RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/IG/W/28
26 October 2000
(00-4461)
Committee on Anti-Dumping Practices
Informal Group on Anti-CircumventionOriginal:  English
TOPIC 2 – WHAT IS BEING DONE BY MEMBERS CONFRONTED
BY WHAT THEY CONSIDER TO BE CIRCUMVENTION?
Replies to Questions Posed by HONG KONG, CHINA1
Regarding the Paper by the UNITED STATES2
The following communication, dated 24 October 2000, has been received from the Permanent
Mission of the United States.
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Q1. According to the procedures described in W/ADP/IG/W/22, an anti-circumvention
inquiry normally is initiated “as a result of an application from the appropriate US industrywhich properly alleges that circumvention is occurring and provides information reasonably
available to the requester to support such allegations.”  Could the US give us some more
concrete ideas on what sort of information is normally required to be included in the
application?  Does the allegation of circumvention need to be substantiated by relevant
evidence?  Would the US author ities examine the accuracy and adequacy of the information
and evidence (if required) provided in the application to determine whether there is justification
to initiate an anti-circumvention inquiry?
Reply
The information in an application from a domestic industry depends upon the nature of the
circumvention alleged to be occurring.  If the application alleges that circumvention is occurringthrough completion or assembly in the United States or a third country, the application would need to
contain detailed information about the parts or components exported to the United States or a third
country and the nature of the processing performed there, including whatever information is
reasonably available to estimate the value of the parts or components as well as the value added in the
country of completion or assembly.  If the allegation concerns a minor alteration or later-developedproduct, the application should contain detailed information about the alteration or later development,
including the production process involved in making any changes to the product, the estimated cost or
value of any changes, the additional uses, if any, for the modified product, and any available
information on the manner in which the modified product is marketed in the United States.
Additionally, an application will typically contain information available to the domestic industry onany decline in imports of the product specifically subject to an order and the volume of imports, as
appropriate, of the parts or components, the product completed or assembled in a third country, or the
altered or later-developed product.
                                                     
1 G/ADP/IG/W/24 & Corr.1
2 G/ADP/IG/W/22G/ADP/IG/W/28
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The Commerce Department will examine the accuracy and adequacy of any information in an
anti-circumvention application.  To the extent that the information can be cross-checked with
available public information, such as import statistics, Commerce will do so.  No anti-circumvention
inquiry will be initiated unless the application describes a prima facie  situation of circumvention
which, from available public information, is credible.
Q2. Would the US authorities examine the “standing” of the domestic industry which files a
circumvention complaint?
Reply
The Commerce Department will entertain applications for an anti-circumvention inquiry only
from entities which qualify as domestic interested parties under United States law in connection with
the antidumping or countervailing duty order alleged to be circumvented.
Q3.  Under what specific circumstances would the US Department of Commerce self-initiate
an anti-circumvention inquiry?  Has the De partment of Commerce ever self-initiated an
anti-circumvention inquiry?  If so, what was the factual situation which led to self-initiation?
Reply
Self-initiation of an anti-circumvention inquir y has occurred only once.  That was in the
recent self-initiation of an anti-circumvention inquiry concerning the antidumping and countervailing
duty orders on pasta from Italy.3  In that case, the information presented to the Commerce Department
in the response to a routine annual review of the orders presented a prima facie  case of circumvention.
That information was, for all practical purposes, identical to the information which had led to a
finding of circumvention two years earlier (in an inquiry which was initiated at the request of thedomestic industry).
4  The inquiry is still pending as of October 2000.
Q4.  Would the US notify the government of th e country which is the subject of the AD order
or the government of the relevant third country regarding the initiation of an
anti-circumvention inquiry?  Would these govern ments be regarded as interested parties and be
given opportunities to present evidence whic h they consider relevant in respect of the
anti-circumvention inquiry?
Reply
Foreign governments involved are routinely notified of the initiation of an anti-circumvention
inquiry.  Further, information on initiation of an  anti-circumvention inquiry is public and routinely
available to such governments.  They would qualify as interested parties under United States law with
full opportunity to present any information or views they consider relevant.
Q5.  According to the procedures described in the paper, the Department of Commerce
obtains information “from appropriate sources on  the patterns of trade in the product(s) in
question, whether the manufacturer or exporter of th e parts or components is affiliated with the
entity which completes or assembles the merchandise in the US or a third country, and whether
imports into the US (or the third country) of the parts or components have increased after the
initiation of the investigation which led to the AD duty order in question”.
                                                     
