WORLD TRADE G/ADP/N/1/ECU/1
G/SCM/N/1/ECU/1
8November 1995
ORGANIZATION(95-3447)
Original: Spanish Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
NOTIFICATION OFLAWS AND REGULATIONS
UNDER ARTICLES 18.5and32.6OFTHE AGREEMENTS
ECUADOR
Theattached communication, dated 1August 1995, hasbeenreceived from thePermanent
Mission ofEcuador, anObserver Government.G/ADP/N/1/ECU/1
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AGREEMENT ONIMPLEMENTATION OFARTICLE VI
OFGATT 1994
AND
AGREEMENT ONSUBSIDIES AND COUNTERVAILING MEASURES
Ecuador'slegislationandthesubregionalrules,whichhaveforceoflawinEcuador1,incorporate
inasingle legaltexttheprecepts oftheAgreement onImplementation ofArticle VIofGATT 1994
andtheAgreement onSubsidies andCountervailing Measures, specify theirscope ofapplication, and
determine thetime-limits, procedures andcompetent bodies forinvestigating cases.
Ecuador istherefore presenting asingle Notification covering bothmultilateral agreements.
InEcuador, theMinister forFinance andPublic Credit isempowered toestablish measures
toprevent orremedy dumping orsubsidization, subject toapriordecision bytheSpecial Commission
oftheTariff Committee.
Ecuador 'sregulations toprevent orremedy dumping orsubsidization statethattheproducer
concerned must submit fororonbehalf ofhisindustry awritten application fortheinitiation ofan
investigation andtheapplication ofpreventive orremedial measures. Theapplication mustcontain
sufficient evidence oftheexistence ofdumping orsubsidization andshow thattheyrepresent aninjury
fordomestic industry.
Within fivedaysfrom thedateofreceipt oftheapplication, interested parties arecontacted
directly bytheMICIP2regarding thematter andarerequested toprovide allinformation necessary
tocommence investigation oftheproducer orexporter oftheproduct subject tothepractice.
During theinvestigation, access togeneral information andnon-confidential documents, as
wellastosummaries orassessments oftheevidence, isallowed. Competent organizations, authorities
andofficialsmaynotdisclosetheevidenceandinformationsubmittedforthepurposesoftheinvestigation
when these areofaconfidential nature.
Pursuant todomestic legislation, thecompetent authority gives priority toconvening meetings
among parties interested intheinvestigation sothattheymaysubmit theirarguments andreach adirect
solution.
Aperiod offourmonths from thedateofreceipt oftheapplication isallowed forthe
investigation; thisperiod maybeextended forafurther twomonths atthediscretion oftheSpecial
Commission. Insuchcases, theSpecial Commission mayrecommend theapplication ofprovisional
orpreventive measures untiltheMinister forFinance andPublic Credit adopts definitive measures.
1TheCommission oftheCartagena Agreement, inDecision No.283,enacted rules toprevent orredress
distortionsincompetitionarisingoutofdumpingorsubsidies.Asamemb erState,Ecuadorisobligedtoimplement
thisDecision.
TheimplementingregulationsaretobefoundinExecutiveDecreeNo.2722-Aof13November1991,published
intheOfficial Journal (Registro Oficial) No.780 of30November 1991.
2Ministry ofIndustry, Trade, Integration andFisheries, National Directorate ofForeign Trade.G/ADP/N/1/ECU/1
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Where theinjury orthreat ofinjury issufficiently serious torequire theadoption ofprovisional
remedial orpreventive measures, apreliminary investigation shallbecarried outonthebasis ofthe
information available within aperiod notexceeding 20daysaftertheapplication hasbeenmade and,
inaddition, theSpecial Commission shallbeconvened within thefollowing fiveworking daysinorder
tomake arecommendation ontheadoption ofremedial measures.
Final decisions ontheexistence ofdumping orsubsidization andinjury caused todomestic
industry bysuchpractices, aswellasontheattenuation orsuspension oftheirapplication, arepublished
intheRegistro Oficial .Incases ofdumping, domestic legislation provides fortheapplication ofduties
onthedumped imports inanamount equal tothemargin ofdumping determined orlessiftheamount
issufficient toremove thethreat ofinjury ortheinjury thathasbeenconfirmed.
Inthecaseofsubsidies, countervailing duties shallbeimposed onsubsidized imports inan
amount equal totheamount ofthesubsidy orlessiftheamount issufficient toremove thethreat of
injury ortheinjury thathasbeenconfirmed.
Remedial measures toprevent orredress distortions caused bybothdumping andsubsidies
maynotbeapplied simultaneously tothesame imported product. Anti-dumping orcountervailing
duties mayremain ineffect foruptotwoyears.
Ecuador 'sforeign service andother offices oftheMinistry ofForeign Affairs accredited to
governmentsabroadmayprovideinformationtocomplementinvestigations,recommendationsorstudies
inforeign markets todetermine theexistence ofdumping. Information mayalsobeobtained ontrade
transactions thatarethesubject ofdumping through legally constituted domestic orforeign specialized
enterprises.
Adetermination oftheexistence ofmaterial injury orthreat ofmaterial injury isbased on
examination ofthefollowing:
(a) Thevolume ofimports subject tosuchpractices, inparticular todetermine whether
therehasbeenasignificant increase either inabsolute terms orrelative toproduction,
consumption andimports inEcuador;
(b) theprices ofdumped orsubsidized imports, inparticular todetermine whether they
aresignificantly lower thanprices forlikeproducts asaresult oftheunfair trade
practices;
(c) theeffects onthedomestic industry astheyappear fromtrends inproduction, domestic
sales, market share, profits, productivity, return oninvestments, utilization ofinstalled
capacity, actual orpotential negative effects oncashflow, inventories, employment,
wages, growth andinvestment capacity.
Ecuadorian legislation establishes administrative review procedures. Allinterested parties may
make useofthese procedures.
Ecuador hasnotyetapplied anycountervailing oranti-dumping duties.
