RESTRICTEDWORLD TRADE
ORGANIZATIONG/SG/Q1/LTU/2
2 May 2002
(02-2504)
Committee on Safeguards Original:  English
NOTIFICATION OF LAWS AND REGULATIONS UNDER
ARTICLE 12.6 OF THE AGREEMENT
Replies from LITHUANIA to Questions Posed by
the UNITED STATES1 regarding the Notification of Lithuania2
The following communication, dated 29 April 2002, has been received from the Permanent
Mission of Lithuania.
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Q1. Article 2, paragraph 5, of the Lithuanian law appears to incorporate the “like product”
definition in the WTO anti-dumping and subsidies agreements, and does not use the term “like
or directly competitive” found in the Safeguards Agreement and in article XIX of GATT 1994or seek to define the domestic producers in terms contained in the Safeguard Agreement.
Please explain how the Lithuanian law is cons istent with the Safeguards Agreement in this
respect.
Reply
According to the Lithuanian law on Safeguards (hereinafter – Law) the definition of “like
product“ contains three elements: a domestic product identical, i.e. alike in all respects to the product
in question imported into the customs territory of Lithuania or  another domestic product which has
closely resembling characteristics or, domestic product directly competitive with the product in
question in the Lithuanian market.
The same applies to definition of the “domestic producers“, which shall mean Lithuanian
producers as a whole of the identical or product which has closely resembling characteristics or
directly competitive products manufactured in the customs territory of the Republic of Lithuania or
those whose collective output of the identical or product which has closely resembling characteristics
or directly competitive products constitutes a major proportion  (over 50 per cent) of the total
production of those products.
We do understand the doubts of the US delegation as to the definition of the “like product”,
since there is a mistake of technical nature in the translation of the document. The translation of
Article 2, paragraph 5 of the Law should be as follows:
“5. “Like product” means a product identical, i. e. in all respects alike to the product in
question imported into the Customs territory of the Republic of Lithuania, or, in
absence of identical product, a product which has like characteristics; or a product
                                                     
1 G/SG/Q1/LTU/1
2 G/SG/N/1/LTU/2G/SG/Q1/LTU/2
Page 2
which is in direct competition in the Lithuanian market with the product in question.”
The original text contains explicit explanation of “like products” and “directly
competitive product”.
Q2. The definition in paragraphs 7 and 8 of Article 2 of the Lithuanian law, when read
together, could be read to suggest that the safe guard measure in the form of a custom duty may
only be applied as provisional measure.  Such a reading would suggest that more permanent
measure must be in the form of a quota.  Please explain what is intended by these definitions,
and how they are consistent with the Safeguards Agreement.
Reply
We would like to confirm that the Law does not in any way limit the possibility to apply the
customs duty as a definitive safeguard measure.
According to Article 2, paragraph 6, quota on imports could only be introduced as a definitive
safeguard measure.  While according to Article 2, paragraph 8, the customs duty could be introducedas:
1. Provisional safeguard measure (duration of application up to 200 days);2. Definitive safeguard measure.
Q3. Article 4 and 5 of the Lithuanian law, which describe the purpose of the investigation
and the process for initiating an investigation,  refer to “imports” causing serious injury, as
opposed to “increased imports” causing serious injury, although subsequent articles in the
Lithuanian law refer to “increased imports” (e. g., article 8, paragraph 1). Is there a reason whythe term “increased imports” is used in some places and not others?
Reply
Rather linguistic problem of translation. Article 2, paragraph 12, Articles 4 and 5 of the Law
provide for term “disruptive imports”, definition of which is provided in Article 2 paragraph 12 (the
increase in the imports of a product in greatly increased quantities…), while the translators instead of“disruptive imports” have used the term “imports causing serious injury.”  Since in article 4 and 5 the
term was used within the meaning described in Article 2 paragraph 12, the same wording of definition
as in that paragraph was used.
We confirm that the Law does not in any way provide that imports in absence of the increase
in imports could be considered as disruptive imports.
Q4. Article 8, paragraph 1 (5) of the Lithuanian law lists the various economic factors to be
considered in determining whether increased import s caused or threatened serious injury, and
includes all the factors listed in Article 4, paragraph 2 (a) of the Safeguards Agreement exceptproductivity.  Is there a reason for the omission?
Reply
We do agree that productivity shall be considered in determining whether increased imports
caused or threatened to cause serious injury.  The omission occurred due to the different legaltechniques used while drafting the Law and the WTO Agreement on Safeguards.G/SG/Q1/LTU/2
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The list of economic indicators covered by Articl e 8 paragraph 5 of the Lithuanian law is not
terminative (on the contrary to part 2 (a) of Article 4 of the WTO Agreement), thus, other known
objective and quantifiable factors influencing and determining the position of local producers shall be
analyzed during the investigation.
