RESTRICTED
WORLD TRADE G/ADP/Q1/EEC/10
G/SCM/Q1/EEC/10
ORGANIZATION 21January 1998
(98-0208)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
NOTIFICATION OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Replies toQuestions from CANADA1,JAPAN2,MEXICO3andtheUNITED STATES4
concerning theNotification oftheEUROPEAN COMMUNITY5
Thefollowing communication, dated 17December 1998, hasbeenreceived fromthePermanent
Delegation oftheEuropean Commission.
_______________
QUESTIONS FROM CANADA
General
Thebasic anti-dumping legislation forproducts covered bytheEuropean Coal andSteel
Community isareplica ofthestandard EClegislation, barring afewdifferences indecision-making
procedures toreflect thefactthatmeasures, should theyberequired, areimposed bytheEuropean
Commission rather thantheCouncil.
Q1. Thenotification inWTO document G/ADP/N/1/EEC/2/Suppl.1 doesnotappear toinclude
provisions forjudicial review ofdecisions andincorporation ofanyrequired actions arising from
suchreviews orincorporation ofWTO Panel decisions. Could theECplease explain themanner
inwhich judicial reviews andWTO Panel reports willbeadopted?
Reply
There isnoautomatic mechanism foradaptation following judicial review, orincorporation
ofWTO panel findings intotheBasic Regulation. Butshould theneedarise, anappropriate amendment
totheCommunity 'santi-dumping legislation would beproposed totheCouncil.
Q2. Inparagraph 5ofArticle 5,itisstated thattheauthorities willnotify thegovernment
oftheexporting country ofreceipt ofaproperly documented complaint prior toinitiation ofthe
investigation. Could theECdelegation clarify theexact timing ofthenotification ofaproperly
documented complaint interms ofthenumber ofdaysprior toinitiation oftheinvestigation?
1G/ADP/Q1/EEC/9-G/S CM/Q1/EEC/9,2G/ADP/Q1/EEC/2-G/S CM/Q1/EEC/2 &G/ADP/Q1/EEC/8-G/S CM/Q1/EEC/8,
3G/ADP/Q1/EEC/5-G/SCM/Q1/EEC/5,4G/ADP/Q1/EEC/6-G/SCM/Q1/EEC/6.
5G/ADP/N/1/EEC/2 &Corr.1 &Suppl.1, G/SCM/N/1/EEC/1.G/ADP/Q1/EEC/10
G/SCM/Q1/EEC/10
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Reply
Internal guidance totheEC'sinvestigating officials specifies thatthedeadline forinforming
thegovernmentofanexportingcountryofthereceiptofaproperlydocumentedcomplaintistwoworking
weeks prior totheeventual initiation ofaprocedure.
Q3. Wenotice that,invarious paragraphs ofArticle 6,certain hearings willbearranged upon
request. Does theECsystem include anyhearings aspartofitsstandard practice, regardless
ofwhether anyparty hasrequested suchahearing?
Reply
Hearings areheldonlyontherequest ofinterested parties inananti-dumping proceeding.
Inpractice, between twoandfourformal hearings arenormally heldpercase. Notethatnodisadvantage
istobeinferred fromthefactthatanyparty doesnotrequest anexparte hearing, orthataparty declines
toparticipate inaconfrontation hearing requested byanother party, astheECautomatically discloses
inwriting toallinterested parties.
Q4. Weunderstand from paragraph 8ofArticle 11thatimporters arerequired torequest
anyrefunds towhich theyfeelentitled. Ifimporters aregranted suchrefunds, isinterest paid
ontheamount owing totheimporters?
Reply
Thebasic anti-dumping Regulation doesnotprovide forthepayment ofinterest onrefunds
toimporters.
Q5. Article 17discusses theuseofsampling. Could theECdelegation explain what margin
ofdumping isgiven toanexporter thatwasnotincluded inthesample inasituation where there
hasbeenadegree ofnon-cooperation bysome oralloftheparties selected toform thesample.
