WORLD TRADE
ORGANIZATIONG/SCM/N/1/PAK/2
23 January 2002
(02-0337)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
NOTIFICATION OF LAWS AND REGULATIONS UNDER
ARTICLE 32.6 OF THE AGREEMENT
PAKISTAN
The following communication, dated 17 January 2002, has been received from the Permanent
Mission of Pakistan.
__________
Under instructions from the Government of Pakistan, the attached copy of Pakistan's
Countervailing Duties Ordinance 2001 is hereby notified to the Committee on Subsidies and
Countervailing Measures.G/SCM/N/1/PAK/2
Page 2
THE GAZETTE OF PAKISTAN
EXTRAORDINARY PUBLISHED BY AUTHORITY
__________________________________________________________________________________
ISLAMABAD, WEDNESDAY, 3 JANUARY 2001
__________________________________________________________________________________
PART I
Acts, Ordinances, President's Orders and Regulations
GOVERNMENT OF PAKISTAN
MINISTRY OF LAW, JUSTICE, HUMAN RIGHTS AND
PARLIAMENTARY AFFAIRS
(Laws, Justice and Human Rights Division)
Islamabad, 3 January 2001
F. No. 2(1)/2001-Pub.  The following Ordinance made by the President is hereby published
for general information:
ORDINANCE NO. 1 OF 2001
AN
ORDINANCE
to amend and consolidate the law re lating to imposition of countervailing
duties to offset subsidies
WHEREAS it is expedient and to give effect in Pakistan to the provisions of Articles VI and
XVI of the General Agreement on Tariffs and Trade, 1994, and to the Agreement on Subsidies and
Countervailing Measures and to amend and consolidate the law relating to imposition of
countervailing duties to offset such subsidies,  to provide a framework for investigation and
determination of such subsidies and injury in respect of goods imported into Pakistan and mattersancillary thereto or connected therewith;
AND WHEREAS the imposition of countervailing du ties to offset injurious subsidization is
in the public interest;
AND WHEREAS the National Assembly and the Sena te stand suspended in pursuance of the
Proclamation of the fourteenth day of October, 1999, and the Provisional Constitution Order No. 1 of
1999;
AND WHEREAS the President is satisfied that circumstances exist which render it necessary
to take immediate action;G/SCM/N/1/PAK/2
Page 3
NOW THEREFORE, in pursuance of the Proclama tion of Emergency of the fourteenth day of
October, 1999, and the Provisional Constitution Order No. 1 of 1999, read with the Provisional
Constitutional (Amendment) Order No. 9 of 1999, and in exercise of all powers enabling him in that
behalf, the President of the Islamic Republic of Pakistan is pleased to make and promulgate the
following Ordinance:
PART I
PRELIMINARY
1. Short title, extent and commencement
(1) This Ordinance may be called the Countervailing Duties Ordinance, 2000.
(2) It extends to the whole of Pakistan.(3) It shall come into force at once.
2. Definitions
In this Ordinance, unless there is anyt hing repugnant in the subject or context:
(a) “Agreement on Subsidies” means the Agreement on Subsidies and Countervailing
Measures included in Annex (1A) to the Final Act of the Results of the Uruguay
Round concerning the Implementation of Article XVI of the General Agreement on
Tariffs and Trade, 1994;
(b) “Appellate Tribunal” means the Appellate Tribunal established under the Anti-
Dumping Ordinance, 2000 (of 2000);
(c) “application” means an application submitted to the Commission pursuant to sub-
section (1) of section 11;
(d) “association” means a trade organization as defined in the Trade Organizations
Ordinance, 1961( XLV of 1961), which has been granted or deemed to have been
granted a licence thereunder;
(e) “Commission” means the National Tariff Commission established under the National
Tariff Commission Act, 1990 (VI of 1990);
(f) “country” means any country or territory whether a member of the World Trade
Organization or not and includes a customs union or customs territory;
(g) “countervailing measures” means any measures that may be taken by the Commission
under this Ordinance including imposition of countervailing duties, whether
provisional or definitive, or the acceptance of an undertaking;
(h) “definitive countervailing duty” means a duty imposed by the Commission under
section 16, sub-section (15) of section 14 or sub-section (2) of section 17;
(i) “domestic industry” means the domestic producers as a whole of a like product or
those of them whose collective output of that product constitutes a major proportion
of the total domestic production of that product, except that when any such domesticG/SCM/N/1/PAK/2
Page 4
producers are related to the exporters or importers, or are themselves importers of the
allegedly subsidised product, in such a case “domestic industry” shall mean the rest
of the domestic producers.
Explanation.  For the purposes of this clause, producers shall be deemed to
be related to exporters or importers only if:
(i) one of them directly or indirectly controls the other;(ii) both of them are directly or indirectly controlled by the same third person; or(iii) together they directly or indirectly control a third person:
Provided that there are grounds for believing or suspecting that the effect of
the relationship is such as to cause the producer concerned to behave differently from
non-related producers and for that purpose one shall be deemed to control another
when the former is legally or operationally in a position to exercise restraint ordirection over the latter:
Provided further that, in exceptional circumstances, as may be determined by
the Commission, the domestic industry in relation to a product in question may be
divided into two or more competitive markets and producers within each such marketmay be regarded as a separate industry if:
(i) the producers within such a market sell all or almost all of their production of
the product in question in such a market; and
(ii) he demand in such a market is not to any substantial degree supplied by
producers of the product in question located elsewhere in Pakistan;
(j) “exporting country” means a country granting subsidy in respect of an investigated
product, which country may be either:
(i) the country of origin of the investigated product; or
(ii) where the investigated product is not exported directly to Pakistan but is
transported through an intermediate country, such intermediate country;
(k) “government” means the government or any public body within the territory of an
exporting country;
(l) “injury” means, unless otherwise specified, material injury to a domestic industry,
threat of material injury to a domestic industry or material retardation of the
establishment of a domestic industry, when subsidised imports are causing suchinjury;
(m) “interested party” includes:
(i) an exporter, foreign producer, an importer of an investigated product or an
association a majority of the members of which are producers, exporters or
importers of such product;G/SCM/N/1/PAK/2
Page 5
(ii) a producer of a like product in Pakistan or an association a majority of the
members of which produce a like product in Pakistan; and
(iii) such other person or group of persons as the Commission may, by
notification in the official Gazette, specify;
(n) “investigated product” means a product which is subject to an investigation under this
Ordinance;
(o) “investigation” means an investigation conducted under this Ordinance;(p) “like product” means a product which is alike in all respects to an investigated
product or, in the absence of such a product, another product which, although not
alike in all respects, has characteristics closely resembling those of the investigated
product;
(q) “prescribed” means prescribed by rules made under this Ordinance;(r) “provisional countervailing duty” means a duty imposed by the Commission under
section 13;
(s) “public notice” means a notice published by the Commission in at least one issue
each of a daily newspaper in the English language and a daily newspaper in the Urdu
language having wide circulation in Pakistan;
(t) “Schedule” mean the Schedule to this Ordinance;
(u) “subsidy” means a subsidy as defined in section 4 and “subsidization” shall be
construed accordingly; and
(v) “WTO” means the World Trade Organization established pursuant to the Marrakesh
Agreement concluded in Marrakesh, Morocco, on the 15 April 1994.
PART II
COUNTERVAILING MEASURES
3. Levy of countervailing duty
(1) Where the Commission determines in accordance with the provisions of this
Ordinance that any exporting country pays or bestows, directly or indirectly, any subsidy upon the
manufacture or production therein or the exportation therefrom of any investigated product including
any subsidy on transportation of such product and such subsidy causes injury then, upon the
importation of any such product into Pakistan, the Commission shall, by notification in the officialGazette, impose a countervailing duty thereon as provided for in this Ordinance.
(2) For the purposes of this Ordinance, a product shall be considered to be subsidised if it
benefits from a countervailable subsidy as provided for in section 4 and 5.
(3) A subsidy may be granted by a government of the country of origin of an investigated
product or by the government of an intermediate country from which the investigated product is
exported to Pakistan.G/SCM/N/1/PAK/2
Page 6
(4) Notwithstanding anything contained in this Ordinance, where an investigated product
is not directly imported from the country of origin  but exported to Pakistan from an intermediate
country, the provisions of this Ordinance shall be fully applicable and such transaction shall, where
considered appropriate by the Commission, by regarded as having taken place between the country of
origin of the investigated product and Pakistan.
PART III
DEFINITION OF SUBSIDY, COUNTERVAILABLE AND
NON-COUNTERVAILABLE SUBSIDIES
4. Circumstances in which subsidy shall be deemed to exist
A subsidy shall be deemed to exist if:
(a) there shall be financial contribution by a government, where
(i) the government practice involves direct transfer of funds including grants,
loans and equity infusion, or potential direct transfer of funds or liabilities, or
both;
(ii) government revenue that is otherwise due is foregone or not collected
including fiscal incentives such as tax credits:
Provided that exemption of an exported product from duties or taxes borne by
a like product when destined for domestic consumption, or remission of such duties
or taxes in amounts not in excess of those which have accrued, shall not be deemed tobe a subsidy provided that such exemption is granted in accordance with the
provisions of the First, Second and Third Schedules;
(iii) the government provides goods or services other than general infrastructure
or purchases goods; or
(iv) the government makes payments to a funding mechanism, or entrusts or
directs a private body to carry out one or more of the type of functions
specified in sub-clauses (i), (ii) and (iii) which would normally be vested in
the government and the practice in, no real sense, differs from practices
normally followed by governments;
(b) there is any form of income or price support within the meaning of Article XVI of the
General Agreement on Tariffs and Trade, 1994; and
(c) a benefit is thereby conferred.
5. Countervailable subsidies
(1) A subsidy shall be subject to countervailing measures under this Ordinance only if the
Commission determines that such subsidy is specific in accordance with the principles set out in sub-
sections (2), (3), (4) and (5).
(2) In order to determine whether a subsidy is specific to an enterprise, industry or a
group of enterprises or industries, hereinafter referred to as “certain enterprises”, within the
jurisdiction of a granting authority, the Commission shall apply the following principles, namely:G/SCM/N/1/PAK/2
Page 7
(a) where the granting authority, or the legislation pursuant to which the granting
authority operates, explicitly limits access to a subsidy to certain enterprises, such
subsidy shall be specific;
(b) where the granting authority, or the legislation pursuant to which the granting
authority operates, establishes objectives criteria or conditions governing the
eligibility for, and the amount of, a subsidy,  specificity shall not exist, provided that
the eligibility is automatic and that such criteria and conditions are strictly adhered to;
Explanation.– For the purposes of clause (b), objective criteria or conditions
mean criteria or conditions which are neutral, which do not favour certain enterprisesover other, and which are economic in nature and horizontal in application, such as,
number of employees or size of enterprise. Such criteria or conditions must be clearly
set out by law, regulation, or other official document, so as to be capable of
verification;  and
(c) if , notwithstanding any appearance of non-specificity resulting from the application
of the principles laid down in sub-clauses (a) and (b), there are reasons to believe that
the subsidy may in fact be specific, the following other factors may be considered by
the Commission, namely:
(i) use of a subsidy programme by a limited number of certain enterprises;
(ii) predominant use by certain enterprises;
(iii) granting of disproportionately large amounts of subsidy to certain enterprises;
and
(iv) manner in which discretion has been exercised by the granting authority in
the decision to grant a subsidy;
Explanation.– For the purposes of clause (c), information on the frequency
with which applications for a subsidy are refused or approved and the reasons forsuch decisions shall, in particular, be considered.
(3) In applying the provisions of sub-clause (c) of sub-section (2), the Commission shall
take into account the extent of diversification of economic activities within the jurisdiction of a
granting authority and the length of time during which subsidy programme has been in operation.
(4) A subsidy which is limited to certain enterprises located within a designated
geographical region within the jurisdiction of a granting authority shall be specific.
(5) The setting or changing of generally applicable tax rates by all levels of the
government entitled to do so shall not be deemed to be a specific subsidy.
