WORLD TRADE
ORGANIZATIONG/ADP/Q1/PHL/4
G/SCM/Q1/PHL/4
16 September 2002
(02-4922)
Committee on Anti-Dumping Practices
Committee on Subsidies and Countervailing MeasuresOriginal:  English
NOTIFICATION OF LAWS AND REGULATIONS UNDER
ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS
Replies by the PHILIPPINES to Questions Posed by
the EUROPEAN COMMUNITIES1 and the UNITED STATES2
The following communication, dated 13 September 2002, has been received from the
Permanent Delegation of the Philippines.
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Replies to Questions by the European Communities
1. Section 6 of the legislation notified by the Philippines lays down the deadlines for the
respondents to submit completed questionnaires.  Could the Philippines please explain how they
intend to comply with Article 6.1.1 of the WTO Anti-Dumping Agreement with regard to
extensions of the available deadline?
Reply
There is nothing in the provisions of Section 6 of the Implementing Rules and Regulations
(the Regulations) of Republic Act No. 8752 (the Act) that prohibit the investigating authorities from
granting extensions to the deadline for the submission of completed questionnaires.
In practice, a 15-day extension is granted when requested.  This is compatible with the
requirements of Article 6.1.1 which provides that:
“Due consideration should be given to any request for an extension of the 30-day
period and, upon cause shown, such an extension should be granted wherever
practicable.”
2. Could the Philippines please indicate the list of the “non-market economy countries”
referred to under Section 11(h)?
Reply
Section 2 (r) of the Regulations provides that:
                                                     
1 G/ADP/Q1/PHL/3, G/SCM/Q1/PHL/3.
2 G/ADP/Q1/PHL/2, G/SCM/Q1/PHL/2.G/ADP/Q1/PHL/4
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“Non market economy refers to the country of export or origin where the government
(1) has a monopoly or substantial monopoly of trade of the country and;
(2) determines or substantially influences the domestic price of the products in that
country.”
3. Section 15 of the legislation notified by the Philippines states that “parties shall be given
five days from the date of receipt of th e notice to defend their interests in writing”.
(a) Would such disclosure occur after the imposition of provisional measures and before a
final determination is made or only before a final determination?
Reply
Section 15 (a) of the Regulations states that:
“Before a final determination, the Commissi on shall inform all interested parties in
writing of the essential facts under consideration and the initial findings as containedin the draft report, giving due regard to the protection of confidential information.
Such disclosure shall be made within three days from the date of completion of the
draft report, after which the parties shall be given five days from the date of receipt of
the notice to defend their interest in writing.”
The above-cited provision mirrors the provision in Article 6.9 of the Anti-Dumping
Agreement.
(b) Should parties consider that such a deadline is insufficient, could the Philippines please
explain how they would treat requests for extension of the time-limit, in particular:
- Would there be a possibility for extension?
- Up to what period?
Reply
As mentioned in No. 1 above, nothing in the provisions of the Act and the Regulations
prohibit the possibility of granting an extension when requested.
Replies to Questions by the United States
1. Section 4 (“Penalty Clause”) of  “The Anti-dumping Act of 1999 ” (Republic Act
No. 8752) (the “Act”) and Article 25 of the Act’s Implementing Rules and Regulations
(“Regulations”) appear to impose a fine and other penalties upon “those found guilty of
dumping”.  The relevant provision states as follows:
“The importer’s licence or charter to do business shall be revoked for those
found guilty of dumping.  Further, its officers shall be disqualified from holdingofficial positions in corporations of othe r business entities in the Philippines.  A
fine equal to twice the definitive anti-dumping duty shall be imposed.”
Please describe all circumstances under which this provision may be invoked.G/ADP/Q1/PHL/4
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Reply
The provisions of Section 4 of the Act and Section 25 of the Regulations enumerated the
persons/parties that can be held liable in case a violation of the statutes is committed.  The penaltyclause is applicable only after a final determination that the importers concerned are guilty of
dumping.  The penalty clause has, thus far, not been invoked.
2. Section 8 of the Regulations allows the Secretary to suspend imposition of the
provisional antidumping duty after taking into account several factors (among others),
including: (1) whether the imposition of a provisional duty “will result in political or economic
crisis” or (2) will cause “a severe shortage of the like product in the domestic market”.
(a) What standards will be applied in determining whether this provision should be
invoked?
Reply
The standard of evidence used and required under the WTO Agreement on Anti-dumping is
generally the same standard adopted under the Act and the Regulations.
(b) Will such suspension of provisio nal duties be temporary or permanent?
Reply
The suspension contemplated under Section 8 of the Regulations is temporary in nature. The
suspension of the imposition of provisional duties depends upon the existence of certain factors. Ifthose factors cease to exist then the reason for suspension also ceases.
(c) What effect will suspension of provisional duties have on the authority to collect definite
duties?
