns;
whether the manufacturer or exporter of the parts or components is affiliated with the party
assembling or completing the product; and whether there has been an increase in imports of parts or
components after the initiation of the investigation.  Finally, before making a finding ofcircumvention under section 1677j(a), the Departme nt must notify the US International Trade
Commission, which, if it believes that a significant injury issue is presented by the proposed inclusion
of the parts or components in the order, may provide advice as to whether the inclusion would be
inconsistent with its original determination.
Second:  how could it be claimed that anti-dumping duties that are already imposed on
one specific product be imposed on another?
Reply
The above-referenced provision of United States anti-dumping law is limited to situations in
which the production step being performed in the United States is so minor or insignificant that theparts or components are, for all commercial purposes, the same as the finished product subject to the
order.  If the production step which has been moved to the United States is not minor or insignificant,
then there will be no finding of circumvention on the parts or components.  See, for example, Hot-
Rolled Lead and Bismuth Carbon Steel Product s from Germany and the United Kingdom; Negative
Final Determinations of Circumvention of  Anti-dumping and Countervailing Duty Orders , 64 Fed.
Reg. 40336, 40342 (July 26, 1999), in which the Department, in determining not to find
circumvention under section 1677j(a) found, inter alia , that the completion process in question
required significant capital investment.
Third:  in the case of parts of comp onents, are there circumstances where an
anti-circumvention inquiry can be conducted and measures applied by the authority on a
specific product without an application being received from the concerned domestic industry?G/ADP/IG/W/33
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Reply
If the Department of Commerce has sufficient information before it to conclude that an
inquiry is warranted, the Department has the authority under its regulations, section 351.225(b), to
initiate an anticircumvention inquiry whether or not an application has been received.
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