(6) Notwithstanding anything contained in sub- section (2), (3), (4) and (5), the following
subsidies shall be deemed to be specific, namely:
(a) subsidies contingent, in law or in fact, whether solely or as one of several other
conditions, upon export performance, including those illustrated in the First Schedule:G/SCM/N/1/PAK/2
Page 8
Provided that subsidies shall be considered by the Commission to be contingent in
fact upon export performance when the facts demonstrate that granting of a subsidy,
without having been made legally contingent upon export performance, is in fact tied
to actual or anticipated exportation or export earnings:
Provided further that the mere fact that a subsidy is accorded to enterprises which
export shall not for that reason alone be considered by the Commission to be an
export subsidy for the purposes of this sub-clause; and
(b) subsidies contingent, whether solely or as one of several other conditions, upon the
use of domestic over imported goods.
(7) Any determination of specificity by the Commission under this section shall be
substantiated on the basis of positive evidence.
6. Non-countervailable subsidies
(1) The following subsidies shall not be subjected to countervailing measures under this
Ordinance, namely:
(a) subsidies which are not specific as determined in accordance with the provisions of
section 5;
(b) subsidies which are specific in accordance with the provisions of section 5 but which
meet the conditions set out in sub-section (2), (4) or (6) as read with sub-section (3),
(5) and (7); and
(c) the element of subsidy which may exist in  any of the measures listed in the Fourth
Schedule:
Provided that the provisions of this sub-clause shall cease to apply on the first day of
January 2004.
(2) Subsidies for research activities conducted by firms or by higher education or
research establishments on a contract basis with firms shall not be subject to countervailing measures
under this Ordinance, if the subsidies cover not more than seventy-five per cent of the costs of
industrial research or fifty per cent of the costs of pre-competitive development activity, provided that
such subsidies are limited exclusively to:
(a) personnel costs such as researchers, technicians and other supporting staff employed
exclusively in the research activity;
(b) costs of instruments, equipment, land and buildings used exclusively and permanently
except, when disposed of on a commercial basis, for the research activity;
(c) costs of consultancy and equivalent services used exclusively for the research activity
including bought-in research, technical knowledge, patents or otherwise;
(d) additional overhead costs incurred directly as a result of the research activity; and(e) other running costs such as those of materials, supplies and the like incurred directly
as a result of the research activity.G/SCM/N/1/PAK/2
Page 9
(3) For the purpose of sub-section (2):
(a) allowable levels of non-countervailable subsidy shall be established by reference to
the total eligible costs incurred over the du ration of an individual project and in the
case of programmes which span both industrial research and pre-competitivedevelopment activity, allowable level of non-countervailable subsidy shall not exceed
a simple average of the allowable levels of non-countervailable subsidy applicable to
the above two categories, calculated on the basis of all eligible costs as set forth in
sub-clauses (a) to (e) of sub-section (2);
(b)  the term “industrial research” means planned research or critical investigation aimed
at discovery of new knowledge, with the objective that such knowledge may beuseful in developing new products, processes, services, or in bringing about a
significant improvement to existing products, processes or services; and
(c) the term “pre-competitive development activity” means translation of industrial
research findings into a plan, blueprint or design for new, modified or improvedproducts, processes or services, whether intended for sale or for use, including
creation of a first prototype which would not be capable of commercial use and, may
further include conceptual formulation and design of products, processes or services,
alternatives and initial demonstration or pilot projects, provided that the same projects
cannot be converted or used for industrial application or commercial exploitation but,shall exclude routine or periodic alterations to existing products, production lines,
manufacturing processes, services, and other ongoing operations even though those
alterations may represent improvements.
(4) Subsidies to disadvantaged regions within the territory of an exporting country given
pursuant to a general framework of regional devel opment, which would be non-specific if the criteria
set out in section 5 were applied to each eligible region concerned, shall not be subject to
countervailing measures under this Ordinance, provided that:
(a) each disadvantaged region is a clearly designated contiguous geographical area with a
definable economic and administrative identity;  and
(b) the region is regarded as disadvantaged on the basis of neutral and objective criteria,
indicating that the region’s difficulties arise out of more than temporary
circumstances; such criteria being clearly set out by law, regulation, or other official
document, so as to be capable of verification.
Explanation.– The criteria mentioned in sub-clause (b) shall include a
measurement of economic development which shall be based on at least one of the
following factors, namely:
(i) either income per capita, or household income per capita, or Gross Domestic
Product per capita, which must not be above eighty-five per cent of the
average for the territory of an exporting country; or
(ii) unemployment rate, which must be at least one hundred and ten per cent of
the average for the territory of an exporting country as measured over a three-years period. Such measurement, however, may be a composite one and may
include other factors.
(5) For the purposes of the sub-section (4):G/SCM/N/1/PAK/2
Page 10
(a) a “general framework of regional development” means that regional subsidy
programmes are part of an internally consistent and generally applicable regional
development policy and that regional development subsidies are not granted in
isolated geographical points having no, or virtually no, influence on the developmentor a region; and
(b) “neutral and objective criteria” means criteria which do not favour certain regions
beyond what is appropriate for elimination or reduction of regional disparities within
the framework of a regional development policy.
Explanation.– Regional subsidy programmes shall include ceilings on the
amount of subsidy which can be granted to each subsidized project. Such ceilings
must be differentiated according to the different levels of development of eligible
regions and must be expressed in terms of in vestment costs or the cost of job creation.
Within such ceilings, the distribution of subsidy shall be sufficiently broad and even
to avoid predominant use of a subsidy by, or granting of disproportionately largeamounts of subsidy to, certain enterprises.
(6) Subsidies to promote adaptation of existing facilities to new environmental
requirements imposed by either law or regulation, or both which, result in greater constraints and
financial burden on firms shall not be subject to countervailing measures under this Ordinance,provided that subsidy :
(a) is a one-off non-recurring measure;(b) is limited to twenty per cent of the cost of adaptation;(c) does not cover the cost of replacing and operating a subsidized investment which,
must be fully borne by the entity;
(d) is directly linked to and proportionate to an entity’s planned reduction of nuisances
and pollution, and does not cover any manufacturing cost savings which may be
achieved; and
(e) is available to all entities which can either adopt new equipment or production
processes, or both.
(7) For the purpose of sub-section (6) the term “existing facilities” means facilities
having been in operation for at least two years at the time when new environmental requirements are
imposed.
PART IV
CALCULATION OF THE AMOUNT OF COUNTERVAILABLE SUBSIDY
7. Calculation of amount of countervailable subsidy
(1) The amount of countervailable subsidy, for the purposes of this Ordinance, shall be
calculated by the Commission in terms of any benefit conferred on a recipient which is found to exist
during an investigation period for subsidization which period, shall normally be the most recent
accounting year of the beneficiary but may be any other period of at least six months prior to initiation
of an investigation for which reliable financial and other relevant data are available.G/SCM/N/1/PAK/2
Page 11
(2) In determining the amount of countervai lable subsidy the Commission shall apply the
following principles to calculate any benefit co nferred on the recipient as referred to in sub-
section (1), namely:
(a) government provisions of equity capital shall not be considered to confer any benefit,
unless an investment can be regarded as inconsistent with the usual investment
practice including, for the provision of risk capital of private investors in the territory
of an exporting country;
(b) a loan by a government shall not be consid ered to confer any benefit, unless there is a
difference between the amount that a firm receiving the government loan pays on it
and the amount that the firm would pay for a comparable commercial loan which the
firm could actually obtain on the market, in which event the benefit shall be the
difference between these two amounts;
(c) a loan guarantee by a government shall not be considered to confer any benefit,
unless there is a difference between the amount that a firm receiving the guarantee
pays on the loan guaranteed by the govern ment and the amount that the firm would
pay for a comparable commercial loan in th e absence of the guarantee, in which case
the benefit shall be the difference betw een these two amounts, adjusted for any
difference in fees; and
(d) a provision of goods or services or purchase of goods by a government shall not be
considered to confer any benefit, unless the provision is made for less than adequate
remuneration or the purchase is made for more than adequate remuneration, and the
adequacy of remuneration shall be determined in relation to prevailing marketconditions for the product or service in question in the country of provision or
purchase including price, quality, availability, marketability, transportation and other
conditions of purchase or sale.
8. General provisions on calculation of countervailable subsidies
(1) Subject to sub-section (2), the amount of countervailable subsidies shall be
determined by the Commission in terms of subsidization per unit of an investigated product exported
to Pakistan and in establishing such amount the following elements may be deducted from the total
subsidy, namely:
(a) any fee or other costs necessarily incurre d in order to qualify for or, to obtain a
subsidy; and
(b) export taxes, duties or other charges levied on export of an investigated product to
Pakistan specifically intended to offset a subsidy.
(2) Where an interested party claims a deduction under sub-section (1) such party shall
prove to the Commission that the claim is justified.
(3) Where a subsidy is not granted by reference to the quantities manufactured, produced,
exported or transported, the amount of countervailable subsidy shall be determined by allocating thevalue of the total subsidy, as appropriate, over the level of production, sales or exports of the products
concerned during an investigation period for subsidization.G/SCM/N/1/PAK/2
Page 12
(4) Where a subsidy can be linked to acquisition or future acquisition of fixed assets, the
amount of countervailable subsidy shall be calculated by spreading the subsidy across a period which
reflects normal depreciation of such assets in the industry concerned, and the amount so calculated
which is attributable to an investigation period, including that which derives from fixed asset acquired
before such period, shall be allocated as provided for in sub-section (2):
Provided that where assets are non-depreciating, a subsidy shall be valued as an interest-free
loan, and be treated in accordance with the provisions of sub-clause (b) of sub-section (2) of section 7.
(5) Where a subsidy cannot be linked to acquisition of fixed assets, the amount of any
benefit received during an investigation period shall, in principle, be attributed to this period, and
allocated as provided for in sub-section (2), unless special circumstances arise justifying attributionover a different period.
PART V
DETERMINATION OF INJURY
9. Determination of injury
(1) A determination of injury by the Commission shall be based on positive evidence and
shall involve an objective examination of
(a) volume of any subsidised imports and their effect on prices in domestic market for
like products; and
(b) consequent impact of subsidised imports on domestic industry.
Explanation.– With regard to volume of any subsidised imports,
consideration shall be given by the Commission to whether there has been a
significant increase in subsidised imports, either in absolute terms or relative to
production or consumption in Pakistan. With regard to effect of any subsidised
imports on prices, consideration shall be given by the Commission to whether there
has been significant price undercutting by the subsidised imports as compared withthe price of a like product of domestic industry, or whether the effect of such imports
is otherwise to depress prices to a significant degree or prevent price increases which
would otherwise have occurred, to a signific ant degree, provided that no one or more
of these factors shall be deemed to necessarily give decisive guidance.
(2) Where imports of a product from more than one country are simultaneously subject to
an investigation, the effects of such imports may be cumulatively assessed by the Commission only if
it determines that:
(a) the amount of countervailable subsidies established in relation to the imports from
each country is negligible as defined in sub-section (3) of section 15 and that the
volume of imports from each country is not negligible; and
(b) a cumulative assessment of the effects of the imports is appropriate in the light of
conditions of competition between imported products and the conditions ofcompetition between the imported products and a like domestic product.
(3) An examination by the Commission of an impact of subsidised imports on a domestic
industry concerned may include an evaluation of all relevant economic factors and indices having aG/SCM/N/1/PAK/2
Page 13
bearing on the state of the domestic industry including th e fact that the domestic industry is still in the
process of recovering from the effects of past subsidisation or dumping, the magnitude of the amount
of countervailable subsidies, actual and potential decline in sales, profits, output, market share,
productivity, return on investments, utilisation of capacity, factors affecting domestic prices, actual
and potential negative effects on cash flow, inventor ies, employment, wages, growth, ability to raise
capital or investments and, in the case of agriculture, whether there has been an increased burden on
Government support programmes.
(4) The Commission shall satisfy itself that subsidised imports are, through the effects of
subsidies, as set forth in sub-sections (1) and (3), causing injury within the meaning of this Ordinance.
The consideration of a causal relationship between subsidised imports and injury to domestic industry
shall be based on an examination by the Commission of all relevant evidence before it.
(5) The Commission shall examine known factors other than subsidised imports which
are injuring domestic industry to ensure that injury caused by such other factors is not attributed to
subsidised imports. Such other factors may include factors such as the volume and prices of non-
subsidised imports, contraction in demand or changes in patterns of consumption, restrictive tradepractices of and competition between a third country and domestic producers, developments in
technology and export performance and productivity of domestic industry.
