RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/IG/W/20
27 May 1999
(99-2133)
Committee on Anti-Dumping Practices Original:  English
INFORMAL GROUP ON ANTI-CIRCUMVENTION
Paper by the United States
The following communication, dated 29 April 1999, has been received from the Permanent
Mission of the United States.
_______________
In earlier submissions the United States has discussed the need for anticircumvention
measures and suggested some of the criteria or standards which may be employed in determining
whether circumvention of an antidumping duty order exists.  Additionally, we have set forth several
hypothetical examples of circumvention and answer ed questions concerning them raised by other
Members.
We believe that the group’s discussions of what constitutes circumvention will be aided by
supplementing our earlier submissions with several examples of actual cases we have encountered.  In
the interest of promoting better understanding of this subject we have included examples of cases in
which we have found circumvention to exist and ex amples in which we did not find circumvention.
The examples given, of course, do not represent all the types of circumvention which may exist.
I. 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.G/ADP/IG/W/20
Page 2
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 not
enhance or diminish its suitability.  It was sold for the same ultimate use, in the same channels oftrade, and to some of the same customers as the higher silicon content product.
II. 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 ofthe 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.  Substantial
investments 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.G/ADP/IG/W/20
Page 3
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 in
the third country, we found no circumvention.
Discussion
The foregoing examples are only samples of actual U.S. experience in conducting
anticircumvention inquiries and do not represent the wide variety of circumstances the U.S. and other
countries encounter in such inquiries.  Neither do they, in themselves, demonstrate all the relevant
standards and criteria that are appropriate to employ in determining whether circumvention exists.
They do, however, help to show that circumvention questions arise under a wide variety of facts and
circumstances, and that a consistent set of standards must be used to analyze each case. The examples
given suggest that, in conducting anticircumvention inquiries, the authorities should look for a numberof factors, including:
• whether there has been a change subsequent  to the issuance of the antidumping duty
order, either in the product or in the manner it is produced, or the country in which itis produced or completed;
• whether there have been changes in trade flows in the product or in the relationships
between producers in the original country and companies further processing theproduct elsewhere;
• whether the “new” product is sold to the same customers in the importing country and
used for the same purposes;
• whether any change in the nature of the product or any processing/assembly operation
in the importing country or a third country is insignificant;
• whether any importer/processor in a third country or the importing country is
affiliated with the exporter/producer subject to the antidumping order.
As the examples demonstrate, the United States  has been careful not to use anticircumvention
decisions to frustrate or discourage legitimate, significant investments in substantial
fabrication/assembly operations.  Nor have we found circumvention to exist when the imported
product is very different from the product subject to the order.  Not every change subsequent to an
order constitutes circumvention.  However, without the ability to take appropriate action against
genuine circumvention, by applying rational, consistent standards in judging changes occurring after
an order has been issued,  such orders would be made meaningless and ineffective in providing relief
to industries injured by dumping.G/ADP/IG/W/20
Page 4
The United States hopes that these examples of actual cases will facilitate the group’s
discussion of what constitutes circumvention and what factors are relevant in conducting a
circumvention inquiry.
__________