RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/IG/W/29/Rev.1
15 October 2001
(01-5017)
Committee on Anti-Dumping Practices
Informal Group on Anti-Circumvention
TOPIC 2 – WHAT IS BEING DONE BY MEMBERS CONFRONTED
BY WHAT THEY CONSIDER TO BE CIRCUMVENTION
Note by the Secretariat
Revision
At its last meeting, the Informal Group on Anti-Circumvention directed the Secretariat to
revise the previously circulated list of all concrete scenarios which had been submitted by Members in
their previous papers, document G/ADP/IG/W/29.  Accordingly, based on the written submissions of
Members, the Secretariat has compiled the following list:
I.  G/ADP/IG/W/2 (UNITED STATES)................................................................................................ .........1
II.  G/ADP/IG/W/10 (TURKEY) ..................................................................................................... ................2
III.    G/ADP/IG/ W/11 (NEW ZEALAND)............................................................................................ .............3
IV.    G/ADP/IG/W/13 (EUROPEAN COMMUNITY) .....................................................................................4V.  G/ADP/IG/W/17 (KOREA)....................................................................................................... .................5
VI.    G/ADP/IG/W/20 (UNITED STATES) ........................................................................................... ............7
VII.   G/ADP/IG/W/25   (NEW ZEALAND) ........................................................................................... ...........8
VIII.  G/ADP/IG/W/ 31   (MEXICO)................................................................................................ .................10
I. G/ADP/IG/W/2 (UNITED STATES)
(a) An importing country places an anti-dumping or countervailing duty measure on nickel (the
element) from an exporting country.  The product  description in the measure defines nickel as
consisting of at least 99 per cent pure nickel (which is the industry standard).  The measure
covers shipments from the exporting country that have averaged 100 tons per year over the
last few years.  The producer/exporter in the exporting country responds to the measure by
adding a small amount of silver to the nickel during its production process, so that the
resulting metal is 98.5 per cent pure nickel, 0.5 per cent silver, and 1 per cent normal
impurities.  Exports of industry-standard nick el from the exporting country immediately drop
to zero and are replaced by 100 tons per year of the new alloy, which is made by the sameproducers in the exporting country and sold, under the original nickel contracts, at prices and
volumes so similar as to reinforce the notion that these are the same goods, sold to the same
customers, for similar purposes as the previously-exported nickel.G/ADP/IG/W/29/Rev.1
Page 2
(b) An importing country places an anti-dumping or countervailing duty measure on hinges from
an exporting country.  The product description in the measure describes complete hinges,
which are what the exporting country has been exporting.  The producer/exporter in the
exporting country responds by shipping the two hinge halves and pin separately to the
importing country, or a third country, where they are assembled in a matter of minutes andsold in the importing country.  The hinge components are manufactured by the same
producers in the exporting country and sold at prices and volumes so similar as to reinforce
the notion that these are the same goods, sold to the same customers in the importing country,
under the original hinge contracts, for similar uses as before the anti-dumping or
countervailing duty measure.
(c) An importing country places an anti-dumping or countervailing duty measure on salt from an
exporting country.  The product description in the measure describes granular salt, which iswhat the exporting country has been exporting.  The producer/exporter in the exporting
country responds to the anti-dumping or countervailing duty measure by combining the salt
with water and exporting it as saline syrup.  The syrup is produced by the same producers in
the exporting country and sold at prices and volumes so similar as to reinforce the notion that
these are the same goods, sold to the same customers in the importing country, under the samecontracts, for similar uses as before the anti-dumping or countervailing duty measure.
II. G/ADP/IG/W/10 (TURKEY)
In 1994 the Turkish authorities received a request for the imposition of an anti-dumping duty
on the imports of non-refillable pocket flint lighters.  At the end of the investigation, it wasestablished that the aforementioned products were imported at dumped prices and that they caused
material injury to the domestic industry.  Consequently, an anti-dumping duty in the amount of
$0.08/piece was imposed on the imports of these products on 6 May 1995.
