RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/IG/W/43
18 February 2002
(02-0824)
Committee on Anti-Dumping Practices
Informal Group on Anti-CircumventionOriginal:  Spanish
COMMUNICATION BY PERU
The following communication, dated 28 January 2002, has been received from the Permanent
Mission of Peru.
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The Permanent Mission of Peru to the International Organizations with headquarters in
Geneva presents its compliments to the Secretariat of the World Trade Organization – Rules Divisionand hereby submits a paper by Peru to the Group on Anti-Circumvention of the WTO Committee on
Anti-Dumping Practices.
This paper provides an insight into the experien ce gained by Peru and highlights factors that
should be taken into consideration in reviewing practices that might constitute circumvention of anti-dumping duty.  Replies to the first two questions  raised by the Members of the Group, i.e. "What
constitutes circumvention?" and "What is being done by Members confronted with what they consider
to be circumvention?", are given below.
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I. INTRODUCTION
The Ministerial Decision on Circumvention was adopted by governments in Marrakesh as a
result of the Uruguay Round of Multilateral Trade Negotiations.  This Decision recognizes the
desirability of applying uniform rules in this area as swiftly as possible, in order to prevent
circumvention of anti-dumping measures.
As a contribution to the ongoing debate on the issue, Peru wishes to offer a few comments
and details of its experience in the matter.
II. TOPIC 1 – WHAT CONSTITUTES CIRCUMVENTION?
The term "circumvention" derives from the verb "circumvent".  In the present context, it may
be defined as an act or acts the purpose or objective of which is to avoid, by one means or another, the
payment of anti-dumping duty.
In order to determine whether the purpose of a given act is to evade anti-dumping duty, we
consider it necessary to discuss – in detail and on the basis of concrete examples – practices such as
the following:
• Minor alterations of merchandise;G/ADP/IG/W/43
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• export of components and spare parts;
• third country or importing country assembly;
• third country transshipment;
• customs fraud.
Factors to be considered in determining whether a practice is aimed at evading anti-dumping
duty include the following:
• The moment in which the act in question occurred;
• trade trends;
• investments made.
We believe that the way to clarify whether a practice constitutes circumvention is to obtain
detailed explanations of how the practice came about, by way of concrete examples and experience
acquired by Members.
III. TOPIC 2 – WHAT IS BEING DONE BY MEMBERS CONFRONTED WITH WHAT
THEY CONSIDER TO BE CIRCUMVENTION?
Peru has taken the following action in this respect.
1. Textile imports from the People's Republic of China
In 19951, it was decided to levy definitive anti-dumping duties on imports of cotton fabric and
mixed (10-50.97%) fabrics, originating in and/or coming from the People's Republic of China.
In order to prevent possible circumvention through false statements as to the country or place
or origin of goods subject to anti-dumping duties, Peru has passed legislation requiring the submission
of a certificate of origin.  Thus, there are general rules2 for determining the origin of imports in cases
where it is decided to apply anti-dumping and/or  countervailing duties, laying down a series of
minimum requirements to be met by a certificate of origin.  Specific rules3 were subsequently
established in order to prevent goods subject to anti-dumping duties from being imported under othertariff headings, stipulating mandatory presentation of certificates of origin for imports subject to anti-
dumping measures and thus preventing any circum vention through fraudulent customs declarations.
2. Imports of footwear from the People's Republic of China, Chinese Taipei and the
Republic of Indonesia
• Opening of an investigation against the People's Republic of China and
application of definitive anti-dumping duties
                                                     
1 Decision No. 005 99 INDECOPI/CDS.
2 Supreme Decree No. 21-05-11 INCI.
3 Supreme Decree No. 102-96 IMNCUDM.G/ADP/IG/W/43
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By Decision No. 005-97-INDECOPI/CDS, published in the Official Gazette El Peruano on
15 and 16 March 1997, as amended by Decision No. 008-97-INDECOPI/CDS, published on
29 and 30 May 1997, the Anti-Dumping and Subsidies Control Commission4 of the National
Institute for the Defence of Competition and the Protection of Intellectual Property5 ordered
the application of definitive anti-dumping duties on footwear of specific sub-headings,
originating in the People's Republic of China,6 as specified in the aforementioned Decisions.
Between 1997 and 1998, imports from China dropped from 18.06 per cent in 1997 to 16.66
per cent in 1998, in terms of share of the total volume of imports, which was attributed to the
levy of definitive anti-dumping duties.  In 1998, however, imports from Chinese Taipei and
Indonesia grew by 49.68 per cent and 283.33 per cent, respectively, increasing these
countries' share of the total volume of imports.
• Opening of an investigation against Chinese Taipei and application of definitive
anti-dumping duties
On 16 November 1998, the Corporación del Cuero, Calzado y Afines (Leather, Footwear and
Leather Components Corporation), both in its own right and on behalf of the Asociación de
Pequeños y Medianos Fabricantes de Calzado7 (Small and Medium Footwear Manufacturers'
Association), requested the Commission to commence investigation proceedings against the
alleged dumping of imports of footwear from China, Chinese Taipei and Hong Kong, and to
review specific anti-dumping duties in force on imports from China.  It also requested the
application of provisional duties, in accordance with the provisions of Article 22 of Supreme
Decree No. 133-91 EF.
By Decision No. 004-1999/CDS-INDECOPI, the Commission ordered the opening of an
investigation against the alleged dumping of im ports of footwear from Chinese Taipei and
China, and the review of specific definitive anti-dumping duties on imports of footwear from
China.  It declared the opening of an invest igation regarding imports of footwear from Hong
Kong to be unfounded.
By Decision No. 014-1999-INDECOPI/CDS, the Commission ordered the application of
provisional anti-dumping duties on imports of footwear from Chinese Taipei.
By Decision No. 001-2000-INDECOPI/CDS, published in the Official Gazette El Peruano  on
30 and 31 January 2000, the Commission ordered the imposition of definitive anti-dumping
duties and the modification of specific anti-dumping duties in force on footwear of specific
sub-headings, originating in and/or coming from China and Chinese Taipei, as specified in the
aforementioned Decisions.
• Opening of an investigation against import s of footwear originating in Indonesia
and application of provisional anti-dumping duties
In 1999 the total volume of imports fell to 3,942,951 pairs of footwear, i.e. a drop of
29.80 per cent as compared to 1998, which was attributed to the application, in May 1999, of
provisional anti-dumping duties on imports from Chinese Taipei.  In 2000, however, the total
volume of imports rose by 61.91 per cent, i.e. 6,384,082 pairs of shoes, thus exceeding thefigure registered in 1998.
                                                     
