RESTRICTED
WORLD TRADE G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
ORGANIZATION 23July1996
(96-2897)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
NOTIFICATION OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Replies ofthePHILIPPINES1
toquestions posed byARGENTINA2,AUSTRALIA3,theEUROPEAN COMMUNITY4,
HONG KONG5andtheUNITED STATES6
Thefollowingcommunication,dated2July1996,hasbeenreceivedfromthePermanentMission
ofthePhilippines.
_______________
A. Introduction
ThePhilippine Anti-Dumping andCountervailing Dutylegislation isembodied inSection 301,
asamended bytheRepublic Act(RA) 7843, andSection 302ofthePhilippine Tariff andCustoms
Code, respectively. RA7843, which wassigned on21December 1994 andtook effect on
31December 1994.
Before answering thespecific questions raised withrespect tothePhilippines 'Anti-Dumping
andCountervailing Duty legislation, some relevant principles ofthePhilippine legalsystem should
bestated.
Based onthePhilippine Constitution, principles ofinternational lawforms partofthelawof
theland. Treaties andstatutes normally provide thedetermination oftheseprinciples. Intheirabsence,
theprocess ofselecting these principles restswiththecourts.
ThePhilippines alsohasrules ondirectory andmandatory provisions oflaw. With respect
tofiling datesofcases anddateswhen decisions aretoberendered, administrative tribunals andquasi-
judicial bodies haveflexibility inconsidering suchprovisions asdirectory andnotmandatory.
Itispertinent tonotealsothatunder theexisting jurisprudence, atreaty ratified bythePresident
andconcurred inbythePhilippine Senate validly amends aprior law. Ininterpreting therefore the
anti-dumpingandcountervailinglegislationofthePhilippines,theseprinciplesmustbetakenintoaccount.
1G/ADP/N/1/PHL/1-G/SCM/N/1/PHL/1.
2G/ADP/W/315-G/SCM/W/323,3G/ADP/W/336-G/SCM/W/344,4G/ADP/W/326-G/SCM/W/334,
5G/ADP/W/352-G/SCM/W/360,6G/ADP/W/378-G/SCM/W/388.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
Page2
ThePhilippines,asoneofthesignatoriesontheratificationoftheWTOAgreement,iscommitted
tocomply withitsprovisions. Andsince theWTO Agreement onAnti-Dumping Practices (ADP)
cameintoeffect ouranti-dumping legislation (RA7843), itistheposition ofthePhilippine Government
thattheWTO Agreement onADP, being alaterandself-executory treaty, hasamended andmodified
RA7843. Thisposition finds legal basis under theexisting andprevailing jurisprudence thatan
international treaty ratified bythePresident andconcurred inbythePhilippine Senate amends theprior
law.
Withrespecttosubsidiesandcountervailingmeasures,thesubstantiveprovisionsofthelegislation
(Section 302ofthePhilippine Tariff andCustoms Code (Presidential Decree 1464) andDepartment
ofFinanceOrderNo.300)aredueforamendmentinordertocomplywiththesubstantiveandprocedural
requirements oftheWTO Agreement onSubsidies andCountervailing Measures (SCM). Adraftbill
isbeing prepared forsubmission tothePhilippine Congress.
Itisworthy tonotethatnocasehasbeeninitiated under thenewanti-dumping legislation.
B. Questions from Argentina
1. ActNo.7843, known astheAnti-Dumping Actof1994, isthelegislation notified asbeing
currently inforce bytheRepublic ofthePhilippines inaccordance with notification
G/ADP/N/1/PHL/1-G/SCM/N/1/PHL/1 of6November 1995. Areading oftheActsuggests
possible contradictions withthetextoftheAgreement.
What legislation willthePhilippines apply intheevent ofacontradiction? DothePhilippines
intend toissue newrules which takeintoaccount thenewrequirements oftheAgreement on
Dumping?
Asexamples ofpossible contradictions wecould mention theprovisions concerning theinitiation
ofaninvestigation motu proprio, concerning customs clearance during theinvestigation,
concerningnotificationsandpublications,concerningtheretroactivityoftheanti-dumpingduties,
concerning theparticipation ofother interested parties intheprocedure, concerning thecausal
relationship andconcerning injury factors, thedetermination ofmargins ofdumping, normal
value andtheapplication oftheAgreement onCustoms Valuation forthepurpose ofdetermining
thelatter, provisional measures, thereviews provided forinArticle 11,andappeals tothe
courts against administrative decisions.
Asmentioned inourintroduction, thePhilippine Anti-Dumping legislation isembodied in
Section 301ofthePhilippine Tariff andCustoms Code, asamended byRA7843. However, following
thelegalprinciple thatinternational treaties formpartofthelawoftheland, thePhilippines isbound
bytheADP Agreement which came intoeffect afterouranti-dumping law.
Incaseofconflicts, theadministering government agencies havetheflexibility tousetheADP
Agreement asaguideline forimplementation. Newimplementing rulesandregulations willbeissued
ifthere isastrong needforit.
2. Wheresubsidiesareconcerned,itispossibletoidentifycontradictionssimilartothosementioned
under theprevious question concerning dumping.
What willbethePhilippine 'sposition withrespect tosuchcontradictions?G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
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Asmentioned inourintroduction, adraftbillisbeing prepared forsubmission tothePhilippine
Congress tomodify andupdate thesubsidies andcountervailing legislation tomake itaneffective tool
toensure fairtrade inconformity withtheSCM Agreement.
C. Questions from Australia
1. Thenotified legislation differs fromtheWTO Anti-Dumping andSubsidies Agreements ina
number ofaspects andalsodoesnotcontain much ofthedetail inthose agreements. Willthe
Philippines berevising itslegislation orissuing regulations? Ifnot,areother arrangements
inplace togiveguidance totheadministering authorities regarding theprovisions oftheWTO
Agreement andwhatwould betheirstanding inajudicial review? (Some ofthose areas of
divergence arecommented onbelow.) Dothecommon procedural provisions foranti-dumping
andcountervailing setoutinSection 301foranti-dumping alsoapply toSection 302for
countervailing?
