WORLD TRADE
ORGANIZATIONG/SCM/N/1/LVA/2
22 July 2002
(02-4039)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
NOTIFICATION OF LAWS AND REGULATIONS UNDER
ARTICLE 32.6 OF THE AGREEMENT
LATVIA
The following communication, dated 17 July 2002, has been received from the Permanent
Mission of Latvia.
_______________
Disclaimer:  The English language text below is provided by the Translation and Terminology Centre
for information only; it confers no rights and imposes no obligations separate from those conferred or
imposed by the legislation formally adopted and published.  Only the latter is authentic.  The originalLatvian text uses masculine pronouns in the singul ar.  The Translation and Terminology Centre uses
the principle of gender-neutral language in its English translations.  In addition, gender-specific
Latvian nouns have been translated as gender-neutral terms, e.g. chairperson.
Text consolidated by Tulkošanas un terminolo ģijas centrs (Translation and Terminology Centre) with
amending law of:
7 December 2000.
If a whole or part of a section has been amended, the date of the amending law appears in square
brackets at the end of the section. If a whole section, paragraph or clause has been deleted, the date of
the deletion appears in square brackets beside the deleted section, paragraph or clause.G/SCM/N/1/LVA/2
Page 2
The Saeima1 has adopted and the
President has proclaimed the following Law:
On Protection Against Subsidized Imports
Chapter I
General Provisions
Section 1. Terms Used in this Law
The following terms are used in this Law:
(1) price adjustments  – adjustments effected by an exporting state, eliminating or restricting
a subsidy, or by an exporter, revising the price of a subsidized good or discontinuing the export of arelevant good to Latvia;
(2) exporting state  – the state of the origin of an imported good that exports such good or an
intermediary state from which a good is imported into Latvia;
(3) the interested parties  –
(a) exporters or foreign producers of a subsidized good,
(b) importers of a subsidized good,
(c) trade associations, a majority of the members of which are producers, exporters or
importers of a subsidized good,
(d) government of the exporting state (exporting states),
(e) the domestic producers of like goods,
(f) trade and producer associations, a majority of the members of which produce like
goods in Latvia, and
(g) consumers and processors of imported goods;
(4) countervailing measures  – price adjustments, provisional measures or countervailing
duties;
(5) like goods  – goods that are identical, that is, in every respect similar to the imported good
subject to an investigation, or, if there are no such goods, other goods the characteristics of which are
similar, though not in all aspects, to the characteristics of the imported good subject to an
investigation;
(6) material retardation of the establishment of a production sector  – infliction of injury
upon domestic producers when a production sector is not yet established, but there is evidenceregarding its potential establishment, and subsidized imports substantially prevent the establishment
of such production sector, which would otherwise have occurred under circumstances of fair
competition.
Section 2. Purpose and Principles of Application of this Law
(1) The purpose of this Law is to countervail a subsidy if, as a result of an investigation
conducted in accordance with the provisions of this Law, it is determined that subsidized imports
cause injury to domestic producers.G/SCM/N/1/LVA/2
Page 3
(2) This Law determines the procedures for the taking of measures to countervail a subsidy which
has directly or indirectly been granted in an exporting state for the production, export or transport of
such a good whose release for free circulation in the territory of Latvia causes injury to domestic
producers.
Section 3. Responsible Authority
The State Trade Defence Bureau shall implement this Law.
Chapter II
Subsidies
Section 4. Concept of a Subsidy
(1) A subsidy is:
(1) a State financial contribution, when:
(a) the State directly or indirectly grants funds to a producer or an exporter of a good,
(b) a State duty or tax is not applied or calculated, which otherwise should have been
collected. If, when exporting goods to another state, exemption from such a State duty
and tax or a tax rebate does not exceed the tax collected on goods provided fordomestic market consumption, such exemption or reduction shall not be considered to
be a subsidy,
(c) the State ensures supplies of goods or services on conditions other than those which
are in force in the general infrastructure, or also purchases goods on preferential
conditions, or(d) the State makes payments into a fund or after its authorization one or more of the
functions mentioned in the preceding Sub-clauses of this Paragraph are performed,
which are usually performed by the State and which are not within the competence of
the relevant natural or legal person; and
(2) any type of income or price support within the meaning of Section XVI of the 1994
General Agreement on Tariffs and Trade.
(2) The State financial contribution or the income or price support referred to in Paragraph one of
this Section shall not be considered to be a subsidy, if the recipient of such contribution or support has
not been granted a financial benefit.
