. /.WORLD TRADE
ORGANIZATIONG/ADP/AHG/W/151
14 October 2003
(03-5453)
Committee on Anti-Dumping Practices
Working Group on ImplementationOriginal:  English
ARTICLE 2.4.1 – FOREIGN EXCHANGE FLUCTUATIONS
Paper by the United States
The following communication, dated 14 October 2003, has been received from the Permanent
Mission of the United States.
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Article 2.4.1 – Foreign Exchange Fluctuations
Under Article 2.4.1 of the AD Agreement, if a fair comparison between export price and
normal value requires a conversion of currencies, that conversion should be made at the exchange rateexisting on the date of sale.  Article 2.4.1 also requires the investigating authority to ignore currency
fluctuations, and allow exporters at least 60 days in an investigation to have adjusted their export
prices to reflect sustained movements in exchange rates.  The requirements of Article 2.4.1 have been
incorporated into US anti-dumping law.
1
In an anti-dumping investigation, the US Department of Commerce uses the daily exchange
rates published by the New York Federal Reserve Bank and classifies them as normal or fluctuating
based on a comparison with a benchmark rate.2  The benchmark rate is the moving average of the
daily exchange rates for the prior eight weeks.
Exchange Rate Fluctuations
If the daily exchange rate varies from the benchmark rate by more than 2.25 percent (in either
direction), Commerce classifies the daily rate as a fluctuation.  In the case of a fluctuation, Commerceuses the benchmark rate to convert foreign currencies to US dollars instead of the daily rate.
3
Sustained Movements
When the weekly average of daily exchange rates exceeds the weekly average of benchmark
rates by more than five percent for eight consecutive weeks, Commerce finds that there has been a
sustained movement in the exchange rate.  When a sustained movement occurs during the period of
investigation, the exporter has 60 days to adjust its prices.4  In such a case, Commerce will use the
exchange rate in effect just prior to 60-day period as the exchange rate throughout that 60-day period.
                                                     
1  Section 773A of the Tariff Act of 1930 (19 U.S.C. §  1677b-1).
2  Policy Bulletin 96-1: Import Administration Exchange Rate Methodology, 61 Fed. Reg. 9434, 9435
(8 March 1996); see US Department of Commerce website at http://www.ia.ita.doc.gov/policy/bull96-1.txt .
3  61 Fed. Reg. at 9435.
4 Policy Bulletin 96-1.G/ADP/AHG/W/151
Page 2
After the 60-day period, Commerce returns to using the daily or benchmark rate (as described above),
unless or until another sustained movement occurs.
A sustained movement is defined only for increases in the foreign currency values.  Normally,
no adjustment is made for decreases in the foreign exchange value.  However, when the decline invalue “is so precipitous and large as to reasonably preclude the possibility that it is only fluctuating”
Commerce uses the daily rate in effect at the end of the decline, rather than the benchmark rate.
5
Notice of Rates to be Used
Commerce makes available the results of this analysis on the Internet.  At
http://www.ia.ita.doc.gov/exchange , Commerce publishes the exchange rates that it will use in any
anti-dumping investigation or review, including any applicable fluctuations or sustained movements.
In addition, Commerce also makes available the computer programming language used to perform theanalyses described above.
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5  61 Fed. Reg. at 9436.