RESTRICTED
WORLD TRADE G/ADP/W/108
G/SCM/W/117
ORGANIZATION 19October 1995
(95-3180)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
REPLIES TOQUESTIONS POSED BYTHE OFFICE OFTHE
UNITED STATES1TRADE REPRESENTATIVE CONCERNING
THE NOTIFICATION OFAUSTRALIAN LAWS AND REGULATIONS2
Thefollowing communication, dated 5October 1995, hasbeenreceived fromthePermanent
Mission ofAustralia.
_______________
Anti-Dumping:
Q.1 269TAB(1)ofthe1901Actidentifiesconstructedexportprice("CEP")casesassalestoAustralia
which arenotatarms length. Prices below "arms length" aredefined in269TAA(1), interalia,as
anyprices atwhich themerchandise issoldataloss. HowdoesAustralia determine whether prices
areat'arms length '?Howdoesthisrelate tothedetermination ofwhether CEPisused?
Answer 1
269TAA(1) defines salesthatarenotarmslength. Itsetsoutthree criteria that,ifapplicable,
require theAustralian authorities totreatatransaction asnonarmslength. None ofthecriteria relates
tosalesataloss.
269TAA(1)(a) provides thatapurchase orsaleshallnotbetreated asarms length if
"there isanyconsideration payable ...other thantheirprice". Thetypeofconsideration that
maybecovered bythisprovision would include offset arrangements inthepriceofother goods
traded between theparties.
269TAA(1)(b) provides thatasaleshallnotbetreated asarms length if"theprice is
influenced byacommercial orother relationship ..."Itisnotpresumed thatarelationship
persehasaninfluence ontheprice. Ifthere isnoevidence ofaninfluence ontheprice then
thetransaction mustbeconsidered tobeatarmslength eventhough theremaybeacommercial
orother relationship.
269TAA(1)(c) provides thatasaleshallnotbetreated asarmslength if"intheopinion
oftheMinister thebuyer ...will,directly orindirectly, bereimbursed, becompensated or
otherwise receive abenefit for,orinrespect of,thewhole oranypartoftheprice".
1G/ADP/W/14-G/SCM/W/21
2G/ADP/N/1/AUS/1-G/SCM/N/1/AUS/1.G/ADP/W/108
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269TAA(2) provides thattheMinister maytreatsalesofgoods bytheimporter ataloss“...
asindicating thattheimporter ...willdirectly orindirectly bereimbursed ...for,inrespect of,the
whole orpartoftheprice". Inother words theMinister maytreatsalesbytheimporter atalossas
indicating thatthecondition inparagraph (1)(c) issatisfied, andthereby treatthesalefromtheexporter
totheimporter asnonarms length.
Afactual finding thatsales bytheimporter areatalosswillnotautomatically require that
suchsalesbetreated asnonarmslength. 269TAA(1)(c) requires theMinister toformulate anopinion
astotheexistence ofareimbursement orcompensation. Informulating thisopinion theMinister would
bebound byadministrative lawprinciples (e.g.toactreasonably andtohaveregard onlytorelevant
considerations). Thus eveniftheMinister came toafinding offactthatsalesbytheimporter were
ataloss,thatfinding maynot,intheabsence ofother relevant indicators, formasufficient basis for
theMinister todetermine thesalebetween theexporter andimporter wasnotatarms length.
269TAB(1)(b) relevantly provides thattheexport price istobeconstructed ifthepurchase
ofgoods bytheimporter wasnotarms length.
Q.2 What doesAustralia consider tobean"arms length" price? What isAustralia 'stestfor
determining thataprice isat"arms length"? Please explain howthisrelates tothedetermination
ofwhether CEPisused, consistent withArticle 2.3oftheADAgreement.
Answer 2
269TAA setsoutthreeconditions that,ifapplicable, require theAustralian authorities totreat
atransaction asnonarms length. Anarms length price istherefore onethatdoesnotsatisfy the
conditions ofsection 269TAA. (Refer toAnswer 1.)
Asindicated, 269TAB(1)(b) provides thattheexport price istobeconstructed ifthepurchase
ofgoods bytheimporter wasdetermined tobenotatarms length, including, ifappropriate, where
thatdetermination isbased onsalesbytheimporter ataloss.
Article 2.3permits reliance upon aCEPwhere oneoftwoconditions ismet. Thatis,where
"...there isnoexport price ..."or"...where itappears totheinvestigating authorities ...thatthe
export price isunreliable because ofassociation oracompensatory arrangement".
Adecision astowhether thefirstofthese conditions hasbeenmetcanbemade based upon
theacceptance ofanestablished circumstance, ie.theabsence ofanexport price.
Adecision astowhether thelatter condition applies cannot attract thesamedegree ofcertainty.
Significantly Article 2.3doesnotdefine theterms “association ”or“acompensatory arrangement".
Itrequires theapplication ofjudgement onthepartoftheinvestigating authorities. Theymustconsider
theinformation before them relating toanyassociations orcompensatory arrangements, andevaluate
whether anyeffect ontheexport price issuchastogiverisetoanappearance ofunreliability.
269TAA(1) provides thatexport transactions willnotbetreated asarms length ifoneofthe
following three conditions ismet:
(a) where there isaconsideration payable other thantheprice;
(b) acommercial orother relationship influences theprice; orG/ADP/W/108
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(c) where, intheopinion oftheMinister, abuyer willbereimbursed, compensated or
willotherwise receive abenefit.