(6) The effect of subsidised imports shall be assessed by the Commission in relation to
the production by domestic industry of a like product when available data permits separateidentification of that production on the basis of such criteria as the production process, producers’
sales and profits:
Provided that where such separate identification of that production is not possible, the effects
of subsidised imports shall be assessed by the Commission by examination of the production of thenarrowest group or range of products including a like product, for which the necessary information
can be provided.
(7) A determination of a threat of material injury by the Commission shall be based on
facts and not merely on allegation, conjecture or remote possibility and any change in circumstances
which would create a situation in which subsidy would cause injury must be foreseen and imminent.
(8) In making a determination regarding the existence of a threat of material injury, the
Commission shall take into consideration factors such as:
(a) the nature of subsidy or subsidies in question and any trade effects likely to arise
therefrom;
(b) any significant rate of increase of subsidised imports into a domestic market
indicating the likelihood of substantially increased imports;
(c) sufficient freely disposable capacity of an exporter or an imminent substantial
increase in such capacity indicating the likelihood of substantially increased
subsidised exports into Pakistan, account being taken of the availability of other
export markets to absorb any additional exports;
(d) whether imports are entering at prices that would, to a significant degree, depress
prices or prevent price increases which otherwise would have occurred and would
probably increase demand for further imports; and
(e) inventories of an investigated product.G/SCM/N/1/PAK/2
Page 14
Explanation.– None of the factors specified in sub-section (8) by itself shall
be deemed to necessarily give decisive  guidance but the totality of the factors
considered by the Commission must lead to the conclusion that further subsidised
exports are imminent and that, unless protective action is taken, material injury willoccur.
10. Further circumstances in which injury may be found to exist
(1) Where domestic industry in relation to a product in question has been divided into
two or more competitive markets and the producers within each such market regarded as a separate
industry in accordance with the second proviso to clause (i) of section 2, injury may be found to existeven where a major portion of the total domestic industry does not suffer injury provided that, there is
a concentration of subsidised imports into such a separated market, and provided further that the
subsidised imports are causing injury to the producers of all or almost all of the production within
such market.
(2) Where injury is found to exist in the circumstances referred to in sub-section (1), the
exporters or the government granting countervailable subsidies shall be given an opportunity to offer
an undertaking in accordance with section 14 in respect of the region concerned or to cease exporting
at subsidised prices to the region concerned prior to any countervailing measures being applied by the
Commission under this Ordinance.
(3) In the circumstances referred to in sub-section (2), special account shall be taken by
the Commission of any interest of the region and if an adequate undertaking is not offered promptly or
if the situations set out in sub-section (13) and (14) of section 14 apply, a provisional or definitive
countervailing duty may be imposed by the Commi ssion in respect of domestic industry as a whole.
(4) The provisions of sub-section (6) of section 9 shall apply to this section.
PART VI
INVESTIGATION
11. Initiation of investigation
(1) Save as provided for in sub-section (11), the Commission shall initiate an
investigation to determine the existence, degree and effect of any alleged subsidy only upon receipt of
a written application by or on behalf of domestic industry.
(2) An application shall be submitted to the Commission with such fee as may be
prescribed and shall include sufficient evidence of the existence of countervailable subsidies
including, if possible, of their amount, and of injury within the meaning of this Ordinance and shall
contain such information as is reasonably ava ilable to an applicant on the following, namely:
(a) identity of the applicant and a description of the volume and value of domestic
production of a like product by the applicant;
Provided that where an application is made on behalf of domestic industry,
the application shall identify the industry on behalf of which the application is made
by a list of all known domestic producers of the like product or, association of
domestic producers of the like product and, to the extent possible, a description of theG/SCM/N/1/PAK/2
Page 15
volume and value of domestic production of the like product accounted for by such
producers;
(b) a complete description of an allegedly subsidised product including its current
customs tariff classification number as contained in the First Schedule to the CustomsAct, 1969 (IV of 1969), the name of exporting country, identity of each known
exporter or foreign producer, and a list of known persons importing the product in
question;
(c) evidence with regard to the existence,  amount, nature and countervailability of
subsidy in question; and
(d) information on changes in volume of allegedly subsidised imports, the effect of those
imports on prices of a like product in dom estic market and the consequent impact of
the imports on domestic industry as demonstrated by relevant factors and indices
having a bearing on the state of domestic industry, such as those listed in the
explanation to sub-section (1) of section 9, and in sub-section (3) of section 9.
(3) The Commission shall, to the extent possible, examine the accuracy and adequacy of
the evidence provided in an application to determin e whether it is compliant with the requirements of
sub-section (2) and in order to determine whether there is sufficient evidence to justify initiation of an
investigation.
(4) An investigation may be initiated by the Commission in order to determine whether
or not the alleged subsidies are specific in accordance with the principles set out in section 5.
(5) An investigation may also be initiated by the Commission in respect of subsidies
which are non-countervailable in accordance with the provisions of section 6 in order to determine
whether or not the conditions set out therein have been met.
(6) If a subsidy is granted pursuant to a subsidy programme which has been notified in
advance of its implementation to the WTO Committee on Subsidies and Countervailing Measures in
accordance with Article 8 of the Agreement on Subsidies and in respect of which the said Committee
has failed to determine that the relevant conditions laid down in Article 8 of the Agreement onSubsidies have not been met, an investigation shall not be initiated by the Commission in respect of a
subsidy granted pursuant to such a programme, unless an infringement of Article 8 of the Agreement
on Subsidies has been ascertained by the compet ent WTO Dispute Settlement Body or through
arbitration as provided in Article 8(5) of the Agreement on Subsidies.
(7) An investigation may be initiated by th e Commission in respect of measures of any
type listed in the Fourth Schedule, to the extent that they contain an element of subsidy as defined in
section 4, in order to determine whether the measures in question fully conform to the provisions of
the Fourth Schedule.
(8) An investigation shall not be initiated by the Commission pursuant to sub-section (1)
unless the Commission is satisfied, on the basis of an examination as to the degree of support for, or
opposition to, an application expressed by domestic producers of a like product, that the application
has been made by or on behalf of domestic industry.
(9) An application shall be considered to have been made by or on behalf of domestic
industry if it is supported by those domestic producers whose collective output constitutes more than
fifty per cent of the total production of a like product produced by that portion of domestic industry
expressing either support for or opposition to the application:G/SCM/N/1/PAK/2
Page 16
Provided that no investigation shall be initiated by the Commission when domestic producers
expressly supporting an application account for less than twenty-five per cent of the total production
of a like product produced by domestic industry.
(10)  The Commission shall, as soon as possible after receipt of a properly documented
application in accordance with the requirements of section 11, and in any event before initiation of an
investigation, give notice to an exporting country, which shall be invited for consultations with the
aim of clarifying the situation as to matters referred to in sub-section (2) and arriving at a mutually
agreed solution.
(11)  The Commission may, suo moto , initiate an investigation without having received a
written application by or on behalf of domestic industry if it has sufficient evidence of the existence of
countervailable subsidies and injury within the meaning of this Ordinance.
(12)  The evidence both of subsidy and of injury shall be considered simultaneously by the
Commission in the decision on whether or not to initiate an investigation and an application shall berejected where there is insufficient evidence of either  countervailable subsidies or of injury to justify
initiation of an investigation:
Provided that an investigation shall not be initiated against countries whose imports represent
a market share of below one per cent unless such countries collectively account for three per cent ormore of domestic consumption.
(13) An application may be withdrawn by an applicant prior to initiation of an
investigation by the Commission, in which case it shall, subject to the provisions of sub-section (1) of
section 15, be deemed not to have been made:
Provided that upon withdrawal of an application any fee paid by an applicant pursuant to sub-
section (2) shall stand forfeited in favour of the Commission.
(14) Where, after consultation with an exporting country as provided for in sub-
section (10), the Commission is satisfied that there is sufficient evidence to justify initiating an
investigation, the Commission shall give notice of such decision by means of a public notice ofinitiation of an investigation, and the initiation of an investigation shall be effective on the date on
which such notice is published.
(15) Where the Commission does not consider it appropriate to initiate an investigation it
shall inform an applicant of its decision.
(16) The public notice of initiation of an investigation referred to in sub-section (14) shall
announce initiation of an investigation, indicate the product and countries concerned, give a summary
of the information received, provide that all relevant information is to be communicated to the
Commission, state the periods within which any interested party may make itself known, present itsviews in writing and submit information if such views and information are to be taken into account
during the investigation and shall also state the period within which interested parties may apply to be
heard by the Commission in accordance with sub-section (4) of section 12.
(17) The Commission shall advise any exporters, importers and any association of
importers or exporters known to it to be concerned, as well as an exporting country and an applicant,
of initiation of an investigation and, subject to the requirements of section 29, provide the full text of
an application to the known exporters and to the authorities of an exporting country, and make it
available upon request to other interested parties involved:G/SCM/N/1/PAK/2
Page 17
Provided that, where the Commission determines that the number of exporters involved is
particularly high, the full text of a written complaint may instead be provided by the Commission only
to the authorities of an exporting country or to a relevant association.
(18) An investigation shall not hinder the procedures of customs clearance.
12. Principles governing investigation
(1) Following initiation of an investigation, the Commission shall commence an
investigation and such investigation shall cover both subsidisation and injury which, shall be
investigated simultaneously.
(2) For the purpose of a representative finding, an investigation period shall be selected
by the Commission which, in the case of subsidisation shall, normally, cover an investigation period
provided for in section 7 and information relating to a period subsequent to the investigation period
shall not, normally, be taken into account by the Commission.
(3) Parties receiving questionnaires from the Commission used in a countervailing duty
investigation shall be given at least thirty days  to reply and such time limit for exporters shall be
counted from the date of receipt of the questionnaire which, for this purpose shall be deemed to have
been received one week from the day on which it was sent to a respondent or transmitted to anappropriate diplomatic representative of an exporting country:
Provided that where a party shows due cause for an extension to the satisfaction of the
Commission, an extension of not more than thirty days may be granted by the Commission at its
discretion.
(4) Any interested party which has made itself known in accordance with sub-
section (16) of section 11 shall be heard by the Commission if it has, within the period prescribed in a
public notice of initiation of an investigation made a written request for hearing showing that it is an
interested party likely to be affected by the result of an investigation and that there are particular
reasons why it should be heard.
(5)  Opportunities shall, on request, be provided for any importers, exporters and an
applicant, which have made themselves known in accordance with sub-section (16) of section 11 and
the government of an exporting country to meet those parties having adverse interests, so that
opposing views may be presented and rebuttal arguments offered. Provision of such opportunities
shall take account of the need to preserve confidenti ality and of convenience to the parties. There shall
be no obligation on any party to attend such meeting and failure to do so shall not be prejudicial to
that party’s case. Oral information provided under this sub-section shall only be taken into account by
the Commission to the extent that the same is subs equently confirmed in writing and provided to the
Commission.
(6) Without prejudice to the provisions of section 42, an applicant, the government of an
exporting country, importers and exporters and their representative associations, which have made
themselves known in accordance with sub-section (16) of section 11, may, upon written request,
inspect all information made available to the Commission by any party to an investigation, as distinct
from internal documents prepared by the Commission, which is relevant to presentation of their casesand is not confidential within the meaning of section 29, and that it is used in an investigation. Such
parties may respond to such information and their comments shall be taken into consideration
wherever they are sufficiently substantiated in a response.G/SCM/N/1/PAK/2
Page 18
(7) Save as provided for in section 28, any information which is supplied by interested
parties and upon which findings are based shall, to the extent possible, be examined for accuracy by
the Commission.
(8) An investigation shall, whenever possib le, be concluded within one year and in no
event later than eighteen months from its initiation, in accordance with the findings made pursuant to
section 14 for undertakings or the findings made pursuant to section 16 for definitive action.
(9) Throughout an investigation, the Commission shall afford an exporting country a
reasonable opportunity to continue consultations with a view to clarifying the factual situation and
arriving at a mutually agreed solution:
Provided that the Commission may continue an investigation during such consultations.