Reply
Within thelimits oftimeandresources available, cooperating firms outside asample maybe
given individual margins ofdumping. Inanycase, ifaparty selected toform partofasample fails
tocooperate, itsmargin ofdumping isnotusedinthecalculation oftheweighted average which is
otherwise applied tocooperating firms notselected forthesample.
Q6. Inparagraph 3ofArticle 4,itappears that, incases where aregional investigation has
beeninitiated, provisional duties ordefinitive duties maybeimposed inrespect oftheCommunity
asawhole. Could theECplease explain whether there might beasituation inwhich theduty
would onlybeimposed inrespect ofimports intotheregion covered byinvestigation? Ifso,could
theECexplain thecircumstances inwhich duties would onlybeimposed onimports intothe
investigated region asopposed toimports intotheentire EC?
Reply
Ananti-dumping dutyimposed attheconclusion ofaregional investigation mustbeEC-wide,
inlinewiththesingle market principle ofacommon external tariff. However, suchadutyisnot
imposed inregional investigations before theexporters concerned havebeengiven theopportunityG/ADP/Q1/EEC/10
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toofferregion-specific undertakings. Itisonlywhen undertakings arenotforthcoming, orarelater
breached, thataCommunity-wide dutywould beconsidered.
QUESTIONS FROM JAPAN
(G/ADP/Q1/EEC/2-G/SCM/Q1/EEC/2)
Q1. HastheECalready informed theCommittee ofitschange ofregulations pursuant to
Article 18.5oftheAgreement onImplementation ofArticle 6oftheGeneral Agreement onTariffs
andTrade 1994?
Reply
TheECnotified theCommittee initscommunication of12March 1997 ofthischange toits
anti-dumping legislation. This communication waspublished bytheCommittee Secretariat on
1April 1997 indocument G/ADP/N/1/EEC/2/Suppl.1.
Q2. Under itsnewRegulation, howwilltheECdealwiththesituation where anexporter sells
through subsidiaries initshome market andintheEC? Inparticular, inmaking allowances,
what account would betaken oftheindirect selling costs ofthesubsidiaries?
Reply
Incalculating normal value theECselects thelevelontheexporter 'sdomestic market which
mostappropriately matches thecorresponding levelfromwhich export prices aredrawn. Export prices
arebased onsalesprices tothefirstindependent buyers, oranequivalent construction, inaccordance
withArticle 2.3oftheWTO Anti-Dumping Agreement. Ifevidence isprovided byanexporter that
thereareconsistent andcleardifferences intherolesperformed bythesalessubsidiaries inthedomestic
andexport markets, which culminate indifferent levels oftrade forthefirstsalestounrelated buyers
inthese markets, thenitwillbedeemed thatprice comparability hasbeenaffected. Anadjustment
shalltherefore bemade sothatnormal value isestablished atalevelequivalent tothatoftheexport
price (asprovided forinArticle 2.4oftheWTO Anti-Dumping Agreement).
Q3. Would theposition beanydifferent ifthehome saleswerenotmade through asubsidiary?
Reply
Ifthere arenosalessubsidiaries ontheexporter 'sdomestic market, adjustments willstillbe
made inaccordance withtheabove criteria -thenumber ofhands passed through bygoods inthe
distribution chain isinitself notcentral tothecaseforanadjustment forleveloftrade.
Q4. Does thesituation described fallwithin thescope ofthenotion of"different leveloftrade"
asmentioned inthenewArticle 2.10(d)? Ifso,would itfallunder sub-paragraph (d)(i) orsub-
paragraph (d)(ii)?
Reply
Thesituation described mayfallwithin thescope ofArticle 2.10(d), "level oftrade", ifevidence
provided bytheexporter clearly demonstrates thatthecomparison should beadjusted inviewofthe
lackofequivalent levels onthetwomarkets. Whether itwould fallunder sub-paragraph (d)(i) or(d)(ii)G/ADP/Q1/EEC/10
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would depend onwhether asuitable point ofreference atagenuinely comparable levelcanbefound
ontheexporter 'shome market (e.g.other producers ofthelikeproduct, production ofasimilar product
type). While theexistence ofsuchareference point mayenable thequantification ofanadjustment
factor asprovided forin(d)(i), theabsence ofonewould leadtothesituation described in(d)(ii).