In 1997, while the mentioned duty was in force, another complaint, which contained evidence
regarding dumping and injury, was lodged by the domestic producers for the levying of an anti-
dumping duty on the imports of refillable pocket flint lighters originating in the same country.
Moreover, it was alleged in the complaint that the anti-dumping duty on the imports of non-refillable
pocket flint lighters had been circumvented.
As stated above, since there is no legal remedy specifically aimed at offsetting circumvention
of an existing anti-dumping duty, the Turkish authorities initiated a new investigation coveringdumping and injury determinations.
During the investigation, it was found that imports of non-refillable pocket flint lighters
decreased drastically, both in absolute terms and in terms of market share, after the imposition of the
anti-dumping duty, while imports of refillable pocket flint lighters originating in the same countryincreased.  In the course of the investigation, dum ping, injury and the causa l link between the two
were established.  Accordingly, an anti-dumping duty in the amount of $0.12/piece was imposed on
imports of refillable pocket flint lighters on 29 May 1998.
Furthermore, it was observed, in the course of the second investigation, that some of the
refillable lighters sold in the Turkish market were slightly modified versions of the disposable lighters
subject to the anti-dumping duty.G/ADP/IG/W/29/Rev.1
Page 3
III. G/ADP/IG/W/11 (NEW ZEALAND)
Sugar from Belgium, Denmark and the Netherlands
In November 1988, anti-dumping duties were imposed on imports of refined sugar from
Malaysia, Thailand and Germany.  Prior to the completion of this investigation imports of sugar fromBelgium, Denmark, the Netherlands, and Papua Ne w Guinea also started to appear in the market-
place.  The same exporters and importers were involved in importing from the second set of countries
as were involved in the first case.  Accordingly, in September and October 1988, the New Zealand
industry lodged another application with the Ministry to initiate investigations into the dumping of
sugar from these new sources of supply.  This second investigation was initiated in December 1988
and completed in June 1989 with anti-dumping duties being imposed on imports from the
Netherlands, Belgium and Denmark.
This is an example of circumvention of the original anti-dumping duty by way of switching
suppliers or "country hopping".  In recognition of the fact that different countries were involved,
New Zealand conducted a new investigation, based on a new application by the New Zealand
industry.
Plasterboard from Thailand
In June 1989 the New Zealand manufacturer of plasterboard lodged an application for the
initiation of an investigation against various sizes of standard and foil-backed plasterboard fromThailand.  The investigation was initiated and the like goods defined as:
Standard or foil—backed plasterboard having nominal dimensions of 9 mm. or
9.5 mm. thickness, by 1,200 mm. width by 2,400 mm. to 3,600 mm. length.
After a period of time, importers began to avoid the anti-dumping duties on some plasterboard
by varying the lengths of board so that they were  outside the description of the final notice, i.e.
lengths shorter than 2,400 mm. and longer than 3,600 mm.  In particular, lengths of board measuring
4,800 mm. in length were being imported and cut in half to supply the market with the most popular
length board of 2,400 mm.
The New Zealand industry lodged a new applicati on for an investigation and this was initiated
and conducted into the following goods:
Plasterboard of nominal dimensions of 9 mm. or 9.5 mm. thickness and lengths of
less than 2,400 mm. and greater than 3,600 mm.
An anti-dumping duty was imposed on these goods at the same level as that applying to the
first investigation.
Imports then started appearing in the market-place for goods with a thickness of 10 mm.  This
particular board competed directly against the board of 9 mm. or 9.5 mm. thickness and the
New Zealand industry lodged a further application, which was initiated in October 1996.  The
definition of the goods in this case was:
Standard plasterboard with dimensions falling between a thickness of 8.75 mm. to
10.25 mm. of any length or width (not including plasterboard subject to anti-dumping
duty under other notices)."
