RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/Q1/KOR/18
G/SCM/Q1/KOR/18
22 January 2002
(02-0316)
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 EUROPEAN COMMUNITIES1
and the UNITED STATES2 Regarding the Notification of KOREA3
The following communication, dated 21 January 2002, has been received from the Permanent
Mission of Korea.
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Replies to Questions posed by the European Communities
Q1. Article 52 (2) of the Customs Act states:   "If it is deemed necessary to consider the
competitiveness of the relevant industry, price stabilization, and trade co-operation, in imposing of
anti-dumping duty, the Minister of Finance an d Economy may reflect such factors through
investigation on them."
Q2. Article 58 (2) of the Customs Act states:   "When the Minister of Finance and Economy
imposes countervailing duty, if it is deemed necessary to consider enhancing competitiveness of
related industries, price stabilization, cooperation in trade, and etc., those factors may be examined
and reflected."
Q3. Could Korea please explain under which circumstances would the Minister of Finance
and Economy deem necessary to consider that the above factors should be examined and
reflected?  In which context (e.g. injury, caus ation or public interest) would Korean authorities
carry out such an assessment? Could Korea please  also explain how would such an investigation
be carried out?
Reply
The objectives of Articles 52.2 and 58.2 of the Customs Act are to consider the overall effects
to “the competitiveness of the relevant industry, price stabilization, and trade cooperation” in
determining the appropriate level of anti-dumping or countervailing duties.
Upon the recommendation by the KTC for the imposition of an anti-dumping or
countervailing duty, the Minister of Finance & Economy (MOFE) evaluates whether the measure
                                                     
1 G/ADP/Q1/KOR/16-G/SCM/Q1/KOR/16
2 G/ADP/Q1/KOR/17-G/SCM/Q1/KOR/17
3 G/ADP/N/1/KOR/5-G/SCM/N/1/KOR/5G/ADP/Q1/KOR/18
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might have potential future negative effects, such as weakening the competitiveness of the related
industries, creating a monopoly, increasing price.
Such an assessment is carried out separately from the investigation on the dumping margin or
subsidy, existence of injury, or their causal relationship.  It can be regarded as the consideration of“public interest”.  The consideration of such “public interest” usually results in a less severe measure
than recommended by the KTC.
The Act does not stipulate any further detail regarding the evaluation of public interests.
However, because the anti-dumping duty should be imposed within 18 months of the initiation of the
investigation, the evaluation regarding the above factors should be completed within the same period.
If necessary, the MOFE may consult related government agencies or request other related agencies toconduct the evaluation themselves.
Replies to Questions posed by the United States
General Remarks
□ Korea’s laws and regulations on anti-dumping which were notified to the WTO Committee on
Anti-Dumping Practices in 2001 contain no significant revision.  The revision mainly aimed
for renumbering of the provisions or clarify expressions for better understanding.
□ The laws and regulations regarding anti-dumping measures include the Customs Act,
Enforcement Decree of the Customs Act, and Enforcement Regulation of the Customs Act,
which incorporate the WTO Anti-dumping Agreement.  Despite no substantial revision, the
full text of anti-dumping law and regulations has been notified to the WTO for an easyreference to the Members.
Q1. Article 60.2(4) of the Decree and 12.3 of the Regulation provides that the Trade
Commission may  reject the application if it fails to achieve the degree of industry support
required to initiate under Article 5.4 of the AD Agreement.  Please confirm that the Trade
Commission must  reject such an application.
Answer
□ Article 60.2 (4) of the Decree and Article 12.3 of the Regulation require the application for
anti-dumping investigation be made “by or on behalf of” the domestic industry.
□ The use of the word “may” – a literal translation of the Korean text - does not imply any
arbitrary discretion or inconsistency with Article 5.4 of the WTO Anti-Dumping Agreement.
No anti-dumping investigation has been initiated so far based on the application that does not
meet the requirement provided in the WTO Anti-Dumping Agreement.
