RESTRICTED
WORLD TRADE G/ADP/W/62
G/SCM/W/71
27September 1995
ORGANIZATION(95-2837)
Committee onAnti-Dumping Practices Original: Spanish
Committee onSubsidies andCountervailing Measures
REPLIES TOORAL QUESTIONS POSED BYTHE UNITED STATES
CONCERNING THE NOTIFICATION OFVENEZUELAN
LAWS AND REGULATIONS1
Thefollowing communication, dated 5September 1995, hasbeenreceived fromthePermanent
Mission ofVenezuela.
_______________
Ienclose herewith theresponses tothequestions posed bytheUnited States totheGovernment
ofVenezuela during themeetings toreview Anti-Dumping andSubsidies legislation.
Please notethatthese responses cover allthequestions puttoVenezuela.
1G/ADP/N/1/VEN/1-G/SCM/N/1/VEN/1G/ADP/W/62
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UNITED STATES
(Responses totheFollow-Up Questionnaire)
1. Reforms totheRegulations
Please clarify whether theLawonUnfair Foreign Trade Practices willbeamended by
futureregulationsandifsowhatistheexpectedtime-frameforimplementationofthoseregulations?
Asnotified, inresponse totheoriginal questionnaire, theLawonUnfair Foreign Trade Practices
ofJune1992 wasamended bytheLawapproving theMarrakesh Agreement ofDecember 1994. In
thisrespect, theLawonUnfair Foreign Trade Practices isonlyapplied insofarasitdoesnotconflict
withordiverge fromtheWTO Anti-Dumping Agreements orthose onSubsidies andCountervailing
Measures. Itshould alsobepointed outthatingeneral intheVenezuelan judicial system lawsapproved
bytheCongress cannot beamended bytheirregulations.
Owing totheexistence oftheLawapproving theMarrakesh Agreement, itisnotnecessary
intechnical terms toadopt anyadditional provisions (through other laws, regulations, decrees or
administrative orders) toimplement theobligations oftheWTO Agreements.
Despite theabove, asindicated, theGovernment oftheRepublic ofVenezuela iscurrently
drawing updraftregulations toreplace theRegulations under theLawonUnfair Foreign Trade Practices
andtodeveloptherulesstemmingfromtheWTOAgreementsrelatingtoanti-dumpingandcountervailing
measures. Asindicated, these amendments arenottechnically necessary fortheimplementation of
theWTO Agreements, because theAgreements formpartofVenezuelan legislation and,inaddition,
havehigher legal status thananyregulation. However, through these amendments theuseofthe
provisions currently included invarious lawscould befacilitated, andthetechnical andmethodological
aspects ofinvestigations improved.
Theprocess ofreforming theRegulations would takeatleastsixmonths. Inanycaseby
mid-1996 wehopetobeinaposition tonotify theCommittees ofthefinaldecision regarding thechanges
intheRegulations under theAnti-Dumping Law.
2. Targeted Dumping
Willyour regulations provide guidance onwhen targeted dumping willbefound?
Inaccordance withtheprovisions ofArticle 2.4.2 oftheWTO Anti-Dumping Agreement and
withitspastpractice,theCommissionwillcontinuetobeguidedbythecomparisonofweighted-averages
ofexport transaction prices indetermining whether dumping exists. Theabove remains trueapart
fromthespecial casesprovided forintheAnti-Dumping Agreement itself(i.e.where apattern ofexport
prices isfound which differs significantly among different purchasers, regions ortime-periods (targeted
dumping), orifitisshown thatsuchdifferences could notbetaken intoaccount appropriately bythe
useofaweighted average-to-weighted average ortransaction-to-transaction comparison). The
Commission willconsider thattheuseofweighted averages maymaterially affect theoutcome ofan
investigation onlyifitfinds thatthere isapattern ofexport prices which differs significantly, in
accordance withtheabove provision.