Ecuador 'slegislation doesnotatpresent distinguish between specific subsidies andgeneral
subsidies. Since specific subsidies weredefined forthefirsttimeintheAgreement onSubsidies and
Countervailing Measures ofGATT 1994, when itbecomes amember oftheWTO Ecuador willrevise
itslegislation inorder toutilize thedefinition given inthatAgreement.G/ADP/N/1/ECU/1
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In1990, Ecuador began toimplement apolicy toeliminate production andexport subsidies.
Itisaware oftheimportance ofpolicies toassist industry, particularly intheexport sector, forthe
economic development programmes ofdeveloping countries, asstated inArticle 14oftheGATT
Subsidies Code.
Ecuador doesnotcurrently grant anybenefits oradvantages under specific lawstopromote
theproduction ofindustrial andagricultural goods; therearenoexport orcredit subsidies andnofiscal
encouragement orincentives. Ecuador doesnothaveanyproduction subsidies intheformofartificial
ratesforpublic services.
Consequently, Ecuador confirms thatitscurrent legislation conforms totheprovisions ofthe
Agreement onImplementation ofArticle VIoftheGeneral Agreement onTariffs andTrade 1994and
theAgreement onSubsidies andCountervailing Measures.
ThetextsofDecision No.283oftheCommission oftheCartagena Agreement andExecutive
Decree No.2722-A of13November 1991, published intheOfficial Journal, No.780of
30November 1991, areattached.G/ADP/N/1/ECU/1
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Fifty-Fifth Regular Session oftheCommission
21-22 March 1991
Lima, Peru
DECISION 283
Rules ToPrevent OrRedress Distortions InCompetition
Arising OutOfDumping OrSubsidy Practices
THE COMMISSION OFTHE CARTAGENA AGREEMENT,
HAVING REGARD TOChapter VIIIoftheCartagena Agreement, Decisions 230,258,281
andProposal 223/Rev.3 oftheBoard,
CONSIDERING:
ThattheCommission adopted Decision 230,establishing rules forpreventing orremedying
practices thatmaydistort competition;
ThatDecision 258establishes thattheCommission, uponaproposal bytheBoard, shallrevise
therules ontrade competition;
ThatDecision 281establishes that,atthelatest on31March 1991, theCommission, upon
aproposal bytheBoard, shallrevise therules ontrade competition laiddown inDecision 230;
Thatinordertoachievetheobjectivesoftheintegrationprocesswithinaframeworkcharacterized
byopenness,itisnecessarytoenhancesubregionalrulesoncompetition,takingadvantageofinternational
experience, sothattheyconstitute effective mechanisms toprevent orredress distortions caused by
dumping orsubsidies;
Thatbecause oftheirorigin andscope, itisnecessary todistinguish between dumping and
subsidies, which arethesubject ofthisDecision, andpractices which restrict freetrade, aswellas
export restrictions;
Thattheregulations onsubsidies inthisDecision shallbeapplicable while commitments on
theharmonization offoreign tradepromotion instruments areundertaken or,iftheincentives framework
ofsuchharmonization causes distortions incompetition incertain special cases.
DECIDES:
I.SCOPE OFAPPLICATION
Article 1.Theobjective oftherules inthisDecision istoprevent orredress distortions in
competition caused bydumping orsubsidies.
Article 2.Member States orenterprises which havealegitimate interest mayrequest the
Board toauthorize theapplication ofmeasures toprevent orredress distortions incompetition inthe
subregional market caused bydumping orsubsidies inthefollowing cases:G/ADP/N/1/ECU/1
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(a) Where practices originating intheterritory ofanother member Statethreaten tocause
orcause material injury todomestic production forthedomestic market ofthecountry
concerned;
(b) where practices originating inamember Statethreaten tocause orcause material injury
todomestic production forexport toanother member State;
(c) where practices originating inacountry outside thesubregion threaten tocause orcause
material injury todomestic production forexport toanother member State; and
(d) where practices originating inacountry outside thesubregion threaten tocause orcause
material injury toitsdomestic industry; thisapplies toproducts subject totheCommon
External Tariff; andthecorrective measures mustbeapplied inmore thanonemember
State. Inother cases, thedomestic regulations ofeachmember State mayapply.
Forthepurposes ofthisDecision, threat ofinjury shallinclude material retardation inthe
establishment ofadomestic industry.
II.DUMPING
Article 3.Animport isdumped when theexport price islessthanthenormal value fora
likeproduct when destined forconsumption oruseinthecountry oforigin orofexport intheordinary
course oftrade.
Article 4.Alikeproduct isaproduct which isalikeinallrespects totheproduct subject
tothepractice orintheabsence ofsuchaproduct another product which hasverysimilar characteristics,
taking intoconsideration elements suchasitsnature, quality, useandfunction.
Article 5.Theexport priceisthepriceactually paidorpayable fortheproduct soldforexport
toamember State.
Incases where there isnoexport price orwhere itappears totheBoard thattheprice is
unreliable because ofassociation oracompensatory arrangement between theexporter andtheimporter
orathirdparty, theexport price maybeconstructed onthebasis oftheprice atwhich theimported
products arefirstresold toanindependent buyer. Iftheproducts arenotresold toanindependent
buyer, ornotresold inthecondition asimported, theprice maybeconstructed onsuchreasonable
basis astheBoard maydetermine.
Incalculating theexport price, thenecessary adjustment shallbemade toallow forallcosts
incurred priortoresale, including allduties andtaxesandareasonable margin ofprofit. Theadjustments
shallalsotakeintoaccount interaliathecosts oftransport, insurance, maintenance andunloading;
import duties andother taxes payable afterexport from thecountry oforigin; areasonable margin
ofgeneral, administrative andselling costs; areasonable margin ofprofit, andanycommission usually
paid.
Article 6.Forthepurposes ofthisDecision, "normal value" means theamount actually paid
orpayable foralikeproduct bycomparison withtheproduct imported intothemember State, when
soldforconsumption oruseinthedomestic market ofthecountry oforigin orofexport, intheordinary
course oftrade.G/ADP/N/1/ECU/1
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Theordinary course oftradeshallmean transactions between associated parties orparties who
areabound byacompensatory arrangement, provided thattheprices andcostsarecomparable tothose
intrade between independent parties.
