RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/Q1/PER/7
G/SCM/Q1/PER/7
12 May 1998
(98-1853)
Committee on Anti-Dumping Practices
Committee on Subsidies and Countervailing MeasuresOriginal:  Spanish
NOTIFICATION OF LAWS AND REGULATIONS UNDER
ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS
Replies of Peru1 to Questions Posed by
Japan2 and Canada3
The following communication, dated 30 April 1998, has been received from the Permanent
Mission of Peru.
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REPLIES TO QUESTIONS POSED BY JAPAN
It should be pointed out that, by virtue of Legislative Decision 26407 published on
18 December 1994, the Peruvian Congress approved the Agreement Establishing the World Trade
Organization and the Agreements contained in th e Final Act of the Uruguay Round, and incorporated
those texts in domestic Peruvian legislation.  Accordingly, the Anti-Dumping Agreement and the
Agreement on Subsidies and Countervailing Measures entered into force on 1 January 1995 and have
the status of domestic law as their provisions are directly applicable in Peru.
Consequently, Peru enacted Supreme Decree 043-97-EF for the purpose of regulating the
procedural and administrative aspects of the arrangements applicable to the conduct of investigations.
Question 1
Is the AD Agreement directly applicable wherever there is no corresponding provision
in "Supreme Decree No. 043-97-EF" (hereinafter "the Decree")?
Reply
Yes.
                                                     
1G/ADP/N/1/PER/1/Suppl.2-G/SCM/N/1/PER/1/Suppl.2.
2G/ADP/Q1/PER/5-G/SCM/Q1/PER/5.
3G/ADP/Q1/PER/4+Corr.1- G/SCM/Q1/PER/4+Corr.1G/ADP/Q1/PER/7
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Question 2
Could Peru explain what the term "para-tariff barriers" means in Article 5 of the
Decree?  Could Peru explain how distortion of domestic prices may occur by tariff or "para-
tariff barriers"?
Reply
The term "para tariff barriers" means formalities which impede foreign trade, such as
registration of importers and exporters, quotas, exch ange control, the requirement of certificates of
quality, sanitary, animal health and phytosanitary measures, rules of origin, etc.
Article 5 of Supreme Decree No. 043-97-EF refers to the impossibility of making a proper
comparison on account of the distortion of domestic prices in the country of origin caused by para
tariff measures.
Question 3
Does "the normal value" in Article 6 of the Decree mean the constructed normal value?
Reply
The normal value provided for in Article 6 of Supreme Decree 043-97-EF relates to
circumstances where it is not possible to use the value of imports coming from or originating in
countries which have no market economy, which do not operate under normal market conditions, or
where the low volume of sales on the domestic market of the exporting country do not permit a proper
comparison. In such cases, the normal value shall be determined by means of comparison with a
comparable price of the like product when it is exported to a third country, making it consistent with
the provisions of Article 2 of the Anti-Dumping Agreement.
Question 4
Could Peru explain why "[t]he production processes" and "[s]cale of production" are
necessary in determining "the normal  value" in Article 6 of the Decree?
Reply
Article 2.2 of the Anti-Dumping Agreement states that, when there are no sales of a product
in the ordinary course of trade in the domestic market of the exporting country or when, because ofthe particular market situation or the low volume of  the sales in the domestic market of the exporting
country, no proper comparison can be made, the existence of dumping shall be determined by
comparison with the cost of production in the country of origin, plus a reasonable amount for
administrative costs.
Accordingly, the production process and the scale of production (sales) are relevant in
determining normal value, since those factors directly influence production costs and, by extension,
the normal constructed value which the Commission needs to determine for the purposes of its
investigation.G/ADP/Q1/PER/7
G/SCM/Q1/PER/7
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Question 5
Article 3.2 of the AD Agreement provides that "[w]ith regard to the volume of the
dumped imports, the investigating authoritie s shall consider whether there has been a
significant increase in dumped imports, either in absolute terms or relative to production or
consumption in the importing Member".  Howev er, Article 14 of the Decree provides that "the
Commission shall take into account ... I(a) .. a significant increase in the volume of dumped
imports in absolute terms or relative to production, sales or consumption".  Could Peru explain
why the Decree includes "sales" though it  is not included in the AD Agreement.
Reply
Article 3.2 of the Anti-Dumping Agreement lays down criteria for determining an increase in
the volume of imports, which include the level of imports relative to production or consumption, but
do not include the term "sales" which is found in Article 14.I(a) of the Regulations.
In this connection, it should be pointed out that, while it is true that the Agreement does not
expressly use the term "sales", the Dumping and Subsidies Commission considers that sales by
domestic producers constitute a relevant additional indicator in as much as they make it possible to
evaluate consumption of a product and - in conseque nce - its market share.  Such information would
provide an additional tool for assessing injury to the domestic industry.
The inclusion of sales as an additional elemen t of analysis is not inconsistent with the
Agreement but, on the contrary, provides a clarification which each of the country Members should
introduce in its legislation.
Question 6
Article 14 of the Decree provides that "the Commission shall take into account ... I(a) ...
