+--------------------------------------------------+-------------------+
| **[World Trade]{.smallcaps}**                    |                   |
|                                                  |                   |
| **[Organization]{.smallcaps}**                   |                   |
+--------------------------------------------------+-------------------+
|                                                  |                   |
+--------------------------------------------------+-------------------+
|                                                  | *                 |
|                                                  | *G/ADP/N/1/CHL/2\ |
|                                                  | G/SCM/N/1/CHL/2** |
|                                                  |                   |
|                                                  | 14 March 2000     |
+--------------------------------------------------+-------------------+
|                                                  | (00-1017)         |
+--------------------------------------------------+-------------------+
|                                                  |                   |
+--------------------------------------------------+-------------------+
| **Committee on Anti-Dumping Practices**          | Original: Spanish |
|                                                  |                   |
| **Committee on Subsidies and Countervailing      |                   |
| Measures**                                       |                   |
+--------------------------------------------------+-------------------+

NOTIFICATION OF LAWS AND REGULATIONS

UNDER ARTICLES 18 .5 AND 32.6 OF THE AGREEMENTs

CHILE

The following communication, dated 9 March 2000, has been received from
the Permanent Mission of Chile.

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

Pursuant to Article 18.5 of the Anti-Dumping Agreement and Article 32.6
of the Agreement on Subsidies and Countervailing Measures, I have
pleasure in transmitting herewith the amendments made to Chile\'s
legislation on the investigation and imposition of anti-dumping duties
and countervailing measures.

The amendment to Law 18,525 concerning \"Rules on the importation of
goods\", which authorized the conduct of investigations concerning
anti-dumping and countervailing duties, was adopted under Law No. 19,612
published in the Official Journal (Diario Oficial) of 31 May 1999. The
amendment in question introduces no significant changes in anti-dumping
or countervailing duty investigations. It merely revokes the authority
under Article 10 to establish so-called \"tariff surcharges\" and
minimum customs values, while at the same time incorporating procedures
for the investigation and application of safeguard measures, through the
amendment to Article 9 of Law No. 18,525, procedures which were duly
notified in document G/SG/N/1/CHL/2.

For a better understanding of this notification, the following two
annexes are attached:

[Annex I]{.underline}: the text of Law No. 19,612.

[Annex II]{.underline}: the text of Law No. 18,525, in its current
wording following the recent amendments under Law No. 19,612.

annex i

Law No. 19,612

Amending Law No. 18,525 on Import Price Distortions for the Purpose of

Establishing a Safeguards Procedure Pursuant

to the Marrakesh Agreement

Bearing in mind that the National Congress has approved the following
draft Law

\"**Single article** - Make the following amendments to Law No. 18,525:

\(a\) Delete the comma after the word \"surcharges\" in the first
paragraph of Article 4 and insert the words \"of the kind\" referred to
in Article 9 or\".

\(b\) Replace Article 9 by the following:

**Article 9**. In the circumstances envisaged in Article XIX of the
General Agreement on Tariffs and Trade 1994 and in the Agreement on
Safeguards of the World Trade Organization, the President of the
Republic may apply *ad valorem* tariff surcharges, through a Supreme
Decree of the Ministry of Finance, subject to a favourable report by the
Commission referred to in Article 11.

The surcharges referred to in the preceding paragraph may be applied
provisionally if the Commission determines that the circumstances
envisaged in Article 6 of the Agreement on Safeguards of the World Trade
Organization exist. The Commission shall have a period not exceeding 30
days from the date of initiation of the investigation in which to make
such determinations.

The Commission may initiate an investigation pursuant to a written
request submitted by the domestic industry affected by the serious
injury or threat of serious injury. Domestic industry shall be
understood to meet the definition contained in Article 4.1(c) of the
Agreement on Safeguards of the World Trade Organization. The Commission
may on its own initiative conduct an investigation when it possesses
information that justifies so doing.

The surcharges referred to in this Article shall not be applied for more
than one year, including the period of provisional application of the
measure. However, they may be extended for one further period not
exceeding one year when the reasons for their application still exist,
subject to a favourable report by the Commission referred to in the
first paragraph above. Extension of the surcharge shall include a
timetable for its gradual dismantling, unless there are exceptional
circumstances duly substantiated by the Commission.

Application of a surcharge which, when added to the tariff in effect,
amounts to a figure higher than the tariff bound in the World Trade
Organization shall require the approval of three-quarters of the members
of the Commission.