3 Certain Pasta from Italy: Notice of Initiation of Anti-circumvention Inquiry on the Antidumping and
Countervailing Duty Orders, 65 FR 26179, 5 May 2000.
4 Anti-circumvention Inquiry of the Antidumping Order on Certain Pasta from Italy: Affirmative Final
Determination of Circumvention of the Order, 63 FR 54672, 13 October 1998.G/ADP/IG/W/28
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What are these “appropriate sources”?  Could the US provide us with more concrete
ideas?
Reply
The primary source of information on trade patterns, possible affiliation of the producer(s)
with completing or assembling entities, and increa ses of imports of parts or components is the
producer(s) in the country subject to the order.  Other sources include official trade statistics of the
United States (or, as appropriate, any third country in question), and authoritative public sources of
information on the structure of corporations (e.g., Dun & Bradstreet).
Q6. In the course of an anti-circumvention  inquiry, would the US carry out on-site
investigations in the country which is the subject of the AD duty order or the third country in
order to verify information provided in the questionnaires?
Reply
The Commerce Department may choose to conduct an on-site investigation to verify
information submitted in connection with an anti-circumvention inquiry, but does not always do so.
The decision is made case-by-case and depends upon the nature of the relevant information submitted
by the company or companies involved.
Q7.  What are the “circumstances specified by law” in which the Department of Commerce
must notify the International Trade Commission of its intent to include the product(s) subject to
the anti-circumvention inquiry within the scope of the AD order?
Reply
The International Trade Commission (ITC) is notif ied of the intent to reach an affirmative
determination of circumvention whenever the inquiry involves: (1) merchandise completed or
assembled in the United States (other than minor completion or assembly), (2) merchandise
completed or assembled in a third country, or (3) later-developed merchandise which incorporates a
significant technological advance or significant alteration of an earlier product.5
Q8. Under the procedures described in W/ ADP/IG/W/22, if the International Trade
Commission believes the proposed inclusion of  the merchandise within the scope of the AD
order presents a “significant injury issue”, it may provide the Department of Commerce with
written advice as to whether the inclusion of the merchandise would be inconsistent with the
original affirmative injury determination.  What is meant by a “significant injury issue”?  What
analysis is performed in determining what a “signi ficant injury issue” is?  What is the weight of
the Commission’ s advice in the Department of Commerce’s conclusion?
In the example on steel wire rope  previously provided by the US6, will the authorities
examine injury to producers of wire rope or wi ll they examine injury to producers of wire
strand?  If the US authorities examine injury only to producers of wire rope, how can the US
justify the extension of AD duties to a product for which no injury determination has ever been
made?
                                                     
5 19 USC 1677j(e)(1)
6 G/ADP/IG/W/20G/ADP/IG/W/28
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Reply
After receiving notice from Commerce, the ITC may request consultations with Commerce
concerning the merchandise that Commerce seeks to include in the antidumping or countervailing
duty order pursuant to its preliminary anti-circumvention determination.  If, after these consultations,the ITC believes that a “significant injury issue is presented by the proposed inclusion,” it may
provide written advice to Commerce.  If a significant injury issue exists, the ITC’s advice will address
whether inclusion of the merchandise subject to the affirmative Commerce anti-circumvention
determination “would be inconsistent with the affirmative determination of the Commission on which
the order or finding is based."
7  The legislative history of this provision indicates that, in discharging
its responsibilities under US law, the ITC should consider whether the imported articles subject to the
Commerce anti-circumvention determination were not  encompassed by or were expressly excluded
from the domestic like product(s) on which the Commission made affirmative determination(s).8  In
all anti-circumvention investigations to date, the ITC has advised Commerce that consultations were
not necessary.
The anti-circumvention inquiry involving steel wire rope and steel wire strand concerned a
minor finishing operation by an affiliated importer who performed the simple process of converting
steel wire strand to steel wire rope, reselling the steel wire rope to the same customers who had been
purchasing steel wire rope directly from the exporter, and doing so in the same volumes as the
previous direct shipments. The ITC did not conclude that the proposal to include steel wire strand
within the order warranted consultations with the Department of Commerce.
Q9. What is the normal duration of an anti-circumvention inquiry?  How does that compare
with the normal duration of an original investigation?
Reply
United States law9 provides that anti-circumvention i nquiries should, “to the maximum extent
practicable ”, be completed with 300 days after initiation.  Anti-circumvention inquiries normally
would be completed in somewhat less time than that required for an original antidumping
investigation, although additional time occasionally is required to address and resolve the issues
presented.
Q10. We note in general that the US au thorities have emphasized that their
anti-circumvention procedures cl osely parallel those in original AD investigations or reviews,
and provide the same procedural safeguards to  ensure accurate well-founded conclusions and
protect the rights and interests of all parties.  We would be interested to know if there are any
differences between an anti-circumvention inquiry and an original investigation.  If yes, what
specifically are these differences?  Could the US provide more details in this respect?
Reply
We do not believe that there are any significant differences in procedural safeguards between
antidumping investigations and anti-circumvention inquiries.  As noted in our recent paper, parties
have a full opportunity to present factual information on the matters before the Commerce
Department.  Further, the Commerce Department issues a preliminary determination on which all
parties may submit comments.  Parties are invited to present the Commerce Department with all
                                                     
719 U.S.C. § 1677j(e)(2)-(3).
8 H. Conf. Rep. 576, 100th Cong., 2d Sess. 602-03 (1988).
9 19 USC 1677j(f)G/ADP/IG/W/28
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relevant legal arguments, and may request a hearing.  Finally, anti-circumvention inquiries are subject
to the same judicial review procedures as antidumping investigations.
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