Q5.  Article 8, para 8, of the Lithuanian law stat es that the Institution normally would examine
information covering the last 3 years, but woul d allow the Institution to examine information
for as little as 6 month.  Under what circums tances might the Institution examine information
for a period as short as 6 month?  How would the Institution know that the industry’s condition
during the most recent 6 month is not its normal condition, and how would it establish the
linkage between the increase in imports and the se rious injury or threat to the domestic injury
based on a review of so short a period?  Would 6-month data be sufficient to show increased
imports?
Reply
Article 8, paragraph 8, of the law does provide for a possibility that in the course of
investigation the period of information to be considered could be limited to 6 months.  This provision
is rather theoretical than practical.
Nevertheless, we consider that in case of infant industries or industries that have undergone
restructuring and have just started production of a new product (therefore the annual data cannot bepresented) facing a sudden increase in imports of the like or directly competitive product and causing
or threatening to cause serious injury to the said  producers, the limitation mentioned above could well
be justified.
As to the possibility that 6-month data would be sufficient to show increased imports, we
would like to note that Lithuania is a small economy and fluctuations in foreign trade are generally
bigger that in large economies (for example: while conducting safeguard investigation on imports of
non-dried pastry yeast Investigating authority has recorded the 97.6 per cent increased in imports over
the period of 9 months).
Q6. Article 10 of the Lithuanian law lists as an objective of a safeguard measure ,"to
eliminate" serious injury or the threat thereof. Article 5, paragraph 1, of the SafeguardsAgreement uses the term "prevent or remedy seri ous injury."  What does the Lithuanian law
mean by "eliminate", and is this the same thing as  "prevent or remedy"?
Reply
Linguistic problem of the translation, in Lit huanian language one word meaning “to prevent
or remedy” can also be translated into “eliminate”.  The translators have chosen the latter option.
Q7.  Article 11 of the Lithuanian law allows for the taking of a provisional safeguard measure.
However, unlike Article 6 of the Safeguards Agreement, it does not indicate the circumstancesunder which such a measure might be taken (“critical circumstances”), or require that there be
“clear evidence” that increased imports are ca using or threatening serious injury.  Please
explain how the Lithuanian provision is consistent with the requirements of Article 6 of the
Safeguards Agreement.  For example, does Lithuania believe that provisional measures could be
applied when critical circumstances are not present?G/SG/Q1/LTU/2
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Reply
Article 11 of the Lithuanian law does not use terms “critical circumstances“ and “clear
evidence“ because they may have ambiguous interpretation and it was problematic to include them
due to the requirements of legal techniques of the legislation of Lithuania.
We believe that both requirements are properly addressed in the Law introducing
requirements even stricter than those of the Agreement on Safeguards and even narrowing the
possibilities of the application of provisional safeguard measures.
“Critical circumstances” are addressed in provision of the Article 11 paragraph 2 “due to the
significant impairment in the position of domesti c producer, provisional measure must be applied
without delay…”.  The Law requires that “significant impairment” should be in place, while the
Agreement of Safeguards only requires that “delay could cause a damage”.
As to “clear evidence” Lithuania has introduced the requirement of “preliminary
determination has been made on the basis of objective data”, while Agreement on Safeguards requires
only “preliminary determination”.
Taking into consideration these aspects we do not see contradictions between the appropriate
provisions of the Agreement and the Law.
Q8. Article 14, paragraph 3, of the Lithuanian law provides, when there is no agreement
with the exporting countries with respect to the allocation of a quota, that the quota be allocated
based on country shares for the last 3 years.  Article 5, paragraph 2 (a), of the Safeguards
Agreement refers to shares “during a previous representative period” and does not specify the
duration of that period.  On what basis does Lithuania conclude that the “previousrepresentative period” shall be in all cases the last 3 years?
Reply
According to the Article 8, paragraph 8 of the Law, while conducting investigation, normally
the information covering the last three years shall be examined.  This time period allows to define and
objectively evaluate the historic import flows.
Paragraph 1 of Article 5 of the WTO Agreement provides for that “if a quantitative restriction
is used, such a measure shall not reduce the quantity of imports below the level of a recent period
which shall be the average of imports in the last three representative years”.
Normally, taking into consideration above-mentioned factors, the quota shall be allocated
among the countries or groups of countries in proportion to their share of imports of the product in
question over the last three years.  However Article 14, paragraph 3 of the Law does provide that due
account shall be taken of the factors, which are or may be affecting trade in the product in question.
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