RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/Q1/LVA/3
G/SCM/Q1/LVA/3
27 April 2001
(01-2141)
Committee on Anti-Dumping Practices
Committee on Subsidies and Countervailing MeasuresOriginal:  English
NOTIFICATION OF LAWS AND REGULATIONS
UNDER ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS
Replies to Questions Posed by the UNITED STATES1
Regarding the Notification of LATVIA2
The following communication, dated 26 April 2001, has been received from the Permanent
Mission of Latvia.
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Q1. Article 4(3) of Latvia’s Antidumping Law (“Latvian AD Law”) provides that an
antidumping investigation shall be conducted in accordance with the “Regulations of theCabinet of Ministers” of Latvia, which apparently regulate the determination of the dumping
margin, the determination of injury, the acquisition of information, and investigation procedure
in a Latvian antidumping proceeding.  Are these reg ulations now in existence?  If so, will Latvia
notify them to the WTO?
Reply
The Regulation of the Cabinet of Ministers No. 234 "On Procedure for the Implementation of
Provisions of Anti-Dumping Law" has been adopted and Latvia will make the notification to the
WTO as soon as the English translation will be available.
Q2. Article 7 of the Latvian AD Law provides that an antidumping investigation may be
initiated if “a complaint has been received fr om domestic producers who produce more than 50
per cent of the like products produced by that portion of the domestic producers either
supporting the application or opposing it; or ... there is sufficient evidence of dumping, injury
and their causal link.”  However, the AD Agreement provides that an antidumping investigation
may only be initiated upon the filing of an application by the domestic industry if both of theserequirements are satisfied, among other things.  See Articles 5.2, 5.3, 5.4, & 5.8 of the AD
Agreement.  To what extent is Article 7 of the Latvian Law consistent with these provisions of
the AD Agreement?
Reply
Inconsistency with the WTO AD Agreement appears due to incorrect translation.  The
Latvian AD Law in its original language provides for both criteria to be met in order to initiate an
anti-dumping investigation and does not contain the word "or" between them.
                                                     
1 G/ADP/Q1/LVA/1-G/SCM/Q1/LVA/1
2 G/ADP/N/1/LVA/2 + Suppl.1G/ADP/Q1/LVA/3
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Q3. Article 9(1)(2) of the Latvian AD Law provides that an investigation shall not be
initiated if imports are negligible.  It then defines imports from a particular country as being
negligible if they are “less than 1 per cent of th e total volume of the market of like products,
unless the imports of the products under investigation from several countries do not constitutemore than three or more per cent of the domestic market consumption of like products.”  To
what extent is this provision consistent with Article 5.8 of the AD Agreement, which provides
that imports from a particular country will normally be considered negligible if they are found
to “account for less than 3 per cent of imports of  the like product” in the importing country,
“unless countries which individually account for less than 3 per cent of the imports of the like
product [in that country] collectively account for more than 7 per cent of imports of the like
product in the importing [country]”?  In particular:
(a) How is Article 9(2) of the Latvian AD Law consistent with the requirements of
Article 5.8 of the AD Agreement, particularly in situations where imports
occupy more than 33 per cent of the dome stic market?  In such a situation, there
may be cases in which imports from a particular country under investigationmight account for less than three per cent of total imports (and therefore be
negligible under the WTO standard) but nonetheless have more than one per
cent of the Latvian market (and therefore not be negligible under the Latvian
standard).
(b) How is the second step of the negligibility test in the Latvian AD Law intended to
apply?  It appears from the language of the provision (as translated) that several
countries meeting Latvia’s one per cent negligibility test would not be considered
negligible if they accounted for less than 3 per cent  of the Latvian market in the
aggregate but that they would be considered negligible if they accounted formore than 3 per cent  of the market in the aggregate.  Is this correct?
Reply
Latvian AD Law uses total sales (including domestic sales) in Latvian market of the product
concerned as a subject of determining dumping margin.  The volume of imports from particular
country is considered negligible if it represents a market share of below 1 per cent, unless countrieswhich individually account for less than 1 per cent, collectively account 3 per cent or more of Latvia's
consumption. We consider that such criterias are adequate with those contained in AD Agreement
(respectively 3 per cent for individual country and 7 per cent for several countries).
Q4. Article 13 of the Latvian AD Law provides  that the State Bureau of Trade Defence
(“SBTD”) will issue questionnaires, including supplemental questionnaires, to interested parties
in the investigation.  The law does not, however,  contain a specific time frame for the submission
of questionnaire responses.  How will the SBTD ensure that it provides these interested parties
with the 30 day reply period required by Article 6.1.1 of the AD Agreement?
Reply
There is an error in English translation. Acco rding to the Article 13 (1) of the Latvian AD
Law, 37 days are given to foreign producers and exporters for reply.
Q5. Article 33(5) of the Latvian AD Law provides that the Saeima (the Latvian Parliament)
shall “decide on the application of anti-dumping duties based on the information provided by
the Cabinet of Ministers” and that “[t]he procedures for the collection of antidumping duties
shall be specified by the Cabinet of Ministers.”  The Law does not otherwise specify how theG/ADP/Q1/LVA/3
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Saeima and the Cabinet of Ministers will be make their decisions with regard to whether
antidumping duties will be imposed and collected.  For example, the law does not specifically
state that the Saeima will only impose a definitive antidumping or countervailing duty if the
imports in question are found to be dumped or subsidized and are causing material injury tothe domestic industry.  How will the Saeima and the Cabinet ensure that their actions are
consistent with the AD Agreements in this regard?