(3) In conformity with the provisions of this Law, goods are subsidized, if their production or
export is supported by a countervailable subsidy in accordance with Section 5 of this Law.
Section 5. Countervailable Subsidies
(1) Subsidies are countervailable if they, in accordance with the provisions of Clauses 2, 3 and 4
of this Paragraph are specific for an undertaking (company), a sector, a group of undertakings
(companies) or sectors. A subsidy is specific, if:
(1) the State gives certain undertakings (companies) an opportunity to receive a subsidy,
thereby restricting the rights of other undertakings (companies) to receive the subsidy;
(2) it is granted to a limited circle of undertakings (companies) in a specified geographical
region. Determination of taxes or changes in tax rates shall not be deemed to be a specific subsidy;G/SCM/N/1/LVA/2
Page 4
(3) it is an export subsidy which separately or as one of several other conditions in
accordance with relevant regulatory enactments or actually is contingent upon the export of goods.  A
subsidy is actually contingent upon the export of goods, if the evidence indicates that the granting of it
is not legally contingent on the export of goods but is actually associated with the existing oranticipated exports or with the income acquired by exporting the goods.  The fact alone that a subsidy
has been granted to exporting undertakings (companies) does not allow the subsidy to be considered
as an export subsidy; or
(4) it separately or as one of several other conditions pertains to the use of Latvian goods in
contrast to goods of foreign origin.
(2) A subsidy is not specific, if the State determines objective criteria or conditions for the right
to receive subsidies and their amount.  The objective criteria and conditions shall be neutral, shall not
create any advantage to particular undertakings (companies), shall be of an economic nature, and they
shall be used on a horizontal level based on separate indicators [the number of employees in an
undertaking (company) or the size of the undertaking (company)].  The criteria referred to shall bespecified in regulatory enactments.
(3) If in accordance with the provisions referred to in Paragraph one, Clause 1 and Paragraph two
of this Section it cannot be determined whether a subsidy is specific, other factors may be taken into
account in evaluating [the use of a subsidy programme in a restricted circle of particular undertakings(companies), the majority of individual undertakings (companies) utilising the subsidies, the granting
of disproportionately large subsidies to concrete undertakings (companies), and the way in which a
decision to grant the subsidies has been taken].  When evaluating, the information concerning the
frequency of rejection or support of the requests for a subsidy and the reasons for the taking of the
relevant decision shall be taken into account, observing the diversity of economic activities within thecompetency of the authority that has granted the subsidy and the time period within which the subsidy
programme has operated.
Section 6. Non-countervailable Subsidies
(1) Subsidies which are not subject to countervailing measures (hereinafter – non-countervailable
subsidies) are:
(1) subsidies that are not specific;(2) subsidies that are specific, within the meaning of Section 5, Paragraph one, Clauses 1 and
2 of this Law, but which conform to the provisions of  Paragraph two, four or five of this Section; and
(3) subsidies for the State domestic support measures that are specified in Annex 2 of the
World Trade Organization Agreement on Agriculture.
(2) Subsidies for research activities conducted by undertakings (companies), higher educational
institutions or State scientific institutions, on the basis of a contract with undertakings (companies),
are non-countervailable subsidies, if they cover not more than 75 per cent of the costs of industrial
research or 50 per cent of the costs of pre-competitive development activity and include exclusively:
(1) remuneration of personnel;(2) costs of instruments, equipment, land and buildings if such instruments, equipment, land
and buildings are permanently utilized for research activities (except in cases when such are utilized
to acquire profits);G/SCM/N/1/LVA/2
Page 5
(3) costs of consultancy and similar services necessary for research activities, as well as
costs of bought-in research, technical knowledge, patents and other costs; and
(4) any other costs incurred as a result of research activity.
(3) Subsidies to regions in need of special support in the territory of an exporting state that have
been granted in accordance with the general regional development framework are non-
countervailable, if:
(1) each region in need of special support is a clearly designated permanent economic and
administrative territorial unit;  and
(2) a region has been deemed to be in need of special support on the basis of neutral and
objective criteria determined in regulatory enactmen ts, which shall indicate that the difficulties in the
relevant region are associated with such circumstances that are not temporary in nature.
