RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/AHG/W/42
16 April 1998
(98-1519)
Committee on Anti-Dumping Practices
Ad Hoc Group on ImplementationOriginal:  English
TOPIC 1* - ARTICLE 6.5:  TREATMENT OF CONFIDENTIAL INFORMATION
TOPIC 2* - PERIOD OF DATA COLLECTION
TOPIC 3* - ARTICLE 6.10:  SAMPLING METHOD
TOPIC 4* - ARTICLE 5.6:  SPECIAL CIRCUMSTANCES
TOPIC 5* - ARTICLE 5.5:  NOTIFICATION TO THE EXPORTING MEMBER
TOPIC 6* - ARTICLE 6.2: HEARINGS
TOPIC 7* - ARTICLE 6.9:  PROVISION OF ESSENTIAL FACTS
TOPIC 10* - ARTICLE 9:  DUTY ASSESSMENTS
Paper by Japan
The following communication, dated 14 April 1998, has been received from the Permanent
Mission of Japan.
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1. Treatment of Confidential Information1 (Topic 1, Article 6.5)
Japanese law protects information which is, Japan believes, by nature confidential, as
explained in the Government of Japan's subm ission to Ad hoc group of to the Committee of
30 September 1997.2 Illustrative examples of confidential information set forth in Japan's paper
include the following:
- Cost of manufacturing
- Sales expenses
- Actual transaction prices- Names of customers or suppliers
- Other business proprietary information
The information on the items listed below should also be treated as confidential because its
disclosure would likely result in significant comp etitive advantage to a competitor, or because its
disclosure would have a significantly adverse effect on the company to which the information relatesor on the person supplying the information.
- Production capacity and operating ratio
- Volume of production and sales for each company
- Non-public financial statements
                                                     
*See document G/ADP/W/401 for descriptions of the topics.
1See document G/ADP/W/401 for descriptions of the numbered topics and document WTO/AIR/750
for a description of supplemental topics.
2See document G/ADP/AHG/W/23.G/ADP/AHG/W/42
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From the practical point of views, in Japan, it is only the precise numbers and specific names of
traders, and not general descriptions of the categories of information listed above or other categories
of information, that warrant confidential treatment.   Confidential treatment should be accorded only to
the information that has been treated as confidenti al by those who providing the information, and that
is not publicly available.  On the other hand, even though confidential treatment is warranted it is
necessary to provide non-confidential information su ch as index so that the interested parties can
understand the reasons for determinations made in an investigation.
Regarding the disclosure of confidential information in anti-dumping investigations, Japanese
law does not permit the disclosure of confidential information to an interested party or its
representatives.  Although certain Members may be permitted to disclose the confidential information
to the representatives of interested parties pursuant to protective orders, there is no system of
protective orders, or any other basis under Japanese law for the disclosure of confidential information
to interested parties or their representatives.
In our view, non-disclosure of confidential information to interested parties or their
representatives does neither deprive them of the ability to participate in a meaningful manner in an
investigation nor result in the denial of critical information to defend their interests.  Interested parties
and their representatives have access to non-confidential information, summaries of confidential
information, and essential facts underlying final determinations.  In this connection, we carefullyexamine the requests for confidential treatment, fo r example, if we receive the extravagant requests
and find they are not warranted, the requests shall be rejected.  In our view, investigating authorities
should indicate the basic methodologies used in an investigation and the results for interested parties
to understand, but it is not necessary to disclose every detail of concrete figures of calculation.
Japanese law provides that a person submitting the information that is determined to be
confidential shall furnish a non-confidential summary of such information in writing.  If confidential
information cannot be summarized, a document stating why it cannot be summarized shall be
submitted to the Minister of Finance.
The confidential information may be disregarded if the person fails to furnish a
non-confidential summary or to submit a document explaining the reasons why the confidentialinformation cannot be summarized, or if those documents does not sufficiently explain the reasons.
