WORLD TRADE
ORGANIZATIONG/SG/N/7/VEN/1/Suppl.1
G/SG/N/11/VEN/1/Suppl.1
31 March 2003
(03-1800)
Committee on Safeguards Original:  Spanish
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT
ON SAFEGUARDS BEFORE TAKING A PROVISIONAL
SAFEGUARD MEASURE REFERRED TO IN ARTICLE 6
AND
NOTIFICATION UNDER ARTICLE 9, FOOTNOTE 2,
OF THE AGREEMENT ON SAFEGUARDS
VENEZUELA
Supplement
The following communication, dated 13 March 2003, has been received from the Permanent
Mission of Venezuela.
_______________
I enclose herewith a copy of Decree No. 2132  of 15 November 2002, which supplements the
content of documents G/SG/N/7/VEN/1 and G/ SG/N/11/VEN/1 of 5 November 2002, concerning
notifications under Article 12.4 of the Agreement on Sa feguards before taking a provisional safeguard
measure referred to in Article 6, and under Article 9, footnote 2, of the Agreement on Safeguards.G/SG/N/7/VEN/1/Suppl.1
G/SG/N/11/VEN/1/Suppl.1
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SUPPLEMENT
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON
SAFEGUARDS BEFORE TAKING A PROVISIONAL
SAFEGUARD MEASURE REFERRED
TO IN ARTICLE 6
NOTIFICATION UNDER ARTICLE 9, FOOTNOTE 2,
OF THE AGREEMENT ON SAFEGUARDS
The following information supplements the content of document G/SG/N/7/VEN/1 -
G/SG/N/11/VEN/1 of 5 November 2002:
"A provisional safeguard measure on imports of U sections of iron or steel, hot-drawn or
extruded, of a height of between 80 mm and 120 mm, falling under tariff subheading 7216.31.00 ofthe Venezuelan Customs Tariff, and of I sections of iron or steel, hot-drawn or extruded, of a height of
between 80 mm and 140 mm, falling under tariff subheading 7216.32.00 of the Venezuelan Customs
Tariff, as described in document G/SG/N/7/VEN/1 - G/SG/N/11/VEN/1, was adopted by Decree
No. 2132,  published in the Official Journal of the Bolivarian Republic of Venezuela No. 37.590, of
12 December 2002".
Decree No. 2132 15 November 2002
HUGO CHAVEZ FRIAS
President of the Republic
In exercise of the powers conferred upon him under Article 236.24 and Article 301 of the
Constitution of the Bolivarian Republic of Venezuela and pursuant to the provisions of Article 31 of
the Law on Safeguard Measures and Articles 1, 3.10 and 83 of the Basic Customs Law, in Council of
Ministers,
CONSIDERING
Official Note No. 0445/2002 of 3 September 2002 of the President of the Anti-Dumping and
Subsidies Commission and the conclusions of the provisional Technical Report of the Technical
Secretariat of the Anti-Dumping and Subsidies Commission,
CONSIDERING
The recommendations of the Ministry of Finance and the Ministry of Production and Trade,
following assessment of the following elements:
Procedure
(a) On 1 November 2001, the Technical Secretariat of the Anti-Dumping and Subsidies
Commission  (CASS), by means of Decision No. ST-S-AP003/01, initiated the investigation
into safeguard measures for imports of U sections of iron or steel, hot-drawn or extruded, of aG/SG/N/7/VEN/1/Suppl.1
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height of between 80 mm and 120 mm, falling under tariff subheading 7216.31.00 of the
Venezuelan Customs Tariff, and of I sections of  iron or steel, hot-drawn or extruded, of a
height of between 80 mm and 140 mm, falling under tariff subheading 7216.32.00 of the
Venezuelan Customs Tariff.
(b) The investigation was initiated at the request of Siderúrgica del Turbio, S.A. (SIDETUR),
located in Barquisimeto, Lara State, since this company represents the entire domestic
production of U and I sections of iron or steel of the above-mentioned heights, similar to the
imported goods.
(c) The analysis carried out by the CASS Technical Secretariat shows the use and function of the
imported goods and the domestic goods to be similar. These goods are mainly destined foruse in metal structures that can be welded or secured with bolts and submitted to a surface
coating process such as galvanization or painting, and are used in the construction, metal,
electrical, oil and housing industry, as well as in the construction of industrial warehouses,
slabs,  walkways, overpasses, truck platforms, billboards, transmission towers and electricity
substations.