Where there arenosalesofthelikeproduct intheordinary course oftrade inthedomestic
market ofthecountry oforigin orofexport orwhere suchsalesdonotpermit areliable determination
ofthenormal value, itshallbedetermined:
(a) Byconsidering thehighest export priceforthelikeproduct exported toathirdcountry,
provided itisrepresentative;
(b) intheabsence ofsuchaprice, byconsidering theconstructed priceofthelikeproduct.
Thisshallbebased onthecostofproduction intheordinary course oftrade inthe
country oforigin, plusareasonable amount foradministrative andselling costs and
profit. Asageneral rule,theaddition forprofit shallnotexceed theprofit normally
realized onsalesofproducts inthesamecategory inthedomestic market ofthecountry
oforigin;
(c) where there isnoexport price toathirdcountry thatisrepresentative ortheprice of
alikeproduct cannot beconstructed, thenormal value maybecalculated onareasonable
basis tobedetermined bytheBoard;
(d) inthecaseofimports coming fromandoriginating incountries withcentrally-planned
economies, thenormal value shallbedetermined onthebasisofthecomparable price
intheordinary course oftradeatwhich thelikeproduct issoldinathirdcountry with
amarket economy andasimilar levelofdevelopment fordomestic useorconsumption.
Where there isnocomparable price, thenormal value maybeconstructed ona
reasonable basis tobedetermined bytheBoard.
Incases where products arenotimported directly fromthecountry oforigin butfromathird
country, theprice atwhich theproducts aresoldfrom thecountry ofexport toamember State shall
normally becompared withthecomparable priceinthecountry ofexport. However, comparison may
bemade withtheprice inthecountry oforigin if,forexample, theproducts aremerely transshipped
through thecountry ofexport, orsuchproducts arenotproduced inthecountry ofexport orthere
isnocomparable price forthem inthecountry ofexport.
Article 7.Themargin ofdumping istheamount bywhich theexport price islessthanthe
normal price. Thismargin shallbecalculated perunitofproduct imported atthedumping price.
Theexport price andthenormal value shallbeexamined onacomparable basis inrespect of
thephysical characteristics oftheproduct, thequantities andconditions ofsale,taking intoaccount
differences intaxes andother criteria thatmight affect price comparison. Thecomparison shallbe
made atthesame stage ofthetransaction, usually attheex-factory level, andinrespect ofsalesmade
atasnearly aspossible thesame time.
III.SUBSIDIES
Article 8.Animport hasbeensubsidized when theproduction, manufacture, transport or
export oftheimported goodoritsrawmaterials orinputs hasreceived directly orindirectly anybounty,
aid,premium orsubsidy inthecountry oforigin orofexport. Inthecaseoftransport, thegeographical
situation ofBolivia asaland-locked country shallbetaken intoaccount.G/ADP/N/1/ECU/1
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Theexistence ofmultiple currency practices relating totrade andfinancial transactions inthe
country oforigin orofexport maygiverisetoasubsidy andtherefore beconsidered assuchforthe
purposes ofthisDecision.
Article 9.Theamount ofthesubsidy shallbecalculated inmonetary units oradvalorem
perunitofthesubsidized product imported.
Theamount ofthesubsidy shallbeestablished bydeducting interaliaanyexpenditure that
hashadtobeincurred inorder tobenefit fromthesubsidy andtaxesorother levies towhich theexport
hasbeensubjected.
Inthecaseofmultiple currency practices, theamount ofthesubsidy shallbedetermined on
thebasisoftherulesestablished within theframework ofharmonization ofexchange policies. Inthe
absence ofsuchharmonization, theBoard shallprovide atechnical estimation oftheamount ofthe
subsidy.
Indetermining thesubsidy, likeproduct shallmean aproduct which isalikeinallrespects
totheproduct subject tothepractice or,intheabsence ofsuchaproduct, another product which has
verysimilar characteristics, taking intoconsideration elements suchasitsnature, quality, useand
function.
IV.PROCEDURE
Article 10.Thefollowing shallbeentitled tosubmit anapplication:
(a)member States through theirrespective liaison bodies; and
(b)theenterprise orenterprises which havealegitimate interest totheextent allowed
bynational legislation.
Theapplication shallcontain thefollowing information:
- Thenature ofthepractice anditsduration;
- thecharacteristics oftheproducts subject tothepractice;
- theenterprises involved;
- theevidence giving risetothepresumption oftheexistence ofathreat ofinjury or
injury todomestic industry orexports, caused byimports ofproducts subject tothe
practice which arealiketothose produced orexported andhavebeenimported within
theprevious 12months orareintheprocess ofbeing imported;
- thelevels oftheduties requested.
When theBoard hasreceived theapplication, itshalltransmit ittotheliaison bodies where
theenterprises involved intheinvestigation carry outtheireconomic activity.
Article 11.TheBoard shallnotinitiate aninvestigation iftheapplication isincomplete. In
suchcases, itshallinform theapplicant accordingly, specifying theinformation thatislacking, within
20working daysfollowing thesubmission oftheapplication.G/ADP/N/1/ECU/1
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IftheBoard considers thattheapplication iscomplete, within 20working daysfromthedate
ofitssubmission, itshalldecide onthecaseinareasoned resolution. Theresolution shallalsobe
communicated tothecomplainant enterprise orenterprises.
Article 12.Duringtheinvestigation,theBoardmayrequestandcollectevidenceandinformation
from theliaison bodies and,either through them ordirectly, from producers, exporters, importers
orconsumers withalegitimate interest intheinvestigation. Thelatter mayalsoprovide information
or,asappropriate, present theirarguments totheBoard.
Where theBoard requests, collects orreceives evidence andinformation directly, itshall
communicate ittotherespective liaison bodies.
TheBoard mayalsorequest andcollect evidence andinformation fromexporters andauthorities
ofcountries outside thesubregion whose products arebeing investigated. Suchexporters orauthorities
mayprovide information, orwhere appropriate, present theirarguments totheBoard.
Investigations carried outinapplication ofthisDecision shallunder nocircumstances hinder
thecustoms clearance ofthegoods concerned.
