RESTRICTED
WORLD TRADE G/ADP/Q1/KOR/9
G/SCM/Q1/KOR/9
ORGANIZATION 11July1997
(97-2911)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
NOTIFICATION OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Replies ofKOREA1
toQuestions from CANADA2,CHILE3,theEUROPEAN COMMUNITIES4,
MEXICO5,TURKEY6,andtheUNITED STATES7
Thefollowing communication, dated 30June1997, hasbeenreceived from thePermanent
Mission ofKorea.
_______________
Question from Canada
Q. Article 4-3ofTheDecree oftheCustoms Actdoesnotappear torequire thenotification
ofthegovernment ofanexporting Member ofthereceipt ofaproperly documented complaint
ascontemplated byArticle 5.5oftheADAgreement. Where inKorean lawistherequirement
fortheresponsible Korean authority togivesuchnotification?
Reply
When theTrade Commission decides toinitiate aninvestigation ofdumping, thenitnotifies
theexporting countries andother interested parties ofthecontents ofthedecision according tothe
provisions ofparagraph 3ofArticle 4-3oftheDecree.
Questions from Chile
Q.1. With regard totheamount ofanti-dumping duties, please clarify what provision ismade
intheRegulation oftheCustoms Actfortheimposition ofadutywhich isequal tothemargin
ofdumping andcorrects onlytheinjury caused.
Reply
Itisprescribed inArticle 10,Paragraph 1thatadutyinanamount notmore thanthedifference
between thenormal value andthedumping price ofadumped product maybeimposed inaddition
tothecustoms duty.
1G/ADP/N/1/KOR/3-G/SCM/N/1/KOR/3.
2G/ADP/Q1/K OR/1-G/S CM/Q1/K OR/1,3G/ADP/Q1/K OR/6-G/S CM/Q1/K OR/6&G/ADP/Q1/K OR/8-G/S CM/Q1/K OR/8,
4G/ADP/Q1/K OR/2-G/S CM/Q1/K OR/2 &G/ADP/Q1/K OR/7-G/S CM/Q1/K OR/7,5G/ADP/Q1/K OR/5-G/S CM/Q1/K OR/5,
6G/ADP/Q1/KOR/3-G/SCM/Q1/KOR/3,7G/ADP/Q1/KOR/4-G/SCM/Q1/KOR/4.G/ADP/Q1/KOR/9
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Page2
Q.2. How areadjustments forquality ofthelikeproduct taken intoaccount inparagraph 6
ofArticle 4-6oftheDecree oftheCustoms Act.
Reply
Thedifference inthequality ofthelikeproduct between theKorean product andthedumped
product istobereflected inaprice adjustment based onthemanufacturing cost.
Q.3. Please explain inwhat waytheinvestigation could bedifferent, inaccordance with
paragraph 3ofArticle 4-9oftheRegulation oftheCustoms Act,forexporters whoexport after
theinvestigation period. How aretheappropriate transparency andnotification oftheparties
guaranteed?
Reply
Thenewexporter whoexports aproduct toKorea under investigation aftertheinvestigation
period issubject toanti-dumping dutyatanaverage dumping rateoftheproducts which havebeen
investigated already. Butiftheexporter doesnotwanttobeimposed astheaverage dumping rate,
thenheshallbeinvestigated byordinary investigation procedures.
Q.4. Inwhat wayareadjustments warranted intheevent thattheexchange-rate fluctuations
referred toinparagraph 12ofArticle 4-4oftheDecree oftheCustoms Acttaketheform of
sustained inflation andastable exchange rate(strong revaluation against theUSdollar).
Reply
Theprovision ofParagraph 12,Article 4-4oftheRegulation isestablished forthepurpose
offollowing theprovision oftheWTO Anti-Dumping Agreement, Article 2.4.1.
InKorea, however, there havebeennocases where theexchange ratefluctuations havebeen
taken intoaccount incomputing thedumping margin inaccordance withtheprovision ofthisArticle.
But,ifitisnecessary inthefuture toapply thisprovision, wewilladhere totherules oftheWTO
Anti-Dumping Agreement, Article 2.4.1.