(10) The Commission shall allow industrial users of an investigated product in Pakistan,
and representative consumer organizations in cases where the investigated product is commonly sold
at retail level in Pakistan to provide to the Co mmission, in writing, no later than two months after
initiation of an investigation, information concerning matters relevant to the investigation regarding
subsidisation dumping and injury.
PART VII
PROVISIONAL COUNTERVAILING MEASURES
13. Provisional countervailing duties
(1) Provisional countervailing duty shall be imposed by the Commission if:
(a) an investigation has been initiated by the Commission in accordance with section 11;(b) a public notice of initiation of an investigation has been given and interested parties
have been given adequate opportunities to submit information and make comments in
accordance with sub-section (16) of section 11; and
(c) a provisional affirmative determination has been made by the Commission that a
subsidy exists and that there is consequent injury to domestic industry.
(2) A provisional countervailing duty shall be imposed no earlier than sixty days from
initiation of an investigation but no later than nine months from initiation of the investigation andshall be in an amount equal to the total amount of countervailable subsidies as provisionally
established by the Commission.
(3) A provisional countervailing duty shall be in the form of cash deposit equal to the
amount of the provisionally calculated amount of subsidisation:
Provided that the release of a product concerned for free circulation in Pakistan shall be
subject to provisions of such cash deposit.
(4) A provisional countervailing duty shall be imposed for a period not exceeding four
months.G/SCM/N/1/PAK/2
Page 19
PART VIII
UNDERTAKINGS AND TERMINATION WITHOUT MEASURES
14. Undertakings
(1) An investigation may be terminated by the Commission without imposition of
provisional or definitive countervailing duties upon receipt of a satisfactory voluntary undertaking
under which:
(a) an exporting country agrees to eliminate or limit subsidy or take other measures
concerning its effects; or
(b) any exporter undertakes to revise its prices or to cease exports in question as long as
such exports benefit from countervailable subsidies,
so that the Commission is satisfied that the injurious effect of the subsidies is eliminated.(2) Price increases under such undertakings shall not be higher than those which are
necessary to offset the amount of countervailable subsidies and shall be less than the amount of
countervailable subsidies if such increases would be adequate to remove injury to domestic industry.
(3) Undertakings may be suggested by the Commission but no country or exporter shall
be obliged to enter into such an undertaking and the fact that countries or exporters do not offer such
undertakings, or do not accept an invitation to do so, shall in no way prejudice the outcome of an
investigation by the Commission:
Provided that the Commission may in such circum stances determine that a threat of injury is
more likely to be realised if the subsidised imports continue.
(4) Undertakings shall not be sought or accepted by the Commission from countries or
exporters unless a provisional affirmative determination of subsidisation and injury caused by such
subsidisation has been made by the Commission.
(5) Save in exceptional circumstances, undertakings may not be offered later than the end
of the period during which representations may be made pursuant to sub-section (7) of section 30.
(6) The decision to accept an undertaking shall rest with the Commission.
Explanation.  The Commission may not accept a price undertaking if it considers the
acceptance thereof to be impractical because the number of actual or potential exporters is too great or
for reasons of general policy or for any other reason.
(7) An exporting country or exporter concerned may be provided with the reasons for
which it is proposed to reject an offer of an undertaking and may be given an opportunity to make
comments thereon and the reasons for rejection shall be set out in a definitive decision by the
Commission.
(8) Parties which offer an undertaking shall be required to provide a non-confidential
version of such undertaking so that it may be made available to interested parties to an investigation.G/SCM/N/1/PAK/2
Page 20
(9) If an undertaking is accepted by the Commission, it shall nevertheless complete an
investigation if it receives a request from an exporting country or exporter in writing to continue such
investigation or where the Commission so decides on its own accord.
(10) In the event the Commission makes a negative determination of subsidisation and
injury pursuant to an investigation continued under sub-section (9), an undertaking in question shall
automatically lapse except in cases where the Commission determines that such a determination is
due in large part to the existence of such undertaking in which case the Commission may require that
such undertaking be maintained for a reasonable period of time to be determined by the Commission.
(11) In the event the Commission makes an affirmative determination of subsidisation and
injury pursuant to an investigation continued pursua nt to sub-section (9), an undertaking in question
shall continue consistent with the provisions of this Ordinance.
(12) The Commission may require any country or exporter from whom an undertaking has
been accepted to provide, periodically, information relevant to the fulfilment of such undertaking and
to permit verification of such information.
(13) Failure to provide any information re quested by the Commission pursuant to sub-
section (12) shall be deemed to be a violation of an undertaking in question.
(14) Where undertakings are accepted from certain exporters during the course of an
investigation, they shall, for the purpose of sections 19, 20, 21 and 23 be deemed to take effect from
the date on which the investigation is concluded for an exporting country.
(15) If an undertaking is violated or deemed to be violated, the Commission may, subject
to the provisions of this Ordinance, take expeditious actions, which may include immediateapplication of provisional measures using the best information available. In such cases, a definitive
countervailing duty may be levied in accordance with the provisions of this Ordinance on products
entered for domestic consumption not more than ninety days before the application of such
provisional measures, except that any such retroactive assessment shall not apply to imports entered
before such violation of the undertaking.
15. Termination of investigation without measures
(1) Where an application is withdrawn, an investigation shall be terminated by the
Commission:
Provided that the Commission may, if it considers it fit to do so, continue an investigation
notwithstanding the withdrawal of an application in which event, the Commission may, subject to the
provisions of this Ordinance, impose such measures as are provided for in this Ordinance.
(2) Where, the Commission determines in accordance with the provisions of sub-
sections (3), (4), (5), (6) and (7), that the amount of countervailable subsidies is negligible or, wherethe volume of subsidised imports, whether actual or potential, or injury is negligible then it shall
immediately terminate an investigation.
(3) The amount of countervailable subsidies shall be considered to be negligible if such
amount is less than one per cent ad valorem, except that:
(a) in the case of investigations concerning imports from developing countries the
negligible subsidy threshold shall be two per cent ad valorem; andG/SCM/N/1/PAK/2
Page 21
(b) for those developing countries which are referred to in the Fifth Schedule and other
developing countries which are members of the WTO and which have completely
eliminated export subsidies, the negligible subsidy threshold shall be three per cent ad
valorem.
(4) Where the application of sub-section (3) depends on elimination of export subsidies,
it shall apply from the date on which elimination of export subsidies is notified to the WTO
Committee on Subsidies and Countervailing Measures pursuant to the Agreement on Subsidies, and
for so long as export subsidies are not granted by a developing country concerned:
Provided that this provision shall expire on the first day of January, 2003:
Provided further that it is only an investigatio n that shall be terminated where the amount of
countervailable subsidies is below the relevant level for individual exporters who shall remain subject
to investigation by the Commission under this Ordinance and may be re-investigated in any
subsequent review carried out for a country concerned pursuant to sections 19 and 20.
(5) Injury shall normally be regarded as ne gligible where the market share of any imports
is less than the amounts set out in the proviso to sub-section (12) of section 11.
(6) In the case of an investigation concerning imports from developing countries, the
volume of subsidised imports shall be considered ne gligible if it represents less than four per cent of
the total imports of a like product in Pakistan, unless imports from developing countries whose
individual shares of total imports represent less than four per cent collectively account for more than
nine per cent of the total imports of a like product in Pakistan.
(7) In the case of an investigation concerning imports from countries other than
developing countries, the volume of subsidised imports shall be considered negligible if it represents
less than three per cent of the total imports of a like product in Pakistan, unless imports from such
countries under investigation which individually account for less than three per cent of the total
imports of a like product in Pakistan collectively account for more than seven per cent of imports of
the like product in Pakistan.
PART IX
DEFINITIVE COUNTERVAILING DUTIES
16. Imposition of definitive countervailing duties
(1) Where the Commission has established the existence of countervailable subsidies and
injury caused thereby, a definitive countervailing duty shall be imposed by the Commission, unless
the subsidy in question is withdrawn or it has been demonstrated to the satisfaction of the
Commission that the subsidies no longer confer any benefit on any exporters involved.
(2) A definitive countervailing duty shall be an amount equal to the amount of
countervailable subsidies from which any exporters have been found to benefit, as established by the
Commission in accordance with the provisions of this Ordinance.
(3) A definitive countervailing duty shall be imposed in an appropriate amount in each
case, on a non-discriminatory basis, on imports of a product from all sources found to benefit from
countervailable subsidies and causing injury except as to imports from those sources from which
undertakings under section 14 have been accepted by the Commission.G/SCM/N/1/PAK/2
Page 22
(4) When the Commission has limited its examination in accordance with section 27, any
definitive countervailing duty applied to imports from exporters or producers which have made
themselves known in accordance with section 27 but were not included in an examination shall not
exceed the weighted average amount of countervailable subsidies established for parties in a sample.
(5) For the purposes of sub-section (4), the Commission shall disregard any negligible
amounts of countervailable subsidies and amounts of countervailable subsidies established in the
circumstances referred to in section 28.
(6) Individual duties shall be applied to imports from any exporter or producer for which
an individual amount of subsidisation has been calculated as provided for in section 27.
PART X
RETROACTIVITY
17. Retroactivity
(1) Save as otherwise provided in this section, provisional and definitive countervailing
duties shall only be applied to products which enter Pakistan for consumption after the time when the
requirements set out in sub-section (1) of section 13 and sub-section (1) of section 16, as the case may
be, have been fulfilled.
(2) Where the Commission makes a final determination of injury, but not of a threat
thereof or of material retardation of the establishment of an industry or, in the case of a final
determination of a threat of injury, where the Commission determines that the effect of subsidised
imports would, in the absence of provisional measures, have led to a determination of injury,definitive countervailing duties shall be levied by the Commission retroactively for the period for
which provisional duty, if any, have been applied.
(3) If a definitive countervailing duty imposed by the Commission pursuant to sub-
section (2) is higher than a provisional countervailing duty, the difference shall not be collected:
Provided that where a definitive countervailing duty is lower than a provisional
countervailing duty, the duty difference shall be refunded by the Commission in an expeditious
manner.
(4) Save as provided for in sub-section (3), where the Commission makes a
determination of threat of injury or material retardation but, no injury has yet occurred, a definitivecountervailing duty shall be imposed by the Commission only from the date of the determination of
threat of injury or material retardation and any cash deposit provided during the period of application
of provisional countervailing duty shall be refunded by the Commission in an expeditious manner.
(5) Where the Commission makes a negative final determination any cash deposit
provided during the period of application of provisional countervailing duties shall be refunded by the
Commission in an expeditious manner.
(6) A definitive countervailing duty shall be imposed by the Commission on products,
which were imported for consumption not more than ninety days prior to the date of application ofprovisional countervailing duty if, the Commission determines, for an investigated product in
question, that injury which is difficult to repair, is caused by massive imports in a relatively short
period of a product benefiting from a countervailable subsidy and the Commission deems it necessary
to impose such duty in order to preclude the recurrence of such injury.G/SCM/N/1/PAK/2
Page 23
PART XI
DURATION, REVIEWS AND REFUNDS, AND GENERAL PROVISIONS
18. Duration of definitive countervailing duty
Subject to the provisions of this Ordinance, a definitive countervailing duty imposed pursuant
to this Ordinance shall remain in force only as long as, and to the extent that, it is necessary to
counteract countervailable subsidies which are causing injury.
19. Expiry reviews
(1) A definitive countervailing duty shall expire after five years from its imposition or
five years from the date of the most recent review which has covered both subsidisation and injury,
unless it is determined in a review that the expiry would be likely to lead to a continuation or
recurrence of subsidisation and injury. Such an expi ry review may be initiated, on an initiative of the
Commission or, upon a request made by or on behalf of domestic producers, and the measure in
question shall remain in force pending the outcome of such review.
(2) An expiry review shall be initiated by the Commission upon request made by or on
behalf of domestic producers where such request contains sufficient evidence that the expiry of ameasure in question would be likely to result in a continuation or recurrence of subsidisation and
injury.
Explanation.– Such a likelihood may, for example, be indicated by evidence of continued
subsidisation and injury or evidence that the removal of injury is partly or solely due to the existenceof measures or evidence that the circumstances of exporters, or market conditions, are such that they
would indicate the likelihood of further injurious subsidisation.