This finally captured all plasterboard that co mpeted directly with the goods made by the
New Zealand industry.G/ADP/IG/W/29/Rev.1
Page 4
This is an example of circumvention of the original and subsequent anti-dumping duty by
way of importing goods slightly different from those stipulated in the final notice.  In order to deal
with this situation, New Zealand conducted a new investigation, based on a new application by the
New Zealand industry.
This illustrates some of the difficulties that can arise in trying to define like goods.
Hog bristle paint brushes from China
In January 1988, an investigation was initiated into the dumping of hog bristle paint brushes
from the People's Republic of China.  A final notice was issued in May 1988 imposing an anti-dumping duty on the paint brushes.
Since the final notice, reviews of the continue d need for the anti-dumping duties have been
carried out in 1992 and 1997.  The 1997 review resulted in a reassessment of the level of anti-
dumping duty.
From time to time shipments of brushes allegedly from countries other than the People's
Republic of China have been examined by the New Zealand Customs Service and have been found to
be of Chinese origin.  Such shipments have been dealt with under the provisions of the Customs and
Excise Act.  This is an example of how efforts to evade duty by claiming another origin have been
resolved through use of the appropriate legislation.
IV. G/ADP/IG/W/13 (EUROPEAN COMMUNITY)
Factual example 1.
Fibre (HS code 1234 56) is subject to an AD duty. After imposition of the AD duty, a marked
substitution of imports of fibre by imports of “tow” - i.e. fibre in uncut form - originating in the same
country of export takes place. As tow is classified in another HS heading (HS 1234 57), it has not
been covered in the operative part of the Regulation imposing the AD duty.  There is a clear co-
incidence in timing of the imports of the new form of fibre with the presence of the anti-
dumping measure.   
After importation, tow is cut into fibre; a relatively simple, mechanical process,  involving no
particular know-how and only very minor materi al investment. It is then sold for the same
applications and to the same customers as the fibre previously exported in cut form. The extent of
investment in the importing country can therefore be classed as insignificant.
The cutting operation, which in the vast majority of cases is part of a continuos process,
generates extra costs in terms of packaging and labour which are not offset by any significant cost
savings or price premiums but even compounded by the higher hourly labour cost in the importing
country, if compared with that in the exporting country.  The new activity resulting in non-payment
of anti-dumping duties (circumventing practice) has no apparent economic justification  other
than avoidance of anti-dumping measures.
Factual example 2.
Bicycles (HS code 8712 00) are subject to an  AD duty. After imposition of the AD duty, a
marked substitution of imports of bicycles by imports of knocked down kits of bicycles, i.e. bicycle
parts originating in the same country of export takes place. Bicycle parts are classified in other HSG/ADP/IG/W/29/Rev.1
Page 5
headings (HS 8714 xx). There is therefore a clear co-incidence in timing of the imports of the
component bicycle parts with the pres ence of the anti-dumping measure.
The shipments of the bicycle kits are spread over various containers, and shipments, and are
routed to several customs entry points. Therefore they cannot be classified as complete bicyclespursuant to classification rule 2a of the Community  Customs Code (which allows for the constituent
parts to be classified under the heading of the completed product, should they all be contained in the
same shipment), and are not covered by the operative part of the Regulation imposing the AD duty.
After importation, the bicycle parts are being easily assembled (a relatively simple,
mechanical process, not involving particular traini ng, know how or investment) and sold for the same
uses and to the same customers as the complete bicycles previously exported. The extent of
investment in the importing country can therefore be classed as insignificant.
The value of the parts coming from the exporting country, compared to the value of other
parts used in the assembly operations, is significan t. The value added in the importing country to the
parts assembled is limited. The leading apparent economic justification  for the new activity which
results in non-payment of anti-dumping duties (circumventing practice) is precisely the
avoidance of anti-dumping measures.