Q.5. Paragraph 1ofArticle 4-10oftheDecree oftheCustoms Actestablishes theconditions
forapplying provisional measures. How isthecausal relationship thatisnecessary inorder to
impose measures taken intoaccount?
Reply
Inordertoimposeprovisionalmeasures,itisnecessarytohaveapositivepreliminaryjudgement
thattheimported products havebeendumped andthatanindustrial injury hasoccurred duetothe
dumped products.
Q.6. With regard totheamendment toparagraph 1ofArticle 4oftheRegulation oftheCustoms
Act,please clarify whether intheexpression "function, characteristics andconstituent parts" each
ofthese terms constitutes asimultaneous requirement taken intoaccount inthedefinition ofthe
likeproduct, andwhether agreater degree ofimportance isattached toanyofthem.G/ADP/Q1/KOR/9
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Page3
Reply
Forthedefinition ofthelikeproduct, theterms "function, characteristics andconstituent parts"
areconsidered simultaneously andcomprehensively, andthedegree oftheir importance isnot
distinguished.
Follow-up Questions from Chile
Q.1. Weunderstand from Korea 'sreply thatitslegislation provides thatanti-dumping duties
aresetforanamount equal tothedumping margins calculated. Please confirm thispoint. If
thisisnotthecase, please explain ifitispossible forthemargins applied tobelessthan the
dumping margins, asrecommended byArticle 9.1oftheAnti-Dumping Agreement.
Reply
AccordingtoParagraph1,Article10oftheCustomsAct,theanti-dumpingdutyshallnotexceed
thedifference between thenormal value andthedumping price(margin ofdumping). Inother words,
iftheinjury margin islessthanthedumping margin, theformer isapplied asananti-dumping duty
rate.
Q.2. Paragraph 3ofArticle 4.9oftheCustoms Actestablishes thatthemethod, procedure
etc.oftheinvestigation maybedifferent from those applied tothepersons whoaresubject to
aninvestigation asprescribed bytheOrdinance ofthePrime Minister. What could bethemain
differences andthereasons justifying them?
Reply
Inourlegislation, other suppliers 'dutyratemaybeapplied toanewshipper. Ifthethinks
hisdumping margin islessthanothersuppliers ',hemayrequest thatourinvestigation authority calculate
hisowndumping margin.
Insuchacase, theMinister ofFinance andEconomy shallcarry outaninvestigation against
suchanewsupplier, asprescribed intheprovision ofArticle 4-9(3), onamore accelerated basisthan
aninvestigation under Article 4-4oftheDecree forthebenefit ofthenewshipper.
Questions from theEuropean Communities
Q.1. Could Korea clarify which "experts concerned" arereferred toinArticle 4-4(1)?
Reply
"Experts concerned" means theCPAs andlawyers, etc.whoparticipate intheinvestigation.
They should havenorelationship totheconcerned parties inorder toensure fairness andeffectiveness
oftheinvestigation.
Q.2. Could Korea explain howitdefines "direct effect" and"direct relationship" asmentioned
inArticles 4-6(6) and4-4(11) respectively?G/ADP/Q1/KOR/9
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Reply
Onappearance, theymaybeinterpreted asdifferent. However, theyhavethesame meaning.
Theprovision ofArticle 4-4(11) oftheRegulation mayberephrased inthefollowing way:
Theprice adjustment duetoadifference intheconditions ofsaleofthelatter partof
Article 4-6(5) oftheDecree willbeconfined tothecasewhere suchconditions ofsalehave
suchadirect effect onthesaleprice astohaveanimpact thereon.
Q.3. Could Korea provide precise details ofhowitselects sample suppliers, i.e.those suppliers
mentioned inArticle 4-9(2)?
Reply
"Selecting Method" isprescribed inArticle 4-2(1) oftheRegulation. Inselecting theproducts
andsuppliers subject toinvestigation, asprescribed inArticle 4-3(1)(Subparagraphs 1and3)ofthe
Decree, thesampling method thatisstatistically validonthebasisoftheavailable material (including
themethod forselecting thenumber ofsuppliers orproducts based onthelargest percentage ofimport
volume) will,inprinciple, beused.
