WORLD TRADE  
ORGANIZATION  TN/RL/GEN/3 
14 July 2004 
 (04-3017) 
Negotiating Group on Rules Original:   English 
 
  
DUTY ASSESSMENT METHODOLOGIES 
 
Communication from Canada
 
 
 The following communication, dated 7 April 2004 , is being circulated at the request of the 
Delegation of Canada. 
 
 The submitting delegation has requested that this paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(04)/42), also be circulated as a formal document. 
 
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Issue 
 
 In its first detailed submission  to the Negotiating Group on Rules1, Canada indicated that, in 
these negotiations, the Group should seek to improve predictability in duty enforcement systems so that importers and exporters can operate in a more certain environment, while providing the requisite 
protection from material injury to domestic industries.  In Canada’s view, such improvement would 
help to reduce uncertainties in the market and more  readily allow for the resumption of non-injurious 
trade. 
 
Description of the Problem 
 
 The Agreement on Implementation of Article VI of the General Agreement on Tariffs and 
Trade 1994  (ADA) provides little guidance to WTO Members on methods of duty imposition.  
Articles 9.3.1 and 9.3.2 recognize that Members may apply widely different types of duty assessment 
systems, based on either a prospective approach or on a retrospective approach .  Like many WTO 
Members, Canada maintains a prospective duty a ssessment system, while other Members assess 
duties on a retrospective basis. 
 
 Canada is of the view that uncertainty about anti-dumping duty liability at the time of importation has an effect on trade that goes beyond the intended purpose of the anti-dumping measure. Under a retrospective system, at the time of importation, the importer does not have any 
certainty with respect to the maximum amount of final antidumping duties that will eventually be 
levied.  When the final amount of duties owed is known, i.e., sometimes more than two years after 
importation, and the final assessment is higher, the im porter is no longer able to pass any additional 
cost on to the customer.  This leads to an uncerta in business environment and adds to the level of 
protection intended by the measure.   
 
 By contrast, under a prospective system, importers generally know at the time of importation 
the amount of anti-dumping duties, if any, that they are required to pay.  At the time of importation, 
the importer is either required to pay an “ ad valorem ” duty or, in a system based on “prospective 
normal values” such as in Canada, the difference, if any, between the export price and the normal 
                                                     
 
1 TN/RL/W/47, page 7. TN/RL/GEN/3 
Page 2  
 
 value for the imports in question.  In either case, the likelihood that importers will face additional duty 
liability in the future is significantly lower than  under a retrospective system, thus creating a more 
stable business environment.  
 
Possible clarificatio ns and improvements 
 
 Given the important objective of achieving greate r predictability in international trade, it is 
Canada’s view that efforts to clarify and improve the provisions of the Agreements on duty imposition 
methodologies should be undertaken, in order to mi nimize the cost of the uncertainty associated with 
any duty assessment system.     In trying to achieve this objective, Canada do es not exclude that the Group work towards one 
uniform duty assessment methodology that woul d ensure predictability.  However, if both 
retrospective and prospective methodologies are to be retained, the question that arises is how to 
improve and clarify the current Agreements.  Canada proposes to explore the following in this regard: 
 1. Tighter timeframes for ADA Article 9.3 reviews or refunds 
 
 Canada believes that final anti-dumping liabilities should be determined at a time as close as 
possible to the time of importation of the product su bject to an anti-dumping measure.  Consequently, 
Articles 9.3.1 and 9.3.2 of the AD A could be amended to reduce the time afforded to authorities to 
complete assessments of duty liability (retrospective system) or to complete refund of duties paid in excess (prospective system).  These would normally ta ke place within 9 months, and in no case more 
than 12 months, after the date of a request.  
 
 In Canada’s view, tighter timeframes are pe rfectly consistent with disciplines already 
imposed on Members’ authorities, considering that the ADA provides that investigations of dumping 
and injury shall normally be completed within 12 months, and in no case within more than 
18 months.
2  In contrast, reviews under Article 9.3 deal  solely with the issue of dumping and could 
therefore be concluded more expeditiously.  
 
2. Clarify the right of parties to se ek reviews immediately after importation 
 
 Article 9.3.1 of the ADA provides that a dete rmination of final duty liability “shall take place 
as soon as possible, normally within 12 months, and in no case more than 18 months after the date on 
which a request for a final assessment of the amount  of the anti-dumping duty has been made”.  Thus, 
the duration of the period of uncertainty regarding the final amount of duty payable can be limited by 
the filing of a request for a final assessment.  However, some Members only allow requests for 
reviews at specific points in time.  Therefore, th ese Members impose an additional delay of as much 
as one year before a request for a final assessment of duty liability will be considered, thereby 
delaying a final decision and prolonging the uncertainty about the final duty liability for a period of up 
to two and one half years.  This delay would be reduced by our previous suggestion, but could be 
further reduced if Article 9.3.1 of the ADA is cl arified by establishing that a request for a final 
assessment may be made immediately after entry.  In  Canada’s view, this prop osal for clarification is 
justified by the language of Article 9.3.1, wh ich imposes on Members a mandatory timeline for 
making final duty assessments; this mandatory ti meline would appear to be devoid of any real 
significance if Members can choose, at their conv enience, the time at which a request for final 
assessment may be made.   
                                                     
 
2 Article 5.10 of the ADA.  TN/RL/GEN/3 
 Page 3 
 
 
 3. Introduce in the ASCM similar disciplines with respect to duty assessment methodologies 
 
 The Agreement on Subsidies and Countervailing Measures does not incorporate disciplines 
similar to those of Articles 9.3.1 and 9.3.2 of the ADA. Given that predictability in international trade 
is an important objective whether countervailing measures or anti-dumping measures are imposed, it 
is Canada’s view that this lacuna  should be corrected.  Canada would therefore propose that the duty 
assessment disciplines of the ADA, as it may be m odified by these negotiations, be incorporated into 
the ASCM, with any adjustment that would be necessary in the context of the imposition of 
countervailing duties. 
 
Related issue 
 
 Like the United States3 and Egypt4, Canada believes that Members should consider whether 
the question of interest on refunds should be clar ified in the ADA and ASCM.  More precisely, they 
could be clarified to require that interest  be paid on monies collected in excess. 
 
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3 TN/RL/W/98, page 4. 
4 TN/RL/W/110, page 5.