Article 13.TheBoard may, pursuant toitsauthority, request andcollect evidence, treatthe
information received asconfidential iftheapplicant requests andjustifies suchtreatment, because the
applicant isthesource oftheinformation andthedisclosure ofthatinformation mayhaveadverse effects
forhim.
SectionsofinternaldocumentspreparedbytheBoardormemberStateswhichcontainconfidential
information mayalsobetreated asconfidential.
Where anapplicant wishes evidence tobetreated asconfidential, heshallprovide asummary
oftheinformation likely tobedisclosed oranexplanation giving thereasons whyitisnotsusceptible
ofsummary. Inthelatter case, theBoard mayreject theexplanation anddisregard theevidence.
Likewise, evenifthere aregrounds fortherequest, theinformation maynotbedisregarded
iftheperson submitting itdoesnotprovide anon-confidential summary thereof, provided thatitis
susceptible ofsummary.
Theparties interested intheinvestigation mayrequest inwriting theinformation provided or
prepared inapplication ofthisDecision, anditmaybecommunicated provided itisnotofaconfidential
nature.
ThisArticle shallnotprevent thedisclosure ofgeneral information, and,inparticular, the
grounds onwhich theresolutions referred tointhisDecision arebased iftheyarerequired forthe
purposes oflegalproceedings. Suchdisclosure shallensure thattradesecrets ofpersons withalegitimate
interest intheinvestigation arenotrevealed.
Article 14.Duringtheinvestigation,theBoardmayconvenemeetingsexofficioorattherequest
ofoneoftheinterested parties withaviewtoreaching adirect solution, theundertakings andoutcome
ofwhich shallbecontained inanAct.
Nointerested party shallbeobliged toattend suchameeting andtheirabsence shallnotbe
detrimental totheircase.G/ADP/N/1/ECU/1
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TheBoard shalldecide onthecaseinareasoned resolution indicating theundertakings entered
intoandwhether itisdecided tosuspend theinvestigation ortocontinue itattherequest oftheperson
thatisthesubject ofthecomplaint.
Theexporters ortheauthorities inthecountry oforigin ofthepractice shall provide the
information required toverify compliance withtheundertakings entered into. Ifthese undertakings
arenotfulfilled ortherelevant information isnotprovided, theBoard shallresume theinvestigation
andimmediately establish anti-dumping orcountervailing duties atthelevels determined onthebasis
oftheinformation available, orinitsabsence, atthelevels requested bytheenterprises concerned.
Initsdefinitive decision, theBoard shalldetermine thecontinuation, modification orelimination of
theduties concerned.
Article 15.TheBoard shallhaveaperiod offourmonths, from thedateofpublication of
theResolution referred toinArticle 11ofthisDecision, tocarry outtheinvestigation.
Inspecial cases, thisperiod maybeextended byuptotwomonths, andtheBoard shallso
notify theapplicant.
Article 16.Intaking itsdecision, theBoard shalltakeintoaccount theexistence ofpositive
evidence regarding:
(a) Thedumping orsubsidization practices which distort competition;
(b) thethreat ofinjury ortheinjury caused bysuchpractices inaccordance withArticle 2
ofthisDecision; and
(c) thecausal relationship between thepractices andthethreat ofinjury ortheinjury.
Article 17.Adetermination ofthethreat ofinjury orinjury andthecausal relationship with
thepractices maybebased interaliaonexamination ofthefollowing:
(a) Thevolume ofimports subject tosuchpractices, inparticular todetermine whether
there hasbeenasignificant increase inabsolute terms orrelative toproduction and
consumption inthemember Stateconcerned orrelative toimports fromthecomplainant
member State;
(b) prices ofimports subject tosuchpractices, inparticular todetermine whether they
aresignificantly lower thanprices forlikeproducts intheabsence ofsuchpractices.
Itshallalsobedetermined whether theeffect ofsuchimports istodepress prices to
asignificant degree orlikewise prevent price increases which otherwise would have
occurred; and
(c) theeffects ontheindustry orexports ofthemember State estimated onthebasis of
actual orpotential trends intherelevant economic factors, forexample, production,
domestic sales, exports, market share, utilization ofinstalled capacity, employment,
inventories andprofits.
Article 18.Attheconclusion oftheinvestigation, theBoard shallissue, within aperiod of
20working daysfrom thedateprovided inArticle 15,areasoned Resolution regarding itsfindings
onthebasis oftheinformation available.G/ADP/N/1/ECU/1
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TheResolution shallindicate thelevels oftheduties established, theimports subject tothe
practices forwhich suchduties shallbeapplied, theperiod fortheiradoption andtheirduration. Where
appropriate, itshallalsoindicate thecriteria usedtodetermine theduration.
Article 19.WhentheBoard,attherequestoftheliaisonbodiesorinterestedparties,hasverified
thatthegrounds fortheResolution referred tointheprevious paragraph havechanged orceased to
exist, itshalldeclare theResolution partially ortotally without effect, amending orcancelling it.The
Board shallhaveaperiod ofthree months inwhich totakeitsdecision.
TheBoard mayalsoverify exofficio thatthegrounds fortheResolution havechanged orceased
toexistandamend orcancel it.
V.MEASURES
Article 20.Incases ofdumping, anti-dumping duties shallbeimposed onthedumped imports
inanamount equal tothemargin ofdumping determined orlessiftheamount isadequate toremove
thethreat ofinjury ortheinjury thathasbeenconfirmed.
Article 21.Incasesofsubsidies, countervailing duties shallbeimposed onsubsidized imports
inanamount equal totheamount ofthesubsidy orlower iftheamount issufficient toremove the
threat ofinjury ortheinjury thathasbeenconfirmed.
Article 22.Corrective measures toprevent orredress distortions caused bybothdumping
andsubsidies maynotbeapplied simultaneously tothesame imported product.
Article 23.Where thethreat ofinjury ortheinjury isevident, themember State orthe
enterprises which havealegitimate interest mayrequest theBoard toauthorize theapplication of
immediate corrective measures.