ThePhilippineAnti-DumpingandCountervailinglegislationisembodiedinSection301,amended
byRA7843, andSection 302ofthePhilippine Tariff andCustoms Code. Theagencies administering
countervailing investigations havetheflexibility tousetheADP andSCM Agreements asguidelines
forimplementation because wearebound byourcommitments intheWTO. Adraftbillisnowbeing
prepared forsubmission tothePhilippine Congress toprovide details onsubsidies andcountervailing
measures tobeconsistent withtheSCM Agreement.
ThePhilippine legalsystem gives theproper parties therighttoseekareview ofthedecisions
ofquasi-judicial bodies withtheregular courts.
Theanti-dumping andcountervailing procedures aresimilar because theprocedures thatapply
toSection 302asproposed inthedraftbillarebased ontheADP andSCM Agreements.
2. What aretherequirements forpetitions foranti-dumping andcountervailing investigations?
Does thePhilippines envisage thatmany cases would beinitiated exofficio?
Wehave thesame requirements forprotests under theanti-dumping andcountervailing
investigations. Ananti-dumping protest, sameascountervailing, hastobeinwriting specifying therein
thematerial allegations ofdumping. Inbothcases, documentary requirements mustbecomplied with
before suchcanbeconsidered forpreliminary investigation.
ThePhilippines doesnotenvisage thatpetitions foranti-dumping andcountervailing willbe
initiated exofficio .
3. Inviewoftheperiods involved, could thePhilippines clarify whether the"prima facie"
determination isinrespect ofinitiation rather thanpreliminary determination assetoutunder
Article 7oftheAnti-Dumping Agreement. Section 301(a) (page 2)refers tothe"determination
ofaprima faciecaseofdumping". Does thisinclude thedetermination ofinjury andcausal
linkaswellasdumping?
Theprocess ofdetermining theexistence ofaprima faciecaseismerely preparatory tothe
initiation oftheformal investigation. Iftheprotestee canprovide evidence ofnormal value, thenthere
isanimmediate determination thatthere isnoneedtopursue thecase.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
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Indetermining theexistence ofaprima faciecase,alltheelements ofdumping, suchas:price
difference, injury andcausal linkage areconsidered. Ifanyofthese elements areabsent, thecaseshall
notbeinitiated.
4. Could thePhilippines confirm thatSection 301(a) (pages 2and3)allows orrequires the
imposition ofanti-dumping measures priortoapreliminary affirmative determination andthat
Section 302(a) (pages 1and2)alsoallows theimposition ofcountervailing measures prior
toapreliminary affirmative determination.
TheSecretary ofTrade andIndustry shallwithhold hisdecision ontheapplication ofprovisional
measures untiltheTariff Commission hasmade apreliminary determination andrecommendation on
theexistence ofanimminent danger ofinjury, sixty(60)daysafteritsinitiation ofthecase,inaccordance
withtheADP andSCM Agreements.
5. Does thesecond paragraph ofSection 301(b)(1)(page 3)preclude theuseofsales ofthelike
product intheexporting country when thatisnotthecountry oforigin?
Theuseofsalesofthelikeproduct intheexporting country, when thatisnotthecountry of
origin, isnotexpressly prohibited intheAct. Infact,theActprovides thatifsuchcountry isatthe
same levelofdevelopment, thensuchsalesmaybeused.
6. Under thefourth paragraph ofSection 301(b)(1)(page 3),what isconsidered tobea"fair
comparison" andhowcanthenormal value becaused tobeunreliable because ofanassociation
orarrangement between theexporter andtheimporter? Under thesame paragraph, whatis
thebasis forchoosing theapproach thatresults in"thehigher ofvalues"? Moreover can
methods other thanthose setoutinArticles 2.1and2.2oftheAnti-Dumping Agreement (such
astheuseofasurrogate country andtheimported costs oflikeproduct intotheproducing
country) beusedtodetermine normal values incircumstances other thanthose setoutinthe
second AdNotetoGATT Article VI:I?
FaircomparisonisbasedontheexportpriceandthenormalvalueasdeterminedbythePhilippine
Trade Representative intheexporting country. Where association andarrangement between theexporter
andtheimporter isfound toexist, asdefined intheADP Agreement, thenthereport oftheTrade
Representative intheexporting country isadopted.
7. Doestheterm"likearticle" (Section 301(O)(5), page8)mean thesameas"likeproduct" under
theAnti-Dumping Agreement ordoesitalsopotentially include other competitive products (see
also(Sections 301(b)(3)(d)(i) and301(E), pages 4and5respectively)? What isthescope of
theterm“kindorclass”usedinthefirstparagraphs ofSection 301(a) and(b)(1)(pages 2and
3)?Isitthesame as"likearticle"?
TheTariff Commission treats theissueof"likeproduct" inanarrow sense bylimiting product
comparison toarticles which aresubstantially made ofthesame materials, perform thesamefunction,
andhavecharacteristics closely resembling articles under consideration.
8. How will theexistence and levels ofmargins ofdumping bedetermined under
Section 301(b)(2)(page 3)?
Thedumping margin isdetermined onthebasis ofthecomparison between thenormal value
andtheexport price.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
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9. WhatguidancewillbeprovidedtotheinvestigatingauthoritiesbeyondSection301(b)(3)(page4)
onthequestion ofthedetermination ofinjury andcausal link?
TheDepartment ofTrade andIndustry andtheTariff Commission willuserelevant provisions
oftheADP Agreement indetermining injury andcausal link.
10. Onwhat basis would thePhilippines collect duties onimports made prior tothedateof
application asisapparently mandatory under Section 301(E)(page 5)?
The150-dayperiodinSection301,paragraphE,refersonlytothecoverageoftheinvestigations,
andnotnecessarily tothescope oftheanti-dumping dutytobecollected. Inanyevent, Article 10
oftheADPAgreementallowstheretroactiveapplicationofanti-dumpingdutiesundercertainconditions.
11. Areexporters considered tobeincluded under Section 301(G)(page 5)("protestee") andwill
theybeafforded thesamerights asother interested parties under theAnti-Dumping Agreement?