(d) The importers of the products under investigation during the period November 1998 to
October 2001, are identified in the procedure as Maploca, Suplidora de Materiales Carabobo
C.A. (SUPLIMACA), and Productos Meta lúrgicos Carabobo C.A. (PROMETALCA).
(e) From the information contained in the administrative file of the CASS Technical Secretariat,
it was preliminarily determined that the following companies produce and/or export to
Venezuela the goods under investigation:  Aceralia Perfiles, S.L., Spain, and Salzgitter AG
Stahl Und Technologie, Germany.
(f) The countries of origin or provenance of the imports during the investigation period are the
following: the Czech Republic, Romania, France, Belgium, Poland, Spain and Brazil.
Increase in Imports
(a) Over the course of the investigation period (November 1998-October 2001), imports of the
product in question were found to have increased in absolute terms by 2009.1 percentage
points, from 203.67 in the first year to 4,295.48 in the third year.
(b) Imports relative to domestic production rose significantly from 0.385 per cent in the first year
to 6.9 per cent in the third year, i.e. an eighteen-fold increase over the course of the
investigation period.
(c) The share of imports in apparent consumption underwent similar growth from 0.38 per cent in
the first year to 6.5 per cent in the third year, representing a seventeen-fold increase relative to
consumption.
(d)        A prospective analysis estimated that between November 2001 and October 2002 imports of
the products under investigation would amount to 11,911 MT, i.e. a 177.3 per cent increase
over the figure for the final year of the previous period of investigation.
Imports relative to production would stand at 22 per cent, i.e. a three-fold increase in the
volume of  imports relative to domestic production compared to the final year of
investigation.G/SG/N/7/VEN/1/Suppl.1
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The analysis also forecast an 18 per cent rise in imports in terms of consumption, contrasting
with the percentage for the final year of investigation (6.5 per cent).
(e) In view of the marked increase in imports of the product under investigation, both in absolute
terms and in relation to domestic production and consumption, noted during the period ofinvestigation, the conclusion was that the increased imports requirement for declaring the
appropriateness of a provisional safeguard measure had been fulfilled.
Unforeseen Developments
The findings regarding the significant increase in imports and its future projection are
supported by the marked growth which these va riables may undergo in view of the unforeseen
situation of the world steel market since the late 1990s, as a consequence of the fall of the Soviet
Union, the Asian crisis and the global reaction to these political and economic events.  The situation is
marked by an expansion in production, excessive idle capacity and the increased share of exports in
global production, which have modified iron and steel trade flows and led to a sharp fall in
international steel prices and the emergence of a vast number of protectionist measures taken byvarious countries, such as tariff increases and anti-dumping, countervailing and safeguard measures.
The latter have increased significantly since March 2002, when the United States and the European
Union introduced safeguard measures on imports of iron and steel products.
In view of the above, there is an obvious need for precautionary mechanisms such as a
provisional safeguard measure, in order to diminish the threat of serious injury to the domestic
industry posed by the unforeseen increase in imports and its future projections.
Threat of Serious Injury to the Domestic Industry
In the determination of imminence of serious injury as a result of increased imports, the
economic variables considered displayed the following patterns:
- Domestic production:
In the first period considered, domestic production increased by 16.8 per cent, from
52,935 MT in the first year of investigation to 61,828 MT in the third year.  However, it is expected to
drop by 12.39 per cent in relation to the final year of investigation (November 2000-October 2001).
- Domestic sales:
This variable showed a net increase of 15.03 per cent during the period of investigation.  The
trend is expected to reverse over the period covered by the prospective analysis, however, and to
decline by 12.39 per cent compared with the final year of investigation.
- Exports:
Net growth of 346.43 per cent was recorded between the first and the third year of
investigation.  It should be emphasized, however,  that a 1,264 per cent increase was noted between
the first and the second year, followed by a 67.28 per cent reduction between the second and the
third year.  It is estimated that exports will fall by 67.28 per cent in relation to the final year of
investigation - meaning that they would stand at 164 MT.G/SG/N/7/VEN/1/Suppl.1
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-I n v e n t o r i e s :
Inventories increased by 96.04 per cent between the first and the final year of investigation,
from 1,441 MT to 2,825 MT.  A 55 per cent rise in this variable is anticipated in the period covered
by the prospective analysis, which would bring inventories to 2,979 MT.
- Domestic ex-works price:
The domestic ex-works price increased by 1.30 per cent between the first and the third year of
investigation, from 432.07 $/MT to 437.68 $/MT, respectively.  However, the expectation is that it
will fall by 17.96 per cent compared to the final year of investigation, down to 359.07 $/MT.