Q5. CantheECgiveexamples of"differences infunctions" asusedinsub-paragraph (d)(i)?
Reply
The"differences infunctions" referred toinparagraph (d)(i) could include anyoftheusual
tasks carried outatagiven leveloftrade (producer, distributor, dealer, etc).
Q6. Cantherequirements ofsub-paragraphs (d)(i) besatisfied ifthere aredifferences in
functions orprices, orcantheybesatisfied onlywhen there aredifferences inbothofthese?
Reply
Therequirements ofsub-paragraph (d)(i) arefulfilled normally when there aredifferences in
bothfunctions andprices. However, ifanexporter wasnotinaposition toshow different prices for
thetwolevels oftrade inquestion (orifthedistinction between thelevels didnotexistononeofthe
markets) aspecial allowance could begranted.
Q7. CantheECgiveanyexamples ofthesituations where adjustments would bemade under
Article 2.10(k)?
Reply
ItremainstobeseenwhatspecificcircumstanceswouldinvoketheapplicationofArticle2.10(k).
Anycostnotspecifically mentioned inthepreceding subparagraphs maystillbeconsidered foran
allowance, should thecriteria in(k)bemet.
Q8. Does sub-paragraph (k)have anyrelevance tothesituation described inthefirsttwo
questions?
Reply
Asoutlined above, subparagraph (k)serves toemphasize thenon-exhaustive nature ofthelist
ofpossible allowances when comparing normal value andexport price. Thesituation described in
thefirsttwoquestions isnotspecific ordetailed enough toenable anexact assessment ofthelikelihood
andnature ofadjustments under Article 2.10.
Q9. Although sub-paragraph (k)refers broadly to"differences inother factors", the
corresponding recital speaks onlyof"differences inselling expenses". IstheRegulation tobe
interpreted inthislimited way? Aredifferences inprofit levels considered irrelevant?
Reply
Allowances arenormally given forexpenses incurred; allofthecostcomponents which form
partofthose expenses aretobecovered bytheadjustment. Asforprofit, theCommunity hasnever
beenoftheviewthatitisallowable assuch. Thisissue wasraised byJapan intheUruguay Round
anditsviewwasrejected.G/ADP/Q1/EEC/10
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FOLLOW-UP QUESTIONS FROM JAPAN -(G/ADP/Q1/EEC/8-G/SCM/Q1/EEC/8)
Q1. Areindirect costsand/or profits oftheselling subsidiary intheexporting country deducted
from thenormal value?
Reply
Likeexport prices, normal values arebased onsales prices tothefirstindependent buyers,
oranequivalent construction, inaccordance withArticle 2oftheWTO Anti-Dumping Agreement.
Asstated inprevious answers, observations andevidence totheeffect thattheprices usedfornormal
value represent alevel oftrade which isnotcomparable tothatoftheexport prices willleadtoan
adjustment. Thisadjustment would haveaneffect equivalent toremoving indirect costsand/or profits
ofaselling subsidiary from normal value.
Q2. Ifso,howcould thatbeexplained inthecontext oftheamended Regulation?
Thedownward adjustment ofnormal value inthemanner explained above would becarried
outunder theprovisions ofArticle 2.10(d) oftheECanti-dumping Regulation, which obliges the
Community tomake allowance fordifferences inleveloftrade.
Q3. Ifnot,howcould thatbeexplained inaccordance withtheconclusion ofthePanel inthe
Audio-Cassette Case?
Asstated above, amounts equivalent totheindirect costsand/or profits ofselling subsidiaries
intheexporting country mayberemoved from normal value aspartofaleveloftrade adjustment.
TheECwouldliketoremindJapanthattheconclusionsoftheAudio-CassettesPanelwereneveradopted.
QUESTIONS FROM MEXICO
Q1. Where there isacontradiction between theWTO Agreements andCommission Decision
No.2277/96/ECSC, howwillitberesolved bythecompetent authority oftheEuropean Union?