(3) In carrying out investigations under this section, the Commission shall provide any
exporters, importers, an exporting country and domestic producers with the opportunity to amplify,
rebut or comment on the matters set out in a review request, and conclusions shall be reached by the
Commission with due account taken of all relevant and duly documented evidence presented inrelation to the question as to whether the expiry of measures would be likely, or unlikely, to lead to
the continuation or recurrence of subsidisation and injury.
(4) The Commission shall notify an impending expiry by a public notice which shall be
published at an appropriate time, as determined by the Commission, in the final year of the period ofapplication of a measure in question and a public notice announcing the actual expiry of a measure
under this section shall also be published by the Commission.
20. Interim reviews
(1) The need for continued imposition of measures under this Ordinance may also be
reviewed, where warranted on an initiative of the Commission or, provided that a period of at least
twenty-four months has elapsed since the imposition of definitive countervailing duty, upon a request
by any exporter, importer or by domestic producers or an exporting country which contains sufficient
evidence substantiating the need for such an interim review.
(2) An interim review under sub-section (1) shall be initiated by the Commission where a
request contains sufficient evidence that the continued imposition of a measure is no longer necessary
to offset countervailable subsidy or that injury w ould be unlikely to continue or recur if a measureG/SCM/N/1/PAK/2
Page 24
were removed or varied, or that an existing measur e is not, or is no longer, sufficient to counteract
countervailable subsidy which is causing injury:
Provided that the Commission may require an applicant requesting a review under sub-
section (1) to fill in an additional questionnaire pr ovided by it requiring such information and for such
period as the Commission deems necessary before such review is initiated in which case the review
shall be initiated following the receipt by the Commission of such questionnaire duly filled in.
(3) In carrying out investigations pursuant to this section, the Commission may, in
addition to other factors considered relevant by it, consider whether the circumstances with regard to
subsidisation and injury have changed significantly, or whether existing measures are achieving the
intended results in removing an injury previously established under section 9.
21. Accelerated reviews
(1) Any exporter whose exports are subject to a definitive countervailing duty but who
was not individually investigated during an original investigation for reasons other than a refusal toco-operate with the Commission, shall be entitled, upon request, to an accelerated review in order that
the Commission may promptly establish an individual countervailing duty rate for that exporter
provided that such review shall be initiated after domestic producers have been given an opportunity
to comment.
(2) The Commission may require an applicant requesting a review under sub-section (1)
to fill in an additional questionnaire provided by it before such review is initiated in which case a
review under sub-section (1) shall be initiated following the receipt by the Commission of such
questionnaire duly filled in.
22. Refunds
(1) Notwithstanding anything contained in section 19, an importer may apply to the
Commission for refund of duties collected where it is shown that the amount of countervailable
subsidies, on the basis of which duties were paid, has been either eliminated or reduced to a level
which is below the level of the duty in force.
(2) An importer may submit an application for refund of countervailing duties collected
within any twelve months period to the Commissi on no later than sixty days from the end of such
period.
(3) An application for refund shall be considered to be duly supported by evidence only
where it contains precise information on the amount of refund of countervailing duties claimed and all
customs documentation relating to the calculation and payment of such amount and includes
evidence, for a representative period, of the amount of countervailable subsidies for any exporter or
producer to which the duty applies:
Provided that, where the importer is not associated with any exporter or producer concerned
and such information is not immediately available, or where any exporter or producer is unwilling to
release it to an importer, the application for refund shall contain a statement from the exporter or
producer that the amount of countervailable subsidies has been reduced or eliminated, as specified in
this section, and that the relevant supporting evidence will be provided to the Commission:
Provided further that where such evidence is not forthcoming from any exporter or producer
within a reasonable period of time, as determined by  the Commission, the application shall be rejected
by the Commission.G/SCM/N/1/PAK/2
Page 25
(4) The Commission shall determine whether and to what extent an application should be
granted, or it may decide at any time to initiate an interim review, whereupon any information and
findings from such review, carried out in accordance with the provisions applicable for such review,
shall be used to determine whether and to what extent a refund is justified.
(5) A refund of countervailing duties under this section shall normally take place within
twelve months, and in no circumstances more than eighteen months after the date on which a request
for a refund, duly supported by evidence, has been made by an importer of a product subject to
countervailing duty.
23. General provisions on reviews and refund
(1) The provisions of sections 11 and 12, excluding those relating to time limits, shall mutatis
mutandis apply to any review carried out pursuant to sections 19, 20 and 21.
(2) Any review pursuant to sections 19, 20 or 21 shall be carried out by the Commission
expeditiously and shall normally be concluded within twelve months of the date of initiation of the
review.
(3) Where a review pursuant to section 20 is in progress at the end of the period of
application of a measure as defined in section 19, the measure shall also be investigated under theprovisions of section 19.
(4) In any review or refund investigation carried out pursuant to sections 19 to 22, the
Commission shall, provided that circumstances ha ve not changed, apply the same methodology as in
an investigation which led to the duty, with due account being taken of sections 7, 8 and 27.
24. Circumvention
(1) Countervailing duties imposed pursuant to this Ordinance may be extended by the
Commission to imports from third countries of li ke products, or parts thereof, if the Commission
determines that circumvention of the measures in force is taking place.
(2) For the purposes of sub-section (1), circumvention shall mean a change in the pattern
of trade between third countries and Pakistan which stems from a practice, process or work for which
there is insufficient cause or economic justification other than an imposition of a duty, and where
there is evidence that the remedial effects of a duty are being undermined in terms of either the prices
or quantities of like products, or both, and that either the imported like product or parts thereof, orboth, still benefit from subsidy.
25. General provisions
(1) Countervailing duties, provisional or definitive, as the case may be, imposed under
this Ordinance shall:
(a) take the form of ad valorem or specific duties:
Provided that provisional countervailing sh all take the form ofcash deposits equal to
the amount of a provisionally calculated amount of subsidisation.
(b) be imposed in addition to other import duties levied on an investigated product; andG/SCM/N/1/PAK/2
Page 26
(c) be collected in the same manner as customs-duties under the Customs Act, 1969 (IV
of 1969).
(2) No product shall be subject to both anti-dumping duties under the Anti-Dumping
Duties Ordinance, 2000 ( of 2000), and countervailing duties under this Ordinance for the purpose ofdealing with one and the same situation arising from dumping or from export subsidisation.
(3) The decisions regarding imposition of provisional or definitive countervailing duties,
and notices regarding acceptance of undertakings or terminating an investigation, shall be published
by the Commission in a public notice which shall contain, in particular, and with due regard to the
protection of confidential information in accordance with section 29, the names of exporters, if
possible, or of the countries involved, a description of the product and a summary of the facts andconsiderations relevant to subsidy and injury determinations and in each case, a copy of the said
notice shall be sent to the known interested parties.
(4) The provisions of sub-section (3) shall apply, mutatis mutandis , to reviews under this
Ordinance.
(5) The Commission shall establish and maintain a non-lapseable personal ledger account
in its name for the purpose of this Ordinance and all duties and fees payable under and collected
pursuant to this Ordinance shall be held in such account.
(6) The account established under sub-section (5) shall be maintained and operated in
such manner as may be prescribed.
PART XII
VERIFICATION VISITS, SAMPLING, NON-COOPERATION,
CONFIDENTIALITY AND DISCLOSURE
26. Verification visits
(1) The Commission may, where it considers it appropriate, carry out visits to examine
the records of importers, exporters, traders, agents, producers, trade associations and organizations, toverify information provided on subsidisation and injury:
Provided that in the absence of a proper and timely reply a verification visit may not be
carried out.
(2) The Commission may carry out investigations in third countries as required, provided
that:
(a) it obtains consent of an entity concerned;
(b) it gives notice to a country in question; and
(c) the country in question does not object to an investigation.(3) As soon as consent of an entity concerned has been obtained the Commission shall
give notice to an exporting country of the name and address of the entity to be visited and the dates
agreed.G/SCM/N/1/PAK/2
Page 27
(4) An entity concerned shall be advised of the nature of information to be verified
during verification visits and of any further information which needs to be provided during such
visits:
Provided that this shall not preclude the Commission from requiring further information or
verification.
27. Sampling
(1) Where the Commission determines that the number of complainants, exporters or
importers, types of product or transactions is large, the Commission may limit an investigation to:
(a) a reasonable number of parties, products or transactions by using samples which are
statistically valid on the basis of information available at the time of selection; or
(b) to the largest representative volume of any production, sales or exports which can
reasonably be investigated within the time available.
(2) The selection of parties, types of products or transactions made under this section
shall rest with the Commission:
Provided that preference shall be given by the Commission to choosing a sample in
consultation with, and with the consent of, the parties concerned:
Provided further that such parties make them selves known and make sufficient information
available to the Commission, within three weeks of initiation of an investigation, to enable a
representative sample to be chosen.
(3) In cases where the examination has been limited in accordance with this section, an
individual amount of countervailable subsidisati on shall, nevertheless, be calculated by the
Commission for any exporter or producer not initially selected who submits the necessary information
within the time limits provided for in this Or dinance except where the Commission determines that
the number of exporters or producers is so large that individual examinations would be unduly
burdensome and would prevent completion of an investigation within the applicable time limits.
(4) Where the Commission has decided to undertake a sample as provided for in this
section and there is a degree of non-cooperation by some or all of the parties selected which is likely
to materially affect the outcome of an investigation, a new sample may be selected by the
Commission:
Provided that if a material degree of non-cooperation persists or there is insufficient time to
select a new sample, the relevant provisions of section 28 shall apply.
28. Non-cooperation
(1) Where any interested party refuses access to, or otherwise does not provide,
necessary information within the time limits provided  in this Ordinance, or significantly impedes an
investigation, provisional or final determinations, whether affirmative or negative, may be made by
the Commission on the basis of the facts available.
(2) Where the Commission establishes that any interested party has supplied false or
misleading information, such information shall be disregarded and use may be made by the
Commission of the facts available.G/SCM/N/1/PAK/2
Page 28
(3) Where any information submitted by an inte rested party is not ideal in all respects it
shall nevertheless not be disregarded by the Commission:
Provided that the Commission is satisfied that any deficiencies are not such as to cause undue
difficulty in arriving at a reasonably accurate finding and that the information is appropriately
submitted in good time and is verifiable, and that the party has acted to the best of its ability.
(4) If evidence or information is not accepted by the Commission, a supplying party shall
be informed forthwith of the reasons therefor and shall be granted an opportunity to provide further
explanations within such time limit as the Commission may specify.
(5) If determinations, including those regarding the amount of countervailable subsidies,
are based on the provisions of sub-section (1) including any information supplied in an application it
shall, where practicable and with due regard to the time limits of an investigation, be checked by the
Commission by reference to information from other independent sources which may be available
including published price lists, official import statistics and customs returns, or information obtainedfrom other interested parties during the investigation.
(6) If an interested party does not co-opera te, or co-operates only partially so that
relevant information is thereby withheld, the result ma y be less favourable to the party than if it had
co-operated.
29. Confidentiality
(1) Subject to sub-section (2), the Commission shall, during and after an investigation,
keep confidential any information submitted to it and such information shall not be disclosed without
specific permission of the party submitting it.
(2) Information which is:(a) by nature confidential, because its disclosure shall be of significant competitive
advantage to a competitor, or because its disclosure would have a significantly
adverse effect upon a person supplying the information, or upon a person from whomthe information was acquired, or where the Commission determines such information
to be of a confidential nature for any other reason; or
(b) provided on a confidential basis by parties to an investigation,
shall, upon good cause shown, be treated as confidential by the Commission.
(3) The following types of information shall be deemed to be by nature confidential,
unless the Commission determines that disclosure in a particular case would neither be of significant
competitive advantage to a competitor nor have a significantly adverse effect upon a person supplyingan information or upon a person from whom such information was acquired, namely:
(a) business or trade secrets concerning the nature of a product, production processes,
operations, production equipment, or machinery;
(b) information concerning financial condition of a company, which is not publicly
available; andG/SCM/N/1/PAK/2
Page 29
(c) information concerning costs, identification of customers, sales, inventories,
shipments, or amount or source of any income, profit, loss or expenditure related to
the manufacture and sale of a product.