Reply
None, because the provisions of Section 8 apply only to provisional measures.  However, in
the context of Section 18 of the Regulations, it may be possible that the collection of definite duties
can also be suspended.  This would be the case if those certain factors, which earlier had necessitated
a suspension of the provisional duties, persist at the time when the definite duties are to be imposed
and collected.  In recent Philippine anti-dumping case history, there have been a few occasions whenthe imposition of provisional and definite duties were suspended.
3. Section 1l(k) of  the Regulations indicate s that in situations where “export price” is
unreliable because of a relationship or compensa tory arrangement between the foreign exporter
and the importer or a third party, the export price may be “constructed “ on the basis of theprice at which the dumped product is “first resold to an independent buyer, or if such product
is not resold to an independent buyer, on such reasonable basis as the Secretary or Commission
may determine”. Similarly, Section 301(s)(2) of th e Act states that if the export price cannot be
used, then “the export price may be constructed based on such reasonable bases as the
Secretary or the Commission may determine.”
(a) What is meant by the term “independent buyer”?G/ADP/Q1/PHL/4
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Reply
Section 11(k) of the Regulations defines the term “independent buyer” as the party to whom
the allegedly dumped product is first resold in case there is no export price or that such export price isunreliable. Note must be made of footnote 11 under Article 4 of the Agreement on Antidumping
which provides that a transaction is independent if the buyer and the seller have no legal or
operational relationship. Neither do they have a substantial link in terms of shareholding,
management, financial, marketing or other forms of control.
(b) What types of “relationships” or “compensatory arrangements” will make an export
price unreliable?
Reply
The “relationship” or “compensatory arrangements” refer to transactions which are not “arms
length” as defined under Section 2(c) of the Regulations. Also, please note footnote 11 under Article 4of the Anti-dumping Agreement, which should provide adequate guidance to the investigating
authorities in the Philippines.
(c) How will the Secretary or Commission determine the constructed export price if such
unreliable sales are not sold to an “independent” buyer?
Reply
Section 11(k) of the Regulations provides that:
“In cases where there is no export price or where it appears that the export price is
unreliable…  or if such product is not resold to an independent buyer, or not resold in
the condition as imported, on such reasonable basis as the Secretary or Commission
may determine. In this case, allowances for cost, including duties and taxes incurred
between importation and resale, and for profits, should also be made…”
4. Section 2(c) of the Regulations defines the term “Arm’s Length Transaction” as a
“transaction where the price is not affected by any relationship between the buyer and the
seller, or if there is no compensation, reimbursement, benefit or other consideration given in
respect of price”.  What is meant by the term “any relationship”?  Is this limited strictly to
ownership interests, or can it involve contractual and other relationships?
Reply
As a practical matter, Section 2(c) of the Act should be read in conjunction with footnote 11
of Article 4 of the Anti-dumping Agreement.
5. Section 11(b)(1) of the Regulations st ates that where the comparison is not
“comparable” because of a difference in physica l characteristics, an adjustment may be made
based on “a reasonable estimate of the mark et value of the difference”.  How will the
Philippines calculate this reasonable estimate?G/ADP/Q1/PHL/4
G/SCM/Q1/PHL/4
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Reply
“Reasonable estimate”, as provided for in Section 11(b) of the Regulations, is a general term
to be implemented on a case-to-case basis but at the same time should be read in light of the letter andspirit of the Act and the Anti-dumping Agreement.
6. Section 11(c) of the Regulations indicates it may be appropriate to resort to third
country sales, constructed value, or COP, inter alia , if “the particular market situation makes
domestic sales unsuitable for proper comparison (price does not reflect a fair price in normal
market conditions e.g. consignment or monopsony)”.  Please clarify what types of situations
might be deemed “unsuitable for proper comparison.  In particular, are there any situationsother than “consignment sales” or “monopsony” sales that might indicate that the home market
price is not fair and thus should not be used?
Reply
The listing of “consignment or monopsony” is not exclusive and other situations may be
appropriate under Section 11(c) but this is determined on a case to case basis.
7. Section 301(e), as amended by the Act, stat es that, once an anti-dumping investigation is
initiated, “the respondent is given the opportunity to present evidences to prove that he is notinvolved in dumping”.  Are the respondents also provided the opportunity to submit evidence
and argument on the questions of material injury and causal link?
Reply
Under the Act, the respondent is given the opportunity to present evidence which are, in
essence, to rebut or counter the facts alleged in the petition.
Since the petition must also allege – as prescrib ed in Section 301(b) of the Act – the presence
and the extent of material injury or threat of inju ry to the domestic industry, the causal relationship
between the allegedly dumped product and the material injury or threat of material injury to the
affected domestic industry, it can be inferred that the respondents also have all the opportunity toreply, comment and rebut issues dealing with material injury and causal link.
Furthermore, under Section 6(b) of the Regulations, the “respondent is required to submit
within 30 days from the receipt of such notice the completed pro-forma respondent’s questionnaire
and other evidence and information to dispute the allegations contained in the application” whichcover not only the allegation of dumping, but also of material injury and causal link.
