. /.RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/474
15 January 2002
(02-0178)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
IMPLEMENTATION-RELATED ISSUES REFERRED
TO THE COMMITTEE BY MINISTERS
Questions from Australia to Brazil1 and India2
The following communication was received on 14 January 2002 from the Permanent Mission
of Australia.
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Australia submits the following comments and questions seeking clarification of certain
aspects of the Brazilian and Indian proposals.  Th ese comments and questions are without prejudice to
whether Australia endorses any conclusions which may be drawn in relation to the review of
countervailing duty investigations.
Article 14
• For a subsidy to exist from duties foregone or not collected, benefit should have been received
during the investigation period
(3rd dot point of the Chair’s list of issues; paragraphs 19-21 of document G/SCM/W/462)
An exporter may have applied for, but not received, a subsidy during the investigation period.
Australia agrees that if the duty refund has not been received and no benefit has been conferred during
the investigation period, then a subsidy cannot be deemed to exist for the purposes of a countervail
investigation.  The exporter would have had to have availed itself of the duty refund.
In the example outlined by India in paragraph 19 of document G/SCM/W/462, does India
presume that a specific subsidy, i.e. an actionable subsidy, exists whereby the investigating authorities
may impose countervailing duties?
• Expenses incurred by recipient to obtain the subsidy should be deducted from amount of the
subsidy and from amount of countervailing duty
(5th dot point, 1st sub dot point of the Chair’ s list of issues; paragraphs 22-23 of document
G/SCM/W/462; paragraph 7(e)  of document G/SCM/W/464)
In terms of the examples provided in paragraph 22 of document G/SCM/W/462, if these
charges/expenses are ones which apply on the commercial market, for example, bank guaranteecharges, does India consider that deductions for these expenses constitute subsidies?
                                                     
1 G/SCM/W/464.
2 G/SCM/W/462.G/SCM/W/474
Page 2
Does India distinguish between application/administration fees charged by governments to
administer countervailable schemes and fees required to access a benefit under countervailable
schemes which could/would apply in the normal course of business, i.e. costs which would otherwise
be borne by a firm on the commercial market?
Does Brazil agree that expenses incurred by a recipient in order to obtain the subsidy should
be deducted from the amount of countervailing duty?
• To determine average useful life of assets, depreciation information of individual recipient firms
should be used
(6th dot point of the Chair’s list of issues, paragraphs 17-18 of document G/SCM/W/462)
Could India clarify what is meant by a depreciation period “without any scientific basis”?  Is
India suggesting that there is or should be a st andard applied?  How would this apply where a
government provides flexibility or allows a firm self-assessment in relation to the definition of whole
of life costing for capital goods?
De minimis
• Introduce in Article 19 a provision that no duty be collected where subsidy amount is de minimis
(paragraphs 12-14 of document G/SCM/W/464)
We agree that if it is determined that the amount of the subsidy is found to be de minimis ,
then the investigation is terminated.  Does Article 11.9 provide for termination where the amount of
subsidy is de minimis for a specific exporter?
Brazil states in paragraph 13 that establishment of a de minimis amount of subsidy requires
the immediate termination of an investigation and that it follows that the same parameters should be
followed in terms of the imposition and collection of duties.
We recall that Article 11.9 of the SCM reflects or parallels Article 5.8 of the Anti-Dumping
Agreement (ADA).  WTO jurisprudence has found that the de minimis test in Article 5.8 does not
require a de minimis test in Article 9.3 duty assessment procedures and therefore cannot require
Members to apply a de minimis standard in duty assessment procedures.  Given that the DRAMS
Panel found that the term “case” used in the first sentence of Article 5.8 encompassed at a minimum
the notions of an “application” and “investigation”, what situations would give rise to a countervailing
duty being imposed even where the amount of subsidy has been found to be de minimis during the
investigation period?
Is it the case that duties may be imposed as the exporter was above de minimis during the IP
but subsequently would be de minimis?
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