Exporters areincluded asparties andwillbeafforded thesame rights astheother parties and
questionnaires willbesenttothem either directly orthrough theirrespective embassies.
12. What timeperiods willexporters andproducers begiven torespond toquestionnaires? Are
the"memoranda" referred tointhefinalparagraph ofSection 301(b)(3)(page 4)different from
questionnaire inviewoftheshort timeperiod allowed forresponse byinterested parties?
Bothprotestees andexporters willbegiven atleastthirty (30)dayswithin which toanswer
thequestionnaire inaccordance withArticle 6.1.1 oftheADP Agreement.
Yes, thememoranda andthequestionnaire aredifferent since memoranda arejustinitial
submissions ofthecomplaint/protest bytheinterested parties.
13. Willprovision bemade forexporter specific measures, price undertakings andresidual rates
ofduty?
Yes,insofarasprice undertakings and/or other measures fortheearly determination of
investigations areconcerned.
14. Could thePhilippines advise whether Section 301(1)(pages 5and6)limits therights ofinterested
parties tohavejudicial review ofalltheadministrative actions relating tofinaldeterminations
andreviews apart from thecalculation oftheamount ofanti-dumping duty. What isthe
comparable situation forcountervailing?
ThePhilippine legalsystem gives theproper parties theright toseekjudicial review inthe
regular courts. Reviews oftheamount oftheanti-dumping dutymaybeappealed totheCourt of
TaxAppeals.
15. Onwhatbasis hasthePhilippines specified inSection 301(O)(2) (page 7)theminimum levels
ofcotsandprofits? Would theactual costs incurred (andprofits made) beaccepted ifthey
wereabletobeverified, eventhough theywerelessthanthespecified minimum levels?
Thisisbased onthepastexperience andestablished practice. However, theseminimum levels
ofcostsandprofits aremereguidelines forinvestigation, andtheTariff Commission mayaccept actual
costs andprofits made evenifsucharelessthantheminimum levels.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
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16. Does "significant share" inSection 301(O)(3) (page 7)indefining "domestic industry" have
thesamemeaningas"majorproportion"intheAnti-DumpingAgreement?Whatlevelofsupport
ofthedomestic industry would berequired forinitiation ofaninvestigation?
Yes,"significant share" defining thePhilippine domestic industry isthesame withthe"major
proportion" intheADP Agreement. With respect tothelevelofsupport, thegovernment agency is
guided byArticle 5.4oftheADP Agreement.
D. Questions oftheEuropean Union
Anti-dumping legislation
Q.1 Could thePhilippines clarify whether Republic ActNo.7843 isactually inforce?
TheActhastheforce oflaw. However, because thePhilippines islegally bound byits
commitment totheWTO Agreement onADPwhich cameintoeffect afterouranti-dumping legislation,
italsohastheforce oflaw.
Q.2 InthePhilippines, itappears thatinvestigations canbeinitiated based onevidence of"reason
tobelieve" (e.g.anewspaper article) oftheexistence ofdumping andinjury. Howdoesthis
comply withtheprovisions ofArticle 5oftheWTO Agreement withregard tothecontents of
complaints?
"Reason tobelieve" presumes thereissufficient evidence toinitiate aninvestigation. However,
generally, adumping protest isentertained onlyupon receipt bytheDepartment ofFinance orthe
Department ofTrade andIndustry ofaduly documented complaint inaccordance with certain
requirements (e.g.standard form, dulynotarized complaints, pre-hearing consultations/conferences).
These include evidence ofdumping, injury andcausality between these two.
Q.3 Does thePhilippines publish anotice announcing theinitiation ofaninvestigation?
Yes,theTariff Commission publishes notice ofpublic hearings andconsultations relative to
thedisposition ofthecase.
Q.4 Onwhatbasisunder theAgreement doesthePhilippines justify requiring theimporter/exporter
toprovide evidence ofnormal value within 15daysofthereceipt ofthepetition andresort
to"available data" ifsuchinformation isnotforthcoming?
Thisrequirement ismerely partoftheprocess ofdetermining theexistence ofaprima facie
case, preparatory totheinitiation oftheformal investigation.
Q.5 Before theestablishment ofaprima faciecaseofdumping, howdoestheAgreement permit
thePhilippines towithhold customs release ofimported products unless a"bond" isfiled?
Thiswould onlyapply iftheSecretary ofTrade andIndustry determines thatthere exists an
imminent danger ofinjury toaparticular industry asaresult ofdumping. Butthisissubject tothe
petitioner filing abondtoanswer fordamages which theimporter maysuffer asaresult oftheholding
oftherelease ofthequestioned importation incasetheSecretary findsthatthereisnoprima faciecase.
Todate,nowithholding ofrelease hasbeendonepresumably because ofthebondrequirement.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
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Q.6 Article 7oftheAgreement saysthatbonds cannot berequired within 60daysofinitiation.
HowdoesthePhilippines implement thisprovision?
TheSecretary ofTrade andIndustry shallwithhold hisdecision ontheapplication ofprovisional
measures untiltheTariff Commission hasmade apreliminary determination andrecommendation on
theexistence ofanimminent danger ofinjury, only60daysafteritsinitiation ofthecaseinaccordance
withtheADP Agreement.
Q.7 Inrelation tonormal value, whyhavethePhilippines notincorporated thedetailed provisions
oftheAgreement, particularly inrelation tosales ataloss, constructed value andfair
comparison?
Although theActdoesnotexplicitly stipulate suchdetailed provisions, theagency concerned
willadopt theADP Agreement asitsprincipal guideline inthecourse ofitsanalysis andevaluation
ofthecase.
Q.8 TheWTO Agreement states thattheinvestigation period shall beatleastsixmonths. What
isthepractice ofthePhilippines?
Theinvestigation period oftheTariff Commission covers approximately twelve (12)months,
which isconsistent withArticle 5.10oftheADP Agreement.
Q.9 Forimports made subsequent totheinvestigation, thedumping margin appears tobecalculated
onapershipment basis withrevised normal values? Could thePhilippines givemore precise
details ofhowthissystem operates?
