. /.RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/IG/W/44
22 April 2002
(02-2266)
Committee on Anti-Dumping Practices
Informal Group on Anti-CircumventionOriginal:  English
TOPIC 3 - TO WHAT EXTENT CAN CIRCUMVENTION BE DEALT WITH
UNDER THE RELEVANT WTO RULES?  TO WHAT EXTENT CAN IT NOT?
WHAT OTHER OPTIONS MAY BE DEEMED NECESSARY?
Paper by the United States
The following communication, dated 19 April 2002, has been received from the Permanent
Mission of the United States.
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Over the last five years, the Informal Gr oup on Circumvention has discussed at length,
although not conclusively resolved, the first two topics before it, namely: what constitutes
circumvention, and what is being done by Member s confronted with what they consider to be
circumvention?  During the course of these discussions, the Informal Group has been presented with
the practices of numerous Members in the face of what they consider to be circumvention.  Although
these discussions have not produced a consensus view on how to define the "problem ofcircumvention of anti-dumping duty measures" referred  to by the Ministers in their Decision on Anti-
Circumvention, what is clear is that a number of members view the circumvention of anti-dumping
duty measures as a serious threat to the effectiveness of those measures in combating unfair trading
practices.
Further, the Informal Group on Anti-Circumvention has discussed a number of examples
which illustrate the problem of circumvention, and how that problem is addressed by various
Members.  See G/ADP/IG/W/29/Rev.1.  These exampl es have been both hypothetical and real, the
latter demonstrating ways exporters have found to escape the effect of valid determinations of
dumping made under Article VI of GATT 1994 and the Anti-Dumping Agreement, and thus escape
the internationally agreed upon consequences of such unfair trading practices.  Some of the most
memorable of these real scenarios include:
• One member discussed an anti-dumping duty order on an input into various metal alloys with
a concentration higher than a certain level.  This product was imported for use in the
production of aluminum.  This member described how, after issuance of the order, exporters
began diluting the product with aluminum, to bring it below the threshold concentration,thereby avoiding coverage under the anti-dum ping duty order.  This change was of no
commercial consequence to the main customers for product, who intended to alloy the
product with aluminum anyway.
• Another member described a situation in which it entered an anti-dumping duty order on a
certain concentration of a liquid product.  Shortly afterwards, imports of the liquid at higher
and lower concentrations than that covered by the order increased, and an investigation led toG/ADP/IG/W/44
Page 2
the conclusion that these high and low concentrations, imported free of anti-dumping duties,
were simply being combined after importation to create the covered concentration.
• Another member presented a situation in whic h it issued an antidumping duty order on a
construction material in the commercially standard length of 2400 mm. Shortly thereafter,
shipments of the material in 4800 mm lengths, which were not subject to antidumping duties,increased.  Authorities concluded that this new product was simply being cut in half after
importation.
Throughout these discussions, it has become clear that Members disagree on the procedures
which should be used to address circumvention scenarios, as well as the types of behaviour
which should be considered to be circumvention.  This brings the United States to the topic
currently before the Informal Group:  To what extent can circumvention be dealt with underthe relevant WTO rules?  To what extent can it not?  What other options may be deemed
necessary?
In referring this topic to the Anti-Dump ing Committee, the Ministers agreed on "the
desirability of the applicability of uniform rules in this area as soon as possible."  In the view of the
United States, the current lack of uniform rules threat ens to result in a situation in which transparency,
predictability and due process may suffer from the lack of uniform rules.  Thus, while many Members
exercise their sovereign rights to deal with circumvention in the absence of uniform rules, it is
precisely this absence of agreed upon rules which leaves other Members uncertain of the appropriate
approach when faced with the types of problems described above.
Although Members currently disagree on certain issues, in some areas there do appear to be
common understandings.  For example, there appears to be a common view that action may be taken
against evasion of anti-dumping duty measures thr ough fraudulent activity.  Further, there may be
areas in which Members can reach some consensus on particular actions which do not constitutecircumvention.  For example, a decision by an exporter to shift its export sales to a new product with
significantly different physical characteristics, uses, customers and costs may be an economic
response which does not constitute circumvention.  Similarly, a decision to re-locate a significant
value-added production facility to a third country generally may not be considered to be
circumvention.  While Members may not yet be in a position to reach consensus on the line to bedrawn in difficult cases, new users of anti-dumping measures in particular would benefit from general
guidelines on the most extreme cases of what does not constitute circumvention.
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