V. G/ADP/IG/W/17 (KOREA)
1. Case Analysis:  Circumvention Investigation on Imports of Colour Television Receivers
(CTVs)
On 11 August 1995, labour unions in the United States, including the International
Brotherhood of Electrical Workers, filed an ap plication requesting that the US Department of
Commerce conduct an anti-circumvention enquiry of  the anti-dumping duty order on CTVs from the
Republic of Korea.  The investigation was initiated on 19 January 1996 by the US Department of
Commerce to determine whether Samsung Electronics Co. Ltd., and other Korean television
producers were circumventing the anti-dumping duty order on CTVs from Korea by using their
production facilities in Mexico.
Prior to the initiation of the anti-circumvention investigation, the United States had been
levying anti-dumping duties on imports of Korean CTVs since April 1984.  These duties were
abolished on 2 September 1998, when the US Department of Commerce revoked the anti-dumpingduty order on CTVs from Korea, as it applied to Samsung.  Starting in 1984, Korean CTV
manufacturers began moving much of their production abroad, and in 1991, exports of Korea-made
CTVs to the US ceased altogether.  A de minimis  dumping margin of less than 0.5 per cent, as defined
in the US Tariff Act, was assessed on CTVs made in Korea by Samsung from April 1985 until the
time when the product ceased to be imported into the United States in early 1991.
The petitioners of the anti-circumvention investigation alleged that Korean producers of
CTVs were circumventing the anti-dumping order by shipping Korean-origin colour picture tubes
(CPTs) and other CTV parts to Mexican assembly plants operated by a related party in Mexico for
assembly into complete CTVs prior to exportation to  the United States.  Before relocating production
to third countries, Korean producers had responded to the anti-dumping duty by shipping thecomponents of the CTVs to the US for final assembly.  However, the US Department of Commerce
determined that CPTs and printed circuit boards (P CBs) were within the scope of the anti-dumping
duty order on CTVs from Korea.
1  Following this determination by the US Department of Commerce,
                                                     
1 See the petition before the International Trade Administration of the US Department of Commerce,
Inv. No. A-580-008, Public Document.G/ADP/IG/W/29/Rev.1
Page 6
Korean producers allegedly relocated the assembly operation to third countries to circumvent the anti-
dumping duty.
Further, the petitioners claimed that the value of Korean parts incorporated in colour
televisions assembled in Mexico and Thailand was significant and that operations in Mexico and
Thailand were of a limited nature;  besides the simple assembly operation, petitioners argued, littlevalue was added to the final product through the processing done in Mexico and Thailand.  The
petitioners also asserted that patterns of trade in CTVs and CTV parts in recent years between Korea,
the United States, Mexico and Thailand suggested that Korean producers were circumventing the
1984 anti-dumping duty order covering CTVs from Korea, given that US imports of CTVs from
Korea had declined since 1985, immediately follow ing the imposition of the anti-dumping duty on
imports of CTVs.  They also pointed out that Korean exports of CPTs and PCBs to Mexico and
Thailand increased and that the assembly operations in Mexico resulted in fast increases in exports ofCTVs containing Korean CTPs and other Korean components to the US.
From an economic viewpoint, an exporter has no incentive to circumvent an anti-dumping
duty order unless the anti-dumping duty involved is significant.  To claim that a producer has
circumvented an anti-dumping order, it must therefore be shown that the mere existence of the anti-
dumping duty order, whether it is de minimis  or not, poses a significant export barrier which needs to
be circumvented.  But in the particular case of Samsung, from April 1985 until the time when the
product ceased to be imported into the United States in early 1991, the producer did not pay any anti-
dumping duty for its exports to the United States.
What has prompted the producer's decision to relocate to Mexico were relative advantages in
terms of production as well as shipping costs.  In addition, NAFTA tariff preference provisions whichresulted in duty-free exports to the US of CTVs produced in Samsung's Mexican plant also helped to
trigger the producer's relocation decision.  Unlike what was claimed by the petitioners of the anti-
circumvention investigation, shifts in trade patterns are not good indications to establish a causal link
between an anti-dumping duty and a relocation of production.  Indeed, increased exports of CTVs
containing Korean CPTs and other Korean component s from Mexico to the US were the outcome of a
business decision based on cost assessments and the possibility of preferential access rather than the
desire to circumvent AD duties.  This is all the more true when we take into account that Samsung
had not paid any AD duties on CTVs exported from Korea between 1985 and 1991.
