RESTRICTED
WORLD TRADE G/ADP/AHG/W/12
23September 1997
ORGANIZATION(97-3885)
Original: Spanish Committee onAnti-Dumping Practices
AdHocGroup onImplementation
TIMELINE, CONFIDENTIAL INFORMATION, AND LESSER
DUTY RULE (PARAGRAPH 3OFWTO/AIR/643)
Information Provided byVenezuela
Thefollowing communication, dated 8September 1997, hasbeenreceived fromthePermanent
Mission ofVenezuela.
_______________
Ihavethepleasure totransmit herewith Venezuela 'sreplies concerning "certain information"
requested asagreed atthelastmeeting oftheAdHocGroup onImplementation on29and30April 1997.
Accordingly, please findattached thetimetable forthephases oftheanti-dumping andsubsidy
investigation process, alistofinformation Venezuela believes isconfidential bynature, andadescription
ofhowthelesser dutyruleisapplied byVenezuela.G/ADP/AHG/W/12
Page2
1. Timetable ofthephases oftheinvestigation process inanti-dumping andsubsidy procedures
inVenezuela
1.1 Initiation phase (approximate duration: between 15and36working days, asthecasemaybe)
Theprocedure fordetermining theexistence ofdumping andsubsidization andinjury tothe
domestic industry producing likegoods maybeinitiated attherequest ofaninterested partyorexofficio.
Where aninvestigation isinitiated attherequest ofaninterested party, theapplicant mustfulfil aset
ofrequirements relating totheidentification oftheparties, thedescription ofthegoods, thepresentation
ofevidence concerning theexistence ofdumping orsubsidies andinjury, acomplete description of
theallegedly dumped orsubsidized goods, information onnormal value, export price, andidentification
ofimporters andexporters, interalia.Iftheapplication concerns subsidization, itmustindicate the
typeofsubsidy andtheelements which determine thattheexporter ortheproducer isentitled tothe
subsidy. Asregards theinitiation ofaninvestigation exofficio, thismayonlybedonein"exceptional
circumstances", provided theCASS hassufficient evidence oftheexistence ofdumping orsubsidization
andinjury tothedomestic industry.
Once theapplication foraninvestigation hasbeenreceived, theTechnical Secretariat ofthe
CASS hasfiveworking daysinwhich todecide whether itmeets therequirements laiddown bythe
Law, theRegulations andtheWTO Anti-Dumping andSubsidies Agreements. Iftheapplication does
notmeet therequirements foropening theinvestigation, itwillbereturned totheapplicant forthe
latter tomake good-within 15working days-theomissions orshortcomings found intheapplication.
Iftheapplication meets therequirements fortheopening oftheinvestigation, itwillbetransmitted
totheCASS forthelatter todecide whether toinitiate theinvestigation; otherwise, theapplication
willnotbeallowed. Before taking thedecision toinitiate aninvestigation, theCASS willnotify the
government oftheexporting Member concerned. TheCASS hastenworking daystodecide whether
toinitiate theinvestigation. Once theinvestigation hasbeeninitiated, thedecision oftheCASS must
benotified toalltheparties concerned andpublished intheOfficial Gazette oftheRepublic ofVenezuela.
Moreover, anannouncement containing anextract fromthedecision toinitiate theinvestigation must
bepublished intwodaily newspapers attheexpense oftheapplicant. When these formalities have
beenfulfilled, theprocess ofinvestigation andverification willbeinitiated.
1.2. Verification phase (approximate duration: oneyear, which maybeextended to18months
inexceptional circumstances)
Theverification phase begins when alltheparties concerned bytheinvestigation havebeen
notified; theannouncement containing anextract fromthedecision toopentheinvestigation hasbeen
published inthenational press; andcopies oftheannouncement havebeenprovided totheTechnical
Secretariat. Evidence andarguments aretobepresented bytheinterested parties within aperiod of
60working daysfromthedateofcompletion ofthese formalities. Questionnaires arealsosenttothe
interestedparties,requiringaresponsewithin30workingdays,withpossibilityofextension.Moreover,
theTechnical Secretariat carries outalltheinvestigations required todetermine theexistence ofdumping
orsubsidies andinjury tothedomestic industry, andvisits theheadquarters ofthefirms involved in
theinvestigation inorder tocheck theinformation supplied andcarry outon-the-spot investigations.
