RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/Q1/TUR/4
G/SCM/Q1/TUR/4
26 October 2000
(00-4467)
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 Posed by BRAZIL
Regarding the Notification of TURKEY1
The following communication, dated 25 October 2000, has been received from the Permanent
Mission of Brazil.
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1. Article 1 of the Agreement on Subsidies and Countervailing Measures defines a subsidy as
follows:
“ 1.1. For the purpose of this Agreement, a subsidy shall be deemed to exist if:
(a) (1) there is a financial contribution by a government or any public body
within the territory of a Member (referred to in this Agreement as
“government”), i.e., where: (...);
or
(a) (2)  there is any form of income or price support in the sense of Article XVI of
GATT 1994;
and
(b) a benefit is thereby conferred.. ”
But the definition of subsidies in the Turkish legislation (Article 2(b) of Law 3577;
Article 2(b) of the Decree on the Prevention of Un fair Competition in Imports; and Articles 4(b) and
12 of the Regulation on the Prevention of Unfair Competition in Imports) links the conferral of a
benefit only to the financial contributions by the government: “ Subsidy: A direct or indirect financial
contribution by the country of origin or export, which confers a benefit or any form of income or price
support within the meaning of Article XVI of GATT.”
Could Turkey clarify the reason why, in its legislation, “any form of income or price support
in the sense of Article XVI of GATT 1994” would be considered a subsidy without a benefit beingthereby conferred?
2. Article 2.2 of the Anti-Dumping Agreement establishes conditions in which sales in the
domestic market does not permit a proper comparison, such as:
                                                     
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“2.2.  (...) when, because of the particular market situation or the low volume of the sales in
the domestic market of the exporting country2, such sales do not permit a proper comparison,
...”
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2 Sales of the like product destined for consumption in the domestic market of the
exporting country shall normally be considered a sufficient quantity for the determination of
the normal value if such sales constitute 5 per cent or more of the sales of the product under
consideration to the importing Member, provided that a lower ratio should be acceptable
where the evidence demonstrates that domestic sales at such lower ratio are nonetheless of
sufficient magnitude to provide for a proper comparison.”
The Turkish legislation does not mention which conditions would not permit a proper
comparison; it simply establishes that:
“(e) Normal Value:
(2) When there are no sales of the like product in the domestic market of the country of origin
or export in the ordinary course of trade, or where such sales do no permit a proper
comparison, the normal value shall be the export price of the like product when exported to
an (...)” (Art. 2(e)(2) of Law 3577; Art. 2(e)(2) of the Decree; and Art. 4 (e)(2) of the
Regulation).
Could Turkey explain which are the criteria used to determine when would the domestic
market sales of the exporting country in the ordinary course of trade not permit a proper comparison?
3. In the Turkish legislation – Article 2(g) of Law 3577, Article 2(g) of the Decree and
Article 4(g) of the Regulation - the amount of the subsidy is defined as follows:
“(g) Amount of Subsidy: Direct or  indirect financial contribution maintained by the country of
origin or export for manufacture, production, export or transportation of the product sold for
export, or total amount of benefits in any fo rm of income or price support in the sense of
Article XVI of GATT 1994 ”
But Article 13 of the Regulation (Calculation of the amount of the countervailable subsidy)
establishes that:
“The amount of countervailable subsidies shall be calculated in terms of the benefit conferred
on the recipient during the investigation period.  (...)”
Despite this proviso, we notice in the Turkish legislation several references to the amount of
the subsidy instead of the amount of countervailable subsidy: in Articles 7 (Anti-dumping duty and
countervailing duty), 12 (Provisional Measures), and 13 (Definitive measures) of Law 3577;Articles 4 (Circumstances warranting imposition of measures and measures) and 10 (Refund of
excessive duties) of the Decree; and Articles 28 ( Negligible Rates) and 29 (Termination and
suspension of investigation).
Could Turkey explain which is the relation between the two forms presented in its legislation
(amount of subsidy, and amount of countervailable subsidy)? For example, Article 28 of the
Regulation, where there are references to negligible quantities in the amount of the subsidy.  Could
Turkey clarify if this calculation method to determine the amount of countervailable subsidies is the
same as the one used to determine the amount of the su bsidy referred in this Article?  If that is not the
case, which is the methodology adopted to determine the amount of the subsidy?G/ADP/Q1/TUR/4
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4. Article 2(i) of the Decree on the Prevention of Unfair Competition in Imports, as well as
Article 4(i) of its Regulation, have a definition of "Circumvention":
“(i) Circumvention:
(1) Cases where there is evidence that, a change in the pattern of trade between
a third country and Turkey, stemming from a practice, process or work for
which there is insufficient due cause or economic justification other than to
avoid the anti-dumping duty or countervailing duty, existed and that the
remedial effects of the duty are being undermined or nullified in terms of the
prices and/or quantities of the like products and there is evidence of dumpingor continuance of subsidy in relation to the normal values previously
established for the like products;
(2) Cases where, there is evidence that, due to the lowering or export prices, the
expected effects of the anti-dumping duty on selling prices of the imported
products subject to measures in the Turkish market are being undermined ornullified and thus the remedial effects of the duty in terms of removal of
injury to the domestic industry are being weakened”
Article 11 of the Decree establishes that:
“Anti-dumping duties and countervailing duties imposed may be extended as to cover like
products or parts thereof and imports of such product form third countries, where it is
determined as a result of the investigation initiated that effects of definitive duties are being
nullified consequent to a practice or work for which there is insufficient due cause or
economic justification other than to avoid the anti-dumping duty or countervailing duty inforce. Imports of the product subject to inves tigation may be made subject to registration
during the investigations to be carried out under this paragraph.
