WT/DS206/R
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ANNEX E
Questions and Answers
Contents Page
Annex E-1 Answers of India to Questions of the Panel - First Meeting E-2
Annex E-2 Answers of the United States to Questions of the Panel - First
MeetingE-27
Annex E-3 Answers of Chile to Questions of the Panel E-56
Annex E-4 Answers of the European Community to Questions of the Panel E-59
Annex E-5 Answers of Japan to Questions of the Panel E-61
Annex E-6 Comments of the United States on India's Replies to Questions of
the PanelE-65
Annex E-7 Comments of India on the United States Replies to Questions of
the PanelE-70
Annex E-8 Answers of the United States to Questions of the Panel - Second
MeetingE-86
Annex E-9 Answers of India to Questions of the panel - Second Meeting E-93WT/DS206/R
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ANNEX E-1
ANSWERS OF INDIA TO QUESTIONS OF THE PANEL -
FIRST MEETING
(12 February 2002)
Questions to India
Q19. India claims that the United States viol ated Article 2.4 of the AD Agreement because the
failure to use the US sales data submitted by SAIL resulted in an unfair comparison.  DoesIndia consider that a comparison of normal value based on facts available and export price
based on the US sales data would have been fair  within the meaning of Article 2.4?  Does India
agree that USDOC was entitled to rely on facts available with respect to the determination of
normal value in this case?
Reply
1. The answer to the first question is yes, as suming that the phrase "US sales data" in the
question refers to SAIL's actual submitted US sales data.  As described more fully in the Answer to
Question 20, the comparison undertaken by USDOC in this case was unfair because one of the twoelements of the comparison was determined unfairly,  i.e., USDOC based export price on information
that was not fairly selected from the available options.  A "fair" comparison must be based on the
most accurate information that can be used -- be it from the questionnaire responses submitted by
interested foreign parties, the information in the peti tion, or another source. It is incorrect to argue, as
the United States has argued in this case, that only  information from the petition or only information
from the interested foreign respondents can be used to make a "fair" comparison.  Nothing in the AD
Agreement mandates this artificial "all or nothing" approach.  As India has argued, Annex II,
paragraph 3 directs that "all information which" meets the criteria of that paragraph must be used in
comparison.  Furthermore, the object and purpose of the AD Agreement is to use the most accurate
information available in order to make the fairest comparison possible.
2. The answer to the second question is also yes.  However, India does not agree that USDOC
was entitled to adopt an "adverse inference" ( i.e., rely on adverse  facts available), because an
objective and non-biased investigating authority could not have found that SAIL did not cooperate by
withholding information. See India First Oral Statement at paragraphs 75-80; India's Rebuttal
Submission at paragraphs 90-103.
Q20. Could India elaborate on the link it draws between the Article 2.4 "fair comparison"
requirement and the asserted violation of Arti cle 6.8.  Specifically, does India consider that a
comparison in which one element is determined in violation of some other provision of the AD
Agreement is, ipso facto, unfair in terms of Article 2.4?  Does India consider that this constitutes
a separate violation of the AD Agreement?  For instance, assume a panel were to conclude thatan investigating authority violated some aspect of  Article 2.2 in the calculation of normal value.
Would this, in India's view, necessarily constitute a violation of Article 2.4 as well?
Reply
3. AD Agreement Article 2.4, first sentence, establishes a separate requirement that
investigating authorities make a "fair comparison" "between the export price and normal value".  The
Appellate Body in EC Bed Linens  held that "Article 2.4 sets forth a general obligation to make a 'fairWT/DS206/R
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comparison' between export price and normal value.  This is a general obligation that, in our view,
informs all of Article 2 . . ."1  The Appellate Body in Japan Hot-Rolled commented on Article 2.4 as
follows:
We would also emphasise that, under Article 2.4, the obligation to ensure a "fair
comparison" lies on the  investigating authorities , and not the exporters.  It is those
authorities which, as part of their investigation, are charged with comparing normal
value and export price and determining whether there is dumping of imports.2
4. As the Appellate Body has indicated, Article 2.4 encompasses the requirement thatinvestigating authorities obtain information to ensure  that they correctly discern and then compare the
proper export price with the proper normal value.  As a separate and general obligation, Article 2.4
applies to the actions and decisions taken by investigating authorities that result in a comparisonwhich is "unfair" but which may not be explicitly addressed in detail in the text of the AD Agreement.
Given the wide diversity and creative methodologies that could be used to calculate dumping margins,
it is important to maintain the viability of this  safeguard to ensure that whatever the exact
methodology that may be applied, the margins ultimately are based on a fair comparison.
5. In this case, Article 2.4 was violated because USDOC used the petition’s lowest export price
of $251
3 per ton when it calculated the final dumping margin.  The facts show that this price was
fiction -- it was an offer from a non-affiliated company, it was at a price that was almost $100 per ton
less than the weighted average of SAIL's verified actual US prices,4 it was a price that was $103 per
ton less than the average unit value reflected in the US customs data also included in the petition,5 and
finally, it was a price solely from an offer that never became a sale. (The last point is evident from the
fact that SAIL's complete US sales database shows that no sale at $251 -- or at a price even close to
that low a price -- took place during the period of investigation).6  There is no way that a "fair"
comparison could be made by using this fictitious price when USDOC knew of its fictitious nature.
In sum, the ultimate margin of 72.49 per cent based on the improper application of facts available didnot represent a fair comparison between the "export price and the normal value."
6. Whether a comparison is "fair" depends on the "available" facts  that investigating authorities
may properly take into account under the circumstances and consistent with Article 6.8 and Annex II.
Since India acknowledges in this case that USDOC could properly use facts available for the normal
value side of the dumping comparison, the "fair" comparison for the purposes of AD Agreement
Article 2.4 would be to compare either SAIL's actua l US sales data or the US Customs data in the
petition with the normal value from the petition.  But in no circumstances could a "fair comparison"
be made using the US price of $251 price per ton from the petition.
7. India agrees that in many instances actions resulting in a violation of the provisions of
Articles 2, 5-7 and 9 of the AD Agreement (including  Article 2.2, as suggested by the Panel) may also
result in a violation of the first sentence of Article 2.4.  If the Panel agrees with India that USDOC
improperly refused to use information from foreign respondents meeting the requirements of
Annex II, paragraph 3 and Article 6.8, then, for the reasons described above, it could also conclude
that there was a violation of Article 2.4, first sentence because USDOC did not make a "fair"
comparison between normal value and US price.  Bu t, while there is some overlap between Article 6.8
and the first sentence of Article 2.4, the text of each provision is distinct, and depending on the
                                                     
1 WT/DS141/AB/R, para. 59.
2 WT/DS184/AB/R, para. 178 (emphasis added).
3 Ex. IND-1, at figure 5, page 00040 (Public version).
4 Ex. IND-32 (public version).
5 Ex. IND-8.
6 India Exhibits 8, 31-32; India First Oral Statement at paras. 14-24.WT/DS206/R
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circumstances, a violation (or non-violation) of Article 6.8 does not automatically mean there is a
violation or non-violation of Article 2.4.
8. Moreover, in this case, India's argument regarding Article 2.4, first sentence is not dependent
on the Panel's ruling regarding facts available.  Even if this Panel were to find that the United Stateswas justified in applying "total facts available" (a result to which India would strongly object),
USDOC had a separate  obligation to ensure that the facts used to calculate a dumping margin -- even
those facts from the petition -- result in the most fair comparison possible.  Thus, even in this
alternative scenario, USDOC would have been required to reject the $251 price in favour of the US
customs pricing data in the petition in order to make a fair comparison under Article 2.4, first
sentence.  For this reason, India disagrees with the statement of the United States in its First
Submission that India's Article 2.4 claim is "dependent upon India succeeding on its primary
argument that Commerce acted inconsistently with its WTO obligations when it based its
determination on the facts available . . . ."
7
Q21. India argues that paragraph 5 of Annex II requires that information in a particular
category must be accepted, despite possible flaws, if it can be used without undue difficultiesand if the party providing it has acted to the best  of its ability.  India also asserts that if a
category of information satisfies the three or sometimes four conditions of paragraph 3 of
Annex II, the investigating authorities may not re ject that category of information.  These
requirements do not, however, address the substance or quality of the information in question.
Does India maintain that the investigating authority must, in all cases, base its determination onthe information submitted in these circumstances ?  What if, for instance, information regarding
home market sales is known to be incomplete, but is verifiable, timely submitted, and can be
used with undue difficulties – would this incomplete information have to be used in calculating
the dumping margin?  Going further, what if, upon verification, the information proves to be
incorrect - must it still be used in calculatin g the dumping margin?  What if the information
simply cannot be verified - must it still be used in calculating the dumping margin?  Would
India consider that the completeness or correctnes s or actual verification of the information is
part of the conditions under paragraph 3 of Annex II, or would these be separate or further
requirements?
Reply
9. With respect to the first statement in the qu estion, India directs the attention of the Panel to
India's analysis of Annex II, paragraph 5 that is se t forth in paragraphs 81-86 of its First Submission.
India's position includes the statement that  "[t]hus, if information is not submitted within a reasonable
period, or is not completely verifiable, or is usable only if the investigating authorities must spend
days and weeks of additional work, then paragraph 5 becomes applicable."
10. The answer to the first question -- whether I ndia maintains that the investigating authority
must, in all cases, base its determination on the information meeting the requirements of Annex II,
paragraph 3 -- is yes.  By the use of the term "base its determination" India reads the Panel's question
to mean, include the information at issue within the mix of information that is used in calculating a
dumping margin.  No one piece of information, sta nding alone, can be used as the sole basis for
calculating a dumping margin because it would only represent – at most – one side of the dumping
calculation.  Therefore, "all information which" meets the requirements of Annex II, paragraph 3 must
be used in conjunction with other information in calculating a dumping margin.  But what
investigating authorities cannot do is ignore the submitted information if it meets the fourrequirements of Annex II, paragraph 3.
                                                     
7 First Written Submission of the United States, para. 179.WT/DS206/R
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11. Regarding the question as to whether incomplete home market sales must be used in the
calculation of a dumping margin, the answer would be yes, if it met all four of the requirements of
Annex II, paragraph 3 (including the "undue difficulty" element).  However, if the home market sales
were incomplete, then the gaps in the home market sales could be filled with information from other
"available" facts, including the petition.  Thus, for example, if a respondent submitted information
that satisfied the requirements of Annex II, paragraph 3 regarding sales of 70 per cent of the home
market models during the period of investigation, but no information for the remaining 30 per cent of
models, then the investigating authorities would be required to use the submitted information
regarding the sales of the 70 per cent of home market models, and use facts available for sales of the
remaining models.  Moreover, if the authorities determined that the responding party refused access to
the information that constituted a significant impeding of the investigation, then the authorities could
apply adverse facts available.  Thus, in the exam ple above, the authorities could use the highest
normal value from the petition as facts available for the unreported sales.
12. Regarding the question of what would happen if upon verification, the particular information
on home market sales proves to be incorrect, then the answer is no, the information does not have to
be used.  The reason is that this particular information would not comply with one of the fourconditions of Annex II, paragraph 3 -- i.e., it would not be "verifiable."
13. The Panel asks whether the information must be used if it "simply cannot be verified".  If by
"cannot be verified" the Panel means that during the verification process the actual information at
issue was tested and (1) found to inaccurate and incomplete, (2) there was not information available todemonstrate that the reported information was complete or accurate (such as missing records or
computer data problems), or (3) examination of other source documents (sales invoices, contracts,
bills of lading, letters of credit, etc.) for the category of information (such as export sales or normal
value) revealed significant errors in the inform ation examined, then the answer is that no, the
investigating authorities would not have to use the information in the determination of a dumping
margin.  India directs the attention of the Panel to  its Rebuttal Submission at paragraphs 65-72 where
the terms "verifiability" and "verified" are discussed in detail.
14. With respect to the final question regarding whether India considers that the completeness,
correctness or actual verification of the information is part of the conditions under paragraph 3 of
Annex II or a separate or further requirement, th e answer is that determining whether information is
"verifiable" or is actually "verified" is one of the requirements imposed on administering authoritiesby Annex II, paragraph 3.  India does not understand Annex II, paragraph 3 to establish a separate
requirement that the authorities determine if information is "complete" or "correct".  However, these
concepts are obviously relevant to the determination of the factors that are set out in Annex II,
paragraph 3, including the "verifiability" or actual verification of information.
8  In addition, as India
has explained in its analysis of the term "can be used without undue difficulty", the extent to which
verified and timely produced information regarding a “component” or category of information is
complete and correct may be relevant to the consideration of whether the information can be used
without undue difficulty.9
Q22. Does India dispute the USDOC finding that SAIL failed to act to the best of its ability inrespect to information other than US sales data?  Is it correct to understand that India has not
contested the scope of the information request put to SAIL during the investigation?
                                                     
8 See India Rebuttal Submission at paras. 69-75.
9 See India Rebuttal Submission at paras. 14-27; Answer to Panel's Question 23.WT/DS206/R
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Reply
15. Yes, India does dispute the finding that SAIL did not act to the best of its ability regarding its
cost of production information.   However, this is a claim in the alternative, which the Panel need not
reach for the resolution of this case if it agrees with India that SAIL's US sales data should have beenused in the calculation of the final dumping margin.  Another alternative claim, which the Panel need
not reach under the same assumption,  is India's clai m that SAIL did not refuse access to information
or significantly impede the investigation (i.e., it did not fail to cooperate).  Therefore, there was no
basis for USDOC to use adverse facts in calculating an AD margin.  See India First Oral Statement at
paragraphs 75-80; India Rebuttal Submission at paragraphs 87-100.
Q23. In SAIL's calculations comparing US sales data to "verified" home market sales, what
assurance is there that the home sales data covered  all sales of comparable product, or that cost
data covered all production of the comparable pro duct?  Especially in light of the "significant"
flaws in the home sales and cost data, which SAIL does not dispute allowed USDOC to rely on
facts available.  Isn't the argument here, over which facts available to use, which does not
appear to be the subject of a claim in this di spute?  Does India consider that the comparison
SAIL proposed would not have posed "undue difficulties" for USDOC?
Reply
16. There seems to be some confusion underlying this question.  India has conceded that there
were “significant” flaws in SAIL’s submitted home market sales and cost databases, and has not
argued that SAIL’s home market sales data were “verified” successfully by USDOC.  Nor is India
arguing that SAIL’s submitted home market sales data be used to calculate its dumping margins.
17. India does agree that the “argument here” is “over which facts available to use”, in particular,
whether SAIL’s submitted US data were "available" facts that should have been used by USDOC.
India’s position is that USDOC violated Article  2.4, Article 6.8 and Annex II, paragraph 3 of the
Agreement by rejecting SAIL’s submitted US sales data, which met the conditions of Annex II,
paragraph 3, in favour of a price offer in the petition, and by calculating the final margin in an unfair
manner by using export price information that was grossly inaccurate.  Thus, India respectfully
submits that, contrary to the statement in this question, this issue is very much “the subject of a claim
in this dispute”.
178. With respect to the last question, India directs the Panel to its First Submission, its First Oral
Statement, the two affidavits of Mr. Hayes, and paragraphs 48 to 67 of its  Rebuttal Submission,
which all demonstrate that the use of the US sales data would not have posed “undue difficulties” for
USDOC to implement.  In fact, India’s actual US sales data could have been combined with the NVinformation in the petition in a number of ways, some of which are very similar to – and hence, as
easy to implement – as that adopted by USDOC in impermissibly applying adverse total facts
available.
Q24. Section 782(d) of the Tariff Act of 1930, as amended, specifies that in the case of
deficient submissions, the USDOC "may, subject to subsection (e), disregard all or part of the
original and subsequent responses" (emphasis added). How does India justify the contention
that the US law required USDOC to reject US sales data and rely on facts available in violation
of the AD Agreement, in light of this statutory language, US case law permitting use of partial
facts available, USDOC decisions relying on part ial facts available, the arguments presented in
SAIL's USCIT brief, and India's acknowledgement that that statute "could" be interpreted
otherwise?WT/DS206/R
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Reply
19. There are two aspects to this question – one focusing on the permissive verb (“may”) in
section 782(d), and the other focusing on the application “partial” as opposed to “total” facts
available.  India acknowledges the obvious fact that the text of 782(d) uses the permissive verb “may”in authorizing USDOC to “disregard all or part of the original and subsequent responses”.  However,
as discussed in the First Meeting, USDOC and the US Court of International Trade (USCIT) have
interpreted that verb in a mandatory sense – i.e., as if the word “may” were “shall”.  India emphasizes
that this interpretation is not a matter of administrative practice, whereby USDOC could have stated
that, although applying section 782(d) in a particular case to disregard a respondent’s data, it still
recognized that it “may”, in other situations, apply section 782(d) not to disregard the respondent’s
data.  To the contrary, the USDOC and USCIT decisions show that the agency and the Court haveconcluded that USDOC must apply section 782(d) to disregard a respondent’s data once it determines
that the respondent has failed to meet all the criteria of section 782(e).
20. It should be recalled that section 782(e) establishes conditions for mandatory acceptance of a
respondent’s submitted data – i.e., if the criteria listed in that section are satisfied, the data cannot bedisregarded. But if the converse occurs – i.e., not all of the criteria in section 782(e) are satisfied – that
should only mean that USDOC is not required to accept the respondent’s submitted data.  It should
not also mean that USDOC is required to reject the data, precisely because failure to meet the
requirements of section 782(e) returns a party to the ambit of section 782(d), which says “may”.
Nonetheless, USDOC and the USCIT have interprete d section 782(d) as granting no further flexibility
to USDOC to accept data once it has been found not to satisfy the conditions of section 782(e).  In
that situation, USDOC “must” – not “may” – disregard the submitted information.
21. The cases found in India’s Exhibits 28 and 29, discussed during the First Meeting,
demonstrate this interpretation by USDOC and th e USCIT. For example, the first USCIT decision
included in India Exhibit 29, Allegheny-Ludlum Corp. v. United States , noted that section 776(a)
requires USDOC to apply facts available in four situations, and it noted that some of those situations
existed in that case.  The respondent raised the issue of the application of section 782(d), but the Court
rejected that argument because several of the criteria in 782(e) were not satisfied.  It stated that “its
[section 782(d)’s] remedial provisions are not triggered unless the respondent has met all of the five
enumerated criteria [of section 782(e)].  Failure to fulfil any one of these criteria renders section
[782(d)] inapplicable”.
10  In other words, failure to satisfy all the criteria of section 782(e) leads to
automatic failure of section 782(d), which, in turn, leads to the application of section 776(a) with its
mandatory requirement to adopt facts available.
22. Turning to USDOC interpretation, in Roller Chain, Other Than Bicycle, From Japan  (which
is included in India Exhibit 28), USDOC clearly tr eated section 782(d) as mandatory, stating, “Given
that Kaga [a respondent] failed to provide the necessary information in the form and manner
requested, even after being provided several opportunities to cure these deficiencies, the Department
is required , under section 782(d), to apply, subject to section 782(e), facts otherwise available.”11
USDOC then went on to find that the respondent failed to satisfy several of the criteria under section
782(e), and it concluded that “the application of section 782(e) of the Act does not overcome section776(a)’s direction  to use facts otherwise available for Kaga’s submissions.”
12  USDOC therefore
applied total facts available for the margins for this respondent.  In other words, once USDOC
determined that the respondent’s data failed to satisfy all the conditions for mandatory acceptance
under section 782(e), USDOC did not then pause at section 782(d), to determine how it should
                                                     
10 Allegheny-Ludlum Corp. v. United States , Slip Op. 00-170, at 26, 31 (28 Dec. 2000) (Ex. IND-29).
11 Roller Chain, Other Than Bicycle,  From Japan, Final Results and Partial Rescission of Anti-
Dumping Duty Administrative Review , 63 Fed. Reg. 63671, 63674 (16 Nov. 1998) (emphasis added) (Ex. IND-
28).
12  Id. (emphasis added).WT/DS206/R
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exercise the discretion it was granted by the statutory phrase “may disregard”.  To the contrary, it
immediately concluded that it must apply section 776(a), which imposes a mandatory requirement to
disregard the submitted data.
23. Likewise, in Certain Cut-to-Length Carbon Steel Plate from Sweden , USDOC concluded that
the respondent failed to meet the requirements of both subsections (e) and (d).  USDOC did not then
say that subsection (d) provides it with discretion to accept the information anyway – to the contrary,
it reverted to the mandatory language in section 776(a), stating simply that “[f]or the foregoing
reasons, the Department has determined that, insofar as [the respondent’s] cost data could not be
verified, section 776(a) requires  the Department to use the facts available with respect to this data.”13
In another example, Elemental Sulphur from Canada , USDOC set out the text of section 782(d), but it
then concluded that the respondent’s failure to provide certain cost information that it was reviewingunder section 782(d) “constitutes a withholding of information within the meaning of 776(a)(2)(A)” –
not 782(d).
14  In other words, USDOC leapt over the question whether the criteria of section 782(d)
had been satisfied, and whether it should exercise discretion under that provision to accept the
submitted data anyway.  Instead, it went directly to section 776(a), with its mandatory “shall”
language.
24. Finally, USDOC’s Final Determination in the current case provides another clear example of
its mandatory interpretation of th e statute.  USDOC quoted and paraphrased the text of the relevant
statutory provisions, including the word “may” in section 782(d).  However, after enumerating the
ways in which SAIL’s submitted data failed to satisfy section 782(e), USDOC did not then return tosection 782(d) to decide how to exercise its discretion. Rather, it simply stated that “[a]s a result [of
SAIL’s failure to satisfy section 782(e)], the Department does not have an adequate basis upon which
to conduct its analysis to determine the dumping margin and must  resort to facts available pursuant to
section 776(a)(2) of the Act.”
15
25. During the First Meeting, counsel for the United States mentioned one USCIT decision, NSK
Ltd. v. United States , Slip Op. 2001-69, as a counter-example.  However, the relevant portion of that
decision (pages 84-94) concerns only the appli cation of section 782(e), because the respondent
involved in that case satisfied the five criteria of that statute, thus triggering the mandatory acceptance
of its submitted data.  The issue of the application of section 782(d) (whether mandatory or
discretionary) after a failure to satisfy the criteria of section 782(e) never arose in NSK.
26. Turning to the second aspect of this question – whether the statute mandates the imposition of
partial as opposed to total facts available – as India explained in its First Submission, USDOC
interprets the word “information” in sections 776(a) and 782(e) as applying to “all information”
submitted.  Indeed, USDOC has repeatedly noted that its consistent practice is to reject a respondent’s
submitted data “in toto” when the data regarding one of the “essential components” is unusable.Linked inexorably with this "practice" is USDOC's consistent interpretation of sections 782(d),
782(e), and 776(a) as requiring it to apply total facts available where information regarding what it
terms an "essential component" is not availabl e from the respondent.  (India addresses USDOC’s
application of the long-standing total facts available practice in the responses to Questions 35 and 36
below.)
27. Furthermore, the Panel’s question here appears to suggest that India’s position on the
mandatory nature of the requirement imposed by the statute is contrary to decisions by the USCIT,
and SAIL’s arguments in its briefs to the USCIT.  However, none of the USCIT decisions on “partial
                                                     
13 Certain Cut-to-Length Carbon Steel Plate From Sweden: Preliminary Results of Anti-Dumping Duty
Administrative Review , 61 Fed. Reg. 51898, 51899 (4 Oct. 1996) (emphasis added) (Ex. IND-28).
14 Elemental Sulphur From Canada: Preliminary Results of Anti-Dumping Duty Administrative
Review , 62 Fed. Reg. 969, 970 (7 Jan. 1997) (Ex. IND-28).
15 Final Determination, Ex. IND-17, at 73127 (emphasis added).WT/DS206/R
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facts available” have required USDOC to accept data on one of a respondent’s “essential
components” when USDOC has rejected data on other “essential components.” To the contrary, as is
evident from the USCIT’s decision in this very case, the Court has generally accepted USDOC’s
arguments against using “partial facts available” when one of the essential components is unusable.
As the USCIT stated in SAIL’s appeal of USDOC’s  Final Determination, “[t]he Department’s refusal
to accept SAIL’s sales data is also consistent with its long standing practice of limiting the use of
partial facts available. More specifically, the Department only uses partial facts available to ‘fill gaps’
in the record. . . .”16   The Court went on to describe another case in which it had “upheld the
Department’s decision to ‘reject a respondent’s submitted information in toto  when flawed and
unverifiable . . . data renders all price-to-price comparisons impossible.’ . . .  Similarly, here the
Department’s legal interpretation is reasonable”17 – i.e., the interpretation to reject SAIL’s US sales
data because of flaws in other databases.  And as for SAIL’s own argumentation before the USCIT,
although its counsel was ethically bound to zealously represent the company’s interests − including the
argument that “partial facts available” could include the acceptance of SAIL’s US sales database in
this case − clearly that was an uphill battle that was lost when confronted by USCIT’s recitation of its
own and USDOC’s precedents.
28. As a final point of clarification, India stresses that as set forth in its First Submission, its First
Oral Statement, and in the answer to Questio n 30, infra, there is an entirely separate per se (as such)
claim regarding section 782(e) that does not involve section 782(d).  This claim is that section 782(e)sets up too high a standard, by imposing additional criteria that do not exist in the Agreement, before
the mandatory acceptance of the submitted data is triggered.
Q25. The heading of India's argument regarding Article 15 asserts that USDOC violated
Article 15 by "failing to give special regard to the situation of India as a developing countrywhen it applied facts available in relation to SAIL’s US sales data." However, the body of the
argument related to the alleged failure of USDOC to "explore possibilities of constructive
remedies" as required by the second sentence of Article 15.  Is India asserting a violation of the
first sentence of Article 15, and if so, could India please explain the legal argument in support of
its claim?  Could India elaborate on its interpretation of the first sentence of Article 15?  InIndia's view, what obligations does it impose on a developed country, and when must those
obligations be satisfied?  Could India expand on its assertion and explain how, specifically, the
USDOC actions in this case constitute a violation of the first sentence of Article 15?
Reply
29. India is asserting an independent claim for a violation of the first sentence of AD Agreement
Article 15.
Legal interpretation of First Sentence of Article 15:
30. The obligation imposed by the first sentence of Article 15 is mandatory because it provides
that "special regard must be given. . ."  It does not say "should be given" or "must be considered”.
The operative action required from investigating authorities is to provide "special regard" "when
considering the application of anti-dumping measures".  The inclusion of the clause "when
considering the application of anti-dumping measures" indicates that the developed country
investigating authority must take action after collecting information and in deciding whichinformation to use and how to use it to calculate the margins. Finally, the use of the term "special
situation" highlights the needs of developing countries and appears to be similar to the concept of
"essential interests" embodied in the second sentence of Article 15.
                                                     
16 SAIL v. United States , Slip Op. 01-60, at 12 (22 May 2001) (citation omitted) (Ex. IND-20).
17 Id. at 13 (quoting Heveafil Sdn. Bhd. v. United States , Slip Op. 01-22, at 9 (27 Feb. 2001)).WT/DS206/R
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31. Exactly what constitutes sufficient "special regard" will depend on the facts and
circumstances of each case.  The requirement that developed country authorities give "special regard"
implies that before applying a dumping margin they must give some extra consideration to the
arguments and special situation of respondents in developing countries.  It may include exercising any
available discretion granted by statutory or regulatory provisions to use information provided byrespondents in developing country Members.  It may require making a distinction in regulations or
practice between respondents based in developing and developed country Members.  Finally, it could
also include exercising special care in choosing which facts to use even when facts available must be
used, and in an example relevant to the current case, it may mean taking additional steps to
corroborate information in the petition that would be used as facts available.  In short, the notion of
"special regard" requires an enhanced, conscious application of equity and fairness, focusing on
applying the applicable rules to the maximum extent possible to facilitate the "special situation" ofdeveloping countries.
32. But it is not enough for an investigating author ity to maintain an awareness of special regard
during an investigation.  The authorities must also articulate in some manner in the final
determination how they exercised such special rega rd.  Otherwise, it would be impossible for WTO
Members and WTO panels to judge whether the obligation in the first sentence of Article 15 has been
discharged.
Argument in support of India's claim under the First Sentence of Article 15:
33. There were several key points late in the investigation in which USDOC was required to give
“special regard” to SAIL's "special situation."  In particular, "special regard" should have been given
when USDOC was faced with a choice in calculating the margin to be applied in the final
determination.  As the Panel knows, USDOC could ha ve used SAIL's verified (and verifiable), timely
produced US sales database  instead of  the single offer price of $251 in the petition.  Before it madethis choice, USDOC was presented with considerable arguments by SAIL's counsel in the case and
rebuttal briefs filed on 12 and 17 November 1999, respectively, and again at the hearing held by
USDOC on 18 November  that it should use the company’s actual submitted US sales data.
18  SAIL's
counsel argued that because SAIL's US database was complete, accurate, and verified,  it would be
arbitrary and capricious for USDOC to discard it and use information that it knew to be incorrect
instead.  But there is no evidence in the Final Determination that in deciding to use the $251 price
offer in the petition -- or in making any other decision regarding the application of anti-dumpingmeasures -- USDOC ever gave any "special regard" to SAIL’s “special situation.”  This is not
surprising since nothing in the US statutes, regulations or procedures implementing the AD
Agreement grant any specific authority to USDOC to give any "special regard" to developing country
respondents in considering the application of anti-dumping measures.  The statute and regulations
simply authorize USDOC to apply a "one size fits all" methodology.
34. How is the Panel to judge whether the United States provided sufficient "special regard" to
SAIL?  India would suggest that at a minimum, the Panel must examine the Final Determination to
see if there is any evidence that USDOC indicated how it took the special situation of SAIL into
account when considering the application of anti-dumping measures.  At a minimum, the FinalDetermination should state the steps USDOC considered in deciding what information to use and how
that choice was -- or was not – affected by the fact that SAIL was a developing country respondent.
For example, USDOC could have considered exercising, for the first time in its history, the apparent
discretion existing on the face of section 782(d) to accept SAIL's US sales data despite the absence of
usable information in the cost and home market databases.  Yet, the Final Determination does notreflect any such reconsideration of USDOC's long- standing interpretation and practice of applying
sections 782(d) and 782(e) in a mandatory fashion -- regardless of the developmental status of the
                                                     
18 Ex. IND-14, IND-15.WT/DS206/R
Page E-11
responding company.  In fact, the Final Determination includes no description whatsoever of the
required "special regard" to SAIL.
35. India notes that the United States has argued that it provided additional time during the
investigation to SAIL to respond to its questionnair es and that this evidenced its concern for SAIL's
status as a developing country company.  But most of these so-called extensions of time were
burdened with yet more requests for information.19  And in one instance, USDOC rejected three of
SAIL’s submissions as untimely – two of which were late by one day – which hardly demonstrates
that USDOC was applying a “special regard” for the situation of a struggling developing country
respondent.20  Nor do such extensions of time constitute providing "special regard" when "considering
the application of anti-dumping measures".  This can only be done after the information is collected
and processed.  It is at this later stage when the margins are calculated and a variety of different factsand methodologies can be used to calculate the ultimate margin that the special regard must be given.
At this crucial later stage of the process, USDOC provided no such special regard to SAIL in the
current case.  In fact, it knowingly used fiction in place of reality in choosing the  $251 price offer
from the petition to calculate the final dumping margin.
36. Finally, the United States correctly notes that India previously asserted that the first sentence
of Article 15 does not impose any specific legal obligation on developed country Members.
21  India
still takes the position that there are no specific legal requirements for specific action set out in the
first sentence of Article 15.  However, India has reflected on the mandatory nature of the first
sentence and is now of the view that this mandato ry provision does create a general obligation, the
precise parameters of which are to be determined based on the facts and circumstances of the
particular case.
Q26. Does India agree with the contention of th e United States that the respondent ultimately
controls the information necessary to a dumping calculation?  How does India respond to thecontention that to allow the respondent to cont rol the information gathering process by deciding
which information (or category of information) it will provide, and requiring that this
information be accepted if it is adequate under paragraph 3 Annex II regardless of what flaws
there may be with other information, gives th e respondent control over the dumping calculation
and thus opens the possibility for manipulation of the results?
Reply
37. India agrees, of course, that the respondent possesses the data from which the most accurate
dumping margins can be calculated.  India does not agree however, that the respondent in any way has
“control over the dumping calculation” or can “manipulate” the results in the negative sense
suggested by the United States.  It would be more correct to say that the investigating authoritycontrols the dumping margin calculations, in that it decides (within the limits imposed by the AD
Agreement) what data to use and actually performs the calculation.  This information can, in
appropriate situations, include the selective, non-neutral information included within the petition.  In
India’s view, the issue is not an abstract one of “control,” but whether the Agreement contains
                                                     