[w]hether the rate of growth of the dumped or subsidized imports has meant that these importscame to represent an important proportion co mpared to production, sales or consumption
during the period of the investigation".  Could Peru show numerical criteria to define "an
important proportion"?
Reply
No numerical criteria or percentages are applied by the Commission to determine what is
meant by a considerable increase in the volume of dumped imports.  The Commission considers that
each case should be evaluated on its own merits, since the specific characteristics of  each market
decisively affect the impact which dumped imports or subsidies may have on domestic producers.
One factor to be taken into account, for example, is the level of concentration of each market.
In this connection, Article 3.2 of the Anti-Dumping Agreement establishes no numerical
criteria for determining a significant increase in dumped imports, either in absolute terms or relative
to production or consumption in the importing Member.G/ADP/Q1/PER/7
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Question 7
According to Article 17 of the Decree, a re the producers included in "domestic
industry" if they are "related to the exporters of the allegedly dumped or subsidized product"?
Please explain the other criteria in detail as well.
Reply
Article 17 of the Peruvian Regulations does not in principle exclude producers related to the
exporters of the dumped or subsidized product.  In this connection, the relationship between the
domestic industry and the exporters of the product under investigation is an aspect which the
Commission will evaluate on a case-by-case basis in order to determine the domestic industry.
Accordingly, the Commission will evaluate the existing commercial or financial relationship between
enterprises.
Consequently, Article 17 of the Decree applies the criteria laid down in Articles 4.1 and 16.1
of the Anti-Dumping and Subsidies Agreements, respectively, in order to determine the domestic
industry.
Question 8
Article 8.2 of the AD Agreement provides that "[p]rice undertakings shall not be sought
or accepted from exporters unless the authorities of the importing Member have made apreliminary affirmative determination of dumping and injury caused by such dumping".
However, Article 34 of the Decree provides the ph rase "during the course of an investigation".
Could Peru explain the relation between both provisions?  Could Peru explain why an exporter
or government of an exporting country can undertake commitments before a preliminary
determination?
Reply
Price undertakings, which are regulated in Articles 34 et seq of Supreme Decree 043-97-EF,
may only be given once the corresponding investigative procedure has been initiated.  Nevertheless,
pursuant to the provisions of Article 8.2 of the Anti-Dumping Agreement, the Peruvian authorities
require as a precondition for seeking or accepting an undertaking that there should be a preliminaryaffirmative determination of dumping or subsidization causing injury.
Accordingly, both exporters and the government of the exporting country will undertake
commitments vis-à-vis the Commission once the requirements of Article 8.2 of the Anti-Dumping
Agreement have been fulfilled, a situation which will arise when the Commission is ready to apply a
provisional duty.
Question 9
Under what circumstances does a government of a country exporting the dumped or
subsidized goods undertake commitments instead of an exporter?  Article 8.1 of the
AD Agreement states "Proceedings ... from any exporter ...".  Could Peru explain the
relationship between Article 34 of the Decree, which allows both an exporter and government of
an exporting country to undertake commitments and Article 8.1 of the AD Agreement, which
allows only an exporter to undertake commitments?G/ADP/Q1/PER/7
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Reply
Supreme Decree No. 043-97-EF regulates the procedures for investigating dumping and
subsidization, and it is for that reason that Article 34 attributes liability to the exporter in cases of
dumping and to the government of the exporting country in cases of subsidization.
Question 10
How could Peru explain the consistency of Article 48 of the Decree, that address
anti-circumvention, with the AD Agreement?
Reply
Although the Anti-Dumping Agreement and the Agreement on Subsidies and Countervailing
Measures provide for no anti-circumvention measures, this topic was included in the negotiations
which preceded adoption of the Agreement on Implementation of Article VI of the GATT 1994.
Accordingly, in order to prevent this type of  practice, the Peruvian Regulations cover such
situations.  Similar measures have been adopted by other country Members such as Argentina,
Mexico and the United States.
REPLIES TO QUESTIONS POSED BY CANADA
It should be pointed out that, by virtue of Legislative Decision 26407 published on
18 December 1994, the Peruvian Congress approved the Agreement Establishing the World TradeOrganization and the Agreements contained in th e Final Act of the Uruguay Round, and incorporated
those texts in domestic Peruvian legislation.  Accordingly, the Anti-Dumping Agreement and the
Agreement on Subsidies and Countervailing Measures entered into force on 1 January 1995 and have
the status of domestic law;  their provisions are directly applicable in Peru.  In this connection, Peru
enacted Supreme Decree 043-97-EF for the purpose of regulating the procedural and administrativeaspects of the arrangements applicable to the conduct of investigations.
Question 1
We note that Peru's Regulations do not incl ude provisions for sampling.  Does this mean
that Peru will not use sampling during  the course of an investigation?
Reply
As Supreme Decree 043-97-EF contains no specific provisions on sampling, the rules set out
in the Anti-Dumping and Subsidies Agreements are applicable.  These rules - as has already been
indicated - have the status of law in Peru.