Reply
There isnoinconsistency between theWTO Anti-Dumping Agreement andECSC legislation.
Q2. What kindofcharacteristics willbetaken intoaccount todetermine thelikeness ofproducts
inaccordance withArticle 1.4?
Reply
TheECSC legislation on"likeproduct" isidentical toArticle 2.6oftheWTO Anti-Dumping
Agreement. Essentially thefactors taken intoaccount arephysical characteristics andend-use or
application.G/ADP/Q1/EEC/10
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Q3. Which countries doestheECconsider tobelong tothenon-market-economy group?
Reply
Thecountries considered bytheECasnon-market economies arelisted intheAnnex toCouncil
Regulation (EC) No.519/94, which wassubsequently amended byRegulation (EC) No.839/95 -
removing theBaltic States fromthelist.Thusthecountries invariably treated asnon-market economies
atpresent are:Albania, Armenia, Azerbaijan, Belarus, China, P.R., Georgia, Kazakstan, North Korea,
Kyrgyzstan, Moldova, Mongolia, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan andVietnam.
Q4. Article 1.3oftheDecision refers towhere "products are[merely] transshipped": please
explain howtheinvestigating authority defines goods intransit?
Reply
Acountry oftransshipment isacountry through which goods areshipped enroute between
thecountry ofexport andthecountry offinaldestination. There would belittlevalue added tothe
product insuchacountry, andcertainly notenough forittoobtain theorigin ofthatcountry.
Q5. Article 2.1provides thatthenormal value maybeestablished onthebasis ofother sellers
orproducers. What ismeant byother sellers orproducers? Howshould thisbeunderstood taking
intoaccount thattheAnti-Dumping Agreement doesnotexplicitly provide forthispossibility?
Before having recourse toinformation fromoutside thecompany, should theinvestigating authority
notfirstexhaust thepossibilities expressly provided forintheCode orusepartial information
from theenterprise inquestion supplemented byoutside information?
Reply
There isnohierarchy intheoptions setoutinArticle 2.2oftheWTO Agreement. Thesame
applies totheECSC legislation. The"other sellers andproducers" referred tounder Article 2.1are
those identified andinvestigated inthecontext ofthesameinvestigation. Thepossibility ofusing such
prices isinconformity withArticle 2.2.2 (iii)oftheWTO Anti-Dumping Agreement. Ifthere are
nosuch"other sellers orproducers" intheexporting/originating country, thenormal value willbe
established asfurther laiddown intheWTO A-DAgreement, i.e.byconstructing from costof
production, SG&A andprofit.
Q6. Article2.1mentionsthatpricesbetweenpartieswhichareassociatedorhaveacompensatory
arrangement canbeusedtoestablish thenormal value ifitisdetermined thattheyareunaffected
bytherelationship. What criteria doestheinvestigating authority usetoconsider thatthese prices
arenotaffected bytherelationship?
Reply
Therelationship between associated parties isdeemed topreclude theuseofprices charged
between themwhen suchprices canbeseentobeorhavebeenaffected bythatrelationship, e.g.when
suchprices, orthecosts involved inmaking suchsales, differ from costs andprices associated with
other sales.G/ADP/Q1/EEC/10
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Q7. Article 2.3mentions asoneoftheoptions fornormal value thecostofproduction inthe
country oforigin plusareasonable amount forselling, general andadministrative costs andfor
profits, ortheexport prices toanappropriate third country. Inthisregard, isthere anorder
ofpreference forusing oneoption ortheother? Ifnot,what criteria would beused?
Reply
When there areinsufficient sales intheordinary course oftrade onthedomestic market of
theexporter, theECnormally usesconstructed normal value (costofproduction plusselling, general
andadministrative expenses, plusreasonable profit).
Q8. What degree ofinjury isnecessary todetermine thatthere ismaterial injury, andhow
isthisconclusion reached under Article 3.6?
Reply
TheEC'sdefinition ofinjury setoutinArticle 3.1oftheECSC Decision isidentical tothat
contained infootnote 9oftheWTO Agreement. Material injury maybedeemed tobepresent when
thefactors described inArticle 3.5,taken asawhole, reveal significant adverse effects. Thisnotion
of"significant" effects isdrawn fromthereferences toprice andvolume effects setoutinArticle 3.2
oftheWTO Agreement.