19 See, e.g., Ex. US-8 (supplemental questionnaire dated 27 May 1999); Ex. US-9 (letter dated
11 June 1999, granting extension of time and asking additional questions); Ex. US-11 (memo to USDOC filedated 7 July 1999, noting “deficiencies” in SAIL’s electronic database and requests for “new files andsupporting format sheets”); Ex. US-20 (letter dated 12 July 1999 from USDOC to counsel for SAIL offeringopportunity to resubmit electronic databases and asking additional questions on cost data); Ex. US-12
(additional supplemental questionnaire dated 7 July 1999); Ex. US-17 (additional supplemental questionnaire
dated 2 August 1999); Ex. US-18 (additional suppl emental questionnaire dated 3 August 1999).
20 See USDOC letter to SAIL rejecting submissions (7 July 1999) (Ex. IND-9).
21 First Written Submission of the United States, para. 182.WT/DS206/R
Page E-12
adequate procedures for collection and use of information to determine dumping margins, and
whether those procedures have been properly applied in a given case.
38. The purpose of an anti-dumping investigation is to establish the most accurate possible
dumping margin, not to achieve a particular outcome.  Moreover, the Agreement contains detailedprocedures for collecting and using information to establish that margin. This is why Article 9.3
stipulates that the amount of a dumping margin may not exceed a margin calculated in accordance
with Article 2.  This is also why Article 6 provides how evidence is to be collected and used in
determining a dumping margin under Article 2, and why Article 6.8 and Annex II establish
procedures to be followed in the event that a respondent does not or cannot provide information
requested.  In addition, Article 2.4, first sentence mandates that a “fair comparison” must be made
between normal value and export price.  India co nsiders that these provisions govern how dumping
margins are to be established in every possible situation in which either no or incomplete information
is received from a respondent.  Thus, if the procedures contained in the Agreement are followed
properly, there should be no issue as to which party “controls” the process or “manipulates” the
outcome.  Moreover, India considers that these pr ovisions establish a strong preference against
rejecting information submitted by a respondent even if that information is incomplete.
39. Nevertheless, the United States contends that the investigating authority must have sufficient
authority to take additional action to assert “control over the process” to its own satisfaction and to
avoid what it considers as “manipulation” of the process by the respondent.  Before discussing how
these concerns affect the situation referred to in the question, where some of the information isadequate and the rest is flawed, it is instructive to consider how the United States’ concerns affect the
outcome under the Agreement in situations in which there is much less cooperation or accurate data
available.
40. Even in the most extreme possible case of total non-cooperation, the United States’ concerns
regarding “manipulation” have no basis in the language and operation of the Agreement.  Consider a
situation where a respondent receives a petition and a questionnaire from the USDOC and decides not
to respond to the questionnaire or participate further in the investigation.  While the United States
would suggest that a respondent is thereby “manipulating” the process, the respondent’s reaction may
be an entirely appropriate, reasonable business decision.  A respondent simply may not be able to bear
the considerable legal and administrative costs and other burdens of participating in the investigation,
or may be incapable of assembling or translating th e necessary records.  This situation clearly permits
the investigating authority to use “the facts available” for every aspect of establishing a margin.
Even in this situation, however, the investigating authority does not have unlimited discretion.  The
margin must still be based on facts that are permissibly "available", established using “special
circumspection” and, where “practical,” informati on checked against independent sources.  Moreover,
while the Agreement, in Annex II, paragraph 7, notes that this situation “ could ” result in a less
favourable outcome for the respondent, the nature and extent of this outcome is still dependent on
facts established using special circumspection.  Thus, even in the most extreme situation of a
respondent failing to provide any data, the Agreem ent lays down procedures that must be carefully
followed, and does not leave open issues as to who “controls” the process or how outcomes are
“manipulated”.  More importantly, the Agreement applies these procedures and reaches a possiblyadverse outcome without needing to make subjective judgements as to whether a respondent is
“manipulating” the process.
41. Moreover, the United States’ approach to ensuring that it has sufficient control over the
process would lead to the establishment of margins not supported by the evidence.  In a case where arespondent decides to provide at least some info rmation, the Agreement already provides more than
sufficient incentives to encourage cooperation withou t permitting an investigating authority to discard
information provided by respondents that meets the criteria of Annex II, paragraph 3 and without
undermining the goal of calculating accurate margins based on facts.  India refers the Panel to the
discussion at paragraphs 47-61 of its Oral Statement at the First Meeting of the Panel, in which IndiaWT/DS206/R
Page E-13
explained that the ability of the investigation authority to rely on information supplied by the domestic
industry for even part of the margin calculation creates the strongest possible incentive for a
respondent to comply with the authority’s data requests.  India noted therein that the United States
informed the panel in the Japan Hot-Rolled  dispute that “it is generally understood that applicants will
document the highest degree of dumping that the available evidence will support”.  A respondentproviding some information knows, therefore, that  any information that it does not provide may be
replaced by “the highest degree of dumping that the available evidence will support”.  This is surely
sufficient incentive to cooperate.  Where a respondent submits some data and invites the use of the
“highest degree” of dumping in place of the remaining data, the respondent can hardly be said to
control the calculation or manipulate the outcome.
42. Indeed, turning to the facts of this case, SAIL was so desperate to avoid the application of
facts available regarding its cost of production that it repeatedly strove to satisfy USDOC’s data
requests and supplemental questionnaires, and it even submitted a totally revised cost database on the
first day of verification.  It did this because it knew that the legally permissible alternative was for
USDOC to use facts available in the petition – the “highest degree of dumping” – to establish its
constructed value.  SAIL's inability to provide this  information in a timely fashion resulted in the
application of much higher margins than would have resulted if SAIL's revised cost database had been
used.
22  It is hard to see this extraordinary effort to get the cost data “right” as evidence that SAIL had
control over or was somehow manipulating the process (or failed to cooperate).
43. India notes also that to the extent that the Agreement must be interpreted as creating or
requiring incentives to participation by respondents in an investigation, in practical terms the
United States’ position creates as many negative as positive incentives.  The United States’ position is
that it may use total facts available, which may be adverse, even in situations where respondents make
extensive efforts to cooperate and indeed succeed in providing much usable data.  If respondents
know that if they try but despite their best efforts fail to submit entirely accurate or usable data, theconsequences will be no different than if the respondent made no effort at all to respond, then the
incentive is clearly for the respondent to save its time and money and not respond.
44. For these reasons, India considers that the Agreement provides adequate, objective procedures
to determine objective margins based on facts, even in situations where respondents either provide no
information at all or selectively provide certain information, without giving rise to any concerns
regarding subjective issues of control or manipulation.
45. In any event, this case is neither one where the respondent failed to respond at all nor one
where the respondent tried, in the United States’ phrase, to “provide only that select information
which would not have negative consequences for them”.  SAIL clearly tried very hard to provide
complete and accurate responses to all sections of the USDOC’s questionnaires and to “pass” allaspects of the USDOC’s verification.  SAIL did not  deliberately attempt to submit inaccurate or
incomplete data or otherwise “control” or “manipulate” the process.  As a practical matter, therefore,
it is not clear what relevance the United States’ concerns about “control” or “manipulation” have to
this case.  Even if the Agreement permits the application of adverse facts available where the
investigating authority has reason to believe that the respondent “manipulated” the data, there is nobasis for such a finding here.  SAIL’s dumping margin therefore should not be affected by concerns
regarding the possible manipulation of data by other respondents in other cases.
Q27. It is the Panel's understanding that US law does not provide for the imposition of a
lesser duty.  In this circumstance, does India consider that the US was obliged to explore thepossibility of imposing a lesser duty under Article 15?
Reply
                                                     
22 SAIL’s case brief to the USDOC, at 13 (Ex. IND-14).WT/DS206/R
Page E-14
46. The Panel is correct that the US anti-dumping law does not provide for the imposition of a
“lesser duty” than that calculated as the “full margin of dumping”, in the language of Article 9.1.
Nevertheless, India believes that Article 15 requires the United States to at least consider the
possibility of a lesser duty remedy for developing countries.  Article 15 expressly provides that"possibilities of constructive remedies shall  be explored before anti-dumping duties are applied".  The
panel in EC Bed Linens stated that "imposition of a lesser duty, or a price undertaking would
constitute 'constructive remedies' within the meaning of Article 15".
23  AD Agreement Article 8.3
requires authorities to inform the exporter of the reasons why the price undertaking has not been
accepted.  Moreover, the United States was required, pursuant to Article 18.4 of the AD Agreement,
to "take all necessary steps, of a general or particular character, to ensure, not later than the date of
entry into force of the WTO Agreement for it [1 January 1995] the conformity of its laws, regulationsand administrative procedures with the provisions of this Agreement as they may apply for the
Member in question".
47. There can be no doubt that a lesser duty is a “constructive remedy”, as found by the Bed
Linens panel.  Nor is there any doubt that Article 15 applies to all WTO members.  Therefore, in order
to meet its obligations under Articles 15 and 18.4, the United States was required to have legislation
that gave authority to USDOC to engage in the exploration of a lesser duty prior to the imposition of
anti-dumping duties with developing countries.  Any other reading of Articles 15 and 18.4 would
permit a Member to avoid its responsibilities under Article 15 to explore all constructive remedies
simply because it refused to enact the necessary laws, regulations or administrative procedures.  Sucha failure to enact legislation represents a nullification and impairment to the rights of India and to
Indian companies that are entitled to have price undertakings explored in negotiations with USDOC.
Q28. Could India please explain why it considers the US sales data to be "unrelated" to the
rest of the data in this case?  Would India consid er that, in every case, the data on (a) the prices
of the subject merchandise in the domestic ma rket of the exporting country, (b) the export
prices of the subject merchandise, (c) the costs of production, and (d) constructed value, are
separate and distinct categories of information?  Would India consider that if an exporter
provides information on any one or more of these elements that is verifiable, timely provided,
and where applicable in the computer language or medium requested, that information must be
used in calculating a dumping margin for the exporter providing the information? Would
India's answer to the previous question be affected by the extent to which information on otherelements is not verifiable, or not timely provided, or not in the computer language or medium
requested?  That is, does India see any possibility of a "global" perspective on the decision
whether information can be used without undue difficulties in calculating the dumping margin?
Reply
48. India considers the US sales data to be unrelated to the rest of the data in this case for a
number of reasons.  First, SAIL recognized and treated its export and domestic market sales as a
separate area of commercial activity, as demonstrated by the facts set forth in the verification reports
that SAIL maintains separate sales offices and personnel, separate records, and distinct channels ofdistribution for the export sales, as opposed to their home market sales and cost of production.
Financial and accounting records for the export and domestic markets were also maintained
separately, because export transactions involve currency conversion, which is not relevant for home
market sales.  Indeed, USDOC’s verification report describes the differences in processing and
recording of US sales and home market sales.  The report highlights the very centralized nature ofSAIL’s export contracts, including those involving the United States.  Export sales were transacted by
the International Trade Division in New Delhi, and transferred to the Transport and Shipping office in
                                                     
23 European Communities - Anti-Dumping Duties on Imports of Cotton-Type Bed Linens from India ,
WT/DS141/R at para. 6.229.   WT/DS206/R
Page E-15
Calcutta for all aspects of execution, from cutting production work orders to invoicing and billing to
receipt of payments.  All US sales were shipped fr om one plant through one port (Verification Report
at pages 8-9).  Home market sales, on the other hand, were characterised as very decentralized in all
phases of the sales process.  Sales could be contracted and recorded by one of many branch offices, or
they could be contracted by the production plants and recorded by a branch office.  Customers couldhave merchandise shipped from plants, or could pick-up purchases directly from the stockyards.  Even
more distinct is SAIL's cost databases, which involve separate cost accounting systems, and are based
at the firm’s production facilities (plants), rather than its sales offices.  Each production facility
produced its own financial statement based on its distinct cost records.  Plants generally transferred
the recording and processing of sales to branch sales offices in situations where sales were contracted
directly by a plant. (Verification Report at pages 7, 9).  These facts involving SAIL are not atypical.
Many companies worldwide similarly maintain separate information for export sales, home marketsales and cost of production data.
49. This separation among the export sales, home market sales, and COP/CV is recognized by
USDOC itself, which, in the Final Determination in this case, as in many others, has identified these
areas as four separate – not a single unified –  “essential components” of a respondent’s data.  Thedistinction is also recognized in USDOC’s questionnaires, which routinely are subdivided into
separate sections for US sales, home market sales, and COP/CV.  In fact, USDOC’s original
questionnaire and its supplemental questionnaires were distinctly organized into sections for home
market sales, US sales, and costs of production and constructed value.  The Table of Contents clearly
defines the separation of data for the entire course of the investigation: Section B is Sales in the HomeMarket; Section C is Sales to the United States; Section D is Cost of Production and Constructed
Value.  Furthermore, the Import Administration’s Anti.Dumping Manual, a training and operating
guide for use within USDOC, also makes a clear di stinction between the purposes, acquisition, and
analysis of home market sales data, US sales data, and cost of production and constructed value
data.
24  More fundamentally, the US anti-dumping law itself has separate provisions defining and
describing the calculation of US price and NV.25
50. For these reasons, India submits, in response to the second question, that, barring unusual
circumstances, the four so-called “essential components” are indeed separate and distinct categories of
information.
51. The answer to the third question is yes, information meeting the conditions of Annex II,
paragraph 3 must be taken into account together with other usable information in calculating a final
dumping margin.  India refers the Panel to pa ragraphs 50-90 and 91-113 of its First Submission,
paragraphs 31-61 of its First Oral Statement, Answers to Questions 19-21, 26, and paragraphs 14-27
of its Rebuttal Submission for further argumentation supporting this conclusion.
52. In response to the fourth question, India submits that the text-based requirement of Annex II,
paragraph 3 requires authorities to use information that meets the four conditions, and that this
requirement is not impacted by the extent to which other information is not verifiable, timely
produced or in the proper computer language. India assumes in this answer that the particular
information referred to by the Panel met the four conditions of annex II, paragraph 3.
53. Another related issue is whether a verification failure in one component of information can be
attributed to the verifiability of information in another component of information.  As India has
argued in Section V.C of its Rebuttal Submission, it was not appropriate for USDOC to conclude that
the admitted verification problems in the cost and home market sales databases infected theverifiability of SAIL's US sales database. USDOC's  verification report repeatedly found that SAIL's
                                                     
24 Relevant portions of this Manual are attached as Ex. IND-37.
25 See section 772 of the Trade Act of 1930 as amended, 19 U.S.C. § 1677a (export price and
constructed export price); section 773 of the Trade Act of 1930 as amended, 19 U.S.C. § 1677b (normal value).WT/DS206/R
Page E-16
US sales data was verifiable, i.e., repeated audits of that information resulted in the findings that "we
noted no discrepancies".  Yet, in the verification "failure" memorandum, USDOC clearly imputed the
admitted problems in SAIL's home market and cost databases to the SAIL's US sales data.  This
"total" verification "failure" for all of SAIL's data led naturally to the application of "total" facts
available.  No objective and non-biased investigating authority could have made such a finding basedon the record of the investigation.  India believes that given the separation of databases maintained by
many companies (including SAIL), it would be diff icult for a verification failure in one category of
information to "spill over" into another category resulting in a finding of "total" verification failure,
particularly where the information at issue was in fact found to be verifiable.  See India's Rebuttal
Submission, paras. 82-86.
54. Regarding the final question as to whether there is a "global" perspective on whether
information can be used without undue difficulty, India's answer is no.  As India has argued
repeatedly, the term "all information which . . . can be used without undue difficulty" does not mean,
as the United States argues, the totality of the information submitted by a respondent.  Rather, it
involves particular pieces or categories of information that  must be examined separately by
investigating officials to determine on a case-by-case process whether they can be used, together withother available information, in calculating a dumping  margin.  In addition, India would direct the
Panel to paragraphs 11 to 24 of its Rebuttal Submission where it sets forth in detail the type of factors
it believes should be considered in determining whether a piece of information that is timely produced
and verifiable can be "used without undue difficulty".  There may be relatively unusual instances in
which a piece of information is simply so minor in relation to a larger category of information that itcould only be used with undue difficulty.  This would have to be determined on a case-by-case basis.
But that situation is clearly not presented by the facts of the present case.  India notes that the
United States reads such a global perspective into section 782(e)(3) by adding the element "the
information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable
determination".  But as India has argued previously, this language is not found -- and cannot bepermissibly implied -- in the text of Annex II, paragraph 3 or Article 6.8.
Q29. Is it correct to understand that, in India's view, the fact that there is no or unverifiable
information concerning the cost component of the US sales has no effect on the verifiability or
reliability of the US sales price data that was pr ovided?  Does India consider that it may in some
circumstances be the case that the lack of some  aspect of the requested information renders the
entire body of data to which that aspect pertains unreliable?
Reply
55. The answer to the first question is yes.  India’s understanding of this question is that by “cost
component of the US sales”, the Panel is referring to the variable cost of manufacture and total cost ofmanufacture data that were reported in the VCOMU and TCOMU fields of SAIL’s US sales database,
submitted as Ex. IND-8.  This absence of this information had no impact on the verifiability or
reliability of SAIL's US sales data for the following reasons:
56. In its normal course of business SAIL’s records regarding its costs of production are
completely segregated from the records to document sales revenues and expenses.  The USDOC’s
verification report demonstrates that the company’s full cost data, which were the ultimate basis for
deriving the VCOMU and TCOMU information that was copied to the US sales database, are
maintained as separate databases in its production facilities in India. USDOC’s cost verification was
conducted at SAIL’s BSP plant in Bhilai, India, the RSP plant in Rourkela, India, and its Raw
Materials Division in Calcutta.  However, the introduction to the Sales Verification Report states that
the sales verification was held at different locations – i.e., at various branch offices “including
New Delhi, India, …Calcutta, India, …and Visakhapatnam, India”.
26  That report examined no
                                                     
26  USDOC, SAIL’s Sales Verification Report at 1 (Ex. IND-13).WT/DS206/R
Page E-17
element of the cost of production.  Furthermore, the cost databases have nothing to do with the US
sales data that were maintained and reported in a completely separate fashion by SAIL.  As described
above, the manner in which USDOC collects, verifies, and analyzes data clearly establishes a
distinction between the “four essential components” -- home market sales data, US sales data, and
costs of production and constructed value data.  Indeed, the calculation of the US price of importedmerchandise is not affected by an aspect of cost.  By statute, by regulation, and by practice the
Department always makes adjustments for differences in physical characteristics to normal value.
27  In
such circumstances a cost is associated with US me rchandise so that if it is matched to non-identical
home market merchandise, an adjustment to normal value can be made, but in no instance is a cost-
based adjustment made to US price.
57. Second, the fact that SAIL’s US sales data met the “verifiable” factor is evident from
USDOC’s  verification report itself, in which the USDOC personnel repeatedly noted the lack of any
“discrepancies” involving that database, as discussed extensively at the First Meeting and in India’s
Rebuttal Submission at paragraphs77-84.  Even  USDOC’s Memorandum of Verification Failure,
submitted as India Exhibit 16, identified only one error in the US sales database (the width coding
error), which all parties concede could be easily corrected, as described in Mr. Hayes’ affidavit (Ex.IND-24).
58. Third, USDOC never stated in the US sales verification report, the US cost verification report,
the verification failure memo, or in the Final Determination that the verifiability or reliability of
SAIL's US sales data was negatively impacted by the absence of verifiable or reliable data concerningthe VCOMU and TCOMU fields.  There is simply no such connection made in these repeated
evaluations of the facts between the VCOMU and TC OMU and the verifiability of SAIL's US sales
data.  Given SAIL's repeated arguments to USDOC before the issuance of the Final Determination
that its US sales data was verifiable, reliable, and usable, it is revealing that USDOC did not point to
the VCOMU or TCOMU cost information as resultin g in the conclusion that the sales information
was not verifiable or reliable.  But this is not surprising given the fact that SAIL's US sales
information  was examined during verification was successfully verified.
59. Fourth, USDOC did not consider that the lack of data on the “cost component” in the US
price offer that formed the basis of the petition’s calculation of the 72.49 per cent margin undermined
the reliability or verifiability of that $251 price offer.  The single cost component in the petition used
for this final determination margin was applied to all of the imports from India in the final
determination even though that one cost did not ha ve what USDOC now claims is an "essential" link
to the other types of cut-to-length plate.  Even assuming that USDOC may now "re-evaluate" its
findings on this issue (see India Rebuttal Submission at paragraphs 25-43 for a contrary view), there is
simply no basis in the record for a reasoned conclusion that the lack of the same “cost component”
data related to SAIL's US sales could somehow be  found to undermine the reliability or verifiability
of that data which actually went through a verification and was found to contain only a few minor
errors.
60. In response to the last question, there may be circumstances in which so much information is
missing or unverifiable in the database of one of the “essential  components” – US  sales, homemarket sales, COP, or CV – that the verifiability or usability of the particular information might be
called into question.  This would have to be determined on a case-by-case basis.  A key factor would
be the extent of the verification process and the separate nature of the manner in which the foreign
respondent maintained the information.  Another key factor is the usability of the data in connection
with other data.  India has presented detailed considerations regarding undue difficulty inparagraphs 11-24 of its Rebuttal Submission.  But this case does not present such a situation in which
the verifiability or usability (or even "reliability") of SAIL's US sales data can be called into question
                                                     
27 See section 773(a)(6)(C)(ii) of the Trade Act of 1930 as amended, 19 U.S.C. § 1677b(a)(6)(C)(ii),
quoted in paragraph 50 of India’s Rebuttal Submission.WT/DS206/R
Page E-18
by defects in the cost and home market database.   India submits that it is not necessary for the Panel
to determine the boundaries of such a situation, becau se however it might be defined,  it would require
far more severe circumstances than exist with SA IL’s US sales database in the current case -- in
which there is no question about the  ease with which the one (width coding) error identified in the
Sales Verification Report could be corrected.
Q30. Does India consider that §782(e)(3) is NOT consistent with goal of objective decision-
making based on facts, or does India object to it because it is not a provision specifically found
in Annex II?
Reply
61. India is of the view that Section 782(e)(3) is not consistent with the goal of objective
decision-making based on facts because, as interpreted by USDOC and the USCIT, it requires the
discarding of information that satisfies the conditions of Annex II, paragraph 3 – i.e., that is verifiable,
timely produce and usable without undue difficulties.  These decisions have interpreted the word
"information" in Section 782(e) as meaning "all information necessary to calculate a dumpingmargin".
28  This means that Section 782(e) has been applied to all the information requested, not to
selected portions or categories of information.  Such a result -- which always occurs when USDOC
determines that some "essential" component (usually cost-related) of the information requested is not
usable -- prevents the use of  respondents’ information regarding other “essential components” that
meets  the requirements of Annex II, paragraph 3  in calculating a dumping margin.  If Section782(e)(3) did not add to the obligations or detract from the rights of WTO Members, then India would
not object to that statute simply because its exact words are not reflected in Annex II.  But that is not
the case here for the reasons set forth in Indi a's First Submission at paragraphs 148-49 and 154-156,
and in India's First Oral Statement at paragraph 65.  As India has argued in these previous
submissions, Section 782(e)(3) imposes an additional hurdle (not based in the text of the ADAgreement) for respondents to overcome before th eir information must be used by investigating
authorities.
Q31. Where in the AD Agreement does India find an  obligation on the investigating authority
to carry out and record, as suggested in paragraph 74 of its oral statement, a detailed analysis of
a proposed constructive remedy?
Reply
62. India sees two aspects to the Panel's question: first, whether there is an obligation to "carry
out" an analysis of the exploration of constructiv e remedies other than dumping duties, and second,
whether there is an obligation to create a record of such an exploration.
63. First, regarding whether there is an obligation in the AD Agreement for Members to "carry
out" an analysis of a proposed constructive remedy, I ndia notes that the word "explored" in Article 15
has been defined as "examine, scrutinize, search out".29  The term "explore" requires a rigorous and
thoughtful examination.  This word requires scrutiny (i.e., careful examination) of proposalssubmitted by developing country respondent companies.  It also requires investigating authorities to
search out ways that the proposed constructive remedies could be used -- or to determine why they
could not.    See also India First Oral Statement, paragraphs 72-74.
64. Regarding the second factor, Article 15, second sentence imposes a mandatory obligation on
developed country investigating authorities to explore constructive remedies such as price
undertakings before applying anti-dumping duties.  As a mandatory requirement, it carries with it the
                                                     
28 India's First Written Submission, paras. 132, 154-158.
29 New Shorter Oxford Dictionary, Vol. 1 at  889.WT/DS206/R
Page E-19
obligation to articulate the basis for the decision made regarding the offered suspension agreement.
The reason is simple and compelling.  How else is a WTO panel or a WTO Member to judge under
Article 17.6(i) whether an investigating authority ev aluated the relevant fact s in complying with the
mandatory requirement?  Panels cannot accept post hoc justifications. WTO Members will have no
idea whether their rights have been violated if there is no articulation of the consideration given to aproposed price undertaking or suspension agreement.
65. AD Agreement Article 8.3 requires authorities to "provide the exporter the reasons which
have led them to consider acceptance of an undertaking as inappropriate. . .".  This provision is useful
context for understanding the obligation of investigatin g authorities to articulate their consideration of
proposed constructive remedy, such as a suspension agreement under Article 15.  Similarly,
Article 12.2.2 of the AD Agreement provides useful context for the interpretation of Article 15.  Itstates that a public notice must be issued on "all relevant information on the matters of fact and law
and reasons that have led to the imposition of final measures or acceptance of a price undertaking . . ".
A very relevant piece of information for developing country Members is the articulation of reasons
that a dumping margin -- and not constructive re medies -- was imposed in the final determination.
Q32. Is it correct to understand that India considers that a comparison between a constructed
normal value calculated by petitioners, and an average of US sales prices, or an average of a
subset of US sales prices for product that "matches" the product for which normal value was
calculated, yields a more accurate result, one that better represents "objective decision-making
based on facts", than a determination that a pplies the dumping margin calculated in the
petition as facts available?  If so, could India explain in detail why it considers this result
"better".  Would India's view be the same if the outcome were different?
Reply
66. The answer to the first question is yes, assu ming that the "US sales prices" in the question
refer to SAIL's submitted price data regarding its actual US sales made during the period of
investigation.
67. The answer to the second question is that this is a "better" result because (1) it results in a
fairer comparison of export price and normal value as required by Article 2.4, first sentence; (2) it is
consistent with the text of the AD Agreement, Article 6.8 and Annex II, paragraph 3;  (3) it usesinformation known to be accurate, i.e., SAIL's ve rified (and verifiable) and timely produced, actual
US sales data; and (4) unlike the price offer in the petition, it does not use price information that is
know to be incorrect and unrelated to the prices at  which any of SAIL’s products were sold in the
United States during the POI.  India notes that combining SAIL's actual, verified US sales data with
normal value data from the petition is not a “perfect” or even a “best” result.  This is becausecombining these two elements on export price and normal value results in a dumping margin which
India believes is still far greater than the actual dumping margin in this case, as is evident from an
analysis of SAIL’s submitted data on all the “essential  components”.  SAIL estimated in argument
before the USDOC that, based on its revised cost of production database that was rejected by USDOC
as untimely, its "true" margin of dumping was less than one per cent.
30  However, India believes that,
given the “available” facts that can be considered by  the Panel in this dispute, the "better" result --
indeed the "far better" result -- is to use SAIL's US sales data in the calculation of the dumping
margin.
68. India is not entirely clear about the meaning of the last question.  If by a "different" outcome,
the Panel means that a situation in which the margin of dumping would have been lower if the
information in the petition had been used, then the answer is that India's position would be the same.
Investigating authorities  must use information submitted by a respondent that meets the requirements
                                                     
30 SAIL’s case brief to the USDOC, Ex. IND-14 at 12-13  (12 November 1999).WT/DS206/R
Page E-20
of Annex II, paragraph 3.  In the unusual case where the use of the actual data results in a higher
dumping margin than that alleged by the petitioner -- not a situation existing in this investigation --
the only proper solution would be to use the information submitted by respondent.  If that had been
the situation in this investigation, India would likely not have pursued this dispute to a WTO panel.
Q33. India appears to have argued that the investigating authority should, in deciding
whether information will be rejected and facts availa ble used instead, have reference to the facts
available that would likely be used, and assess wh ether they are, in fact, "better", "as good as",
or "worse" than the imperfect information pr ovided by the exporter.  Is this a correct
understanding of India's position?  Could India explain what relevance the facts available
ultimately used have in the decision regarding whether information provided can be used in the
investigation without undue difficulties?  Could India please explain its apparent view that thequality of the facts available ultimately relied upon in making a determination somehow effects
the degree of effort that might be considered "undue difficulties" in using the information
provided?
Reply
69. India directs the Panel to the discussion of the "undue difficulty" element of Annex II,
paragraph 3 set forth in paragraphs 11 to 24 of India's Rebuttal Submission where the questions
contained in Questions 33 and 34 are addressed in detail. However, as a general matter, India submits
that the comparative determinations that the Pane l believes India is requesting it to make – i.e.,
whether one source of information is “better,” “as good as,” or “worse than” other information – are
all derived from the text  of Annex II, paragraph 3 and the object and purpose of the AD Agreement.
That is, if the information submitted by a respondent meets the conditions of that paragraph (including
whether it is usable without undue difficulty), then it must be used – i.e., it is by definition “better”
than information from other sources, and in particular a biased document such as the petition.WT/DS206/R
Page E-21
Questions to both parties
Q34. Would the parties please discuss their views concerning the meaning of the phrase
"undue difficulties" in paragraph 3 of Annex II?  Does it encompass substantive as well as
procedural aspects of using the data in question?
Reply
70. India directs the Panel to the discussion of the "undue difficulty" element of Annex II,
paragraph 3 set forth in paragraphs 11 to 24 of India's Rebuttal Submission where the questions
contained in Questions 33 and 34 are addressed in detail.
Q35. The United States argues that India's clai m regarding US "practice" in the application
of facts available is not properly before the Pane l and submits that under the US law, an agency
such as USDOC may depart from established "practice" if it gives a reasoned explanation for
doing so.  The United States thus argues that US "practice" cannot be the subject of a claim.
Could the United States please elaborate on this  argument? India is invited to respond to this
question as well.
Q36. Could the parties explain their views as to what constitutes "practice" as used by India
in its request for establishment?
Replies to Questions 35 and 36
US procedural objection:
71. India disagrees with the United States’ assertion that India's claims regarding US "practice"
are not properly before the Panel because they were allegedly not discussed during the consultation.
Paragraph 5 of the consultation request stated that India wished to consult concerning "DOC's
determination of sales at less than fair value in  contravention of WTO rules governing the use of
"facts available" (e.g., the refusal by the US authorities to accept timely, verifiable and appropriately
submitted export price information)."31  The "determination" referred to in this paragraph is the "Final
Determination" issued by USDOC (Ex. IND-17), in which USDOC stated the following:  "It is the
Department's long-standing practi ce to reject a respondent's questionnaire response in toto when
essential components of the response are so riddled with errors and inaccuracies as to be unreliable."
The "use" of facts available described in the consultation request involved USDOC's application of its
total facts available practice.  This long-standing practice is intertwined with USDOC's Final
Determination in this case.  There is no question that the discussion during the consultation concerned
USDOC's Final Determination and USDOC's application of total facts available. It is impossible todiscuss the "total facts available"  aspect of USDOC's Final Determination without necessarily
implicating the practice that was identified and used  in the Final Determination.  Accordingly, there is
no basis for the United States’ assertion that the consultation request and the consultation did not
include discussions related to  USDOC's application of its self-professed "long-standing practice" of
applying total facts available.
72. Moreover, contrary to the United States' arguments, the Appellate Body in Brazil Aircraft
held that DSU Articles 4 and 6 do not "require a precise  and exact identity  between the specific
measures that were the subject of consultations and the specific measures identified in the request for
the establishment of a panel".
32  The Appellate Body noted its agreement with the Brazil Aircraft
panel that one purpose of consultations is to "clarify the facts of the situation and it can be expected
that information obtained during the course of th e consultations may enable the complainant to focus
                                                     
31 Ind. Ex-22.
32 WT/DS46/AB/R, para. 132.WT/DS206/R
Page E-22
the scope of the matter with respect to which it seeks establishment of a panel."33  Moreover, the panel
in Brazil Aircraft  stated that "nothing in the text of the DSU . . . provides that the scope of a panel's
work is governed by the scope of prior consultations".34  See also  Japan- Measures Affecting
Agricultural Products (a panel's terms of reference are based on the panel request and there is no
requirement that the challenged measures be specific ally identified during consultations in order for
the claim to be included within the terms of reference).35  Indeed, in the Japan Varietals  dispute, the
United States indicated its agreement with the following statement:
Consultations are, however, a matter reserved for the parties.  The DSB is not
involved; no panel is involved; and the consultations are held in the absence of the
Secretariat.  In these circumstances, we are not in a position to evaluate the
consultation process in order to determine if it functioned in a particular way.  Whilea mutually agreed solution is to be preferred, in some cases it is not possible for
parties to agree upon one.  In those cases it is our view that the function of a panel is
only to ascertain that consultations, if required were in fact held or, at least,
requested.
36
73. There is no dispute that consultations were held between India and the United States.
US claim that its long-standing practice of applying total facts available is not a "measure":74. India does not agree that the fact that USDOC could arguably change its total facts available
"practice" means that this practice is not a "measure".  A "practice"  becomes a "measure" throughrepeated similar responses to the same situation.  For example, USDOC always applies total facts
available in a particular situation (i.e., where one or more of four "essential" components of
information from the respondent is missing).  It has done this consistently since 1995.  Interested
foreign parties subjected to a USDOC investigation can easily predict that USDOC will apply this
"practice" in future cases in which they are involved.  Indeed, when SAIL argued that the practiceshould not be applied in this case, USDOC responded with the statement that it "must" apply total
facts available.
37  Where such a practice is established over a long period of time, it takes on the
character of a measure.  This is because a similar response can be predicted (or threatened) in the
future.  At what point a pattern of similar conduct takes on the character of a measure is to be
determined on the facts and circumstances of each case.  But to simply label something a "practice"
(as opposed to an administrative procedure, regulation or law) and then claim that it can be changed at
any time and is therefore immune from challenge before the WTO opens the door for considerablepotential abuse of the obligations impos ed by the AD and other WTO Agreements.
75. The fact that a "practice" can be changed relatively quickly does not make it "non-measure".
India must ask why a long-standing practice is deemed a non-measure when an administrative
procedure, regulation or even a law in some Members can be changed just as easily.  There is noquestion that administrative procedures and regulations in many WTO Members can be changed
practically overnight.  Even laws can be changed quickly -- particularly those based on executive
orders.  There is simply no logical reason why the ease and speed with which a measure can be
changed reflects on its status as a "measure".  The only relevance of the speed with which a measure
can be changed is the reasonable period of time available to a Member to bring a measure intocompliance pursuant to Article 21.3 of the Dispute Settlement Understanding.
                                                     
33 Id.
34 WT/DS46/R, para. 7.9, 7.10.
35 WT/DS76/R, para. 8.4.
36 WT/DS76/R n.33 quoting WT/DS27/R para. 7.19 (emphasis added).
37 Final Determination, at 73127 (Ex. IND-17).WT/DS206/R
Page E-23
76. In addition, USDOC's total facts available prac tice constitutes an "administrative procedure"
as that term is used in Article 18.4 of the AD Agreement.  USDOC's long-standing total facts
available "practice" is an "administrative" action because it is taken by an agency of the US
government.  It is also a "procedure" because it details exactly what procedure will be used for the
calculation of dumping margins in the event that one "essential" component of information is notprovided by an interested foreign party.  The fact that this "administrative procedure" is found in the
decisions of USDOC and the USCIT, as opposed to, for example, a publicly available USDOC
practice manual, does not make it any less a "procedure".  To so hold would be to elevate form over
substance.  And as an administrative procedure, USDOC's total facts available practice is a "measure".
See AD Article 18.4; Article XVI:4 of the Ma rrakesh Agreement Establishing the WTO.
77. The United States relies on the panel report in United States - Measures Treating Exports
Restraints as Subsidies  for the proposition that its total facts available practice does not have
"independent operational status", i.e., that it is not a "measure".
38  The United States ignores the facts
in the Exports Restraints  decision that distinguish it from this case.  In Exports Restraints , the alleged
"practice" did not involve any actual decisions by USDOC or the USCIT; as that panel noted, "there
has been no post-WTO case where the United States has countervailed an export restraint".39  I n
addition, the Exports Restraints panel noted that Canada argued that USDOC "normally" follows the
practice – although it admittedly had not been applied since the WTO came into effect.40  N o t
surprisingly, the Exports Restraints  panel concluded that Canada had not "identified concretely what
US 'practice' is", and that the term "practice in the sense used by Canada cannot require any particular
treatment of export restraints in US CVD investigations".41
78. The "practice" at issue in this dispute is far different from the non-practice at issue in Exports
Restraints .  The record shows that USDOC always  applies total facts available when one of the
components of information USDOC considers to be "essential" cannot be used.  USDOC itself stated
in the Final Determination that its consistent practice is to apply "total facts available".  India and thePanel asked the United States at the First Meeting to identify any investigation in which USDOC did
not apply total facts available where one of the essential components of a respondent’s data could not
be used.  The United States could identify no such instance.  In fact, a key USDOC official at its
hearing during the investigation indicated that he did not know of any case where USDOC filled
missing gaps for entire cost of production and home market databases.
42  Thus, this is not a case
where USDOC has "no" applications of the practice, or where it "sometimes" or "normally" applies
the practice.  Here, USDOC always applies the same practice to discard information in one
component if other components of information are unusable.
79. Accordingly, for the foregoing reasons, India disagrees that a long-standing practice is not a
"measure".
India's claims regarding USDOC 's long-standing practice:
80. There are two distinct claims relating to USDOC's total facts available practice set forth in the
request for establishment of a panel.  The first is a per se  (as such) claim.  India is no longer pursuing
this claim.
81. However, India is asserting the second claim relating to USDOC’s "practice" set forth in the
request for establishment of a panel.  This claim involves the application  by USDOC of its "long-
standing practice" of total facts available in this case in violation of the AD Agreement.  As set forth
                                                     