Q.4. Could Korea explain thereference inArticle 4-9(3) tointernational agreements, i.e.how
doesitinterpret therules intheagreement onextending provisional measures?
Reply
"International agreement" inthisArticle refers totheWTO ADAgreement.
Q.5. Could Korea explain what thebestavailable information, asreferred toinArticle 4-11(6),
would be?
Reply
Thebestinformation available referred toinArticle 4-11, Paragraph 6hasthesame meaning
asprescribed intheWTO ADAgreement, Article 6.8andAnnex II.
OurGovernment gives every effort inorder togetinformation frominterested parties before
taking anyanti-dumping measures. But,inthecases where theinterested parties donotprovide any
information within areasonable time, then, ourGovernment makes adetermination onthebasis of
thefactsavailable.
Follow-up Question from theEuropean Communities
Q. Korea stated thatthe"experts concerned" referred toinArticle 4.4(1) ofitslegislation
wouldnotbegovernmentofficials,butindividuals(lawyers,auditors,etc.)appointedbytheKorean
Trade Commission specifically forthepurpose ofcarrying outanti-dumping investigations.
Could Korea explain how itensures theobjectivity andadherence totherules of
confidentiality ofitsinvestigators. What sanctions areprovided forincases ofbreach of
confidentiality?G/ADP/Q1/KOR/9
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Page5
Reply
Anyexpert participating intheinvestigation shallsubmit awritten memorandum stating that
hewillnotdisclose anyoftheconfidential information acquired from hisparticipation inthe
investigation.
Furthermore, anyperson whoreveals anyconfidential matter acquired fromhisparticipation
intheinvestigation procedures shallbeliable forpunishment according toActssuchastheLawyer
ActandtheCertified Public Accountant Act.
Questions from Mexico
Customs ActanditsDecree oftheCustoms Act
Q.1. Where there isaconflict between theWTO Agreements andtheCustoms Act,howwill
itberesolved bythecompetent Korean authority?
Reply
Inouropinion, theprovisions ofourCustoms Actarecompletely consistent withtheWTO
Agreement. Ifthere isanydiscrepancy, theWTO Agreement willbeapplied.
Q.2. Article 10,paragraph 4,oftheCustoms Actstates thatwhere theundertakings, asreferred
toinparagraph (3),areaccepted, theMinister ofFinance andEconomy shallhavetheinvestigation
suspended orterminated without taking anyprovisional measures orimposing anyanti-dumping
duty; provided that, iftheMinister ofFinance andEconomy deems theinvestigation tobe
necessary,ortheexporterrequeststocontinuetheinvestigation,theinvestigationmaybecontinued.
Under what circumstances maytheKorean investigating authority deem itnecessary topursue
ananti-dumping investigation evenwhen ithasaccepted theundertaking ofanexporter torevise
hisprices ortocease exporting atthedumping price?
Reply
IftheMinister ofFinance andEconomy suspends orterminates theinvestigation asaresult
ofundertakings, theinvestigation authority (KTC) maybeunable tocalculate thedumping margin
tobeimposed toother exporters except theundertaking exporter.
Insuchacase, theMinister ofFinance andEconomy mayhavetheinvestigation continued
notwithstanding anacceptance oftheundertaking.
Q.3. Paragraph (7)ofArticle 10oftheCustoms Actstates thattheMinister ofFinance and
Economy may, ifnecessary, conduct areview, ontheimposition oftheanti-dumping dutyand
ontheundertakings, asreferred toinparagraph (3),andtakemeasures which arenecessary
fortheimposition oftheanti-dumping duty: Could Korea explain themeaning of"measures
which arenecessary fortheimposition oftheanti-dumping duty" andwhere itwould apply?G/ADP/Q1/KOR/9
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Reply
Thenecessary measures fortheimposition ofananti-dumping dutyincludes thefollowing:
(1) anamendment ofthedutyrateandimposition period inthePrime Minister 'sDecree
forextending theeffective period oftheanti-dumping duty;
(2) andanotification oftheextension totheparties concerned andsoforth.