If a request for confidentiality is not warranted, the person submitting the information shall be
promptly informed of why such treatment was dete rmined to be unwarranted.  The information may
not be examined unless the request for confidentiality of the information is withdrawn or an
appropriate summary of the information is submitted in writing.
If the information that has been submitted is disregarded for any of the reasons set forth
above, the person who submitted the information shall be informed in writing of why the information
was disregarded.
If an investigation is initiated, interested partie s shall, upon request in writing, be provided the
opportunity to examine the information that has been submitted except the information which is
confidential, the information submitted by interested parties confidentiality is claimed, and the
documents recording the information orally presented as  confidential by interested parties.  [Cf. the
Cabinet Order Relating to Anti-Dumping Duty (hereinafter referred to as "the Cabinet Order"),
Articles 7.6-7.10 and 11.]G/ADP/AHG/W/42
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2. The Period of Data Collection (Topic 2)
Japan supports the Draft Recommendation Concerni ng The Period Of Data Collection For A
Dumping Investigation ("Draft Recommendation") because it would create needed and flexible rules
in this area by providing a minimum level of transparency and predictability.3 Japan recognizes the
need for investigating authorities to retain flexibility regarding the period of data collection to deal
with the particular circumstances of each investig ation.  Nevertheless, the need for flexibility should
not result in giving unlimited discretion to investigating authorities.
The guidelines set forth in the Draft Recommendation would provide investigating authorities
with flexibility regarding the length of the data collection periods, while enhancing transparency ofinvestigations and providing potentially interested parties with predictability.  Without guidelines on
the period of data collection, exporters and producers cannot effectively conduct their business in
conformity with anti-dumping laws in advance of a case, if any.  Nor can they have full knowledge, in
advance, on detailed anti-dumping proceedings, such as the retention period for business records.  Theguidelines will also allow exporters and producers to begin collection of the necessary data
immediately after the initiation of an investigation.
While providing transparency and predictability, the guidelines to be recommended should
not prevent investigating authorities from altering the period of data collection in exceptional
circumstances.  Moreover, because such situations are likely to arise only infrequently, the need for
flexibility to deal with such situations would not significantly impair the predictability resulting from
the adoption of a basic rule.
Finally, Japan provides the following responses to Question 2 (b) set forth in
Document WTO/AIR/750.
Regarding a potential difference between the period of data collection for investigations and
the "profitability analysis period" referred to in Canada's paper
4, Japan believes that these periods
generally will be the same.  Investigating authorities will examine sales during a specific period to
determine normal value.  Investigating authorities ma y need to examine these sales also when it has
reasons to believe that the sales were made below the cost of production.  Thus, the sales to be
considered as a basis for determining normal value will be the subject of a sales below cost inquiry,
and the both periods will be the same.
Regarding inadequate or inappropriate periods of investigation, the original period of
investigation in a Japanese anti-dumping proceeding has not so far been found to be inadequate or
inappropriate.  Altering the period of investigation should occur only in exceptional circumstances,and investigating authorities should explain the need for modification of the original period of
investigation.
Procurements or tenders may present exceptional circumstances because they can involve
significant differences between the date of sale and the shipments or entries of merchandise.  Such
cases could constitute exceptional circumstances justifying modification of the original period of
investigation.  Japan has not had anti-dumping investigations involving procurements or tenders.
Japanese anti-dumping law is prospective and does not have any specific provisions regarding
periods of data collection in review investigations or refund situations.  Normally, the period of data
collection for reviews and refunds should be 12 months in the absence of special circumstances
warranting an extension of this period.  For reviews for injury, the period of data collection should
normally be three years.
                                                     
3 See document G/ADP/AHG/22.
4 See document G/ADP/AHG/W/30 at 8-9.G/ADP/AHG/W/42
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Regarding fluctuating exchange rates, Japan believes that the pertinent issue is not the period of data
collection, but how investigating authorities establish the relevant exchange rates to convert foreign
currencies.  Fluctuations in exchange rates should not result in a change in the period of investigation.