The application of emergency or safeguard measures provided for in trade
agreements shall be governed, as a supplementary matter, by the rules of
this Article and its regulations. Where there is inconsistency between
the regulations under this Law and those contained in the aforementioned
agreements, the latter shall prevail to the extent of the inconsistency.

When compensation is agreed with another country under a safeguard
measure, the President of the Republic may, through a Supreme Decree of
the Ministry of Finance and for the period of application of the
measure, lower tariffs or accelerate the tariff reduction process
provided for in the corresponding trade agreement.

The President of the Republic may, through a Supreme Decree of the
Ministry of Finance, raise the tariffs applicable to goods from another
country when no agreement has been reached on adequate compensation as a
result of that country\'s application of a safeguard measure to Chilean
goods.

\(c\) In Article 10, delete the phrase beginning \"Surcharges of\" and
ending with \"24 per cent *ad valorem*\".

\(d\) In Article 10, delete the words \"these surcharges\" between the
words \"which\" and \"anti-dumping duties\".

\(e\) In the fifth paragraph of Article 11, delete the words \"these
surcharges\" and replace the words \"minimum customs values\" by
\"surcharges\".

\(f\) Replace the tenth paragraph of Article 11 by the following:

\"The Commission shall be responsible for considering complaints
concerning the application of the Agreement on Subsidies and
Countervailing Measures, the Agreement on Safeguards and the Agreement
on Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994, which form part of the Marrakesh Agreement Establishing the
World Trade Organization\".

With my approval and endorsement; to be enacted and implemented as a law
of the Republic. Santiago, 28 May 1999. EDUARDO FREI RUIZ-TAGLE,
President of the Republic. Eduardo Aninat Ureta, Minister for Finance.
Jorge Leiva Lavalle, Minister for the Economy, Development and
Reconstruction.

annex ii

law no. 18,525

Rules on the Importation of Goods

**Article 1.** All foreign goods to be imported into Chile shall be
subject to payment of the duties established in the Customs Tariff or in
other relevant legal provisions.

The provisions of the preceding paragraph shall not apply to the total
or partial exemptions provided in the Tariff, in special laws or
international treaties.

**Article 2.** The customs duties established for various categories of
goods in the official text of the Tariff approved by Finance Decree No.
679 of 1981, published in the *Diario Oficial* of 14 December 1981, and
its subsequent amendments, and the duties to be applied under the 1980
Montevideo Treaty Establishing the Latin American Integration
Association (LAIA), shall form part of this Law.

The general rules on interpretation of the tariff nomenclature, the
complementary general rules, the rules on units and packaging, the rules
on valuation procedures and the Notes under each heading in the Tariff
referred to in the preceding paragraph shall also form part of this Law.

**Article 3.** The rules on surtaxes and rates shall be established in a
resolution by the Director of the National Customs Service. The
explanatory notes to the nomenclature issued or to be issued by the
Brussels Customs Cooperation Council shall be used to interpret the
Customs Tariff without prejudice to the authority given to the Director
of the Service under Article 4, No. 7, of the Basic Law on the National
Customs Service.

**Article 4.** Where the President of the Republic subdivides the
headings in the Customs Tariff and modifies those subdivisions for
statistical purposes or for any other administrative reasons, this shall
not affect the customs duty payable under Article 2 upon import of the
goods, except when the subdivision has been created to apply surcharges
of the kind referred to in Article 9 or anti-dumping duties or
countervailing duties of the kind referred to in Article 10.

The National Customs Service may make the subdivisions and amendments
referred to in the preceding paragraph, subject to authorization by the
President of the Republic. In such cases, the resolutions of the Service
shall be published in the *Diario Oficial*.

The Director of the National Customs Service shall be responsible for
indicating the customs categories in which the goods shall be classified
and shall be obliged to use the nomenclature in the Customs Tariff for
that purpose.

**Article 5.** The taxable base for *ad valorem* duties shall be the
customs value of the goods entering Chile. This value shall be
determined in accordance with the provisions of Articles 6, 7, 8 and 9
of this Law.

**Article 6.** Where sales take place under free market conditions, the
customs value shall be determined on the basis of the transaction value,
that is the price actually paid or payable for the goods when sold for
import into Chile.

A transaction shall be deemed to have taken place under free market
conditions between a buyer and an independent seller when the payment of
the price is the only obligation performed by the buyer and there is no
contractual or other commercial relation between the buyer and the
seller and their partners other than that created by the transaction on
the goods in question. Two persons shall be deemed to be related
commercially if one of them has any interest whatsoever in the business
of the other or if both have a common interest in any business or if a
third party has a direct or indirect interest in the business of one of
them.