38 United States First Submission, para. 146
39 WT/DS194/R, para. 8.125.
40 Id., para. 8.126.
41 Id., para. 8.129.
42 Ex. IND-15 at 51.WT/DS206/R
Page E-24
in the detailed request for establishment of the panel, this claim is based on the application of
USDOC's long-standing practice that resulted in the rejection of SAIL's US sales data and the
establishment of an unfair comparison between normal value and the export price.  There are three
elements to this claim:  (1) that a long-standing practice exists; (2) that the long-standing practice was
applied in this case, and (3) that the application of the long-standing practice in this case isinconsistent with the AD Agreement.
82. With respect to the first element -- whether there is a long-standing practice --  the Panel has
before it the Final Determination, in which USDOC plainly states that it has a "long-standing practice
to reject a respondent's questionnaire in toto  when essential components of the response are so riddled
with errors and inaccuracies as to be unreliable".
 43  USDOC also stated in the Final Determination
that "the Department must apply total adverse facts available because SAIL's data on the whole isunreliable".  Numerous USCIT decisions, as well as USDOC decisions in other investigations, also
describe the "long-standing practice" of USDOC in applying total facts available.
44
83. With respect to the second element -- whether the long-standing practice was applied in this
case -- once again, the answer is supplied by the Final Determination, in which USDOC stated that
"total facts available" are "warranted for this determination" and that it "must apply total adverse facts
available. . . ."45  There can be no doubt that USDOC applied  its practice in this case.
84. Finally, regarding the third element -- whether the long-standing practice as applied is
inconsistent with the AD Agreement --  India's arguments throughout this proceeding have all focused
on the inappropriate rejection of SAIL's US sales data in the calculation of the final dumping margin.
The process  by which USDOC rejected SAIL's US sales data -- which USDOC itself admitted was
"usable" if minor corrections were made -- was through the application of total facts available.  This
application was inconsistent with AD Agreement Ar ticle 6.8, and Annex II, paragraphs 3, 5, and 7 for
the reasons stated in India's First Submi ssion and in India's First Oral Statement.
Q37. Do the parties consider that the USDOC "calculated" a dumping margin in this case?
In this regard, we note the arguments made by the United States in paragraphs 93 to 97 of its
first written submission regarding Article 6.8, which provides that "preliminary and final
determinations, affirmative or negative" may be made on the basis of facts available.
Reply
85. India notes that there is no reference in the AD Agreement to the term "calculate".  The
closest analogues to the word "calculate" in the Agreement are found in the first sentence of
Article 2.4, which requires investigating authorities to make a "fair comparison", the title of Article 2
"determination of dumping", and the reference in Article 9.3 to the margin of dumping being"established" under Article 2.  That being said, there is no doubt that in the current case, USDOC
compared the price of $251 per ton for the export price with a price of $372 for normal value.  This
comparison, as shown in Figure 5 of the Petition, resulted in the “calculation” of a dumping margin of
72.49 per cent.  India responds to the US arguments regarding "preliminary and final determinations"
(found at paragraphs 93-97 of the US First Submission) in India's Rebuttal Submission at
paragraphs 9-10.
Q38. Could the parties please explain their views regarding the meaning of the phrase
information should be "taken into account" as used in Annex II paragraph 3.  (Ignore for
purposes of this question whether "should" is to be understood as mandatory or not).  Forinstance, might it be understood to mean that the determination must be based on that
                                                     
43 Final Determination, at 73130 (Ex. IND-17).
44 See, e.g., Ex. IND-28, IND-29.
45 Final Determination, at 73130 (Ex. IND-17).WT/DS206/R
Page E-25
information? or to mean that the investigating authority must look at the information further,
attempt to verify it, and judge its reliability, but may ultimately not base decision on it and refer
to facts available instead?
Reply
86. The correct interpretation of the phrase " should be taken into account when determinations
are made " is that if the particular information at issue (which can include an entire “essential
component of information or individual pieces of information) meets the four criteria of Annex II,
paragraph 3, it has to be taken into account in the calculation of a dumping margin.  Having passed
the rigors of the four-part test, and in particular the requirement that it be usable without undue
difficulty, the information cannot be ignored making the "determination".  The "determinations aremade" phrase in anti-dumping parlance means the issuance of a final dumping margin.  The phrase
"taken into account" has to be read with the phrase "all information which" in Annex II, paragraph 3
phrase which precedes it.  This contextual reading indicates that the particular pieces of information
should be combined  with other  information to calculate the dumping margin.  In this sense, the
"account" language in the text could be seen as referr ing to the  totality of the information available to
be used in calculating the dumping margin.  Accordingly, the piece of information at issue in an
Annex II, paragraph 3 analysis is to be taken into account along with that other  available information.
87. Noting the Panel's direction to ignore the "should v. shall" question, India would only state
that it believes that resolution of the "should" question does resolve the question of whetherinformation meeting the four requirements of Annex II, paragraph 3 must be used.  India also notes
that it sees no basis in Annex II, paragraph 3 for an  explicit requirement that investigating authorities
"judge its reliability".  India believes that any concerns concerning the "reliability" of information --
particularly information that has in fact been verified  or been deemed to be verifiable -- is resolved if
it meets the four conditions of Annex II, paragraph 3.
Q39. Could the parties please explain their views as to the meaning of the term "verifiable" in
Annex II, paragraph 3, with specific reference to, inter alia, the following possibilities:
(a) information is prepared and presented in a way that it can be checked against
the books and records of the company submitting it;
(b) information not only satisfies (a), but also when it is checked, it is found to be
complete, accurate and reliable – i.e., it passes verification.
Reply
88. India has discussed the meaning of "verifiable" and "verifiable" in detail in its Rebuttal
Submission at paragraphs 66 to 72.  India has also addressed questions relating to verifiability in its
answers to Questions 21, 28 and 29.  Accordingly, Indi a would direct the attention of the Panel first to
the Rebuttal submission and then to the above-referenced answers for the complete answer to this
question.
89. In response to the two possibilities suggested by the question, India believes an investigating
authority may, within the requirements of the AD Ag reement, find that information is "verifiable" if
makes an assessment under possibility (a).  In other words, it need not conduct an actual audit to
accept the information provided by respondents.  Ho wever, if an investigating authority wishes to
conduct an "on the spot verification" as anticipated by Annex I, paragraph 7 of the AD Agreement, it
may properly examine source documents in an "audit" to verify the reported information as accurate,
reliable and complete.  Thus, possibility (b) would be consistent with the AD Agreement.WT/DS206/R
Page E-26
90. However, in response to the Panel's use of the terms "complete" and "accurate" India would
caution that information reported need not be perfect in order to verifiable.  There may be minor gaps
in the information within a given “component”( i.e., it may not be "complete") at which time the issue
becomes whether the missing information can be obta ined from alternative sources.  Or the question
may be whether the missing information is of such importance that it casts doubt as to the overallreliability of the information submitted within the particular component of information.  Information
may also be reported which a review of source doc uments shows is not completely "accurate".  The
question would be whether this information is capable of being corrected and the extent of the
imperfections determined by reviewing other source documents.WT/DS206/R
Page E-27
ANNEX E-2
ANSWERS OF THE UNITED STATES TO QUESTIONS
OF THE PANEL - FIRST MEETING
(12 February 2002)
Questions for the Parties
To the United States
Q1. In paragraph 84 of its first submission, the United States asserts that "Nothing in the
AD Agreement requires an administrating authority to evaluate distinct "categories" of
information  separately for purposes of determining whether it is permissible to use facts
available for a dumping determination".  In par agraph 83 of its submission, the United States
enumerates certain information which is necessary for conducting an anti-dumpinginvestigation - including prices of the subjec t merchandise in the domestic market of the
exporting country, export prices of the subjec t merchandise, and in appropriate circumstances,
cost of production information and constructed value information.  Without prejudice to the
United States' legal argument, could it be consid ered that, for practical purposes of calculating
an anti-dumping duty, these constitute distinct "categories" of information?
Reply
1. Any set of information or data can be separated into “categories”.  The definition of the term
“category” is “any of a possibly exhaustive set of basic classes among which all things might be
distributed".1  In this sense, the information which is necessary for conducting an anti-dumping
investigation – including prices of the subject merchandise in the domestic market of the exportingcountry, export prices of the subject merchandise, and in appropriate circumstances, cost of
production information and constructed value information – could be considered “categories” of
information.  In turn, each of these “categories” is actually a “set of categories” – comprised of
multiple smaller “categories” of information such as prices, quantities, physical characteristics, levels
of trade, packing and movement expenses.  Each of these “categories” is necessary to calculate adumping margin.
2  Even each sales listing for a particular model of subject merchandise could be
identified as a “category” of a respondent’s sales information.  But as the European Communities
aptly stated at the meeting with third parties,
It is important to recognize that the data requested of interested parties in an anti-
dumping investigation is not atomised, it does not consist of independent sets of data
which have no link to one another.  Consequently, failure to provide one set of data
may affect the validity of other elements of data provided.3
                                                     
1 The New Shorter Oxford English Dictionary, Clarendon Press, Oxford, 1993.
2 See, e.g., Article 2.4 of the AD Agreement (“Due allowance shall  be made in each case, on its merits,
for differences which affect price comparability, including differences in conditions and terms of sale, taxation,levels of trade, quantities, physical characteristics, an d any other differences which are also demonstrated to
affect price comparability” (emphasis added)(footnote omitted)).
3 Third Party Oral Statement of the European Communities at para. 3.WT/DS206/R
Page E-28
2. India itself seems unsure of where it would draw the line between different “categories” of
information.  In its First Written Submission, India expressed the view that the Indian respondent’s
US sales database was a “category” of information that should be examined separately under the lens
of Annex II, paragraph 3.4  If this US sales “category” satisfied the criteria of Annex II, paragraph 3,
then India stated that it must be used.  At the first Panel meeting, however, India made the following
statement:
India recognizes that it may not be reasonable to expect an investigating authority to
conduct a separate examination of each of the four conditions in Annex II,
paragraph 3 for thousands of individual pieces of information submitted by a
respondent.  India does not insist upon an interpretation of Annex II, paragraph 3 that
would require investigating authorities to use any piece of information provided by
foreign respondents, no matter how small and isolated.  India’s First Submission usedthe qualifying term “categories” of information for exactly this reason.  The
United States correctly points out that the term “category” is not a term found in the
AD Agreement.  However, what is important here is not the exact term used.  Rather,
what is important is the need to interpret the Agreement in good faith, in a way thatensures the use of information meeting the four criteria of Annex II, paragraph 3.
5
3. India then continued by offering as an exam ple of a “category” of information the “weight
conversion factor” information at issue in the Japan Hot-Rolled  dispute.  But this “weight conversion
factor” information – a formula used to measure the difference between the actual and estimated
weight per ton for steel in coils – is just such a “small and isolated” piece of information that India
claims investigating authorities need not separately examine.6  India’s reasoning shows the flaw in
applying the criteria of Annex II, paragraph 3 to subject “ categories” of information.
4. In sum, India’s focus on the term “categories” of information is misguided for two reasons.
First, as India concedes, the term “categories” does not appear in the AD Agreement.  As the
Appellate Body has said, “The fundamental rule of treaty interpretation requires a treaty interpreter toread and interpret the words actually used by the agreement under examination, and not words which
the interpreter may feel should have been used.
7  In fact, the only "category" of information
recognized by Article 6.8 is "necessary" information.  Second, treating as distinct what India
conceives as separate “categories” of information ignores the very nature of the anti-dumping analysis
required by Article VI and the rest of the AD Agreement.  As Article 2.4 of the AD Agreement makesclear, the required comparison of this information means that the various pieces of “necessary
information” are in no way distinct.  The customary rules of treaty interpretation do not allow India to
read the term "categories" into the AD Agreement as a way of narrowing the Panel’s focus to the
smallest subset of information that India believes will pass muster under the conditions of Annex II,
paragraph 3 (here, an as-yet undefined subset of SAIL’s U. sales information).
Q2. In paragraph 91 of its first submission, the Un ited States refers to the fact that certain
portions of information provided by a respondent may appear acceptable in isolation, but when
the nature and extent of deficien cies on the whole are substantia l, it calls into question the
                                                     
4 First Written Submission of India at para. 51 (“ [a]ny  category of information which is submitted by a
foreign respondent and which meets [the criteria of Annex II, paragraph 3] must be used by investigating
authorities without regard to whether the foreign respondent has submitted other  categories of information that
[do not meet the criteria of Annex II, paragraph 3].” (emphasis in original)).
5 Oral Statement of India at para. 34 (emphasis added).
6 Japan Hot-Rolled Panel Report  at para. 7.32.
7 EC - Measures Concerning Meat and Meat Products  (“EC-Hormones  AB Report” ), WT/DS48/AB/R,
adopted Feb. 13, 1998, para. 181(“ EC-Hormones AB Report ”).WT/DS206/R
Page E-29
reliability of the entire response.  The United St ates asserts that Article 6.8 provides that in such
circumstances, the investigating authority may re ly on facts available.  Can the United States
point to any specific language in the AD Agreement which refers to the potential impact of
deficiencies of some information submitted on the reliability of the entire response?
Reply
5. The text of the AD Agreement recognizes that where there are significant deficiencies in the
necessary information that has been submitted, those deficiencies may have an impact on the
reliability of the entire response.  Article 6.8 of the AD Agreement states that “preliminary and final
determinations, affirmative or negative, may be made on the basis of facts available” where a
respondent does not provide necessary information.  Article 6.8 does not require that all necessary
information must be missing before a preliminary or final determination may be made based on facts
available; rather, it states that such determinations may be made when necessary  information is not
provided.  Therefore, an investigating authority is not restricted to merely filling “gaps” when
necessary information is missing – if the circumstances warrant, the authority may base its entire
determination on facts available, subject to the provisions of Annex II.  In the case of the Indianrespondent, SAIL, a very significant degree of in formation was not provided or was unusable; what
was missing was not susceptible to replacement or “gap-filling” by other pieces of information.  Even
SAIL’s US database contained significant deficiencies and errors.
8
6. By stating in Article 6.8 that investigating authorities may base preliminary and finaldeterminations on facts available when “necessary information” is not provided, Article 6.8 does not
establish a standard that limits the use of facts available to situations in which no necessary
information has been provided.  The fact that Articl e 6.8 allows an investigating authority to base its
preliminary or final determination on facts available implies that some necessary information which
the respondent has properly submitted to the investigating authority will not be used.  The text of
Annex II, paragraph 5 reinforces this point in st ating that “[e]ven though the information provided
may not be ideal in all respects, this should not justify the authorities from disregarding it, provided
the interested party has acted to the best of its ab ility”.  The text of Annex II, paragraph 5 recognizes
that certain information can be ideal in some respects, and yet authorities may disregard the
information if the submitting party has not acted to the best of its ability.  Again, in the case of the
Indian respondent, even India acknowledges that  SAIL’s information was far from ideal in many
respects.
7. In sum, based on the text of Article 6.8 and Annex II, paragraph 5 of the AD Agreement,
investigating authorities are not prevented from assessing whether deficiencies in a significant portion
of information necessary for an anti-dumping calculation has an impact on the reliability of the entire
response
Q3. Does the United States consider that section 782(e)(3) relates to the condition set out in
paragraph 3 of Annex II regarding whether information is "appropriately submitted so that it
can be used in the investigation without undue difficulties", or does the United States justify this
aspect of its statute on some other or additional basis?
Reply
8. Section 782(e)(3) provides that Commerce should take into account whether submitted
information is “not so incomplete that it cannot se rve as a reliable basis for reaching the applicable
determination”.  First, it is entirely consistent with Article 6.8 and Annex II for an investigating
                                                     
8 Details of the deficiencies and unreliability of SAIL data were described in the US First Written
Submission at paras. 19-58 and 148-163 and are further discussed herein in response to Question 10.WT/DS206/R
Page E-30
authority to consider whether or not submitted information forms a reliable basis for calculating a
company’s dumping margin.  For example, Annex II, paragraph 3 provides that investigating
authorities should consider whether information is verifiable, demonstrating the importance of one
method by which an investigating authority can ensure that information is reliable.
9. Furthermore, as discussed in the United States’ Second Written Submission, when Commerce
has a questionnaire response which contains some usable and some unusable information, it is
relevant to consider whether there is enough info rmation to form an objective basis for determining
the respondent’s margin of dumping.  By requiring Commerce to evaluate the degree of completeness
of the information, section 782(e)(3) provides that, when the other criteria have been met, Commerce
may not decline to consider the partial information when it is sufficiently complete that it can form a
reliable basis for a dumping calculation.  In other words, if the respondent supplies enoughinformation to provide a reliable indication of its margin of dumping, the fact that Commerce may
have to fill in some gaps based on facts available will not prevent Commerce from using that
information.  In this respect, the considerations of paragraph 5 of Annex II of the AD Agreement also
are reflected in section 782(e)(3).
Q4. In paragraph 107 of its first submission, the United States suggests that Annex II
paragraphs 3 and 5 urge the investigating author ity to take into account, or at least not to
disregard information on the record which meet s the criteria set out in these provisions, but
does not oblige Members to utilise this informatio n.  Does this not suggest that an interpretation
which furthers the goal of objective decision-mak ing based on facts, by requiring consideration
of information which meet the criteria, is more ap propriate than one which allows investigating
authorities to reject some information submitted because of problems with respect to other
information?
Reply
10. An interpretation that requires consideration of information which meets the criteria of
Annex II, paragraph 3 - but does not require the investigating authority to "use" the information to
calculate an antidumping margin - furthers the goal of objective decision-making based on facts.  The
AD Agreement should be interpreted in a manner th at will maintain the careful balance between the
interests of investigating authorities, injured domestic industries, and exporters that is reflected in the
AD Agreement.  On the one hand, there is a clear preference in the AD Agreement for the use ofinformation provided by a respondent.  On the other hand, when a preponderance of the information
provided proves inaccurate and unreliable - or when  a party fails to provide the information at all -
requiring an investigating authority to use any re maining information, regardless of its limits, would
place control of the anti-dumping investigation fi rmly within the hands of the exporting party.
Interpreting the AD Agreement to allow responding parties to selectively provide information and torequire investigating authorities to use that inform ation would encourage such selective responses and
defeat the underlying purpose of “objective decision-making based on facts”.
11. An interpretation that requires consideration of information which meets the criteria of
Annex II, paragraph 3 - but does not require the investigating authority to "use" the information - alsorests on a permissible interpretation of Annex II, paragraph 3.  According to Article 17.6(ii), a panel
shall uphold a measure where it rests upon a permissible interpretation of the Agreement.  The
decision by Commerce to apply facts available in this case satisfies this principle: 1) Annex II,
paragraph 3 requires that information should be "taken into account" if it satisfies four criteria; 2) the
phrase “take into account” is defined as “take into consideration” or “notice"
9,  and 3) Commerce did
"take into account" or "take into consideration" or "notice" all of SAIL’s submitted information.  To
                                                     
9 New Shorter Oxford Dictionary, Clarendon Press, Vol. 1 at 15.WT/DS206/R
Page E-31
this end, in its preliminary determination, Commerce took SAIL ’s efforts to provide information into
account in selecting the facts available used as the preliminary margin of dumping.10  Furtherm ore,
notwithstanding significant concerns with the responsiveness and completeness of SAIL’s data, and
over the objections of petitioners, Commerce further considered and took into account the information
provided by SAIL by attempting to verify that information.11  In the end, Commerce’s Final
Determination  took account of the totality of the record, the substantial problems with SAIL’s data,
the verification failure, and the undue difficulties that would have been required to use any of SAIL’s
data and determined to base its determination entirely on facts available.12
Q5. Does the United States object to the submission of the affidavit of Mr. Hayes per se , or
does the United States object to the arguments made by India to the effect that the correction of
errors in the US sales database would have be en a relatively simple matter for the United
States?  In this regard, we note that SAIL did propose, during the proceedings before USDOC,
that the USDOC computer programme could have been modified to address the errors in the
US sales database, and did propose alternative calc ulations of the margin of dumping.  Does the
United States object to the Hayes affidavit because it contains different proposals in these
matters than were presented during the investigatio n?  If so, could the United States explain
why it considers this significant, given that th e Panel will not, for itself, either calculate the
dumping margin or correct programming language? What specific aspects of the Hayesaffidavit and testimony does the United States consider constitute new facts as opposed to new
analysis or arguments regarding the facts in the record?
Reply
12. First, the United States does object to the Hayes affidavit per se .  An "affidavit" is a "a written
statement, confirmed by oath or affirmation, to be used as evidence".13  The purpose of an affidavit,
therefore, is to serve as evidence.  The Hayes affidavit itself expresses its purpose as such.14  While
India is entitled to make any arguments to the Panel that are within the Panel’s terms of reference,
India is not entitled to present new factual information, even in the guise of an affidavit.  Pursuant toArticles 17.5(ii) and 17.6(i), the pertinent evidence on which the panel must base its review is the
record established by the investigating authority at the time of its determination.
15
13. Second, there are specific aspects of Mr. Hayes' affidavit and testimony that constitute new
facts.  In addition to the new computer programme attached by Mr. Hayes to his affidavit and his
factual conclusions that certain errors in the US sales database "were either adverse to SAIL or would
likely not have been used" by Commerce, Mr. Hayes stated at the first meeting of the Panel that hehad "created a new exhibit, India Exhibit 32" with new calculations of total price, expense, and
                                                     
10 See First Written Submission of the United States at ¶ 34.
11 Id. at ¶ 37.
12 Id. at ¶¶ 45-51.
13 New Shorter Oxford Dictionary, Clarendon Press, Vol. 1 at 35.
14 Hayes Affidavit, Ex. IND-24.  For example, the affidavit includes 1) a computer program created for
a separate anti-dumping proceeding that never appeared  in the record of that proceeding, and was never
submitted in the India plate proceeding; and 2) post-hoc assertions of fact that errors discovered in SAIL’s USsales database “were either adverse to SAIL or  would likely not have been used” by Commerce.
15 See United States-Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan  ,
WT/DS184/R, adopted 28 February 2001, at paras. 7.6-7.7 ("It seems clear to us that, under this provision, apanel may not, when examining a claim of violation of the AD Agreement, in a particular determination,consider facts or evidence presented to it by a party in an attempt to demonstrate error in the determinationconcerning questions that were investigated and decided by the authorities, unless they had been made availablein conformity with the appropriate domestic procedures to the authorities of the investigating country during the
investigation").WT/DS206/R
Page E-32
quantity data for all of SAIL’s US sales, and he invited the Panel to see new calculations and
"substitutions" in India Exhibit 33.16
14. Finally, the specific proposals made by Mr. Hayes did, in fact, differ from proposals made by
SAIL during the Commerce proceeding.  The fact that these proposals are different underscores theunderlying reason for the requirement in Articles 17.5(ii) and 17.6(ii) that panels consider the record
before the authorities at the time of their determinations, and not new information.  It would not be
appropriate or fair to assess the adequacy of Commerce’s determination using information that India
only developed two years later and that India has continued to refine over the course of this case.
SAIL made arguments during the investigation as to how its own data could be used and the Panel
should limit its review to those arguments, to the ex tent that India continues to pursue them.  The fact
that India’s new methodologies never occurred to SAIL , that it has taken India two years to develop
them, and that India must even now continuously refine them, only serves to demonstrate why they
are irrelevant to the Panel’s review of whether Commerce’s determination of the evidence before it
was unbiased and objective.
Q6. Can the United States explain how the US sales data, had it been accepted and taken
into account, would have affected negatively the process of reaching an objective decision based
on facts?  Does the United States consider that  a decision based entirely on facts available is
more in keeping with the obje ctives of the AD Agreement than  one based in part on facts
available and in part on verified information?  Please explain in detail.  Would the United States
consider that it is in all cases unsound to calculate a dumping margin based on a comparison ofnormal value calculated on the basis of facts a vailable and export price calculated on the basis
of verified information submitted by the party in question?
Reply
15. The Panel’s question assumes that SAIL’s US sales data were “verified” and, therefore, could
be used in reaching a decision based on facts.  As we explained at the first meeting of the Panel, they
were not.  Based on the comprehensive flaws in SAIL’s information, Commerce reached a
determination that SAIL ’s information failed verification in toto .  This determination was based on
errors in the US sales data itself (as detailed in Question 10 below) and the inherent linkages between
the respondent’s US sales and its other data.  The term “US sales data” is an inclusive term meaning
all of the data pertaining, or related, to US sales.  It includes, for example, the cost of manufacturingdata for each US sale – data which SAIL was unable to verify as accurate.  This data is necessary for
making due allowance for physical differences which affect price comparability.  Because the data
was inaccurate and unusable in the calculation of a dumping margin, it could not have been used to
reach an objective decision based on fact.
16. As the Appellate Body stated in the Japan Hot-Rolled  case, the goal of an anti-dumping
investigation is “ensuring objective decision-making based on facts”.  To reach this goal, the
investigating authority must assess whether it can use the particular facts before it when making its
determination.  If a responding party does not provide the information necessary for making a
decision, as in this case with respect to SAIL, the Agreement provides for the use of facts available bythe investigating authorities.  In some cases, it will be possible to use only partial facts available;
however, as in this case, there may be times wher e the information submitted by the responding party
is so deficient that it will not provide an indication of the respondent’s level of dumping and the
investigating authority may appropriately rely entirely  on facts available.  In such a case, the decision
to use total facts available is an objective one, based on the facts on the record of the investigation.As long as the decision to use total facts available is made with regard to the viability of the overall
                                                     
16 Oral Statement of India at para. 91 (comments by Mr. Hayes).WT/DS206/R
Page E-33
record of information necessary for making an anti-dumping determination, this decision will be
consistent with the objectives of the AD Agreement.
17. With these points in mind, the United States does not believe that it is necessarily unsound in
all cases for the calculation of a dumping margin to be based on a comparison of normal valuecalculated on the basis of facts available and export price calculated on the basis of verified
information.  The use of facts available, partial or total,  must be addressed on a case-by-case basis,
and there may be a situation where a normal value based on facts available can be compared to export
price calculated on the basis of verified information.  The case at issue is not one of those cases.
Q7. Speaking hypothetically, could the USDOC have concluded that, standing alone, US
sales data was verified, timely submitted, accurate and reliable?  If your response is no, pleaseexplain why not.
Reply
18. It is difficult to address this issue hypothetically, given Commerce’s specific finding in this
case that SAIL’s information – including its US sales data – failed verification.17  In addition, there
were inaccuracies specific to the US sales data that were never resolved, as detailed in the verification
report and acknowledged by India in its “affidavit”.  As a result, Commerce concluded that these
errors in the US sales database “support our conclusion that SAIL’s data on the whole is unreliable.18
For these reasons, Commerce could not conclude that the US sales data, standing alone, were verified,
accurate, and reliable.
Q8. Does the United States consider that the interpretation of US law adopted by USDOC
and affirmed by the USCIT and applied in this case is a necessary result under US principles of
statutory interpretation, or would the United St ates consider that the USCIT merely accepted as
reasonable an interpretation by USDOC, but that, following US principles of statutory
interpretation, the statute could be interpreted differently?  Please provide specific references
and authorities in support of your response.  Is it correct to understand the United States'
position as being that its statutory provisions governing use of facts available require USDOC to
apply facts available in circumstances in which the AD Agreement permits the use of facts
available?
Reply
19. The standard of review of anti-dumping determinations under US law is analogous to the
standard provided in Article 17.6(ii) of the AD Ag reement, i.e., that a determination applying a
provision that admits of more than one interpretation will be upheld if it rests on a permissibleinterpretation.  In the underlying USCIT decision, the court affirmed Commerce’s decision to apply
total facts available, stating that the court’s responsibility was to determine if the agency’s
interpretation of the statute was “reasonable, in light of the language, policies and legislative history
of the statute".
19  The court did not express a view as to whether the statute could be interpreted
differently.20
                                                     
17 Determination of Verification Failure Memorandum, Ex. US-25.
18 Id.  at 5.
19 Steel Authority of India, Ltd. v. United States , 149 F. Supp. 2d 921, 927 (May 22, 2001).  Following
the filing of the United States’ First Written Submission, the  USCIT upheld Commerce’s Remand
Redetermination, which further explained its finding that SAIL failed to act to the “best of its ability.”  See Steel
Authority of India, Ltd. v. United States , Slip Op. 2001-149 (Dec. 17, 2001) (Exhibit US-28).
20 The Court’s holding is in conformity with the standard of review expressed in the United States Code
and historically recognized by the Court of International Trade, that  “the Court of International Trade mustWT/DS206/R
Page E-34
20. It is not correct that the “facts available” provisions of US law require  Commerce to apply
facts available in circumstances in which the AD Agreement permits  the use of facts available.  As
noted in our first written submission at paragraphs 119 - 147, nothing in the US statute, or regulations,
requires that Commerce apply facts available in a manner inconsistent with Article 6.8 and Annex II
of the AD Agreement.  The application of facts available is a discretionary exercise, not a mandatory
one, specifically dependent upon the quantity and quality of the information submitted by therespondent.  This analysis is particularly true for section 782(e) of US law.
21. Section 782(e) requires that Commerce consider  information that might otherwise be rejected
under section 776(a), if five relevant criteria are met.  In some cases, like the case now before this
Panel, Commerce has found that a respondent has failed to provide significant necessary information
on the record and that what was provided should be disregarded because it failed to meet the criteria
of section 782(e).  In other cases, however, Commerce has determined that the necessary information,though flawed, could be used in its calculations because the criteria of 782(e) were met.
22. In India Exhibit 28, India presented administra tive cases adopting “total” facts available and
suggested that section 782(e) “as interpreted” by Commerce requires the rejection of all of a
respondent’s information where only some informa tion is flawed.  This is incorrect.  Even the
determinations submitted by India make clear that Commerce interprets section 782(e) as requiring it
to consider information even where that informa tion contains a significant flaw.  For example, in
Certain Cut-to-Length Carbon Steel Plate from Sweden: Preliminary Re sults of Anti-Dumping
Administrative Review , the respondent’s cost data failed verification.  Nevertheless, Commerce stated
that “[w]e must  therefore consider whether the submitted cost data is useable under Section 782(e) of
the Act".
21
23. Other cases not cited by India also rebut its assertion.  For example, in Final Results;
Administrative Review and New Shipper Review of  Antidumping Duty Order on Stainless Steel Bar
from India , 65 Fed. Reg. 48965 (August 10, 2000) and accompanying Decision Memoranda ( India
Steel Bar Final Results ), Commerce determined that although the cost information provided by the
Indian respondent, Panchmahal,  was incomplete, pursuant to section 782(e) of the Act, it could applymost of the information on the record to its calculations, and use “partial facts available” in the areas
in which necessary facts were missing:
We have determined that the continued use of total adverse facts available with
respect to Panchmahal is unwarranted. Pursuant to section 782(e) of the Act, we willnot decline to consider information that is submitted, even if it does not meet all of
our requirements , if the information was timely, could have been verified, is not so
incomplete that it cannot serve as a reliable basis for our determination, the
submitting party demonstrates that it acted to the best of its ability in providing the
information and meeting our requirements, and the information can be used without
undue difficulties. With respect to the information submitted by Panchmahal, we find
                                                                                                                                                                    
sustain ‘any determination, finding or conclusion found by Commerce unless it is ‘unsupported by substantial
evidence on the record, or otherwise not in accordance with  law.’” Fujitsu General Ltd. v. United States, 88 F.3d
1034 (Fed. Cir. 1996)(quoting 19 U.S.C. § 1516a(b)(1)(B )).  “Substantial evidence” means “such relevant
evidence as a reasonable mind migh t accept as adequate to support a conc lusion.”  Consolidated Edison v.
NLRB, 305 U.S. 197, 229 (1938);  accord   Matsushita Elec. Indus. Co. v. United States , 750 F.2d 927, 933 (Fed.
Cir. 1984).  Even if it is possible to draw two inconsistent conclusions from the evidence contained in the
record, this does not mean that the DOC’s findings are not supported by substantial evidence, and the Court willsustain DOC’s determination if its conclusion is found  to be reasonable.  See Consolo v. Federal Maritime
Comm’n, 383 U.S. 607, 620 (1966).
21 61 Fed. Reg. 51898, 51899 (1996), Ex. IND-28.WT/DS206/R
Page E-35
that a sufficient amount of it meets these requirements and, thus, we have not
declined to use it in our final results.22
As a result, Commerce resorted to facts available only with respect to certain portions of the marginanalysis.
24. Similarly, in Polyester Staple Fibre from Taiwan , Commerce recognized that the respondent
failed to submit entirely accurate and complete responses to its cost and sales database, but
determined that the application of partial facts av ailable, rather than total facts available, was
appropriate under the statute.
23  Commerce noted that the respondent’s submissions had been timely,
the majority of the information provided was accurate, the effect of the errors discovered at the
verification of sales and costs were limited in scope and the impact of those errors on any potential
dumping margin was small.  Commerce determined that the respondent’s data, overall, “could be usedwithout undue difficulties” and that “pursuant to section 782(e) of the Act, we do not find that
[respondent’s] information is so incomplete that it cannot serve as a reliable basis for reaching a final
determination”.
25. Commerce's interpretation of section 782(e) of the Act is also supported by decisions of the
USCIT.  For example, in NSK Ltd., v. United States , 170 F. Supp. 2d. 1280 (6 June 2001), the court
reviewed Commerce's decision to accept adjustment and rebate information from certain respondents
in an antidumping review.  The Court affirmed Commerce’s decision to accept these adjustments and
rebates, citing to section 782(e) of the Act.  The Court noted that section 782(e) “liberalized
Commerce’s general acceptance of data submitted by respondents in anti-dumping proceedings bydirecting Commerce not to reject data submissions once Commerce concludes that the specified
criteria are satisfied".
24
26. Thus, contrary to India’s assertions, United States law requires Commerce to accept a
respondent’s data where the criteria of section 782(e) are met.  As we explain in greater detail inSection 1 of our Second Submission, section 782(e) of the Act serves to reduce  the likelihood that
Commerce will resort to the facts available in a particular case.  Furthermore, all of the provisions
pertaining to the application of facts available in the US statute and regulations are fully consistent
with Article 6.8 and Annex II of the Agreement.
Q9. Could the United States clarify whether USDOC found all the databases submitted by
SAIL unusable at the preliminary stage, or all the databases except for the US sales database?Was the 16 July "final database" limited to information other than US sales?  Was it also found
to be unusable, as the  earlier ones had been, or  were these data analysed for purposes of the
final determination?
Reply
27. As detailed in our First Submission, SAIL’s electronic databases had significant flaws that
were never corrected.  One week before its 19 July 1999, preliminary determination, Commerce
continued to advise SAIL that “your electronic database submissions have proven seriously deficient
and are currently unusable".25  On 16 July 1999, SAIL submitted revised electronic databases,
including information on US sales, but this information was submitted too late to be incorporated into
                                                     
