WORLD TRADE
ORGANIZATIONG/SG/N/8/CZE/3
31 May 2002
(02-3019)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON
SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT
THEREOF CAUSED BY INCREASED IMPORTS
CZECH REPUBLIC
The following notification, dated 28 May 2002, has been received from the Permanent
Mission of the Czech Republic.
_______________
1. Evidence of serious injury or threat  thereof caused by increased imports
The Ministry of Industry and Trade, the body responsible for conducting the respective
investigation, concluded that cocoa powder (HS 1806 10 90) is being imported into the
Czech Republic in such increased quantities and under such conditions as to be a substantial cause of
serious injury or threat thereof to the domestic sugar industry.
Imports of cocoa powder (HS 1806 10 90) in tons in 2001
I II III IV V VI VII VIII IX X XI XII
47.0 990.6 1,211.6 1,314.6 853.8 2,358.9 1,012.4 1,681.7 1,741.0 3,372.4 1,692.3 120.1
The average of monthly imports of cocoa powder in 2001 (February 2001-November 2001,
i.e. during the period following the introduction of a provisional safeguard measure on substitutes of
sugar and before the imposition of a provisional safeguard measure on cocoa powder) reached a level
of 1,622.94 tons.
Dramatically increased imports of cocoa powder followed the imposition of a provisional
safeguard measure on imports of substitutes of sugar in January 2001 (G/SG/N/7/CZE/2).  The high
level of imports rose further after the adoption of a definitive safeguard measure on imports of these
products in July 2001 (G/SG/N/8/CZE/2, G/ SG/N/10/CZE/2 and G/SG/N/11/CZE/2).
Imports of sugar, substitutes of sugar and cocoa powder
(HS 1806 10 90) in 1998-2001
Imports in tons 1998 1999 2000 2001
Sugar * 35,579.30 30,303.70 27,624.20 25,071.80
% share 85.08 76.43 38.08 49.92
Substitutes of
sugar **
recounted to sugar6,233.75 9,342.58 44,675.07 10,397.38
% share 14.91 23.56 61.59 20.70G/SG/N/8/CZE/3
Page 2
Imports in tons 1998 1999 2000 2001
Cocoa powder
recounted to sugar5.48 3.94 242.21 14,756.86
% share 0.01 0.01 0.33 29.38
Total 41,818.53 39,650.22 72,541.82 50,226.04
* HS 1701, without inward processing.
** HS 1702 30 10, 1702 40 10, 1702 60 10, 1702 90 30, 1702 90 99, 2106 90 30 and
2106 90 59.
Increased imports of cocoa powder have caused serious injury or threat thereof to the
domestic sugar industry that has been in the process of adjustment.  Due to imports of the product in
question, domestic sugar sales further declined and provoked subsequent revenue losses.  The share of
total imports of cocoa powder to domestic production increased from 0.001 per cent in 1998 to 3.4 per
cent in 2001.  The prices of imported cocoa powder showed a declining trend.  In 2001, these prices
represented only 86.92 per cent of the import price average for the period 1998-2000.
Share of imported cocoa powder (HS 1806 10 90) recounted to sugar
in domestic production, consumption and sales of sugar
1998 1999 2000 2001
Share of domestic
production ofsugar in per cent0.0012 0.0010 0.0558 3.4533
Share of domestic
consumption of
sugar in per cent0.0014 0.0010 0.0577 3.4559
Share of domestic
sales of sugar in
per cent0.0015 0.0011 0.0756 5.3784
2. Information on an absolute increase in imports
During the period from January to December 2001, 16,396.51 tons of cocoa powder were
imported, which recounted to the volume of sugar, equalled 14,756.86 tons of sugar.  The magnitude
of an enormous increase can be demonstrated by the comparison of the 2001 volume and the averagevolume of imports during the preceding three years.  The difference is 16,303.31 tons, in other words
it is 174.93 times higher than the average.
Imports of cocoa powder (HS 1806 10 90) in 1998-2001
1998 1999 2000 2001
Tons 6.09 4.38 269.12 16,396.51
Mil CZK 0.39 0.27 3.04 188.61G/SG/N/8/CZE/3
Page 3
Cumulated increased imports of cocoa powder (HS 1806 10 90) in 2001
16 396,51
16 276,41
14 584,07
11 211,67
9 470,65
7 788,91
6 776,53
4 417,673 563,88
2 249,241 037,66
47,03
02 0004 0006 0008 00010 00012 00014 00016 00018 000
JanuaryFebruary
MarchApril
May June
July
August
September
OctoberNovember
Decembertons
3. Precise description of the product involved
The product in question is cocoa powder containing 80 per cent or more by weight of sucrose
(including invert sugar expressed as sucrose) or isoglucose expressed as sucrose (HS item 1806 10
90).  It was concluded that cocoa powder is a like or directly competitive product with respect to
sugar.
4. Precise description of the proposed measure
The Ministry of Industry decided to terminate the investigation and to recommend to the
Government the application of a definitive safeguard measure on imports of cocoa powder.
The measure recommended consists of tariff quota calculated as an average volume of
imports in the last three representative years, i.e. 1998-2000.  Imports above tariff quota will be
subject to the additional customs duty.
5. Proposed date of introduction of the measure
It is proposed to apply a definitive safeguard measure with the effect not later than
16 June 2002.
6. Expected duration of the measure
A safeguard measure may be applied for a period of up to four years.
7. Expected timetable for progressive liberalization of the measure
The safeguard measure will be progressively liberalized through an annual increase of the
tariff quota.
__________