Q.4. Paragraph (8)ofArticle 10oftheCustoms Actestablishes thatananti-dumping dutyor
anundertaking shallloseitseffect after fiveyears from theimposition oftheanti-dumping duty,
ortheenforcement oftheundertakings, andifitscontents aremodified asaresult ofthereview
ofdumping andindustrial injury, asreferred toinparagraph (7),itshallloseitseffect after five
years from thedateoftheenforcement ofsuchamodification. Does thismean thatthereview
bothofdumping andofindustrial injury isnecessary fortheeffect ofthemeasure tobeextended,
oristhereview ofonlyoneofthese factors sufficient?
Reply
Ourinvestigation authorities always review bothdumping anddomestic industrial injury before
extending theimposition period ofananti-dumping duty.
Q.5. Paragraph (9)ofArticle 4-4oftheDecree oftheCustoms Actestablishes thepossibility
fortheTrade Commission torequest theMinister ofFinance andEconomy topropose the
undertakings laiddown inparagraph (3)ofArticle 10oftheCustoms Act. Towhom would the
Minister ofFinance andEconomy propose these undertakings? Intheevent thatthisproposal
isputtoexporters, doesKorea consider thatthisproposal caninfluence exporters infavour of
assuming anundertaking? Ifso,would suchameasure notgoagainst thespirit ofArticle 8.1
oftheAnti-Dumping Code? How doesKorea seektoreconcile thisprovision ofitslegislation
withwhat issetoutinArticle 8.1oftheAnti-Dumping Code?
Reply
Paragraph (9)ofArticle 4-4oftheDecree oftheCustoms Actmeans thattheMinister ofFinance
andEconomymayproposethepriceundertakingtotheexportersubjecttoananti-dumpinginvestigation.
Wethink thatthisprovision isinfullconformity withArticle 8.5oftheAnti-Dumping
Agreement, which states thattheauthorities oftheimporting Member maysuggest priceundertakings
toexporters.
Q.6. Inaccordance withparagraph (7)ofArticle 4-8oftheDecree oftheCustoms Act,inorder
foraparty tohaveaccess todocumentary evidence andmaterial submitted fortheinvestigation,
therequest willhave tobemade inwriting, indicating thematerial which theparty intends to
review andthereasons fortherequest, andunless there isareason, access shall notbedenied.
Could Korea explain what would bethepossible reasons fordenying aninterested party access
tothepublic record ofadossier? Inaddition, Article 6.1.2 oftheAnti-Dumping Code clearly
states that, withtheexception ofconfidential information, evidence submitted byaninterested
party shallbemade available promptly toother interested parties participating intheinvestigation.
From theabove, itisclear thatKorean legislation contradicts theprovisions oftheAnti-Dumping
Code andthatthislegislation restricts theright ofdefence oftheinterested parties. How does
Korea seektoreconcile these provisions?G/ADP/Q1/KOR/9
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Reply
Theinvestigation authorities mayrefuse therequest incases where itisapparent thatsucha
request fortheinformation isintended toimpede theinvestigation procedure.
Ifitisclear thattherequest ismade foranaccess tonon-confidential information witha
malignant intention andtheinvestigation procedure isprocrastinated andtheparties concerned are
seriously injured, theinvestigating authorities maywellhavetheauthority todenytherequest. We
donotthink itisinconsistent withtheAgreement.
Questions from Turkey
Q.1. Inaccordance withArticle 11.3oftheADAgreement, "...anydefinitive anti-dumping
dutyshallbeterminated onadatenotlaterthanfiveyears from itsimposition". Could theKorean
authorities please clarify, ifthestatement of"expiry dateisdetermined separately bytheOrdinance
ofthePrime Minister" onpage3,Article 10,paragraph (8),means thattheKorean authorities
mayestablish anexpiry datelater thanfiveyears, from theimposition ofduties?