22 India Steel Bar Final Results  Decision Memorandum, US-Exh 26, at 3 (emphasis added).
23 Final Determination of Sales at Less Than Fair Value; Certain Polyester Staple Fibre From Taiwan ,
65 Fed. Reg. 16877 (March 30, 2000) and accompany Decision Memorandum, Exhibit US-26, at Issue 1 ( PSF
from Taiwan ).
24 NSK Ltd., v. United States , 170 F. Supp. 2d. 1280, 1318 (June 6, 2001), Exhibit US-27.
25 Letter from Commerce to SAIL Re: Return of Untimely Information , Ex. US-14) at 1.WT/DS206/R
Page E-36
the preliminary determination.  Commerce explained that “because of problems with the electronic
databases that SAIL submitted, its questionnaire response cannot be used to calculate a reliable
margin at this time".26  In any event, this electronic database tape, in turn, was replaced on
17 August 1999, and SAIL attempted to submit a further database tape on the first day of verification,
which Commerce rejected as untimely.  The verification itself revealed, for example, that:
The total cost of manufacture (TCOM) and the variable COM (VCOM) on the COP
tape submitted 17 August 1999, are incorrect.  There is no way to establish a
meaningful correlation between the TC OM and VCOM on the tape and the
underlying cost data and sources documents.27
28. The TCOM and VCOM information was directly relevant to the US sales database andresulted in a complete lack of information that  would be needed for “difference in merchandise”
adjustments.  Given that the purpose of these cost and sales databases are to be run in comparison
with each other, the flaws in these databases left Commerce with nothing it could analyze at the time
of the Final Determination .
Q10. Would the United States specify how the US sales data was itself flawed?  Did the
USDOC specifically determine that consideration of the US sales data would cause "undue
difficulties"?  Can the United States point to wh ere, in the determination or otherwise in the
record, this conclusion can be discerned?  Can the United States explain the underpinnings of
this conclusion? Or, is it accurate to conclude that the only reason the USDOC decided not toconsider the US sales data is because of the pr oblems identified with the other data?  Please
explain in detail what would be the "undue difficulty" in comparing export prices derived from
the US sales database with information contained in the petition. Could the United States clarify
how the absence of cost of manufacture informat ion US export sales make the entire US sales
database unreliable?
Reply
29. Commerce did not base its decision not to consider the US sales data solely on problems with
other data.  While the reliability of SAIL’s que stionnaire response was judged on the information
presented by SAIL as a whole, Commerce also identified significant flaws in the US sales database.
30. First, keeping in mind that on-site verification amounts to a selective audit that does not
review each piece of data submitted, the “sales” verification of most aspects of the Indian
respondent’s US sales database revealed numerous flaws in the items examined.  One significant flaw
was the discovery at verification that a physical characteristic used to match US and home market
sales was incorrectly reported,  an error that affected approximately 75 per cent of US sales in thedatabase.
28  In addition, several other errors were  discovered, including the fact that certain freight
costs were over- and under-reported for export sales29 and that the duty drawback calculation for US
sales was incorrect.
31. Second, the “cost” verification also reviewed elements of the US sales database.  For
logistical reasons, the cost elements of the US sales database were examined separately.  As SAIL
acknowledges, the cost verification ended in SAIL’s co mplete failure to reconcile its costs to its books
                                                     
26 Preliminary Determination, Ex. IND-11, at 41203.
27 Cost Verification Report , Ex. US-3, at 2.
28 First Written Submission of India at para. 30.
29 Sales Verification Report , Ex. IND-13, at 30.WT/DS206/R
Page E-37
and records.30  As a result of this failure, another flaw in the US sales database was exposed: the total
cost of manufacture (TCOM) and variable cost of manufacture (VCOM) for each US sale could not
be verified.  Without verified TCOM and VCOM information, Commerce could not adjust for
differences in physical characteristics that affect price comparability as required by Article 2.4 of the
Agreement.
32. In assessing the information submitted by SAIL – including the flaws in the US sales database
described above – Commerce specifically determined, inter alia , that the information “cannot be used
without undue difficulty".31  As Commerce stated in its final determination, “SAIL’s questionnaire
response is substantially incomplete and unusable in that there are deficiencies concerning a
significant portion of the information required to calculate a dumping margin".32  While there were
significant flaws in the US sales database, Commerce’s facts available determination was based on allof SAIL’s information.  This is appropriate because the data requested in an anti-dumping
investigation does not consist of independent sets of data which have no link to one another.
33  To
assess the “undue difficulty” of using information, one must evaluate how the necessary comparison
of information can be accomplished in its present state.  In this case, the absence of the cost
information associated with US sales made the required comparisons not just difficult, but impossible,where adjustment for physical differences were necessary.  Even for those sales for which the missing
cost information was not needed – sales that matched identically and would require no adjustment for
physical characteristics pursuant to Article 2.4 – US authorities would have been required to manually
correct the physical characteristics for 75 per cent of  the sales just to be able to identify the identical
sales, then it would have been necessary to make further corrections for freight costs, duty drawbackerrors, etc.
33. As to whether it would cause "undue difficulty" to compare the export prices derived from the
US sales database with information contained in the petition, we note that all the corrections just
described would be required, with the result that Commerce could still not be assured that all errorswere discovered.  These corrections would have caused undue difficulty, notwithstanding India’s
assertions to the contrary.  In fact, India’s evolving proposals demonstrate the undue difficulty
involved in making this comparison.
34. Finally, to accept India’s argument that “fac ts available” should result in a calculation that
leaves the respondent in the same position as if it had provided the information would encourage
respondents in an anti-dumping proceeding to pick and choose the information they submit, providingonly the information that is to their advantage.  To do so would render Article 6.8 and Annex II of the
AD Agreement meaningless.
Q11. In paragraph 33 of its first submission, the Un ited States identifies 1) technical errors in
SAIL's electronic databases, 2) lateness and incompleteness of certain narrative portions of thequestionnaire response, and 3) lack of product-specific costs in connection with the finding that
SAIL did not act to the best of its ability to provide the information requested.  Is it correct to
understand that these three factors are the entire ba sis of the conclusion that SAIL did not act
to the best of its ability to provide the information requested?
                                                     
30 SAIL’s USCIT Brief , Ex. IND-19, at 16.
31 Final Determination , Ex. IND-17, at 73130-31.
32 Id.
33 We note in this regard the statement of the European Communities that “it is important to recognize
that the data requested of interested parties in an anti-dumping investigation is not atomised, it does not consistof independent sets of data which have no link to one another.”  Third Party Statement of the European
Communities at para. 3.WT/DS206/R
Page E-38
Reply
35. The Panel refers to paragraph 33 of the first submission, in which the United States
summarized the three factors that USDOC identified in its  preliminary  determination that SAIL did
not act to the “best of its ability”.  Ultimately, by the time of Commerce’s Final Determination , there
were additional factors justifying a finding that SAIL failed to act to the best of its ability.  In the
Final Determination  , Commerce noted that SAIL “consistently failed to provide reliable information
throughout the course of the investigation,” despite Commerce’s “numerous and clear indications to
SAIL of its response deficiencies".34  Furthermore, Commerce noted that “[e]ven though we rejected
use of SAIL's questionnaire response at the preliminary determination, because the company was
seemingly attempting to cooperate, albeit in a flawed  manner, we continued to collect data after the
preliminary determination in an attempt to gather a sufficiently reliable database and narrative recordfor verification and for use in the final determination".
35  SAIL continued to provide Commerce with
unusable data, however, and Commerce in the end determined SAIL had not acted to the best of its
ability, summarizing in detail the deficiencies in the previously-identified areas of completeness,
timeliness, and workability of computer tapes and the fact that SAIL failed verification.36
36. The US Court of International Trade then requested Commerce to further explain itsreasoning that SAIL had not acted to the “best of its ability” and Commerce did so in its Remand
Redetermination.
37  SAIL filed comments with USDOC on this  point but chose not to challenge the
finding before the USCIT.
37. Commerce addressed in detail in its Remand Redetermination the factors contributing to its
determination that SAIL had not acted to the best of its ability during this investigation.  Commerce
explained that it has very limited knowledge of the actual extent of a respondent’s ability to comply
with requests for information, as it is the resp ondent, not Commerce, that possesses the necessary
information and knowledge of the company’s operations and records".38  Therefore, Commerce
explained, it was incumbent upon SAIL in this case to demonstrate why it was incapable of providing
the requested information in a timely fashion.  As has already been discussed in the United States’
first written submission, SAIL failed to provide Commerce with necessary information for calculating
its margin of dumping, and during the investigation never explained to Commerce that it was unable
to provide this information.
38. Commerce noted in the Remand Redetermination that SAIL informed Commerce that it was
experiencing difficulties in gathering and submitting the requested information, but that in all of its
communications with Commerce, SAIL further indicated that the requested information would be
forthcoming.  “SAIL gave every indication that it would comply with the agency’s information
requests".39  Nonetheless, even after Commerce returned submissions to SAIL with explanations of
what needed to be done to complete its electronic databases, for example, SAIL again submitteddeficient databases with “no reasonable basis for its failure to provide the information requested".
40
39. Commerce also noted that SAIL is one of the largest steel producers in the world, has an
established accounting system and its books are audited annually by a large team of public
accountants.41  Given the size and sophistication of SAIL, the extent of the insufficient responses
                                                     
34 Final Determination , Ex. IND-17, at 73129-30.
35 Id.
36 Id. at 73130.
37 Remand Redetermination , Ex. IND-21.
38 Id. at 4.
39 Id.
40 Id. at 7.
41 Id. at 8.WT/DS206/R
Page E-39
provided by SAIL during the investigation, and SAIL ’s repeated opportunities to correct information
and its failure to do so, Commerce determined that SAIL had not cooperated during the investigation
to the “best of its ability".42
Q12. Could the United States elaborate on its contention that Article 15 second sentence only
requires action by a developed country proposing to impose anti-dumping measures if the
developing country in question first demonstrates that there are "essential interests" that would
be affected by the imposing of an anti-dumping measure?  Specifically, could the United States
explain the legal basis of its view that the first step belongs to the developing country, which
must come forward with a demonstration that the imposition of anti-dumping duties would
affect its essential interests?  Could the United St ates indicate, in general, what elements such a
demonstration might consist of, or what might be considered relevant factors in this regard, in
its view?
Reply
40. The second sentence of Article 15 states that the obligation to explore constructive remedies
arises when the application of antidumping duties “would affect the essential interests of developing
country Members”.  Therefore, there would be no basis to find a developed country Member in breachof that provision unless the application of an antidumping measure in a particular case would affect
the developing country Member’s essential interests.
41. There are two components to this enquiry.  First, what are the “essential interests” at issue?
Second, how would the application of an antidumping measure in the particular case affect thoseinterests, if at all?  As a practical matter, it is the developing country Member and the respondent
private company that will possess the information needed to answer these questions.  Developed
country Members are in no position to identify what interests individual developing country Members
view as “essential” to their own interests, and investigating authorities cannot assess whether the
application of an anti-dumping measure in a particular case would affect those interests unless theprivate respondent or its government provides the information needed to make such an assessment.
43
Moreover, it is not enough for a private respondent to provide evidence suggesting that the imposition
of an antidumping measure would affect its own essential interests; it is the developing country
Member’s essential interests that are relevant.
42. The elements relevant to demonstrating these matters will likely vary from case to case.
Some possible elements – assuming there are essential interests at issue –  might include whether the
product is of particular strategic importance to the developing country Member; whether the
developed country Member is the sole market for the product; whether the total value of the affected
trade is significant relative to the developing country Member’s economy as a whole; and whether, if
the private respondent company is large enough that imposition of a measure would affect the
developing country Member’s essential interests (and not just the company’s own), the producer
produces other products that the measure would not affect.  If the company produces a variety of
products that it sells to a variety of markets, the imposition of an antidumping measure on the export
of a single product to a single export market may not affect the company’s essential interests, much
less the developing country Member’s essential interests.
                                                     
42 Id. at 8-9.
43 The India Steel investigation is a case in point.  As th e United States noted in its first written
submission (at para. 187), SAIL’s letter addressing the possibility of a suspension agreement did not mentionIndia’s essential interests, and it did not claim that (or explain how) applying an anti-dumping measure toSAIL’s exports of steel plate would affect those interests.  See Letter from SAIL’s Counsel to Commerce Re:
Request for a Suspension Agreement , dated 29 July 1999 (Exh. IND-10).WT/DS206/R
Page E-40
43. India characterizes the US position on this issue as “an unfortunate attempt by a developed
WTO Member to read additional restrictions into a provision that already provides little benefit in
terms of legal effect or certainty to developing countries . . . ".44  This is simply not true.  The US
position on this issue is based on a good faith reading of the language of Article 15.  The second
sentence of that Article demonstrates a clear decision by the WTO Members that the specialprovisions of Article 15 do not simply apply to any case in which a developing country is involved as
a respondent.  Otherwise, there would have been no need to include any reference to essential
interests in the provision.
Q13. Is the cost verification an integral process, or is the cost of manufacture for US export
sales separately verified?  If the former, can the Un ited States point to any particular part of the
cost verification report that relates to informat ion regarding cost of manufacture of US export
sales?
Reply
44. On-site verifications are structured to fit the situation of the company being examined.
Verification for certain companies will be conducted by the same staff at the same location, covering
US sales, home market sales, cost of production and constructed value.  Other verifications, such as
that conducted for SAIL, are done by separate teams of staff due to the number of locations to be
visited.  This resulted in separate verification reports.  But the purpose of verification is the same: to
conduct a spot-check to test the accuracy of the submitted information.  The verification of eachessential element of the response is necessary to the overall verification of the response.  In this case,
the cost of manufacture for US sales was verified separately with the rest of the cost data for logistical
reasons.  Had SAIL’s data been available at a single location, it would have been verified together
with the US sales data.
45. SAIL’s total cost of manufacture (TCOM) and variable cost of manufacture (VCOM) were
developed using a single cost methodology.  In f act, in replying to Commerce’s questions requesting
TCOM and VCOM information for US sales, SAIL simply referred Commerce to its cost
questionnaire (Section D) response.
45
46. Similarly, the verification of cost information was conducted on a consolidated basis.  All
cost information, regardless of whether it related to home market or US sales, was examined duringthe cost verification.  As the United States previously noted, and India has not disputed, SAIL failed
to verify its reported cost information.
46
Q14. Is it US practice to make adjustments fo r differences affecting price comparability,
including physical differences in the products co ncerned, to export price, to normal value, or
does it vary from case to case?  Could the United States please explain the significance of cost of
manufacture information in the context of expo rt price information?  Is this information
equally important in all cases, or was it considered particularly significant in this case?
Reply
47. Yes, it is US practice to make adjustments to export price and normal value for differences
affecting price comparability, including physical differences in the products concerned.  The
United States makes such adjustments in accordance with its obligations under Article 2.4 of the AD
Agreement.  Article 2.4 states the following:
                                                     
44 India’s Oral Statement at para. 69.
45 See SAIL Section C Questionnaire Response at C-49 and C-50 (Exhibit US-29).
46 First Written Submission of the United States at para. 40.WT/DS206/R
Page E-41
“A fair comparison shall be made between the export price and the normal value.
This comparison shall be made at the same level of trade, normally at the ex-factory
level....   Due allowance shall be made in each case, on its merits, for differences
which affect price comparability, including differences in conditions and terms ofsale, taxation, levels of trade, quantities, physical characteristics , and any other
differences which are also demonstrated to affect price comparability.”  (Emphasis
added.)
48. The US statute implements these obligations under Article 2.4.  The specific adjustments
necessary for making a fair comparison will vary on a case-by-case basis.  For example, if sales to the
United States were made on a delivered basis, all of the movement expenses associated with delivery
from the factory to the US customer would have to be deducted from export price in order to reach an
ex-factory price.  On the other hand, if the US sales were made on an ex-factory basis, the exporter
would have incurred no costs to deliver the merchandise to the US customer.  Consequently, there
would be no movement expenses to deduct from the export price.
49. Cost of manufacture information is very important in the context of export price information,
because it is the information needed to make the due allowance for differences in physical
characteristics mandated by Article 2.4.  Article 2.4 imposes an obligation on Members to make
adjustments to account for physical differences that affect price comparability in the process of
making fair comparisons between export price and normal value.  The United States bases its price
adjustments for physical differences on differences in variable cost of manufacture between distinctproducts.  Without the cost of manufacture data, it is not possible to make these price adjustments.
50. The cost of manufacture information is equally important in all cases in which products sold
in the US market must be matched to sales of non-identical merchandise in the comparison market.
Q15. The United States in paragraph 10 of its oral submission notes that the US sales data
was only "a fraction" of the information necessa ry for an anti-dumping analysis.  Does this
characterization refer to the amount of informat ion involved in relation to the total information
necessary?  How would this be measured - number of pages, data points?  Would the conclusion
be the same if, in terms of volumes involved, the US sales were much larger than home market
sales (but home market sales still met the test of footnote 2)?  How about if foreign production
were much greater than the volume of export sales ?
51. As an initial matter, the United States notes that paragraph 10 of its oral submission discussed
India’s request that the US authorities use SAIL’s US pricing  information to perform an anti-dumping
analysis.  It was this pricing  information that the United States characterized as a fraction of the
information necessary for an anti-dumping analysis.  The US sales data normally necessary to performan antidumping analysis would further include selling expenses, movement charges, product matching
characteristics, variable cost of manufacturing, total cost of manufacturing, and constructed value.  As
discussed above in response to question 10, much of this information in SAIL’s US database was
inaccurate and/or unusable.
52. The United States’ characterization of the US pricing information as being a fraction of the
information necessary for an anti-dumping analysis was, indeed, a reference to the amount of
information involved in relation to the total information necessary.  However, this “amount” of
information cannot be measured with respect to the number of pages needed to print out US prices or
the number of data points needed to programme them.  Rather, it needs to be measured with respect tothe totality of information necessary to perform an anti-dumping analysis.  In this case, as India itself
has conceded, most of the information SAIL submitted that was necessary to perform the anti-
dumping analysis was inaccurate, failed verification, and could not be used in performing the analysis.WT/DS206/R
Page E-42
This includes all of the information related to home market sales, cost of production, constructed
value, and some of the information related to US sales.
Q16. Could the USDOC have identified, amon g the US sales reported in the US sales
database, export prices for transactions involv ing a like or similar product to that represented
in the constructed normal value reported in the peti tion?  Is it the United States' view that this
would, in this case or inherently, constitute "undue difficulty" in using this information in the
investigation?  Please explain in detail the nature and scope of the undue difficulty involved.
Reply
53. As we explained at the first Panel meeting and in response to Questions 6 and 10, the US
sales database contained numerous flaws and could not be used.  In addition, as India and SAIL have
conceded, all other data with respect to home market sales, cost of production, and constructed value
proved to be unverifiable, unreliable, and unusable.  These combined failures properly led Commerce
to conclude that it should make a determination in this investigation on the basis of total facts
available.  After making this conclusion in the face of such a failure on the part of the respondent, for
Commerce or any investigative authority to attempt to rehabilitate such a response by selectively
identifying certain information that might be useable would have inherently constituted an undue
difficulty.
54. For Commerce to have identified, among the US sales reported in the US sales database,
export prices for transactions involving a like or similar product to that represented in the constructed
normal value reported in the petition, would have involved undue difficulty.  To have identified US
sales transactions of like or similar merchandise would have required Commerce to manually review
and input the physical characteristics for 75 per cent of the US sales transactions, then identify those
sales of merchandise that was identical to the product in the petition for which there was a constructedvalue.  Commerce would also have had to input corr ected freight costs that had been either over- or
under-reported, duty drawback errors and any other errors discovered while making the comparisons.
Q17. Is it the United States' view that paragraph 5 of Annex II is symmetrical?  That is,
paragraph 5 provides that if a party has acted to the best of its ability, the fact that the
information provided is not ideal in all respects should not justify disregarding it.  Putting aside
the import of "should", does the United States consider that the fact that a party has failed to
act to the best of its ability should justify the investigating authority in disregarding information
that is otherwise not ideal in all respects? Furthe r, does the United States consider that the fact
that a party has failed to act to the best of its ability should justify the investigating authority in
disregarding information that is otherwise ideal in all respects?
Reply
55. Annex II, paragraph 5 states that even if “information provided may not be ideal in all
respects, this should not justify the authorities from disregarding it,” provided that the interested party
responding to authorities’ questionnaires has acted to  the best of its ability.  The natural corollary to
this principle is that where a party has not acted to the best of its ability, and its information is not
ideal in all respects, that information may be disregarded by the investigating authorities.  Therefore,
in response to the first question, the United States agrees that if a party submitting information has
failed to act to the best of its ability, an authority  may disregard information that is not ideal in all
respects.  While the appropriateness of disregarding the information would have to be considered on acase-by-case basis, we note that in this case, SAIL’s information was ideal in almost no respect.WT/DS206/R
Page E-43
56. In response to the second question, the United States notes that if the information provided is
ideal in all respects, it would not be necessary to consider whether the party acted to the best of its
ability.
Q18. It appears that India considers that a comparison between a constructed normal value
calculated by petitioners, and an average of US sales prices, or an average of a subset of US
sales prices for product that "matches" the product for which normal value was calculated,
yields a more accurate result, one that better represents "objective decision-making based on
facts," than a determination that applies the dump ing margin calculated in the petition as facts
available.  Could the United States respond to this proposition, specifically regarding the
relative quality of the result in each case?  Does  the outcome affect the United States' view in
this regard?
Reply
57. As we noted in response to Question 16, the lack of necessary information to conduct an
anti-dumping analysis required Commerce to base its determination on facts available in the petition;specifically, the price offer in the petition which matched the product on which constructed value was
based.  The relative quality of this decision – comparing the price offer in the petition to the matching
product on which constructed value was based – is quite sound, particularly where the information has
been corroborated as in this case.
58. As an alternative, India would require that Commerce make all the changes necessary to
utilize the US sales data – an exercise that would have involved a distinct amount of speculation given
the extent of what was missing – so that these sales could be compared to the product for which
normal value was calculated.  Given that many of these sales did not match the product on which
normal value was based, a subset of these sales would need to be identified in order to conduct thiscomparison.  The relative quality of India’s proposed ex ercise is questionable at best.  It is the analytic
process involved  – not the outcome – that affects the United States’ view in this regard.
Questions to India
Q19. India claims that the United States viol ated Article 2.4 of the AD Agreement because the
failure to use the US sales data submitted by SAIL resulted in an unfair comparison.  DoesIndia consider that a comparison of normal value based on facts available and export price
based on the US sales data would have been fair  within the meaning of Article 2.4?  Does India
agree that USDOC was entitled to rely on facts available with respect to the determination of
normal value in this case?
Reply
59. India’s argument is based on the false premise that a breach of Article 6 could also constitute
a breach of Article 2.4.  Even if there had been a breach of Article 6 in the investigation at issue (a
point the United States does not concede) such a breach would not cause a violation of Article 2.4.The Panel’s question illustrates the flaw in the logic of India’s suggestion that Articles 2.4 and 6 are
linked.  The United States discusses this point further in its answer to Question 20.
Q20. Could India elaborate on the link it draws between the Article 2.4 "fair comparison"
requirement and the asserted violation of Arti cle 6.8.  Specifically, does India consider that a
comparison in which one element is determined in violation of some other provision of the AD
Agreement is, ipso facto, unfair in terms of Article 2.4?  Does India consider that this constitutes
a separate violation of the AD Agreement?  For instance, assume a panel were to conclude thatWT/DS206/R
Page E-44
an investigating authority violated some aspect of  Article 2.2 in the calculation of normal value.
Would this, in India's view, necessarily constitute a violation of Article 2.4 as well?
Reply
60. To the extent that India is arguing that there is a link between Articles 2.4 and 6.8, its
argument is unfounded.  There is no support in the text of the Agreement for an interpretation of
Article 2.4 that would allow breaches of other provisions to also constitute a breach of Article 2.4.
61. The ordinary meaning of this term used in Article 2.4, viewed in context, demonstrates this
point.  Article 2 governs the “Determination of Dumping”.  The first sentence of Article 2.4, in turn,
states that “A fair comparison shall be made between the export price and the normal value”.  Theremainder of that paragraph sets out the ways in wh ich investigating authorities are to make this fair
comparison.
62. The first sentence of Article 2.4.2 further demonstrates this point.  That provision establishes
additional criteria for establishing margins, “subject to the provisions governing fair comparisons inparagraph 4”.  Thus, it is the provisions in paragraph 4 of Article 2 that establish the obligations
relevant to making a fair comparison.  By contrast, there is no language suggesting that other
provisions of the Agreement are implicated in Article 2.4 in any way.
Q21. India argues that paragraph 5 of Annex II requires that information in a particular
category must be accepted, despite possible flaws, if it can be used without undue difficulties
and if the party providing it has acted to the best  of its ability.  India also asserts that if a
category of information satisfies the three or sometimes four conditions of paragraph 3 of
Annex II, the investigating authorities may not re ject that category of information.  These
requirements do not, however, address the substance or quality of the information in question.Does India maintain that the investigating authority must, in all cases, base its determination on
the information submitted in these circumstances ?  What if, for instance, information regarding
home market sales is known to be incomplete, but is verifiable, timely submitted, and can be
used with undue difficulties - would this incomplete information have to be used in calculating
the dumping margin?  Going further, what if, upon verification, the information proves to be
incorrect - must it still be used in calculating the dumping margin?  What if the information
simply cannot be verified - must it still be used in calculating the dumping margin?  WouldIndia consider that the completeness or correctnes s or actual verification of the information is
part of the conditions under paragraph 3 of Annex II, or would these be separate or further
requirements?
Reply
63. This question identifies an important flaw in India’s “sequencing” argument regarding the
relationship between Annex II, paragraph 3 and Annex II, paragraph 5.  We agree with the statement
in the question that the requirements of Annex II, paragraph 3 do not address the substance or quality
of the information in question.  India’s interpretation, to the extent that it requires an investigatingauthority to use information without regard to its substance or quality, is an interpretation that
contradicts objective decision-making based on facts.
Q22. Does India dispute the USDOC finding that SAIL failed to act to the best of its ability in
respect to information. other than US sales data?  Is it correct to understand that India has notcontested the scope of the information request put to SAIL during the investigation?WT/DS206/R
Page E-45
Reply
64. The United States notes that SAIL declined to submit any comments to the US Court of
International Trade challenging Commerce’s Remand Determination that SAIL failed to act to the
best of its ability.  The United States can confirm that SAIL did not contest the scope of theinformation request put to SAIL during the investigation.
Q23. In SAIL's calculations comparing US sales data to "verified" home market sales, what
assurance is there that the home sales data covered  all sales of comparable product, or that cost
data covered all production of the comparable pro duct?  Especially in light of the "significant"
flaws in the home sales and cost data, which SAIL does not dispute allowed USDOC to rely on
facts available.  Isn't the argument here over which facts available to use, which does not appearto be the subject of a claim in this dispute?  Does India consider that the comparison SAIL
proposed would not have posed "undue difficulties" for USDOC?
Reply
65. This question raises a very important point: the essence of India’s challenge is that US
authorities used the wrong “source” for facts available.  Yet India has not made a legal claim that
matches the essence of its challenge.  India has abandoned its claim under Annex II, paragraph 7, that
the United States failed to exercise special circumspection in using information supplied in the
petition and India has not indicated any other provision of the Agreement which is within the terms ofreference and which establishes an obligation to evaluate facts available alternatives relative to one
another.  The Panel has issued a preliminary ruling indicating that, having abandoned its Annex II,
paragraph 7 claim, India may not revive it.
Q24. Section 782(d) of the Tariff Act of 1930, as amended, specifies that in the case of
deficient submissions, the USDOC "may, subject to subsection (e), disregard all or part of the
original and subsequent responses" (emphasis added). How does India justify the contention
that the US law required USDOC to reject US sales data and rely on facts available in violation
of the AD Agreement, in light of this statutory language, US case law permitting use of partial
facts available, USDOC decisions relying on part ial facts available, the arguments presented in
SAIL's USCIT brief, and India's acknowledgement that that statute "could" be interpreted
otherwise?
Reply
66. It is difficult to see how India can justify its contention that US law required  Commerce to
reject the Indian respondent’s US sales data.  Section 782(d) expressly states that Commerce “may”disregard information but only after it considers the information pursuant to section 782(e).  In
response to Question 8, we have identified Commerce decisions and USCIT case law that permit –
indeed encourage – the use of partial facts available.  SAIL itself argued to the USCIT that facts
available  “arguably is justified (but not required) for certain of its information".
47
Q25. The heading of India's argument regarding Article 15 asserts that USDOC violated
Article 15 by "failing to give special regard to the situation of India as a developing countrywhen it applied facts available in relation to SAIL’s US sales data." However, the body of the
argument related to the alleged failure of USDOC to "explore possibilities of constructive
remedies" as required by the second sentence of Article 15.  Is India asserting a violation of the
first sentence of Article 15, and if so, could India please explain the legal argument in support of
its claim?  Could India elaborate on its interpretation of the first sentence of Article 15?  In
                                                     
47 SAIL’s CIT Brief , Ex. IND-19, at 16.WT/DS206/R
Page E-46
India's view, what obligations does it impose on a developed country, and when must those
obligations be satisfied?  Could India expand on it assertion and explain how, specifically, the
USDOC actions in this case constitute a violation of the first sentence of Article 15?
Reply
67. There is no possible basis for India to assert a violation of the first sentence of Article 15
because, as India has previously conceded, the provision imposes no obligations on developing
country Members.  India stated in Bed Linens  that the first sentence "does not impose any specific
legal obligation, but simply expresses a preference that the special situation of developing countries
should be an element to be weighted when making that evaluation".48  India contrasted the lack of any
specific legal obligation with its interpretation of the second sentence, which it claimed "imposes aspecific legal obligation to ‘explore possibilities’".
49  The United States urges the Panel to take these
facts into account in the event that India changes its interpretation of the first sentence for purposes of
the present proceeding.
Q26. Does India agree with the contention of th e United States that the respondent ultimately
controls the information necessary to a dumping calculation?  How does India respond to the
contention that to allow the respondent to cont rol the information gathering process by deciding
which information (or category of information) it will provide, and requiring that this
information be accepted if it is adequate under paragraph 3 Annex II regardless of what flaws
there may be with other information, gives th e respondent control over the dumping calculation
and thus opens the possibility for manipulation of the results?
Reply
68. SAIL is likely to respond that it had no intent to manipulate the results, but this is beside the
point.  The Panel’s question raises an essential question regarding how to ensure the careful balance
between the interests of investigating authorities and exporters that is reflected in the AD Agreement.
Q27. It is the Panel's understanding that US law does not provide for the imposition of a
lesser duty.  In this circumstance, does India consider that the US was obliged to explore the
possibility of imposing a lesser duty under Article 15?
Reply
69. The only place in the AD Agreement that addresses the issue of  “lesser duty” is Article 9.1.
That provision indicates only that it is “desirable” to impose a lesser duty if doing so would be
adequate to remove the injury to the domestic industry.  Article 9.1 explicitly reserves that decision tothe authorities of the importing Member.  Article 9.1 is not a mandatory provision, and there is
nothing in Article 15 which would override the clearly discretionary nature of Article 9.1.
70. Moreover, in a recent submission to the Committee on Anti-Dumping Practices, Ad Hoc
Group on Implementation, India made a proposal to “operationalize” Article 15 by making the lesserduty rule mandatory with respect to imports from developing countries as a “constructive remedy” in
                                                     
48 Panel Report on European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed
Linens from India , WT/DS141/R, adopted 12 March 2001, para. 6.220.
49 Id.  Since all parties were in agreement that the first sentence of Article 15 imposed no obligation,
the Bed Linens  panel expressed no views on the matter.  Id., para. 6.227 n.85.WT/DS206/R
Page E-47
antidumping cases.50  The fact that India has made such a proposal further demonstrates that there is
no such obligation at present.
Q28. Could India please explain why it considers the US sales data to be "unrelated" to the
rest of the data in this case?  Would India consid er that, in every case, the data on (a) the prices
of the subject merchandise in the domestic ma rket of the exporting country, (b) the export
prices of the subject merchandise, (c) the costs of production, and (d) constructed value, are
separate and distinct categories of information?  Would India consider that if an exporter
provides information on any one or more of these elements that is verifiable, timely provided,
and where applicable in the computer language or medium requested, that information must be
used in calculating a dumping margin for the exporter providing the information?  Would
India's answer to the previous question be affected by the extent to which information on otherelements is not verifiable, or not timely provided, or not in the computer language or medium
requested?  That is, does India see any possibility of a "global" perspective on the decision
whether information can be used without undue difficulties in calculating the dumping margin?
Reply
71. The United States refers the Panel to its response to Question 1 in assessing this issue.
Q29. Is it correct to understand that, in India's view, the fact that there is no or unverifiable
information concerning the cost component of the US sales has no effect on the verifiability or
reliability of the US sales price data that was pr ovided?  Does India consider that it may in some
circumstances be the case that the lack of some  aspect of the requested information renders the
entire body of data to which that aspect pertains unreliable?
Reply
72. We refer the Panel to India’s Oral Statement on this issue.  There, India stated that
If an interested foreign party does not or fails to provide complete information
regarding an important category of information (which could include one or more of
what the USDOC refers to as the “essential components of a respondent’s data”) then
depending on the circumstances, it may be appropriate for investigating authorities tofind that they cannot use partial information for that category “without undue
difficulties.”  Assuming that the authorities also find that the party did not use its best
efforts in attempting to supply the complete information, then the application of facts
available may be appropriate as to the entire category of information.
51
73. India went on to give an example of when facts available in its entirety would be justified that
is remarkably analogous to this case:
[I]f a foreign respondent provided information on all export sales but did not provide
information on a number of necessary characteristics of such sales (for example, their
physical characteristics or the prices at which they were sold), the investigating
authorities may be justified in finding that  they cannot use that information without
undue difficulty because it is too incomplete.52
                                                     