Iftheparticular circumstances oftheexport transaction satisfy oneormore oftheconditions
outlined, thiswould form abasis upon which Australian authorities could come toafinding offact
thatanassociation oracompensatory arrangement existed.
269TAA(1)(c) isexpanded bytheprovisions of269TAA(2) because 269TAA(2)(b) isonly
acondition tobesatisfied before theMinister mayexercise thediscretion conferred by269TAA(2).
Theprovisions of269TAA(2) arenotmandatory, theMinister isnotdirected tocome toafinding
thatsalesarenonarms length inallcases where heissatisfied theyhavebeenmade ataloss.
Conferring suchadiscretion isconsistent withArticle 2.3.Asmentioned above, authorities
arerequired toestablish anappearance ofunreliability only, andthephrase “association ora
compensatory arrangement" isneither defined inArticle 2.3nordoesitscontext suggest thatitshould
begiven anarrow meaning. Itistherefore permissible toregard sales bytheimporter atalossas
arelevant indicator uponwhich tobaseafinding ofan“association oracompensatory arrangement."
Q.3 HowdoesAustralia determine whether merchandise issoldatalossunder 269TAA(1)?
Answer 3
269TAA(1) doesnotmention salesataloss.
269TAA(2)referstosalesbytheimporterataloss,and269TAA(3)includesmatterstheMinister
must haveregard towhen determining whether goods aresoldbyanimporter ataloss.
Under 269TAA(3), acostrecovery price isdetermined byadding theprice paidorpayable
forthegoods bytheimporter toidentified costs incurred intheimportation andsaleofthegoods.
Ifthecostrecovery price isgreater thantheimporter 'sselling price thesalesare,prima facie, ata
loss. Consideration isthengiven towhether thecosts arelikely toberecovered within areasonable
period oftime. Iftheassessment isthattheimporter would beunlikely torecover allofitscostswithin
areasonable period, thesaleistreated asbeing ataloss.
Q.4 Itappears thatCEPcanbeusedincases where there isnoassociation between theimporter
andtheexporter. Please explain thecircumstances inwhich Australia usesCEP. Howisthisconsistent
withArticle 2.3oftheADAgreement?
Answer 4
Refer toAnswer 2.
Q.5 269TAC(1) appears topermit Australia tocompare export sales byonecompany withhome
market sales byadifferent company. Under whatcircumstances would thisprovision beused? How
isitconsistent withArticle 2.2oftheADAgreement?
Answer 5
269TAC(1) permits comparison ofexport salesbyanexporter withdomestic salesbyadifferent
company intheexporter 'sdomestic market.G/ADP/W/108
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Article 2.1oftheADAgreement provides thatthenormal value is"thecomparable price ...
forthelikeproduct ...intheexporting country". Itdoesnotrequire thatthegoods beeither produced
orsoldbythecompany selling ontheexport market.
Sales byother sellers oflikegoods intheexporting country would beusedwhere sales by
theexporter arenotavailable, orarenotconsidered asreliable. There might, forexample, bea
relationship which affects theexporter 'sprice inthedomestic market.
Article 2.2provides forthenormal value tobedetermined byreference toacomparable third
country salesprice oraconstructed salesprice only"when there arenosalesofthelikeproduct in
theordinary course oftrade inthedomestic market oftheexporting country" orwhen suchsalesdo
notpermit aproper comparison.
Neither Article 2.1norArticle 2.2,noranyother provision, restricts theconsideration tothe
exporter 'ssalesinthedomestic market. Australia 'slegislation, which requires thatifpracticable these
salesbeconsidered before resort toArticle 2.2,istherefore consistent withtheAgreement.
Q.6 269TAC(1) appears toallow theuseofconstructed value orthird country prices when the
collection ofhome market prices is"impracticable". Under whatconditions would collection ofhome
market information be"impracticable"? Howisthispractice consistent withArticle 2.2oftheAD
Agreement?
Answer 6
Thepractice ofusing aconstructed value orthirdcountry price when thecollection of"home
market prices" is"notpracticable" comes under 269TAC(2)(b) rather than269TAC(1).
269TAC(2)(b) provides fortheuseofconstructed value orthirdcountry prices indetermining
normal value when "likegoods arenotsoldintheordinary course oftrade forhome consumption ...
insalesthatarearms length transactions bytheexporter, thatitisnotpracticable toobtain, within
areasonable time, information inrelation tosalesbyother sellers oflikegoods ...".
Theterm"notpracticable" therefore applies onlytoother sellers inthedomestic market. This
provision covers thesituation when because oftimeconstraints (answer 14refers) itwasnotpossible
tocontact other sellers afteritwasdiscovered thatlikegoods arenotsoldintheordinary course of
trade insalesthatarearms length transactions bytheexporter inthecountry ofexport.
Article 2.2oftheADAgreement doesnotstand onitsown. Itmustbeconsidered inthecontext
ofthewhole Agreement. Article 6.14, which relates tothecollection ofevidence, states that"the
procedures ...(described inArticle 6)...arenotintended toprevent theauthorities ofaMember from
proceeding expeditiously withregard to...reaching preliminary orfinaldeterminations ...inaccordance
withrelevant provisions ofthisAgreement". 269TAC(2)(b) enables theAustralian authorities tocarry
outinvestigations andmakepreliminary andfinaldeterminations within legislative timeframes consistent
withArticle 6.14.