Q9. Inaccordance withArticle 4.1(a), would thedivision oftheterritory oftheCommunity
intoisolated markets involve theterritory ofacountry orofagroup ofcountries, orcanitbe
adivision byeconomic regions?
Reply
Onprinciple, the"exceptional circumstances" which mayleadtotheconsideration thatpart
ofCommunity territory contains aseparate industry initsowncompetitive market, could apply toan
economically distinct region within aMember State. Thisprinciple isinfullconformity withArticle 4
oftheWTO Agreement. Inreality, suchsub-divisions ofCommunity Member States areextremely
rare.
Q10. How isthedegree ofsupport fororopposition totheinitiation ofaninvestigation
determined? How isthisdone inthecaseofisolated markets?
Thestanding ofcomplaints isestablished inconformity withArticle 4oftheWTO Agreement.
InbothCommunity-wide andregional proceedings, levels ofsupport (andopposition) aredetermined
byconsultations withtheproducers, ortheirrepresentatives, orthrough sampling techniques ifthe
number ofsuchproducers islarge. Itshould beborne inmind thatinregional cases theinjury has
tobeestablished forthequasi-totality ofproducers present intheregion concerned.
Q11. Whyistheorder ofparagraphs (a)and(b)ofArticle 6different from theorder established
inArticle 2.2.2, subparagraphs (i)and(ii)oftheAnti-Dumping Agreement?
Reply
TheECpresumes thatMexico intended torefertoArticle 2.6oftheECSC Decision rather
thanArticle 6.G/ADP/Q1/EEC/10
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There isnohierarchy intheoptions setoutinArticle 2.2.2 oftheWTO Agreement; thesame
applies toEClegislation. Nevertheless, itisprobably fairtosaythattheECwillfinditmoreappropriate
touseamounts actually usedforother producers oftheproduct under investigation rather thantohave
togototheconsiderable trouble ofextending theinvestigation toproducts which arenotpartofthe
proceeding.
Q12. Under Article 8.6,inwhat cases canthetemporary maintenance ofanundertaking be
considered inthecaseofanegative determination ofdumping orinjury? What evidence will
theinvestigating authority usetocomplete theinvestigation onceaprice undertaking hasbeen
agreed between theinterested parties?
Reply
Ifundertakings areaccepted priortothecompletion ofaninvestigation, thatinvestigation shall
stillnormally becompleted -theCommunity 'sposition hasinreality beentocomplete investigations
inevery suchcase. Furthermore, there hasnever beenacasewhere undertakings were maintained
following afinalfinding ofnodumping ornoinjury.
Thelanguage oftheCommunity 'sArticle 8.6onthepossibility ofmaintaining undertakings
istaken directly from Article 8.4oftheWTO Agreement. Intheory, itwould seem reasonable to
maintain anundertaking foraperiod oftimeifitweretheexistence ofthatundertaking which ledto
afinding ofnoinjurious dumping. Inpractice, itisdifficult toenvisage howsuchasituation could
arisegiven thatanyinvestigation period selected atthestartofaproceeding would necessarily exclude
thetimeduring which anundertaking became operational.
Q13. With regard toArticle 2.10(a), what ismeant by"areasonable estimate ofthemarket
value ofthedifference" inphysical characteristics? Please specify themethod ofestimation and
thepreferred sources from which itisobtained?
Reply
Themethod forobtaining areasonable estimate ofthemarket value ofdifferences inphysical
characteristics isbydefinition casespecific. There canbenofixed method orsource ofinformation
forgeneral application. Wherever suchadjustments aremade, anexplanation ofthemethod usedis
made available toallinterested parties.
Q14. With regard toArticle 2.10(d), what ismeant bydifferences inlevels oftrade andhow
isthisdifferent from other types ofdifferences included indiscounts, rebates, quantities andother
terms andconditions ofsale?