Samsung's relocation of production to a third country was accompanied by the relocations of
unrelated Korean suppliers of Samsung.  These facilities included a CTV assembly plant, parts and
component plants, a CPT plant, a glass plant, and several feeder plants established and operated by
unrelated Korean suppliers of Samsung.  From these facilities, Samsung produced CTVs that weresold throughout North, Central and South America.
The fact that relocation of production to Mexico occurred immediately following the
imposition of the anti-dumping duties was presented by the US Department of Commerce as evidence
of circumvention of anti-dumping duties.  This is, however, a coincidence;  the anti-dumping duty
order was in place, but there was no anti-dumping duty to circumvent.G/ADP/IG/W/29/Rev.1
Page 7
VI. G/ADP/IG/W/20 (UNITED STATES)
A. CIRCUMVENTION DETERMINED TO EXIST
Example One
Steel Wire Rope
An antidumping duty on steel wire rope was issued.  Subsequent to the issuance of the order,
a producer of steel wire rope from the country subject to the order greatly reduced its exports to the
United States of steel wire rope and began exporting large volumes of steel wire strand.  The steel
wire strand was imported by a company affiliated with the producer/exporter who then subjected the
wire strand to minor processing in the United States that converted it to steel wire rope.  Thereafter it
was sold in the same volumes to the same unrelated customers in the United States who previouslypurchased steel wire rope completely fabricated before importation.
We found circumvention of the order even though steel wire strand was not specifically
named in the order.  We found that steel wire strand was of the same general class or kind of
merchandise as steel wire rope, and the processing of the strand into rope was minor in nature andadded relatively little value to the product.  Other relevant factors which supported the determination
were the significant reduction in exports of steel wire rope coinciding with the rise in exports of steel
wire strand from the foreign producer, the affiliation of the importer/processor with the
exporter/producer, and the continuation of sales of steel wire rope to the same customers and in the
same general volumes as before issuance of the order.
Example Two
Silicon Metal
Antidumping duty orders were issued on silicon metal from several countries.  The orders
specifically covered silicon metal with a silicon content of at least 96 percent.  The petitioner urged
that the scope should include silicon metal with as little as 90 percent silicon content, but we rejected
this claim because there was no information on record at that time indicating that any product
containing less than 96 percent silicon was considered silicon metal within the industry.
Subsequently, a product which contained only 89 to 95 percent silicon was exported to the
United States.  The new product was made in the same manner as the product specified in the order,
except that aluminum was added to reduce the silicon content below 96 percent.  It was then sold
exclusively to secondary aluminum producers, who also were traditional customers for silicon metal
from these countries and for whom the higher al uminum content was not an undesirable impurity.
We determined that the product was within the scope of the original orders, even though those
orders contemplated only products containing at least 96 percent silicon.  As noted above, they simply
were not included because at the time they were issued there was no evidence that a product with a
lower silicon content was considered silicon metal.  The addition of aluminum to the product did not
alter its physical characteristics in any meaningful way and, for its intended customers, did notenhance or diminish its suitability.  It was sold for the same ultimate use, in the same channels of
trade, and to some of the same customers as the higher silicon content product.G/ADP/IG/W/29/Rev.1
Page 8
B. CIRCUMVENTION DETERMINED NOT TO EXIST
Example One
Fork Lift Trucks
Subsequent to the issuance of an antidumping duty order on fork lift trucks, imports of
completed fork lift trucks declined significantly and imports of parts and sub-assemblies of fork lift
trucks increased equally significantly.  U.S. importers affiliated with the exporters performed
fabrication and assembly operation in the United States and sold the completed fork lift trucks to the
same customers that need to import finished trucks.