When these free conditions do not exist, the taxable base of the *ad
valorem* duties shall be the price that it is deemed the goods could
obtain at the time the customs duties are payable in a transaction under
free market conditions between an independent buyer and seller.

**Article 7.** The customs value of the imported goods shall include all
the costs incurred for transport to the place of importation. These
costs shall include loading and unloading, transport, commission,
insurance, brokerage, interest and the cost of packing unless they are
governed by their own customs regime. The place of importation of the
goods shall be the place of entry for customs formalities. For the
purposes of valuation, the customs duties shall be payable on the date
appearing on the corresponding customs declaration.

**Article 8.** In the cases referred to in the final paragraph of
Article 6 or where there are grounds for considering that the declared
value is not the actual value, the National Customs Service shall
establish the value taking into account the various elements which, in
the transaction in question, are contrary to the concept of a
transaction under free market conditions.

For the purposes mentioned above, the Service shall consider the customs
value of identical goods or, if there are none, similar goods sold at
the same level of trade as those being valued. In determining the value,
the Service shall also take into account reliable information from
manufacturers or may require information from national or foreign public
authorities. The same procedure shall be followed when the importation
of the goods into Chile does not come under a sales contract. In the
case of used goods, when taking into account the price of new identical
or similar goods, reductions for use and age shall be taken into account
as appropriate.

The valuation established on the basis of the rules in this Law shall
constitute the taxable base for the application of *ad valorem* duties
or for fixing the amount corresponding to the difference in duty if the
import declaration has already been processed. The acts of the National
Customs Service modifying the declared value shall be appealable in
conformity with the procedure laid down in Articles 132 et seq. of the
Customs Order.

**Article 9.** In the circumstances envisaged in Article XIX of the
General Agreement on Tariffs and Trade 1994 and in the Agreement on
Safeguards of the World Trade Organization, the President of the
Republic may apply *ad valorem* tariff surcharges, through a Supreme
Decree of the Ministry of Finance, subject to a favourable report by the
Commission referred to in Article 11.

The surcharges referred to in the preceding paragraph may be applied
provisionally if the Commission determines that the circumstances
envisaged in Article 6 of the Agreement on Safeguards of the World Trade
Organization exist. The Commission shall have a period not exceeding 30
days from the date of initiation of the investigation in which to make
such determinations.

The Commission may initiate an investigation pursuant to a written
request by the domestic industry affected by the serious injury or
threat of serious injury. Domestic industry shall be understood to meet
the definition contained in Article 4.1(c) of the Agreement on
Safeguards of the World Trade Organization. The Commission may on its
own initiative conduct an investigation when it possesses information
that justifies so doing.

The surcharges referred to in this Article shall not be applied for more
than one year, including the period of provisional application of the
measure. However, they may be extended for one further period not
exceeding one year when the reasons for their application still exist,
subject to a favourable report by the Commission referred to in the
first paragraph above. Extension of the surcharge shall include a
timetable for its gradual dismantling, unless there are exceptional
circumstances duly substantiated by the Commission.

Application of a surcharge which, when added to the tariff in effect,
amounts to a figure higher than the tariff bound in the World Trade
Organization shall require the approval of three quarters of the members
of the Commission.

The application of emergency or safeguard measures provided for in trade
agreements shall be governed, as a supplementary matter, by the rules of
this Article and its regulations. Where there is inconsistency between
the regulations under this Law and those contained in the aforementioned
agreements, the latter shall prevail to the extent of the inconsistency.

When compensation is agreed with another country under a safeguard
measure, the President of the Republic may, through a Supreme Decree of
the Ministry of Finance and for the period of application of the
measure, lower tariffs or accelerate the tariff reduction process
provided for in the corresponding trade agreement.

The President of the Republic may, through a Supreme Decree of the
Ministry of Finance, raise the tariffs applicable to goods from another
country when no agreement has been reached on adequate compensation as a
result of that country\'s application of a safeguard measure to Chilean
goods.

**Article 10.** Anti-dumping[^1] and countervailing duties are hereby
established for imports of goods of which the entry into the country
causes or threatens serious injury to the domestic industry by entering
at diminished prices as a result of artificial effects in their
respective markets. The President of the Republic shall determine the
goods to which these surcharges, anti-dumping duties and countervailing
duties shall apply, as well as their amount and duration, which shall
not exceed one year, after receipt of the report by the Commission
referred to in the following Article.