(4) A subsidy that has been granted to promote the adaptation of existing facilities to new
environmental requirements determined by regulatory  enactments and that creates more restrictions
and increases expenditures or decreases the income of undertakings (companies) is a non-
countervailable subsidy, if it:
(1) is a one-time measure;
(2) is limited to 20 per cent of the costs associated with the adaptation of the existing
facilities to the new environmental requirem ents determined by regulatory enactments;
(3) does not cover the costs of utilization of the subsidized investment, which shall be fully
covered by the undertaking (company);
(4) is directly linked to a planned reduction in environmental pollution by the undertaking
(company), is proportionate to such reduction and does not cover the likely savings in production
costs;  and
(5) is available to all the undertakings (companies) that are able to introduce new equipment
or industrial technology.
(5) Pre-competitive development activities are the inclusion of industrial research findings in a
plan or design to create new, modified or improved  products, industrial technology or services for sale
or use, except ordinary routine or periodic alterations to existing goods, production lines, industrial
technology or services, even if such alterations may represent improvements.  The pre-competitive
development activities may also include conceptual formulation and design of goods, technology or
services, alternatives and initial demonstrations or management projects, if they are not utilized for
production or commercial use.
Section 7. Principles of Calculation of the Amount of a Countervailable Subsidy
(1) An amount of a countervailable subsidy shall be calculated in terms of the financial benefit
obtained by a recipient in conformity with the following principles:
(1) capital provided by the state in the form of shares does not grant a financial benefit,
except in cases where the investment may be cons idered inconsistent with the usual investmentG/SCM/N/1/LVA/2
Page 6
practices of private investors (including for the provision of risk capital) in the territory of the
exporting state;
(2) a loan provided by the State does not grant a financial benefit, unless there is some
difference between the amount paid by the recipient of the state loan and the amount the recipientwould have paid for an equivalent loan receivable in  the market.  In that case, the financial benefit
shall be the difference between these two amounts;
(3) a guarantee provided by the State does not grant a financial benefit, unless there is some
difference between the amount paid by the undertaking (company) that has received guarantees on the
state secured loan and the amount it would have pa id for an equivalent commercial loan without a
guarantee from the government.  In that case, the financial benefit obtained shall be the differencebetween these two amounts that have been adju sted for any differences in rates;  and
(4) the realized provision of goods or services by the State, or purchase of goods does not
grant a financial benefit, unless it has been done for remuneration that is less than the adequate value
of the goods or services, or in a larger amount than the adequate remuneration.  The adequacy of theremuneration shall be determined with respect to the main market conditions for the relevant good or
service (price, quality, availability of the good or service, market availability, transportation and other
purchase or sale conditions) in the state performing the referred to provision or purchase.
(2) The amount of a countervailable subsidy shall be calculated per one unit of a subsidized good
in accordance with the procedures determined by the Cabinet.
Chapter III
Investigation Procedures
Section 8. Initiation of an Investigation
(1) In order to determine the existence of subs idies, their nature, amount and impact, the State
Trade Defence Bureau shall initiate an investigation on the basis of a submission in writing by a
natural or a legal person representing domestic producers, except the case referred to in Paragraph two
of this Section.
(2) An investigation may also be initiated on the initiative of the State Trade Defence Bureau if
there is evidence at its disposal of the existence of a countervailable subsidy and injury caused by it.
Section 9. Domestic Producers
(1) Domestic producers are the aggregate of domestic producers of like goods in the territory of
Latvia or producers whose aggregate production amount of like goods constitutes a major proportion
of the total domestic production of such goods, except in cases where the domestic producers and
exporters and importers of subsidized goods are mutually associated persons.
(2) Domestic producers and exporters and importers of subsidized goods are mutually associated
persons only if there are grounds for considering that as a result of such relations the relevant
domestic producers act differently from the producers not mutually associated and if they conform to
one of the following criteria:
(1) one of them directly or indirectly controls the other;
(2) both are directly or indirectly controlled by a third person; orG/SCM/N/1/LVA/2
Page 7
(3) both jointly directly or indirectly control a third person.
(3) Within the meaning of this Law, one shall be  deemed to control the other if one is able to
restrict or manage the other.
Section 10. Contents of a Submission
(1) The following information shall be included in a submission:
(1) the name, surname, personal identity number, address and telephone number of the
submitter, or, if the submitter is a legal person, the name, legal address, registration number, telephone
number, as well as the name, legal address, registration number and telephone number of all the otherknown relevant producers;
(2) certification of support for the written submission, which shall be submitted by each
domestic producer who supports such submission;
(3) total volume and value of the like good, as well as the volume and value of the like good
produced by the submitter and each relevant producer;
(4) a complete description of the subsidized good, also a commodity code in accordance
with the Harmonized Commodity Description and Coding System, and the technical description andutilization of the good;
(5) the exporting state of the subsidized good;(6) the identity of each known exporter, foreign producer and importer;(7) evidence of the existence of the subsidy, its type and, if possible, its amount;  and(8) information concerning changes in the volume of subsidized imports, the impact of such
imports on the prices of the like good in the domestic market, and the subsequent impact of such
imports on the domestic production, which are proven by the relevant factors and indices determining
the state of domestic production.