Reply
ThisprovisionwillbeamendedtoensureconformitywiththebasicEClegislationfornon-ECSC
products (noinvestigations areinprogress under thecurrent ECSC legislation). Theadjustment for
differences inleveloftrade isapplied when thecomparison ofexport price andnormal value would
otherwise beunfair, duetodifferences inthefunctions performed bythesellers atthepoint ofsale
tothefirstindependent buyers ineachmarket. Adjustments willbegranted where suchdifferences
areshown toaffect price comparability.G/ADP/Q1/EEC/10
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Q15. What ismeant by"areasonable estimate ofthemarket value ofthephysical difference",
andwhat isthemethod ofestimation, andthepreferred sources forobtaining suchestimation?
Reply
TheECassumes Mexico intended torefertothe"market value ofthedifference" inlevelof
trade (Article 2.10(d)).
Normally theECwould quantify thisallowance viadifferences inprices actually paidattwo
levels oftrade. However, iftwodiscernable levels donotexist, theECwould beprepared totake
account ofanyreasonable evidence inthisrespect. Inthefinalanalysis, aspecial allowance insome
form willbegranted -evenwhere nosuchevidence hasbeenforthcoming -ifadifference inlevels
oftrade clearly exists.
Q16. With regard tothecalculation ofthemargin ofprice discrimination onthebasis ofa
comparison transaction bytransaction, howarethetransactions tobecompared selected -i.e.
considering clients, dates orsome other criterion?
Reply
Inatransaction bytransaction comparison between export prices andnormal values, all
transactions within theinvestigation period areincluded inthecalculation. Itisvitaltoensure that
likeiscompared withlike(e.g.product sub-groupings arecompared onlywiththeircounterparts to
ensure accurate model-by-model comparison). There isnoselection oftransactions which takeplace
onthesame dateortothesame customer, forexample, forthispurpose.
Q17. With respect toArticle 2.12, please explain theweighting factor used tocalculate the
weighted-average price discrimination margin.
Reply
Aweighted average dumping margin incaseswhere dumping margins varyissimply established
bydividing thetotalamount ofdumping bythetotalc.i.f. Community frontier value (expressed as
apercentage).
Q18. What istheroleoftheconsultations provided forinArticle 15,paragraph 3,inthe
determination oftheexistence andamount ofinjury?
Reply
Thequestion refers totheEuropean Community 'sinternal consultation machinery. The
informationprovidedbytheCommissiontoCommunityMemberStates'delegatesgivesafullexplanation
oftheinvestigation findings andhowtheywere reached.
Q19. With regard toArticle 16.1, arethereasons given theonlyonesforwhich verification
oftheinformation willnotbecarried out?
Reply
On-spot verifications arenormally carried outwhen aproper andtimely replytoaquestionnaire
isreceived, andareveryrarely undertaken when nosuchreply hasbeenforthcoming. There may
ofcourse beother reasons whyon-spot visits toallrespondents donottakeplace, suchaslackofG/ADP/Q1/EEC/10
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agreement bythefirms concerned, theapplication ofsampling, orevenbudgetary constraints onthe
investigating authorities.
Q20. With regard toArticle 16,what aretheconsequences ofnotaccepting averification visit?
Reply
Refusal toagree toaproposed verification visitmeans thattheCommission willusethebest
information available from sources other thanthenon-cooperating company.
Q21. What sampling criteria areconsidered statistically valid intheCommunity 'sview in
accordance withArticle 17.1?
Reply
TheCommunity hasthusfaronlylimited itsexaminations inaccordance withthefinalmethod
outlined inArticle 6.10oftheWTO Agreement, i.e.limiting theexamination tothelargest percentage
ofthevolume oftheexports fromthecountry inquestion which canreasonably beinvestigated. The
Commission isopentosuggestions astowhatconstitute themostpractical "statistically validsampling
techniques".
Q22. With regard toArticle 17,howistheprice discrimination margin calculated forenterprises
thatarenottaken intoaccount inthesample butexpress aninterest inparticipating, orfor
enterprises which provide information andevensoarenottaken intoaccount forthesample under
Article 17,paragraph 3?