Thetime-limit forconclusion oftheinvestigation forthedetermination ofunfair practices andinjury
isoneyearfromthedateofitsinitiation, unless exceptional circumstances areinvolved, inwhich case
itmaynotexceed 18months.
During theinvestigation theTechnical Secretariat willprovide theapplicants, importers and
exporters theopportunity tomeet sothatopposing views maybepresented andpossible rebuttal
arguments offered. There isnoobligation onanyperson toattend ameeting ofthekind, andfailure
todosowillnotbeprejudicial tothatparty'scase.G/ADP/AHG/W/12
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1.3 Decision phase (duration: 30working days)
When theTechnical Secretariat hasconcluded theinvestigation, itisrequired totransmit to
theCASS afinaltechnical report sothatthelattermaydecide whether toimpose definitive anti-dumping
orcountervailing duties. Upon receipt ofthefinalreport, theCASS has30working daysinwhich
toadopt itsfinaldecision. Should theCASS decide toimpose definitive duties, itmusttransmit that
decision tothecustoms authority forthelatter tobegin collecting theduties. Itwillalsoarrange for
theexecution ofsecurities orthedefinitive levying ofanyprovisional duties imposed. Intheevent
thattheCASS decides nottoimpose definitive duties, therelevant decision must betransmitted to
thecustoms authority withanorder torelease anysecurities deposited orrefund anyprovisional duties
imposed.
1.4 Other procedural aspects
Notifications
Alldecisions bytheCASS mustbenotified totheinterested parties inperson, including the
domestic producer orproducers, importers, exporters andcountries under investigation. Suchdecisions
mustalsobepublished intheOfficial Gazette oftheRepublic ofVenezuela. Inorder tocomply with
Article 5.5oftheAnti-Dumping Agreement, before proceeding toinitiate aninvestigation theauthorities
shallnotify thegovernment oftheexporting Member concerned oftheapplication fortheinitiation
oftheinvestigation inquestion. Thenotification shallbemade tothediplomatic representation of
theMember concerned inVenezuela.
Provisional duties
TheCASS mayimpose provisional anti-dumping orcountervailing duties, provided always
thatatleast60working dayshaveelapsed since theinitiation oftheinvestigation, thatapreliminary
affirmative determination hasbeenmade ofdumping orsubsidies andinjury tothedomestic industry,
andthattheCASS considers suchmeasures tobenecessary toprevent injury tothedomestic industry
during theinvestigation. Provisional measures mayremain inforce fornomore thanfourmonths.
Deminimis margin andsignificance ofimports
There shallbeimmediate termination incases where theCASS determines thatthemargin
ofdumping isdeminimis ,orthatthevolume ofdumped imports, actual orpotential, ortheinjury,
isnegligible. TheCommission hasalready applied thisprovision inacaseinwhich itdetermined
thatthemargin ofdumping was1.11percentandtherefore immediately ordered thetermination of
theinvestigation.
Undertakings
TheCASS mayconclude orsuspend ananti-dumping orsubsidy investigation before taking
afinaldecision, when undertakings aregiven withregard toprices, theelimination ofexports, orthe
limitation ofsubsidies, asthecasemaybe.
Access tothefile
During theinvestigation anyinterested party willhaveaccess totheinformation contained in
thefile,andmayobtain acopy ofanydocumentation inthefile,withtheexception ofinformation
thathasbeendeclared confidential.G/ADP/AHG/W/12
Page4
Duration andreview ofanti-dumping duties
Anti-dumping duties haveaduration offiveyears. They maybereviewed annually bythe
Commission exofficio orattherequest ofaninterested party, without prejudice tothefactthatthey
maybemodified orcancelled before theexpiry oftheirperiod ofvalidity where theCommission
considers thatcircumstances havechanged orthecauses which gaverisetothemhaveceased toexist.
Judicial review
Alldecisions oftheCASS aresubject toappeal before theFirstAdministrative Court.
1.5 International agreements andVenezuelan anti-dumping andsubsidy legislation
TheMarrakesh Agreement Establishing theWorld Trade Organization wasincorporated into
theVenezuelan legal system afterbeing approved bytheCongress oftheRepublic, ratified bythe
President oftheRepublic andpublished intheOfficial Gazette oftheRepublic ofVenezuela, Special
issueNo.4829of29December 1994. ThisAgreement includes interaliatheAnti-Dumping Agreement
andtheSubsidies andCountervailing Measures Agreement. Hence, under theVenezuelan Constitution
thelawsapproving these Agreements haveaspecial status andtakepreference overother laws, owing
totheirnature andtheform inwhich theyhavebeenincorporated intotheVenezuelan legalsystem.