ThePhilippines doesnotmake anadjustment onapplicable dumping dutyonsubsequent
importations. Intheevent thatthere isaneed tomodify orrevise thedumping margin, formal
investigation procedures arecarried out.
Subsidies andCountervailing Measures
1. On9October 1995, thePhilippines notified Section 302oftheirTariffs andCustoms Code
which "embodies thecountervailing dutylaw".
2. Nochanges havebeenmade tothislawsince thePhilippine 'saccession totheTokyo Round
Codes in1985.
3. Apart fromthefactthatthelegislation hasremained intact since 1985(i.e.thechanges tothe
Subsidies Agreement brought about bytheUruguay Round havenotbeenincorporated in
Philippines law)thetextofSection 302isinitselfextremely concise andtherefore inappropriate
fortheconduct ofcountervailing investigations.
4. Section 302refers tofuture promulgation of"allrules andregulations" necessary tocarry
outfunctions under thatsection. Suchrules andregulations (ifanyexist) donot,however,
seem tohavebeennotified totheWTO.
5. Itistherefore notpossible fortheCommunity tofullyexercise itsright toexamine the
compatibility ofPhilippine lawonSubsidies withtheWTO legislation atthisstage.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
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6. Under whatrules would thePhilippines conduct countervailing investigations? Howdothey
intend tocomply withtheprocedural requirements oftheWTO Subsidies Agreement?
7. Howcanparties involved inacountervailing procedure (exporters, importers) know whattheir
rights andobligations are? Forexample, howdothePhilippine authorities ensure, thatthe
Uruguay Round provisions onconfidentiality, standing ofcomplaints, assessment ofinjury,
retroactivity, collection ofprovisional duties andcalculation ofsubsidy amounts willbeadhered
to?Furthermore, whatruleswould theyapply todetermine thenon-actionable nature ofgreen
Subsidies?
Asmentioned inourintroduction, thelegislation onsubsidies andcountervailing measures
isdueforamendment inorder tomake thisaneffective tooltoensure fairtrade. Restassured that
anyamendment willbeconsistent withthesubstantive andprocedural requirements oftheSCM
Agreement. Atanyrate,thePhilippines hasnotimplemented theexisting lawandhasnotimposed
anycountervailing measure against anyGATT Contracting Party orWTO Member.
E. Questions from Hong Kong
1. Philippines 'notification contains Republic ActNo.7843amending Section 301,Part2,TitleII,
Book 1oftheTariff andCustoms Code.
(a) What isthelegal status oftheWTO ADAgreement (theAgreement) inPhilippines?
Does ithavetheforce oflaw?
(b) ArePhilippines ADofficials required, legally orotherwise, toobserve theprovisions
oftheAgreement intheconduct ofADproceedings, ortoconsult them, forexample
ontheinterpretation ofdomestic legislation?
Asexplained earlier, theADPAgreement hastheforceoflawunder thePhilippine legalsystem.
With respect tothesecond question, theanswer isintheaffirmative.
2. Although Republic ActNo.7843waspassed bythePhilippines legislature inDecember 1994
subsequent tothesigning oftheWTOAgreement inApril1994, numerous Philippines provisions
appear todepart fromtheprovisions oftheAgreement. Notable examples areasfollows:
- Paragraph (a)authorizes theCommissioner ofCustoms toholdtherelease ofthe
questioned importations. Article 5.9oftheAgreement provides thatanADproceeding
shall nothinder theprocedures ofcustoms clearance.
- Paragraph (a)provides forimposition ofprovisional measures upondetermination of
aprima faciecaseofdumping within 20daysfromreceipt ofpetition orinformation.
Article 7.3oftheAgreement provides thatprovisional measures shallnotbeapplied
sooner than60daysfromthedateofinitiation oftheinvestigation andArticle 7.1
thereof provides thatsuchmeasures maybeapplied onlyiftheconditions setouttherein
arefulfilled.
- Paragraph (b)requires allparties concerned tosubmit theirrespective memoranda
within 15daysfromnotice. Article 6.1.1 provides thatexporters orforeign producers
shall begiven aminimum period of30daysforreply toquestionnaires.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
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- Sub-sectionDauthorizescollectionofdumpingdutiesondumpedarticlesandsub-section
Eprovides thatallimportation oflikearticles within 150daysimmediately preceding
thefiling oftheprotest arecovered bytheinvestigation. Article 10.6oftheAgreement
however provides thatsubject tocertain conditions, adefinitive anti-dumping dutymay
belevied onproducts which wereentered forconsumption notmorethan90daysprior
tothedateofapplication ofprovisional measures. Article 10.8further provides that
noduties shallbelevied retroactively prior tothedateofinitiation oftheinvestigation.
- Sub-section Eprovides thatthedumping dutyshallbeequal tothedifference between
theactual export priceandthenormal value actually existing atthetimeofimportation
asdetermined bytheCommission. Sub-section Lprovides thattheestablished dumping
dutyshallbesubject toadjustment based onwhichever higher oftheprevailing normal
values asdefined inparagraph b-1. Article 9.3oftheAgreement provides thatthe
amount oftheanti-dumping dutyshallnotexceed themargin ofdumping asestablished
under Article 2.Accordingly, theapplicable normal value fortheestablishment of
dumping margin should bethelatest onedetermined, notnecessarily thehigher one.
- Sub-section O.2defines thevarious elements of"cost ofproduction" including
administrative, selling andgeneral expenses, shipment -related expenses andprofit,
butartificially limits theirminimum leveltocertain percentages oftheproduction costs.
Article 2.2.1.1 oftheAgreement however requires costbenormally calculated on
thebasis ofactual records.