Reply
Cooperating companies notselected forthesample under Article 17shallbegiven anindividual
dumping margin unless thenumber ofcompanies requesting individual treatment ofthiskindisso
large astomake theaccurate completion ofsuchassessments unmanageable inthetimeavailable.
Insuchcases, when largenumbers ofcompanies areinvolved, theywillbeaccorded adumping margin
equal totheweighted average ofthemargins established forthesampled companies.
Q23. What isthemeaning of"alessfavourable result" inArticle 18.6?
Reply
Thenotion ofapotentially "less favourable result" referred toinArticle 18.6oftheECSC
Decision isthesame asthatsetoutinAnnex II(point 7)totheWTO Anti-Dumping Agreement. The
withholding ofrelevant information bycompanies means thattheinvestigating authorities areobliged
tolooktoother sources, which mayleadtolessfavourable conclusions thanwould theinformation
heldbythecompany itself.
Q24. WithregardtoArticle18,whatistheprobativevalueoftheapplicant'sassertionsinrelation
tothepartial information provided bysome other party appearing intheproceedings?
Reply
Incasesonnon-cooperationwheretheCommissionisobligedtoresorttothebestfactsavailable,
theinformation supplied inthecomplaint willnormally beconsidered asitisclearly readily available.G/ADP/Q1/EEC/10
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However, itwillnotbetaken inisolation where other information isalsoavailable, either asprovided
byother parties inthecourse oftheinvestigation, orfrom other independent sources.
QUESTIONS FROM THE UNITED STATES
Q1. Article 1.1ofCouncil Regulation (EC) No. 2331/96 of2December 1996
(G/ADP/N/1/EEC/2/Suppl.1, Page 3)amends paragraph 10ofArticle 2ofRegulation (EC)
No.384/96 (G/ADP/N/1/EEC/2 Page 9),replacing subparagraph (d).Theamendment at(d)(ii)
provides that, when anexisting difference inlevel oftrade cannot bequantified, aspecial
adjustment maybegranted. What kindofshowing willberequired toquantify theamount of
thespecial adjustment?
Reply
Thequestion highlights thedifficulty involved infine-tuning theallocation ofcosts toensure
faircomparison between export price andnormal value. Howcantheunquantifiable bequantified?
Normally, theECwould quantify thisallowance viadifferences inprices attwolevels oftrade.
However, iftwodiscernible levels donotexist, theECwould beprepared totakeaccount ofany
reasonable evidence inthisrespect. Inthefinalanalysis, aspecial allowance insome form willbe
granted -evenwhere nosuchevidence hasbeenforthcoming -ifadifference inlevels oftradeclearly
exists.
Q2. Article 1.2ofCouncil Regulation (EC) No. 2331/96 of2December 1996
(G/ADP/N/1/EEC/2/Suppl.1, Page 3)amends paragraph 10ofArticle 2ofRegulation (EC)
No.384/96 (G/ADP/N/1/EEC/2, Page 10),adding subparagraph (k).Subparagraph (k)provides
thatanadjustment bemade fordifferences infactors nototherwise provided forinparagraph 10
ifitisdemonstrated thattheyaffect price comparability asrequired under thisparagraph, in
particular thatcustomers consistently paydifferent prices onthedomestic market because ofthe
difference insuchfactors. Isthereference todifferent prices onthedomestic market intended
tolimittheapplicability ofsubparagraph (k)tosituations inwhich thefactor which differs between
thenormal value andtheexport orconstructed export price isafactor which willalsodiffer in
thesame manner inthenormal value market?
Reply
Theverification ofwhether pricedifferences affect pricecomparability isalways doneinrelation
totheexporter 'sdomestic market which, inanti-dumping terms, isdeemed tobethe"benchmark"
market orthe"fair" value market.
Q3. Willanadjustment pursuant tosubparagraph (k)alsobeavailable ifnormal value isbased
onthird country sales orconstructed value?
Reply
Yes. Anadjustment pursuant toArticle 2.10(k) willalsobeavailable ifnormal value isbased
onthirdcountry salesorconstructed value.
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