Thismeans thatoncethenecessary requirements havebeenfulfilled forincorporating theseagreements
intotheVenezuelanlegalsystem,theyareappliedwithprecedenceovertherelevantdomesticlegislation.
Accordingly, foranyinvestigation involving imports from WTO Member countries theapplicable
provision oftherespective Agreement willbeapplied, either because suchaprovision doesnotexist
inVenezuelan legislation orbecause thelatter conflicts withtheprovisions oftheAgreements.
Meanwhile, thepre-existing Venezuelan anti-dumping legislation willcontinue toapply infulltoimports
from countries thatarenotWTO Members.
Finally, asVenezuela belongs totheAndean Community, special rulesapply forimports from
countries thataremembers ofthatAgreement. Thelegislation inquestion isDecision 283ofthe
Commission oftheCartagena Agreement, which establishes theanti-dumping orsubsidy provisions
applicable toimports ofgoods fromanycountry belonging totheCartagena Agreement. Inthesecases
theCASS isnotempowered toconduct theinvestigations concerned, thisbeing theresponsibility of
theBoard oftheCartagena Agreement.
2. Listofinformation Members believe isconfidential bynature
Thequestion oftheconfidential treatment ofinformation provided inproceedings isdealtwith
inArticle 48oftheVenezuelan Anti-Dumping Law, which provides asfollows:
"The Commission andtheTechnical Secretariat shallnotdisclose anyinformation received
during thecourse ofananti-dumping orsubsidy investigation when theparty providing such
information requests thatitshould betreated asconfidential. Forthispurpose, theparty
concerned shallindicate thegrounds fortreating theinformation asconfidential andshallattach
anon-confidential summary oranexplanation ofthereasons whysuchasummary cannot be
made.
Arequest forconfidential treatment shallbedealtwithaccording towhether disclosure ofthe
information would beofsignificant advantage toacompetitor orwould haveanyother adverse
effect upon theperson providing theinformation orupon athirdparty."G/ADP/AHG/W/12
Page5
Accesstotheinformationprovidedbyinterestedpartiesinananti-dumpingorsubsidyproceeding
isveryimportant inthatitensures transparency andobjectivity. Inthisconnection, access tothe
information inthefileensures thattheparties involved canfullyexercise theirrightofdefence, while
thepossibility oftreating certain information confidentially encourages interested parties tofurnish
information which could beofvitalimportance fortheproceeding butwhich would notbesupplied
ifitdidnotreceive confidential treatment. Hence, thequestion ofthepossibility ofdeclaring certain
information confidential ornotmust behandled verycarefully.
TheTechnical Secretariat oftheAnti-Dumping andSubsidies Commission isresponsible for
analysinganddecidingwhetherthecharacterornatureoftheinformationforwhichconfidentialtreatment
hasbeenrequested justifies suchtreatment. Thetreatment ofconfidential information bytheTechnical
Secretariat isnotamatter ofrigidcriteria prejudging thenature oftheinformation. Ineachparticular
case, aseries ofnecessary factors must beanalysed todetermine whether theinformation requires
suchtreatment. Inthecourse ofthevarious investigations conducted bytheCASS inwhich confidential
treatment oftheinformation provided hasbeenrequested, theTechnical Secretariat hasdeveloped some
analytical criteria fordetermining whether ineachparticular casetheinformation should betreated
asconfidential ornot.
1. Fulljustification must beprovided insupport oftherequest forconfidentiality,
regardless ofwhether theinformation isconfidential bynature orbecause therequesting
party provides itasconfidential. Forthispurpose, therequesting party mustexplain
thegrounds orreasons forwhich itconsiders thatdisclosure oftheinformation provided
would beofsignificant advantage toitscompetitors orhaveanadverse effect upon
theperson providing theinformation orupon athirdparty.
2. Inorder todetermine thesignificant advantages oradverse effects which disclosure
oftheinformation provided could haveforanenterprise orthirdparty, theTechnical
Secretariat must analyse: (i)thetypeofinformation supplied interms ofits
fundamental, secret orstrategic character within theenterprise; (ii)thelevel of
aggregation oftheinformation supplied; and(iii)thepossible consequences ofpublic
access totheinformation supplied.