Q.7 269TAC(8) provides foradjustment tonormal value where thereisadifference intimes ofsale,
types ofgoods, orcircumstances ofsale,asdirected bytheMinister. When willadjustments bemade
under 269TAC(8) andwhatadjustments willbemade? Forexample, arepacking andfreight included?
SeeArticle 2.4oftheADAgreement.G/ADP/W/108
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Answer 7
Under 269TAC(8) thedomestic salesprice oflikegoods mustbeadjusted toaccount forall
differences intheterms andcircumstances ofdomestic andexport sales. Theadjustments aremade
toensure thatanydifferences willnotaffect thecomparison between normal value andexport price.
Australian legislation iscastinbroad terms andtherefore doesnotcontain adefinitive list.Export
chargessuchaspackingandfreightareconsideredbytheAustralianauthoritieswhenmakingadjustments
under 269TAC(8).
Q.8 Australia doesnotappear torequire thatexport price andnormal value becompared atthe
sameleveloftrade. Willleveloftrade adjustments bepermitted and,ifso,under whatcircumstances?
Answer 8
Asindicated inAnswer 7,269TAC(8) iscastinbroad terms butdoesensure thatthedomestic
salesprice oflikegoods isadjusted toaccount foralldifferences intheterms andcircumstances of
domestic andexport sales. Thisincludes differences inleveloftrade.
Q.9 Under 269TAF, whatcriteria willtheMinister apply todetermine whether there hasbeena
"sustained movement inexchange rates", andhowwilltheMinister select theeffective dateofan
adjustment forasustained movement inexchange rates? SeeArticle 2.4.1 oftheADAgreement.
Answer 9
269TAF doesnotspecify abasis upon which adetermination ofasustained movement in
exchange ratesismade. Such adetermination would beamatter ofobservation, from authoritative
sources, overtime.
269TAF(4), (5)and(6)provide abasis upon which adate, oranynumber ofdates, canbe
notified andtheexchange rateapplicable onthatday,orthose days, maythenbeapplied for60days
thereafter. Thisprocedure wasseenasanappropriate mechanism toimplement therequirement of
Article 2.4.1 thatexporters beallowed 60daystoadjust export prices toreflect sustained movement
inexchange rates, given that
- thesustained movement maybea"oneoff"event; or
- there maybecontinuing movement inrates, andthedirection andamount ofthat
movement maychange overtime; and
- there maybemovements which arenotsustained, andtherefore aprocedure for
exporters toadjust export prices isinappropriate.
Q.10 Explain howprofit willbeaccounted forinconstructed value. SeeArticle 2.2.2 oftheAD
Agreement.
Answer 10
Article 2.2.2 oftheADAgreement requires profits tobebased onactual datapertaining to
sales ofthelikeproduct orifprofit cannot bedetermined onthisbasis, itmaybedetermined ona
number ofother bases.G/ADP/W/108
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269TAC(2)(c) provides foraconstructed normal value. Aconstructed normal value includes
theprofit determined bytheMinister toapply todomestic salesintheordinary course oftrade inthe
country ofexport.
269TAC(5B) provides thattheprofit soincluded istobedetermined inaccordance with
Regulation 181. Regulation 181states matters theMinister musttakeaccount ofindetermining an
amount tobetheprofit onthesaleofgoods forthepurpose ofconstructing anormal value. This
regulation requires theMinister tocalculate anamount representing theprofit using datarelating to
thesaleoflikegoods intheordinary course oftrade orifprofit cannot bedetermined onthisbasis,
theregulation provides anumber ofother bases which areconsistent withArticle 2.2.2.
Where domestic salesareatalossandaretherefore determined tobenotintheordinary course
oftrade, aprofit component isnotincluded inaconstructed normal value because oftheoperation
of269TAC(13) and269TAAD.
Subsidies andCountervailing Measures:
Q.11 269TACC(4)(a) doesnotmention theconcept of"riskcapital", asreferred tobyArticle 14(a)
oftheSCMAgreement. Intheabsence ofaspecific provision, howwould Australia ensure theconformity
ofitspractice withtheAgreement?
Answer 11
Thephrase "normal investment practice" wasconsidered toencompass "theprovision ofrisk
capital" anditwastherefore notnecessary toinclude aspecific reference toriskcapital intheparagraph.
Q.12 Explain thephrase in269TAAC(2) "without limiting thegenerality ofthecircumstances inwhich
asubsidy isspecific." SeeArticle 2oftheSCM Agreement.
Answer 12
Theneedfortheexpression "Without limiting thegenerality ofthecircumstances inwhich
asubsidy isspecific" in269TAAC(2) arises from thelegislative drafting ofSection 269TAAC, in
particular theneedfortheMinster tomake adetermination under subsection (4)taking account of
subsection (5).Theparticular criteria forspecificity andnon-specificity aresetoutin269TAAC and
arethesame asinArticle 2oftheSCM Agreement. Although there areslight differences, these are
duetoAustralian legislative drafting requirements. Theexpression doesnotimply thattheAustralian
authorities could apply theconditions inrespect ofspecificity inamanner different fromAustralia 's
WTO rights andobligations.
