RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/AHG/W/91
28 April 2000
(00-1712)
Committee on Anti-Dumping Practices
Ad Hoc Group on ImplementationOriginal:  English
PRACTICAL ISSUES AND EXPERIENCE IN APPLYING
ARTICLE 2.4.2
TERMINATION OF INVESTIGATIONS UNDER ARTICLE 5.8
IN CASES OF DE MINIMIS  IMPORT VOLUME
PRACTICAL ISSUES AND EXPERIENCE WITH RESPECT TO
QUESTIONNAIRES AND REQUESTS FOR INFORMATION
UNDER ARTICLES 6.1 AND 6.1.1
Paper by Korea
The following communication, dated 26 April 2000, has been received from the Permanent
Mission of the Republic of Korea.
_______________
Practical Issues and Experience in Applying Article 2.4.2
With regard to comparison of normal value and export price, Article 2.4.2 provides two
general methods (Average-to-Average and Transact ion-to Transaction) and one exceptional method
(Average-to-Transaction).  It is well recognized that the Average-to-Transactions comparison method
usually produces extremely unfair results by ignoring negative dumping margins – the "zeroing
method" – as shown below.1  Therefore, the Agreement allows the Average-to-Transaction method
only in exceptional cases where a pattern of export prices differs significantly among differentpurchasers, regions or time periods.
Date of Sales Normal
ValueExport Price Dumping
MarginsDumping Margins compared
with Average Normal Value
(100)
January 2000February 2000March 2000
April 200095
105
95
10595
105
95
1050
00
05
0 (zeroing)
5
0 (zeroing)
Average 100 100
• Average-to Average:  100-100 = 0% (no dumping)
• Transaction-to-Transaction:  0+0+0+0 = 0% (no dumping)
• Average-to-Transaction  (5+0+5+0)/400 = 2.5% (dumping)
                                                     
1 Volume of sales is ignored in the examples.G/ADP/AHG/W/91
Page 2
With regard to the other two methods, the Average-to-Average and Transaction-to-
Transaction methods do not always lead to the same result as show below.
Example A
Date of Sales Normal Value Export Price Dumping Margins
January 2000
February 2000
March 2000
April 2000
May 2000
June 200095
100
105
95
100
105No sale
No sale
105
No sale
No sale
1050
0
Average 100 105
• Average-to Average:   (105-100)/100 = 5% (dumping)
• Transaction-to-Transaction:  0+0+0+0 = 0% (no dumping)
Example B
Date of Sales Normal Value Export Price Dumping Margins
January 2000
February 2000March 2000
April 2000
May 2000
June 200095
100105
95
100
105No sale
95
No sale
No sale
105
No sale5
0 (zeroing)
Average 100 100
• Average-to-Average:  (100 – 100) = 0% ( no dumping )
• Transaction to-Transaction:  (5+0)/200 = 2.5% ( dumping )
The Anti-dumping Agreement is silent about which method is fairer in each case.  Articles 2.4
and 2.4.2 of the Anti-Dumping Agreement just require a fair comparison to be made between the
export price and normal value.  However, what is certain is that an anti-dumping authority should not
be able to find a dumping margin by merely choosing the method that shows dumping (i.e., theAverage-to-Average method in Example A and th e Transaction-to-Transaction method in Example
B.)  An anti-dumping authority should be cons istent in applying a comparison method, either
Average-to-Average or Transaction-to-Transaction.  If the authority should deviate from its
customary method, it may have to provide a full explanation for doing so, as required by the fair
comparison requirement in Article 2.4 and 2.4.2.
Korean law provides that the existence of ma rgins of dumping shall be determined primarily
on the basis of a comparison of a weighted average normal value with a weighted average of all
export prices.  Even though the possibility of using other methods (i.e., Transaction-to-Transaction
and Average-to-Transaction) is open, the Korean Trade Commission (KTC) has customarily followeda weighted average basis, because:
1. A Transaction-to-Transaction comparison is impracticable in most cases involving
many transactions;  andG/ADP/AHG/W/91
Page 3
2. There have been no cases so far allegedly to be target dumping – different export
prices among different purchasers, regions or time periods – warranting the Average-
to-Transactions method.
Termination of Investigations under Article 5.8 in Cases of de minimis  Import Volume
Article 5 covers the initiation and subsequent anti-dumping investigation as the title of the
article indicates.  Specifically, Article 5.8 requires that there be "sufficient evidence of either dumping
or of injury to justify proceeding with the case".  De minimis  dumping margins and import volumes
are essential factors that must be considered throughout all stages of an investigation, including the
initiation of investigation.  The evidence regarding de minimis  dumping margins and import volumes
may be available not only at the stage of preliminary and final determinations, but also at the stage ofdecision of initiation of investigation.  In the latter case, it is desirable not to initiate an investigation.
Indeed, the burden of responding to an investigation should not be imposed on the concerned parties
unnecessarily, especially, on exporters.
The KTC terminates an investigation when it finds the dumping margin is de minimis  or the
import volume is negligible.  Also, the KTC does not initiate an investigation, if evidence available at
the time of the decision of initiation support the de minimis  conditions.  For the determination of the
negligibility of import volume, the KTC examines the most recent 12-month period available
preceding the initiation of investigation.
Practical Issues and Experience with Respect to Questionnaires and Requests for Information under
Article 6.1 and 6.1.1
The questionnaires to exporters mainly request information needed to determine the dumping
margin, and partially information used to determine the threat of future injury.
The KTC usually asks exporters, importers, and others to answer the questionnaires within
37 days.  Some cases, however, showed that the questionnaires could not be completed and returned
to the KTC within the requested time-period, for instance, because:  (1) foreign parties did not use
English as their primary language;  and (2) small- and medium-sized companies did not maintain
adequate data to answer the questionnaires completely.  If respondents request an extension of the due
date, in written form, in order to complete the questionnaire, the KTC decides whether or not to allowthe extension on a case-by-case basis.  In most cases, extensions were allowed in order to encourage
them to provide more accurate and complete answers so that the KTC could make determinations as
fairly as possible.
The questionnaire for the determination of dumping margin is composed of several sections
requiring the information below:
- Introductions:  Introductions for filing the response.  Introductions for preparing the response.- General Information:  Identity and communication.  Legal representative.  Corporate structure
and related parties. Production process.  Distribution process.  Sales process.  Sales to related
persons in domestic market.  Accounting/financial policy and practices.  Exports through
intermediate countries.  Sales of merchandise under investigation.  Supplied by an unrelated
producer.
- Product Description:  Scope of investigation.  Export product specifications.  Domestic
product specifications.  Comparison of export and domestic products.  Comparison of export
and Korean products.G/ADP/AHG/W/91
Page 4
- Operating Statistics:  Sales.  Total quantity and value of sales.  Production and capacity
statistics.  Inventories.
- Sales to Korea (Export Price):  Sales to independent customers and adjustments.  Sales to
related parties and adjustments.  Adjustments for export sales.
- Sales to Domestic Market:  Sales to independen t customers and adjustments.  Sales to related
parties and adjustments.  Adjustments for domestic sales.
- Cost of Production and Constructed Value:  General explanation.  General information.
Response methodology.  COP and CV data files;  and
- Instruction for Preparing  Computerized Information
__________