These aspects arecarefully analysed bytheTechnical Secretariat when taking adecision on
confidential treatment, since information supplied asconfidential bynature doesnotnecessarily need
tobetreated assuchwithout firstbeing analysed indetail.
Inanyevent,inpracticethereexistsinformationwhich,dependingonitsnature,doesnotrequire
further justification inorder toconclude thatitshould betreated asconfidential. Anillustrative list
oftheinformation which theTechnical Secretariat hasconsidered confidential bynature according
tothevarious confidentiality decisions ithastaken includes: information onunitcosts ofaproduct,
details ofacompany 'spastorfuture investments, acompany 'scommercial strategies andexpansion
plans, percentages ofcomponents ofacompany 'sexclusive product, manufacturing formulas forthe
product concerned andmarket share percentages.
3. Description ofhowthelesser dutyruleisapplied bytheMember
Theprovision enabling thecompetent authorities toimpose ananti-dumping orcountervailing
dutythatislessthanthemargin ofdumping determined ortheamount ofthesubsidy, when suchlesser
dutywould beadequate toremove theinjury tothedomestic industry producing likegoods ("lesser
dutyrule"), isestablished inArticle 16oftheVenezuelan anti-dumping legislation asfollows:G/ADP/AHG/W/12
Page6
"Theanti-dumping orcountervailing duties tobeimposed shallunder nocircumstances exceed
themargin ofdumping ortheamount ofthesubsidies respectively. Anti-dumping or
countervailingdutiesmaybelessthantheaforementionedlimitswhentheCommissionconsiders
thattheyaresufficient toremove theinjury orthreat ofinjury."
Inthevarious investigations inwhich anti-dumping duties lessthanthemargin ofdumping
determined havebeenimposed, theCommission hasconsidered thatthefundamental purpose ofthis
lesser dutyruleistoencourage competition between theimported goods subject todefinitive duties
andtheinjured domestic product.
Theability toimpose alesser dutyisdirectly linked totheinjury suffered bythedomestic
producer, sincealesser dutymaybeimposed provided itissufficient toremove theinjury. Thequestion
therefore arises astowhatwould betheapplicable lesser dutywhich would remove theinjury incurred.
Thereply liesinthemargin oramount ofinjury suffered bythedomestic producer.
Despite theguidelines laiddown intheAgreements anddeveloped byMember countries, injury
isadifficult element toquantify. Inanyevent some countries havedeveloped methodologies to
determine theamount ofinjury through aprice comparison between theinvestigated import andthe
injured domestic product. These methodologies wereusedbytheCASS inoneofitsinvestigations,
inwhich itdetermined thattheapplication ofalesser dutywassufficient toremove theinjury caused
tothedomestic industry producing likegoods.
Thecaseinquestion where alesser dutywasestablished wastheanti-dumping investigation
intoimports ofcrystal andhigh-impact polystyrene originating intheUnited States. Here, although
adumping margin of15.61 percentwasdetermined forcrystal polystyrene and25percentforhigh
impact polystyrene, adefinitive advalorem dutyof9percentwasestablished onthebasis thatthis
wassufficient toremove theinjury suffered bythedomestic industry producing likegoods.
Inorder toestablish theapplicable lesser dutyinthiscase, theCommission hadtodetermine
theprice atwhich theimported good should enter toenable thelikedomestic good tocompete fairly
andatthesame timecover costs, expenses andprofits. Consequently, thelesser dutyapplied was
theresult ofthedifference between theabove-mentioned prices, sothatthefullmargin ofprotection
would notbegranted, thusensuring thatthedutywasnotmore import-restrictive andencouraging
competition between theimported goods subject todefinitive duties andtheinjured domestic product.
Another casewhere adutywasimposed thatwaslessthanthemargin ofdumping determined
wasintheinvestigation onimports ofbluejeans originating inChina. Inthiscasetheapplication
ofthelesser dutywasbasically justified bypractical reasons: astheinvestigation concerned products
ofidentical nature andsimilar use(women 'sbluejeansandmen'sbluejeans), andalthough theamount
oftheapplicable definitive duties differed between thetwoproducts, itwasconsidered more practical
toimpose asingle anti-dumping dutyforbothproducts, intheform oftheapplicable lesser duty.