Nevertheless, in the investigative process, the Commission applies this procedure for the
purpose of determining the normal value in cases where a very large number of exporters, producersor importers are involved, or even in cases where the product under investigation is represented by
different types or designs, making it impossible to obtain a reliable average normal value.  In the latter
case, for example, the Dumping and Subsidies Commission of INDECOPI may select a representativeG/ADP/Q1/PER/7
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sample of the different models, in accordance with technical criteria such as demand for each model,
prices, import volumes, etc., and these criteria will be evaluated in each specific case.
Question 2
We note that Peru's Regulations do not include provisions for reviewing decisions in the
context of extending findings beyond five years.  Does this mean that Peru does not envisageextending any finding beyond five years?
Reply
Article 40 of Supreme Decree 043-97-EF refe rs to Article 11.3 of the Anti-Dumping
Agreement and Article 21.3 of the Subsidies Agreement as the provisions considered directly
applicable by the Peruvian authorities.
In this connection, Peruvian legislation recognizes and applies the sunset clause and
guarantees the right of the authorities to review the necessity of the measure, on their own initiative orupon a duly substantiated request made by or on behalf of the domestic industry, in order to determine
whether the expiry of the duty would be likely to lead to continuation of the dumping or subsidization
causing injury.
Consequently, Article 47 of Supreme Decree No. 043-97-EF provides that, after at least six
months have elapsed since the conclusion of the investigation, such a review may be carried out,which means that the review of anti-dumping or countervailing duties may take place during a period
of between six months and five years after the issue of the decision imposing definitive duties.
Question 3
We note that Article 18 addresses the issue of standing that must be met by a domestic
industry filing an application for initiation of an anti-dumping investigation.  The Article doesnot address how the authorities will handle a situation where the portion of domestic industry
opposing the application is greater than the portion of domestic industry supporting the
application.  Could the Peruvian delegation explain how it will handle such situations and, what,
if any, steps the investigating authorities will take  to determine if there is any opposition to the
application from some portion of the domestic industry.
Reply
Articles 5.4 and 11.4 of the Anti-Dumping and Subsidies Agreements respectively state that
an investigation shall not be initiated if, in the examination of the degree of support for, or opposition
to, the application submitted, it is not determined that the application has been made by or on behalf
of the domestic industry, in accordance with the established parameters of representativeness.
In the evaluation preceding initiation of the investigation, the Committee will require the
applicant to demonstrate that it satisfies the prescribed criteria of representativeness.  However,
having regard to the obligation to avoid any publicizing of the application provided for in Article 5.5
of the Anti-Dumping Agreement, all interested parties will be notified only once the investigation has
been initiated, and they may put forward appropriate arguments for or against the investigation that
has been initiated.  In both cases, the Commission will study the information used in support of such
arguments.G/ADP/Q1/PER/7
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As a customary procedure and as part of the process of investigation, the Commission may
interview other domestic producers not directly affected by the alleged dumping or subsidization
practices, in order to verify the information obtained before initiation of the procedure.
[Observation:  To date, the cases investigated by the Commission have been presented by
domestic producers representing more than 50 per cent of domestic production.]
Question 4
Could the Peruvian delegation please expl ain what is meant by the expression in
Article 23 "on pain of liability".
Reply
The expression "on pain of liability" refers to  the fact that presentation of the information
requested by the national authority is not compulsory.  Parties which do not present the information
requested accept the consequences of their behaviour.  The Commission will make a decision on thebasis of the best information available (Articles 6.8 and 12.7 of the Anti-Dumping and Subsidies
Agreements respectively).
Question 5
Could the Peruvian delegation please explai n the time period for making a preliminary
determination.   Under what circumstances, and when, will provisional duties be applied?
Reply
Supreme Decree No. 043-97-EF prescribes no  period of time for the application of
provisional duties after the initiation of the investigation, although the conditions to be met for the
application of such duties are laid down in Article 42, the terms of which are compatible with
Articles 7.1 and 17.1 of the Anti-Dumping and Subsidies Agreements respectively.
With regard to the period for the application of provisional measures, the Commission applies
Article 7.3 of the Anti-Dumping Agreement and Ar ticle 17.3 of the Subsidies Agreement, under
which such measures may not be applied sooner than 60 days from the initiation of the investigation.
Question 6
We note that Chapter III discusses the topic of undertakings.  Could the Peruvian
delegation please explain the time period during which it will accept undertakings.  Also, could
it please explain how it will handle a situatio n where an exporter requests that the investigation
be continued?
Reply
Pursuant to the provisions of Article 8.2 of the Anti-Dumping Agreement, as a precondition
for seeking or accepting an undertaking, the Peruvian authorities require that there should be a
preliminary affirmative determination of dumping or subsidization causing injury.  In such cases, the
Commission will be required to follow strictly the guidelines laid down in both Agreements.G/ADP/Q1/PER/7
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Similarly, if an exporter were to request that the investigation be continued once an
undertaking has been accepted, the Commission would act in accordance with the provisions of
Article 8.4 of the Anti-Dumping Agreement.
Question 7
Could the Peruvian delegation please ex plain why it has chosen 8 per cent as a de
minimis margin in Article 38?
Reply
There is  a typing error in the English version of Supreme Decree 043-97-EF, which should
read 3 per cent instead of 8 per cent.
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