Where theBoard considers thattherequest isadmissible, itmayauthorize ordetermine the
establishment ofprovisional measures, which maybeintheform ofanti-dumping orcountervailing
duties, orthedeposit ofsecurity -either incashorbonds -equal totheamount oftheduty, within
aperiod of20working daysfrom thedateoftherequest mentioned intheprevious paragraph.
Suspension ofcustoms valuation shallbeanadequate provisional measure provided thatthenormal
dutyandtheestimated amount oftheanti-dumping dutyareindicated.
During theinvestigation, theBoard maysuspend theapplication ofprovisional measures and
initsdefinitive decision shalldetermine thecontinuation, modification orelimination ofthemeasures
established.
Where thedefinitive duties arehigher thantheprovisional duties paidorguaranteed, theamount
inexcess shallnotbepayable. Inthecontrary case, thedifference shallberefunded orthereduced
amount ofthesecurity shallbecollected.
Where definitive duties arenotestablished, theentire amount paidbywayofprovisional duty
shallberefunded orthesecurity shallbereleased.
Article 24.TheBoard mayalsoapply definitive anti-dumping orcountervailing duties on
productsmarketedforconsumptionwithin90dayspriortothedateoftheestablishmentoftheprovisional
duties.G/ADP/N/1/ECU/1
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Theaforementioned definitive duties maybeapplied inorder toprevent renewed occurrence
oftheinjury incases where theBoard determines theexistence ofaninjury which isdifficult torepair
caused bymassive dumped orsubsidized imports inashort period oftime. Inthecaseofdumping,
itmustalsobedetermined thatthereisahistory ofdumping which caused injury, orthattheimporter
was,orshould havebeen, aware thattheexporter practised dumping.
VI.FINAL PROVISION
Article 25.ThisDecision replaces Decision 230inrespect oftherulestoprevent orredress
distortions incompetition arising outofdumping orsubsidy practices.
Done inthecityofLima onthetwenty-first dayofthemonth ofMarch ofonethousand nine
hundred andninety-one.G/ADP/N/1/ECU/1
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REGISTRO OFICIAL NO.780OFTHE GOVERNMENT OFECUADOR
30SEPTEMBER 1991
No.2772 -A
Rodrigo Borja,
President oftheRepublic,
CONSIDERING:
Thattheneworientation oftariff policy requires thetimely adoption ofeffective measures
toremedy orprevent unfair international trade practices;
ThatArticle 41oftheTariff Lawineffect authorizes theapplication ofanti-dumping duties;
ThattheCommission oftheCartagena Agreement, inDecision 283,published inthesupplement
toRegistro Oficial No.682of13May 1991, adopted rules toprevent orredress distortions in
competition arising outofdumping orsubsidy practices; and
Byvirtue ofthepower granted tohimbythelaw;
DECREES THE FOLLOWING:
REGULATIONS TOPREVENT ORREMEDY DUMPING ORSUBSIDY PRACTICES
CHAPTER I
Object
Article 1.These Regulations indicate therequirements andprocedures tobefollowed in
applying preventive orremedial measures against dumping orsubsidies.
TheseRegulationsdonotcoverunder-invoicingpractices,whichshallbedeterminedandpunished
according totherulesoncustoms valuation contained intheOrganic Customs Lawanditsimplementing
Regulations, theCriminal Code andother related legalprovisions.
CHAPTER II
Dumping
Article 2.Animport isdumped when theexport price islessthanthenormal value fora
likeproduct when destined forconsumption oruseinthecountry oforigin orofexport intheordinary
course oftrade.
Article 3.Alikeproduct isaproduct which isalikeinallrespects totheproduct subject
tothepractice orintheabsence ofsuchaproduct another product which hasverysimilar characteristics,
taking intoconsideration elements suchasitsnature, quality, useandfunction.G/ADP/N/1/ECU/1
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Article 4.Theexport priceisthepriceactually paidorpayable fortheproduct soldforexport
toEcuador.
Incases where there isnoexport price orwhere itappears tothecompetent bodies thatthe
price isunreliable because ofassociation oracompensatory arrangement between theexporter and
theimporter orathirdparty, theexport price maybeconstructed onthebasis oftheprice atwhich
theimported products arefirstresold toanindependent buyer. Iftheproducts arenotresold toan
independent buyer, ornotresold inthecondition asimported, theprice maybeconstructed onsuch
reasonable basisasthecompetent bodies orauthorities referred toinChapter IVofthese Regulations
maydetermine.
Incalculating theexport price, thenecessary adjustment shallbemade toallow forallcosts
incurred priortoresale, including allduties andtaxesandareasonable margin ofprofit. Theadjustments
shallalsotakeintoaccount interaliathecosts oftransport, insurance, maintenance andunloading;
import duties andother taxes payable afterexport from thecountry oforigin; areasonable margin
ofgeneral, administrative andselling costs; areasonable margin ofprofit, andanycommission usually
paid.
Article 5.Forthepurposes oftheseRegulations, "normal value" means theamount actually
paidorpayable foralikeproduct bycomparison withtheproduct imported intoEcuador, when sold
forconsumption oruseinthedomestic market ofthecountry oforigin orofexport, intheordinary
course oftrade.
Theordinary course oftradeshallmean transactions between associated parties orparties who
arebound byacompensatory arrangement, provided thattheprices andcostsarecomparable tothose
insalesbetween independent parties.
Where there arenosalesofthelikeproduct intheordinary course oftrade inthedomestic
market ofthecountry oforigin orofexport orwhere suchsalesdonotpermit areliable determination
ofthenormal value, itshallbedetermined:
(a) Byconsidering thehighest export priceforthelikeproduct exported toathirdcountry,
provided itisrepresentative;
(b) intheabsence ofsuchaprice, byconsidering theconstructed priceofthelikeproduct
based onthecostofproduction intheordinary course oftradeinthecountry oforigin,
plusareasonable amount foradministrative andselling costsandprofit. Theaddition
forprofit shallnotexceed theprofit normally realized onsalesofproducts inthesame
category inthedomestic market ofthecountry oforigin;
(c) where there isnoexport price toathirdcountry thatisrepresentative ortheprice of
alikeproduct cannot beconstructed, thenormal value maybecalculated onareasonable
basis tobedetermined bythecompetent bodies orauthorities.