50 Implementation-Related Issues Referred to the Committee on Anti-Dumping Practices and its
Working Group on Implementation , Paper Submitted by India, G/ADP/AHG/W/128, 1 February 2002, para. 9.
51 Oral Statement of India at para. 57.
52 Id. at para. 58.WT/DS206/R
Page E-48
74. This admission by India is significant because the foreign respondent in this case did not
provide information on a necessary characteristic (the cost of manufacture characteristics required to
allow Commerce to adjust for the differences in physical characteristics of the US merchandise with
the normal value merchandise).  Therefore, India’s own reasoning would support the rejection of the
US sales data.
Q30. Does India consider that §782(e)(3) is NOT consistent with goal of objective
decision-making based on facts, or does India object to it because it is not a provision
specifically found in Annex II?
Reply
75. The United States requests that the Panel review its response to Question 3 with regard to this
question.
Q31. Where in the AD Agreement does India find an  obligation on the investigating authority
to carry out and record, as suggested in paragraph 74 of its oral statement, a detailed analysis of
a proposed constructive remedy?
Reply
76. There is no provision in the AD Agreement wh ich requires investigating authorities to take
such steps.  The three logical places to look for such an obligation are Article 15, Article 8 (the priceundertakings provision), and Article 12 (which addresses a Member’s obligations with respect to
public notice and explanation of determinations).  None of these provisions imposes an obligation on
authorities to carry out and record a detailed analysis of a proposed constructive remedy.
77. In addition, India has not alleged violation of Article 8 or Article 12.  Consequently, US
conformity with those provisions is not within the Panel’s terms of reference.
78. Finally, even if the Panel should find that the AD Agreement contains an obligation to
provide some degree of analysis of a proposed price undertaking when a developing country is
involved, and even if India has alleged a violation of the relevant provision, the degree of theinvestigating authority’s analysis would certainly be proportionate to the seriousness of the price
undertaking proposal submitted.  In this case, we note India’s statement to the Panel during the first
meeting that India’s proposal for a price undertaking was not a realistic proposal, but was merely a
negotiating ploy.
Q32. Is it correct to understand that  India considers that a comparison between a
constructed normal value calculated by petitioners, and an average of US sales prices, or anaverage of a subset of US sales prices for product that "matches" the product for which normal
value was calculated, yields a more accurate result, one that better represents "objective
decision-making based on facts", than a de termination that applies the dumping margin
calculated in the petition as facts available?  If so, could India explain in detail why it considers
this result "better".  Would India's view be the same if the outcome were different?
Reply
79. The United States notes that the only difference between the two approaches for applying
facts available is that one may result in a lower margin  than the other.  It is not possible to say which
is more accurate because that implies that one knows what the correct margin is.  In this case, there isWT/DS206/R
Page E-49
no way to know what the correct margin of dumping  is because SAIL did not supply the information
necessary to calculate the actual margin of dumping.
Q33. India appears to have argued that the investigating authority should, in deciding
whether information will be rejected and facts availa ble used instead, have reference to the facts
available that would likely be used, and assess wh ether they are, in fact, "better", "as good as",
or "worse" than the imperfect information pr ovided by the exporter.  Is this a correct
understanding of India's position?  Could India explain what relevance the facts available
ultimately used have in the decision regarding whether information provided can be used in the
investigation without undue difficulties?  Could India please explain its apparent view that the
quality of the facts available ultimately relied upon in making a determination somehow effects
the degree of effort that might be considered "undue difficulties" in using the information
provided?
Reply
80. Please refer to the response to the previous question.
Questions to both parties
Q34. Would the parties please discuss their views concerning the meaning of the phrase
"undue difficulties" in paragraph 3 of Annex II?  Does it encompass substantive as well asprocedural aspects of using the data in question?
Reply
81. Annex II, Article 3 recognizes that information should be taken into account if, among other
things, it is “appropriately submitted so that it can be used in the investigation without undue
difficulties”.  The term “undue” is defined as “going beyond what is warranted or natural".53  Whether
or not the use of information would cause undue difficulties must be determined on a case-by-case
basis, and both substantive and procedural aspects of using the data could be relevant to this question.
For example, the information may be substantively flawed in such a manner that corrections would be
unduly difficult or impossible.  Alternatively, the use of certain information might create procedural
issues that would cause undue difficulty.  For example, the exercise of using information mightinvolve receiving comments from a large number of interested parties that would be unduly difficult
under the circumstances of a particular case, or may be unduly difficult given the time constraints of
completing the investigation within required time limits.
Q35. The United States argues that India’s clai m regarding US “practice” in the application
of facts available is not properly before the Pane l and submits that under the US law, an agency
such as USDOC may depart from established “ practice” if it gives a reasoned explanation for
doing so.  The United States thus argues that US “practice” cannot be the subject of a claim.
Could the United States please elaborate on this  argument?  India is invited to respond to this
question as well.
Reply
82. The United States first notes that, in response to a question at the first Panel meeting, India
appeared to state that it is not pursuing a separate claim with respect to “practice”.  Therefore, thePanel need not reach the issue of whether practice can be the subject of a claim.
                                                     
53 New Shorter Oxford Dictionary, Clarendon Press, Vol. II at 3480.WT/DS206/R
Page E-50
83. Having noted this point, and responding to the Panel’s question, it is a well-established
principle of US administrative law that an administrative agency, such as Commerce, is not obliged to
follow its own precedents, provided that it explains why it departs from them.54  Thus, even if
Commerce had made determinations in previous cases to reject respondents’ submissions in toto  and
to rely instead on the facts available, it would not be bound by those determinations in futureantidumping proceedings involving the use of the facts available.
55  The relevant consideration under
US law is that Commerce determinations be consistent with the statute and the regulations.
84. As the United States noted in its first written submission, what India refers to as “practice”
consists of nothing more than individual applications of the US facts available provisions.  While
these applications themselves might individually constitute measures, they do not, through numbers,
mutate into a separate and distinct “measure” that can be called “practice”.  While Commerce, likemany other administrative agencies in the United States, uses the term “practice” to refer collectively
to its past precedent, that precedent is not binding on Commerce, and is, therefore, irrelevant for
purposes of WTO dispute settlement.  India’s alleged “practice”  simply consists of specific
determinations in specific antidumping proceedings that are not within the Panel’s terms of reference.
85. The panel in the Export Restraints  case addressed this issue in some detail.  Canada had
claimed that the United States had a practice of treating export restraints as countervailable subsidies,
and that this “practice” constituted a measure that could be subject to panel review.  In response to a
question from the panel, Canada defined this US “practice” as “an institutional commitment to follow
declared interpretations or methodologies that is reflected in cumulative determinations".
56  Canada
admitted, however, that US law permits Commerce to depart from its “practices” as long as it explains
its reasons for doing so.57  The panel correctly rejected Canada’s argument on the grounds that US
practice “does not appear to have independent operational status such that it could independently give
rise to a WTO violation as alleged by Canada".58
86. In addition to the fact that US facts available  “practice” cannot constitute a measure, India’s
claims regarding such “practice” are not properly before the Panel because they do not conform toArticles 4.7 and 6.2 of the DSU.  As we explained in our first written submission, India did not
identify US facts available “practice” in its request for consultations and the United States and India
never consulted with respect to US  “practice".
59
                                                     
54 See, e.g. , Kenneth Culp Davis and Richard J. Pierce, Jr., Administrative Law Treatise  § 11.5 at 206
(Little, Brown, 3rd ed 1994) (“The dominant law clearly is that an agency must either follow its own precedents
or explain why it departs from them.  The courts so requ ire.”) (copy attached as Exhibit US-30); and Charles H.
Koch, Jr., Administrative Law and Practice  § 5.67[4] at 255 (West, 2d ed. 1997) (hereinafter “Koch”) (“Neither
the Constitution nor general administrative law prohibits an agency from deviating from prior precedent, but
there is some general requirement of consistency.  At least, the law requires an explanation for deviations frompast practices.”) (copy attached as Exhibit US-31).
55 Indeed, even if Commerce had made determinations under section 776(a) that resulted in the use of
the facts available in place of respondents’ submitted information, those determinations, in and of themselves,would not justify similar determinations in future antidumping investigations.  Koch, supra , note 54, at 256
(“[T]he agency may not rely on past precedent alone to justify its decisions.”).  Instead, Commerce ultimatelywould have to justify any such decision on the basis of  the statute and the evidence of record.  The existence of
prior determinations using facts available under simila r factual scenarios would merely serve as evidence that
Commerce was not acting arbitrarily in the new antidumping proceeding.
56 Panel Report on United States – Measures Treating Exports Restraints as Subsidies , WT/DS194/R,
adopted August 23, 2001, para. 8.120.
57 Id., para. 8.125.
58 Id ., para. 8.126.
59 See US First Written Submission , para. 147 and n. 28 (citations omitted).WT/DS206/R
Page E-51
Q36. Could the parties explain their views as to what constitutes “practice” as used by India
in its request for establishment?
Reply
87. The United States respectfully submits that this question demonstrates the validity of the US
position that India’s claims regarding US facts available “practice” are not properly before the Panel
because they do not conform to Articles 4.7 and 6.2 of the DSU.  After one full round of briefing and
a meeting of the parties with the Panel, it is difficult to discern the point of India’s arguments
involving “practice”. Judging from its response to the question that the Panel asked at the first Panel
meeting, however, India does not appear to be making a separate claim on the issue of “practice”, but
is merely using this concept to form indistinct and nebulous arguments in support of its claims with
regard to the US facts available provisions “as such” and as applied in this case.
88. To elaborate, India has already admitted that the US statutory provisions can be interpreted in
the manner that it prefers.60  Since this fact invalidates its challenge to the US facts available
provisions “as such”, India argues instead that the Panel should examine the statute as it has been“interpreted” in Commerce practice.  But India’s citation of previous Commerce facts available
determinations does nothing to prove that the US facts available provisions are inconsistent “as such”
with the AD Agreement.  An agency’s decision to exercise its discretion to interpret a statute in a
particular way cannot transform a WTO-consistent statute into a WTO-inconsistent one.  Moreover,
the United States has already explained (in response to Question 8) why India is wrong to claim thatCommerce has interpreted the US facts available provisions to require the rejection of all of a
respondent’s information where only some information is flawed.
89. With respect to India’s “as applied” arguments ( i.e., as applied in other cases), the fact that
Commerce has applied the provisions in certain ways in other cases sheds no light on whetherCommerce acted inconsistently with its obligatio ns under the AD Agreement in the investigation at
issue.
Q37. Do the parties consider that the USDOC "calculated" a dumping margin in this case?
In this regard, we note the arguments made by the United States in paragraphs 93 to 97 of its
first written submission regarding Article 6.8, which provides that "preliminary and final
determinations, affirmative or negative" may be made on the basis of facts available.
Reply
90. Commerce did not “calculate” a dumping margin in this case because SAIL’s information
could not be used for such a purpose.  It is more accurate to state that Commerce “made” its finaldetermination on the basis of the facts available.  This reflects the language of Article 6.8 of the AD
Agreement, which provides that, under specified circumstances, “preliminary and final
determinations, affirmative or negative, may be made on the basis of facts available.” (emphasis
added).  It is also consistent with paragraph 1 of Annex II, which states that investigating authorities“will be free to make determinations on the basis of the facts available” when, as in the present case,
parties fail to supply necessary information within a reasonable time.
Q38. Could the parties please explain their views regarding the meaning of the phrase
information should be "taken into account" as used in Annex II paragraph 3.  (Ignore for
purposes of this question whether "should" is to be understood as mandatory or not).  Forinstance, might it be understood to mean that the determination must be based on that
information? or to mean that the investigating authority must look at the information further,
                                                     
60 See India’s first written submission at para. 153.WT/DS206/R
Page E-52
attempt to verify it, and judge its reliability, but may ultimately not base decision on it and refer
to facts available instead?
Reply
91. The term “take into account” is defined as “take into consideration” or “notice.".61  Thus,
Annex II, paragraph 3, requires investigating authorities to “take into consideration” or “notice”
information which is verifiable, appropriately submitted so that it can be used in the investigation
without undue difficulties, supplied in a timely fashion and, where applicable, supplied in a medium
or computer language requested by the authorities.  In this case, Commerce took into account SAIL’s
information, consistent with the totality of the record evidence.62  Annex II, paragraph 3, however,
does not require that Commerce use the information in its calculations.
Q39. Could the parties please explain their views as to the meaning of the term "verifiable" in
Annex II, paragraph 3, with specific reference to, inter alia,  the following possibilities:
(a) information is prepared and presented in a way that it can be checked against
the books and records of the company submitting it;
(b) information not only satisfies (a), but also when it is checked, it is found to be
complete, accurate and reliable - i.e., it passes verification.
92. The term “verifiable” is defined as “able to be verified or proved to be true; authentic,
accurate, real".63  The use of the word “verifiable” in Annex II, paragraph 3 of the AD Agreement is
understandable since an actual on-site verification is not required by the AD Agreement.  Thus,
information that has not been subject to actual verification may be considered to be “verifiable ”
provided that it is internally consistent and otherwise properly supported.  In such circumstances, aninvestigating authority that opts not to verify such  information cannot decline to consider it because it
was not, in fact, verified.  This was the principle expressed in the panel decisions in Japan Hot-Rolled
and Guatemala Cement II
64,  where the investigating authorities in those cases refused to accept or
verify the information during the relevant investigations.
93. The facts established in this case are quite different, however.  Neither the Japan Hot-Rolled
panel nor the Guatemala Cement II panel were faced with a situation like the instant one in which on-
site verification of the information was attempted but the information failed to be verified.  Such
information which has actually been subjected to verification and found not to verify can no longer be
said to be “verifiable” since it has been proven to be inaccurate.  Such an explicit finding – such as
was made in this case – that a respondent’s information failed verification65 rebuts any assertion that
information was “able to be verified or proved to be true".66
                                                     
61 The New Shorter Oxford English Dictionary, Clarendon Press, Oxford, 1993 (under the “phrases”
section following the definition of the term “account”).
62 See the response to Question 4, supra .
63 New Shorter Oxford Dictionary, Clarendon Press, at 3564.
64 Guatemala – Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico ,
WT/DS/156/R, 24 October 2000, para. 2.274; United States – Anti-Dumping Measures on Certain Hot-Rolled
Steel Products from Japan , WT/DS/184/R (28 February 2001, adopted 23 August 2001) ( Hot-Rolled Panel
Report ) at para. 5.79.
65 Verification Failure Memorandum, Ex. US-25.
66 New Shorter Oxford Dictionary, Clarendon Press, at 3564.WT/DS206/R
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Questions for third parties
Q2. Could Chile please explain its view that  a reading of the provisions of Annex II
paragraphs 3 and 5 satisfies the criteria set out in the  Mavrommatis  case relied upon by Chile of
being the "more limited" interpretation, which, as  far as it goes, is clearly in accordance with
the common intentions of the parties?
Reply
94. Chile argues that the term “should” in paragraphs 3 and 5 of Annex II of the Anti-Dumping
Agreement should be interpreted as “mandatory and binding”, rather than permissive.  It bases its
argument on the fact that the Spanish language version of the AD Agreement translates the phrase“should be taken into account” as “deberá tenerse en cuenta".
67  In Chile’s view, the English-language
term “should” is properly translated as “debería ”, not “deberá.”  It then cites this supposed conflict as
a reason to apply the statement of the Permanent Court of International Justice in the Mavrommatis
case that, in resolving such conflicts, an interpre ter is bound to adopt the “more limited” interpretation
which can be made to harmonize with the common intention of the Parties.  Chile’s argument not onlymisapplies the Mavrommatis  case, but also misinterprets the manner in which the term “deberá” is
used in the WTO Agreements.
95. With respect to the supposed conflict be tween the terms “should ” and “deberá,” an
examination of the text of the WTO Agreements demonstrates that the Agreements repeatedly use“deberá” as the Spanish equivalent of “should,” even when the term is clearly being used in a
permissive sense.  For example, Article 5.4 of the Agreement on the Application of Sanitary and
Phytosanitary Measures  (the “SPS Agreement”) states that:
Members should, when determining the appropriate level of sanitary or phytosanitary
protection, take into account the objective of minimizing negative trade effects.
96. The panel in the Hormones  case found that the wording of Article 5.4, “in particular the
words ‘should ’ (not ‘shall’) and ‘objective’”, demonstrated that the provision did not impose an
obligation.
68  Nonetheless, the Spanish-language equivalent of Article 5.4 of the SPS Agreement
translates “should” as “deberá".69
97. Similarly, in the AD Agreement, the term “should” is repeatedly translated as “deberá,”including when “should” and “shall” are used in the same sentence.  Article 6.1.1, for example, states
that exporters or producers “shall” be given at least 30 days to reply to questionnaires, investigating
authorities “should” give due consideration to extension requests, and such requests “should” be
granted wherever practicable.  The Spanish language version of Article 6.1.1 translates “should” as
“deberá”, and “shall” as “dará”.
                                                     
67 Chile’s description of the relevant language as “deberá tomarse en cuenta” is a mis-cite of the actual
term used in paragraph 3 of Annex II.  Cf. Chile’s Oral Statement at para. 4 with AD Agreement, Annex II,
para. 3 (Spanish version).
68 Panel Report on EC Measures Concerning Meat and Meat Hormones , Complaint by Canada,
WT/DS48/R/CAN, 18 Aug. 1997, para. 8.169.
69 See SPS Agreement, Article 5.4 (Spanish version) (“los Miembros deberán tener en cuenta”) (the
text uses “deberán” in place of “deberá” because “Miembros” is plural.)WT/DS206/R
Page E-54
98. Indeed, in the Spanish language version of the AD Agreement, while the term “should”
generally is translated as  “deberá,” the term “shall” generally is not  translated as “deberá".70
Moreover, “debería” – Chile’s preferred translation of “should” – is never used.71
99. Since Chile’s purported conflict between “should” and “deberá” does not in fact exist, there isno reason for the Panel to turn to the Mavrommatis  case.  Moreover, there is some question in the
scholarly literature whether the Court’s dictum in Mavrommatis  was meant to establish a general
rule.
72  In any event, to the extent that the case is relevant, the more “limited” interpretation of the
third paragraph of Annex II is that it imposes a permissive obligation, not a mandatory one.  Chile’s
analysis assumes that Mavrommatis  uses the word “limiting,” but it in fact uses “limited”.  The more
limited interpretation – that which imposes the more limited obligation – is that the term at issue is
permissive.  Further, the interpretation which harmonizes the common intention of the parties in this
case is that the term “should” or “deberá” is non-mandatory.  All parties and third parties to this
dispute agree that authorities at least should  take information into account if the conditions of
paragraphs 3 and 5 are met – only some think that they must.
                                                     
70 See, e.g., Article 1 (“shall be applied” translated as “se aplicarán”); Article 2.4 (“A fair comparison
shall be made” translated as “Se realizará una comparación  equitativa”); Article 6.9 (“shall inform” translated as
“las autoridades informarán” and “should take place” translated as “deberá facilitarse”).
71 Chile’s argument also ignores that the French version of the Agreement uses the term “devraient,”
which translates as “should,” not “shall.”  See AD Agreement, Annex II, para. 3 (French version).
72 See, e.g., Report of the International Law Commission on the Work of its Eighteenth Session ,
Yearbook of the International Law Commission, 1966, Vol. II, at 225 (commentary on Article 29,para. 8)(stating that the Mavrommatis  case “is not thought to call for a general rule laying down a presumption
in favour of restrictive interpretation in the case of an ambiguity in plurilingual texts”.)WT/DS206/R
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EXHIBITS
US-27.  NSK Ltd., v. United States , 170 F. Supp. 2d. 1280, 1318 (6 June 2001)
US-28.  Steel Authority of India, Ltd. v. United States , Slip Op. 2001-149 (17 Dec. 2001)
US-29.  SAIL Section C Questionnaire Response (excerpts)US-30.   Kenneth Culp Davis and Richard J. Pierce, Jr., Administrative Law Treatise  § 11.5 at 
206 (Little, Brown, 3 rd ed 1994)
US-31.  Charles H. Koch, Jr., Administrative Law and Practice  § 5.67[4] at 255 (West, 2d ed. 
1997)WT/DS206/R
Page E-56
ANNEX E-3
ANSWERS OF CHILE TO QUESTIONS
OF THE PANEL
(12 February 2002)
Q1. In Chile's and Japan's views, does the requirement to "use" information if it satisfies the
conditions of Annex II, paragraph 3, apply to any piece of information that satisfies the
conditions, no matter how small or limited in relation to the entire body of information?
Reply
The obligation to use information that satisfies the requirements of Annex II, paragraph 3,
applies to any information, no matter how small a nd regardless of its relation to the rest of the
information or the entire body of information.  According to paragraph 3 of the Annex, all
information which fulfils the requirements set forth in that paragraph must be taken into account bythe investigating authority when making its determinations.  Paragraph 3 does not specify the nature
of such information or its degree of importance in relation to the overall body of information.  In
Chile's view, the investigating authority must take  account of all the information supplied by the
interested party, except where it does not satisfy the requirements.  In addition, qualifying information
as limited on account of the weight it carries in relation to the whole body of information to be
provided would make little sense and would certainly have no grounds in the wording of paragraph 3.
Q2. Could Chile please explain its view that  a reading of the provisions of Annex II,
paragraphs 3 and 5, satisfies the criteria set out in the Mavrommatis  case relied upon by Chile of
being the "more limited" interpretation, which, as fa r is it goes, is clearly in accordance with the
common intentions of the parties?
Reply
Anti-dumping duties are exceptional measures applicable under the WTO Agreements in the
specific circumstances provided for in the Agreements.  Hence, both Article VI of the GATT 1994
and the Anti-Dumping (AD) Agreement must be read in a restrictive manner, in order to prevent a
broad interpretation of their provisions from serving as a basis for using anti-dumping duties for
purposes different from those contemplated in the two Agreements.  As Japan pointed out in its
written submission, various panels dealing with anti-dumping matters have ruled on the mandatorynature of the term "should" (not only with respect to Annex II, paragraphs 3 and 5), even though it
may not be so under other circumstances.  This reflects the restrictive sense in which the provisions of
the AD Agreement and the GATT 1994 must generally be interpreted.  The foregoing is especially
important in limiting the discretion that may be ex ercised by the investigating authority.  Thus, the
Spanish version of Annex II, paragraphs 3 and 5, limits the authority's scope of discretion through anobligation to use the information supplied by the in terested party, provided that such information
satisfies the conditions set forth in those paragraphs.  On the other hand, the English version –
according to the United States interpretation – leaves considerable room for discretion to the
investigating authority.  This would include the absu rd option of not taking into account information
supplied by the interested party, even if such information fulfilled the requirements of paragraph 3.WT/DS206/R
Page E-57
Chile therefore considers that, in limiting the investigating authority's scope of discretion, the
Spanish version of Annex II, paragraphs 3 and 5, offers the most restrictive interpretation of all three
versions and undoubtedly reflects the intention of the parties, which was – and still is – to resort to
anti-dumping measures in exceptional circumstances and on condition that the strict requirements of
Article VI of the GATT 1994 and the AD Agreement are fulfilled.
Furthermore, if the investigating authority had the option and not the obligation to take
account of all the information provided, what would be the purpose of the requirements in Annex II,
paragraph 3?  Likewise, if the authority were not under the obligation to take such information into
account, what would be the point of the phrase "to the best of its ability" in Annex II, paragraph 5?
Q3. Could Chile please explain why, as indica ted in paragraph 14 of its oral statement, it
considers that the investigating authority, having  decided to use facts available, should compare
it to the information that was rejected?  Does  Chile consider that this is a requirement, or
merely an appropriate methodology?
Reply
Annex II, paragraph 1, provides that the investig ating authority is to specify the information
required from the interested party, which must also be made aware that if such information is not
supplied within a reasonable period of time, the investigating authority will be free to use the facts
available, including those contained in the application for the initiation of an investigation by the
domestic industry.
This means that the facts presented by the domestic industry may not be the only ones made
available.  There are other sources of information, such as certain internationally known prices and
market conditions – as we pointed out in paragraph 14  of our statement.  However, there is also, and
perhaps most importantly, the information supplied by the interested party, regardless of whether suchinformation has been rejected by the investigatin g authority.  An objective and impartial authority
cannot refrain from examining information provided by the interested party, including data that it has
rejected, for whatever reason, if such information contains elements that can serve as a basis for its
decisions.  For example, if the authority rejects information because it was not submitted within the
prescribed time-limit, this does not mean that it does not contain elements necessary for the authority
to make its determinations.
The possibility provided by Article 6.8, read in conjunction with Annex II, paragraph 1,
therefore does not release the investigating authority from the obligation to examine all the data and
background information brought to its attention during the course of the investigation, including the
information supplied by the interested party, even if it is only partial or has been rejected, for
whatever reason, by the authority.
Lastly, no provision of the AD Agreement compels the investigating authority to use
information that it has rejected, or to use solely the data submitted by the domestic industry.
Annex II, paragraph 1, specifies that the authority may make its determinations on the basis of the
facts available;  this may be the data provided by the domestic industry but may also be otherinformation.
Q4. Would the third parties please discuss their views concerning the meaning of the phrase
"undue difficulties" in paragraph 3 of Annex II?
Reply
Q5. Do the third parties have a view regarding the possibility of "selective provision" of
information by exporters, and the potential impact  on ability of an investigating authority toWT/DS206/R
Page E-58
make an impartial and objective decision if all information provided that satisfies paragraph 3
of Annex II must be used in making the determination?
Reply
To reply to this question, it is necessary to analyse the meaning of "necessary information" in
Article 6.8 of the AD Agreement.  According to the Diccionario de la Real Academia de la Lengua
Española , necessary means "that necessarily, inescapably or inevitably must be or must occur".
Therefore, if information denied or not supplied within a reasonable period is necessary or absolutely
indispensable for the authority to make its determinations and the authority is unable to do so without
such information, the authority may use the facts available.  Hence, through the selective provision of
information, under Article 6.8 the interested party could potentially prevent the authority fromreaching an objective and impartial decision.  In other words, selective (partial) information may not
be sufficient to fulfil the necessity requirement in Article 6.8.
Q6. Could the third parties please explain th eir views regarding the meaning of the phrase
information should be "taken into account", as  used in Annex II, paragraph 3.  (Ignore for
purposes of this question whether "should" is to be understood as mandatory or not).  For
instance, might it be understood to mean that the determination must be based on that
information, or to mean that the investigating authority must look at the information further,
attempt to verify it, and judge its reliability, but may ultimately not base decision on it and refer
to facts available instead?
Reply
The phrase "should be taken into account" implies an obligation for the investigating
authority to base its determinations on all the information submitted by the interested party.  Annex IIsupplements Article 6.8 of the AD Agreement and thus, although Annex II, paragraph 3, compels the
authority to use the information provided by the interested party, this is not the only information on
which the authority will reach its decisions.  An objective and impartial investigating authority is not
an arbitrator called upon to decide between positions held by two parties;  its role is to gather the
necessary facts on which to base its determinations.  Article 6 of the AD Agreement refers to other
sources of information.  Moreover, pursuant to Article 6, paragraph 9, the authority must inform all
the parties of the essential facts under consideration that form the basis for the decision.  The phrase"should be taken into account" must therefore be interpreted within the broad framework of the
analysis and comparison of data and background information to be conducted by any investigating
authority.  This phrase merely reaffirms the authority’s obligation to examine the information
supplied by the interested party but would not obligate the authority to base its determinations solely
and exclusively on such information.
Q7. Could the third parties please address their views as to the meaning of the term
"verifiable" in Annex II, paragraph 3, with specific reference to, inter alia , the following
possibilities:
Reply
(a) Information is prepared and presented in a way that it can be checked against the books
and records of the company submitting it;
(b) information not only satisfies (a), but also wh en it is checked, it is found to be complete,
accurate and reliable – i.e., it passes verification.WT/DS206/R
Page E-59
ANNEX E-4
ANSWERS OF THE EUROPEAN COMMUNITIES
TO QUESTIONS OF THE PANEL
(12 February 2002)
(Questions 1 to 3 are not addressed to the European Communities)
Q4. Would the third parties please discuss their views concerning the meaning of the phrase
"undue difficulties" in paragraph 3 of Annex II?
1. Pursuant to the Vienna Convention on the Law of Treaties, the Panel should first consider the
ordinary meaning of the phrase “undue difficulties” and then consider the context in which it is found.The ordinary meaning of “undue” would suggest some thing beyond what is normal, or proportionate.
1
When paired with “difficulties” this suggests a difficulty beyond the normal, beyond what can be
expected from the ordinary course of events. Thus, data which required minor corrections or minor
additions to be useable could not be regarded as us eable only with “undue difficulty”. This follows
from the general context of the phrase viz. “All information [..] which is appropriately submitted so
that it can be used in the investigation without undue difficulties”.
2. The European Communities consider that where data which is “necessary” (to use the
language of Article 6.8) has not been provided, the use of other information (e.g. domestic sales prices
when cost of production data has not been provided) might be rendered disproportionately or unduly
difficult, because an investigating authority w ill be unable to put the otherwise acceptable data
through the necessary tests.
Q5. Do the third parties have a view regarding the possibility of "selective provision" of
information by exporters, and the potential impact  on ability of an investigating authority to
make an impartial and objective decision if all information provided that satisfies paragraph 3
of Annex II must be used in making the determination?
3. The European Communities recall that the Appellate Body has stated that the Anti-Dumping
Agreement aims at ensuring “a careful balance betw een the interests of investigating authorities and
exporters”.2  Were an exporter only to selectively provide data with the aim of achieving a result most
favorable to it, it evidently would not respect its share of the obligation in the balance of interests andwould prevent an investigating authority from basi ng itself on the most relevant objectively verified
information.
4. Were an investigating authority required to accept all information that met the requirements
of paragraph 3 of Annex II (the European Communities assumes that this question presupposes a
                                                     
1 The New Shorter Oxford English Dictionary defines “undue” as “going beyond what is warranted or
natural; excessive, disproportionate”.
2 Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel
Products from Japan , WT/DS184/AB/R, adopted 23 August 2001, para.102. quoted at para. 5 of the EC’s
Written Third Party Submission.WT/DS206/R
Page E-60
restrictive interpretation of “unduly difficult”) it would be clear that an exporter would be able to
choose which information is supplied, and then taken into account by the investigating authority (it
could only be used if it the investigating authority was also satisfied of its accuracy – Article 6.6). If
domestic sales were not in the ordinary course of trade, but the exporter did not provide data on cost
of production, SG & A expenses etc, the investigating authority, if forced to accept the domestic salesdata, would have no means by which to make an assessment of domestic sales and thus it would be
the exporter which would control the result of the determination.
Q6. Could the third parties please explain th eir views regarding the meaning of the phrase
information should be "taken into account" as used in Annex II paragraph 3.  (Ignore for
purposes of this question whether should is to be understood as mandatory or not).  For
instance, might it be understood to mean that the determination must be based on thatinformation?  or to mean that the investigatin g authority must look at the information further,
attempt to verify it, and judge its reliability, but may ultimately not base decision on it and refer
to facts available instead?
5. The European Communities understand the ordinary meaning of “taken into account” as
requiring that the information be accepted as part of the investigation.  Any requirements concerning
the nature of the information, e.g. whether it is veri fiable and otherwise suitable for use, must be met
before the information can be “taken into account” as the first sentence of paragraph 3 of Annex II
makes clear. However, the question of whether the information is actually used in the determination
(i.e the determination is actually based on the in formation) furthermore depends on the authorities
satisfying themselves, in whatever manner deemed appropriate, of the accuracy of the information
(Art. 6.6).
Q7. Could the third parties please address their views as to the meaning of the term
"verifiable" in Annex II, paragraph 3, with spec ific reference to, inter alia, the following
possibilities :
(a) information is prepared and presented in a way that it can be checked against
the books and records of the company submitting it;
(b) information not only satisfies (a), but also when it is checked, it is found to be
complete, accurate and reliable - i.e., it passes verification.
6. The obligation upon an investigating authority in terms of standard of proof is set out in
Article 6.6 of the Agreement. Article 6.6 provides that the authority must “satisfy itself as to the
accuracy” of the information provided.  Paragraph 3 of Annex II sets out standards which data
supplied must meet to be taken into account by the investigating authority. For information to beactually used  in a determination it must be checked for accuracy by the investigating authority (see
para 5 above). One of the conditions for data to be taken into account pursuant to paragraph 3 of
Annex II is that it must be capable of verification; the ordinary meaning of “verifiable” being “able to
be verified or proved to be true”.
3  Thus, the European Communities would interpret the term
“verifiable” in accordance with possibility (a) set out above.
                                                     
3 New Shorter Oxford English Dictionary.WT/DS206/R
Page E-61
ANNEX E-5
ANSWERS OF JAPAN TO QUESTIONS OF THE PANEL
Q1.  In Chile’s and Japan’s views, does the requirement to “use” information if it satisfies
the conditions of Annex II paragraph 3 apply to  any piece of information that satisfies the
conditions, no matter how small or limited in relation to the entire body of information?
Reply
Yes, an investigating authority is required to consider all information meeting the four
conditions of Paragraph 3, regardless of its volume (in absolute or relative terms).  This rule is found
expressly in the text of Paragraph 3 itself:  “ All information” that meets four conditions “should be
taken into account”.  (Emphasis added.)  As stated by the Appellate Body in United States – Hot-
Rolled Steel from Japan ,  “[I]f these conditions are met, investigating authorities are not entitled to
reject information submitted, when making a determination”.1
It is clear, therefore, that information satisfying the conditions of Paragraph 3 must be
considered by the investigating authority.  Paragr aph 3 leaves the investigating authority no discretion
to introduce other considerations, such as the volume of such information, into the decision whether to
take into account information provided.
As the Appellate Body stated, “paragraph 5 of Annex II prohibits  investigating authorities
from discarding information that is ‘not ideal in a ll respects’ if the interested party that supplied the
information has, nevertheless, acted ‘to the best of its ability’”.2  Thus, the investigating authority
should ask not how much information was submitted, but how hard the respondent tried to cooperate.
In answering that question, the investigating author ity cannot use the volume of information provided
as a proxy to measure the respondent’s cooperation.  As the Appellate Body has recognized, “[P]artiesmay very well ‘cooperate’ to a very high degree, even though the requested information is, ultimately,
not obtained.  This is because the fact of ‘cooperating’ is in itself not determinative of the end result
of the cooperation”.
3
In the end, therefore, if the respondent cooperated “to the best of its ability” in the prevailing
circumstances, and it was able to submit only a little information meeting the conditions of
Paragraph 3, that information cannot be disregarded.
Q4.  Would the third parties please discuss their views concerning the meaning of the phrase
“undue difficulties” in paragraph 3 of Annex II?
Reply
The meaning of the phrase “undue difficulties” should be determined on a case-by-case basis.
It is not possible to establish in the abstract a comprehensive definition that covers all eventualities.
                                                     
1 United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan , Report of
the Appellate Body, WT/DS184/AB/R, AB-2001-2, para. 81 (emphasis in original).
2 Id. at para. 100 (emphasis added).
3 Id. at para. 99.WT/DS206/R
Page E-62
Whether a particular difficulty is an “undue difficulty” must be determined in light of all the
prevailing circumstances.
Yet, certain parameters are apparent.  It is obvious, for example, that not every difficulty
encountered by an investigating authority will be considered an “undue difficulty”.  A particulardifficulty must be “undue,” which is to say, “excessive” or “unwarranted”.  Most difficulties that arise
will be ordinary difficulties; these must be accepted by investigating authorities as a normal part of
anti-dumping investigations and they cannot just ify a refusal to take in to account information
submitted.  Only in rare circumstances should a difficulty be deemed “undue”.
The phrase “undue difficulties” also must be understood in context.  In this regard, one should
recall the Appellate Body’s statement that “coopera tion” is “a two-way process involving joint effort”
by the investigating authority and the respondent.
4  It follows that a difficulty cannot be deemed
“undue” unless its resolution would necessitate greater effort by the investigating authority than the
investigating authority is required to make to satisfy its duty of cooperation.
Q5.  Do the third parties have a view regarding the possibility of “selective provision” of
information by exporters, and the potential impact  on ability of an investigating authority to
make an impartial and objective decision if all information provided that satisfies paragraph 3
of Annex II must be used in making the determination?
Reply
As mentioned in the response to Question 1, information that satisfies the conditions of
Paragraph 3 must be considered whenever the respondent has acted “to the best of its ability”.  In this
regard, Japan does not consider well founded the concerns that have been expressed about “selective
provision” of information.  The concept of “selective provision” means that a respondent hasconsciously chosen to provide certain information and to withhold other information.  In that
circumstance, the respondent would not have cooperated “to the best of its ability” and an
investigating authority would be authorized by Paragraph 5 to disregard the information that was
“selectively provided”.  Thus, Japan respectfully submits that Paragraph 5 adequately resolves any
concerns about “selective provision” and there is no need to adopt a construction of Paragraph 3 to
address this issue.
Q6.  Could the third parties please explain their views regarding the meaning of the phrase
information should be “taken into account” as used in Annex paragraph 3.  (Ignore for
purposes of this question whether should is to be understood as mandatory or not).  For
instance, might it be understood to mean that the determination must be based on that
information?  Or to mean that the investigatin g authority must look at the information further,
attempt to verify it, and judge its reliability, but may ultimately not base decision on it and refer
to facts available instead?
Reply
The meaning of the obligation to “take[] into account” all information that satisfies the
conditions of Paragraph 3 should be determined by reading Paragraph 3 together with Paragraph 5.
Reading these provisions together shows that info rmation meeting the four conditions of Paragraph 3
must be used in the calculation of dumping margins unless the investigating authority is authorized by
Paragraph 5 to “disregard” such information.  In other words, information meeting the conditions ofParagraph 3 must be used whenever the respondent has acted “to the best of its ability”.
                                                     