3. Sampling Method (Topic 3, Article 6.10)
In its paper of 15 October 1997, Canada requested Members to respond to the following
question: "whether Members which have used sampling have used data from co-operating exporters
who were not formally included in the sample to determine the dumping margin for the sample?"5
Japanese law does not stipulate a specific provision regarding the use of sampling, and Japan has not
resorted to sampling in an anti-dumping investigation until now.
Canada's question raises important policy considerations.  To comply with the requirements in
Article 6.10 of the Agreement, sampling must be "statistically" valid.  The importance of carefully
selecting samples are apparent since the dumping margin (if any) calculated for the sample will serve
as the "all-others rate."
Inclusion of data from "co-operative exporters" in a sample, however, would necessarily
distort the statistic validity of the initially selected samples and render them statistically invalid.
Co-operative exporters would likely consist only of those exporters who believe they can obtain
dumping margins that would be lower than the dumping margin for the sample.  Consequently, data
from co-operative exporters should not be included in initially selected samples.
Responding to this problem solely by refusing to include data from co-operative exporters in
initially selected samples would, however, be an unnecessarily inflexible answer.  To avoid
discouraging voluntary responses, investigating authorities should utilize, to the extent possible, the
procedure set forth in Article 6.10.2 of the Anti-dumping Agreement for co-operative exporters.
4. Special Circumstances (Topic 4, Article 5.6)
Consistent with Article 5.6 of the Anti-dumping Agreement, Japanese law provides for
self-initiation under special circumstances if there is sufficient information that imported goods are
being dumped and are causing material injury to the domestic industry.  Japanese law does not
prescribe the special circumstances pursuant to whic h self-initiation of an investigation may occur.
[Cf. the Customs Tariff Law (hereinafter referred to as "the Law"), Article 8.5.]
To increase transparency and avoid arbitrary invocations of the right of self-initiation,
investigating authorities should provide an explanat ion why an investigation was initiated without the
receipt of a written application by, or on behalf of, a domestic industry.  Requiring investigating
authorities to explain the basis for a self-initiation of an investigation may avoid abuses of thisauthority while providing investigating authorit ies with sufficient discretion to decide when
circumstances are sufficiently special to warrant the self-initiation of an investigation.
Additionally, because self-initiation amounts to an exception to the general rule of initiation
of investigations through the filing of applications, Members should not self-initiate an investigation
without a specific reason.
One of the inappropriate examples of the specific  reasons is political pressure to investigating
authorities to initiate the investigation.  Members should not self-initiate the investigation by political
pressure only.  Japan is concerned that Members may self-initiate anti-dumping investigations in
response to the pressure put by influential domestic  interests, for example, companies in strategic or
                                                     
5 See document G/ADP/AHG/W/30 at 13.G/ADP/AHG/W/42
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politically sensitive industries.  Self-initiation in this situation inappropriately injects political
considerations that should not constitute a "special circumstance."
We support the view of NZ proposal that difficulties in ascertaining the level of support
cannot be considered to constitute a special circumstances justifying self-initiation of an investigationunder Article 5.6.  However, Article 5.6 does not exclude the case of fragmented industries to be
considered as the special circumstances.  The fragmentation of industry could be a barrier to the filing
of a written application.  Also, it should not be  understood that Article 5.4 and footnote 13 prohibit
authorities from self-initiating an investigation in the case of fragmented industry.  Thus, the special
circumstances in Article 5.6 should not be examined only in the context of footnote 13 but based onwhat the situations are like.
Regarding the role of the government in assisting industries in preparing applications, the
Government of Japan provides general and limited assistance only.  The Government of Japan
explains the procedures involved in an anti-dumpi ng investigation, including the requirements for an
application for the initiation of an investigation, in response to requests from a domestic industry.
5. Notification of the Government of the Exporting Member (Topic 5, Article 5.5)
Japan supports to clarify the notification requirements under Article 5.5 and to make
guidelines on them.  For this purpose, in our view , it is necessary to make the following points clear.
