RESTRICTED
WORLD TRADE G/ADP/W/170
G/SCM/W/177
ORGANIZATION 24November 1995
(95-3719)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
QUESTIONS CONCERNING THE NOTIFICATIONS PROVIDED
BYMALAYSIA1OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Thefollowing communication, dated 14November 1995, hasbeenreceived fromthePermanent
Mission ofKorea.
_______________
1. General Questions
(a) Incases where there arenorelevant provisions inthedomestic legislation, doestheWTO
Agreement apply?
(b) Iftheprovisions oftheexisting domestic legislation donotconform totheWTO Agreement,
dotheprovisions oftheWTO Agreement apply?
2. Determining Selling Costs &Profits
Indetermining theamount ofselling costsandprofits, WTO A-DAgreement 2.2.2 states that
"The amounts foradministrative selling andanyother costs andforprofit shallbebased onactual
datapertaining toproduction andsalesintheordinary course oftradeofthelikeproduct bytheexporter
orproducer under investigation."
Article 16(4) ofMalaysia 'sA-DActstipulates, "...thecostofproduction shallbecomputed
onthebasis ofallfixed andvariable costs ofmaterials andmanufacturing intheordinary course of
trade intheexporting country plusareasonable amount forselling, administrative andother general
expenses andreasonable margin ofprofit."
Canthereasonable amount ofSG&A andprofit inMalaysian A-DActbeconstrued same as
those intheArticle 2.2.2 oftheAgreement?
3. Adequacy ofpetition
According toWTO A-DAgreement 5.4,"Noinvestigation shallbeinitiated when domestic
producers expressly supporting theapplication account forlessthan25percentoftotalproduction
ofthelikeproduct produced bythedomestic industry."
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Wewerenotabletofindtherelevant content inMalaysia 'sA-DAct.Please provide guidelines,
ifany.
4. Deminimis rule
According toWTO A-DAgreement 5.8,ananti-dumping investigation should beterminated
when thedumping margin islessthan2percentordumped imports fromaparticular country isless
than3percent....
Where aresuchprovisions inMalaysia 'sregulations?
5. Start-up operation costadjustment
According toWTO A-DAgreement 2.2.2.1, start-up operation costshall bereflected in
calculating normal price when itisnecessary.
Where aresuchprovisions inMalaysia 'sregulations?
6. Proper Comparison
(a) Deminimis volume
Forproper comparison, WTO A-DAgreement 2.2states that"Sales ofthelikeproduct destined
forconsumptioninthedomesticmarketoftheexportingcountryshallnormallybeconsideredasufficient
quantity forthedetermination ofthenormal value ifsuchsalesconstitute 5percentormore ofthe
salesoftheproduct under consideration totheimporting country, provided thatalower ratioshould
beacceptable magnitude toprovide foraproper comparison.:
However, inMalaysia 'sA-DRegulation 26(2)(a), "thequantity ofmerchandise soldfor
consumption inthedomestic market during theperiod being examined issosmall inrelation tothe
quantity soldto...."
Please clarify whether "sosmall ...quantity" means "5percent" asspecified intheWTO
Agreement ornot?
(b) Exchange rate
According toWTO Agreement 2.4.1, when thepricecomparison under thisparagraph requires
aconversion ofcurrencies, suchconversion should bemade using therateofexchange onthedate
ofsale,provided thatwhen asaleofforeign currency onforward markets isdirectly linked totheexport
saleinvolved, therateofexchange intheforward saleshallbeused. Fluctuations inexchange rates
shallbeignored and,inaninvestigation theauthorities shallallow exporters atleast60daystohave
adjusted theirexport prices toreflect sustained movements during theperiod ofinvestigation.
WherearesuchprovisionsinMalaysia'sregulations?Inaddition,whichisthestandardcurrency
between theexporter 'scountry andimporter 'scountry incalculating A-Dmargin?G/ADP/W/170
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7. Sales below costs
WTO A-DAgreement 2.2.1 paragraph 2states that"Ifprices which arebelow perunitcosts
atthetimeofsaleareabove weighted average costs fortheperiod ofinvestigation, suchprices shall
beconsidered toprovide forrecovery ofcosts within areasonable period oftime."
Cantheabove article beapplied toMalaysia?