Incases where products arenotimported directly fromthecountry oforigin butfromathird
country, thepriceatwhich theproducts aresoldfromthecountry ofexport toEcuador shallbecompared
withthecomparable priceinthecountry ofexport. However, comparison maybemade withtheprice
inthecountry oforigin if,forexample, theproducts aremerely transshipped through thecountry of
export, orsuchproducts arenotproduced inthecountry ofexport orthere isnocomparable price
forthem inthecountry ofexport.G/ADP/N/1/ECU/1
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Article 6.Themargin ofdumping istheamount bywhich theexport price islessthanthe
normal price. Thismargin shallbecalculated perunitofproduct imported atthedumping price.
Theexport price andthenormal value shallbeexamined onacomparable basis inrespect of
thephysical characteristics oftheproduct, thequantities andconditions ofsale,taking intoaccount
differences intaxes andother criteria thatmight affect price comparison. Thecomparison shallbe
made atthesame stage ofthetransaction, usually attheex-factory level, andinrespect ofsalesmade
atasnearly aspossible thesame time.
CHAPTER III
Subsidies
Article 7.Animport hasbeensubsidized when theproduction, manufacture, transport or
export oftheimported goodoritsrawmaterials orinputs hasreceived directly orindirectly anybounty,
aid,premium orsubsidy inthecountry oforigin orofexport.
Theexistence ofmultiple currency practices relating totrade andfinancial transactions inthe
country oforigin orofexport maygiverisetoasubsidy andtherefore beconsidered assuchforthe
purposes ofthese Regulations.
Article 8.Theamount ofthesubsidy shallbecalculated, asappropriate, inmonetary units
oradvalorem perunitofthesubsidized product imported.
Inthecaseofmultiple currency practices, theamount ofthesubsidy shallbedetermined on
thebasisoftherulesestablished bytheCartagena Agreement within theframework ofharmonization
ofexchange policies orintheabsence ofsuchrules, onthebasisoftheelements provided totheCentral
Bank ofEcuador inamandatory report.
CHAPTER IV
Competent Bodies andAuthorities
Article 9.TheMinister forFinance andPublic Credit isempowered toestablish measures
toprevent orremedy dumping orsubsidy practices inaccordance withtheAgreement.
Priortoexercising thisauthority, theMinister shallseektheopinion oftheSpecial Commission
oftheTariff Committee oroftheTariff Committee itself.
Incases within thecompetence ofthebodies oftheCartagena Agreement, theMinister shall
notseektheopinion oftheSpecial Commission inorder toestablish preventive orremedial measures
andtheauthorization given inthecorresponding Resolution shallsuffice.
Article 10.TheSpecial Commission shallbecomposed ofthefollowing members oftheTariff
Committee:
(a) TheMinister forFinance andPublic Credit orhisdelegate, whoshall chair the
Commission;
(b) theMinister forIndustry, Trade, Integration andFisheries, orhisdelegate; andG/ADP/N/1/ECU/1
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(c) theMinister responsible forthesector producing thegoodaffected bytheunfair trade
practice orhisdelegate.
Representatives oftheChambers ofIndustry, Trade andAgriculture shallprovide theTariff
Committee withinformation according tothesectors involved intheparticular investigation.
Where appropriate, representatives ofother ministries, institutions orpublic enterprises or
associations ofproducers, importers orexporters mayparticipate asadvisers.
Article 11.TheSpecial Commission shallhavethefollowing functions:
(a) Tomake recommendations onthedraftdecisions oftheMinister forFinance andPublic
Credit concerning theestablishment ofmeasures toprevent orremedy dumping or
subsidy practices, except where abody oftheCartagena Agreement iscompetent;
(b) attherequest oftheinterested party, tomake recommendations regarding the
applications submitted totheNational Directorate ofForeign Trade oftheMinistry
ofIndustry, Trade, Integration andFisheries, inorder tobring them totheattention
ofthecompetent body oftheCartagena Agreement iftheyhavebeenrejected bythe
Directorate because itconsidered thatthere werenogrounds fortheinvestigation or
theapplication ofremedial measures; and
(c) tosubmit reports toanycompetent bodies orauthorities requesting them onother
investigations onsuchunfair tradepractices; tomake recommendations regarding the
application ofmeasures toprevent orremedy dumping andsubsidy practices and,
additionally, toprovide information onthepractices ofdomestic enterprises which
causeorthreatentocauseinjurytodomesticindustryinamemberStateoftheCartagena
Agreement.
Infulfilling itsfunctions, theSpecial Commission shallreceive reports andstudies fromthe
National Directorate ofForeign Trade oftheMinistry ofIndustry, Trade, Integration andFisheries,
which shallactasSecretariat oftheCommission.
Article 12.Ecuadorian commercial attachés, diplomatic missions andother offices ofthe
Ministry ofForeign Affairs accredited toforeign governments shallobtain fromthecountry inwhich
theyaresituated theinformation required bytheNational Directorate ofForeign Trade oftheMinistry
ofIndustry, Trade, Integration andFisheries ortheSpecial Commission inrelation totherelevant
investigations, recommendations orstudies.
Attherequest oftheNational Directorate ofForeign Trade oftheMinistry ofIndustry, Trade,
Integration andFisheries, theCentral BankofEcuador shallprovide information ontheprices declared
onimport permits orother relevant information inthepermits andaccompanying documents, aswell
asontheexchange ratesforforeign currency required inorder toinvestigate specific cases.
Article 13.Where theinformation required fortheinvestigation cannot beobtained through
theoffices mentioned inthepreceding paragraph ortheinformation isnotprovided within areasonable
period, theMinistry ofIndustry, Trade, Integration andFisheries mayreach agreement withlegally
constituted domestic orforeign specialized enterprises forthepurpose ofproviding information on
exchange ratesandother factors related totrade transactions involving dumping orsubsidization.G/ADP/N/1/ECU/1
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Insuchcases, thepersons requesting theinvestigation shallbearthecostsarising inconnection
withtheprovision oftheinformation.