Q2. Article 60.3 of the Decree states that the Trade Commission will “notify” the
government of the supplying country and the suppliers of initiation of an investigation, but does
not require that they be provided with a copy of the application. Please confirm that Korea will
provide these parties with the full text of the written application, as required by Article 6.1.3 of
the AD Agreement.G/ADP/Q1/KOR/18
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Answer
□ The “matters concerning the determination on the initiation of the investigation” to be notified
under Article 60.3 of the Enforcement Decree are regarded as including the full text of the
written application provided in Article 6.1.3 of the WTO Anti-Dumping Agreement.
□ Currently, the Trade Commission provides the text of application to the known exporters, the
authorities of the exporting countries and other interested parties involved.
Q3. Articles 60.3 and 71 of the Decree do not require that the public notice of initiation
contain all of the information enumerated in Article 12.1.1 of the AD Agreement.  Please
confirm that public notices of initiation will contain all of the information required.
Answer
□ The provisions of the WTO Anti-Dumping Agreement are used as the main reference for
interpretation and implementation of domestic laws and regulations regarding anti-dumping.“The matters concerning the determination on the initiation of the investigation” provided in
Article 60.3 of the Enforcement Decree and “the details thereof” provided in Article 71.1 of
the Enforcement Decree include those provided in Article 12.1.1 of the WTO Anti-Dumping
Agreement.
Q4. Article 69 of the Decree permits the retroactive imposition of provisional measures up to
90 days prior to the preliminary determination as provided for under Article 10.6 of the AD
Agreement.  However, Article 69 does not appear to require a finding that the massive dumped
imports are likely to seriously undermine the remedial effect of the definitive anti-dumping duty
to be applied.  In what way does Korea intend to comply with the obligation to make such a
finding?
Answer
□ Article 69.1.2 of the Enforcement Decree allows anti-dumping duty to be retroactive if it is
deemed necessary as stated “...where it is necessary to retroactively impose the anti-dumping
duty to prevent a recurrence of a material injury, etc....”.  As such, “if it is necessary” to
retroactive the anti-dumping duty, it will be “determined” by the Ministry of Finance and
Economy in accordance with Article 10.6 of the WTO Anti-Dumping Agreement.
□ The Ministry of Finance and Economy will make its final decision based on the Trade
Commission’s investigation on whether the related party imported massive quantities during ashort period of time which is likely to seriously undermine the remedial effect of the anti-
dumping duty.
Q5. Article 69 of the Decree does not specifically provide for an opportunity to comment on
the massive dumped imports prior to application of retroactive provisional measures, asrequired by Article 10.6(ii) of the AD Agreement.  Please confirm that Korea intends to provide
such an opportunity to comment.
Answer
□ Article 69 of the Enforcement Decree does not specifically require the comment of the
interest parties for applying retroactive anti-dumping duty.G/ADP/Q1/KOR/18
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□ However, Article 64.8 of the Enforcement Decree does allow all interested parties to provide
comments through a summarized report.  In accordance with this Article, the Ministry of
Finance and Economy and Trade Commission gives the opportunity for all interested parties
to provide comments.
Q6. Article 69 of the Decree applies retroactive provisional measures to “imported
products,” as .opposed to products that entered for consumption  as required under Article 10.6
of the AD Agreement.  Please confirm that Korea does not intend to apply retroactive
provisional measures to transshipped merchandise not entered for consumption.
Answer
□ Korea does not define transshipped merchandise as imports.  As stated in Article 2 of the
Customs Act, only goods to be consumed or used in Korea are defined as imports, and goods
to be transshipped to foreign countries from bonded areas are not regarded as imports.
Q7. Article 71 of the Decree does not require that  the public notices of preliminary and final
determinations contain all of the information enumerated in Article 12.2 of the AD Agreement.
Please confirm that public notices of preliminary and final determinations will contain all of the
information required.
Answer
□ The details to be included in the public notices in accordance with Article 71 of the
Enforcement Decree are interpreted as containing all of the information enumerated in
Article 12.2 of the WTO Anti-Dumping Agreement.