**Article 11.** A National Commission shall be established to
investigate the existence of distortions in the prices of imported
goods. This Commission shall comprise the Inspector-General of the
Economy, who shall be its Chairman; two representatives of the Central
Bank of Chile, who shall be designated by its Board; representatives of
the Ministry of Finance, the Ministry of Agriculture and the Ministry of
the Economy, Development and Reconstruction, who shall be designated by
a resolution published in the *Diario Oficial*; the National Director of
Customs; and a representative of the Ministry of Foreign Affairs,
designated as above. The above-mentioned members shall have the
alternates provided for by law or as designated by their respective
institutions by resolution published in the *Diario Oficial*.

*The Commission shall be responsible for hearing complaints concerning
distortions in the prices of internationally traded goods. To that end,
it shall conduct an investigation in each case. It shall report the
opening and subject of an investigation within five working days after
the complaint has been duly lodged, by means of a notice published in
the Diario Oficial. Within 30 days from the date of such notice, the
Commission shall receive whatever information interested parties wish to
submit and request any reports it considers necessary. Before reaching a
decision, it shall also conduct hearings of the interested parties, if
they so request, to hear their arguments.*

The complaint submitted to the Commission shall indicate the distortion
and the manner in which it causes or threatens material injury to the
domestic industry affected.

Without prejudice to the provisions of the preceding paragraphs, the
Commission may on its own initiative conduct the investigations referred
to in this Article when it possesses information that justifies so
doing. Investigations conducted by the Commission on its own initiative
shall as far as possible be subject to the same procedure as for
investigations of complaints.

Within a maximum period of 90 days from the date of publication of the
notice in the *Diario Oficial*, the Commission shall make a decision on
the facts under investigation on the basis of the information in its
possession. If the Commission considers that, on the basis of such
information, it is possible to establish the existence of distortions in
the price of the product and that such distortions cause or threaten
material injury to the affected domestic industry, it shall so state in
the decision it delivers for that purpose, in which it shall recommend,
either jointly or separately, the establishment of the surcharges[^2]
referred to in Article 9 or[^3] the anti-dumping or countervailing
duties referred to in Article 10.

Before delivering the decision referred to in the preceding paragraph
and at any stage in the investigation, the Commission may request the
President of the Republic, through the Minister for Finance, to
establish within a period of 60 days provisional surcharges,
anti-dumping or countervailing duties or minimum customs values. The
duration of the surcharges, anti-dumping or countervailing duties or
minimum customs values applied under this paragraph shall not extend
beyond the date on which the final decision is adopted, and shall be
payable if they were in force at the time when the Customs Service
accepted the corresponding import declaration for processing.

The Commission may at any time request the competent authority to modify
or repeal measures adopted provisionally.

In the event that, upon completion of the investigation, the Commission
decides that there is no distortion in the price of the goods concerning
which it requested provisional measures, or that distortions do exist
but do not cause or threaten serious injury to the national economy, the
persons affected by the provisional surcharges, anti-dumping or
countervailing duties or minimum customs values may apply for the refund
of such payments. Likewise, the persons concerned may request the total
or partial refund of amounts paid under such provisional measures when,
following a recommendation by the Commission in the relevant resolution
that definitive surcharges, anti-dumping or countervailing duties or
minimum customs values be imposed, the competent authority does not
impose any such measure or adopts a measure for a lower amount than that
which had to be paid under the provisional measure. Current interest
shall accrue on refundable amounts. Application for refund must be made
within 90 days of the date of entitlement to refund, after which the
right thereto shall lapse.

The resolutions of the Commission shall be adopted by a majority of
votes; in the case of a tied vote, the Chairman shall have the deciding
vote.

The Commission shall be responsible for considering complaints
concerning the application of the Agreement on Subsidies and
Countervailing Measures, the Agreement on Safeguards and the Agreement
on Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994, which form part of the Marrakesh Agreement Establishing the
World Trade Organization.

Regulations enacted by Supreme Decree of the Ministry of Finance shall
establish the necessary procedure for the collection of the duties,
taxes and other charges arising out of the provisional imposition of
minimum customs values, surcharges, anti-dumping and countervailing
duties and their refund, where appropriate. The regulations shall also
determine the procedures necessary for the implementation of the
provisions of this Article.

The Central Bank of Chile shall act as the Technical Secretariat of the
Commission referred to in the first paragraph of this Article.

**\_\_\_\_\_\_\_\_\_\_**

[^1]: The phrase beginning \"surcharges of 3 per cent and ending with 24
    per cent *ad valorem* is deleted.

[^2]: The words \"minimum customs values\" are replaced by
    \"surcharges\".

[^3]: The word \"surcharges\" is deleted.