Q.13 HowdoesAustralia interpret theterm"particular enterprises", asitisusedin269TAAC?
Answer 13
Thephrase, "particular enterprises" hasthesamemeaning as"certain enterprises" inArticle 2
oftheSCM Agreement.
Procedures:
Q.14 While itappears fromthetimetable thatinvestigations willbecompleted within oneyear, there
isnoexplicit statement ofsucharequirement. Intheabsence ofanexplicit provision, howdoesAustraliaG/ADP/W/108
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ensure conformity ofitspractice withArticle 5.10oftheADAgreement andArticle 11.11 oftheSCM
Agreement, which requires completion ofinvestigations inoneyear, andinnoinstance longer than
18months?
Answer 14
Timeframes forthevarious elements ofaninquiry areasfollows:
- 269TC(4)(c) refers topublication oftheperiod formaking apreliminary finding which
is120daysoranother period asprescribed byregulations. Customs Regulation 183AB
states thattheperiod formaking apreliminary finding istheperiod ending 100days
aftertheinitiation oftheinvestigation or120daysifalonger period isnecessary.
- 269TD(2) requires theComptroller toreferapositive preliminary finding totheAnti-
Dumping Authority within 7daysofpublication ofthepreliminary finding notice.
- Subsection 7(1)oftheAnti-Dumping Authority Actprovides that,from thedatethe
preliminaryfindingisreferredtotheAnti-DumpingAuthoritybyCustoms,theAuthority
hasaperiod of120days, oranother period ifprescribed bytheregulations (noother
period isprescribed), toreport totheMinister recommending whether definitive
measures should beimposed.
TheAustralian legislation therefore places amaximum timelimitof247daysontheAustralian
authorities toreport totheMinister. Given theseconstraints, specific provisions toreflect Article 5.10
oftheADAgreement andArticle 11.11 oftheSCM Agreement were notconsidered necessary.
Q.15 Australia 'slawdoesnotappear torequire theMinister, before disregarding information
considered "unreliable", toconsider thereasonable ability ofinterested parties torespond. Inthe
absence ofanexplicit provision, howwillAustralia ensure theconformity ofitspractice withArticle
6.8andAnnex IIoftheADAgreement?
Answer 15
TheAdministrative Decisions (Judicial Review) Actrequires theAustralian administration to
adhere tolawsofnatural justice andprocedural fairness. Adecision-maker mustprovide allinterested
parties withanopportunity torepresent theirinterests andaddress theinformation from andclaims
ofothers, must takeintoaccount onlyrelevant factors andmust actreasonably. Afailure tosoact
willcause theFederal Court tosetasidethedecision andtoreferthematter backtothedecision-maker
toberemade.
ThislegalframeworkinwhichAustralianadministratorsoperateensuresproceduresandpractices
areatleasttothestandards ofprocedural fairness required byArticle 6.8andAnnex IItotheAD
Agreement.Giventhislegalframework,specificstatutoryprovisionstoaddresstheseproceduralfairness
issues arenotrequired within theanti-dumping legislation.
Australia'sproceduralrequirementswouldrequiretheMinister,beforedisregardinginformation
considered "unreliable", toensure thatinterested parties hadbeengiven areasonable opportunity to
address theclaimed reasons fordisregarding information provided.
Q.16 Australia 'slawdoesnotappear torequire theMinister nottodisregard information submitted
byaparty where thatparty hasacted tothebestofitsability. Intheabsence ofanexplicit provision,G/ADP/W/108
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howwould Australia ensure theconformity ofitspractice withArticle 6.8andAnnex II,paragraph
5oftheADAgreement?
Answer 16
Refer toAnswer 15.
TheMinister isrequired tobasedecisions onallrelevant information available, thusinformation
submitted byaparty which hasacted tothebestofitsability would notbedisregarded unless itwas
considered notrelevant.
Q.17 Australia 'slawdoesnotappear torequire theMinister touseadverse information onlywhere
aparty hasnotbeencooperative bynotacting tothebestofitsability. Explain thecircumstances
under which adverse information willbeused. SeeArticle 6.8andAnnex II,paragraph 6oftheAD
Agreement.
Answer 17
Refer toAnswer 15.
Paragraph 7ofAnnex IIplaces anobligation onanadministration thatinformation from "a
secondary source" should beusedwith"special circumspection". Theparagraph recognises thata
situation where aninterested party doesnotcooperate could leadtoaresult which islessfavourable
totheparty thaniftheparty didcooperate.
Australia isuncertain astowhattheUSisreferring when itusestheterm"adverse information".
Ifthisismeant toconvey theselection ofinformation under "best information available" thatisthe
mostadverse, then, theAustralian authorities donotadopt suchapractice andindeed areprecluded
fromsodoing bywellaccepted principles ofadministrative law,inparticular those relating tonatural
justice. Inaddition Australia doesnotconsider thatsuchanapproach would beconsistent withthe
obligations under theAgreements.
Relevant provisions contained intheCustoms Actare269TAB(3) and269TAC(6). These
provisions enable theMinister todetermine export priceandnormal value having regard toallrelevant
information when theMinister issatisfied thatsufficient information hasnotbeenfurnished orisnot
available. TheAustralian authorities usethese provisions when theexporter orimporter refuses to
supply, oronlysupplies inpart,theinformation requested. Insuchsituations ajudgement ismade
astowhich information heldisthemostreliable. Thismaybefromthecomplainant, anindependent
thirdparty oranyothersource. However anyinformation usedunder theseprovisions mustbereliable.