4 Id. at para. 104 (citing Agreement, art. 6.13).WT/DS206/R
Page E-63
Japan further notes that this obligation cannot mean that the investigating authority may
“attempt to verify [information satisfying the conditions of Paragraph 3] and judge its reliability” and
then disregard such information in favour of “facts available”.  Such a construction would render
meaningless both Paragraph 3 and Paragraph 5.
• First , one of the four conditions in Paragraph 3 is that the information “is verifiable”.
The duty to “take[] into account” only applies to information that meets all fourconditions.  This means that the duty only concerns information that has already been
determined to be “verifiable,” i.e. “capable of being verified” (See Question 7 below.)  If
the duty were to mean nothing more than th at the investigating authority must attempt to
verify information that has already been found capable of being verified, then the duty to
take such information into account would be  illusory.  For the duty to have meaningful
content,  something more must be required.
• Second , Paragraph 5 prohibits an investigating authority from “disregarding” information
except where the respondent fails to act “to the best of its ability”.  This prohibition
would be rendered inutile if Paragraph 3 were construed to allow an investigating
authority to “disregard” information that meets the Paragraph 3 conditions without first
determining that the respondent had failed to act “to the best of its ability”.
Q7.  Could the third parties please address their views as to the meaning of the term
“verifiable” in Annex II, paragraph 3, with specific reference to, inter alia , the following
possibilities:
(a) information is prepared and presented in a way that it can be checked against
the books and records of the company submitting it;
(b) information not only satisfies (a), but also when it is checked, it is found to be
complete, accurate and reliable - i.e., it passes verification.
Reply
“Verifiable” means “capable of being verified” or “able to be verified”.  This follows from
the structure of the word.  The suffix “-able” means “susceptible, capable, or worthy of a specifiedaction,” and the relevant action is found in the root of the word.  Here, because the root is the verb
“verif[y],” the word “verifiable” means “capable of being verified”.  It does not mean “actually
verified”.
In Japan’s view, the information submitted as the one described in (a) is “verifiable” whether
or not the authority chooses to conduct verification.  In this regard, it is important to recall that the
investigating authority has discretion whether or not to conduct verification.
5  If the investigating
authority then chooses NOT  to conduct verification, the investigating authority cannot simply dismiss
the information submitted by a respondent as not “capable of being verified”.  In that case, the
information submitted must be deemed to satisfy the “verifiable” condition of Paragraph 3.
Conversely, if the investigating authority chooses to conduct verification and finds serious
errors or omissions, it may be able to conclude that the information submitted was not “capable of
being verified”, provided that the verification is conducted in accordance with the requirements of the
Anti-Dumping Agreement.  In other words, if the submissions were initially "prepared and presented"
as verifiable (Process(a)) but subsequently fails to pass a valid verification (Process(b)), then those
                                                     
5 Anti-Dumping Agreement, art. 6.7 (“the authorities may carry out investigations”) (emphasis added).WT/DS206/R
Page E-64
data are no longer “verifiable” because they are now demonstrated to be not “capable of being
verified”.
The investigating authority may well conduct verifications by way of "spot-checks" for
practical reasons.  It must be noted, however, that once the samples of information are actuallyverified, then the remainder of the information is al so to be deemed “verifiable”.  The fact that the
investigating authority chooses to conduct verification by way of spot-checks should not entitle the
authority to construe “verifiable” data as including only the samples of information that are actually
verified, thereby allowing an investigating authority to disregard the vast bulk of the information
provided.WT/DS206/R
Page E-65
ANNEX E-6
COMMENTS OF THE UNITED STATES ON INDIA’S
REPLIES TO QUESTIONS OF THE PANEL
(18 February 2002)
1. This submission is filed in accordance with th e instructions of the Panel permitting the parties
to this dispute to respond to new points raised in the answers to the 25 January 2002 questions posed
by the Panel.1
2. For the most part, India’s responses to the questions reiterate positions it has taken since the
outset of this dispute.  In at least two instances, however, India has raised new points in its responses
to questions.  Specifically: (1) in response to Question 29, India has presented five new criteria – whatit calls “detailed considerations”  – that it believes should guide whether the use of certain information
would present “undue difficulties"
2, and (2) India has asserted, in response to Question 25, an
independent claim of violation of the first sentence of Article 15 of the AD Agreement.3  T h e
United States will reserve its response to any other new Indian arguments for its oral statement at the
second Panel meeting.
A. India’s “Undue Difficulty” Argument Presents Five More Factors for the Panel's
Consideration but Continues to Focus Exclusively (And Improperly) on Sail's
US Sales Database
3. In its first written submission, India submitted five factors that the Panel should consider in
determining whether "particular categories" of information submitted could be used without “unduedifficulties".
4  India argued that the Panel should focus exclusively on the US sales "category" of
information submitted by SAIL, and that it should consider (1) the timeliness of the information
submitted; (2) the extent to which the information subm itted has been verified or is verifiable; (3) the
volume of the information; (4) the amount of time a nd effort required by the investigating authorities
to make any corrections to information submitted to make it usable to assist in calculating margins;
and (5) whether other interested parties are likely to be prejudiced if the information is used or
corrected.  The United States noted in response that India's focus on the term "categories" is
misguided because that the term does not appear in the AD Agreement and ignores the very nature of
the antidumping analysis required by Article VI and the rest of the AD Agreement.5  India’s focus on
only the US sales database ignored that the Agreemen t refers only to "necessary" information.  India's
application of the criteria exclusively to the US sales database led it to conclude that errors could be
corrected by "simply changing a line of computer code and calculating margins on the basis of the
                                                     
1 25 January 2002 Questions from the Panel.
2 India’s Response to the 25 January 2002 Panel Questions, para. 60, incorporates by reference
paragraphs 14-24 of India’s Rebuttal Submission.
3 India's Response to Questions, paras. 29-36.
4 First Written Submission of India, para. 71.
5 Answers of the United States to 25 January 2002 Questions, para. 4.WT/DS206/R
Page E-66
corrected data within a matter of minutes or even several hours".6  We explained previously that
India’s conclusion is not supported by the facts.7
4. Now, in response to the Panel's questions, India has revised the factors that it asks the Panel
to consider on the issue of "undue difficulty".   India now proposes the following factors for
consideration:  (1) the extent to which the component/category/set of information requested is
complete;  (2) the extent and ease with which gaps in the information can be filled with other
available information in the record;  (3) the amount of information that is available to be used;  (4) the
amount of time and effort required from the authorities to use the data in calculating a dumping
margin;  and (5) the accuracy and reliability of alternative information that would be used if the
respondent's information were discarded.  Again, India applies these criteria only to the US sales data,
and then, only in combination with other conclusions that are not supported by the record.  We willaddress each of India’s new factors in turn for purposes of argument.
5. First, India argues for consideration of the extent to which the "component", "category", or
"set" of information requested – in other words, the Indian respondent's US sales data – is complete.
8
In India's view, SAIL's U.S. sales data was complete "except for the VCOMU and TCOMU data used
to calculate the 'difmer' adjustment . . .".9  But this conclusion ignores the facts established by the
record: the Indian respondent’s US sales database  revealed numerous flaws in the items examined
(and the on-site verification was only a selective audit that did not review each piece of data
submitted).  One significant flaw was the discovery at verification that a physical characteristic used
to match US and home market sales was incorrectly reported,  an error that affected approximately75 per cent of US sales in the database.
10  In addition, several other errors were  discovered, including
the fact that certain freight costs were over- and under-reported for export saleS11 and that the duty
drawback calculation for US sales was incorrect.  For these reasons, India is wrong in its conclusion
that the US sales database was "easily capable of being used" in calculating a margin.
6. Second, India focuses on the "extent and ease with which gaps in the US sales information
can be filled with other available information in the record".  Again, India has incorrectly focused
only on the US sales data and the record does not support the "ease" of its conclusion.  One important
"gap" in the US sales information was the absence of cost information necessary for calculating the
necessary adjustments for physical differences.  SAIL's own "section C" or US sales portion of its
questionnaire response referred Commerce to the "section D" or cost of production portion of the
questionnaire response for this information, and the record reflects that SAIL never provided thisinformation.
12  Only SAIL could easily have filled the gaps; Commerce was certainly in no easy
position to do so.
7. Third, India asks the Panel to consider the amount of US sales information that is available to
be used.13  According to India, "if the information provided represents one entire component" of the
anti-dumping equation – here, presumably, the export price data – then investigating authorities must
make "considerable efforts" to use this information.  Setting aside the fact that the Agreement does
not speak to “components” (or “categories”) of information, the record demonstrates that SAIL did
not even provide an entire  US database; it was flawed, as outlined above.
                                                     
6 First Written Submission of India, para. 36.
7 See, e.g., US Answers to Questions, para. 32.
8 On this point, Question 29 refers to India's Rebuttal Submission, para. 16.
9 Id.
10 First Written Submission of India, para. 30.
11 Sales Verification Report , Ex. IND-13, at 30.
12 SAIL Section C Response  (excerpts), Ex. US-28.
13 India's Rebuttal Submission, para. 18-20.WT/DS206/R
Page E-67
8. Fourth, India argues that the amount of time and effort required from the authorities to use the
US sales data in calculating a dumping margin is relevant.  But as the United States has explained,
even were one to focus solely on the US sales database, the gaps in the information could not be
easily filled.  The absence of the cost information associated with US sales made the comparisons
required by Article 2.4 not just difficult, but impossible, where adjustment for physical differenceswere necessary.
14  Even for those sales for which the missing cost information was not needed – sales
that matched identically and would require no adjustment for physical characteristics pursuant to
Article 2.4 – US authorities would have been required to manually correct the physical characteristics
for 75 per cent of the sales just to be able to identify the identical sales.  It then would have been
necessary to make further corrections for errors such as incorrect freight and duty drawback costs.
Considering these facts, it cannot be said that gaps  in the US sales database could be easily filled.
9. Finally, India asks the Panel to consider the accuracy and reliability of alternative information
that would be used if the respondent's information were discarded.15  To the extent that India uses this
factor to resurrect issues related to its "special circumspection" claim, we simply note that this claim
has already been rejected by the Panel.  Moreover, India is simply wrong to claim that Commerce
"made no efforts to use SAIL's US sales information".  The facts as established reveal that Commercemade strenuous efforts throughout this investigation to use all of SAIL's data, including its US sales
database.
10. In addition to the above criticisms of India’s new factors, the factors themselves, if applied to
the only "subset" of information defined by the Agreement – "necessary information" – would supportCommerce’s actions in this case.  Viewed in the correct light, these criteria would cause an unbiased
and objective investigating authority to reach a very different conclusion from that drawn by India.
11. First, in determining the completeness of the information provided by SAIL that was
necessary to the calculation of a dumping margin, an unbiased and objective investigating authoritycould reasonably conclude that the failure to provide usable home market, export price, cost of
production, and constructed value information meant that the necessary information was incomplete.
Therefore, the information could not be used without undue difficulty.
12. Second, in determining the extent to which information provided by SAIL that was necessary
to the calculation of a dumping margin could be used with other information, an unbiased and
objective investigating authority could reasonably conclude that SAIL's information could not be usedwith other information to calculate a margin – too much of it was missing.  For this reason, the
information could not be used without undue difficulty.
13. Third, in assessing the amount of the necessary information provided by SAIL that could be
used, an unbiased and objective investigating authority could reasonably conclude that without usablehome market, export price, cost of production, and constructed value information, it had almost no
amount of the information necessary for conducting an antidumping analysis.  As a result, use of what
information SAIL did provide would be  unduly difficult, if not impossible.
14. Fourth, in determining the amount of time and effort required to use SAIL's information, an
unbiased and objective investigating authority could reasonably conclude that it would involve a great
deal of time or effort to address the unusable home market, export price, cost of production, and
constructed value information.  Consequently, it could not be said that the information could be used
without undue difficulty.
                                                     
14 US Answers to Questions, para. 32.
15 India's Rebuttal Submission, paras. 22-23.WT/DS206/R
Page E-68
 15. Finally, in assessing the accuracy of alternative information that could be used if the
necessary information could not be used, an unbiased and objective investigating authority could
reasonably conclude that the facts available as provided in the petition are no less accurate and
reliable than the unusable information submitted by the respondent.  Precisely because the submitted
information was unusable, there is no way to know whether the facts available are more or lessreliable vis-a-vis SAIL.  Only by providing accurate information could SAIL guarantee a result that
would accurately reflect SAIL's own sell ing practices.  But it did not do so.
B. India’s New Interpretation of the First Sentence of Article 15 Has No Textual
Basis and Conflicts with the Interpretati ons That It Has Put Forward in Other
Fora
16. As the United States anticipated in its initial answer to Question 25, India has abandoned its
previously-expressed view that the first sentence of Article 15 of the AD Agreement does not create
any obligations for developed country Members.
16  While it continues to maintain that the provision
does not set out any “specific legal requirements”, it now believes that the provision does create a
“general obligation, the precise parameters of which are to be determined based on the facts and
circumstances of the particular case".17
17. As an initial matter, the fact that there are no “specific legal requirements” in the first
sentence of Article 15 – as India still admits – should be dispositive with respect to determining
whether the United States has breached that provis ion.  There is, for example, no basis in the text of
the provision for requiring developed country Members to undertake any of the actions that India
suggests in paragraph 31 of its response to Question 25, and thus no basis for finding a Member inbreach of the provision if it does not undertake them.
18. The Panel should also note that, in addition to contradicting the position that it took in the
Bed-Linens  dispute, India’s new interpretation also confli cts with the interpretation it set forth in a
paper on “operationalizing” Article 15 that it recently filed in the Anti-Dumping Committee.
18  For
example, India argues to the Panel that the refere nce to providing special regard “when considering
the application of anti-dumping measures” means the developed country Member must take action
“in deciding what information to use and how to use it to calculate margins”.  India then sets out a
variety of ways in which a developed country Memb er might do so, including by using SAIL’s data to
collect an antidumping margin.19
19. These arguments flatly contradict the position that India has put forward in its paper to theAnti-Dumping Committee.  In paragraph 3 of that paper, India states that the issue presented in the
first sentence of Article 15 "is that, once dumping and injury have been determined, when deciding
whether anti-dumping measure [sic] should be  imposed, developed countries should take into account
the developing country status of the targeted country".20  India then explained that the “obligation”
arises "when considering the application of anti-dumping measures".21  Thus, while India argues to
                                                     
16 Compare  India’s Response to Questions, para. 36, with Panel Report on European Communities –
Antidumping Duties on Imports of Cotton-type Bed Linens from India , WT/DS141/R, adopted 30 October 2000,
para. 6.220 ( Bed-Linens ).
17 India’s Response to Questions, para. 36.
18 Implementation-Related Issues Referred to the Committee on Anti-Dumping Practices and its
Working Group on Implementation , Paper Submitted by India, G/ADP/AHG/W/128, February 1, 2002 (“India’s
Submission to the Committee”).
19 India’s Response to Questions, paras. 31, 33.
20 India’s Submission to the Committee, para. 3 (emphasis added).
21 Id. (emphasis added).WT/DS206/R
Page E-69
the Panel that the provision is relevant in the calculation of margins , it stated to the Committee that it
is relevant to the application of measures .
20. In addition, India argues that the Panel should judge the compliance of the United States with
its purported “obligations” by examining Commerce’s final determination.22  In its paper to the
Committee, India properly noted that if there is an issue regarding what should appear in a Member’s
published determination, the extent of any such obligation is rooted in Article 12 of the ADAgreement.
23  The United States does not agree with India that a developed country Member is
required to explain in its published report how it gave “special regard” to the “special situation of
developing country Members".  However, even if a Member were required to provide such an
explanation, India has alleged no violation of Article 12 in this case, and US compliance with that
article is not within the Panel’s terms of reference.
21. The United States also notes that India argued in its paper to the Anti-Dumping Committee
that the second sentence of Article 15, viewed in the context of the first sentence, suggests that a
developed country Member could provide “special  regard” to the developing country Member by
exploring constructive remedies.24  The United States agrees with the position that India put forward
in the Bed-Linens  case that the first sentence of Article 15 does not create an obligation.  However,
even if a Member were required to give “special regard” by exploring constructive remedies, the
record demonstrates that the United States did explore constructive remedies in the investigation at
issue.25
22. Finally, the United States recalls the key point related to the paper that India submitted to the
Anti-Dumping Committee: India submitted the paper in the context of “operationalizing” Article 15.The fact that the Ministers have recognized that Article 15 would benefit from clarification and have
asked the Committee to make recommendations on how to “operationalize” the provision
demonstrates that no specific requirements are “operational” at present.  Further, none of India’s
supposed requirements – neither those argued to the Panel nor those suggested to the Committee – is
required by the text.
23. For additional insights on this issue, the United States respectfully refers the Panel to India’s
argumentation on this point in the Bed-Linens  proceeding.  Among other things, India described the
first sentence of Article 15 as not creating a “rock-solid legal obligation”.  Rather, India described the
sentence as a “permissive” provision that contained a statement of "preferred policy".
26
C. Conclusion
24. The United States will address additional points raised by India in its second oral statement
and in response to any questions that the Panel may have at the second Panel meeting.
                                                     
22 India’s Response to Questions, para. 24.
23 India’s Submission to the Committee, para. 13.
24 Id., para. 4.
25 The United States discussed this point in paragraphs 188 – 191 of its first written submission.
26 Bed-Linens , Annex 1-1, paras. 6.20 – 6.22.WT/DS206/R
Page E-70
ANNEX E-7
COMMENTS OF INDIA ON THE UNITED STATES'
REPLIES TO QUESTIONS OF THE PANEL
(18 February 2002)
I. INTRODUCTION
1. In response to the Panel’s invitation at its fi rst meeting with the parties, India submits the
following comments on the answers to the Panel’s questions submitted by the United States on
12 February 2002 (“US Answers”).  As requested by the Panel, India has limited these comments to
the new issues or arguments raised by the United States’ responses, or failures to respond, to the
Panel’s questions.
II. INDIA’S GENERAL COMMENT ON US ANSWERS 7-10, 14-16, AND 18
2. The US Answers1 provide for the first time a written articulation of its new evaluation of the
facts in the administrative record, asserting that SAIL’s US sales database, standing alone, could not
be used without undue difficulties.  This new evaluation of the facts by the United States governmentas a WTO litigant is remarkable in light of the existing evaluation of the facts in the Final
Determination on 29 December 1999, in which the administering authority, USDOC, found that "the
US sales database would require some revisions and corrections in order to be useable" and "the US
sales database contained errors that . . . in isolation were susceptible to correction. . .."
2  Th e  n e w
evaluation of the facts is found throughout the United States’ answers.  The new evaluation focuses on
errors newly claimed to be “significant” and that allegedly render the data totally unusable (such as
the alleged inability to use cost data to calculate a “difference in merchandise” (“difmer”) adjustment,and errors in the reporting of the width, freight expense, and duty drawback).  But the new evaluation
sharply contrasts with the "useable" and "susceptible to correction" findings in the Final
Determination as well as in the Sales Verification Report.  As explained by India in paragraphs 25-43
of its Rebuttal Submission, these new assertions are an attempt to engage the Panel in a de novo
evaluation of the facts and must be rejected.
3. Even in the event that the Panel might permit th e United States as a WTO litigant to add this
new evaluation of fact to the record, the new evalua tion in no way demonstrates that SAIL's US sales
database could not have been used as the export price in combination with the normal value
information in the petition to calculate a dumping margin.
A. The United States’ answers attempt to secure a de novo  evaluation of the facts from
the Panel
4. At numerous points throughout its Answers, the United States asserts that SAIL’s US sales
database was undermined by the lack of data to calculate a difmer adjustment and by other
"significant" errors that rendered SAIL's US sales information unusable.  If the Panel examines the
                                                     
1 See US Answers to Panel Questions 7-10, 14-16, 18.
2 USDOC Final Determination at 73127, 73130 (Ex. IND-17).WT/DS206/R
Page E-71
Final Determination, the Memorandum on Verification Failure and the Sales Verification Report3 it
will find that none of these statements, arguments or findings quoted below are to be found in any of
those documents.  Every one of the US statements is a post hoc  evaluation of the facts in the record.
• "The US sales database contained numerous flaws and could not be used." (US Answers,
para. 53)
• "SAIL's information was ideal in almost no respect." (Id., para. 55)
• "The absence of the cost information associated with US sales made the required comparisons not
just difficult, but impossible, where adjustment for physical differences were necessary." (Id.,para 32)
• "Even for those sales for which the missing cost information was not needed . . . US authorities
would have been required to manually correct th e physical characteristics [width] for 75 per cent
of the sales just to be able to identify the identical sales, then it would have been necessary to
make further corrections for freight costs, duty drawback errors, etc." (Id., para. 32; see also
para. 54)
• “The TCOM and VCOM information was directly relevant to the US sales database and resulted
in a complete lack of information that would be needed for ‘difference in merchandise’
adjustments”..(Id., para. 28)
• “As a result of this [cost verification] failure, an other flaw in the US sales database was exposed:
the total cost of manufacture (TCOM) and variable cost of manufacture (VCOM) for each US
sales could not be verified.  Without verified TCOM and VCOM information, Commerce could
not adjust for differences in physical characteristics that affect price comparability as required by
Article 2.4 of the Agreement."  (Id., para. 31; see also para. 49)
• “[T]here were inaccuracies specific to the US sales data that were never resolved . . . For these
reasons, Commerce could not conclude that the US  sales data, standing alone, were verified,
accurate, and reliable.”  (Id., para. 18)
5. Throughout the investigation, USDOC never  mentioned or evaluated the impact of difmer
data on SAIL's US sales database. Rather, USDOC  relied on the “pervasive flaws” in SAIL’s other
databases to justify its conclusion that the errors identified in the US sales database caused it to be
unreliable.  See Verification Failure Memo at 5.
6. Second, USDOC expressly declined to state in the investigation that the errors that USDOC
did identify in the US sales database (width coding, freight, and duty drawback) were so fundamental
as to render the US database "unusable".  To the contrary, USDOC stated:
• “[T]hese errors [in the US sales database], in isolation, are susceptible to correction”.
Verification Failure Memorandum at 5 (Ex. IND-16).
• “The US sales database contained errors that . . . in isolation were susceptible to correction . . . .”
Final Determination at 73127 (Ex. IND-17).
• “[T]he US sales database would require some revisions and corrections in order to be useable .”
Final Determination at 73130 (Ex. IND-17) (emphasis added).
                                                     
3 Ex. IND-17, Ex. IND-16 and Ex. IND-13.WT/DS206/R
Page E-72
7. Thus, USDOC itself has already found these errors to be correctable, and that with those
corrections, SAIL’s US sales database could be "used".  In its 1999 Final Determination − as opposed
to the new evaluation put forward by the United States as a litigant in 2002 − USDOC focused on the
errors in the databases submitted by SAIL other  than its US sales database.  In sum, the statements on
this subject in the US answers are self-serving, post hoc  rationalizations.  The Panel should reject the
US attempt to re-write history and to induce the Panel to engage in a de novo  evaluation of the facts.
B. The “difmer” adjustment issue does not render the US sales database unusable
8. Turning to the merits of the US arguments: contrary to the assertions quoted in paragraph 4
above, the difmer adjustment issue cannot undermine th e usability of SAIL’s US sales database, at the
least because under US law, the difmer adjustment must be made to normal  value , not US price.4  The
United States failed to answer forthrightly the Panel’s first question in Question 14 − i.e., whether the
difmer adjustment (along with other adjustments) is  made to export price, normal value, or whether it
varies from case to case.  In the US Answers, the United States simply responds “yes” to the question,
and then notes that as a general matter, adjustments are made to both export price and NV. But it
never addresses the question to which  price − home market price or US price − the difmer adjustment is
applied.5  The answer is that the difmer adjustment is only made to NV.  Thus, as India spelled out in
detail in its Rebuttal Submission6, the lack of usable data to make the difmer adjustment might throw
into question the usability of a respondent’s NV data -- not the export price.
9. Furthermore, the adjustments to normal va lue that USDOC makes pursuant to Article 2.4 of
the AD Agreement to account for, inter alia , physical differences that affect price comparability are
not necessary where there is an identical product to product match between export sales and home
market sales.  While the United States places a great deal of reliance on Article 2.4 in paragraphs 47-
50 of its answers, it does not address the fact that once USDOC rejected SAIL's home market sales
and cost of production data, a substantial portion of SAIL's US Sales data (30 per cent) were identicalto the product used in the petition to calculate CV.  Moreover, USDOC ignores the fact that it has
addressed the difmer issue in other cases, such as the Stainless Steel Bar from India
7 by expanding  the
definition of a "product".  If USDOC were to make the same type of expansion of the product in this
case that they did in Stainless Steel , then as Mr. Hayes explained in his Second Affidavit, 72 per cent
of SAIL's products would be identical matches to the product used in the petition.   Thus, the USargument in paragraph 49 that "without cost of manufacture data, it is not possible to make these price
adjustments" is simply not correct when applied to  SAIL's US sales actual database or to its own
practice in Stainless Steel Bar from India .  Nor is this statement at all consistent with what USDOC
did when it compared the single offer price of $251 to the NV in the petition - in that case it applied
the same margin to all of SAIL's imports regardless of the existence of cost data by which a difmer
adjustment could be made.  Finally, India refers the panel to paragraphs 50-64 of its Rebuttal
Submission and Mr. Hayes' Second Affidavit where a variety of ways in which USDOC, consistent
with its prior practice in other cases as well as the calculation made in the Final Determination, could
have used SAIL's US sales data in comparison to the NV in the petition.
                                                     
4 See section 773(a)(6)(C)(ii) of the Trade Act of 1930 as amended.
5 See US Answers, paras. 47-48.
6 India Rebuttal Submission, paras. 44-49.
7 Ex. IND-353.WT/DS206/R
Page E-73
C. The minor errors in the US sales database that were discovered at verification do not
undermine the verifiability or usability of that database
10. The United States' new evaluation of the facts states that USDOC “identified significant flaws
in [SAIL’s] US sales database”8, and the US Answers refer to multiple "significant" flaws.  But this
new evaluation contradicts USDOC’s consistent statements during the investigation, in its Final
Determination, in the Verification Failure Report, and in the Sales Verification Report.  These actual
evaluations of fact by USDOC found these collective errors in the US sales database to be
"susceptible to correction".  And indeed, as India has demonstrated in this proceeding, the errors were
either simple to correct, or unnecessary for the calculation of an export price, or both.
11. The first flaw enumerated by the United States is “the discovery at verification that a physical
characteristic used to match US and home market sales was incorrectly reported”9, referring to the
width coding error.  This error, however, cannot seriously be considered as making SAIL’s US sales
database unusable without “undue difficulty”.  To show the ease with which this error could have
been handled, in Mr. Hayes’ first affidavit10 India provided the nine lines of computer programming
language that would have corrected the error.
12. The United States' new argument is that “US authorities would have been required to
manually correct the physical characteristics for 75 per cent of the sales just to be able to identify the
identical sales”.11  By this, the United States implies that the width coding revisions for each and
every transaction would have to be manually keypunched into the computer program in order toimplement the correction.  This statement is simply incorrect.
13. As Mr. Hayes has indicated, USDOC clearly had other means to input necessary corrections
to the database, in addition to manually typing them in.  First, it is very common for USDOC to
request that respondents submit in electronic form any corrections to database errors discovered atverification.  USDOC could have done so here, thus  shifting to SAIL (and its computer consultants in
Washington) the work required to input the corrections to the width coding for individual US sales
transactions.  Alternatively, if USDOC felt it inappropriate to accept the corrections from a
respondent in electronic form, the list of the corr ections that USDOC personnel took in paper form at
verification
12 could have been electronically scanned to create a text file.  That text file could then
have been copied directly into a SAS program or co uld have been used to create a database in SAS,
Excel, Dbase, Lotus or any other commercially available data-processing product.  This process is notcumbersome, and in December 1999 USDOC had highly trained professional staff, as well as the
equipment, the resources, and the software to perform such a simple task.  Thus, it is disingenuous of
the United States to now suggest in its post hoc  argument that this error would have been “unduly
difficult” to correct.
14. Finally, even in the extremely unlikely si tuation in which USDOC would insist on key
punching the width correction information on the 942 transactions itself, even this task would not be
"unduly difficult".  As India has argued, the concept of "unduly difficult" must take into account a
number of factors including the importance of the information to the calculation of the final dumping
margin.
13  India estimates that it would take at most four hours for an experienced clerical keypunch
operator to input the data necessary to make the change .  All that is involved would be to type in each
of the one to four digit numbers on the second column (listed "obs") of India Exhibit 13 (excerpted
                                                     
8  US Answers, para. 29.
9  US Answers, para. 30.
10 Ex. IND-24.
11 US Answers, para. 32.
12 Pages 41 through 55 of Sales Verification Exhibit S-8, included in Ex. IND-13.
13 India Rebuttal Submission, paras. 12-21.WT/DS206/R
Page E-74
pages from Verification Exhibit 8).  Thus, a single keypunch operator would type in each of the 942
numbers hitting "return" on the computer after each one.
15. The Panel must decide whether four hours of a clerical workers' time is too much effort to use
SAIL's entire US sales database.  When USDOC concluded that this width error was "susceptible tocorrection", they obviously knew how easy it was to make these corrections. Given the fact that
SAIL's US sales data constituted one half of the information required to calculate a dumping margin
in this case, this is not an overly burdensome task for USDOC to undertake -- even in the unlikely
event that they would insist on doing this task th emselves.  It is instructive to compare these four
hours of keypunching to the thousands of hours SAIL  took to attempt to respond to USDOC's request,
the fact that for three weeks teams of between 9-16 persons each day participated in the verification
process alone, not to mention the hundreds of hours spent drafting submissions, verification reports,participating in arguments, and evaluating the facts in  this case.  Viewed in the context of this effort,
four hours of time to input data to SAIL's US sales database could not constitute an "undue
difficulty".
16. The next new “significant flaw” that the United States identifies in SAIL’s US sales database
is “the fact that certain freight costs were over- and under-reported”.
14  Yet USDOC did not identify
this error in the “Summary of Significant Findings” section of its Sales Verification Report or even
mention it in the Verification Failure Report.  Indeed, the Sales Verification Report concludes at
page 30 that “SAIL discovered that it over-reported  its DINLFTPU” (plant-to-port foreign inland
freight).15  In other words, the actual record of the investigation states that  SAIL did not both “over-
and under-report” freight expenses; rather, it only “over-reported” these expenses.  This error caused
SAIL to report an excessive freight amount, which was necessarily adverse  to its interests because
freight is always deducted from the gross US selling price in calculating the export price: the larger
the deduction, the lower the price, and hence the larger the dumping margin.  Thus, in the absence of
information necessary to correct this error, USDOC  could have simply used the reported freight
amounts as the facts available for that piece of information in calculating SAIL’s dumping margins.
This is a practice that USDOC routinely engages in, and it cannot be said that doing nothing to revise
SAIL’s database to account for this error would be "unduly difficult".
17. The final “significant flaw” in SAIL’s US sales database newly identified in the US Answers
is that the “duty drawback calculation for US sales was incorrect”.16  Again, this error was not named
in the “Summary of Significant Findings” section of the Verification Report or in the VerificationFailure Report.  If USDOC had deemed this error “significant,” then USDOC could have handled it
very simply by denying any adjustment for duty drawback.  An adjustment to US price for duty
drawback always  increases net US price and thereby reduces dumping margins.  If USDOC did not
trust the reported duty drawback data submitted by SAIL, it could have simply disregarded that data
and denied the adjustment.  This is something that USDOC commonly does – and it certainly is not“unduly difficult” to do.  Indeed, India followed this conservative approach in the present dispute by
calculating the dumping margins for SAIL(discussed in the First Meeting) ,without including an
adjustment for duty drawback.
18. In any event, the method by which the duty dr awback error could have been easily corrected
is found in the Verification Report itself.  The report states at page 32 that the correction “change[s]
the duty drawback from [14.77%] to [14.41%]”.  Th e correction of duty drawback thus could have
been accomplished with one line of programming dropped into any point of a SAS programME that
invoked US sales, as follows:
                                                     
14 US Answers, para. 30.
15 Ex. IND-13 (emphasis added).  The database field “DINLFTPU” is the field in which plant-to-port
foreign inland freight for shipments to the United States is reported.
16 US Answers, para. 30.WT/DS206/R
Page E-75
DTYDRAWU = GRSUPRU * 0.1441;
In layman’s terminology, this programming language states that duty drawback equals 14.41 per cent
of gross unit price.  It is not a difficult correction to implement; indeed, it could be performed in amatter of minutes by any of USDOC’s experienced an alysts.  Thus, the United States is simply wrong
in arguing that this error (or any of the others described above) rendered SAIL’s US sales database
unusable without undue difficulties.
III.  SPECIFIC COMMENTS ON ANSWERS BY THE UNITED STATES
India’s Comment on US Answer to Question 1
19. The United States  asserts in paragraph 4 of its response that the "only" category recognized
by the AD Agreement is "necessary information" in Article 6.8.  Once again, the United States avoids
completely any reference to the phrase "all informa tion which" in Annex II, paragraph.  This is the
key phrase that is required by the last sentence of Article 6.8 to be considered for the application ofArticle 6.8.  And it is this phrase that  resolves th e question as to whether SAIL's US sales data should
have been used in this case − namely, "all information which" in Annex II, paragraph 3.  As Japan,
Chile, and  the EC have recognized along with India, the obvious import of this "all information
which" phrase is that any information − whether labelled a "category", “component”, "portion", or
"piece" − which satisfies the conditions of Annex II, paragraph 3 should be taken into account by
investigating officials when making a final determination.  And the panel and Appellate Body in the
Japan Hot-Rolled  dispute − another legal authority consistently ignored by the United States − made it
clear that this provision is mandatory.  Information that meets the four conditions cannot be
disregarded when making a final determination.
17   In short, while India believes that “categories” is a
useful analytical tool to highlight the abuses of USDOC's total facts available practice, India is not
bound to the expression "categories".  Since the United States has objected to the use of term"categories", India is willing to  have the Panel focus its analysis on the key term "all information
which" set out in Annex II, paragraph 3.
18
20. Contrary to the United States’ statement in pa ragraph 3, India never suggested or stated that
the "weight conversion factor" information in Japan Hot-Rolled  was a "small and isolated" piece of
information that was not subject to the four conditions of Annex II, paragraph 3.  Indeed, this
information was apparently important enough to justify the Government of Japan’s pursuit of a
successful dispute settlement case against USDOC's wrongful refusal to use this piece of verifiable,
timely produced, and usable information.
21. The United States also errs when it states, in paragraph 4, that “[a]s Article 2.4 of the AD
Agreement makes clear, the required comparison of this information means that the various pieces of‘necessary information’ are in no way distinct”.  Article 2.4 requires that “a fair comparison shall be
made between  the export price and the normal value”.  Thus, Article 2.4 contemplates the existence of
two distinct groups (categories, components) of information that are to be compared – export price
and normal value.  And as India has set forth in its Answers to Panel Questions 28 and 28, USDOC
consistently requests, collects, and verifies export sales and home market sales and cost of productionin a separate fashion.
                                                     