(2) If the information referred to in Paragraph one of this Section is not available, the submitter of
the submission shall indicate the reasons for not submitting the information.  The State Trade Defence
Bureau shall evaluate whether the amount of information presented in the submission is sufficient for
the initiation of an investigation and, if necessary, shall request additional information in accordancewith the provisions of Section 3, Paragraph five of the Law On Safeguarding the Domestic Market.
[7 December 2000]
Section 11. Withdrawal of a Submission
The submitter may withdraw a submission, which has been submitted in accordance with
Section 8 of this Law, at any time before or after initiation of an investigation.  In such case, the
investigation shall not be initiated or shall be discontinued without taking countervailing measures,
unless the State Trade Defence Bureau determines that the continuation of the investigation is in the
interests of the State.G/SCM/N/1/LVA/2
Page 8
Section 12. Informing the Exporting State
If a submission, which is in full compliance with the conditions of Section 10 of this Law has
been received, the State Trade Defence Bureau shall inform the government of the exporting state of
the receipt of such submission prior to taking a decision to initiate an investigation.
Section 13. Decision to In itiate an Investigation
(1) The State Trade Defence Bureau shall take a decision to initiate an investigation within a
period of 45 days from the receipt of a submission.
(2) An investigation may be initiated, if:
(1) a submission has been received from domestic producers who produce more than 50 per
cent of the like goods produced by that portion of the domestic producers either supporting the
application or opposing it;  or
(2) there is sufficient evidence to initiate the investigation.
(3) The State Trade Defence Bureau shall notify of a decision on the initiation of an investigation
in accordance with the provisions of Section 24 of this Law, but if the investigation involves a
Member State of the European Union, also in form, without delay, the Association Council.
(4) An investigation may not be initiated, if:
(1) the domestic producers who support the submission produce less than 25 per cent of the
total production of like goods;  or
(2) the imports from the relevant state are less than one per cent of the total production of
like goods unless such states jointly make up three or more per cent of the domestic market
consumption of the like goods.
(5) An investigation shall be conducted in accordance with Cabinet Regulations, which regulate
the determination of injury, the determination of a causal link between the subsidized imports and the
injury and the conduct of an investigation in foreign states.
[7 December 2000]
Section 14. Informing the Interested Parties
(1) If a decision to initiate an investigation ha s been taken, the State Trade Defence Bureau shall
forward the text of the submission received to known exporters and relevant institutions in the
exporting state in accordance with Section 8 of this Law.  If the number of the exporters is large, the
submission shall be forwarded only to the relevant institution of the exporting state or the public
organization representing the exporters or foreign producers.
(2) If the State Trade Defence Bureau has taken a decision not to initiate an investigation, the
submitter shall be informed of the reasons of taking such decision.
Section 15. Customs Procedures
An investigation initiated by the State Trade Defence Bureau may not hinder the performance
of customs procedures of imported goods.G/SCM/N/1/LVA/2
Page 9
Section 16. Acquisition of Information
(1) During the course of an investigation, the State Trade Defence Bureau shall request necessary
information from interested parties in accordance with procedures determined by the Cabinet.
(2) Interested parties, pursuant to their own initia tive, may submit, in writing, to the State Trade
Defence Bureau any information significant to the investigation.
Section 17. Verification of Information
(1) The State Trade Defence Bureau may become acquainted with the official documents within
the control of interested parties and verify information received.
(2) In order to verify information received or to obtain additional data, the State Trade Defence
Bureau may conduct an investigation in other states  with the provision that an agreement with the
undertaking (company) concerned be reached and the government of the state concerned be notified
of such and the latter does not object to an investigation being conducted.
Section 18. Hearing of Interested Parties
(1) During the course of an investigation an interested party may request an individual hearing or
such hearing in which other interested parties ma y also participate, if such person has submitted a
written request, within the time period set in the public notice for initiation of the investigation,
stating the grounds for the possible impact of the investigation results on the interests of the relevant
person and for the necessity of such hearing.
(2) None of the interested parties have an oblig ation to participate in the hearing process, and
refusal to participate shall not be prejudicial to the interested party.