Q.18 Does Australia 'slawgiverespondents withanopportunity tocorrect deficient submissions,
ortogivereasons forrejecting information, asrequired byAnnex II,paragraph 6oftheA-DAgreement?
Answer 18
Yes. Refer toAnswer 15.
Q.19 Under whatcircumstances, when employing secondary information, willAustralia check the
information against independent sources? SeeAnnex II,paragraph 7oftheADAgreement.G/ADP/W/108
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Answer 19
Refer toAnswer 15.
Asexplained inAnswer 17theAustralian authorities, when using bestinformation available,
arerequiredbyadministrativelawprinciplestoconsiderallreasonablyavailableandrelevantinformation
andtousethatinformation considered tobethemostreliable. Theprocess ofdetermining thereliability
ofinformation willinclude checking thatinformation against independent sources.
Q.20 DoesAustralia 'slawrequire theMinister totakeintoaccount allinformation which isverifiable,
which isappropriately submitted sothatitcanbeusedwithout undue difficulties, andwhich issupplied
inatimely fashion? SeeAnnex II,paragraph 3oftheADAgreement.
Answer 20
Refer toAnswer 15.
Information which isverifiable (indeed allrelevant information) mustbeconsidered. Asnoted
intheprevious reply, Australian authorities including theMinister arebylawrequired toconsider
allreasonably available andrelevant information andtobasedecisions onthatinformation considered
tobethemost reliable.
Q21. 269TAA(3)(b) oftheActcallsfortheMinister, indetermining whether goods aresoldata
loss(forthepurposes oftreating suchsalesasanindication thatarelated importer willbereimbursed
orotherwise receive abenefit fromtheexporter andthatthusthesaleisnotatarms length) tohave
regard to"such other amounts astheMinister determines tobecosts necessarily incurred inthe
importation andsaleofgoods." 269TAB(1)(b) and(c)callsfortheexport price forsales notatarms
length tobereduced by"duties ofCustoms" andby"anycosts, charges orexpenses arising inrelation
tothegoods afterexportation." Dothese provisions permit Australia todeduct anti-dumping duties
from therelated party'sresale price inAustralia ascosts? How isthisconsistent withtheAD
Agreement?
Answer 21
Australian authorities donotdeduct anti-dumping duties from theimporter 'sresale price in
Australia ascosts.
Dumping dutyisdefined in8(2)oftheCustoms Tariff Anti-Dumping Actasa"special duty
ofCustoms" anditisnottherefore a“...dutyofCustoms ...”asmentioned in269TAB(2)(a). As
aresult, dumping (andcountervailing) duties arenot"prescribed deductions" under 269TAB(2)(a).
Q.22 269ZG(2) oftheActrequires thatnewshippers reviews becompleted within 100daysafter
applications arelodged (ie.filedwiththeMinister). Maynewshippers filetheirrequests foraccelerated
reviews atanytimefollowing thefinaldetermination?
Answer 22
269T(1) includes newexporters inthedefinition ofresidual exporters. 269ZE(1) oftheCustoms
Actallows residual exporters tolodge anapplication foranaccelerated review ifadumping or
countervailing dutynotice hasbeenpublished ie.apositive finalfinding hasbeenmade. Thus anG/ADP/W/108
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application foranaccelerated review canbemade atanytimefollowing thepublication ofafinal
determination.
Q.23 Does Australia haveananti-circumvention provision?
Answer 23
Australiaunderstandsthatanti-dumpingandcountervailingmeasurescanonlyapplytoparticular
goods, generally referred toamong practitioners as“likegoods ”.Wefurther understand thatbefore
suchmeasures canbeapplied, inquiries must establish thatthelikegoods havebeendumped and/
orsubsidised, andcaused orthreatened material injury totheindustry producing likegoods.
Australia recalls thatmostofthediscussion onanti-circumvention intheUruguay Round related
totheautomatic extension ofmeasures togoods other thanthelikegoods, suchaspartsforthose goods.
Ifthequestion is"does Australia havesuchprovisions?", theanswer isnoand,inanycase, Australia
doesnotseehowtheywould beconsistent withtheADandSCM Agreements.
Q.24 HowdoesAustralia determine whether aproduct iswithin thescope ofaninvestigation?
Answer 24
Theapplicant isrequired todescribe thegoods inrespect ofwhich measures aresought, and
when theapplication isinitiated thatdescription serves tosetthescope oftheinvestigation.
Injury:
Q.25 269TAE (1)oftheActstates thatmaterial injury toanAustralian industry "hasbeenorisbeing
caused"or"isthreatenedorwouldormighthavebeencaused""becauseofanycircumstancesinrelation
totheexportation ofgoods toAustralia fromthecountry ofexport." Explain howthislanguage is
consistent with:
(a) thedefinition ofmaterial injury asapresent condition contained inArticle 3.5ofthe
ADAgreement andArticle 15.5oftheSCM Agreement;
(b) thedefinition ofthreat ofmaterial injury as"based onfacts andnotmerely on
allegation, conjecture orremote possibility" contained inArticle 3.7oftheAD
Agreement andArticle 15.7oftheSCM Agreement; and
(c) therequirement ofacausal relationship between thedumped orsubsidised imports
andtheinjury tothedomestic industry contained inArticle 3.5oftheADAgreement
andArticle 15.5oftheSCM Agreement.