Inthefuture amendments totheVenezuelan Anti-Dumping Regulations, thispricecomparison
methodology would beclarified. Therulesincluded therein fordetermining whether targeted dumping
exists willbeconsistent withtheguidelines contained intheAnti-Dumping Agreement.G/ADP/W/62
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3. Definition ofSubsidy: Financial Contribution
Concerning paragraph 13ofArticle 2(oftheAnti-Dumping Law), itappears asifany
financial contribution isdeemed tobeasubsidy itself asopposed toanelement indetermining
whether asubsidy exists. Could youplease explain?
Contrary towhatisimplied inthequestion, theexistence ofafinancial contribution isonly
oneoftheelements which theCommission willtakeintoaccount indetermining whether a
countervailable subsidy exists ornot. Thus, inthecaseofimports from WTO Member countries,
andinaccordance withtheprovisions oftheSCM Agreement, theexistence ofafinancial contribution
(orofsome other form ofincome orprice support inaccordance withArticle XVIofGATT 1994)
shallbeonlyoneofthenecessary butnotsufficient conditions fortheCommission todetermine that
acountervailable subsidy exists.
4. Cumulation ofImports
Concerning "Single Paragraph" under Article 12(oftheAnti-Dumping Law), under what
circumstances willVenezuela cumulate imports across investigations?
Asindicated inresponse totheoriginal questionnaire, indirect application oftheprovisions
oftheWTO Agreements, inthecaseofinvestigations involving imports fromWTO Member countries,
theeffects ofimports from various countries willbecumulated onlyinamanner consistent withthe
rulescontained intheAgreements. These rules, which include aspects suchasthattheimports tobe
cumulated besimultaneously subject toinvestigation andthattheCommission considers thecompetitive
conditions between theimported products andthedomestic products before determining whether to
cumulateimportsfromdifferentcountries,wouldbeincludedinthefutureamendmentstotheVenezuelan
Anti-Dumping Regulations.
5. Domestic Industry Support forApplications
Concerning Article 47(oftheAnti-Dumping Regulations): (i)Isthe30percentprovision
usedforthepurpose ofdetermining domestic industry support forapetition? (ii)How isthis
provision consistent with thedefinition ofdomestic industry found inArticle 4oftheAD
Agreement?
Asinformed inresponse totheoriginal questionnaire, theCommission hassofarbeenusing
thecriteria contained inArticle 14oftheAnti-Dumping LawandArticle 47oftheRegulations, not
onlyfordetermining injury, butalsofordetermining standing forfiling applications toinitiate
investigations. Thus, theCommission hasbeenapplying thestandards setoutinArticle 47ofthe
Anti-Dumping Regulations, namely 30percentofdomestic production ofthelikegood(which isstricter
thanthestandard setoutintheWTO Agreements). However, theArticle oftheRegulations does,
exceptionally, ifthespecial circumstances oftheproduction structure inquestion sowarrant, allow
theCommission touseasabenchmark alower percentage, which maynotbelessthan20percent
(alower percentage taken tobeamended to25percentunder theWTO Agreement).
Asinformed, theprovisions oftheWTO Agreements aredirectly applicable toanti-dumping
orsubsidies procedures initiated after1January 1995inVenezuela. Thus, theCommission isverifying
thatapplications fortheinitiation ofanti-dumping orsubsidies investigations arefiledbyaproducer
ornumber ofproducers representing atleast25percentofthedomestic industry, inaccordance with
Article 5.4oftheAnti-Dumping Agreement andArticle 11.4oftheSCM Agreement, respectively.G/ADP/W/62
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Furthermore,aswasmadeclearinresponsetotheoriginalquestionnaire,neithertheVenezuelan
Anti-Dumping LawnortheRegulations include anyprovision concerning theneedtoverify therelative
degreeofsupportfortheapplicationbydomesticproducers(wheresomeproducerssupporthaveopposed
theinvestigation). However, asinformed, theWTO Agreements aredirectly applicable toanti-dumping
orsubsidies procedures initiated after1January 1995 inVenezuela. Inthisrespect, inthecaseof
imports from WTO Member countries -andinaccordance withtherequirements ofArticle 5.4of
theWTO Anti-Dumping Agreement andArticle 11.4oftheSCM Agreement -theCommission, in
theevent ofanyopposition toanapplication filedbydomestic producers, willverify whether there
isadegree ofsupport ofmore thanhalfofthedomestic industry expressing either itssupport foror
opposition totheapplication.