Reply
Anti-Dumping measures suchassubject product, rateandapplication period aretaken bythe
Ordinance ofthePrime Minister. Inanycase,theapplication period mustbenolonger thanfiveyears
when itisdecided separately bytheOrdinance.
Q.2. According totheprovisions ofArticle 5.1oftheADAgreement itisstated that, an
investigation todetermine theexistence, degree andeffect ofanyalleged dumping shallbeinitiated
upon awritten application byoronbehalf ofthedomestic industry. How doyouinterpret the
term "any person" stated inArticle 4.2,paragraph (4)onpage 3,inthiscontext?
Reply
Theterm"anyperson" stated inparagraph 4ofArticle 4.2means anyinterested party toa
domestic industry suffering material injury, etc.,ortheMinister ofthecompetent Ministry incharge
ofsuchanindustry asreferred toinparagraph (1)ofthesame Article.
Q.3. Would youplease clarify, incaseofaconflict which ofthefollowing willprevail in
application, theOrdinance ofthePrime Minister ortheADAgreement?
Reply
TheOrdinance ofthePrime Minister ofourGovernment willbeestablished inconsistency
withtheprovisions oftheAgreement. But,ifthere isanyconflict, theAgreement willprevail.
Q.4. InArticle 4.8,paragraph (9)ofAct(page 9),itisstated that"Ifthecustoms collector,
theheads ofbanks dealing withforeign exchange services, other agencies concerned, orinterested
organizations consider thananimported product hasbeendumped heshallnotify ...".Does this
statement mean that,these parties havearight tomake application fortheinitiation ofadumping
investigation? Ifso,isKorea oftheviewthatthisdoesnotconstitute aconflict withArticle 5.1
oftheADAgreement?G/ADP/Q1/KOR/9
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Reply
Thenotificationbythecustomscollector,theheadsofbanks,etc.,isforthepurposeofcollecting
information necessary forinvestigation ofdumping bytheMinister ofFinance andEconomy andby
theTrade Commission. They donothavetherighttomake anyapplication ofadumping investigation
ortoparticipate intheinvestigation.
Q.5. Article 8.1oftheADAgreement states that,"Proceedings maybesuspended orterminated
without theimposition ofprovisional measures oranti-dumping duties upon receipt ofsatisfactory
voluntary undertakings from anyexporter torevise itsprices ortocease exports totheareain
question atdumped prices ...". Inthiscontext, would youplease clarify ifthestatement of"or
theexport istodiscontinue within sixmonths" stated inArticle 4.11, paragraph (2),onpage10
ofKorean Legislation, considers thecessation ofallexports oftheproduct inquestion toKorea
oronlythecessation oftheexports oftheproduct atdumped prices?
Reply
Theterm"discontinuance oftheexport within sixmonths" stated inArticle 4.11, paragraph 2
means thediscontinuance oftheexports oftheproduct atdumped prices.
Question from theUnited States
Q. Article 10(8) oftheCustoms Actprovides thatanantidumping dutyorder shall loseits
effect fiveyears after thedateofenforcement “except [for] cases where theimposition period
isprovided independently bytheOrdinance ofthePrime Minister. ”How isthisconsistent with
Article 11.3 ofthe1994 Agreement onImplementation ofArticle VIoftheGATT (“AD
Agreement ”),which provides thatanantidumping order “shallbeterminated ”within fiveyears
ofimposition unless “theauthorities determine, inareview initiated before thatdateontheir
owninitiative orupon adulysubstantiated request made byoronbehalf ofthedomestic industry
within areasonable period oftimeprior tothatdate, thatexpiry ofthedutywould belikely to
leadtocontinuation orrecurrence ofdumping orinjury ”?
Reply
Themethod ofdetermining theapplication period oftheanti-dumping dutyspecified in
Article 10(8) oftheKorean Customs Actisconsistent withArticle 11.3ofthe1994 ADAgreement.
OurGovernment decides theapplication period oftheanti-dumping dutyforthesubject product
bytheOrdinance ofthePrime Minister within fiveyears. Theextension oftheapplication period
duetotheresult ofthereview willbesubject tothesame rule.