(4) Any party seeking any information to be kept confidential shall request for the same
at the time the information is submitted, along with the reasons warranting confidentiality. The
Commission shall consider such requests expeditiously and inform the party submitting the
information if it determines that the request for k eeping the information confidential is not warranted.
(5) Any party submitting any information with the request to keep it confidential shall
furnish a non-confidential summary thereof. Such summary may take the form of ranges or indexation
of figures provided in a confidential version, or marked deletions in text or in such other form as theCommission may require:
Provided that such non-confidential summary shall permit a reasonable understanding of the
substance of any information submitted in confidence:
Provided further that the deletion in text shall, unless otherwise allowed by the Commission,
only relate to names of any buyer or supplier.
(6) In exceptional circumstances, parties may indicate that information for which
confidentiality is sought is not susceptible of summary, in which case a statement of the reasons whysummarisation is not possible shall be provided:
Provided that where the Commission concludes that a non-confidential summary provided
fails to satisfy the requirements of sub-section (5), it may determine that the request for keeping an
information confidential is not warranted.
(7) If the Commission finds that a request for keeping an information confidential is not
warranted, and if the supplier of the information is  unwilling to make the information public or to
authorise the disclosure in generalised or summary form, the Commission shall disregard such
information, and return the information concerned to the party submitting it.
(8) Save for sub-section (10), notwithstanding anything contained in this Ordinance or in
any other law for the time being in force, any confid ential information received or obtained, directly
or indirectly, by the Commission pursuant to or in connection with an investigation shall not be
subject to disclosure by the Commission to any Ministry, Division, department, agency or
instrumentality of the Federal Government or a Pr ovincial Government without the prior permission
of the party submitting such confidential information.
(9) Information received pursuant to this Ordinance shall be used only for the purpose for
which it was requested.
(10) The provisions of sub-section (8) shall not preclude the supply of information called
for by the Appellate Tribunal pursuant to section 33:
Provided that the obligation to protect confidenti al information as provided for in this Chapter
shall, mutatis mutandis , extend to the Appellate Tribunal.
30. Disclosure
(1) Any applicant, importer and exporter and their representative association and an
exporting country may request disclosure by the Commission of the details underlying the essentialG/SCM/N/1/PAK/2
Page 30
facts and considerations on the basis of which provisional countervailing duties have been imposed:
Provided that requests for such disclosure shall be  made in writing immediately following imposition
of provisional countervailing duties and in any event no later than fifteen days thereof and a
disclosure by the Commission shall be made in writing as soon as possible thereafter.
(2) The parties specified in sub-section (1) may request for a final disclosure by the
Commission of the essential facts and considerations on the basis of which it is intended to
recommend imposition of definitive countervailing duties, or termination of an investigation or
proceedings without imposition of duties, particular attention being paid to disclosure of any facts or
considerations which are different from those used for any provisional countervailing duties.
(3) Requests for final disclosure shall be addressed to the Commission in writing and be
received, in cases where provisional countervailing duty has been applied, not later than one month
after imposition of that duty.
(4) Where a provisional countervailing duty has not been imposed, parties shall be
provided with an opportunity to request final disclo sure within such time limits as may be determined
by the Commission.
(5) Final disclosure shall be given in writing and shall be made, with due regard to the
protection of confidential information pursuant to section 29, as soon as possible and, normally, not
later than one month prior to a definitive determination.
(6) Where the Commission is not in a position to disclose certain facts or considerations
at that time, these shall be disclosed as soon as possible thereafter.  Disclosure shall not prejudice any
subsequent decision which may be taken by the Commission but where such decision is based on any
different facts and considerations these shall be disclosed as soon as possible.
(7) Representations which are made after a final disclosure is given, shall be taken into
consideration only if received within such period as may be determined by the Commission in each
case, which shall be at least ten days, due consideration being given to the urgency of the matter.
31. Relationships between countervailing duty measures and multilateral remedies
Where an investigated product is made subject to any countermeasures imposed following
recourse to the dispute settlement procedures provided for in the Agreement on Subsidies and such
measures are appropriate to remove the injury caused by any countervailable subsidies, any
countervailing duty imposed with regard to such product under this Ordinance shall immediately be
terminated by the Commission.
PART XIII
APPEAL TO THE APPELLATE TRIBUNAL
32. Appeal to the Appellate Tribunal
(1) Without prejudice to the provisions of section 64 of the Anti-Dumping Ordinance,
2000 (of 2000), the Appellate Tribunal shall also exercise jurisdiction under sub-section (2).
(2) Any interested party may prefer an appeal to the Appellate Tribunal against:
(i) an affirmative or negative final determination by the Commission; andG/SCM/N/1/PAK/2
Page 31
(ii) any final determination pursuant to a review.
(3) Every appeal under sub-section (2) shall be filed within forty-five days from the date
of publication in newspapers of a public notice of any affirmative or negative final determination by
the Commission, as the case may be, and shall be in such form and contain such information as maybe prescribed.
(4) In examining an appeal under sub-section (2), the Appellate Tribunal may make such
further inquiry as it may consider necessary, and after giving the Commission and an appellant an
opportunity of being heard, pass such order as it thinks fit, confirming, altering or annulling a
determination of the Commission appealed against.
(5) An examining an appeal, the Appellate Tr ibunal shall as regards assessment of the
facts relating to an impugned determination of the Commission, determine on the basis of official
record maintained by the Commission or any other documents relied upon by the Commission in
reaching a determination appealed against, whether the establishment of the facts by the Commission
was proper and whether the Commission’s evalua tion of those facts was unbiased and objective.
Where the Appellate Tribunal determines that the Commission’s establishment of the facts was proper
and its evaluation was unbiased and objective, it shall confirm an impugned determination of the
Commission provided that the Appellate Tribunal is satisfied that in reaching the impugned
determination, the Commission complied with the relevant provisions of this Ordinance.
(6) An appeal under sub-section (2) shall be disposed of and the decision of the Appellate
Tribunal pronounced, as expeditiously as possible but not later than ninety days from the date of
receipt of an appeal compliant with the requiremen ts of sub-section (3), except in extraordinary
circumstances and on grounds to be recorded. The Appellate Tribunal shall hear the appeal from day
to day.
(7) The decision of the Appellate Tribunal shall be in writing and shall give details of the
issues raised in appeal and the arguments adopted by an appellant and the Commission, and shall give
reasons for reaching its decision with reference to the provisions of this Ordinance and the facts of the
case.
(8) The Appellate Tribunal shall provide copies of its decision to all the appellants and
the Commission no later that five days from the date of rendering its decision.
(9) The Appellate Tribunal may, if it deems necessary, require an appellant to provide
security in such form as may be prescribed, at the time of filing of an appeal.
(10) The decision of the Appellate Tribunal shall be final and no further appeal shall lie
therefrom:
Provided that the Appellate Tribunal may, if it thinks fit, accept an application from any party
to an appeal in which the Appellate Tribunal has rendered its decision, for a clarification of any of theissues raised by the Appellate Tribunal in its decision:
Provided further that such application shall specify the precise issue in respect of which a
clarification is sought and give reasons as to why a clarification is necessary and the Appellate
Tribunal shall only accept such application if it is  satisfied that a material issue discussed in its
decision requires further clarification or elaboration:
Provided further that the party likely to be adve rsely affected by such clarification shall also
be given a notice by the Appellate Tribunal:G/SCM/N/1/PAK/2
Page 32
Provided also that no application under this sub-section shall be accepted by the Appellate
Tribunal later that thirty days of its decision.
(11) The Appellate Tribunal shall perform its functions under this Ordinance in
accordance with such procedures as may be prescribed.
33. Power of the Appellate Tribunal to call for and examine record
The Appellate Tribunal may call for and examine any records of an investigation conducted
by the Commission and any other information or documents relied upon by the Commission in
reaching a determination appealed against for the purpose of satisfying itself as to the legality orpropriety of an impugned determination of the Commission.
PART XVI
MISCELLANEOUS
34. Power to make rules
(1) The Federal Government may, by notification in the official Gazette, make rules for
carrying out the purposes of this Ordinance.
(2) In particular and without prejudice to the generality of the foregoing power, such
rules may provide for the manner in which any investigation may be conducted, the manner in which
an investigated product may be identified, the factors to which regard shall be had in any such
investigation, the manner of assessment, levy and collection of any countervailing duty, whetherpreliminary or definitive, and for all matters connected with an investigation.
35. Public servants
The employees and other persons authorised to perform or exercise any function or power
under this Ordinance or rendering services to the Commission as consultant or adviser shall be
deemed to be public servants within the meaning of section 21 of the Pakistan Penal Code, 1860(Act XLV of 1860).
36. Failure to disclose correct information offence
Any person who knowingly and wilfully provides false, misleading or incorrect information
to the Commission whether in an application received under this Ordinance or, otherwise in
connection with an investigation under this Ordinance, shall be guilty of an offence and shall on
conviction be liable to imprisonment for a term which may extend to three years, or a fine not
exceeding five million rupees, or both.
37. Cognizance of offences
(1) Notwithstanding anything contained in th e Code of Criminal procedure, 1898 (Act V
of 1898), no court other than a court of session shall have jurisdiction to try any person charged with
an offence under section 36.
(2) No court of session shall take cognizance of an offence under this Ordinance except
upon a complaint in written made by the Commission or an officer authorised by it, and signed by any
two members of the Commission.G/SCM/N/1/PAK/2
Page 33
38. Protection to persons prejudiced in employment because of assisting the Commission
(1) An employer shall not:
(a) dismiss an employee, or prejudice an employee in his employment, because the
employee has assisted the Commission in connection with an inquiry or investigation
under this Ordinance; or
(b) dismiss or threaten to dismiss an employee, or prejudice or threaten to prejudice an
employee in his employment, because the employee proposes to assist the
Commission in connection with an inquiry or investigation under this Ordinance.
(2) For the purposes of sub-section (1), a person shall be taken to assist the Commission
in connection with an inquiry if the person:
(a) gives information, whether orally or in writing, or gives documents, to the
Commission in connection with an inquiry or  investigation under this Ordinance; or
(b) gives evidence, or produces documents, at an inquiry, investigation or hearing held
under this Ordinance.
39. Public file to be maintained fo r interested party and access thereto
(1) The Commission shall establish and maintain a file relating to each investigation or
review pursuant to this Ordinance and subject to the requirement to protect confidential information
under section 29, the Commission shall place in such file
(a) all public notices relating to an investigation or review;(b) all materials, including questionnaires, responses to questionnaires, and written
communications submitted to the Commission;
(c) all other information developed or obtained by the Commission; and(d) any other documents the Commission deems appropriate for disclosure to an
interested party.
(2) The file to be maintained under sub-sec tion (1) shall be available to any interested
party for review and copying at the offices of th e Commission, during such time as the Commission
may specify, throughout the course of an investigation or review and any appeal under section 32.
40. Official file to be maintained by the Commission
(1) The Commission shall establish and maintain an official file relating to each
investigation or review pursuant to this Ordinance and shall place in such file:
(a) all materials, papers and documents, confidential or otherwise, including
questionnaires, responses to questionnaires, and written communications submitted toor by the Commission in connection with an investigation or review;
(b) all documents relating to or setting out any calculations made by the Commission in
connection with an investigation or review;G/SCM/N/1/PAK/2
Page 34
(c) all internal correspondence or memoranda of the Commission relating to or in
connection with an investigation or review that are relevant to the calculation of
dumping margin or determination of injury including, any correspondence with or
between any other Ministry, Division, depart ment, agency or instrumentality of the
Federal Government or any Provisional Government;
(d) any other information developed, obtained or relied on by the Commission in
connection with an investigation or review; and
(e) any other document or information that the Commission deems appropriate for
placing in the official file.
(2) The file to be maintained under sub-sec tion (1) shall only be for the internal use of
the Commission and for the Appellate Tribunal in connection with an appeal under section 32.
41. Appointment of advisers and consultants
(1) Subject to sub-section (2), the Commission may, employ and pay consultants and
agents and technical, professional and other advisers, including bankers, economists, actuaries,
accountants, lawyers and other persons to do any act required to be done in the exercise of its powers,
the performance of its functions or for the better implementation of the purposes of this Ordinance.