Furthermore,numerousprovisionsoftheAgreementareapparentlynotreflectedinthePhilippines
legislation, orthecodification maynotbeadequate. Notable examples areasfollows:
- sufficient domestic sales (Article 2.2andFootnote 2)
- establishment ofcosts (Articles 2.2.1 and2.2.2)
- notion offaircomparison andrelevant provisions (Article 2.4)
- exchange rates (Article 2.4.1)
- comparison methodology (Article 2.4.2)
- cumulative assessment ofinjury (Article 3.3)
- threat ofmaterial injury (Article 3.7)
- standing ofcomplainant (Article 5.4)
- on-site verification (Article 6.6,6.7andAnnex I)
- sampling (Article 6.10)
- dutyforexporters andproducers notselected insampling (Article 9.4)
- application ofbestinformation available (Annex II)G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
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Inconnection withpoints made byHong Kong above, thesewereearlier clarified inourresponse
toquestions posed byAustralia andtheEuropean Union.
Furthermore, itmustbeclarified thatthepremise ofHong Kong thatRA7843wassubsequent
totheADPAgreement isnotcorrect because theeffective dateoftheActpreceded theentry intoforce
oftheWTO Agreement.
(a) What further legislative stepswillPhilippines taketoensure theconformity ofitslaws,
regulations andadministrative procedures withtheprovisions oftheAgreement, in
accordance withArticle 18.4?
Anychange intheAct,ifnecessary, willbecarried outbylegislative enactment.
(b) HowwillPhilippines ensure compliance withtheAgreement before itslawsarebrought
intototalconformity withit?
Asmentioned earlier, (e.g. theresponse tothefirstquestion ofAustralia), the
administering agencies shallharmonize allexisting anti-dumping lawstomake them
consistent withtheADP Agreement.
(c) IfPhilippines iscontemplating adoption ofnewlegislation induecourse, whatisthe
intended purpose andcoverage? What isthelegislative timetable?
Anychange intheAct,ifnecessary, willbetointroduce greater precision, inlinewith
thespirit andletter oftheADP Agreement. Wearenotinaposition toreply tothe
question onlegislative timetable.
3. What judicial review procedures hasPhilippines putinplace inobservance ofitsobligations
under Article 13(Judicial Review) oftheAgreement?
Proper parties aregiven therighttoseekajudicial review intheregular courts asprovided
inthePhilippine legalsystem. Theprocedures oftheregular courts aretobeapplied.
4. What isPhilippines 'policy andlawfortheimplementation ofWTO Panel Reports?
There isnoprovision ontheimplementation oftheWTO panel reports. However, asaWTO
Member, thePhilippines isbound totheprovisions oftheDispute Settlement Understanding.
F. Questions from theUnited States
1. Section 301(a) oftheRepublic ActNo.7843 ("the A-DAct”)[page 2]allows theSecretary
toinitiate aninvestigation based onamagazine article. Doyouconsider thistobe"special
circumstances" asrequired byArticle 5.5forself-initiation ofacase?
No,generally, adumping protest isentertained onlyuponreceipt bytheDepartment ofFinance
ortheDepartment ofTrade andIndustry ofadulydocumented complaint inaccordance withcertain
requirements(e.g.standardform,dulynotarizedcomplaints,pre-hearingconsultationsandconferences).
These include evidence ofdumping, injury andcausality.
ThePhilippines doesnotenvisage thatpetitions foranti-dumping willbeinitiated exofficio .G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
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2. Itappears asiftheFilipino authorities havetheauthority toself-initiate acasebased only
oninformation thatdumping isoccurring. Howisthisconsistent withA-DArticle 5.6which
requires evidence ofdumping, injury andacausal link?
Thisismerely partoftheprocess ofdetermining theexistence ofaprima faciecase,preparatory
totheinitiation oftheformal investigation. However, asamatter ofstandard procedure, theDepartment
ofFinance ortheDepartment ofTrade andIndustry, indetermining theprima faciecase,shallconsider
theelements ofdumping -price difference, injury andcausal linkage. Ifanyofthese elements are
absent, thecaseshallnotbeinitiated.
3. Furthermore, section 301appears toallow theimposition ofpreliminary measures based solely
ontheinformation contained inthepetition. Howisthisconsistent withA-DArticle 7which
requires apreliminary finding ofdumping andinjury andwhich states "provisional measures
shall notbeapplied sooner than60daysfromthedateoftheinvestigation"?
TheSecretary ofTrade andIndustry candirect application ofprovisional measures onlywhen
theTariff Commission hasmade apreliminary investigation andrecommendation ontheexistence of
animminent danger ofinjury, 60daysafteritsinitiation ofthecaseinvestigation.
4. Section 301(b)(1)[page 3]provides alternate means bywhich normal value canbecalculated
when, among other things, salesarenotmade intheordinary course ofbusiness inthemarket
oftheexporting countries. These methods under Filipino lawinclude normal value shallbe
based onthehigher ofvalues determined fromanyofthefollowing methods, suchasbutnot
limited to,thenormal value oflikearticles inaproxy country atthesamestage ofdevelopment
oftheindustry producing thelikeproducts, orthecostofproduction inthecountry ofproduction
ormanufacture oronantheestimated landed costinthecountry ofproduction ormanufacture
which isbased onCandFprice ofsucharticles including duties surcharges, andtaxes when
imported inthecountry ofproduction.
Article 2.2oftheA-DAgreement provides thatwhen salesarenotmade intheordinary course
ofbusiness:
Themargin ofdumping shallbedetermined bycomparison withacomparable price
ofthelikeproduct when exported toanappropriate thirdcountry, provided thatthis
price isrepresentative, orwiththecostofproduction inthecountry oforigin plusa
reasonable amount foradministrative, selling andgeneral costs andforprofits.
While werecognize thatspecial provisions (asallowed bythenotestoparagraph 1ofArticle VI)
canbemade when aneconomy isstate-controlled, weseenoprovisions forthese alternate
means fordetermining normal value when sales areoutside theordinary course. Could you
please explain howthisportion oftheFilipino lawisconsistent withtheA-DAgreement?
FaircomparisonisbasedontheexportpriceandthenormalvalueasdeterminedbythePhilippine
Trade Representative intheexporting country. Now, ifnormal value cannot bedetermined because
ofcircumstances notwithin theordinary course oftradeorwhere thereisanassociation orarrangement
between theexporter andtheimporter, thenthereport oftheTrade Representative isadopted.