Where, as a result of the investigation , it is determined that the definitive duties were nullified
due to the lowering of the export prices, the anti-dumping duty shall be reassessed in
accordance with the new dumping margin calculated.  When investigations to be carried out
under this paragraph, cover the re-examination of normal value, the imports of the productsubject to investigation may be made subj ect to registration during the investigation.
Where imports of the product concerned have been subject to registration and, consequent to
the investigation it is decided to impose measur es, such measures shall be applied from the
date of registration.”
The procedures and principles as regards the process and investigations to be carried out for
the prevention of circumvention shall be set out in the regulation.”
In Section III of the Regulation, "Other investigations", mention is made only to procedures
of the investigation that are related to cases in which there is price reduction (Articles 38 and 39).
With respect to the adopted definition as well as to the procedures outlined in its regulation,
could Turkey clarify the following aspects?
/g216 With regard to item (1) of the definition of “circumvention”, does the expression "third
country" refer to countries other than those whose exports to Turkey were investigated?
/g216 If so, does the Turkish legislation permit the extension of antidumping or countervailing
duties applied on imports of one country to imports from another country, without anantidumping/countervailing duties investigation being conducted for these imports?  Or doesG/ADP/Q1/TUR/4
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the investigation mentioned in Article 11 of the Decree refer to a new anti-
dumping/countervailing duties investigation covering imports from a third country?
/g216 In the last hypothesis, would it be possible for Turkey to open an anti-dumping/countervailing
investigation relating to original imports of a third country, even though the investigating
authorities would have no evidence of dumping/subsidy and injury, as required by Articles 5
of the Anti-Dumping Agreement and 11 of the SCM Agreement?
/g216 Since the Regulation does not outline any procedure for an investigation of "anti-
circumvention" related to changes of trade patterns with a third country, does this mean that
Turkey cannot conduct this type of investigation? If not, which is the regulation thatestablishes the procedures and principles for this type of investigation?
/g216 With regard to an “anti-circumvention” investigation related to export price reductions
(Articles 38 and 39 of the Regulation), is it correct to assume that the normal value will not be
the same one calculated for the period in which the export prices are reduced? To what extentwould a comparison of values from different periods (current export price and the normal
value for, at least, the previous year) allow the “fair comparison” mentioned in Article 2.4 of
the A-D Agreement?
/g216 Since Articles 11 of the AD Agreement and 21 of the SCM Agreement establish rules and
procedures for the revision of the dumping margin/amount of subsidy, wouldn’t an “anti-
circumvention” investigation that ignores these rules violate the WTO Agreements?
5. Article 6.10 of the Anti-Dumping Agreement allows for sampling of
exporters/producers/importers or the types of products involved.  In addition, Article 6.10.1determines that:
“Any selection of exporters, producers, importers or types of products made under
this paragraph shall preferably be chosen in consultation with and with the consent
of the exporters, producers or importers concerned”.
Article 27 of the Regulation goes further than AD Article 6.10 by allowing samplings of
transactions that are statistically valid.  But in contrast with Article 6.10.1, the Turkish legislation
does not require that the selection of the sample be preceded by consultations with or the consent of
the exporters, producers or importers concerned.  How does Turkey explain this omission?
Also in connection to Article 27 of the Regulation, could Turkey clarify the following?
/g216 Bearing in mind that the Regulation determines that the dumping margin may be based on a
sample that is statistically valid, would it be possible for the Turkish investigating authorities
to calculate the dumping margin based on only part of the export transactions?
/g216 If the answer is affirmative, could Turkey identify which Articles of the Anti-Dumping
Agreement would lend support for such a procedure (a partial analysis of the exports under
investigation)?
/g216 If one assumes that a sample of transactions is permissible, why doesn’t the legislation
envisage the possibility of consultations with producers, exporters, or importers, for the
selection of the sample, as was done in the case of samples of exporters, producers, importers
or types of product?G/ADP/Q1/TUR/4
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6. With regard to Public Notices Regarding the Investigation, Article 31 of the Regulation
establishes that:
“(...) All such notices shall be forwarded to the countries concerned and to all known
producers and exporters of the product “.
Bearing in mind the language of Articles 12 of the Anti-Dumping Agreement and 22 of the
SCM Agreement, as well as the definition of all interested parties contained in Article 23 of the
Regulation, could Turkey explain why Article 31 does not require notification to the importers of the
product that is under investigation?
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