CHAPTER V
Procedure andInvestigation
Article 14.Aninterested party which considers thatithasbeenaffected byimports ofdumped
orsubsidizedproductsmayrequesttheNationalDirectorateofForeignTradeoftheMinistryofIndustry,
Trade, Integration andFisheries tocarry outthecorresponding investigation andapply thepreventive
orremedial measures provided forinthese Regulations.
Such requests mayalsobesubmitted inthecases referred toinArticle 2ofDecision 283of
theCommission oftheCartagena Agreement sothat,where appropriate, thecompetent body ofthe
CartagenaAgreementmaycarryouttherelevantinvestigationandauthorizetheapplicationofpreventive
orremedial measures.
TheNational Directorate ofForeign Trade oftheMinistry ofIndustry, Trade, Integration and
Fisheries shallalsocarry outthecorresponding investigation atthewritten request ofanymember
oftheTariff Committee whoprovides sufficient information toallow thepresumption oftheexistence
ofinjury orthreat ofinjury toaspecific industry.
Article 15.Theapplication referred tointhepreceding Article shallcontain thefollowing
information:
(a) Thenature ofthepractice anditsduration;
(b) thecharacteristics oftheproducts subject tothepractice andtheir NANDINA
classification;
(c) theenterprises involved, indicating theirdomicile;
(d) theoffices, institutions orenterprises inthepublic sector granting thesubsidy orthe
characteristics ofthemeasure benefiting theproducer orexporter oftheproduct dumped
orsubsidized; and
(e) theleveloftheduties proposed orthecharacteristics oftheother remedial measures
provided forinthese Regulations.
Article 16.Withinfivedaysfromthedateofreceivingtheapplication,theNationalDirectorate
ofForeign Trade oftheMinistry ofIndustry, Trade, Integration andFisheries shallnotify thecomplaint
totheimporter oftheproduct subject tothepractice, therepresentative ornational distributor, orthe
embassy, consulate orcommercial attachés 'soffice inthecountry oforigin oftheproduct and,through
them, shallrequest theinformation needed toinvestigate theproducer, exporter orgovernment, as
appropriate.
TheNational Directorate ofForeign Trade oftheMinistry ofIndustry, Trade, Integration and
Fisheries shallalsorequest other enterprises thatmight beaffected bythepractices toprovide the
information needed forthecorresponding investigation.G/ADP/N/1/ECU/1
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Article 17.Competent bodies, authorities andofficials shallnotdisclose theevidence and
information received fortheinvestigation when, intheopinion ofpersons requesting theinvestigation
orproviding information, itisconfidential because itmight cause injury orprejudice tothem.
Nevertheless, thesaidbodies orauthorities maytransmit summaries oranalyses ofthisevidence and
information.
Parties interested intheinvestigation referred tointhepreceding Article mayhaveaccess to
general information andnon-confidential documents, aswellastothesummaries mentioned inthe
preceding paragraph.
Article 18.During theinvestigation, theNational Directorate ofForeign Trade oftheMinistry
ofIndustry, Trade, Integration andFisheries shallgivepriority toconvening meetings among parties
interested intheinvestigation withaviewtoreaching adirect solution. Nointerested party shallbe
obliged toattend suchameeting andtheirabsence shallnotdelay theproceedings.
Onthebasis ofthereport bytheNational Directorate ofForeign Trade oftheMinistry of
Industry, Trade, Integration andFisheries onthemeeting among theparties, theSpecial Commission
shallconsider theundertaking bytheproducer orexporter tosuspend pricediscrimination orwithdraw
thesubsidies ortheoffer ofthegovernment concerned tosuspend thegranting ofsubsidies, and,if
theproposal isaccepted, theinvestigation shallbeclosed.
Thecorresponding decision shallspecify theinformation which theproducer orexporter or
government concerned, asthecasemaybe,musttransmit toshow thattheundertakings entered into
havebeenfulfilled. Itshallalsoindicate themeasures tobeadopted iftheundertakings arenotfulfilled
ortheinformation requested isrefused.
Article 19.TheNational Directorate ofForeign Trade oftheMinistry ofIndustry, Trade,
Integration andFisheries shallcarry outtheinvestigation within aperiod notexceeding fourmonths
fromthedateofreceiving theapplication andshallconvene ameeting oftheSpecial Commission within
fiveworking days.
TheSpecial Commission mayextend theinvestigation period bytwomonths; insuchcases,
itmayrecommend theapplication ofprovisional orpreventive measures onthebasisoftheinformation
available untiltheMinister forFinance andPublic Credit adopts definitive measures.
Where theinjury orthreat ofinjury caused bydumping orsubsidies issufficiently serious to
require theadoption ofprovisional orpreventive remedial measures, theNational Directorate ofForeign
Trade oftheMinistry ofIndustry, Trade, Integration andFisheries shallcarry outapriorinvestigation
onthebasisoftheinformation available within aperiod notexceeding 20daysfromthedateofreceiving
theapplication, andinaddition, through thechair oftheSpecial Commission, shall convene the
Commission within thefollowing fiveworking daysinorder tomake arecommendation ontheadoption
ofremedial measures.
Investigations carried outinaccordance withthese regulations shallunder nocircumstances
obstruct orhinder customs clearance oftheproducts concerned. Where provisional orpreventive
anti-dumping orcountervailing duties areestablished, thecustoms authority shallauthorize clearance
ofthegoods subject topayment oftheduties orlodging ofthecorresponding security.
Article 20.Where applications foraninvestigation concern thecases referred toinArticle 2
ofDecision283,theNationalDirectorateofForeignTradeoftheMinistryofIndustry,Trade,Integration
andFisheries shallcarry outapreliminary investigation within 20daysfromthedateofreceiving theG/ADP/N/1/ECU/1
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application. Where thesituation requires theadoption ofimmediate measures because thethreat of
injury ortheinjury isevident, theNational Directorate ofForeign Trade oftheMinistry ofIndustry,
Trade, Integration andFisheries shallcarry outaprior investigation within 10days.
Thepurpose oftheinvestigation istoverify whether theapplication should besubmitted to
thecompetent body oftheCartagena Agreement tosubstantiate theapplication withtheinformation
available, andifnecessary withadditional evidence, toinitiate thecollection oftheinformation required,
and,particularly, todetermine thelevelofanti-dumping orcountervailing duties adequate toprevent
orremedy theunfair trade practices.