5. Under Section 301(b)(3)(d) [page 4]itstates:
Within five(5)daysfrom receipt oftheadvice from theSecretary ofFinance, the
commission shall identify allparties concerned andrequire them tosubmit their
respective memorandum within 15daysfromnotice.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
Page12
Could youplease explain whatthismemoranda isintended toinclude? Also, ifthismemoranda
issynonymouswiththequestionnairereferredtoinA-DArticle6,howisthisprovisionconsistent
withArticle 6which requires thatexporters begiven atleast 30days toreply tothe
questionnaire?
Memoranda arejustinitial submissions oftheonecomplaining orprotesting. Itdiffers from
thequestionnaire referred toinArticle 6oftheADPAgreement which, asprovided, gives theexporters
atleastthirty (30)daystorespond.
6. Please explain Section 301(I) [page 5-6]. Thisprovision appears toallow appeal totheCourt
ofTaxAppeal of“theamount ofthedumping duty”;however thefindings offactinadumping
casearefinalandconclusive andtherefore notappealable. Isthiscorrect andcould youexplain
howthisisconsistent withA-DArticle 13which provides forjudicial review of“administrative
actions relating tofinaldeterminations andreviews ofdeterminations within themeaning of
Article 11”?
Theproper parties aregiven therighttoseekjudicial review intheregular courts under the
Philippine legalsystem. The"amount ofdumping duty" isappealed totheCourt ofTaxAppeals for
amore speedy resolution ofthecase.
7. Section 301(0)(2) (b&d)provide 10percent and8percent minimums forGS&A andprofit
respectively. Howisthisconsistent withA-DArticle 2.2.2?
These minimum levels aremere guidelines forinvestigations iftheactual costs cannot be
determined andverified accordingly. TheTariff Commission mayaccept actual costsandprofits made
evenifsucharelessthanthespecified minimum levels.
8. What provision hasbeenmade forconducting “newShipper ”reviews asprovided forunder
A-DArticle 9.5?
TheActissilent onthis. However, theimplementing agency canobserve theprovision on
conducting "new shipper" reviews asprovided byArticle 9.5oftheADP Agreement.
9. Under Filipino lawwhatistheearliest dateafterreceipt ofapetition thatanti-dumping duties
canbeimposed?
Theearliest dateis215daysafterreceipt ofapetition before ananti-dumping dutycanbe
imposed.
10. Filipino lawdoesnotappear toinclude anyprovision forrequiring aminimum threshold of
industry support prior toinitiation ofaninvestigation. Isthisaccurate andifsohowisthis
consistent withA-DArticle 5.4?
Theimplementing agencies have theflexibility tobeguided byArticle 5.4oftheADP
Agreement.
11. What provisions havebeenmade formaking non-confidential information available toother
interested parties asrequired byA-DArticle 6.1.2?
Allinterested parties willhaveaccess toanynon-confidential information anddatanecessary
tosustain itscase.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
Page13
12. What provision hasbeenmade forthedisclosure thatisrequired byA-DArticle 6.9?
Thisdisclosure requirement isprovided forintheAct.
13. What method ofcomparison isusedfordetermining thedumping margin? Andareexporter
specific margins calculated?
Thedumping margin isdetermined onthebasis ofthecomparison between thefairmarket
value andthepurchase price.
TheActdoesnotprovide forthecalculation oftheexporter specific margin; however, there
isaflexibility fortheTariff Commission toadopt thisprocedure initsinternal rules ofprocedures.
14. What method ofdutyassessment isusedunder Filipino law?
Thedumping dutyislevied, inaddition totheapplicable regular duty, ontheaffected shipments
aswellasonsubsequent importations ofthesubject article from thecountry under protest.
15. Section 301(a) oftheA-DActrefers totheimportation orsaleofanarticle "which might injure,
orretard theestablishment of,orislikely to,injure anindustry producing likearticles inthe
Philippines. ”Howisthislanguage, particularly theuseoftheword “might, ”consistent with
thedefinition ofinjury inArt.3,note9oftheA-DAgreement?
Theterm"might injure" willbeconstrued as"threat ofinjury". There hasbeennoaffirmative
determination onthebasis ofthreat ofinjury.
16. Thesecond andthirdparagraphs ofsection 301(a) [pages 2-3]oftheA-DActappear toallow
forsuspension ofliquidation (i.e., allow release intocirculation tobeheldup)prior toa
preliminary dumping orinjury determination. Howisthisconsistent withA-DAgreement Art.
7.1andArt10.1?
Provisional measures willbeapplied onlywhen theTariff Commission hasmade apreliminary
affirmative determination ofinjury tothedomestic industry, 60daysaftertheinitiation ofthecase.
17. Thesecond paragraph ofsection 301(a) [page 2]oftheA-DActrefers toan"imminent danger
ofinjury"" What doesthistermmean?
Theterm"imminentdangerofinjury"isequivalenttothe"threatofmaterialinjury",comprising
thedefinition ofinjury under theADP Agreement (Article 3).Likematerial oractual injury, athreat
ofmaterial injury isdetermined onthebasis offactual evidence andinformation, taking intoaccount
theelements ofdumping.
18. Section 301(b)(3) oftheA-DActprovides fortheCommission todetermine ifadomestic industry
"suffers" or"hassuffered" injury asaresult ofdumped imports. Does thismean anything
different fromthestandard under Art.3.5oftheA-DAgreement thatdumped imports are
"causing [material] injury" tothedomestic industry?
Inessence, thistermisthesame asthestandard provision under Article 3.5oftheADP
Agreement.
19. What doesthelanguage "asaresult thereof" insection 301(b)(3) oftheA-DActreference?G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
Page14
Thephrase "asaresult thereof" refers tothefindings oftheTariff Commission asthebasis
ofdetermining thecausal relationship between thedumped imports andtheinjury itcaused tothe
domestic industry. Relevant factors maybeincluded inthisrespect, among others, thevolume of
importation ofsubject article, itsimport prices, andtheexport performance, productivity andsales
performance ofthedomestic industry.