(2) The decision to employ and the terms and conditions of employment of external
advisers and consultants pursuant to sub-section (1) shall be made by the Commission in accordance
with such policy guidelines as may be established by the Federal Government, in consultation with
the Commission, from time to time.
42. Indemnity
No suit, prosecution or other legal proceedings shall lie against the Commission, the
Chairman or any member of the Commission or any employee, consultant, agent or adviser of the
Commission in respect of anything which is in good faith done or intended to be done under this
Ordinance or rules made thereunder.
43. Removal of difficulties
The Federal Government may for the purpose of removing any difficulties in relation to any
matters under this Ordinance, make such orders as may appear to it to be necessary for the purpose ofremoving the difficulty:
Provided that no such power shall be exercised after the expiry of two years from the
commencement of this Ordinance.
44. Ordinance to override other laws
The provisions of this Ordinance shall have effect notwithstanding anything inconsistent
therewith contained in any other law for the time being in force, including, without limitation, the
National Tariff Commission Act, 1990 (VI of  1990), and the Customs Act, 1969 (IV of 1969).G/SCM/N/1/PAK/2
Page 35
THE FIRST SCHEDULE
[See section 5(6) (a)]
ILLUSTRATIVE LIST OF EXPORT SUBSIDIES
1. In this Schedule, unless there is anything repugnant in the subject or context:
(a) “commercially available” means that the choice between domestic and imported
products is unrestricted and depends only on commercial considerations;
(b) “direct taxes” means taxes on wages, profits , interests, rents, royalties, and all other
forms of income, and taxes on the ownership of real property;
(c) “cumulative indirect taxes” means indirect taxes which are multi-staged taxes levied
where there is no mechanism for subsequent crediting of the tax if goods or services
subject to tax at one stage of production ar e used in a succeeding state of production;
(d) “import charges” means tariffs, duties, and other fiscal charges that are levied on
imports;
(e) “indirect taxes” means sales, excise, turnover, value added, franchise, stamp, transfer,
inventory and equipment taxes, border taxes and all taxes other than direct taxes andimport charges;
(f) “prior-stage indirect taxes” means those indirect taxes levied on goods or services
used directly or indirectly in making a product;
(g) “remission” of taxes includes the refund or rebate of taxes; and
(h) “remission or drawback” includes the full or partial exemption or deferral of import
charges:
Provided that deferral may not amount to an export subsidy where, for
example, appropriate interest charges are collected.
2. The following is an illustrative list of export subsidies, namely:
(a) any provision by a government of direct subsidies to a firm or an industry contingent
upon export performance;
(b) currency retention schemes or any similar practices which involve a bonus on
exports;
(c) internal transport and freight charges on export shipments, provided or mandated by a
government, on terms more favourable than for domestic shipments;
(d) any provision by a government or its agencies either directly or indirectly through
government-mandated schemes, of imported or domestic products or services for use
in the production of exported goods, on terms or conditions more favourable than forprovision of like or directly competitive products or services for use in the production
of goods for domestic consumption, if, in the case of products, such terms or
conditions are more favourable than those commercially available on world markets
to their exporters;G/SCM/N/1/PAK/2
Page 36
(e) any full or partial exemption, remission, or deferral specifically related to exports, of
direct taxes or social welfare charges pa id or payable by industrial or commercial
enterprises;
(f) any allowance of special deductions directly related to exports or export performance,
over and above those granted in respect of production for domestic consumption, in
calculation of the base on which direct taxes are charged;
(g) any exemption or remission, in respect of the production and distribution of exported
products, of indirect taxes in excess of those levied in respect of production and
distribution of like products when sold for domestic consumption;
(h) any exemption, remission or deferral of prior-stage cumulative indirect taxes on
goods or services used in the production of exported products in excess of any
exemption, remission or deferral of like prior-stage cumulative indirect taxes on
goods or services used in the production of like products when sold for domesticconsumption; provided, however, that prior-stage cumulative indirect taxes may be
exempted, remitted or deferred on exported products even when not exempted,
remitted or deferred on like products when sold for domestic consumption, if any
prior-stage cumulative indirect taxes are levied on inputs that are consumed in the
production of an exported product making normal allowance for waste. This clauseshall be interpreted in accordance with the guidelines on consumption of inputs in a
production process contained in the Second Schedule. For the avoidance of doubt, the
provisions of this clause shall not apply to value-added tax systems and border-tax
adjustment in lieu thereof and the provisions of clause (g) shall exclusively cover
issues relating to excessive remission of value-added taxes;
(i) any remission or drawback of import charges in excess of those levied on imported
inputs that are consumed in the production of an exported product, making normal
allowance for waste; provided, however, that in particular cases a firm may use a
quantity of home market inputs equal to, and having the same quality and
characteristics as, the imported inputs as a substitute for them in order to benefit from
this provision if the import and the corresponding export operations both occur withina reasonable time period, not to exceed two y ears.  This clause shall be interpreted in
accordance with the guidelines on consumption of inputs in the production process
contained in the Second Schedule and the guidelines in the determination of
substitution drawback systems as export subsidies contained in the Third Schedule;
(j) any provision by a government or, special institutions controlled by a government, of
export credit guarantee or insurance programmes, of insurance or guarantee
programmes against increases in the cost of exported products or of exchange risk
programmes, at premium rates which are inadequate to cover long-term operating
costs and losses of the programmes;
(k) any grant by a government or special institutions controlled by or acting under the
authority of a government, or both, of export credits at rates below those which they
actually have to pay for the funds so employed or, would have to pay if they
borrowed on international capital markets in order to obtain funds of the samematurity and other credit terms and denominated in the same currency as an export
credit or, the payment by them of all or part of the costs incurred by exporters or
financial institutions in obtaining credits, in sofar as they are used to secure a material
advantage in the field of export credit terms. Provided, however, that if a countryG/SCM/N/1/PAK/2
Page 37
which is a member of the WTO is a party to an international undertaking on official
export credits to which at least twelve original such members are parties as of the first
day of January, 1979, or, a successor undertaking which has been adopted by those
original members, or if in practice a country which is member of the WTO applies the
interest rates provisions of the relevant undertaking, an export credit practice which isin conformity with those provisions shall not be considered an export subsidy; and
(l) any other charge on a public account constituting an export subsidy in the sense of
Article XVI of the General Agreement on Tariffs and Trade, 1994.
THE SECOND SCHEDULE
(See the First Schedule)
GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION PROCESS
1. For the purposes of this Schedule “inputs consumed in the production process” means inputs
physically incorporated, energy, fuels and oil used in a production process and catalysts which areconsumed in the course of their use to obtain an exported product.
2. Indirect tax rebate schemes can allow for exemption, remission or deferral of prior-stage
cumulative indirect taxes levied on inputs that are consumed in the production of an exported product
making normal allowance for waste. Similarly, drawback schemes can allow for the remission ordrawback of import charges levied on inputs that are consumed in the production of an exported
product making normal allowance for waste.
3. The illustrative list of export subsidies in the First Schedule makes reference to the term
“inputs that are consumed in the production of the exported product” in clauses (h) and (i) of para 2thereof. Pursuant to clause (h) of para 2 of the First Schedule, indirect tax rebate schemes can
constitute an export subsidy to the extent that they result in exemption, remission or deferral of prior-
stage cumulative indirect taxes in excess of the amount of such taxes actually levied on inputs that are
consumed in the production of an exported product. Pursuant to clause (i) of para 2 of the First
Schedule, drawback schemes can constitute an export subsidy to the extent that they result in a
remission or drawback of import charges in excess of those actually levied on inputs that are
consumed in the production of an exported product. Both the said clauses stipulate that normalallowance for waste must be made in findings regarding consumption of inputs in the production of an
exported product. Clause (i) of para 2 of the First Schedule also provides for substitution, where
appropriate.
4. In examining whether inputs are consumed in the production of an exported product, as part
of a countervailing duty investigation pursuant to this Ordinance, the Commission should normally
proceed on the following basis, namely:
(a) where it is alleged that an indirect tax rebate scheme, or a drawback scheme, conveys
a subsidy by reason of over-rebate or ex cess drawback of indirect taxes or import
charges on inputs consumed in the production of an investigated product, the
Commission shall normally first determine whether the government of an exporting
country has in place and applies a system or procedure to confirm which inputs are
consumed in the production of an exported product and in what amounts. Where such
a system or procedure is determined to be applied, the Commission shall normallythen examine the system or procedure to see whether it is reasonable and effective for
the purpose intended, and based on generally accepted commercial practices in the
country of export. The Commission may deem it necessary to carry out, inG/SCM/N/1/PAK/2
Page 38
accordance with section 26, certain practical tests in order to verify information or to
satisfy itself that the system or procedure is being effectively applied;
(b) where there is no such system or procedure, or where it is not reasonable, or where it
is instituted and considered reasonable but is found not to be applied or not to beapplied effectively, a further examination by an exporting country based on the actual
inputs involved will normally need to be carried out in the context of determining
whether an excess payment occurred. If the Commission deems it necessary, a further
examination may be carried out in accordance with clause (a) of this para;
(c) the Commission must normally treat inputs as physically incorporated if such inputs
are used in the production process and are physically present in a product exported,and an input need not be present in a final product in the same form in which it
entered the production process;
(d) in determining the amount of a particular input that is consumed in the production of
an exported product, a “normal allowance for waste” must normally be taken intoaccount by the Commission, and such waste must normally be treated as consumed in
the production of an exported product.  The term “waste” refers to that portion of a
given input which does not serve an independent function in the production process,
is not consumed in the production of an exported product, for reasons such as
inefficiencies, and is not recovered, used or sold by the same manufacturer; and
(e) the Commission’s determination of whether the claimed allowance for waste is
“normal” shall normally take into account the production process, the average
experience of an industry in the country of export, and other technical factors, as
appropriate. The Commission shall bear in mind that an important question is whetherthe authorities in an exporting country have reasonably calculated the amount of
waste, when such an amount is intended to be included in a tax or duty rebate or
remission.
THE THIRD SCHEDULE
(See the First Schedule and Second Schedule)
GUIDELINES IN THE DETERMINATION OF SUBSTITUTION
DRAWBACK SYSTEMS AS EXPORT SUBSIDIES
1. Drawback systems can allow for refund or drawback of import charges on inputs which are
consumed in a production process of another product and where export of this latter product contains
domestic inputs having the same quality and characteristics as those submitted for imported inputs.
Pursuant to clause (i) of para 2 of the First Schedule, substitution drawback systems can constitute an
export subsidy to the extent that they result in an excess drawback of import charges levied initially
on imported inputs for which drawback is being claimed.
2. In examining any substitution drawback system as part of a an investigation the Commission
shall normally proceed on the following basis, namely:
(a) clause (i) of para 2 of the First Schedule stipulates that home market inputs may be
substituted for imported inputs in the production of a product for export providedsuch inputs are equal in quantity to, and have same quality and characteristics as,
imported inputs being substituted. The existence of a verification system or procedure
is important because it enables the government of an exporting country to ensure and
demonstrate that the quantity of inputs for which drawback is claimed does notG/SCM/N/1/PAK/2
Page 39
exceed the quantity of similar products exported, in whatever form, and that there is
no drawback of import charges in excess of those originally levied on imported inputs
in question;
(b) where it is alleged that a substitution drawback system conveys a subsidy, the
Commission shall normally first proceed to determine whether the government of an
exporting country has in place and applies a verification system or procedure. Where
such a system or procedure is determined to be applied, the Commission shall
normally then examine the verification proced ures to see whether they are reasonable
and effective for the purpose intended, and based on generally accepted commercial
practices in the country of export. To the ex tent that any procedures are determined to
meet this test and are effectively applied, no subsidy will be presumed to exist. It maybe deemed necessary by the Commission to carry out, in accordance with section 26,
certain practical tests in order to verify information or to satisfy itself that verification
procedures are being effectively applied;
(c) where there are no verification procedures, or where they are not reasonable, or where
such procedures are instituted and considered reasonable but are found not be actually
applied or not be applied effectively, there may be a subsidy. In such cases, further
examination by an exporting country based on actual transactions involved would
need to be carried out to determine wh ether an excess payment occurred. If the
Commission deems it necessary, a further examination mat be carried out inaccordance with clause (b); and
(d) the existence of a substitution drawback provision under which exporters are allowed
to select particular import shipments on which drawback is claimed shall not of itself
be considered by the Commission to convey a subsidy.