17 India First Oral Statement, paras. 31-36.
18 India First Oral Statement, paras 34-36.WT/DS206/R
Page E-76
India’s Comment on US Answer to Question 2:
22. The US Answers fail to directly respond to the Panel's question: "Can the United States point
to any specific language in the AD Agreement which refers to the potential impact of deficiencies of
some information submitted on the reliability of the entire response"?  Contrary to the United States’arguments, Article 6.8 does not address the potential impact of deficiencies of some information on
the reliability of the entire response.  What is telling about the United States' response in
paragraphs 5-7 is that it never mentions Annex II, paragraph 3.  This is the one provision that does
specifically refer to particular information (be it categories or components or individual pieces of
information).  And Annex II, paragraph 3 does not provide an exception that would permit an
investigating authority to disregard information that meets the four conditions, simply because of
deficiencies in some other information.  Nor does the United States’ response take into account thefact that the last sentence of Article 6.8 requires, inter alia , that the provisions of Annex II,
paragraph 3 be observed in its application.
19
India’s Comment on US Answer to Question 3:
23. The United States again has failed to supply a clear response to the Panel's two questions.
"Undue difficulty" cannot be the basis for the extra provisions set forth in section 782(e)(3), since
“undue difficulty” is already provided for explicitly in section 782(e)(5).  Nor can "verifiability" be
the basis, despite the United States' hint to this effect in its answer, because verifiability is already
provided for explicitly in section 782(e)(2).   Nor can "best efforts" from Annex II, paragraph 5 be the
basis (again contrary to the United States' hint in its answer) because this factor is provided for section
782(e)(4).
24. The US answer does acknowledge that sec tion 782(e)(3) is an additional evaluation step
imposed on respondents that is not found in either Annex II, paragraph 3 or paragraph 5:
"By requiring Commerce to evaluate the degree of completeness of the information,
section 782(e) provides that when  the other  criteria have been met  [i.e., the criteria of
Annex II, paragraphs 3 and 5], Commerce may not decline to consider the partial
information when it is sufficiently complete so that it can form a reliable basis for a
dumping calculation. "20
Translated, this statement means that USDOC uses this criterion in section 782(e)(3) as the legal
justification to reject  information otherwise meeting the four conditions of Annex II, paragraph 3 if it
determines that the absence of other information makes the overall information "incomplete".  The
United States' clarification in its answer makes it clear that section 782(e)(3) is the principal legal
underpinning of the US policy and practice of "total facts available".
India’s Comment on US Answer to Question 4
25. The US answer to Question 4 raises a new argument, which would create a new exception to
allow investigating officials to "take into account" but not "use" information that meets the four
conditions of Annex II, paragraph 3 "when determinations are made".  This argument has no basis inthe text of the AD Agreement and is not a "permissible" reading of this phrase pursuant to AD
Article 17.6(ii). India has already set forth arguments regarding the phrase "should be taken into
account" in its Answer to Panel Question 38.  The discussion below supplements those arguments to
respond to new arguments by the United States.
                                                     
19 See India's First Submission, paras 55-67; India First Oral Statement, paras. 31-43; India Rebuttal
Submission, paras 9-10.
20 US Answers, para. 9 (emphasis added).WT/DS206/R
Page E-77
26. The starting point for the analysis of this phrase is the text of Annex II, paragraph 3, and in
particular its reference to "should be taken into account when determinations are made"  The notion of
"taking into account" must be read with "when determinations are made".  The phrase "when
determinations are made" refers to the point in time when final dumping margins are determined or
calculated.  In the dumping phase of the investigation (as opposed to the "injury" phase), the notion of
"making" a "determination" means determining whether dumping exists and calculating or
determining a dumping margin.  There is no other "determination" to be made.  Thus, information
cannot be "taken into account" in making such a determination unless it is used in the calculation  of a
dumping margin.  There is simply no other use for the information at that point in time.
27. The United States' interpretation would render Annex II, paragraph 3 a nullity, in violation of
the principles of treaty interpretation.  This inte rpretation would allow investigating authorities, at
their total discretion, to "consider" but then decide not to use information that met the conditions of
Annex II, paragraph 3, simply because of the authorities’ evaluation of the "totality of the record".
India agrees with the statement of Japan in this regard at pages 4-5 of its Answers to the questions to
Third Parties.21  Once the investigating authority has verified information and judged it to be reliable,
then it cannot disregard such information.
28. Moreover, the United States' answer incorrectly assumes that Annex II, paragraph 3 is not
mandatory .  Given the mandatory requirement not to disr egard information meeting the requirements
of Annex II, paragraph 3, as interpreted in the panel and Appellate Body decisions in Japan Hot-
Rolled , there is simply no basis for the new discretionary  exception that the US interpretation would
create.  In other words, information meeting the four conditions must  be taken into account − not
disregarded − "when determinations are made."  India refers to paragraphs 25-30 of its First Oral
Statement where the mandatory nature of Annex II, paragraph 3 is discussed.
29. Finally, it bears emphasis that the discretion that the United States seeks for USDOC with this
allegedly "permissible" interpretation would give USDOC the discretion to consider and then discard
approximately 50 per cent of the usable informa tion that was necessary to calculate the dumping
margin in this case.  Since USDOC already had applie d facts available to normal value, the fact that it
"considered" but did not "use" SAIL's US sales data (which was verifiable and usable) meant that it
was discarding approximately one-half of the information necessary to calculate a dumping margin.
The facts of this case provide a powerful reminder of the extent and scope of the loophole that the
United States is seeking to create with this interpretation.
India’s Comment on US Answer to Question 5
30. The United States has again failed to respond to the second part of the Panel's first question,
regarding whether "the United States objects to the arguments made by India to the effect that the
correction of errors in the US sales database would have been a relatively simple matter for the
United States"?  The fact that the United States ignores this question is significant.  Given theevaluation in the Final Determination that the errors in the US sales database "were susceptible to
correction", the United States cannot legally ask the Panel to draw any other conclusions in this
proceeding.
22  And there can be no doubt that these errors were easily correctable as set forth in
paragraphs 12-18 above and in Mr. Hayes’ First Affidavit.23
31. The US answer to Question 5 focuses for the first time on the "form" of Mr. Hayes’statement, claiming that an "affidavit" constitutes "evidence".  India made it clear in its First Oral
                                                     
21 See Written Answers of Japan at pages 4-5.
22 See  India Rebuttal Submission, paras. 25-43.
23 Ex. IND-24.WT/DS206/R
Page E-78
Statement that Mr. Hayes' affidavit stated his "views", which "constitute not new facts but analysis  of
facts that were before USDOC during the investigation".24  The United States counters first by
complaining about the fact that the document stating Mr . Hayes' views was entitled  "affidavit".  India
used this title because it is commonly used in the United States where Mr. Hayes resides.  India has no
objection if the Panel and the United States wish to refer to Mr. Hayes' views as being reflected in a"statement".  His analysis would still be the same.
32. The United States at paragraph 13 argues for the first time that Mr. Hayes' affidavit contains
new facts.  This is simply not correct.  Focusing first on the computer program attached to Mr. Hayes'
First Affidavit, the United States claims that this program never appeared in the investigation of cut-
to-length plate from India.  This is correct, but as India explained in detail in paragraph 82 of its First
Oral Statement, this computer program was offered for illustrative purposes.  It is not "evidence"offered to prove that USDOC should have used that particular program in the calculation of dumping
margins.
25  The calculating tools that USDOC uses in an investigation are within its discretion as
limited by the requirements of the AD Agreement.  Thus, Mr. Hayes used this computer program as a
tool (like a pocket calculator) to facilitate the illustration of how easy it would have been to correct
the width coding error in the US sales database.  To the extent that the United States' non-answer tothe Panel's question concedes that this error was not difficult to correct, then the issue is moot.  But
since the United States now argues for the first time that as a matter of fact, only a laborious manual
(non-computerized) method could have been used to  make the width corrections, then the computer
programming tool is relevant to illustrate the fallacy of this post hoc  rationalization by the
United States.
33. The United States also argues that Mr. Hayes' calculations of new margins reflected in Ex.
IND-32 and 33 are "new evidence".  This is specious. In Ex. IND-32, all Mr. Hayes did was to
calculate the totals of the prices reported in SAIL’s US sales transactions, and then the weighted
average of those prices. All of the data involved are already in the record.  The United States thus istaking the insupportable position that, although x and y are on the record, Mr. Hayes has introduced
new evidence by noting that x + y = z.  And in  Ex. IND-33, Mr. Hayes simply put down on a single
piece of paper evidence that was already in the record − the $372 NV figure from the petition, and the
$346 weighted average price for SAIL’s actual  US sales substituted for the petition’s fictitious price
of $251.  By the logic of the United States, any piece of paper (including this page) created by Indiathat reconfigures and uses data already in the r ecord, but not exactly in the format in which USDOC
used (or refused to use) it, constitutes "new" evidence.  This is simply not correct.
34. Finally, the United States argues in paragraph 14 that Mr. Hayes' presentation of multiple
methodologies (to show how easily SA IL’s US sales data could have been used) also constitutes "new
evidence".   But the United States does not argue that the data used by Mr. Hayes in his various
methodologies are not from the record.  In fact, Mr. Hayes and India have not created new data.
Rather, they simply have used existing  data in the record to establish that USDOC did not evaluate
facts in an objective and unbiased manner.
35. The United States’ new argument that there can be "no new calculation or use of the evidence
in the record" amounts to asserting that petitioners (and Panels) in WTO proceedings have to accept at
face value the authorities’ establishment and evaluations of the facts in any anti-dumping proceeding.
The same logic would ban a panel from using a pocket calculator to check the arithmetic in a
determination, even when the determination had found that 2 + 2 = 5.  But the text of Article 17.6(i)
calls for the Panel to conduct an “assessment” of the facts, not an uncritical acceptance of the
                                                     
24 India First Oral Statement, para. 81 (emphasis added).
25 In evidentiary terms, India did not offer the standard USDOC computer program for the "truth of the
matter asserted therein".  Rather, it was offered as an illustrative tool to demonstrate how an investigating
authority could have corrected SAIL’s submitted US sales information and used the data that was in the record.WT/DS206/R
Page E-79
rationalizations that the authorities have presented. Panels are required to assess “whether the
authorities’ establishment of the facts was proper” and "whether their evaluation of the facts was
unbiased and objective".  In order to do this task, the Panel must first determine what USDOC’s
"evaluation" of the facts was, and then must en gage in an active review of the evidence for that
evaluation.  In aid of this "active" review, India has demonstrated that (1) the information wasverifiable despite USDOC's ultimate evaluation that it was not, and (2) the information was usable
(consistent with the statement in USDOC's Final Determination)  without undue difficulty to calculate
a dumping margin.  Mr. Hayes' analysis − and it is just that, an analysis– simply demonstrates, from
the perspective of an expert former USDOC analyst,  how easily the information in the record could be
corrected and used.  This is analysis that India believes the Panel must have in order to make "anactive review or examination of the pertinent  facts".
26
India's Comments on US Answer to Question 6
36. The United States admits in the last paragraph of the answer to Panel question 7 that it "does
not believe that it is necessarily unsound in all cases for the calculation of a dumping margin to be
based on a comparison of normal value calculated on the basis of facts available and export price
calculated on the basis of verified information".  This is an important acknowledgement, but one not
reflected in USDOC practice.  Since the US legislation implementing the WTO Agreement entered
into effect in 1995, USDOC has always  applied total facts available if one of the two sides of the
dumping margin calculation cannot be supplied by respondents' data.  But taking this statement in
good faith, the key issue for the Panel to resolve regarding India’s claim under Article 6.8 andAnnex II, paragraph 3 is whether an objective and unbiased investigating official could have
concluded that (1) SAIL's US sales data were not verifiable, and (2) SAIL’s US sales data were not
usable to be compared with the normal value inform ation in the petition for the purpose of calculating
a final dumping margin.  India and the United States obviously differ on both of these issues.  India
refers the Panel to its Rebuttal Submission where it presents a detailed analysis of the verifiability ofSAIL's US sales data in the Sales Verification Report and Verification Failure Report at
paragraphs 74-86 ( see also  India's answers to Panel's questions 21, 28, 29 and 39), and an analysis of
the usability of the US sales data in comparison with the constructed value information in the petition
at paragraphs 57-64 and in Mr. Hayes' two affidavits.
37. India has addressed other new arguments made in the US Answer to question 6 in paragraphs
2-18 of these comments.
India's Comments on US Answer to Question 7
38. See paragraphs 2-18 above for a more detailed response to this question.
39. The United States' post hoc  analysis of the alleged "unverifiability" of SAIL's US sales data
standing alone simply cannot withstand a careful examination of the record.  In its answer, the
United States as a litigant claims at paragraph 18 that "inaccuracies specific to the US sales data . . .were never resolved, as detailed in the verification report".  India has addressed this new argument in
detail in paragraphs 2 to 18 above.  But what the United States never says is what USDOC said
repeatedly − that the "several errors" found at verification in the US sales database "were susceptible
to correction".  If these errors were not "resolved", it was only because USDOC chose not to
cooperate in the investigation by making the simple revisions or adjustments that would havecorrected the data.  As the Appellate Body said in Japan Hot-Rolled,  the notion of cooperation
"suggests that cooperation is a process , involving joint effort, whereby parties work together towards
                                                     
26 See India Rebuttal Submission, paras. 7-8; Japan Hot-Rolled , WT/DS184/AB/R, at para 55.  India
has already responded to the United States’ assertions th at India is limited to arguments raised by SAIL, at
paragraph 81 of its First Oral Statement.WT/DS206/R
Page E-80
a common goal".27  USDOC could not simply refuse to make revisions to the margin calculation
computer program where SAIL provided it with the data to do so (for example, regarding the width
coding error, included in Verification Exhibit S-8), or to use the data obtained at verification to make
easy correction to the errors.  The process of cooperation, based on the notion of good faith, and
coupled with the requirements of using the data unless there are undue difficulties presented, requiresa sustained and comprehensive effort by an investigating authority to address in a collectively with the
respondent any inaccuracies and to make concerted efforts to use the respondents' data in making the
final determination.
India’s Comment on US Answer to Question 8
40. In its response to Question 8, the United States has failed to make a clear distinction between
the two separate per se  (as such) claims made by India regarding the US anti-dumping statutes.  The
first is a separate challenge to Section 782(e) for mandating the use of additional criteria by USDOC
not sanctioned by the AD Agreement before respondents' information may be accepted.  The
United States indicates in paragraph 26 that "United States law requires Commerce to accept a
respondent's data where the criteria of section 782(e) are met".  But this statement is consistent withIndia's case, i.e., that respondents' data can only be accepted if it meets all five of the conditions of
Section 782(e).  As India has argued in its Fi rst Oral Statement, while Section 782(e) may reduce  the
likelihood that Commerce will resort to facts available, it does not reduce that likelihood enough
because it imposes two new requirements -- 782(e)(3) and 782(e)(4) that are not found in Annex II,
paragraph 3.
 28
41. Thus, although US law requires the acceptance of a respondent’s data, it does so only after allof the five conditions are met.  For this reason, the USDOC determinations
29 and USCIT decision30
cited in the US Answers are irrelevant.  These cases all merely state that USDOC will acceptinformation submitted by a respondent which satisfies the conditions  of section 782(e).  But that point
fails to address the fact that section 782(e) imposes additional conditions on the acceptance of a
respondent’s information beyond those imposed by the Agreement.
42. India has also argued that a second and independent violation of the Agreement arises from
the fact that section 782(d) requires  the rejection of a respondent’s submitted information once it is
determined that the information fails to meet the conditions for acceptance under section 782(e).
Although section 782(d) uses the discretionary verb “may” in granting authority to USDOC to
disregard the information submitted by a respondent, in fact that section has been interpreted as
mandatory (“shall”) by USDOC and the USCIT.  Paragraphs 21-27 of India’s Answers provide an
extensive review of cases in which USDOC and US CIT have interpreted section 782(d) as mandatory.
Thus, the statute operates to require  the rejection of information that does not meet the conditions
requiring their acceptance (including the improper additional conditions) set out in section 782(e).The cases cited by the United States at paragraphs 23-25 do not contradict this argument.  And the
United States still has not pointed to any instance since 1995 when it has used facts available for
either normal value or export price and respondent data for the other side of the equation in making a
final determination.
                                                     
27 WT/DS184/AB/R para. 99 (emphasis added).
28 India First Oral Statement, paras. 65-66, India Rebuttal Submission, India Answers to Panel
Questions (“India Answers”), para. 61.
29 Final Results; Administrative Review and New Shipper Review of Antidumping Duty Order on
Stainless Steel Bar from India , 65 Fed. Reg. 48965 (Aug. 10, 2000); Final Determination of Sales at Less Than
Fair Value: Certain Polyester Staple Fibre from Taiwan , 65 Fed. Reg. 16877 (30 March 2000), cited in US
Answers, paras. 23-25.
30 NSK Ltd. v. United States , 170 F. Supp. 2d 1280 (USCIT 2001), cited in US Answers paras. 23-25,
and also discussed in India Answers to Panel Questions, para. 25.WT/DS206/R
Page E-81
India's Comment on US Answer to Question 9
43. India notes that the United States does not directly respond to the Panel's questions (1)
whether there was a specific finding by USDOC that the US sales database, standing alone, wasuseable, and (2) whether the US sales data was analyzed for the purposes of the final determination.
Regarding the issue of whether USDOC made any specific findings regarding the "usability" of
SAIL's US sales data, the answer is that USDOC  found that the "US sales database would require
some revisions and corrections in order to be usable" and that those corrections and revisions were
"susceptible to correction"  India directs the Panel to its analysis in paragraphs 2-18 above and to
paragraphs 25-43 of its Rebuttal Submission.
44. With respect to the second issue, whether US DOC analyzed SAIL's US sales data "for the
purposes of the final determination", the United States now argues in paragraph 28 of its Answers that
the absence of TCOM and VCOM "left Commerce with nothing [ inter alia f r o m  S A I L ' s  U S  s a l e s
database] it could analyze at the time of the Final Determination".   But this incorrect post hoc
assertion
31 does not answer the question whether SAIL's US sales data could have been used in a
comparison − not with SAIL's cost of production or home market sales information − but with the
normal value information in the petition.  In this regard, it is significant that the United States has
acknowledged in paragraph 28 of its Answers that it may not be "unsound" to calculate a dumping
margin "based on a comparison of normal value calculated on the basis of facts available and export
price calculated on the basis of verified information" .  But there is nothing in the record to indicate
that USDOC ever "analyzed" SAIL's US sales data, standing alone, to determine if it was usable in
comparison with the normal value information in the petition.  And there is nothing in the record to
indicate that USDOC ever tried to make the corrections to SAIL's US sales data that it repeatedly
acknowledged were "susceptible" to correction.
India’s Comment on US Answer to Question 10
45. See paragraphs 2-18 supra.
46. The United States has again failed to respond to the Panel's question  "did the USDOC
specifically determine that consideration of the US sales data would cause 'undue difficulties "?  Nor
did the United States answer the Panel's next question, "Can the United States point to where in the
determination or otherwise in the record, this conclusion can be discerned"?  The reason the
United States did not respond directly to these two key questions may well be because there is no
place in the record where the United States made an "undue difficulty" finding specifically as toSAIL's US sales data.  Indeed, to the contrary, USDOC said that SAIL’s "US sales database would
require some revisions and corrections in order to be useable". The US Answer to question 10
(paragraph 33) asserts that the US sales data standing alone could not be used except with undue
difficulty.  But this is clearly a post hoc  evaluation by the United States as a litigant before a WTO
panel, which contradicts the express evaluation made by the administering authority, USDOC, in theFinal Determination.  India directs the attention of the Panel to paragraphs 29-33 of its Rebuttal
Submission, where it addresses USDOC's evaluation of the facts and specifically USDOC’s finding
that "the US sales database would require some revisions and corrections in order to be useable ".
India’s Comment on US Answer to Question 11
47. The United States has pointed to various facts as evidence of SAIL’s failure to act to the best
of its ability.  However, the United States has not, and cannot, contradict the evidence presented by
                                                     
31 This assertion is not correct for the numerous reasons set forth in paragraphs 2-18 above, in
paragraphs 25-64 of India Rebuttal Submission, and in Mr. Hayes' First and Second Affidavits.WT/DS206/R
Page E-82
India that SAIL acted to the best of its ability in producing its US sales data as set forth in the Sales
Verification Report (Ind. EX-13).  With respect to the non-US sales data, as India has discussed in its
Answers to Questions and Rebuttal Submission32, the facts relied on by the United States are
inapposite.  In particular, the United States cites USDOC’s Remand Redetermination for the point that
“SAIL informed Commerce that it was experiencing difficulties in gathering and submitting therequested information, but that in all of its comm unications with Commerce, SAIL further indicated
that the requested information would be forthcoming.”
33  This argument is specious.  The
United States is correct that SAIL repeatedly explained to USDOC that it was having difficulties
preparing the requested data, given both the logistical complexities confronting the company and the
fact that USDOC required the data in formats other th an those in which the data are maintained in the
normal course of business.34   The fact that SAIL did not volunteer that it may not be able  to submit
the requested data is hardly surprising.  As the United States must be aware, it is suicidal for arespondent to make such a statement, because US DOC would then all the more swiftly determine that
the respondent is not using its best efforts or is not cooperative, and then apply total adverse facts
available.  Respondents are understandably reluctant to make such a declaration of inability to
respond until they absolutely know they will be unable to do so. In this regard, SAIL continued to try
its best to provide the information requested by USDOC in the required formats even after USDOC'sdeadlines expired.  These facts show that it is unfair to argue that SAIL's statements of good
intentions are "evidence" of a failure by the company to act to the best of its ability.
48. Similarly, the United States repeats yet again that SAIL was a large company, as if its size
were somehow evidence of a failure to act to the best of its ability.
35 But as India has explained in its
Answers36 and as SAIL explained to USDOC durin g the investigation, SAIL’s size was an
impediment  to its ability to organize and submit the requested data to USDOC within the required
timeframe.  The United States as litigant adds the word “sophistication” in its description of the
company, thus asserting that this alleged “sophistication” on the part of SAIL means that its failure to
provide data as requested demonstrated a failure to act to the best of its ability.37  But precisely the
opposite is true.  SAIL is large but not sophisticated.  As explained in detail in India’s Oral Statement
and its Rebuttal Submission38, SAIL is a developing country company, subject to severe
communications and logistical limitations.  USDOC was fully aware of this fact and thus, never made
the finding that SAIL was sophisticated.
49. Finally, India notes that the United States’ answer relies heavily on the conclusions of
USDOC made in its Remand Redetermination made in September 2001 consequent to SAIL’s judicialappeal to the USCIT.  India notes that this Redetermination is not part of the record for the "measure"
that is at issue in this dispute.  Moreover, this "evidence" in the Remand Redetermination was drafted
by USDOC well after  the 7 June 2001 panel request in this dispute.  Therefore, any findings reflected
in the Remand Redetermination are post hoc  and self-serving statements that should be disregarded by
the Panel.  This Panel will need to judge whethe r SAIL "cooperated" in the investigation (for the
production of information as to its US sales, or in the alternative, for the entire investigation), based
on the record that existed at the time of the Final Determination − 29 December 1999.
                                                     
32 India Rebuttal Submission, paras. 94-95.
33 US Answers, para. 38.
34 India First Oral Statement, paras. 75-80; India Answers, para.35.
35 US Answers, para. 39.
36 India Answers, para. 35, 48
37 US Answers, para. 39.
38 India First Oral Statement, para. 76; India Rebuttal Submission, para. 95; see also  India Answers
para. 48..WT/DS206/R
Page E-83
India's Comment on US Answer to Question 12
50. The United States' answer displays a misunderstanding of Article 15, second sentence.  In
paragraph 42, the United States suggests "possible elements" (not found in any US regulation or
statute) by which the impact of the imposition of dumping margins on the essential interests ofdeveloping country Members could be gauged.   India believes that the correct interpretation of the
"essential interests" provision is that any time a developing country respondent foreign company
seeks, as in this case, consideration by USDOC of the possibility of a constructive remedy pursuant to
Article 15, it necessarily has already made a determination that the "essential interests" of its country
are at stake.  The decision as to whether a WTO developing  country’s "essential interests" are at stake
is entirely self-judging.
51. In this case, USDOC knew that SAIL was a stat e-owned entity of the Government of India.  It
knew that SAIL had made a request consistent with Article 15 of the AD Agreement for the
imposition of a constructive remedy.  Thus, there could be no legal question that India had an
“essential interest” in avoiding a loss of the US market for SAIL’s products.  And, as India has argued
in its First Oral Statement at paragraphs 69-74, there can be no doubt that in this case USDOC wasfully aware that, given the number of persons employed by SAIL and the importance of the US
market to SAIL,  India's essential interests would be negatively affected if huge dumping margins
were  imposed on SAIL's exports of cut-to-length pl ate.  The "possible elements" referred to by the
United States in paragraph 42 are far too restrictive, and impinge on the prerogative accorded to
developing countries under Article 15 to seek constructive remedies in anti-dumping investigations. InIndia's view the relevant issue is fairly straight forward: imposition of any dumping margin that would
effectively close off a market and negatively affect employment and income in a developing country
would "affect the essential interests of developing country Members".
India’s Comment on US Answer to Question 13
52. The United States misleadingly describes USDOC standard practice, when it suggests that
cost and sales verifications are handled separately, as in SAIL’s case, only as a matter of logistics –
i.e., “due to the number of locations to be visited” – and that only for this reason were separate
verification reports issued.
39  In fact, USDOC rarely conducts joint and combined verifications, except
in the simplest of cases.  Almost always, as in  this case, USDOC conducts separate verifications of
the cost databases (COP and CV) and the sales databa ses (US sales and home market sales).  As in the
India cut-to-length investigation, USDOC also normally issues separate verification outlines for cost
and sales verifications, and frequently sends different teams of personnel to conduct the cost and sales
verifications of a single company.  Indeed, USDOC maintains a separate Office of Accounting, whose
staff consists primarily of accountants who conduct a large percentage of the cost verifications,
because it is understood that the cost data submitted by respondents often involve more complexaccounting issues than do their sales databases.  Even when the same USDOC personnel conduct both
the cost and sales verifications (which usually occurs only because the Office of Accounting is
understaffed), they are generally handled as separate activities.  Likewise, as in this case, USDOC
almost always issues separate reports after the sales and cost verifications, demonstrating again that
USDOC and the parties recognize that they are separate activities.
53. The United States also comes to a misleading conclusion in asserting that “[t]he verification
of each essential element of the response is necessary to the overall verification of the response”.
40
While the United States would like the Panel to reach this conclusion, it simply is not true.  To the
contrary, individual components or categories of information can − and consistent with Annex II,
paragraph 3 must − be verified independently, and the failure of one component or category to be
                                                     
39 US Answers, para. 44.
40 US Answers, para. 44.WT/DS206/R
Page E-84
successfully verified does not implicate the verifiability of other components or categories of
information.41
India’s Comment on US Answer to Question 15
54.  SAIL's US sales data did comprise a "fraction" but contrary to the United States' arguments,
that fraction was one-half of the totality of the information needed to make the dumping calculation in
this case.  Figure 5 of the petition (set out in India’s Exhibit 32) shows that SAIL's US sales data
constituted a very large fraction – one-half – of the information necessary at the time of Final
Determination to calculate a dumping margin.  The various methodologies proposed by Mr. Hayes are
all are based on the fact that SAIL's US sales data constituted one-half of the information necessary to
calculate a dumping margin.  This is not an original concept.  USDOC based the final margin in thiscase on one non-sale export price offer that was used as  one-half of the information to calculate a
dumping margin.  By contrast, SAIL's US sales ex port price data were backed up by a very large
amount of data that had been checked exhaustively  by USDOC verifiers.  India contends that any
practice − such as the USDOC total facts available practice − which discards all of the verified, timely
produced and usable information is by definition inconsistent with a "fair comparison" or "objective
decision-making based on facts".
India’s Comment on US Answer to Question 16
55. The United States has failed to respond to the Panel’s first question under Question 16,
“Could the USDOC have identified, among the US sa les reported in the US sales database, export
prices for transactions involving a like or similar product to that represented in the constructed normal
value reported in the petition"?  In fact, it is a simple exercise based on the data in India Exhibit 8 to
determine, as set forth in Mr. Hayes’ Second Affidavit, that there is an identical product match for
more than 30 per cent of the cut-to-length plate shippe d by SAIL to the United States with the product
represented in the constructed value figure in the pe tition.  As for "like or similar products" to the
product used to calculate CV in the petition, approximately 72 per cent of the US sales database falls
within this definition, as described in paragraph 10 of Mr. Hayes’ second affidavit.
56. As for the new US "undue difficulty" claim, India would note that it took Mr. Hayes less than
one-half hour to identify the identical products  in SAIL’s US sales database, and the same
insignificant amount of time to conduct his examination of similar commercial grade products, using a
personal laptop computer and the data in India Exhibit 8.  Mr. Hayes will be available to describe the
ease of this process at the Second Meeting of the Panel with the parties.
India's comment on US Answer to Question 17
57. The United States makes the statement at paragraph 56 that "in this case, SAIL's information
was ideal in almost no respect".  This is an unsupported post hoc statement directly contradicted by
the Sales Verification Report (Ind. Ex.-13).  As detailed in India's Rebuttal Submission at paragraphs74-75, the great majority of the information provided  by SAIL regarding its US sales information was
"ideal".  As India notes in paragraph 74 of th e Rebuttal Submission, USDOC  acknowledged that "we
were able to test the accuracy of the reporting for a large number of individual sales observations" and
the United States has admitted that "SAIL made relatively few export sales to the United States".
Every time the USDOC concluded that it found "no discrepancies" in the Sales Verification Report
(analyzed in paragraph 75 of India's Rebuttal Submission), this meant the information checked was
found to contain no defects.  In other words, the information was "ideal".  As detailed in the SalesVerification Report, the vast majority of the information in the matrix of information requested by
USDOC (28 categories of information for 1284 sales) was checked and found to have "no
                                                     
41 See India Rebuttal Submission, paras. 66-73; India Answers 21, 28, 29 and 39.WT/DS206/R
Page E-85
discrepancies".  By contrast, the one offer (non-sale) price used to calculate export price in final
determination was not even corroborated.
58. The Panel should also recall that this US sales information represented one-half of the
information needed to calculate a dumping margin in  this case (the other half being the normal value
information in the petition).  So, when USDOC found that almost all of SAIL's US sales information
that was reviewed at verification had "no discrepancies", this "finding" applied to one-half of the
"necessary information" needed to calculate a dump ing margin.  In short, the United States cannot in
this litigation change its original "no discrepancy" evaluation of the facts into a post hoc  "nearly total
discrepancy" finding.
India’s Comment on US Answer to Question 18
59. Paragraph 57 of the US Answers includes the following statement:  "The relative quality [of
the total facts available] decision - comparing the price offer in the petition to the matching product on
which constructed value was based − is quite sound, particularly where the information has been
corroborated as in this case .”  (emphasis supplied).  India has already demonstrated that the quality of
the supposed corroboration of the export price information in the petition (i.e., the price offer) was
poor to non-existent, and was contradicted by customs import data contained elsewhere in the
petition.42  Thus, the “relative quality” of USDOC’s total facts available decision, which was entirely
based on the price offer in the petition, could not possibly have met the standard required of an
unbiased and objective investigating authority.
India’s Comment on US Answer to Question 35
60. ndia indicated in its A60. r to the Panel's Questions 35 and 36, India is no longer
pursuing an "as such" ( per se ) claim regarding USDOC's long-standi ng practice.  However, India is
still pursuing an "as applied" claim.  In this regard, it is significant that the United States appears to
concede in paragraph 84 that individual applications of the US facts available provisions "might
individually constitute measures". India's claim regarding practice focuses only on the application in
the investigation on cut-to-length steel plate from India of the US facts available "practice" − not on
"specific determinations in specific anti-dumping pr oceedings that are not within the Panel's terms of
reference",to quote the United States at paragraph 84.
61. Exports Restraints  panel report involved a "per se" (as such) claim, not an "as applied" claim.
Indeed, one of the main problems with the argument in the Exports Restraints case was the absence of
any application of the so-called practice in that case.  This case is quite different.
India’s Comment on US Answer to Question 37
62. phrases "may be made" in Article 6.8 and "to make" in Annex II, paragraph 1, to which the
United States refers, do not mean that investigatin g authorities are free to discard information meeting
the conditions of Annex II, paragraph 3.  Rather, when read in the context of Annex II, paragraph 3
("all information which"), these provisions mean that authorities may use information from sources
other than the respondent to fill in the gaps for that necessary information not available from the
respondent ( i.e., information not meeting the requirements of Annex II, paragraph 3 or 5).  If USDOC
had used SAIL's US sales data, as urged by SA IL, USDOC would have "calculated" a dumping
margin using the normal value data from the petition and SAIL's actual US sales data.  India refers the
Panel to its own answer to Question 37 for furt her comments regarding the United States’ answer.
                                                     
42 See India First Oral Statement, paras. 12-24; Ex. IND-1 (figure 5), Ex. IND-30-34.WT/DS206/R
Page E-86
ANNEX E-8
ANSWERS OF THE UNITED STATES TO QUESTIONS OF
THE PANEL - SECOND MEETING
(8 March 2002)
For the United States
Q1(a) Would the United States please explain ho w it arrived at the conclusion that 1 per cent
of the US sales reported by SAIL appear to be identical to the product upon which the normal
value in the petition was based?
Reply
1. The United States’ conclusion – that 1 per cent of the US sales reported by SAIL appear to be
identical to the product upon which the normal value in the petition was based – was reached by
analyzing SAIL’s final US sales database, as submitted on 1 September 1999.  To reach this
conclusion, Commerce sorted the variable fields relating to actual plate specification, plate thickness,and plate width to identify the quantity of reported US sales for which these three characteristics were
identical to the product for which constructed value was calculated in the petition.  Commerce then
divided that quantity by the total quantity reported in the 1 September 1999, database.  The resulting
figure is less than 1 per cent.
Q1(b) Would the United States please explain in detail its objections to the analysis of Mr.
Hayes supporting his statement that 30 per cent of the merchandise reported sold to theUnited States is identical to the merchandise upo n which the constructed value in the petition is
based?
Reply
2. The United States objects to Mr. Hayes’ analysis for several reasons.  First, Mr. Hayes’
analysis is offered – in the form of an  “affidavit” – as evidence, even though this analysis was never
presented to Commerce and, therefore, is not part of the facts established and assessed by Commerce
during the underlying investigation.1  Pursuant to Articles 17.5(ii) and 17.6(i), the pertinent evidence
on which the panel must base its review is the record established by the investigating authority at thetime of its determination.
2  Here, Mr. Hayes’ analysis was offered to the Panel for the first time in an
affidavit presented with India’s second written submission and his explanation as to how he
                                                     