20. Ingeneral, theA-DActdoesnotappear todifferentiate between factors relevant topresent
injury andthose relevant tothreat. Howthisisconsistent withtheA-DAgreement?
Based onpastexperience andestablished practice under theoldanti-dumping law,bothpresent
injury andthreat weredetermined onthebasisofsimilar factors. WiththeADPAgreement, however,
thePhilippines arebound tofollow itsprovisions relative totheproper determination ofthedifferent
stages ofinjury.
21. Section 301(b)(3) oftheA-DActrefers tothe"reasonableness" ofwholesale prices, andsuggests
thatinjury maybebased onlowwholesale prices alone without reference tocausation. How
isthisconsistent withtheA-DAgreement?
Itisconsistent because weconsider other factors andnotjustwholesale prices alone.
22. Section 301(b)(3) oftheA-DActdoesnotmention inventories asafactor tobeconsidered
inmaking determinations ofthreat ofmaterial injury. Howisthisconsistent withArt.3.7(iv)
oftheA-DAgreement?
Inventories ofthearticle/product being investigated areconsidered inthedetermination ofthreat
ofmaterial injury.
23. Theuseofthedisjunctive term"or"insection 301(b)(3) oftheA-DActsuggests thatonlyone
ofthelisted factors needbeconsidered inmaking adetermination ofthreat ofmaterial injury.
Howisthisconsistent withArt.3.7oftheA-DAgreement, which requires thatalllisted factors
beconsidered?
Theimplementing agencies havetheflexibility toconsider alllisted factors inthedetermination
oftheinjury.
24. Section 301(b)(3)(a) oftheA-DActsuggests thatathree percent increase insubject imports
automatically satisfies the"significant rateofincrease" criteria ofA-DAgreement Art.3.7(i).
Isthistheintent, andifso,why? Howisitconsistent withtheA-DAgreement?
TheTariff Commission hastheflexibility tousethispercentage asaguide inthecourse of
theinvestigation.
25. Insection 301(b)(3)(d)(i) oftheA-DAct,what istherelevance ofthe10percentoflocal
consumption figure indetermining likeproduct orinjury? Howdoesthisstandard comply with
thedefinition of“likeproduct ”inArt.2.6oftheA-DAgreement?
Thefigure "10percentoflocalconsumption" isonlyarequirement toindicate thebreadth
andscope oftheaffected localconsumers before acomplaint canbegiven duecourse.
TheTariff commission treats theissueof"likearticles" inanarrow sense bylimiting product
comparability toarticles which aresubstantially made ofthesamematerials, perform thesamefunction,
andhavethecharacteristics closely resembling articles under consideration.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
Page15
26. Section 301(b)(3)(d)(i) oftheA-DActdoesnotspecifically provide foranexamination ofthe
impact oftheimports onthedomestic producers. Howdoesthisconform withArt.3.1ofthe
A-DAgreement?
TheActdoesnotexplicitly stipulate suchdetailed provision; however, theagency concerned
considered several parameters oreconomic indicators asguidelines inthecourse ofitsanalysis and
evaluation ofthecase.
27. Section 301(b)(3)(d)(i) oftheA-DActdoesnotarticulate thefactors thatmustbeconsidered
withregard totheprice effects ofdumped imports. Howdoesthisconform withArt.3.2of
theA-DAgreement?
TheActdoesnotarticulate inthisparticular provision onthefactors tobeconsidered with
regard toprice effects ofdumped imports. Itisprovided, however, inother provisions oftheAct.
Inanyevent, theimplementing agencies havetheflexibility toconsider therelevant economic factor
andindices enumerated inArticle 3oftheADP Agreement intheiranalysis andfindings.
28. Dothespecific percentage changes setoutinsections 301(b)(3)(d)(ii) oftheA-DActmean
thatafivepercent salesdecline or2percentpricedecline automatically establishes causation?
Howistheuseofsuchnumerical factors consistent withArt3.4oftheA-DAgreement, which
states thatasingle factor cannot necessarily provide decisive guidance?
These figures willbeusedmerely asindices fortheguidance oftheagency concerned butdo
notserve assoledecisive factors.
29. Section 301(b)(3)(d)(ii) oftheA-DActrequires onlyconsideration ofdeclines insalesvolume
andprices, declines inproduction volumes, andactual andpotential negative effects of
production andinventories. Where doesPhilippine lawrequire examination oftheother factors
listed inArt.3.4oftheA-DAgreement?
TheActmaynotrefertothese explicitly, buttheywillbetaken intoaccount.
30. Section 302(a) oftheTariff andCustoms Code ofthePhilippines (“SCM Act”)refers tothe
importation orsaleofarticles “which arelikely toinjure anestablished industry, orprevent
orconsiderablyretardtheestablishmentofanindustryinthePhilippines.”Howisthislanguage
consistent withthedefinition ofinjury inArt.15,note45oftheSCM Agreement?
Asmentioned intheintroduction, theconduct ofthecountervailing investigation isgoverned
bySec.302ofthePhilippine Tariff andCustoms Code. Itssubstantive andprocedural provisions
haveactually beenamended bytheSCM Agreement following thelegalstatus ofthePhilippines Anti-
Dumping legislation. Nevertheless, adraftbillisbeing prepared forsubmission tothePhilippine
Congress tomodify andupdate thelegislation tomake itaneffective tooltoensure fairtrade in
conformity withtheSCM Agreement.
31. TheSCM Actdoesnotcontain aprovision comparable tosection 301(b)(3) oftheA-DAct.
What standards doesthePhilippines usetodetermine material injury incountervailing duty
investigations? Aretheythesame standards usedinanti-dumping investigations?
Asmentioned, thedeficiencies ofourcountervailing legislation haveactually beenaddressed
bytheSCM Agreement. These matters will,however, stillbeaddressed intheproposed draftbill.G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
Page16
32. There isnoprovision ineither theA-DActortheSCMActaddressing thecumulative assessment
oftheeffects ofimports frommore thanonecountry, aspermitted byArt.3.3oftheA-D
Agreement andArt.15.3oftheSCMAgreement. Does thePhilippines engage incumulation,
and,ifso,under whatcircumstances?