After conclusion oftheinvestigation, theUnder-Secretariat forTrade andIntegration ofthe
Ministry ofIndustry, Trade, Integration andFisheries shall, where appropriate, request thecompetent
body oftheCartagena Agreement toauthorize theestablishment ofanti-dumping orcountervailing
duties intheamounts itconsiders appropriate toremedy theunfair trade practices.
Article 21.TheNational Directorate ofForeign Trade oftheMinistry ofIndustry, Trade,
Integration, andFisheries, andtheSpecial Commission, intheirinvestigations andrecommendations,
shalltakeintoaccount thedumping (sic)orthegranting ofasubsidy; and,
(a) Thedumping orsubsidization practices;
(b) thematerial injury orthreat ofmaterial injury caused bydumping orthegranting of
asubsidy; and
(c) thecausal relationship between thepractices andthematerial injury orthreat ofmaterial
injury.
Article 22.Adetermination ofmaterial injury orthethreat ofmaterial injury andthecausal
relationship withdumping orsubsidies maybebased interaliaonexamination ofthefollowing:
(a) Thevolume ofimports subject tosuchpractices, inparticular todetermine whether
there hasbeen asignificant increase inabsolute terms orrelative toproduction,
consumption andimports inEcuador;
(b) theprices ofdumped orsubsidized imports, inparticular todetermine whether they
aresignificantly lower thanprices forlikeproducts intheabsence ofunfair trade
practices. Itmayalsobedetermined whether theeffect ofsuchimports istodepress
prices toasignificant degree orlikewise prevent priceincreases which otherwise would
haveoccurred; and
(c) theeffects ondomestic industry estimated onthebasis ofactual orpotential trends
intherelevant economic factors, forexample, production, domestic sales, market
share, profits, productivity, return oninvestment, utilization ofinstalled capacity, actual
orpotential negative effects oncashflow, inventories, employment, wages, growth,
andinvestment capacity.
Article 23.Forthepurposes ofdetermining injury orthreat ofinjury, domestic industry means
thedomestic producers asawhole ofthelikeproducts orthose ofthem whose collective output of
theproducts constitutes amajor proportion oftotaldomestic production. Nevertheless, where producers
arerelated totheexporters orimporters ofthedumped orsubsidized products, theterm
"domestic industry" mayrefertotherestoftheproducers inEcuador.G/ADP/N/1/ECU/1
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Inexceptional circumstances, thedomestic industry maybedivided intotwoormore separate
markets. Theproducers within eachmarket mayberegarded asaseparate domestic industry ifthey
sellmostoftheirproduction oftheproduct inquestion inthatmarket andifthedemand inthatmarket
isnottoanysubstantial degree supplied byproducers intherestofthecountry.
Inthecases referred tointhepreceding paragraph, injury orthreat ofinjury maybefound
toexistevenwhere amajor portion ofdomestic industry isnotaffected, provided thereisaconcentration
ofdumped orsubsidized imports intosuchanisolated market andsuchimports arecausing injury to
theproducers ofalloralmost alloftheproduction within suchmarket.
CHAPTER VI
Application ofMeasures
Article 24.Incases ofdumping, anti-dumping duties shallbeimposed onthedumped imports
inanamount equal tothemargin ofdumping orlessiftheamount isadequate toremove theinjury
orthreat ofinjury thathasbeenfound toexist.
Article 25.Incases ofsubsidies, countervailing duties shallbeimposed onsubsidized imports
inanamount equal totheamount ofthesubsidy orlessiftheamount issufficient toremove theinjury
orthreat ofinjury thathasbeenconfirmed.
Article 26.Where thethreat ofinjury orinjury isevident ortheperiod fortheinvestigation
hasbeenextended provisional measures maybeapplied, which shalltaketheform ofanti-dumping
orcountervailing duties, including inspecific terms orminimum customs values, provided thatthe
increased duties tobepaiddonotexceed themargin ofdumping orsubsidies.
Where thedefinitive duties arehigher thantheprovisional duties paidorguaranteed, theamount
inexcess shallbepayable. Inthecontrary case, thecorresponding difference shallberefunded.
Article 27.Anti-dumping andcountervailing duties maynotbeapplied simultaneously tothe
same imported product.
Article 28.Thedecisions fixing anti-dumping orcountervailing duties shall indicate their
duration, which under nocircumstances shallexceed twoyears. Where itisnecessary toapply the
measures foraperiod exceeding twoyears, theentrepreneur affected bythepractice shallsubmit the
necessary application totheNational Directorate ofForeign Trade oftheMinistry ofIndustry, Trade,
Integration andFisheries insufficient timetoenable thecorresponding investigation tobeundertaken.
Article 29.TheMinister forFinance andPublic Credit mayauthorize payment ofprovisional
orpreventive anti-dumping orcountervailing duties onimports released forconsumption within 90
daysprior totheentry intoforce ofthecorresponding decision.
Article 30.Subject toverification bytheNational Directorate ofForeign Trade oftheMinistry
ofIndustry, Trade, Integration andFisheries andadecision bytheSpecial Commission thatthegrounds
forestablishing anti-dumping orcountervailing duties havebeenmodified orceased, theMinister for
Finance andPublic Credit, shallbyadecision, suspend theirapplication orreduce themtotheequivalent
ofthenewmargin ofthepractice.G/ADP/N/1/ECU/1
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Article 31.Theapplication ofthisDecree, which shallenter intoeffect thedayfollowing
itspublication intheRegistro Oficial shallbetheresponsibility oftheMinisters forFinance andPublic
Credit andforIndustry, Trade, Integration andFisheries.
Done atQuito on13September 1991.
(Signed) Rodrigo Borja, President oftheRepublic
Pablo R.Better, Minister forFinance andPublic Credit
JuanFalconi Puig, Minister forIndustry, Trade, Integration andFisheries
Certified asanauthentic copy:
(Signed) Gonzalo Ortiz Crespo, Secretary-General ofPublic Administration.