1 See US Answers to the Panel’s 25 January 2002 Questions, ¶¶ 12-14
2 See United States-Anti-dumping Measures on Certain Hot-Rolled Steel Products from Japan ,
WT/DS184/R, adopted 28 February 2001, at paras. 7.6-7.7 ("It seems clear to us that, under this provision, apanel may not, when examining a claim of violation of the AD Agreement, in a particular determination,consider facts or evidence presented to it by a party in an attempt to demonstrate error in the determinationconcerning questions that were investigated and decided by the authorities, unless they had been made availablein conformity with the appropriate domestic procedures to the authorities of the investigating country during the
investigation").WT/DS206/R
Page E-87
conducted this analysis was offered – for the first time in this proceeding – orally to the Panel at the
second meeting.  For these reasons alone, Mr. Hayes’ analysis, coming more than two years after the
underlying investigation, should be rejected by the Panel.
3. Second, Mr. Hayes’ analysis ignores Co mmerce’s conclusion that SAIL’s reported
information was not verifiable because it failed the verification process.  Mr. Hayes admits that errors
discovered at verification required that he revise the 1 September 1999, database before he could
reach his 30 per cent estimation, but his revisions only correct for one of the errors.  These
manipulations are described as (1) correction of the width error first by scanning the 942 affected
observations, then by manually changing the incorrect width values for all 942 observations;
(2) isolating the correct “band” of products to be treated as identical to the product on which the
constructed value in the petition was based;  (3) applying the “banding” requirements to the product inthe petition;  and (4) sorting all of SAIL’s data by grade, thickness and width in order to isolate the
sales that matched the product in the petition.
3  Mr. Hayes estimates his time spent on step 1 at one
half hour, although he does not explain how he “scanned the list of 942 observations listed in India
Exhibit 13" to correct the 1 September 1999, database, which contains no observation numbers.4
Mr. Hayes offers no estimations for the time invo lved in undertaking steps 2-4.  In any event, the
various theories and explanations offered by India only serve to reinforce the conclusion that only an
ever-shrinking portion of SAIL’s information may even have been theoretically usable.  Moreover,
even the theoretical use of this limited information would have posed undue difficulties, as significant
changes would have to have been made to the US database.5
4. Finally, the United States disagrees with the significance which India appears to attach to its30 per cent estimate.  As noted above, India’s estimate disregards Commerce’s determination that
SAIL’s information – including the US sales database – failed verification.  India’s estimate also fails
to correct other significant errors in the US database.  India’s conclusion also begs the question: what
about the remaining 70 per cent of SAIL’s reported US sales?  Only SAIL – and perhaps India – knowwhether the exclusion of the remaining 70 per cent of these sales benefits or is adverse to SAIL’ s
interests.  When an investigating authority relies on facts available, it is not possible to determine
whether those facts are advantageous to the responding party because the information necessary to
determine or even estimate that party’s actual margin of dumping is not available.  For these reasons,
the 30 per cent estimate arrived at by India is of questionable value at best.
5. It is worth recalling the test that India sought to establish at the outset of this case – namely,
that the proper way to interpret Article 6.8 and Annex II of the AD Agreement is that “any category of
information submitted by a respondent that is verifiable, timely submitted, in the requested computer
format, and can be used without undue difficulty  must  be used by the investigating authorities in
calculating an anti-dumping margin”.  First Written Submission of India at ¶ 50.  But India itself now
admits that its US sales “category” cannot be used; only a “sub-category” (30 per cent) can eventheoretically be used, and even then, this subset contains errors which have not been accounted for.
Moreover, because of the inherent linkages between the US database and the other necessary
information, there may be additional errors that cannot be detected in the absence of the other
information that SAIL did not provide.
6. In summary, in a case such as this, where the information provided by the respondent is
untimely, unverifiable and cannot be used without undue difficulties, there is no obligation to use the
little information that is provided to calculate a dumping margin, and a fair and objective
administering authority could reasonably decline to do so.  To read the AD Agreement as obliging an
administering authority to use what little information has been provided would nullify the
                                                     
3 Second Oral Statemen t of India at ¶¶ 57-61.
4 Id. at ¶ 57.
5 See, e.g., US Answers to 25 January 2002 Panel Questions at ¶¶ 29-34.WT/DS206/R
Page E-88
authorization in Article 6.8 that investigating authorities may make final determinations based on the
facts available where the necessary  information has not been provided.  Moreover, such an approach
would be inconsistent with the essential balance between the interests of investigating authorities and
exporters reflected in the AD Agreement because it would  place respondent exporters in total control
of what data is used in the dumping calculation and make a meaningful investigative processimpossible.
Q1(c) Is the normal value referred to in (a) above the same as the constructed value referred
to in (b) above?  If not, could the United States  calculate what percentage of US sales reported
by SAIL appear to be identical to the product upon which the constructed value in the petition
was based?
Reply
7. Yes.  The normal value referred to in (a) abov e refers to the constructed value in the petition,
which is the same normal value on which India based its analysis as described in (b) above.  Thus,
both analyses use the same basis for normal value, although the United States’ conclusion that 1 percent of the US sales database appear to be identical to this normal value is based on the final
1 September 1999, database as it was submitted by SAIL to Commerce, not as further revised recently
by counsel to India.
Q2. The United States indicated in its reply to the Panel's question number 10, that in order
to use the US sales data submitted by SAIL, inter alia , "even for those sales for which the
missing cost information was not needed - sales that matched identically and would require no
adjustment for physical characteristics pursuant to Article 2.4 - US authorities would have been
required to manually correct the physical characte ristics for 75 per cent of the sales just to be
able to identify the identical sales" (emphasis added).  Does this refer to correction of the
miscoding of the width of product as 96 inch es rather than over 96 inches, described in
paragraph 30 of India's first submission and referred to in paragraph 5 of the Summary of
significant findings in the verification report,  Exhibit India-13 at page 5?  Why does the
United States consider that these coding erro rs would have to be corrected manually?  How
does this suggestion that it would be difficult or complex to make this correction of the coding
error square with the conclusion in the determination of verification failure, Exhibit India-16 at
page 5, that the errors in the US sales database detailed in the verification report "in isolation,
are susceptible to correction"?
Reply
8. The Panel has asked three questions, which we address in turn.
9. First, the Panel is correct that the statement that “US authorities would have been required to
manually correct the physical characteristics for 75 per cent of the sales just to be able to identify the
identical sales” refers to correction of the miscoding of the width characteristics.6  Commerce would
have been required to review each observation in order to determine which observations containederrors requiring correction.  The United States also noted that further corrections – freight cost, duty
drawback errors, etc. – would also have to be made using the same process.
10. Second, as to why these coding errors would ha ve to be corrected manually, the correction of
these errors would require staff to review each observation to determine where corrections wouldneed to be made.  It should be noted that typically a respondent whose database contained errors
would be required to correct and resubmit those databases so that Commerce could analyze the
                                                     
6 US Answers to Panel’s 25 January 2002 Questions, ¶ 32.WT/DS206/R
Page E-89
revisions; an investigating authority would not typi cally be required to make those corrections on its
own.  In this case, the record reflects – and Commerce concluded – that SAIL never provided usable
databases.7  Based on the information actually submitted in the underlying investigation, any analysis
of SAIL’s US sales database would be limited to the database submitted on 1 September 1999, just
prior to verification.  In order to make just the necessary “coding” corrections, Commerce would needto review each individual observation and input the new information from Verification Exhibit S-8.
8
11. Finally, Commerce’s suggestion that it would be difficult or complex to correct the US
database is consistent with its conclusion that the errors in the US sales database “in isolation, are
susceptible to correction".  When the information submitted by a respondent in an anti-dumping
investigation contains isolated errors, the correction of those isolated errors can typically be
accomplished by the respondent without undue difficulties.  The validity of the corrections can betested once the respective databases are compared as part of the anti-dumping analysis.  Such might
have been the case with respect to SAIL if errors  in its databases were limited to those that were
identified in its US sales database.  The correction of such errors – again, typically accomplished by
the respondent through the submission of a corrected database at an early enough point that it can still
be analyzed and verified – could very well result in usable information that could be then compared aspart of an anti-dumping calculation.  But as vividly documented in the underlying record, the errors in
SAIL’s databases were not isolated to those in the US sales database; SAIL concedes that usable
home market, cost and constructed value databases did not exist.  Therefore, while the US sales
database errors may have been “susceptible” or “able to be affected by” correction –  though not
without undue difficulty – such correction would ha ve been meaningless in light of the magnitude of
everything else that was missing from SAIL’s databases.  Moreover, the validity of such corrections
could not be tested because there were no other databases against which it could be compared.  The
errors in the US sales database could not be corrected without undue difficulties and – even if those
errors were corrected – the data could not be used without undue difficulties because the other
necessary information to calculate a dumping margin was missing.  For these reasons, India isincorrect in its conclusion, Second Submission of India at ¶ 16, that the US sales database was “easily
capable of being used” in calculating a margin.
Q3. Could the United States elaborate on its statement, at paragraph 12 (page 9) of its
second oral statement, that "in determining the amount of time and effort required to use
SAIL's information, an unbiased and object ive investigating authority could reasonably
conclude that it would involve a great deal of time and effort to address the unusable home
market, export price, cost of production, and constructed value information and to identify any
small pieces of data that might have been usable ."  Specifically, does the United States consider
that the unusable home market, cost of production, and constructed value information would
have to be addressed in evaluating whether the US sales price information submitted by SAIL,alone, could be used without undue difficulties.  If so, why?
Reply
12. In its second oral statement, the United States noted that "in determining the amount of time
and effort required to use SAIL's information, an unbiased and objective investigating authority could
                                                     
7 See, e.g., Final Determination , Ex. IND-17, at 73130 (“. . .SAIL has not provided a useable home
market sales database, cost of production database, or constructed value database.  Moreover, the US salesdatabase would require some revisions and corrections in order to be useable.  As a result of the aggregatedeficiencies (data problems and SAIL's responses), the Department was unable to adequately analyze SAIL'sselling practices in a thorough manner for purposes of measuring the existence of sales at less than fair value forthis final determination”).
8 Ex. IND-13.WT/DS206/R
Page E-90
reasonably conclude that it would involve a great deal of time and effort to address the unusable home
market, export price, cost of production, and constructed value information and to identify any small
pieces of data that might have been usable".  This statement was offered in response to a claim made
by India that a determination as to whether SAIL’s information can be used without “undue
difficulties” must include consideration of the amount of information available to be used incalculating a dumping margin.
9  According to India, "if the information provided represents one entire
component" of the anti-dumping equation – here, presumably, the export price data – then
investigating authorities must make "consid erable efforts" to use this information.10  A s  t h e
United States explained, there are several flaws in India’s reasoning.  First, the AD Agreement does
not refer to “categories” of information, as India has subsequently acknowledged.11  Further, the
record demonstrates that SAIL did not even provide an entire  database that did not contain significant
flaws.  While India claims that if the submitted information represents one entire “category” then theauthorities must make "considerable efforts" to use it, that was not the case here.  Thus, even if there
was validity to India's standard (which the United States does not concede), the standard was not met
in this case.
13. As the United States has explained, the more relevant inquiry is to examine – in determining
whether SAIL’s information can be used without “undue difficulties” – the amount of necessary
information that is available to be used in calculating a dumping margin.
12  Given that the information
necessary for the calculation of an anti-dumping analysis in this case – home market sales, export
sales, cost of production data and constructed value data – was almost entirely lacking, it was
reasonable – given the facts of this case  – for an unbiased and objective investigating authority toconclude that it would involve a great deal of time and effort to address the unusable home market,
export price, cost of production, and constructed value information, and to identify any small pieces
of data that might have been usable.
14. This conclusion is particularly true given the explicit linkages between all of the “necessary
information” needed to calculate an accurate anti-dumping margin, namely export prices, home
market prices, cost of production, and constructed value, linkages that are reflected in SAIL’s own
questionnaire responses.  In SAIL’s export price response, for example, SAIL referred Commerce to
its cost of production response – which SAIL and India concede was never usable – for cost
information needed to measure differences in physical characteristics between products.
13  With such
data missing, a fair and objective investigating authority could reasonably determine that the U.S.
sales database – with or without its attendant errors – could not be used alone.  The United Statesagrees with the statement of the European Communities that, in anti-dumping investigations,
“different sets of data are linked and that failure to provide one part of such a set of linked data might
make it impossible to use other data".
14
4. Is it correct to understand that USDOC may (but is not required to) use, in making itsdetermination, information that does not satisfy the requirements of section 782(e)(1)-(5)?  If so, can
the United States cite any case in which USDOC has done so?
15. Yes, it is correct that Commerce may use – but is not required to use – information that does
not satisfy the requirements of section 782(e)(1)-(5).  One of the cases that Commerce submitted to
                                                     
9 India’s Second Written Submission at ¶ 18.
10 Id.
11 First Oral Statement of India at ¶ 34 (“The United States correctly points out that the term “category”
is not a term found in the AD Agreement.”).
12 Comments of the United States of America on India’s 12 February 2002 Responses to Panel
Questions (“U.S. Comments”), at ¶ 7.
13 See, e.g., Ex. US-28.
14 Third Party Oral Statement of the European Communities at ¶ 6.WT/DS206/R
Page E-91
the Panel demonstrates this point: Polyester Staple Fibre from Taiwan.15  In that case, Commerce
identified serious errors in the respondent’s revised database at verification; thus, Commerce was not
able to verify certain information under section 782(e)(2).  Nevertheless, Commerce used the
information consistent with the principle – reflected in section 782(e)(3) – that the information was
not so incomplete that it could not serve as a reliable basis for reaching the determination.  Commerceexplained that the respondent failed to submit entirely accurate and complete responses to its cost and
sales database, but determined that the respondent’s submissions had been timely, the majority of the
information provided was accurate, the effect of the errors discovered at the verification of sales and
costs were limited in scope and the impact of those errors on any potential dumping margin was
small.  The Department of Commerce explained that:
Errors discovered at verification are not, however, automatic grounds for the rejection
of the whole of a respondent's reported data. As detailed in subsequent comments
below, the errors discovered during the verification of FETL's sales and costs were
limited in scope and their impact on any potential dumping margin was small.
Polyester Staple Fibre from Taiwan , Decision Memorandum at Comment 1.  For these reasons,
Commerce determined that the respondent’s data, overall, “could be used without undue difficulties”and that “pursuant to section 782(e) of the Act, we do not find that [respondent’s] information is so
incomplete that it cannot serve as a reliable basis for reaching a final determination”.  Id.
16
For India
Q5. With reference to the discussion in paragraph 11, India's response to the Panel's
question number 21, would India agree that if th e investigating authority reasonably concludes
that it would be "unduly difficult" in a particular case to fill in gaps in information submitted,
then the investigating authority may reject the in formation submitted on the basis that it is not
capable of being used without undue difficulty?
Reply
16. In considering this issue, the United States recalls the statement that India made at the first
Panel meeting (at ¶ 58):
If a foreign respondent provided information on all export sales but did not provide
information on a number of necessary characteristics of such sales (for example, their
physical characteristics or the prices at which they were sold), the investigating
authorities may be justified in finding that  they cannot use that information without
undue difficulty because it is too incomplete.
17. As the United States has noted, SAIL provided information on export sales but did not
provide information on necessary characteristics of such sales, e.g., the cost information required for
any adjustments for physical differences.  See, e.g., U.S. Second Written Submission at ¶ 49.
                                                     
15 Final Determination of Sales at Less Than Fair Value; Certain Polyester Staple Fibre From Taiwan ,
65 Fed. Reg. 16877 (30 March 2000) and accompany Decision Memorandum, Exhibit US-26, at Issue 1 ( PSF
from Taiwan ).
16 See also Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian Federation , 64
Fed. Reg. 38626 (1999)(Comment 2).  In that case, Commerce found that the respondent’s reported factors ofproduction information could not serve as a reliable ba sis for reaching a determination pursuant to section
782(e)(3).  Nevertheless, Commerce declined to use total facts available, instead using the respondent’s reportedfactors of production information to calculate one weight ed-average normal value and compared all US prices to
the single normal value.  64 Fed. Reg at 38630.  This decision can be viewed at
http://ia.ita.doc.gov/frn/9907frn/#RUSSIA.WT/DS206/R
Page E-92
Therefore, by India’s own reasoning, the investigating authorities “may be justified in finding that
they cannot use that information without undue difficulty because it is too incomplete”.
Q6. India suggests, in its answer to the Panel's question 26, at paragraph 41, that a
questionnaire respondent has sufficient incentive to cooperate because it knows that theinformation in the application, which may be used as facts available, represents the highest
degree of dumping.  Of course, the information in  the application is gathered by the petitioner,
and may, in fact, underestimate the degree of dumping.  Would India agree that if the
investigating authority has a basis for concluding  that a questionnaire respondent is providing
only partial information in order to avoid pr oviding a basis for calculating a higher dumping
margin than that alleged in th e petition, an investigating authority may disregard information
submitted?  Or would India maintain that the investigating authority must use all informationsubmitted that meets the criteria of paragraph 3 of Annex II even if the investigating authority
finds the questionnaire respondent is attempting to manipulate the outcome.
Reply
18. The United States respectfully submits th at interpreting the AD Agreement to require an
investigating authority to use partial information submitted by a respondent in cases where it finds
that the respondent is attempting to manipulate the outcome would encourage such manipulation and
result in the nullification of the rights of Members to take action to offset injurious dumping.
Q7. Is it India's position that Article 6.8 precludes the use of "total facts available" in all
circumstances if there is any information submitted that satisfies the requirements of paragraph
3 of Annex II?  Would India agree that in some  circumstances, the fact that some necessary
information is not provided may justify a decision to reject information that, standing alone,
satisfies the requirements of paragraph 3 of  Annex II?  Would India agree that in some
circumstances, the fact that some necessary information is unverifiable may justify a decision to
reject information that, standing alone, satisfies the requirements of paragraph 3 of Annex II?
Reply
19. India has previously expressed the view that information that satisfies the requirements of
Annex II, paragraph 3, “must be used” regardless of any other circumstances.  Putting aside the pointthat the text of Annex II, paragraph 3, states that information “should be taken into account” – not
“must be used” – the United States has noted that the requirements of Annex II, paragraph 3 do not
address the substance or quality of the information in question.  US Answers to 25 January 2002
Panel Questions at ¶ 63.  India’s interpretation, to th e extent that it requires an investigating authority
to use information without regard to its substance or quality, is an interpretation that contradictsobjective decision-making based on facts.
Q8. Would India describe in detail what information it would consider in every case to be
"necessary", in terms of Article 6.8, for an in vestigating authority to make an objective,
unbiased, and accurate calculation of a dumping margin?
Reply
20. The United States has expressed its view on this point in its First Written Submission at ¶ 83,
and its Second Written Submission at ¶ 23.WT/DS206/R
Page E-93
ANNEX E-9
ANSWERS OF INDIA TO QUESTIONS OF THE PANEL -
SECOND MEETING
(8 March 2002)
Questions for India
Q5. With reference to the discussion in paragraph 11, India's response to the Panel's
question number 21, would India agree that if th e investigating authority reasonably concludes
that it would be "unduly difficult" in a particular case to fill in gaps in information submitted,
then the investigating authority may reject the in formation submitted on the basis that it is not
capable of being used without undue difficulty?
Reply
1. India’s answer to the question is yes, if the investigating authority reasonably concludes that it
would be unduly difficult to fill in the gaps in th e information submitted, then the authority may reject
the information.  To suggest that all gaps may be filled in all situations would render the "unduly
difficult" language of Article II, paragraph 3 a nullity.   However, the "unduly difficult" qualifier in the
text of Annex II, paragraph 3 suggests that the situations in which verified information cannot be used
will be exceptional, and must be identified by investigating authorities using strict criteria.  In the
course of this proceeding, India has offered appropriate criteria for assessing whether verified and
timely submitted information would be "unduly difficult" to use.1
Q6. India suggests, in its answer to the Panel's question 26, at paragraph 41, that aquestionnaire respondent has sufficient incentive to cooperate because it knows that the
information in the application, which may be used as facts available, represents the highest
degree of dumping.  Of course, the information in  the application is gathered by the petitioner,
and may, in fact, underestimate the degree of dumping.  Would India agree that if theinvestigating authority has a basis for concluding that a questionnaire respondent is providing
only partial information in order to avoid pr oviding a basis for calculating a higher dumping
margin than that alleged in th e petition, an investigating authority may disregard information
submitted?  Or would India maintain that the investigating authority must use all information
submitted that meets the criteria of paragraph 3 of Annex II even if the investigating authority
finds the questionnaire respondent is attempting to manipulate the outcome.
Reply
2. As a general matter, India submits that the provisions of Annex II must be respected and
applied in all cases.  Moreover, those provisions pr ovide complete guidance as to how to select the
information to be used in calculating dumping margins in cases where Article 6.8 applies.  That said,
in response to the first part of the question, if there is demonstrable evidence (inferred from statement
that the investigating authority "has a basis for concluding") that a respondent is manipulating the
                                                     
1 See India's First Submission, paras. 104-111; India's Rebuttal Submission, paras. 11-64.WT/DS206/R
Page E-94
investigation with a view to avoiding even higher margins than those alleged in the petition by
providing some information but refusing to provide other information, then the investigating authority
may take that demonstrable evidence into account in calculating the dumping margin.  However, this
must be done in accordance with the requirements of Annex II.
3. Putting the Panel’s question in the form of a hypothetical situation, assume that the petition
alleges that the export price is 70 and the normal value is 100, for a dumping margin of (100 – 70) =
30.  Assume that the respondent submits information that satisfies the conditions of Annex II,
paragraph 3, which shows that the export price is in fact 80, but withholds and prevents the disclosure
of any information regarding normal value.  Assume finally (as the Panel's question does) that the
investigating authority has a demonstrable basis for concluding that the correct normal value is 120.
4. Applying Annex II to this hypothetical, the investigating authority must determine what to
use as normal value.  Since the respondent has withheld relevant information from the investigating
authorities, then paragraphs 2-6 of the Annex do not apply.  Pursuant to the last sentence of
paragraph 1, the investigating authority is free to determine normal value on the basis of the facts
available, and in doing so, the authority must foll ow the procedures laid down in paragraph 7.  These
procedures specify that the authority may use information from secondary sources, “including the
information supplied in” the petition (generally presumed to be adverse to respondent).2  Whatever the
secondary source, the authority must, where pract icable, confirm the validity of the information
against other independent sources that may be available.  In this hypothetical, this means that the
investigating authority must check the information in the petition (100) and the information obtainedfrom other sources (120) to determine whether they are accurate and reliable.  In India’s view, the
instruction in Annex II, paragraph 7 that the inve stigating authority must use special circumspection
in these situations means that the investigating auth ority must have a reasonable basis to select either
the 100 or 120 figure as normal value.
5. Because in the Panel's hypothetical the authority has an objective basis to believe that the
respondent is manipulating the process, the last sentence of Annex II, paragraph 7 provides it with the
authority to select the higher figure from the secondary source (assuming that the 120 figure is
reasonably accurate and reliable).  This is consistent with the text of the last sentence of annex II,
paragraph 7, which anticipates an outcome that is less favorable to the respondent than if the
respondent had not withheld the information.  Thus, the investigating authority would be permitted to
make a selection of facts "adverse" to the manipulating respondent by using the 120 figure instead ofthe 100 figure as the normal value.
3
6. Next, the investigating authority must determine what information to use as the basis for the
export price.  The question here is whether it may use the information in the petition and discard
verified, timely submitted, and usable information submitted by the respondent.  Nothing in the text ofArticle 6.8 or Annex II supports an affirmative an swer.  Instead, the investigating authority must
apply the provisions of the Annex to the data, and determine whether the export price submitted by
                                                     
2 See India First Oral Statement, para. 51.
3 This situation is analogous to that which arose in  Canada - Measures Affecting the Export of Civilian
Aircraft , WT/DS70/AB-1999-2 (2 August 1999), paras 197-205, in which the Appellate Body held that  WTO
Panels may take adverse inferences from the refusal of  WTO litigants to provide information requested pursuant
to DSU Article 13.1.  Specifically in paragraph 205, the Appellate Body held that such "adverse" inferencescould have included the inference that Canada's withholding of information included information prejudicial to
Canada's denial that it had granted a prohibited export subsidy.WT/DS206/R
Page E-95
the respondent meets the criteria of paragraph 3.4  If so, then investigating authority would have to use
the 80 figure and calculate the dumping margin under Article 2 as (120 – 80) = 40.
7. In India’s view, no other outcome is consistent with the text of Annex II, which does not
permit information that meets the requirements of paragraph 3 to be discarded simply because otherinformation is not available.  Referring back to the hypothetical, India does not consider that the text
of the Annex permits the investigating authority to  use the export price contained in the petition (70)
in conjunction with the normal value either in the petition (100) or from other sources (120) to
determine the dumping margin.  Either approach (calculating a margin of either (100 – 70) = 30 or
(120 – 70) = 50) would be based on the use of less accurate information in place of more accurate
information in the determination of export price.  In India’s view, this would be entirely inconsistent
with both the language and purpose of the Antidumping Agreement.
8. Thus, in response to the final part of the question, India submits that the investigating
authority must use all information submitted by a respondent that meets the criteria of paragraph 3 of
Annex II, even if the investigating authority finds that the respondent has attempted to manipulate the
outcome by failing to provide other information.  But any attempt to manipulate the process withrespect to the other information can be addre ssed within the framework of the AD Agreement,
including resort to the last sentence of Annex II, paragraph 7.
5  That provision expressly applies to
situations where information is "withheld".   Where the investigating authority finds that such
withholding of information takes place under circumstances suggesting a manipulation of the outcome
of the investigation, the investigating authority may select and use, as a substitute for that information,whatever accurate secondary sources of information may be reasonably available to establish the
dumping margin. And the selection of facts in such circumstances may include the use of information
that would result in a dumping margin as high as, or higher than, that alleged in the petition.
9. On the other hand, USDOC’s practice of using "total facts available" appears based on an
assumption that respondents who only provide some of the requested information necessarily are
doing so because they are acting manipulatively -- i.e.,  because the final margins that would result if
they were to submit complete data would be higher than the margins set forth in the petition.  But
there is no basis for such an assumption in the AD Agreement.  Nor is there any basis to assume
"manipulation" of the process from an inability on the part of the respondent to provide some of the
requested data.  Any such finding of manipulati on can only be found on a case-by-case basis after
examining the facts and circumstances surrounding a respondent’s withholding of information.  Andas India has noted previously, the existing framework of the AD Agreement – including the authority
on the part of the investigating authority to use secondary information, and the authority under the last
sentence of Annex II, paragraph 7 to reach a result “which is less favorable” to the respondent than if
it co-operated – provides considerable disincentives against a respondent’s attempting to “manipulate”
the investigation process.
6
10. India would also stress that in the current case, there is no allegation, and certainly no basisfor an unbiased and objective investigating authority to conclude, that SAIL attempted to manipulate
the investigation with a view to avoiding even higher margins than those set out in the petition by
                                                     
4 Indeed, USDOC's frequent use of partial  facts available to fill gaps for particular information that
respondents have not co-operated in providing illustrates the "framework" of the AD Agreement in action.  See
cases cited in footnote 69 of India's Second Oral Statement.
5  Presumably, the attempt to manipulate could take the form of either submitting inaccurate data or
refusing to produce data or provide access to investigating authorities to the data needed to conduct averification.  In either case, before the investigating authority can reasonably conclude that the respondent isacting in a manipulative manner, it must have engaged in some objective assessment of either the submittedinaccurate data, or the circumstances surrounding the respondent’s failure to submit certain data.
6 See India Answer to Panel Question 26; India First Oral Statement,  paras. 44-61.WT/DS206/R
Page E-96
engaging in the selective provision of information.7 For these reasons, India submits that it is not
necessary for the Panel to define the outer paramete rs of an investigating authority’s ability to use
“adverse” facts available under the last sentence of Annex II, paragraph 7.
11. Finally, India would also refer the Panel to its previous submissions, in which it explained
that the situation described by the question -- wher e the actual dumping margin would be higher than
that set out in the petition -- is not likely to occur in many cases given the highly selective facts used
to calculate the inflated margins in the petition that the United States has acknowledged are generally
adverse to the respondent.8  Further, in those limited cases where the information in the petition would
result in a dumping margin lower than the actual margin of dumping, sophisticated respondents would
respond to this situation by simply not participatin g in the investigation and accepting the margin set
forth in the petition, rather than going to the ef fort of submitting some but not other information.
Thus, in practice, the hypothetical posed by the first question is not likely to confront investigating
authorities very often.  It certainly did not o ccur in SAIL’s case in the instant investigation.
Q7. Is it India's position that Article 6.8 precludes the use of "total facts available" in all
circumstances if there is any information submitted that satisfies the requirements of paragraph3 of Annex II?  Would India agree that in some  circumstances, the fact that some necessary
information is not provided may justify a decision to reject information that, standing alone,
satisfies the requirements of paragraph 3 of  Annex II?  Would India agree that in some
circumstances, the fact that some necessary information is unverifiable may justify a decision to
reject information that, standing alone, satisfies the requirements of paragraph 3 of Annex II?
Reply
12. In response to the first part of the question, India would note that the term "total facts
available" is not a term found in the AD Agreement.  Rather, this term is found only in US practice,and depending on the facts of a particular case, may or may not be consistent with the structure and
operation of the AD Agreement.  The Agreement lays out what the Appellate Body called a "coherent
framework" for deciding when information from a respondent should be used and how to use it.
9  That
framework reflects a clear preference for using information supplied by the respondent.  Under this
framework, investigating officials must go through the process of analyzing particular
pieces/sets/components/categories of timely produced and verifiable information to determine
whether the information can be used in the calculation of a dumping margin.  Nothing in theframework suggests that the non-usability of one piece/set/component/category of information
permits an investigating authority to conclude that another piece/set/component/category of
information is not usable.
13. In situations where an investigating authority has been unable to use without undue difficulty
particular pieces of information provided by respondents -- both in conjunction with respondent's
other information and the information in the petition --  then the authority will necessarily have to
base its margin calculation entirely on information from secondary sources.  This is roughly
equivalent to the US practice of using "total" facts available.  However, India notes that the US
appears to view recourse to “total” facts available as an automatic result once it determines that any
                                                     
7 The record shows that SAIL repeatedly provided USDOC information in response to its requests and
continued to do so even after USDOC's deadlines had expired.  See India Rebuttal Submission, paras. 87-96;
India Answer to Panel Question 26, paras. 42-45.  As India  noted in the latter document, "Even if theAgreement permits the application of adverse facts available when the investigating authority has reason tobelieve that the respondent ‘manipulated’ the data, there is no basis or such a finding here." See also  India First
Oral Statement, paras. 75-80.
8 See India Answer to Panel Question 26, para. 41; India First Oral Statement, paras. 50-54.
9 See India Second Oral Statement, paras. 6-18.WT/DS206/R
Page E-97
so-called "essential component" of information is not verifiable or timely submitted, rather than the
outcome of an objective review of the usability of each of the different
pieces/sets/categories/components of verifiable and timely submitted information submitted by
respondent.
14. In response to the second part of the question, India's position is that any necessary
information which meets the four conditions of Annex II, paragraph 3 must be used in the calculation
of a dumping margin.  As explained in the respon se to question 6 above, it is not a permissible
interpretation of Article 6.8 and Annex II to permit the rejection of information meeting those four
conditions because other information "is not provided."   In the view of India, the key issue is the
"usability" of the information at issue, not whethe r other information is not provided.  The Panel's
question presupposes that the information at issue meets the four conditions of Annex II, paragraph 3,i.e., is "usable without undue difficulty."  However, there may be situations in which this information
is such a small part of an otherwise unusable and incomplete component of necessary information
(such as home market sales), that the information may not be capable of meeting the "undue
difficulty" condition of Annex II, paragraph 3.  In this case, for example, India does not contend that
the United States failed to comply with Annex II, paragraph 3 with respect to SAIL’s submitted homemarket sales information, even though certain of the information regarding the more than 100,000
reported home market sales would, in isolation, meet the requirements of the paragraph.
15. In response to the third part of the question, India notes that the question proposes the
rejection of information that satisfies the four conditions of Annex II, paragraph 3 (including thecondition that it may be used without undue difficulty), because other submitted information is not
verifiable.  For all of the reasons set forth in paragraphs 2-14 above and in India's numerous
submissions in this proceeding, India's response is that the fact that other information is not verifiable
(or useable, timely submitted, or in the requested computer format) does not permit the investigating
authority to discard information that satisfies the conditions of paragraph 3.
10
16. Finally, with respect to all three questions within Question 7, India would note that theinformation at issue in this dispute -- SAIL's US sales database -- was verifiable and "verified" and
could be used without undue difficulty with the norm al value information in the petition to calculate a
dumping margin.  It represented one-half of the information needed to calculate a dumping margin --
not some small piece, portion, or bit of information.  Therefore, the Panel need not determine the
outer limits of the "usability" of a small portion, piece, or bit of information in this case.  Moreover, itis crucial to keep in mind what the application of "total facts available" meant in this case -- the
rejection of an entire database of verified US sales data including information on pricing, quantity and
other necessary information for every single ton of cut-to-length carbon steel plate shipped by SAIL
to the United States during the period of investigation.  By applying "total facts available", USDOC
replaced that verified and usable information with a single offer for sale at an absurdly low price of$251 per ton which even USDOC knew never was sold during the period of investigation.
Q8. Would India describe in detail what information it would consider in every case to be
"necessary", in terms of Article 6.8, for an in vestigating authority to make an objective,
unbiased, and accurate calculation of a dumping margin?
Reply
17. In the context of Article 6.8, the term "necessary information" means individual pieces of
information that collectively permit an investigat ing authority to determine a dumping margin under
                                                     
10 See India Second Oral Statement, paras. 6-18; India Comments to US Answers, paras.19-22,  25-29;
India Rebuttal Submission, paras. 9-10, 65-73; India Answers to Panel's (First) Questions, paras. 9-14, 55-60,
88-90; India First Oral Statement, paras. 25-43;  and India's First Submission, paras. 50-67.WT/DS206/R
Page E-98
Article 2 of the AD Agreement.  At a minimum, this includes information that is needed to calculate
export price, and, independently, information need ed to calculate normal value.  If there is an
allegation that sales are being made below cost, then cost information would also be necessary.  In
practice, what constitutes necessary information will vary widely from case to case.  For example, in
some cases, no home market sales information from affiliates or cost data from affiliated inputsuppliers will be necessary, while in others it will be necessary for affiliates to provide information on
their resales or costs of production.  In other situations, it may necessary to obtain information to
construct the export price because the product is sold to the export market through affiliates, while in
other cases that situation does not arise.  In short, the information that can be considered "necessary"
to calculate a dumping margin will vary widely from case to case.  And what may appear to be
necessary in the beginning of the investigation, such as home market sales information, may not be
necessary later in the investigation when normal value is determined using constructed value.
18. Finally, India notes that the definition of necessary information does not control the question
of the required source of that information, and in particular when particular necessary information
submitted by respondents must be used by investigating authorities.  That question is addressed in
Annex II, paragraphs 3 and 5.
11
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11 See India Second Oral Statement, paras. 6-18.