4 Hereinafter referred to as "the Commission".
5 Hereinafter "INDECOPI".
6 Hereinafter "China".
7 Hereinafter "APEMEFAC".G/ADP/IG/W/43
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In 2000, imports from Indonesia increased by 78.71 per cent as compared to 1999,
i.e. 2,888,535 pairs, raising Indonesia's share in the total volume of imports and making the
country the largest foreign supplier of footwear.
By Decision No. 006-2001/CDS-INDECOPI of 24 April 2001, the Commission ordered the
ex officio  opening of investigation proceedings against the alleged dumping of imports of
footwear originating in Indonesia and entering under sub-headings of tariff headings 6402,
6403, 6404 and 6405.
By Decision No. 024-2001/CDS-INDECOPI of 25 October 2001, the Commission ordered
the imposition of provisional anti-dumping duties on imports of footwear originating in
Indonesia and entering under sub-headings of tariff headings 6402, 6403, 6404 and 6405.
The proceedings have now reached the final stage.  All interested parties have been informed
of the essential facts that are being taken into consideration and that will constitute the
grounds for the decision whether or not to impose definitive measures, and they have been
asked to deliver their comments.
This might constitute an example of circumvention of initial anti-dumping duty by way of a
change in "suppliers".  Nevertheless, since countries other than China are involved, Peru deems it
fitting to open a new investigation.  In the case of Chinese Taipei, the investigation was initiated at the
request of the domestic industry and was commenced ex officio  in the case of Indonesian imports.
With regard to the above imports, the National Customs Administration has, moreover,
notified problems with the tariff classification and declarations of origin.
It should be noted that anti-dumping duties on imports of footwear originating in China and
Chinese Taipei were applied by country, not by exporter.
In short, it is impossible to ascertain whether the change in the origin of the imports is due to
a change in "suppliers" or to customs fraud in the declaration of origin.8
IV. SITUATIONS ARISING IN THE INVESTIGATION PROCEEDINGS THAT MIGHT
CONSTITUTE CIRCUMVENTION BY WAY OF CUSTOMS FRAUD
1. Product classification
INDECOPI has received a number of complaints  from Peruvian firms reporting that the levy
of anti-dumping duties on products entering under specific sub-headings has led to an increase in  like
products entering under other sub-headings.  There are two possible reasons for this:
(i) The products were incorrectly classified under other sub-headings with a view to
evading the payment of anti-dumping duty.
(ii) The products imported under other sub-headings were correctly classified, and the
products in question are substitutes for those subject to duty.
                                                     
8 Pursuant to Article 8(b) of Law No. 28461, the importing of goods supported by fraudulent
documentation or falsified data as to the value, quality, quantity, weight, origin or other characteristics having abearing on taxation or the application of anti-dumping or countervailing duties shall be deemed to be a customs
offence punishable, as customs tax fraud, by fines and imprisonment.G/ADP/IG/W/43
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In the first instance, the importer would be guilty of a customs offence punishable by law,
while in the second the importer would merely be s ubstituting a product subject to duty with a product
not subject to duty, taking advantage of the definition of the product complained of or investigated
that does not cover the imports in question.
2. Declaration of origin
It has been noted that the imposition of anti-dumping duties on specific products leads to
increased imports in such products from third countries.  There are two possible reasons for this:
(i) A false declaration in terms of the origin of the product.
(ii) A diversion of trade whereby like products – but of different origin – are being
imported.
In the first instance, the importer would be guilty of a customs offence punishable by law,
while in the second the importer would merely be substituting a product subject to duty with a product
of different origin that is not subject to anti-dumping duty.
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