RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/Q1/USA/18
G/SCM/Q1/USA/18
13 October 1999
(99-4384)
Committee on Anti-Dumping Practices
Committee on Subsidies and Countervailing MeasuresOriginal:  English
NOTIFICATION OF LAWS AND REGULATIONS UNDER
ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS
Questions  from BRAZIL
Regarding the Notification of the UNITED STATES1
The following communication, dated 11 October 1999, has been received from the Permanent
Mission of Brazil.
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Questions regarding G/ADP/N/1/USA/1/Suppl.4
1. Paragraph 351.505(a)(4)(i) states that:
"The Secretary will consider a firm to be uncreditworthy if the Secretary determines
that, based on information available at th e time of the government-provided loan, the
firm could not have obtained long-term loans from conventional commercial sources.
The Secretary will determine uncreditworthiness on a case-by-case basis, and may, in
appropriate circumstances, focus its creditworthiness analysis on the project beingfinanced rather than the company as a whole."
Please clarify:
(a) Whether the evaluation of the firm would be made in all cases?
(b) Will the project be evaluated only if it is determined that the firm is creditworthy?  If not, in
which circumstances will the Secretary focus its creditworthiness analysis on the project
being financed?
1. Paragraph 351.507(a)(2)(i) states that:
"In general.   Except as provided in paragraph (a)(2)(iii) of this section, the Secretary
will consider an equity infusion as being inconsistent with usual investment practice
(see paragraph (a)(1) of this section) if the price paid by the government for newly
issued shares is greater than the price paid by private investors for the same (orsimilar form of) newly issued shares."
                                                     
1 G/ADP/N/1/USA/1/Suppl.4 and 5-G/SCM/N/1/USA/1/Suppl.4 and 5G/ADP/Q1/USA/18
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Page 2
Please:
(a) Clarify the concept of "similar" form of newly issued shares.  What criteria will be used for
the selection of the "similar" form of newly issued shares?
(b) In which circumstances will the price paid by  private investors for similar form of newly
issued shares be considered instead of the market price of the newly issued shares?
1. Paragraph 351.507(a)(2)(iii) states that:
"The Secretary will not use private investor prices under paragraph (a)(2)(i) of this
section if the Secretary concludes that private investor purchases of newly issued
shares are not significant."
Please explain the criteria used to consider that private investor purchases of newly issued
shares are not significant.  Are there any criteria established in the relevant legislation or in any other
implementing regulation?
2. Paragraph 351.507(a)(5) establishes that:
"(…) If the Secretary determines that the investment was inconsistent with usual
private investment practice, the Secretary will determine the amount of the benefitconferred on a case-by-case basis."
Please explain:
(a) What are the benchmarks, or any general criteria used to determine if the investment is
consistent with the usual practice of private investors?  Are these criteria established in anyrelevant regulation?
(b) In case it is determined that the investment is  inconsistent with the usual investment practice
of private investors, is there any methodology established in the legislation or any other
regulation to determine the amount of the benefit?
5. Paragraph 351.524(b)(2) states that:
"The Secretary will normally allocate (expense) non-recurring benefits provided
under a particular subsidy programme to the year in which the benefits are received
if the total amount approved under the subsidy programme is less than 0.5 per cent of
relevant sales (e.g., total sales, export sales, the sales of a particular product, or the
sales to a particular market) of the firm in question during the year in which the
subsidy was approved."
Please explain:
(a) Is the choice of the "relevant sales (e.g. total sales, export sales, the sales of a particular
product, or the sales to a particular market)", with the objective of evaluating the share of the
subsidy, related to the nature of the subsidy programme in question (e.g. subsidies to the firm,
export subsidies, subsidies to a particular product, subsidies related to sales in a particular
market)?G/ADP/Q1/USA/18
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Page 3
(b) Considering that the benefit conferred by a non-recurring subsidy will be distributed during
the average useful life ("AUL") of renewable physical assets,  what is the reason that justifies
not to allocate the benefit during the AUL, in cases where the total amount approved under
the subsidy programme is less than 0.5 per cent of relevant sales of the firm in questionduring the year in which the subsidy was approved?