8. Section 301(f), as amended by the Act, states that when the Secretary makes an
affirmative preliminary finding in an anti-dumping investigation, “the burden of proof is
shifted to the respondent to rebut the preliminary finding”.
(a) Does this mean that the respondent has the burden of proof of establishing that there is
no material injury to the domestic industry and no causal link between the material
injury and the dumped imports?  If so, how is such an assignment of a burden of proof
consistent with Article 3.1 of the AD Agreement, which requires that an injurydetermination be “based on positive evidence” and “involve an objective examination”
by the investigating authority?G/ADP/Q1/PHL/4
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Reply
At the outset, it must be emphasized that Secti on 301(f), as amended by the Act, clearly states
“that the burden of proof is shifted to the respondent [in order] to rebut the preliminary finding”
(underscoring provided).  The said provision is independent of the procedure for final investigations
conducted by the Tariff Commission, which can be found in paragraphs (h) to (o) of Section 301, as
amended by the Act.
Finally, the Act is consistent with Article 3.1 of the Anti-dumping Agreement of the
Philippines.  In fact, paragraph (i) of Section 301 provides that “the presence and extent of material
injury to the domestic industry, as a result of dumped imports shall be determined on the basis ofpositive evidence and shall require an objective examination of” various considerations.
(b) Do the Philippine authorities conduct any fu rther investigative activities after issuance
of the preliminary finding?
Reply
Yes, the Philippine authorities are required under the law to conduct further investigations
after the issuance of the preliminary findings. To reiterate, this investigative procedure is found in
paragraphs (h) to (o) of Section 301 of the Tariff and Custom Code as amended by RA 8752.
9. The second paragraph of section 3(d)(1) of the Regulations states that “[]n assessing the
sufficiency of evidence provided in the applicatio n, the Secretary will only satisfy himself that
there is evidence that indicates dumping or th e likelihood of dumping, and material injury
based on the evidences submitted by the applicant ”.  What is the significance of the word “only”
in this provision?  Does it merely modify the phrase “evidence that indicates” to suggest that the
evidentiary standard pertaining to dumping and in jury is lower at initiation than in making a
determination?  Or does the word “only” also  modify the phrase “based on the evidences
submitted by the applicant”?
Reply
Section 3 of the Regulations should be read in conjunction with the relevant provisions of the
Act, which pertain to and implement Articles 5 and 7 of the Anti-dumping Agreement.
10. Section 3(d)(4) of the Regulations states th at the Philippine authorities may engage in a
regional industry analysis if two conditions are satisfied.  The first of these conditions is thatproducers within the regional market “have the dominant market share.”  How is this
consistent with Article 4.1(ii) of the AD Agreement, which states that the producers within a
regional market “must sell all or almost all of th eir production of the product in question in that
market”?
Reply
Section 3 (d) (4) of the Regulations is consistent with Article 4.1(ii) of the Anti-dumping
Agreement.  As a practical matter, the definition of “dominant market share” refers to an instance
when the producers “sell all or almost all of their production of the product in question in thatmarket”.  It must be reiterated that provisions of the Act must be read in conjunction with the
provisions of the Anti-dumping Agreement.G/ADP/Q1/PHL/4
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11. Article 4.1(ii) of the AD Agreement requires, in the circumstance of regional industry
analysis, that there be a concentration of dum ped imports into the regional market and that
“the dumped imports are causing injury to the producers of all or almost all of the production
within such market”.  How does Phili ppine law implement these requirements?
Reply
At the outset, it must be mentioned that the provisions of the Act must be read in its entirety,
thus the requirement of “injury” is applicable to all types of actions under the Act (see Sections 1, 3,
12, etc. of the Regulations). In any event, the provisions of the Act must be read in conjunction with
the provisions of the Anti-dumping Agreement, in this case, Article 4.1(ii).
12. Do the Philippine authorities permit confidential information to be disclosed pursuant to
protective order, as authorized by footnote 17 to Article 6.5 of the AD Agreement?
Reply
In respect of anti-dumping case history in the Philippines, there appears to be no experience
as far as the disclosure of confidential information pursuant to a protective order is concerned.
In any event, Section 6(g) of the Regulation provides that:“Information which are confidential, either by nature or which are provided on a
confidential basis, shall not be disclosed without the express permission of the
supplying party…”
The cited provision further provides that:
“Where any request for confidentiality is not warranted or the supplier of the
information is either unwilling to make the information public or to authorize its
disclosure in summary form, such information may be disregarded…”
13. Are the public notice requirements in Section 22(b) of the Implementing Rules
applicable to all the types of actions by the Ph ilippine authorities described in Section 22(a) of
the Implementing Rules?  If not, how do the Philippine authorities implement the requirements
of Article 12.2.1 of the AD Agreement concerning imposition of provisional measures?
Reply
Yes, the public notice requirements in Section 22(b) of the Regulations are applicable to
actions described in Section 22(a).  Section 22 is consistent with the requirements of Article 12.2.1 of
the Anti-dumping Agreement.
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