(3) Information that is provided in accordance wi th this Section shall be taken into account only
if the interested parties submit it also in writing.
Section 19. Consequences of Failure to Submit Information and Delay of Investigation
(1) If, during the course of an investigation, an  interested party does not co-operate – refuses
access to information, does not submit necessary information within the time limit set or otherwise
significantly hinders the investigation – the State Trade Defence Bureau shall take a decision based
only on the information available.
(2) The State Trade Defence Bureau shall notify, in writing, the interested parties of the
consequences of the action referred to in Paragraph one of this Section.
Section 20. Information to be Utilized during an Investigation
(1) Any restricted access information shall be ut ilized during an investigation only for the
purposes for which it has been requested and it is pr ohibited to disclose such information without the
consent of its submitter.
(2) Interested parties shall also submit to the State Trade Defence Bureau a generally accessible
summary of the information submitted.  If interested parties consider the submission of a generally
accessible summary impossible, the reasons for such action shall be indicated.G/SCM/N/1/LVA/2
Page 10
(3) If interested parties do not submit a generally accessible summary and the State Trade
Defence Bureau determines that a request to preserve the status of restricted access information is not
warranted, such information shall not be utilized in the investigation and shall be returned to its
submitter.
Section 21. Availability of Information to Interested Parties
(1) The interested parties who have applied for participation in an investigation in accordance
with Section 24, Paragraph two of this Law, by submitting a substantiated request in writing, may
become acquainted with all the information to be utilized during the investigation, except restricted
access information.
(2) The interested parties may request that the information on the basis of which the State Trade
Defence Bureau has taken a decision to implement provisional measures, be provided.  The interested
parties shall submit a request for the information in writing immediately after the provisional
measures have been implemented.  The State Trade Defence Bureau shall provide the information in
writing within a 14-day period from the date of receipt of the request.
(3) The interested parties may require that inform ation be provided to them on the basis of which
the decision was taken regarding the necessity of countervailing duties or the termination of an
investigation without the implementation of measures, paying special attention to facts or
considerations which are different from those which were utilized in the case of implementation ofprovisional measures.  The interested parties shall submit a request for the information in writing not
later than a month after the publication of a notice regarding the implementation of provisional
measures. If provisional measures have not been taken, the interested parties may submit a request for
the information within the time limit set by the State Trade Defence Bureau.
Section 22. Duration of an Investigation
An investigation shall be completed within a 13-month period from the date of its initiation.
Section 23. Discontinuing an Investigation without Taking Countervailing Measures
An investigation shall be discontinued without delay, if:
(1) the submission is withdrawn in accordance with Section 11 of this Law;(2) the amount of the countervailable subsidy is de minimis , that is, the value of the subsidy
is less than one per cent of the value of the goods;
(3) the injury is negligible;  and(4) the volume of imports is negligible in accordance with Section 13 of this Law.
Section 24. Notices
(1) The State Trade Defence Bureau shall provide a notice in the newspaper Latvijas V ēstnesis
[official gazette of the Government of Latvia] and notify interested parties of:
(1) the initiation of an investigation;
(2) the implementation of provisional measures;G/SCM/N/1/LVA/2
Page 11
(3) the acceptance of price adjustments;
(4) the application of countervailing duties;(5) the application of countervailing duties with retroactive effect;6) the review of countervailing duties and price adjustments;  and(7) the expiration of the time limit for countervailing duties and price adjustments.
(2) A notice of initiation of an investiga tion shall contain the following information:
(1) the exporting state (exporting states) of the relevant good;
(2) the description of the relevant good and its commodity code in accordance with the
Harmonized Commodity Description and Coding Sy stem, as well as a technical description and
intended utilization of the good;
(3) the date of initiation of the investigation;(4) a summary of the factors on which allegations of the existence of subsidies, injury and a
causal link between subsidized imports and injury are based;
(5) the address of the place where information and comments are to be submitted;  and(6) the proposed schedule for the investigation, also, the terms within which interested
parties may apply to participate in the investigation by submitting written argument.
(3) A notice of implementation of provisional measures shall include the following information
acquired during the investigation and the conclusions made:
(1) the known exporters and producers (names) whose goods are subject to an investigation;
(2) the description of the relevant good and its commodity code in accordance with the
Harmonized Commodity Description and Coding Sy stem, as well as a technical description and
intended utilization of the good;
(3) the amount of the countervailable subsidy and facts on the basis of which the existence of
the subsidy has been proven;
(4) the factors taken into account, which have permitted injury to be specified and the causal
link between the subsidized imports and the injury to be determined;  and
(5) the amount of the provisional measures determined, and the reasons why such
provisional measures are necessary to prevent injury during the course of the investigation.