Reply
As provided by the Article 3 of AD Law, the SBTD (supervised by the Ministry of Economy)
is the investigating authority who receives an application from domestic producers, initiates andconducts investigation as well as  determines dumping, injury, causal link and the necessity to adopt
anti-dumping measures.
The legislative body of the Republic of Latvia is the Saeima (Parliament), the constitutional
basis of which provides the Satversme (Constitution). The Satversme states that the Saeima is thehighest legislative body of the State power, and it possesses the right to adopt laws and statements
with the highest legal force after the Satversme. This prerogative includes also adoption of laws
related to trade and economy.
Before submitting it to Saeima, the Cabinet of Ministers discusses all draft laws drawn up by
Ministries and all questions concerning the competence of various Ministries, the number and the
functions of which are defined according to the special rules.
It means that according to Latvia's legal intern al procedure, the SBTD is entitled to conduct
an investigation and recommend anti-dumping measures if necessary. Afterwards the Cabinet ofMinisters and Saeima are making their decisions based on the conclusions and information provided
by the SBTD. Respectively, anti-dumping measures will be adopted only if State Trade defence
Bureau determines dumping, injury and causal link at first.
The last sentence of Article 33(5) of the AD La w which provides that “the procedures for the
collection of anti-dumping duties shall be specified by the Cabinet of Ministers” is excluded by the
amendments to AD Law contained in WTO document (G/ADP/N/1/LVA/2/Suppl.1).
Q6. Article 39 of the Latvian AD Law permits the SBTD to keep an antidumping order in
place for more than five years from the date of it s imposition if it finds that termination of the
order “ may cause a continuation or a recurrence of dumping or injury.”  How is this consistent
with the language of Article 11.3 of the AD Agreement, which provides that an antidumpingduty may only be kept in place for more than five years from the date of its imposition if “expiry
of the duty would be likely  to lead to continuation or recurrence of dumping or injury”?
Reply
The provisions of Latvian AD Law are fully consistent with the Article 11.3 of the AD
Agreement and have the same meaning in Latvian language as contained in the AD Agreement. The
problem appeared due to a discrepancy in translation.
Q7. Article 40(4) of the Latvian AD Law provides that “[i]f the [SBTD] determines, as a
result of [a changed circumstances] review, that  the antidumping duty is not necessary any
longer, the Saeima shall decide, pursuant to the recommendation of the Cabinet of Ministers, on
the revocation of duty.”  How will the Saeima and the Cabinet of Ministers make their decisionG/ADP/Q1/LVA/3
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with respect to revocation of the duty?  For exam ple, will they be able to keep a duty in place
after the SBTD has determined that the duty is no longer necessary?
Reply
Saeima and the Cabinet of Ministers will make their decision with respect to revocation of the
duty in accordance with Latvia's legal internal procedure (See also the answer to Question 5.) and
based on conclusion of the SBTD. There is no legal basis for keeping the duty in force and it will be
revoked if the SBTD has determined that this duty is no longer necessary.
Q8. Article 45 of the Latvian AD Law permits the SBTD to “re-initiate” an antidumping
investigation to assess the effect of an antidump ing duty on domestic prices, in cases in which
domestic producers submit “substantiated evidence that antidumping duties applied have not
caused changes or have caused insufficient changes in the resale prices or subsequent selling
prices.”  Moreover, Article 45 appears to permit the SBTD to increase the original dumping
margins to offset any “presupposed injury” found in the reinitiated investigation.  Where is thistype of “reinitiated” investigation authorized by the AD Agreement?
Reply
Latvian AD Law permits a reopening of the original investigation rather than the initiation of
a complete new investigation -where the imposition of measures does not alter prices in the home
market. This provision has considerable administrative benefits and the rules concerning initiation and
conduct of investigation are followed. Therefore it does not contradict with the AD Agreement.
Q9. Articles 3.1., 3.2, and 3.4 and 3.7 of the AD Agreement provides that an investigating
authority must assess a number of specific factors when considering whether a domestic
industry is materially injured or threatened with material injury in an antidumping
investigation.  For example, the AD Agreement re quires that an investigating authority consider
the volume of the dumped imports, the effect  of dumped imports on prices in the domestic
market for like products, and their consequent  impact on domestic producers of the same
products when performing its dumping analysis.  See Article 3.1 of the AD Agreement.  In
addition, the Agreement requires an investigating authority to assess whether there has been a
significant increase in dumped imports, whether there has been significant price undercutting
by the imports, whether imports have had price-suppressing or depressing effects, and whether
the imports have impacted the sales, profits,  productions, or employment of the domestic
industry, among other things.  (See Article 3.2 & 3.4 of the AD Agreement.)  The Latvian AD
law does not contain similar language.  How do es the law ensure that the SBTD will consider
these required factors in its injury, threat and material retardation analyses before imposing
duties?
Reply
The Regulation of the Cabinet of Ministers "On Procedure for the Implementation of
Provisions of Anti-Dumping Law" contains all factors provided by the AD Agreement for
determination of injury and threat of injury to domestic producers. It will be notified as soon as the
English version will be available.
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