We determined that no circumvention of the order existed.  In spite of the fact that, to a very
significant extent, the completion of fork lift trucks had been shifted from the exporting country to the
United States and that this completion process was accomplished by importers affiliated with the
exporters, in apparent response to the issuance of the antidumping order, we found that the nature of
the U.S. operation was substantial.  That operation included some fabrication, as well as assembly,
and used a significant number of parts of United States and third country origin.  Substantialinvestments in facilities for this purpose had been made, a significant number of employees were
engaged in the operation, and the value added by that operation was a significant proportion of the
value of the finished trucks.  As such, no finding of circumvention was warranted.
Example Two
Color Picture Tubes
Antidumping orders were issued on color picture tubes (“CPTs”) from several countries.
Subsequent to the issuance of the orders, CPTs from these countries were shipped to a third country,where they were incorporated into television sets and then exported to the United States.
In the anticircumvention inquiry we found that direct imports of CPTs had declined
substantially and that many CPTs were imported after assembly into a television set in a third country.
Further, the third country operations were conducted by affiliates of the producers in the countries
subject to the orders and arose subsequently, and in apparent response to, those orders.
Nevertheless, we concluded that television sets could not properly be viewed as subject to an
order on CPTs.  Parts for the television sets, other than the CPTs,  were imported into the third
country from a wide variety of other countries, including the U.S., the processing performed there was
substantial, and the value added in the third country was a very significant proportion of the value of
the finished television sets.  Primarily because of the very substantial transformation of the CPTs inthe third country, we found no circumvention.
VII. G/ADP/IG/W/25   (NEW ZEALAND)
Plasterboard from Thailand
The New Zealand industry in this case manufactures standard plasterboard of 9.5 mm
nominal thickness and in multiple widths and lengths.  This board is mainly used in the domestic
housing market.  Other boards of varying thickness ar e also manufactured, with the next size up being
board which is 12.5 mm thick in multiple widths and lengths.  This board is used in the commercialbuilding market and is not considered to be co mpeting with board in the housing market.  Thai
manufacturers generally produce board with a thickness of 9 mm for the domestic housing market and
other board of varying thickness for the commercial building market.  The distinguishing feature ofG/ADP/IG/W/29/Rev.1
Page 9
the board is the thickness, and standard plasterboard of any thickness within a designated range can
easily be substituted for 9.5 mm board in the New Zealand market.  It is not particularly difficult to
produce board of varying thickness as changes to the production process are minimal.
In June 1989 the New Zealand manufacturer of plasterboard lodged an application for the
initiation of an investigation against various sizes of standard and foil-backed plasterboard from
Thailand.  The investigation was initiated and the like goods defined as:
Standard or foil—backed plasterboard having nominal dimensions of
9 mm. or 9.5 mm. thickness, by 1,200 mm width by 2,400 mm to
3,600 mm length.
After a period of time, importers began to avoid the anti-dumping duties on some plasterboard
by varying the lengths of board so that they were  outside the description of the final notice, i.e.
lengths shorter than 2,400 mm and longer than 3,600 mm.  In particular, lengths of board measuring
4,800 mm in length were being imported and cut in half to supply the market with the most popular
length board of 2,400 mm.
The New Zealand industry lodged a new applicati on for an investigation and this was initiated
and conducted into the following goods:
Plasterboard of nominal dimensions of 9 mm or 9.5 mm thickness and lengths of less
than 2,400 mm and greater than 3,600 mm.
An anti-dumping duty was imposed on these goods at the same level as that applying to the
first investigation.
Imports then started appearing in the market place for goods with a thickness of 10 mm.  This
particular board competed directly against the board of 9 mm or 9.5 mm thickness and the
New Zealand industry lodged a further application, which was initiated in October 1996.  The
definition of the goods in this case was:
Standard plasterboard with dimensions falling between a thickness of 8.75 mm to
10.25 mm of any length or width (not including plasterboard subject to anti-dumpingduty under other notices).