- Costs:
This variable underwent a 2.03 per cent decline during the period considered.  It is estimated
that this trend will continue over the year November 2001 – October 2002 and that the total unit cost
will stand at 293.07 $/MT.
- Operating margin:
The operating margin fell by 2.57 percentage points over the total period considered.
- Operating profits for domestic manufacturers:
Operating profits for domestic manufacturers of products similar to those under investigation
increased by 31.7 per cent during the period of investigation.  However, this variable is expected to
decline by 42.4 per cent in relation to the final year of investigation.
- Price of imports of the products under investigation:
This variable fell by 8.58 per cent over the period of investigation.  It is estimated that the
downward trend will continue and that the price will stand at 309.34 $/MT.
- Percentage comparison of the price of imported products and the price of like domestic goods:
In the first year of investigation the rate stood at 86.15 per cent, falling to 80.72 per cent in
the second year and to 77.75 per cent in the third year. In this regard, the CASS considers that
domestic producers will maintain, in regard to the price of imports, the smallest differential recorded
during the period of investigation, i.e. 86.15 per cent.
- Market share of the domestic manufacturers' products:
This indicator fell by 6.15 percentage points from 99.62 per cent in the first year of
investigation to 93.47 per cent in the third year.  An even greater loss of market share for domesticmanufacturers is anticipated in the period covered by the prospective analysis, that is, a significant
decline of 11.57 percentage points in relation to the final year of investigation, meaning that the
indicator would reach 81.90 per cent.
- Installed capacity:
Installed capacity did not vary over the three years covered by the investigation and is
expected to continue to remain stable at 88,000 MT/year.G/SG/N/7/VEN/1/Suppl.1
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- Utilized capacity:
The utilization of capacity increased by 10.11 percentage points over the period of
investigation, from 60.15 per cent in the first year to 70.26 per cent in the third year.  It is neverthelessexpected to fall to 61.55 per cent in the period covered by the prospective analysis.
- Number of persons employed by the domestic industry:
The number of persons employed decreased in each year covered by the investigation.  The
net rate of reduction for this variable was 16.30 per cent.  Not enough data were available to conduct a
prospective analysis.
- Productivity:
Average productivity in terms of tonnes produced per person employed grew by 39.56 per
cent during the period of investigation.  Not enough data were available to conduct a prospectiveanalysis of this variable.
- Return on investment:
This variable increased over each year covered by the investigation, growing at a net rate of
19.01 percentage points.  Not enough data were available to conduct a prospective analysis.
In conclusion, the CASS Technical Secretariat's preliminary determination is that the
domestic industry declined to some extent during the period of investigation, on account of a
downward trend in two of its relevant economic variables, i.e. market share and inventories.
Considering that there will be a significant increase in the imports under investigation during the
period of prospective analysis, in conditions that will adversely affect domestic prices, and that
domestic industry variables such as production, sales, inventories, operating margin and profits,
market share and utilized capacity are expected to decline, the Technical Secretariat's preliminary
determination is that there is a threat of injury to the domestic industry producing like goods.
Moreover, the fall in international steel prices as a result of current global market conditions
may well lead to an increase in imports, which will exert downward pressure on domestic prices and
in turn affect other economic variables such as the operating margin and profits and return on
investment.
Causal Link
The CASS Technical Secretariat considers that it is possible to make a preliminary
determination of causal link between the significant real and estimated increase in imports of the
products under investigation and the threat of serious  injury to the domestic industry, on the following
grounds:  the significant increase in the imports at issue during the period of investigation;  the
expected much larger increase in these imports as a result of the restrictive situation on international
markets;  and the little relevance or irrelevance of  factors other than the imports in question, such as
the existence of a source of domestic competition, other than the imports, that may adversely affect
the applicant enterprise, the projected evolution of the domestic market in the period covered by the
prospective analysis and the projected evolution of exports, in relation to the imminent deterioration
of the domestic industry producing like goods.G/SG/N/7/VEN/1/Suppl.1
G/SG/N/11/VEN/1/Suppl.1
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On the basis of the findings made by the CASS Technical Secretariat, sufficient evidence is
considered to exist to attribute the threat of seri ous injury to the domestic industry to the significant
increase in imports.