Theprovisions relating tothedegree ofdomestic industry support necessary forapplications
forinvestigations would beincluded inthefuture amendments totheVenezuelan Anti-Dumping
Regulations.
6. Extension ofProvisional Duties
Isitpossible fortheCommission toextend provisional measures longer thanfourmonths?
Asstated, theWTO Agreements aredirectly applicable toanti-dumping orsubsidies procedures
initiated after1January 1995inVenezuela. Thus, asindicated inresponse totheoriginal questionnaire,
inthecaseofaprocedure involving imports from aWTO member country, inaccordance with
Article 7.4oftheAnti-Dumping Agreement andArticle 17.4oftheSCM Agreement, theCommission
willonlyapply provisional measures forabriefperiod which shallnotexceed fourmonths.
Inthefuture amendments totheVenezuelan Anti-Dumping Regulations thispoint would be
clarified.
7. Significant Volume ofImports
Given thattheAgreement specifies that3percentofimports arenegligible, howcan
5percent beconsidered "significant", asspecified inArticle 50(1) (oftheAnti-Dumping
Regulations)?
Asindicated inresponse totheoriginal questionnaire, Article 50(1) oftheAnti-Dumping
Regulations indeed provides that,inthedetermination ofinjury, itshallbeconsidered whether the
volumeofimportsissignificantandhasincreasedinabsolutetermsorrelativetothedomesticproduction
oflikegoods. Thevolume ofimports shallbeconsidered significant when itrepresents atleast5per
centofthedomestic production oflikegoods.
Inconsidering whether therulecontained inArticle 50(1) oftheAnti-Dumping Regulations,
relating tosignificant volumes ofimports, isconsistent withtheprovisions ofArticle 5.8ofthe
Anti-DumpingAgreementandArticle11.9oftheSCMAgreement,itisnecessarytodistinguishbetween
thetwoAgreements, since theycontain different provisions.
(a) Anti-Dumping Agreement
Article5.8oftheWTOAnti-DumpingAgreementprovidesthatinvestigationsshallbeterminated
where itisdetermined thatthevolume ofdumped imports isnegligible. Unlike theVenezuelan
Regulations, thesignificance ofthevolume ofimports isdetermined, notonthebasisofthedomestic
industry, butrather ofatleast3percentofimports ofthelikeproduct intheimporting country .AsG/ADP/W/62
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informed, theprovisions oftheWTO Agreements aredirectly applicable toanti-dumping orsubsidies
procedures initiated after1January 1995inVenezuela. Thus, now, inaccordance withtheprovisions
ofthisArticle oftheADAgreement, theCommission willterminate investigations where itfindsthat
thevolume ofdumped imports isnegligible, i.e.accounts forlessthan3percentofimports ofthe
likeproduct inVenezuela.
(b) SCM Agreement
Similarly, Article 11.9oftheWTO SCM Agreement provides thatinvestigations shallbe
terminated where itisdetermined thatthevolume ofdumped imports isnegligible. Unlike the
ADAgreement, theSCM Agreement doesnotprovide anyprecise volume forconsidering whether
imports ofsubsidized goods aresignificant. Inthisrespect, theprovision contained inArticle 50(1)
oftheVenezuelan Anti-Dumping Regulations goesfurther thantheAgreement andprovides apercentage
fordetermining thesignificance ofimports, using thedomestic industry producing likegoods asa
benchmark.
Despite theabove, itshould bepointed outthatArticle 50(1) oftheVenezuelan Anti-Dumping
Regulations allows theCommission tobaseitsdeterminations concerning thesignificance ofimport
volumes onpercentages other thanthe5percentlevelreferred to,"when, initsview, thecircumstances
ofthecasesorequire". Onecaseinwhich theCommission might consider thatcertain dumped or
subsidized imports weresignificant, inspiteofnotreaching alevelof5percentofthedomestic industry,
would bewhere theyconstitute asignificant percentage (more than3percent) ofthetotalvolume of
imports ofthelikegood inVenezuela, asprovided forinArticle 5.8oftheWTO Anti-Dumping
Agreement.