It was considered that this description would finally capture all plasterboard that competed
directly with the goods made by the New Zealand industry, but in October 1999 board with a
thickness of 10.50 mm appeared in the market.  The New Zealand manufacturer has again beenobliged to lodge a new case, showing that the board it manufactures is "like" the new thickness of
board being imported and the imported board is dumped and is causing it material injury or threat of
material injury.  This case was initiated in April 2000.  The description of the goods under
investigation is:
Standard plasterboard with dimensions of a nominal thickness from, but not including
6 mm, and up to, but not including 12 mm, of any width or length (other than those
dimensions already subject to anti-dumping duty).
The case is currently in its final stages.  All interested parties have been informed of the
essential facts under consideration which will form the basis for the decision whether to apply
definitive measures and have been asked for their comments.  It should be noted that no party has
argued that 10.5 mm board is not "like" 9.5 mm board.
This is an example of circumvention of the original and subsequent anti-dumping duty by
way of importing goods slightly different from those stipulated in the final notices. It illustrates someG/ADP/IG/W/29/Rev.1
Page 10
of the difficulties that can arise in trying to define like goods.  Reference to other countries papers
show that some would deal with such circumstances under circumvention provisions, but in the
absence of such laws and rules others deal with the such changes by initiating a new case.
The situation above is not unlike that described in Part 1 of the United States paper
G/ADP/IG/W/20, particularly Example 2 (Silicon Metal) where it was determined that circumvention
existed.  The US in this case determined that the product was within the scope of the original order
even though the description appeared to cover a certain product.  New Zealand practice, on the other
hand, is to conduct another investigation, based on a new application by the New Zealand industry.
VIII.  G/ADP/IG/W/31   (MEXICO)
Anti-circumvention proceeding concerning high fructose corn syrup (HFCS)
The " Resolution accepting the request of the National Chamber of the Sugar and Alcohol
Industries and declaring the initiation of an anti-dumpi ng investigation into imports of fructose syrup,
known commercially as high fructose corn sy rup, grades 42 and 55 (HFCS-42 and HFCS-55) from
the United States of America, irrespective of the country of consignment, merchandise classified in
tariff headings 1702.40.99 and 1702.60.01 of the General Import Tariff, respectively " was published
in the Official Journal of the Federation on 27 February 1997.
The preliminary resolution of the investigatio n with an affirmative determination of the
application of provisional anti-dumping duties was published on 25 June 1997.
The final resolution of the investigation, imposing final anti-dumping duties, was published
on 23 January 1998.  Also published was the " Resolution declaring ex officio the initiation of an
investigation into circumvention of the payment of countervailing duties imposed on imports of
grade 55 high fructose corn syrup, merchandise classified in heading 1702.60.01 of the General
Import Tariff, from the United States of Americ a, irrespective of the country of consignment".
The initiation of the anti-circumvention invest igation was based on information from the list
of import licences in the Mexican Trade Information System (SIC-MEX), customs agents, the
Ministry of Finance and Public Credit and other information contained in the administrative record of
the investigation, all of which provided sufficient evidence that, on the basis of the analysis of importtrends, the increase in HFCS imports higher than  grade 55 could be circumventing payment of the
countervailing duty imposed on HFCS-55 imports, for the following reasons:
(i) As from the establishment of the provisional countervailing duties imposed
on HFCS-55, imports of HFCS-90 by Almidones Mexicanos, S.A. de C.V.
(hereafter referred to as ALMEX) showed a signficant increase in July 1997
compared with the monthly average observed in the period March-June of the
same year;
(ii) ALMEX imports of HFCS-55 and HF CS-90 were from A.E. Staley
Manufacturing Company (hereafter referred to as Staley) and Archer DanielsMidland Company (hereafter referred to as ADM), companies with which
ALMEX is affiliated, and
(iii) it was learned that the importer was using a process of mixing HFCS-42 with
imported HFCS-90 in order to obtain HFCS-55.
The investigating authority proceeded to not ify the initiation of investigation to the
Government of the United States of America, production companies, importers and exporters knownG/ADP/IG/W/29/Rev.1
Page 11
to it, and gave them a period of time to submit arguments and evidence.  Subsequently, invitations
were extended to producers, importers, exporters, the Government of the United States of America
and anyone who considered that he had a legal in terest in the investigation, to appear in the
proceeding and state what they deemed appropriate.  In addition, greater information was requested
from some of the companies that appeared.