3. An excess drawback of import charges within the meaning of clause (i) of para 2 of the First
Schedule, would be deemed to exist where a government paid interest on any monies refunded under
its drawback schemes, to the extent of an interest actually paid or payable.
THE FOURTH SCHEDULE
[See sections 6(1)(c) and 11(7)]
Explanation.– This Schedule has been set out on the basis of Annex 2 to the Agreement on
Agriculture included in Annex (1A) to the Fina l Act of the Results of the Multilateral Trade
Negotiations of the Uruguay Round. Any terms or expressions which are not explained herein or
which are not self-explanatory are to be interpreted in the context of that Agreement.
DOMESTIC SUPPORT: THE BASIS OF EXEMPTION FROM
THE REDUCTION COMMITMENTS
1. Any domestic support measures for which exemption from the reduction commitments is
claimed shall meet the fundamental requirement that they have no, or at the most minimal, trade-
distorting effects or effects on production. Accordingly, all measures for which exemption is claimed
shall, in addition to a policy specific criteria and conditions set out below, conform to the following
basic criteria, namely:
(a) the support in question shall be provided through a publicly-funded government
programme including government revenue foregone, not involving transfers from
consumers; andG/SCM/N/1/PAK/2
Page 40
(b) the support in question shall not have the effect of providing price support to
producers.
Government Service Programmes
2. General services
Any policies in this category involve expenditures or, revenue foregone, in relation to
programmes which provide services or benefits to agriculture or a rural community. They shall not
involve direct payments to producers or processors. Such programmes, which include but are not
restricted to the following list, shall meet the general criteria stipulated in para 1 and policy-specific
conditions where set out below, namely:
(a) research, including general research, research in connection with environmental
programmes, and research programmes relating to particular products;
(b) pest and disease control, including general and product-specific pest and disease
control measures, such as early-warning systems, quarantine and eradication;
(c) training services, including both general and specific training facilities;(d) extension and advisory services, including the provision of means to facilitate transfer
of information and results of research to producers and consumers;
(e) inspection services, including general inspection services and an inspection of
particular products for health, safety, grading or standardisation purposes;
(f) marketing and promotion services, including market information, advice and
promotion relating to particular products but excluding expenditure for unspecified
purposes that could be used by sellers to reduce their selling price or confer a direct
economic benefit to purchasers; and
(g) infrastructural services, including, electricity reticulation, roads and other means of
transport, market and port facilities, water supply facilities, dams and drainageschemes, and infrastructural works associated with environmental programmes. In all
cases the expenditure shall be directed to the provision or construction of capital
works only, and shall exclude subsidised provision of on-farm facilities other than for
reticulation of generally available public utilities. It shall not include subsidies to
inputs or operating costs, or preferential user charges.
3. Public stockholding for food security purposes
(1) Any expenditure or, revenue foregone, in relation to accumulation and holding of
stocks of products which form an integral part of a food security programme identified in nationallegislation. This may include government aid to pr ivate storage of products as part of such a
programme.
(2) The volume and accumulation of such stocks shall correspond to predetermined
targets related solely to food security. The process of stock accumulation and disposal shall befinancially transparent. Food purchases by a government shall be made at current market prices and
sales from food security stocks shall be made at no less than the current domestic market price for a
product and quality in question.G/SCM/N/1/PAK/2
Page 41
4. Domestic food aid
Eligibility to receive the food aid shall be subject to clearly-defined criteria related to
nutritional objectives. Such aid shall be in the form of direct provision of food to those concerned or
the provision of means to allow eligible recipients to buy food either at market or at subsidised prices.Food purchases by a government shall be made at current market prices and the financing and
administration of the aid shall be transparent.
5. Direct payments to producers
Support provided through direct payments or, revenue foregone, including payments in kind,
to producers for which exemption from reduction commitments as claimed shall meet the basiccriteria stipulated in para 1, plus specific criteria applying to individual types of direct payment as set
out in paras 6 to 13. Where exemption from reduction is claimed for any existing or new type of direct
payment other than those specified in paras 6 to 13, it shall conform to criteria stipulated in sub-
paras (2) to (5) of para 6, in addition to the general criteria set out in para 1.
6. Decoupled income support
(1) Eligibility for such payments shall be de termined by clearly-defined criteria such as
income, status as a producer or landowner, factor use or production level in a defined and fixed base
period.
(2) The amount of such payments in any given year shall not be related to, or based on,
the type or volume of production including, livestock units undertaken by a producer in any year after
the base period.
(3) The amount of such payments in any given year shall not be related to, or based on,
the prices, whether domestic or international, applying to any production undertaken in any year after
the base period.
(4) The amount of such payments in any given year shall not be related to, or based on,
the factors of production employed in any year after the base period.
(5) No production shall be required in order to receive such payments.
7. Government financial participation in income insurance and income safety-net
programmes
(1) Eligibility for such payments shall be determined by an income loss, taking into
account only income derived from agriculture, which exceeds thirty per cent of average gross income
or the equivalent in net income terms, excluding any payments from the same or similar schemes, in
the preceding three-year period or a three-year average based on the preceding five-year period,
excluding the highest and the lowest entry. Any pr oducer meeting this condition shall be eligible to
receive the payments.
(2) The amount of such payments shall compen sate for less than seventy per cent of the
producer's income loss in the year the producer becomes eligible to receive this assistance.
(3) The amount of any such payments shall rela te solely to income, it shall not relate to
the type or volume of production including, livestock units, undertaken by the producer, or to the
prices, whether domestic or international, applying to such production, or to the factors of production
employed.G/SCM/N/1/PAK/2
Page 42
(4) Where a producer receives in the same year payments pursuant to this para and
pursuant to para 8 (relief from natural disasters), the total of such payments shall be less than one
hundred per cent of the producer's total loss.
8. Payments, made either directly or by way of a government financial participation in
crop insurance schemes, for relief from natural disasters
(1) Eligibility for such payments shall ar ise only following a formal recognition by
government authorities that a natural or like disaster including, disease outbreaks, pest infestations,
nuclear accidents, and war on the territory of the Member concerned, has occurred or is occurring, and
shall be determined by a production loss which exceeds thirty per cent of the average of production inthe preceding three-year period or a three-year average based on the preceding five-year period,
excluding the highest and the lowest entry.
(2) Payments made following a disaster shall be applied only in respect of losses of
income, livestock including, payments in connectio n with veterinary treatment of animals, land or
other production factors due to a natural disaster in question.
(3) Payments shall compensate for not more th an the total cost of replacing such losses
and shall not require or specify the type or quantity of future production.
(4) Payments made during a disaster shall not exceed the level required to prevent or
alleviate further loss as defined in sub-para (2).
(5) Where a producer receives in the same year payments pursuant to this para and
pursuant to para 7 (income insurance and income sa fety-net programmes), the total of such payments
shall be less than one hundred per cent of the producer’s total loss.
9. Structural adjustment assistance provided through producer retirement programmes
(1) Eligibility for such payments shall be determined by reference to clearly defined
criteria in programmes designed to facilitate the retirement of persons engaged in marketable
agricultural production, or their movement to non-agricultural activities.
(2) Payments shall be conditional upon the total and permanent retirement of the
recipients from marketable agricultural production.
10. Structural adjustment assistance provid ed through resource retirement programmes
(1) Eligibility for such payments shall be determined by reference to clearly defined
criteria in programmes designed to remove land or other resources, including livestock, from
marketable agricultural production.
(2) Payments shall be conditional upon the retirement of land from marketable
agricultural production for a minimum of three years, and in the case of livestock on its slaughter or
definitive permanent disposal.
(3) Payments shall not require or specify any alternative use for such land or other
resources which involves the production of marketable agricultural products.G/SCM/N/1/PAK/2
Page 43
(4) Payments shall not be related to either type or quantity of production or to the prices,
whether domestic or international, applying to production undertaken using land or other resources
remaining in production.
11. Structural adjustment assistance provided through investment aids
(1) Eligibility for such payments shall be determined by reference to clearly-defined
criteria in government programmes designed to assist the financial or physical restructuring of a
producer's operations in response to objectively demonstrated structural disadvantages. Eligibility for
such programmes may also be based on a clearly defined government programme for re-privatisation
of agricultural land.
(2) The amount of such payments in any given year shall not be related to, or based on,
the type or volume of production including, livestock units, undertaken by a producer in any year after
the base period other than as provided for under sub-para (5).
(3) The amount of such payments in any given year shall not be related to, or based on,
the prices, whether domestic or international, applying to any production undertaken in any year after
the base period.
(4) The payments shall be given only for such period of time necessary for realisation of
an investment in respect of which they are provided.
(5) The payments shall not mandate or in any way designate the agricultural products to
be produced by the recipients except to require them not to produce a particular product.
(6) The payments shall be limited to the amount required to compensate for structural
disadvantage.
12. Payments under environmental programmes
(1) Eligibility for such payments shall be determined as part of a clearly-defined
government environmental or conservation programme and be dependent on the fulfilment of specific
conditions under the government programme, including conditions related to production methods orinputs.
(2) The amount of payment shall be limited to the extra costs or loss of income involved
in complying with the government programme.
13. Payments under regional assistance programmes
(1) Eligibility for such paymen ts shall be limited to producers in disadvantaged regions.
Each such region must be a clearly designated contiguous geographical area with a definable
economic and administrative identity, considered as disadvantaged on the basis of neutral andobjective criteria clearly spelt out in a law or regulation and indicating that the region's difficulties
arise out of more than temporary circumstances.
(2) The amount of such payments in any given year shall not be related to, or based on,
the type or volume of production including, livestock units, undertaken by the producer in any yearafter the base period other than to reduce that production.G/SCM/N/1/PAK/2
Page 44
(3) The amount of such payments in any given year shall not be related to, or based on,
the prices, whether domestic or international, applying to any production undertaken in any year after
the base period.
(4) Payments shall be available only to producers in eligible regions, but generally
available to all producers within such regions.
(5) Where related to production factors, payments shall be made at a degressive rate
above a threshold level of the factor concerned.
(6) The payments shall be limited to the ex tra costs or loss of income involved in
undertaking agricultural production in a specified area.
14. For the purpose of para 3, governmental stockholding programmes for food security purposes
in developing countries whose operation is transparent and conducted in accordance with officially
published objective criteria or guidelines shall be co nsidered to be in conformity with the provisions
of this para, including programmes under which stocks of foodstuffs for food security purposes areacquired and released at administered prices, provided that the difference between the acquisition
price and the external reference price is accounted for in the Aggregate Measure of Support.
15. For the purposes of paras 3 and 4, the provision of foodstuffs at subsidised prices with the
objective of meeting food requirements of urban and rural poor in developing countries on a regularbasis at reasonable prices shall be considered to be  in conformity with the provisions of this para.
FIFTH SCHEDULE
[See section 15(3)(b)]
The developing countries referred to in clause (b) of sub-section (3) of section 15 are as
under, namely:
(a) least-developed countries designated as such by the United Nations which are
members of the WTO; and
(b) each of the following developing countries which are members of the WTO shall be
subject to the provisions which are applicable to developing countries pursuant to
clause (b) of sub-section (3) of section 15 until Gross National Product per capita, as
determined on the basis of the most recent data available from the International Bank
for Reconstruction and Development, has reached United States Dollars One
Thousand per annum, namely:
(i) Bolivia;
(iii) Cameroon;
(iv) Congo;
(v) Côte d’Ivoire;(vi) Dominican Republic;
(vii) Egypt;
(viii) Ghana;
(ix) Guatemala;
(x) Guyana;(xi) India;
(xii) Indonesia;
(xiii) Kenya;
(xiv) Morocco;G/SCM/N/1/PAK/2
Page 45
(xv) Nicaragua;
(xvi) Nigeria;
(xvii) Pakistan;
(xviii) Philippines;
(xix) Senegal;(xx) Sri Lanka; and
(xxi) Zimbabwe.
MOHAMMAD RAFIQ TARAR,
President
MR. JUSTICE
FAQIR MUHAMMAD KHOKHAR,
Secretary
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