RESTRICTED
WORLD TRADE G/SCM/W/19
12July1995
ORGANIZATION(95-1963)
Original: English Committee onSubsidies andCountervailing Measures
QUESTIONS CONCERNING THE NOTIFICATION
PROVIDED BYTHE GOVERNMENT OFKOREA OFLAWS AND
REGULATIONS UNDER ARTICLE 32.6OFTHE AGREEMENT
Thefollowing communication, dated 3July1995, hasbeen received from thePermanent
Delegation oftheEuropean Community.
_______________
Please findenclosed thewritten questions submitted bytheEuropean Community inviewof
thelegislation review tobecarried outinthenextmeeting oftheAnti-Dumping andSubsidies and
Countervailing Measures Committees.
Withregard toSouth Korea 'scountervailing dutylegislation, notified on15March 1995under
Article 32(6) oftheWTO Subsidies Agreement (Document G/SCM/N/1/KOR/1), theEuropean
Community hasthefollowing questions:
1. TheCustoms Act
Article 13(Countervailing Duty)
(5) Itisnotclear what thetext"The provisions ofArticle 10(5) to(8)shallbeapplied mutatis
mutandis tothecases asreferred toinparagraphs (1)to(4)"means, e.g.whatprovisions doArticle 10
contain?
2. TheEnforcement Decree oftheCustoms Act
Article 4-20(Subsidies, etc.)
(3) Thecalculation oftheamount ofasubsidy interms oftheactual benefit totherecipient is
based onsuchmethods asprescribed bytheOrdinance ofthePrime Ministry. Article 5(3)(4) ofthe
Ordinance provides inthecaseoftheprovision orpurchase ofgoods andservices, thatthisshallbe
theamount equal tothedifference between suchprice andtheirmarket price. Article 14(d) SCM
however provides thattheprovision ofgoods orservices orpurchase ofgoods byagovernment shall
notbeconsidered asconferring abenefit unless theprovision ismade lessthanadequate remuneration,
which isdetermined inrelation toprevailing market conditions.
CantheKorean authorities please explain whytheyapply adifferent approach andwhether
theycanassure compliance withArticle 14(d) SCM?G/SCM/W/19
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Article 4-3(Initiation oftheInvestigation onSubsidization andMaterial Injury)
(1) Theinitiation ofaninvestigation isdetermined bytheTrade Commission. Article 4-21provides
thatthisprovision shallmutatis mutandis apply totheinvestigation andimposition ofacountervailing
duty, asprescribed inArticle 13oftheAct.However, noreference ismade toconsultations asprovided
inArticle 13(1) SCM before theinitiation ofanyinvestigation.
AretheMembers, theproducts ofwhich aresubject toaninvestigation, consulted atanyother
stage before initiating aninvestigation?
Article 4-8(Request fortheCooperation ofInterested Parties ontheMaterials, etc.)
(7) Anydocumentary evidence presented under Article 4-2(4) shallbedisclosed toaninterested
party upon request.
TheKorean notification does, however, notcontain Article 4-2(4), whatkindofdocumentary
evidence istherefore meant here?
(9) Thecustomscollector,theheadofabankdealingwithforeignexchangeservices,anotheragency
concerned, oraninterested organization cannotify theMinister ofFinance andEconomy thatimported
products arebeing dumped intheirview. Article 4-21provides thatthisprovision shallmutatis mutandis
apply totheinvestigation andimposition ofacountervailing duty, asprescribed inArticle 13ofthe
Act.
Does thismean thattheauthorities canstartaninvestigation andimpose acountervailing duty
without acomplaint ofthedomestic industry suffering material injury?
Article 4-10(Application ofProvisional Measures)
(2) Article 17(4) SCM provides thattheapplication ofaprovisional dutyshallbelimited toas
short aperiod aspossible, notexceeding fourmonths. Theprovisions intheKorean Enforcement
Decree oftheCustoms Actprovide alsothataprovisional measure shallnotexceed fourmonths.
However, upon request ofanexporter representing asignificant percentage oftrade involved, the
application period maybeextended tosixmonths. Thisextension would apparently benotconsistent
withArticle 17(4) oftheWTO Subsidies Agreement.
Has"asignificantpercentageoftrade"beendefinedandunderwhichconditionsistheapplication
extended?
(3) Likewise, theMinister ofFinance andEconomy mayprolong theapplication period ofthe
provisional measures "inaccordance withtheinternational agreement" ifitisdeemed necessary.
IstheSCM meant here? Ifso,canKorea elaborate onthis,i.e.when canthefourmonths
initsviewbeextended?
Article 4-11(Undertakings toRevise thePrice, toCease Exporting, etc.)
(2) When theexporter agrees torevise itsprices immediately, ortheexport isceased within a
maximum period ofsixmonths, orthequantity ofexport isreduced toacertain level, theMinister
ofFinance andEconomy mayaccept suchundertakings. Inthecaseofceasing exports, thequantity
oftheproducts exported between thedateoftheundertakings andthedateofthecessation maynot
exceed "such alevel astheMinister ofFinance deems proper". TheWTO Subsidies AgreementG/SCM/W/19
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prescribes inArticle 18(1)(b) inthecaseofapriceundertaking apriceincrease, nothigher thannecessary
toeliminate theamount ofthesubsidy.
Does Korea apply aninjury threshold andconsequently alesser-duty rule?
Article 4-12(Retroactive Imposition oftheAnti-Dumping Duty)
(1) InSection 4ofthisparagraph itisstated thatanti-dumping duties canbelevied retroactive
to"other products imported during suchaperiod asdetermined bytheMinister ofFinance andEconomy
under theconditions asprescribed bytheinternational agreement". Article 4-21provides thattheterm
"anti-dumping duty" usedinArticle 4-12shallmean "countervailing duty".
Please, elaborate onthekindofproducts thataremeant here, istheinternational agreement
mentioned theAnti-Dumping Agreement?