Critical Circumstances
In order to determine the existence of critical circumstances, the CASS Technical Secretariat
made an assessment of the imports under investigation in the last six (6) months of the period of
investigation as compared to the previous six (6) months, both in absolute terms and relative to
production and apparent consumption.  The results showed the existence of critical circumstances,
since imports in the first six (6) months amounted to a total of 1,984.18 MT (a figure that exceeds
total imports in the first two years of the period of investigation) and then increased by another
23.86 per cent compared to the previous six (6) months.
HEREBY DECREES
Article 1.  A provisional safeguard measure of an increase in the import duty on the following
products is established and consequently modifies the tariff structure applicable to these products inthe Venezuelan Customs Tariff:
Tariff Regime
Code
(1)Goods Description
(2)Ad valorem
(3)Specific
(4)General
 (5)Andean
(6)
7216
7216.31.00
7216.32.00Angles, shapes and
sections of iron or
non-alloy steel
U, I or H sections, not
further worked than
hot-rolled, hot-drawn
or extruded, of aheight of 80 mm or
more
U sections (80 mm -
120 mm high)
I sections (80 mm -
140 mm high)26.53
26.53
Article 2.  The provisional safeguard measure established under this Decree shall preferably be
applied through the tariff increase measure provided for in the resolutions of the Ministry of Finance
and the Ministry of Production and Trade, of 3 April 2002, Special Official Journal No. 37,415 and of
5 July 2002, Special Official Journal No. 5.593.G/SG/N/7/VEN/1/Suppl.1
G/SG/N/11/VEN/1/Suppl.1
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Article 3.  This measure shall not apply to imports fr om Andean Community member countries or
Mexico, pursuant to the trade integration agreements signed with those countries, nor to imports from
developing country Members of the World Trade Organization (WTO), the average individual share
of which during the investigation period was less than three (3) per cent of total imports and
collectively accounted for not more than nine (9) per cent, in accordance with the provisions ofArticle 9.1 of the WTO Agreement on Safeguards. These countries are listed, for the purpose of this
rule, in Annex 1 to this Decree.
Article 4.  The provisional safeguard measure established under this Decree shall apply from the day
following the publication of the Decree in the Official Journal of the Bolivarian Republic of
Venezuela, until the publication, also in the Official Journal, of the Decree stipulating whether or not
definitive measures are to be applied to imports of products subject to the provisional measure. Theduration of the measure may not in any case exceed two hundred (200) days after its entry into force.
Article 5.  The amounts levied through the application of the provisional safeguard measure
established under this Decree shall be returned to those parties concerned, in the event that a decision
is adopted not to apply the definitive measures to imports of products subject to the provisionalmeasure.
Article 6.  The National Integrated Customs and Tax Administration Service (SENIAT) shall be
responsible for adopting the measures required to ensure the proper application of the safeguard
measure established under this Decree.G/SG/N/7/VEN/1/Suppl.1
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Annex 1
Countries Not Subject to the Proposed Provisional Safeguard Measure
Developing Country Members of the World Trade Organization
Countries Imports November 1998- October 2001
MT Share of total imports (%)
Albania - 0.00
Angola - 0.00
Antigua and Barbuda - 0.00
Argentina - 0.00
Bahrain - 0.00
Bangladesh - 0.00
Barbados - 0.00
Belize - 0.00
Benin - 0.00
Bolivia - 0.00
Botswana - 0.00
Brazil 124 2.05
Brunei Darussalam - 0.00
Bulgaria - 0.00
Burkina Faso - 0.00
Burundi - 0.00
Cameroon - 0.00
Central African Republic - 0.00
Chad - 0.00
Chile - 0.00
China - 0.00
Colombia - 0.00
Congo, Democratic
Republic of-0 . 0 0
Costa Rica - 0.00