Q8. Please describe the manner in which Korea will inform all interested parties of the
essential facts under consideration which form the basis for the decision whether to apply
definitive measures, as required by Article 6.9 of the AD Agreement.
Answer
□ In accordance with Article 64.8 of the Enforcement Decree, the Trade Commission will
provide key evidence to the interested parties involved through a meeting or public hearing
before it makes a final decision.  Moreover, during the investigation the Trade Commission
will provide a non-confidential version of  intermediary report.  In case an interested party
requests, non-confidential information submitted from the other party as well as the Trade
Commission’s non-confidential report can be provided.
Q9. The notified legislation does not describe the procedures for on-the-spot investigations
pursuant to Article 6.7 and Annex I of the AD Agreement.  Under what circumstances, if any,
does Korea intend to conduct such on-the-spot investigations?  Could Korea describe the
procedures which will be used in such cases?
Answer
□ Although the Customs Act does not prescribe procedures for on-the-spot investigations, the
Trade Commission conducts such investigations in accordance with the WTO Anti-DumpingAgreement.  In general, on-the-spot investigations are conducted to examine accuracy and
credibility of the data submitted by the interested party.  An approval for on-the-spotG/ADP/Q1/KOR/18
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investigation must be received from the investigated company and the authority of the export
country.
Q10. Article 56 of the Act states that antidumping duty orders and undertakings “lose effect”
after five years, “except in cases where the ex piry date is determined separately by the
Ordinance of the Minister of Finance and Economy”.  Please describe the circumstances under
which such an expiry date will be determined .  Will such an expiry date be longer than or
shorter than five years?  What standards a nd procedures will be applied in determining
whether to determine such a separate expiry date?
Answer
□ Korea does not impose anti-dumping duty and price undertakings beyond five years of the
date of imposition in accordance with Article 11.3 of the WTO Anti-Dumping Agreement.
□ In all cases of anti-dumping procedures the Ministry of Finance and Economy determines the
products, expiry date and contents as stated in the Korea Customs Act.  The cases where theexpiry date is determined separately as stated in Article 56 refers to when the Ministry of
Finance and Economy is authorized to designate the expiry date which is less than five years.
□ Factors to be considered for the final decision of the expiry date are product characteristics,
competitiveness of related industries, and the need whether to protect the domestic industry.
Q11. Article 70.1(2) of the Decree appears to provide that a five-year review may be carried
out “where there is a chance  that an injury to the domestic industry is caused by the
termination of the antidumping duty or the undertaking”.  Please confirm that, in accordance
with Article 11.3 of the AD Agreement, prior to  maintaining an order longer than five years
Korea will determine that expiry of the duty would be likely  to lead to continuation or
recurrence of dumping and injury.
Answer
□ As provided in Article 11.3 of the WTO Anti-Dumping Agreement, the extension of the
expiry date of the anti-dumping duty requires the decision of the Ministry of Finance and
Economy based on the investigation conducted by the Trade Commission to decide if the
expiry would likely lead to a continuation or recurrence of dumping and injury to the
domestic industry.
Q12. In circumstances in which there is a “special relationship or compensatory
arrangement” between the supplier and the importer, Article 58.4 permits Korea to use the first
resale price to a purchaser wi thout such a relationship.
(a) The notified legislation does not define the term “special relationship”.  What criteria
does Korea apply to identify such a relationship?
(b) Article 10.7 of the Regulations requires Korea only to use a resale price to a purchaser
without such a relationship  after considering “appropriate profits”.  Could Korea
describe how it identifies “appropriate profits”?G/ADP/Q1/KOR/18
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Answer
□ The special relationship is defined in Article 23.1 of the Enforcement Decree, which is
notified as G/VAL/N/1/KOR/2 on 27 April 2001.
□ Appropriate profit is determined after calculating the share of the exporting company's
expenses incurred in Korea from its total expenses and then multiplying the ratio to the
exporting company's actual profit.