Regarding Article 5.5, it is not clear if the second sentence provides for an exception to the
first sentence.  The first sentence talks about avoidance of publication (not of notification) of the
application while the second sentence the notification (not publication) only to the exporting Member
concerned (but not to interested parties) with a certain timing.  Since each of these sentences provides
for different subject-matter, it would not seem appropriate to characterize the second sentence as anexception to the first sentence by referring to the te rm "However" or to consider that both sentences
contradict each other, in considering what should be notified (the receipt of an application or the
application itself).  (The first sentence can be read in conjunction with Article 6.1.3.)
Considering Article 5.5 in conjunction with Article 12.1, we can support the distinction
between two different notification requirements i.e. (1) a notification under Article 5.5 after an
application is received; and (2) a notification under Article 12.1 to exporting Members and otherinterested parties.  The question as to what should be notified under Article 5.5 still exists because this
Article does not specify it.  What should be notified under Article 5.5 may well be less comprehensive
than those provided for in Article 12.1.  As a general rule, Japan provides notification to the
government of the exporting Member including the information such as the date of receipt of the
application, the name of the product, the name of the applicant, and the name of the exporter orproducer described in the application, before the decision to initiate an investigation is officially
made.
The second sentence of Article 5.5 requires Members to make the notification to the
government of an exporting Member before proceeding to initiate an investigation.  It is not clear
exactly when "the procedural action by which a Member formally commences an investigation as
provided for in Article 5" (as stipulated in foot note 1 to the AD Agreement and as quoted in the third
tiret in para. 10, G/ADP/AHG/W/33) is considered to be taken.  The procedural action by which a
Member formally commences an investigation is not taken until the decision to initiate aninvestigation is officially made.  The term "initiated" can be understood to refer to the time when the
decision to initiate an investigation is officially made.  Investigation can actually be started upon that
decision and it would not make much sense in strict ly distinguishing between when an investigation
formally commences and when it is actually started.
It is understood that the notification under Article 5.5 should be made before the decision to
initiate an investigation is officially made.  However, considering that the notification underG/ADP/AHG/W/42
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Article 5.5 would be meaningless if it is made at the same time when the notification under
Article 12.1 is made (when the decision to initiate an investigation is officially made.) and that the
notification under Article 5.5 would have a chilling effect on normal trade if it is made while it is not
certain if an investigation is necessary, the notification under Article 5.5 should be made after internal
procedures commence for making the official decision to initiate an investigation and as soon as
possible before that decision is made.  In the practical point of view, however, defining a certain leadtime would be difficult given a variety of domestic procedures among Members.
6. Hearings (Topic 6, Article 6)
Consistent with the Anti-dumping Agreement, Ja panese law has provisions for hearings for
the presentation of evidence orally and for meetings between interested parties with adverse interests.
This process provides interested parties - those having a direct and specific interest in the proceeding -
with a full opportunity to express their opinions and to defend their interests.  The hearings and the
meeting between parties with adverse interests are not open to the general public, but all interested
parties have a complete opportunity to defend their interests.
Interested parties may request to present any relevant evidence in a written or oral form.  A
request to present evidence orally at a hearing must  be made within the time prescribed in the public
notice of initiation and the notification to the government of the exporting Member.  As a general rule,
interested parties have two months from the date of initiation of an investigation to request a hearingfor the presentation of evidence orally.
At the time of the request, an interested party shall submit in writing the facts to identified by
such evidence and, if necessary, a request for confidential treatment of such evidence together with
the reasons warranting confidential treatment of such evidence.  Where a request to present evidenceorally is made, interested parties shall be informed in writing of the date, time, and place and other
pertinent information for the presentation of such evidence.
In addition to hearings for the oral presentation of evidence, interested parties may request an
opportunity to meet interested parties with adverse in terests.  If the interested parties consent to a
meeting, they shall be given advance written notice of  the facts to be identified at the meeting and the
date, time and place and other pertinent information concerning the meeting.  In a recent case
investigated by Japan, a meeting between interested parties with adverse interests was held based on
the request of an interested party and the absence of any objection by the other interested parties.