Similarly, for the purpose of analysing the information, the investigating authority took
account of the description of the product (tariff regime, physical and chemical characteristics), the
production process, and certain additional factors:
• Description of the product:  its composition and the concentration of fructose, glucose
and other saccharides were analysed.  It was determined that the process used by the
importer for mixing with HFCS-42 in making HFCS-55 was not confined to theHFCS-95 exported by one of the affiliated companies (ADM), for which reason the
investigation had to include imports of HFCS containing in the dry state more than
55 per cent by weight of fructose (enriched HFCS) from the United States of
America, classified in headings 1702.50.01, 1702.60.01, 1702.60.02 and 1702.60.99.
• Tariff regime:  the tariff headings in whic h the product investigated was entering the
country were analysed.  HFCS-55 is classified in tariff heading 1702.60.01 (Other
fructose and fructose syrup, containing in the dry state more than 50 per cent but not
more than 60 per cent by weight of fructose).  Enriched HFCS, depending on the
fructose content, may enter under headings 1702.60.11, 1702.60.02 (Other fructose
and fructose syrup, containing in the dry state more than 60 per cent but not morethan 80 per cent by weight of fructose) and 1702.60.99 (Other fructose and fructose
syrup, other).  These tariff headings are subject to a 15 per cent ad valorem  duty for
most countries and the unit of measure is the kilogramme.  Furthermore, imports of
fructose syrup containing 100 per cent of fructose (crystalline fructose) enter under
tariff heading 1702.50.01.
• Physical and chemical characteristics:  the typical physical and chemical properties,
similarity, essential properties and storage, among others, were analysed.  It was
concluded that all high fructose corn syrups belonged to the same product family and
only showed differences in particular physical properties, attributable to the fructose
content of each product.
• Production process:  in view of the fact that importers and exporters were affiliated,
as well as the elements mentioned above, it was decided to assess the production
process in Mexico by a quantitative analysis of the value of the operations carried out
on Mexican territory and in the exporting country, as well as a qualitative analysis of
the nature of the process.  Since the companies refused to provide information on themanufacturing costs of HFCS-55 and enriched  HFCS, or the amount of investment in
each stage of the production process carried out in Mexico and the United States, the
various stages in the production process were analysed on the basis of specialized
literature provided by three compan ies appearing in the investigation.
From the findings concerning the physical and chemical characteristics of the
products and the production process it was determined that enriched HFCS, becauseof its physical and chemical properties, can be easily changed, by mixing with HFCS-
42, into HFCS-55, a product subject to anti-dumping duties.  As for the amount of
investment, the investigating authority adde d together the investment in machinery
and equipment as well as the research and development costs of all stages of the
production process and obtained the total investment required to install the continuousG/ADP/IG/W/29/Rev.1
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process of producing HFCS-55.  This, combined with the results of the analysis into
the characteristics of the products and the nature of the production process, confirmed
for the investigating authority its determination that the mixing process carried out in
Mexico by the importing company to obtain HFCS-55 from imported enriched HFCS
constitutes a negligible part of the overall production process of the product subject toanti-dumping duties.
• Other factors:  the investigating authority considered that practices to circumvent
anti-dumping measures should be assessed on a case-by-case basis and in the light of
various considerations.  In this case, among other things, an analysis was conducted
of the conditions for the importer and the specificity of the finishing process carried
out in Mexico, the affiliation between importers and exporters (by operating as an
integrated business) and producers and exporters, as well as the importing company'sbusiness plan and its availability.
On 8 September 1998 the investigating authority concluded that there were sufficient
elements to determine that imports of enriched HFCS from the United States were circumventing
payment of the final anti-dumping duties imposed on HFCS-55, since they were components intendedfor processing operations on Mexican territory.
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