Cumulation isnotpractised inthePhilippines. Thismatter willbeconsidered inanyamendment
totheanti-dumping andcountervailing legislation, ifnecessary.
33. TheSCMAct,unlike theA-DAct,doesnotcontain provisions concerning howinvestigations
aretobeconducted. Arethesame procedures setforth intheA-DActapplicable to
anti-dumping investigations alsoapplicable tocountervailing dutyinvestigations under theSCM
Act? Ifnot,howdotheprocedures differ?
Theprocedures arebasically thesame.
34. Istheterm"terminate itsinvestigation" usedinSection 301(C) oftheA-DActintended to
mean "conclude itsinvestigation" pursuant toArt5.10oftheA-DAgreement?
Yes. Theinvestigation period oftheTariff Commission covers approximately twelve (12)
months which isconsistent withArticle 5.10oftheADP Agreement.
35. Section 301(H) oftheA-DActdoesnotdefine "interested parties." Are“interested parties ”
under section 301(H) thesame as“interested parties ”under Art.6.11oftheA-DAgreement?
Yes,under therulesofprocedures adopted bytheTariff Commission, exporters areincluded
asparties.
36. Aretheinterested parties referred toinSection 301(H) oftheA-DActthesameasthe"parties
concerned" referred toinSection 301(G)? Whoarethe"protestant" and"protestee" referred
toinSection 301(G)?
Yes, the"protestant" refers tothedomestic industry, which comprise theproducer or
manufacturer oflikearticle; the"protestee" refers totheimporters, traders and/or consignee ofthe
imported article under consideration orsubject oftheprotest.
37. How doestheA-DActimplement therequirement inArt.6.2oftheA-DAgreement that
interested parties beaccorded thefullopportunity todefend theirinterests?
Allinterested parties aregiven thefullopportunity todefend theirinterest inadumping protest,
which includes pre-hearing consultations orconferences prior tothepublic hearing, which isthestart
oftheformal investigation, andaccess tonon-confidential information.
38. HowdotheA-DActandtheSCM Actimplement therequirements ofArt.6.4oftheA-D
Agreement andArt.12.3oftheSCMAgreement thatinterested parties bepermitted toseeall
information relevant tothepresentation oftheir cases andtheopportunity toprepare
presentations onthebasis ofthatinformation?G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
Page17
These willbefullyobserved bytheconcerned agency intheformal proceedings under theanti-
dumping legislation toward thefinaldetermination oftheprotest. Thisprocedure willalsobeobserved
inthecountervailing measures.
39. TheA-DActcontains noprovision allowing forindependent review ofaninjury determination
inananti-dumping investigation. Howisthisconsistent withtherequirements ofArt.13of
theA-DAgreement requiring theinclusion ofprovisions forsuchreview?
Although theActprovides onlyforreview theamount ofthedumping dutytotheCourt of
TaxAppeals, thePhilippine legalsystem affords theproper parties therighttoseekjudicial review
from regular courts.
40. TheSCM Actcontains noprovision allowing forindependent review ofcountervailing duty
determinations. HowhasthePhilippines implemented therequirements ofArt.23oftheSCM
Agreement concerning judicial review?
Thismatter willbeaddressed intheproposed draftbill.Until then, theSCM Agreement will
supplement theSCM Act.
41. Section 301(O)(3) oftheA-DActstates thattheterm“domestic industry ”maybedefined to
encompass domestic producers whose collective output oftheproducts constitutes a"significant
share" ofthetotaldomestic production. Please explain howthisdefinition isconsistent with
Art4.1oftheA-DAgreement, which refers toproducers whose collective output ofthedomestic
likeproduct constitutes a"major proportion" ofdomestic production.
"Significant share" shall beinterpreted thesame asthe"major proportion" intheADP
Agreement.
42. Thefinalparagraph ofsection 301(a) oftheA-DActprovides thattheSecretary (whoinitiates
theinvestigation) hasthediscretion toexclude related parties fromthedomestic industry. Does
theTariffCommissionhaveitsownindependentdiscretiontoexcluderelatedpartiesforpurposes
ofdetermining injury?
TheTariff Commission exercises discretionary power torecommend theexclusion ofparties
related toeither theprotestant ortheprotestee.
43. Does thedefinition ofrelated parties inthefinalparagraph ofsection 301(a) oftheA-DAct
alsoapply tosection 301(O)(3)?
Yes,theyarethesame.
44. Thestandards setforth insection 301(N) oftheA-DActandsection 302(f) oftheSCM Act
appear topermit duties tobeextended aftertheirfive-year expiration dateifthere arefindings
thattheconditions upon which theoriginal dumping (orsubsidy) andinjury determinations
werebased stillexist. Howisthisconsistent withArt.11.3oftheA-DAgreement andArt.
21.3oftheSCMAgreement, which provide thatduties maybeextended beyond fiveyears only
thedutyiftheauthorities determine thattheexpiry ofthedutywould likely leadtocontinuation
orrecurrence ofdumping (orsubsidy) andinjury?G/ADP/Q1/PHL/1
G/SCM/Q1/PHL/1
Page18
There isnoinconsistency here. TheActprovides thatthere isadefinite period ofsixmonths
within which toinitiate therequest forextension andthatifextended afterdueinvestigation, theperiod
ofextension shallbeeffective foraperiod of24months only.
45. Does thePhilippines engage inregional industry analysis, aspermitted byArt.4.1(ii) ofthe
A-DAgreement andArt.16.2oftheSCM Agreement?
Thismaybeconsidered inthefuture.
46. There arenoprovisions ineither theA-DActortheSCMActgoverning treatment ofconfidential
information. HowhasthePhilippines implemented therequirements ofArt.6.5oftheA-D
Agreement andArt.12.4oftheSCM Agreement?
TheActdoesnotexplicitly provide forprovision governing thetreatment ofconfidential
information. However, theconfidentiality ofadocument isobserved andrespected when marked as
such, following therules ofprocedure oftheTariff Commission.