Interested parties may review all the evidence presented at hearings or meetings between
interested parties with adverse interests, except confidential information.  [Cf. the Cabinet Order,
Articles 8.1 (7), 10, 12.]
7. Disclosure of Essential Facts (Topic 7, Article 6.9)
Japanese law requires the timely disclosure, in writing, of essential facts to interested parties
before a final determination is made.  Japanese law does not prescribe which items must be disclosed
in writing to interested parties.  [Cf. the Cabinet Order, Article 15.]
By way of illustration, in a recent case investigated by Japan, the disclosure of essential facts
included:
- facts regarding the determination of dumping, including establishment and
comparison of the export price and the normal value;
- facts regarding the determination of injury, including volume of imports, prices,
production volumes, market shares, production capacity, and sales data;G/ADP/AHG/W/42
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- facts regarding the causal relationship between dumping and injury; and
- the methodology of calculating the dumping margin.
8. Duty Assessments (Topic 10, Article 9)
The procedures for duty assessment by Members depend on whether their anti-dumping
system is "retrospective" or "prospective."  The Japanese anti-dumping system is prospective.
In principle, unless a request for review is submitted by an interested party, the anti-dumping
duty determined in the original investigation will continue for five years.  At the end of this five-year
period the anti-dumping duty will terminate unless it is determined in a "sunset" review that expiry of
the anti-dumping duty would likely lead to the cont inuation or the recurrence of dumping and injury.
A refund of anti-dumping duties in excess of the amount of the actual dumping margin may
be requested by an importer who paid the anti-dum ping duties.  The application for a refund must be
submitted in writing to the Director-General of Customs of the Ministry of Finance.  The application
for a refund must state the amount of anti-dumping duties to be refunded and provide the calculationunderlying the amount of the refund being requested and sufficient evidence of the payment of
anti-dumping duties.  If the application for a refund is properly documented, the Director-General of
Customs will transmit the application to the Minister of Finance.
Upon receipt of the transmitted application for a refund, the investigating authority, which
consists of the Ministry of Finance, the Ministry of International Trade and Industry and any Ministryhaving jurisdiction over the industry, will initiate an investigation for refund.  The investigation must
be concluded within one year from the date of the request, but may be extended for special reasons for
a maximum period of six months.  The investigating authority will provide prompt written notification
to the importer who filed the application if the period of investigation is extended, and the notification
will set forth the reason for the extension of the investigation period.  After the investigation forrefund has been completed, the Minister of Finance will notify the Director-General of Customs of the
results of the investigation, and based upon this not ification the Director-General of Customs will,
where applicable, promptly refund the amount of the anti-dumping duty in excess of the amount of the
actual dumping margin.  To date, no application for a refund has been filed with the Director-General
of Customs.  [Cf. the Law, Article 8.32 - 8.34; the Cabinet Order, Article 19; the Guidelines forProcedures Relating to Countervailing and Anti-Dumping Duties, Article 5 (4) (Application Form)]
An importer who filed an application for a refund may file a protest challenging the final
decision of the Director-General of Customs.  The importer must file the protest within two months
after the date of the decision of the Director-General being protested.
An importer may appeal the protest decision of the Director-General of Customs to the
Minister of Finance, who shall refer the appeal to the Customs Dissatisfaction Review Committee in
the Ministry of Finance ("Committee").  The importer must file the appeal within one month after the
decision of the Director-General of Customs in the protest matter is known.  The Committee consists
of a chairman and a maximum of 23 additional members.
The Minister of Finance will decide the appeal based on the recommendation of the
Committee.  The importer may file suit challenging the decision on appeal of the Minister of Finance.
The suit may not be filed until a decision on the appeal is made by the Minister of Finance.  [Cf. theCustoms Law, Articles 89-93].
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