Answer 25
(a) Thephrase "would ormight have been caused" wasincluded in269TAE(1) toenable
retrospective definitive measures tobeimposed, under 269TG(1), fortheperiod forwhich
provisional measures havebeenapplied.
269TG(1)(ii)providesfortheimpositionofdefinitivemeasureswhenbecauseofdumping
"material injury toanAustralian industry producing likegoods would ormight havebeencausedG/ADP/W/108
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ifthissecurity (provisional measure) hadnotbeentaken". Thisprovision isconsistent with
Article 10.2oftheADAgreement.
(b) 269TAE(1),whichembracesallpossibilitiesforconsiderationofinjurytoanAustralianindustry,
makes provision forthepossibilities recognised byArticle 3.7oftheADAgreement and
Article 15.7oftheSCM Agreement. 269TAE(1) mustbereadinconjunction with269TAE(2B)
which limits theMinister 'sconsideration ofthreat tocircumstances "aswould make thatinjury
foreseeable andimminent unless ...(definitive) ...measures were imposed".
(c) 269TG, 269TJ and269TJA require thattheMinister besatisfied thatdumped and/orsubsidised
goods hascaused, iscausing oristhreatening tocause material injury totheAustralian industry
before measures canbeimposed. 269TAE simply listsfactors theMinister mayhaveregard
toindetermining, forthepurposes of269TG or269TJ, whether material injury toanAustralian
industry hasbeenorisbeing caused oristhreatened.
Q.26 269TAE(1) oftheActstates that"theMinister may...haveregard to"thefollowing criteria
inorder todetermine whether anAustralian industry hasbeenmaterially injured, threatened, orthe
establishment ofanindustry materially hindered. Howistheapparently discretionary language "may ...
haveregard to"consistent withthe"shall consider" requirement ofArticle 3.2oftheADAgreement
andArticle 15.2oftheSCM Agreement?
Answer 26
269TAE includes anindicative, butnotexhaustive, listing ofthosefactors towhich theMinister
mayhaveregard when determining whether material injury hasbeencaused, orthreatened, toan
Australian industry.
Inopening remarks attheJoint Committee Meeting on20July1995, Australia provided a
general statement relating toissues ofprocedural fairness andtherights ofallinterested parties to
represent theirinterests. Those comments address theissue raised inthisquestion.
Asindicated inthatstatement, alldecisions byadministrators must haveregard torelevant
considerations, andnothaveregard toirrelevant considerations. Theinclusion ofanindicative and
nonexhaustive listofconsiderations inlegislation hastheeffect ofestablishing thateachisrelevant -
andmust beaddressed -unless itisclearly irrelevant given thecircumstances ofaparticular case.
Q.27 Article 3.2oftheADAgreement andArticle 15.2oftheSCM Agreement provide thatprice
undercuttingis"significant"orthatdumpedorsubsidisedimportsdepresspricestoa"significantdegree"
orprevent price increases toa"significant degree". Howis269TAE(1)(d)-(f) oftheActconsistent
withthese requirements thatprice effects besignificant?
Answer 27
Australia ’slegislation requires thatprice undercutting anddepression andtheprevention of
price increases willbeconsidered. Where price effects areconsidered tobeinsignificant theycould
notform thebasis forafinding thatinjury wasmaterial.
269TAE ensures thatprice effects willbeaddressed consistent withArticles 3.2oftheAD
Agreement and15.2oftheSCM Agreement.G/ADP/W/108
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Q.28 269TAE(3) oftheActprovides alistoftherelevant economic factors tobeconsidered. Isthis
listexhaustive orareotherfactors alsoconsidered, suchasinventories, factors affecting domestic prices,
andother relevant economic factors asprovided forinArticle 3.4oftheADAgreement andArticle
15.4oftheSCM Agreement?
Answer 28
269TAE(3) isdrafted asanexhaustive listof‘relevant economic factors ’butitserves only
todefine atermusedin269TAE(1). 269TAE(1) isanonexhaustive list,andinthatrespect reflects
thenonexhaustive listsofconsiderations inArticles 3.4oftheADAgreement and15.4oftheSCM
Agreement.
Q.29 269TAE(2B) oftheActprovides thatdeterminations regarding threat ofmaterial injury “must
takeaccount onlyofsuchchanges incircumstances ...aswould make thatinjury foreseeable and
imminent unless dumping orcountervailing measures wereimposed. ”Howwillthecriteria forthreat
determinations articulated inArticle 3.7oftheADAgreement andArticle 15.7oftheSCMAgreement
beimplemented oratleastconsidered inthethreat determination?
Answer 29
269TAE doesemploy thewords "foreseeable andimminent". However thewords inArticle 3.7
oftheADAgreement" ...theauthorities should consider, interalia,suchfactors as:..."isclearly
anillustrative andnon-exhaustive listoffactors. Thephrase in269TAE(2B) "asdetermined bythe
Minister" covers thefactors included inArticle 3.7andother factors considered onacasebycase
basis.
Q.30 269TAE(2B) provides guidance onhowsubsections (1)and(2)aretobeconsidered forthe
threatdetermination.Issimilarseparateguidanceprovidedregardingconsiderationofthosesubsections
formaterial injury determinations andformaterial hindrance determinations?