Q13. The notified legislation does not require Ko rea to ignore fluctuations in exchange rates,
and allows exporters at least 60 days to adjust export prices to reflect sustained movements in
exchange rates during the period of investigation, as required by Article 2.4.1 of the ADAgreement.  In what way will Korea conform its practice to this provision?
Answer
□ Article 10.12 of the Enforcement Regulations confines price adjustment “to the cases of
continuous movements of exchange rates to the same direction”, thus effectively excluding
the simple fluctuations in price adjustment.  Although there is no clear statement on the
exchange rate fluctuation time period in the Customs Act, 60 days to adjust prices will be
given as required by Article 2.4.1 of the WTO Anti-Dumping Agreement.
Q14. Article 58.6 provides that “if any interest ed party demands price adjustments referred
to in Paragraph 5 because of a difference in physical characteristics or quantity and condition of
sales, he/she shall establish the fact that the diff erence directly affects the market price or on the
manufacturing costs.”
(a) Does this provision reflect a view by Korea that the burden for establishing entitlement
to an adjustment rests with the party claiming the adjustment and not with the
authority?
(b) Could Korea describe, and provide concrete examples of, the type of evidence required
to establish that a difference in quantity and conditions of sale “directly affects the
market price”?  How does Korea distinguish th e effect on market price caused by those
factors from the effect on market price caused by dumping?
Answer
□ This provision means that the interested party who has requested a price adjustment based on
physical characteristics, quantity or condition of sales should provide substantial information
to show the difference.
□ In order to show that the condition of sales directly affects the market price, related credit
expenses such as receipt of short-term borrowings, certificate of quality guarantee and relatedcontractual agreements, evidence of sales commission, contracts related to royalty, and
receipts of storage and advertising expenses would be submitted to the investigating
authorities.
□ Moreover, to show that the sales quantity affects the market price, the price list, sales quantity
together with actual sales invoice showing the difference in market price, and sales data
showing that more than 20 per cent of local sales has resulted in quantity discount, receipts ofG/ADP/Q1/KOR/18
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reduced cost through large sales and production, and related documents would be submitted
to the investigating authorities.
□ Assuming the condition of sales, sales quantity, and dumping affects the market price, the
documents submitted by the interested party such as the condition of sales and sales quantitywill be investigated and confirmed by the inves tigating authorities.  After the adjustment, it
can be viewed that the dumping margin affects the price.
Q15. Article 10.1(1) of the Regulations does not id entify the time period for finding prices in
the ordinary course of trade, as set forth in Article 2.2.1, fn.4 of the AD Agreement.  What is the
time period for such an analysis under Korean law?
Answer
□ Article 10.1.1 of the Enforcement Regulation does not specify the time period regarding
analysis of sales at less than cost of production but that “an extended period of time” will be
taken.
□ Since the Trade Commission compares the weighted average sales price and the weighted
average production cost during the investigation period to decide whether the sales is made
below the production cost, the meaning of “an extended period of time” is the investigation
period.  Generally, the time period of investigation undertaken by the Trade Commission isone year.
Q16. The notified legislation does not descri be the judicial, arbitral or administrative
tribunals or procedures maintained for the purpose , inter alia, of the prompt review of certain
anti-dumping administrative actions as requi red by Article 13 of the AD Agreement.  Could
Korea describe such tribunals or procedures under its law?  What controls does Korea have in
place to ensure the independence of such tribun als or procedures from the authorities making
the determination?  Could Korea provide concrete examples of such tribunals or procedures in
this area?
Answer
□ In regards to the decision of dumping margin, anti-dumping procedures and imposing tariffs
etc. made by the Trade Commission and Minister of Finance and Economy, the interested
party may appeal to administrative proce dures under Article 119 of the Customs Act.
□ However, even after the administrative procedures are finished, if the interested party is not
satisfied with the decision, he may also request for judicial review.  The National Tax
Tribunal, which deals with the administrative review, has independent status to administrative
agencies of anti-dumping measures.  Moreover, the judicial courts are completely
independent from the administrative branch.
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