Questions regarding G/ SCM/N/1/USA/1/Suppl.5
1. Section 351.218 refers to the procedures for suns et reviews.  Apparently, it does not establish
any obligation for the investigating authority to notify  interested parties about the initiation of a sunset
review.  The time-limit established for a substantive response to the information specified inparagraph 351.218(d)(3)(i) is 30 days after the date of publication in the Federal Register of the
Notice of Initiation.
- Could the US indicate whether, at the time of initiation of the sunset review, the investigating
authority will notify interested parties as established by Articles 12.1 and 12.3 of the Anti-Dumping Agreement and Articles 22.1 and 22.7 of the SCM Agreement?
- Could the US indicate whether interested parties will be notified of the required information
established in paragraph 351.218(d)(3)?  Will they receive a questionnaire?
- In case a questionnaire is sent to interested parties, what will be the time-limit for response:
30 days counted from the receipt of the questionnaire, as established by Article 6.1.1 of the
Anti-Dumping Agreement and Article 12.1.1 of the SCM Agreement, or 30 days after the
date of publication of the Notice of Initiation, as established by Section 351.218(d)(3)(i)?
- In case the time-limit for response is 30 days after the date of publication of the Notice, could
the US explain how this time-limit complies with the obligation established by Article 6.1 of
the Anti-Dumping Agreement and Article 12.1 of the SCM Agreement, that is:  all interested
parties shall be given ample opportunity to present in writing all evidence which they
consider relevant in respect of the review?
- Could the US clarify if the investigating author ity would consider a request for an extension
of the 30 days time-limit for response?  Does the relevant legislation or any other
implementing regulation have any provision related to this matter?
2. Paragraph 351.218(d)(2)(iii) establishes that:
The Secretary will consider the failure by a respondent interested party to file a
complete substantive response to a Notice of Information under paragraph (d)(3) of
this section as a waiver of participation in a sunset review before the Department.
- In case a questionnaire is not sent to the foreign interested parties and considering that
information required by paragraph 351.218(d)(3)(ii), (iii) and (iv) are not sufficiently detailed,could the US inform:
(a) what are the criteria to evaluate if a response to a Notice of Initiation is substantive?
(b) If, for example, an interested party pres ents a complete response, but not with the
detail "expected" by the investigating authority, what is the procedure adopted?G/ADP/Q1/USA/18
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3. Paragraph 351.218(d)(2)(iv)(A) establishes that:
"Where a foreign government waives participation in a CVD sunset review under
paragraph (d)(2)(i) or (d)(2)(ii) of this section), the Secretary will:
(A) Conclude that respondent interested parties have provided inadequate
response to the Notice of Initiation under section 751(c)(3)(B) of the Act;"
- In case a foreign government waives participation, could the US delegate clarify if this
provision implies that, if an exporter presents a complete substantive response, it would not
be considered and facts available would be used for the final determination?
4. Paragraph 351.218(e)(1)(ii)(A) establishes that:
"(…) the Secretary normally will conclude that respondent interested parties have
provided adequate response to a Notice of Initiation where it receives complete
substantive responses under paragraph (d)(3) of this section from respondent
interested parties accounting on average for more than 50 per cent, on a volumebasis (or value basis, if appropriate), of the total exports of subject merchandise to
the United States over the five calendar years preceding the year of publication of the
Notice of Initiation."
Could the US clarify:
- Whether the above-mentioned percentage of 50 per cent of "total exports of subject
merchandise" refers to each investigated origin of exports or to the total exports to the US?
- If only one individual exporter presents a complete substantive response and its exports
account for less than 50 per cent of "total exports of subject merchandise" to theUnited States, and it has demonstrated that:
- its exports have not been dumped over the five calendar years preceding the year of
publication of the Notice of Initiation;  and
- the revocation of the order to this exporter would not lead to a recurrence of dumping
will a full sunset review be conducted for this exporter?  If not, what procedure would be adopted?
Could this exporter be excluded from the order?
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