Answer 30
269TAE(2B) wasadded tothematerial injury provisions as,inAustralia ’sview, Articles 3.7
oftheADAgreement and15.7oftheSCM Agreement demanded it.There isnocomparable provision
relating tomaterial injury, ormaterial hindrance totheestablishment ofanindustry.
Q.31 269TAE(2C) oftheActpermits consideration ofthecumulative effects ofimports frommore
thanonecountry“ifhavingregardto”theconditionsofcompetitionbetweenimportedgoodsandbetween
imported goods andthedomestic likegood, “theMinister issatisfied thatitisappropriate todoso.”
Howwilltheother requirements ofArticle 3.3oftheADAgreement andArticle 15.3oftheSCM
Agreement beconsidered, which provide thatthecumulative effect maybeconsidered “onlyif”a
determination ismade thatthedumping margin oramount ofsubsidisation ismore thandeminimis
(pursuant toArticle 5.8orArticle 11.9, respectively) andthatthevolume ofimports fromeachcountry
isnotnegligible?
Answer 31.
269TDAprovidesthatanti-dumpinginvestigationsmustbeterminatedwherethedumpingmargin
isdeminimis orthevolume ofimports negligible. Aspreliminary findings andfinalfindings aremade
onlyinrelation togoods under inquiry, imports fromsources inrelation towhich aninquiry hasbeenG/ADP/W/108
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terminated would notbetaken intoaccount inassessing theaffects ofdumped imports, andthe
requirement ofArticle 3.3(a) oftheADAgreement issatisfied.
269TAE(2C) contains onlythepartofthetestrequired byArticle 3.3(b) oftheADAgreement.
Given theeffect ofthetermination provisions, specific reference totheother provisions ofArticle 3.3
wasnotconsidered necessary.
Q.32 Theterm“Australian industry ”isusedinseveral sections oftheActandisbriefly defined in
269T(4) asconsisting ofaperson or“persons whoproduce likegoods inAustralia ”.How does
Australia ’sapplication orconstruction oftheterm“Australian industry ”conform withtherequirements
oftheArticle 4.1oftheADAgreement andArticle 16.1oftheSCMAgreement, specifically regarding:
(a) therequirement thatdomestic producers constitute a“major proportion ofthetotaldomestic
production; ”
(b) thedefinition ofproducers “related toexporters orimporters; ”and
(c) therestrictions regarding dividing production “intotwoormore competitive markets, ”(ie.
regional industries)?
Answer 32
Article 4.1defines theterm"domestic industry" as"thedomestic producers asawhole" or
"amajor proportion" ofthem. 269TAE(1) refers to"material injury toanAustralian industry". 269T(4)
defines anAustralian industry as"aperson or...persons [i.e.allsuchpersons] whoproduce likegoods
inAustralia". TheAustralian legislation doesnothaveaprovision relating to"amajor proportion".
TheAustralian authorities consider material injury tothewhole domestic industry.
Article 4.1(i) oftheADAgreement provides forproducers whoare"related totheexporters
orimporters orwhoareimporters themselves" tobeexcluded fromthedefinition ofdomestic industry.
Thisprovision isdiscretionary. TheAustralian legislation doesnotcontain thisprovision.
Article 4.1(ii) allows Members toconsider divided competitive markets "inexceptional
circumstances". Australian legislation doesnotcontain thisprovision.
Q.33 Isthere arequirement consistent withArticle 3.6oftheADAgreement andArticle 15.6ofthe
SCMAgreement regarding examination ofproduction dataonthebasisoflikeproduct orthenarrowest
group orrange ofproducts?
Answer 33
Therequirement ofArticle 3.6oftheADAgreement and15.6oftheSCM Agreement is
implemented bythe"Application forAnti-dumping andCountervailing Duties" Form. Section Lof
thatform requires certain information relating toProfit/Loss beprovided. Thissection specifically
requests thefollowing information beprovided.
"1. Provide copies oftrading andprofit andlossstatements forthelikegoods orforthe
narrowest group orrange ofproducts which includes thelikegoods, fortheperiod commencing
from thefinancial yearprior tothestartofinjury through tothecurrent financial period."G/ADP/W/108
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Q.34 Section 269TB(4)(b) oftheActrequires thatapplications foranti-dumping orcountervailing
dutyactions "beinanapproved form" and"contain suchinformation astheformrequires." Isthe
information required ontheapproved formconsistent withtherequirements ofArticle 5.2oftheAD
Agreement andArticle 11.2oftheSCM Agreement?
Answer 34
Theapplication requires answers begiven toanumber ofquestions asked under thefollowing
headings:
A. Applicants Details (including identity oftheapplicant)
B. TheAustralian Industry (including volume andvalue ofdomestic production ofall
known domestic producers)
C. TheGoods (including description oftheproduct)
D. Source ofImports (including names ofcountries ofexport andexporters andnames
ofimporters)
E. Export Price (including information onexport prices)
F. Normal Value (including information ondomestic prices inthecountry ofexport)
G. Price Comparison
H. Dumping Margin
I. Subsidisation
J. Material Injury (including information onvolume ofallegedly dumped imports, effect
onprices andconsequent impact onthedomestic industry)
K. Causal Link
L. Profit/Loss
Ascanbeseenfromtheabove list,theformincludes alltheinformation required inArticles 5.2
oftheADAgreement and11.2oftheSCM Agreement.3
Q.35 269TC(4)(e) oftheActspecifies thatinterested parties willhaveaperiod of“notmore than
40daysafterthedateofinitiation oftheinvestigation ”tolodge “submissions concerning thepublication
ofthenotice sought bytheapplication. ”Howisthisconsistent withArticle 6.2oftheADAgreement
andArticle 12.3oftheSCM Agreement?