Côte d'Ivoire - 0.00
Croatia - 0.00
Cuba - 0.00
Djibouti - 0.00
Dominica - 0.00
Dominican Republic - 0.00
Ecuador - 0.00
Egypt - 0.00
El Salvador - 0.00
Estonia - 0.00G/SG/N/7/VEN/1/Suppl.1
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Countries Not Subject to the Proposed Provisional Safeguard Measure
Developing Country Members of the World Trade Organization
Countries Imports November 1998- October 2001
MT Share of total imports (%)
Fiji - 0.00
Gabon - 0.00
Gambia - 0.00
Georgia - 0.00
Ghana - 0.00
Granada - 0.00
Guatemala - 0.00
Guinea - 0.00
Guinea-Bissau - 0.00
Guyana - 0.00
Haiti - 0.00
Honduras - 0.00
Hong Kong, China - 0.00
Hungary - 0.00
India - 0.00
Indonesia - 0.00
Israel - 0.00
Jamaica - 0.00
Jordan - 0.00
Kenya - 0.00
Korea, Republic of - 0.00
Kuwait - 0.00
Kyrgyzstan - 0.00
Latvia - 0.00
Lesotho - 0.00
Lithuania - 0.00
Macao, China - 0.00
Madagascar - 0.00
Malawi - 0.00
Malaysia - 0.00
Maldives - 0.00
Mali - 0.00
Malta - 0.00
Mauritania - 0.00
Mauritius - 0.00
Mexico - 0.00
Moldova - 0.00G/SG/N/7/VEN/1/Suppl.1
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Countries Not Subject to the Proposed Provisional Safeguard Measure
Developing Country Members of the World Trade Organization
Countries Imports November 1998- October 2001
MT Share of total imports (%)
Mongolia - 0.00
Morocco - 0.00
Mozambique - 0.00
Myanmar - 0.00
Namibia - 0.00
Nicaragua - 0.00
Niger - 0.00
Nigeria - 0.00
Oman - 0.00
Pakistan - 0.00
Panama - 0.00
Papua New Guinea - 0.00
Paraguay - 0.00
Peru - 0.00
Philippines - 0.00
Qatar - 0.00
Rwanda - 0.00
Saint Kitts and Nevis - 0.00
Saint Lucia - 0.00
Saint Vincent and the
Grenadines-0 . 0 0
Senegal - 0.00
Separate Customs
Territory of Taiwan,
Penghu, Kinmen andMatsu-                                         0.00
Sierra Leone - 0.00
Singapore - 0.00
Slovakia - 0.00
Slovenia - 0.00
Solomon Islands - 0.00
South Africa - 0.00
Sri Lanka - 0.00
Suriname - 0.00
Swaziland - 0.00
Tanzania, United
Republic of-0 . 0 0
Thailand - 0.00
Togo - 0.00G/SG/N/7/VEN/1/Suppl.1
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Countries Not Subject to the Proposed Provisional Safeguard Measure
Developing Country Members of the World Trade Organization
Countries Imports November 1998- October 2001
MT Share of total imports (%)
Trinidad and Tobago - 0.00
Tunisia - 0.00
Turkey - 0.00
Uganda - 0.00
United Arab Emirates - 0.00
Uruguay - 0.00
Zambia - 0.00
Zimbabwe - 0.00
Subtotal 124 2.05
Done in Caracas, on the fifteenth day of the m onth of November of two thousand and two, 192nd year
of Independence and 143rd year of the Federation.
(signed)
HUGO CHAVEZ FRIAS
Endorsed
Executive Vice-President
(signed) JOSE VICENTE RANGEL
Endorsed
Minister for Foreign Affairs
(signed) ROY CHADERTON MATOS
Endorsed
Minister for Finance
(signed) TOBIAS NOBREGA SUAREZ
Endorsed
Minister for Defence
(signed) JOSE LUIS PRIETO
Endorsed
Minister for Production and Trade(signed) RAMON ROSALES LINARES
Endorsed
Head of the Ministry of Agriculture and Land
(signed) RICAURTE LEONETT
Endorsed
Minister for Higher Education
(signed) HECTOR NAVARRO DIAZG/SG/N/7/VEN/1/Suppl.1
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Endorsed
Minister for Education, Culture and Sport
(signed) ARISTOBULO ISTURIZ ALMEIDA
Endorsed
Minister for Health and Social Development
(signed) MARIA URBANEJA DURANT
Endorsed
Minister for Labour
(signed) MARIA CRISTINA IGLESIAS
Endorsed
Minister for Infrastructure
(signed) ISMAEL ELIEZER HURTADO SOUCRE
Endorsed
Minister for Energy and Mines
(signed) RAFAEL DARIO RAMIREZ CARREÑO
Endorsed
Minister for the Environment and Natural Resources
(signed) ANA ELISA OSORIO GRANADO
Endorsed
Minister for Planning and Development(signed) FELIPE PEREZ MARTI
Endorsed
Head of the Ministry of Science and Technology
(signed) MARLENE YADIRA CORDOVAEndorsed
Minister for Communication and Information
(signed) NORA MARGARITA URIBE TRUJILLO
Endorsed
Minister of State
(signed) JOSE FRANCISCO NATERA MARTINEZ
Endorsed
Minister of State
(signed) NELSON JOSE MERENTES DIAZ
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