Answer 35
Article 6.2oftheADAgreement requires authorities toprovide interested parties witha"full
opportunity forthedefence oftheirinterests" throughout theinvestigation.
269TC relates tothepreliminary investigation. 269TC(4) requires theComptroller topublicly
notify thedecision toinitiate aninvestigation andinclude certain matters inthenotice. Oneofthose
matters, specified in269TC(4)(e), isaninvitation tointerested parties tolodge submissions within
40daysofinitiation oftheinvestigation. (This requirement isconsidered necessary because ofthe
legislative timeframes inwhich theAustralian authorities operate.) However thisrequirement issubject
to:
- 269TC(6), which provides foranextension oftimeformaking asubmission; and
3Interested persons arerequested tocontact theSecretariat, Office 1023, Tel.7395109.G/ADP/W/108
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- 269TD(1), which requires theComptroller, when making apreliminary finding, to
takeintoaccount theapplication, submissions received andanyothermatters considered
relevant. "Other matters" mayinclude submissions received afterthe40daydeadline.
Thelegalrequirements governing theconduct offinalinquiries areincluded inPartIVofthe
Anti-Dumping Authority Act. Subsection 23(2) liststhematters which mustbeincluded inapublic
notice ofthecommencement ofaninquiry. 23(2)(g) requires thenotice to"invite interested parties
tolodge withtheAuthority, within aspecified period ofnotlessthan40daysafterthedateofthe
public notice oftheinquiry, submissions concerning thesubject matter oftheinquiry".
Subsection 7(6)oftheAnti-Dumping Authority Actrequires theAuthority tohaveregard to
allsubmissions received within theperiod specified inthenotice ofinquiry under section 23.Subsection
7(7)requires theAuthority tohaveregard tosubmissions thatrelate tothestatement ofessential facts
placed onthepublic record andreceived within 7daysafterthestatement isplaced onthepublic record.
Aspreviously explained inAnswer 15,under Australian administrative lawadecision-maker
must provide allinterested parties withanopportunity torepresent theirinterests andaddress the
information from andclaims ofothers.
Q.36 Arethere anyrequirements concerning howinformation istobesought frominterested parties
inaninvestigation consistent withArticle 6.1oftheADAgreement andArticle 12.1oftheSCM
Agreement?
Answer 36
269TC(4)(e) requires theComptroller toinclude inapublic notice oftheinitiation ofa
preliminary investigation aninvitation tointerested parties tolodge submissions. Questionnaires are
senttoallidentified importers andexporters onthedaytheinitiation notice ispublished. The
questionnaires describe alltheinformation thatisrequired tobeprovided insubmissions.
TheAnti-DumpingAuthoritypubliclynotifiesthecommencementofafinalinquiryinaccordance
withsection 23oftheAnti-Dumping Authority Act.23(2)(g) requires theAuthority toinvite interested
parties tolodge submissions "concerning thesubject matter oftheinquiry". Importers andexporters
identified during thepreliminary investigation, andothers found toexist, areadvised oftheinformation
required tobeincluded inasubmission.G/ADP/W/108
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REPLIES BYAUSTRALIA TOQUESTIONS FROM THE UNITED STATES
(G/ADP/W/14/Suppl.1 -G/SCM/W/21/Suppl.1) CONCERNING THE NOTIFICATION OF
AUSTRALIAN LAWS AND REGULATIONS (G/ADP/N/1/AUS/1 -G/SCM/N/1/AUS/1)
Q.1 Isthereaprovision under Australian lawtogiveguidance totheMinister ofwhich export price
should beused?
Answer 1
Itisnotnecessary togiveguidance totheMinister onwhich export priceshould beusedbecause,
wherever practicable, allexport prices during theinvestigation period areusedinthedetermination
ofdumping margins. 269TACB(1) requires theMinister tocompare export prices ofgoods, established
inaccordance with269TAB, exported toAustralia during theinvestigation period withcorresponding
normal values, determined under 269TAC. Inaccordance with269TACB(2), theMinister maymake
comparisons onaweighted average basis; oratransaction totransaction basis; oracombination of
thetwo.
Incertain circumstances, where therearealargenumber ofexporters, sampling maybeapplied
under 269TACB(8).
Q.2 Ifsalesintheexport market arefound tobebelow cost,whatprice willtheAustralian officials
usetobegin constructing theexport price?
Answer 2
269TAB(1)(b) provides fortheexport price tobeconstructed ifthepurchase ofthegoods by
theimporter wasdetermined tobenon-arms length including, ifappropriate, where thatdetermination
isbased onsalesbytheimporter ataloss.
Anexportpriceisconstructedfrom"thepriceatwhichthegoodsweresosoldbytheimporter...
lesstheprescribed deductions" regardless ofwhether thegoods wereon-sold bytheimporter ataloss.