(4) A notice of application of countervailing duties shall include information pertaining to the
particular matter, and reasons for taking the decision, and also:
(1) the known exporters and producers (names) whose goods are subject to an investigation;
(2) the description of the relevant good and its commodity code in accordance with the
Harmonized Commodity Description and Coding System;G/SCM/N/1/LVA/2
Page 12
(3) the amount of the countervailable subsidy and facts on the basis of which the existence of
the subsidy has been proven;
(4) the factors taken into account, which have permitted injury to be specified and the causal
link between the subsidized imports and the injury to be determined;
(5) the reasons why significant arguments or claims of the exporters and importers have been
accepted or rejected;
(6) the amount of the countervailing duties to be applied, also, the considerations that are
significant for the evaluation of the interests of the State, and the consideration, whether a duty that isless than the amount of the countervailable subsidy determined would be adequate in order to rectify
the injury to domestic producers;  and
(7) the reasons for taking such decision, if the countervailing duty is applied to imports, to
which provisional measures have been implemented.
Chapter IV
Provisional Measures
Section 25. Implementation of Provisional Measures
(1) Provisional measures may be manifested as the liability insurance of an importer or a bank
guarantee (hereinafter - guarantee).
(2) Provisional measures may be implemented not earlier than 60 days and not later than nine
months from the date of initiation of an investigation.
Section 26. Conditions for Implementation of Provisional Measures
Provisional measures may be implemented, if:
(1) an investigation has been initiated in accordance with Section 8 of this Law;(2) a public notice has been made and interested parties have been given an opportunity to
provide information and comments in accordance with Section 24 of this Law;
(3) a preliminary affirmative decision has been taken concerning the fact that the producer of
the imported good or the exporter has benefited from the countervailable subsidy and injury has been
caused to domestic producers;  and
(4) the implementation of the provisional measures is in the interests of the State.
Section 27. Amount of Provisional Measures
The amount of provisional measures may not exceed the total amount of the countervailable
subsidy determined as a result of a preliminary decision.  The amount of the provisional measure may
be less than the amount of the subsidy determined if the lesser amount is adequate to rectify the injury
to domestic producers.G/SCM/N/1/LVA/2
Page 13
Section 28. Procedures for Implementation of Provisional Measures
The Cabinet shall take, in accordance with specified procedures, a decision on the
implementation of preliminary measures on the basis of the proposals submitted by the State Trade
Defence Bureau.
Section 29. Duration of Provisional Measures
The duration of provisional measures shall not exceed four months.
Chapter V
Price Adjustments
Section 30. Principles of Price Adjustments
(1) An investigation may be terminated without  the implementation of provisional measures or
application of countervailing duties, if price adjust ments have been received from an exporting state
or exporter.
(2) The price increase in accordance with such price adjustments shall not be greater than that
which is necessary in order to compensate for the impact of countervailable subsidies.  Such increase
shall be less than the amount of countervailable subsidies, if the State Trade Defence Bureaudetermines that a smaller price increase is sufficient, in order to rectify the injury to domestic
producers.
(3) Price adjustments may be recommended by the State Trade Defence Bureau, however, no
exporting state or exporter shall be forced to undertake such adjustments.  An investigation may notbe affected by the fact that the exporting state or exporter does not offer or does not accept a
recommendation to undertake price adjustments.
(4) An exporting state or exporter that offers price adjustments shall provide the State Trade
Defence Bureau with a generally accessible summary of the price adjustments, which does not include
restricted access information.
Section 31. Acceptance of Price Adjustments
(1) The State Trade Defence Bureau shall, in ac cordance with the procedures determined by the
Cabinet, propose or accept from an exporting state or exporter price adjustments recommended, if it
has taken a preliminary affirmative decision on the existence of a countervailable subsidy and injuryto domestic producers.
(2) If a decision has been taken regarding the acceptance of a price adjustment, the State Trade
Defence Bureau shall approve the price adjustment bill of lading which the relevant exporter presents
to customs institutions when declaring the investigated goods for free circulation.
(3) If the price adjustment bill of lading is not presented, a guarantee document shall be requested
or the relevant countervailing duty shall be collected.
[7 December 2000]
Section 32. Rejection of Price Adjustments
The State Trade Defence Bureau shall not accept the proposed price adjustments, if their
acceptance is considered to be ineffective, in thos e cases when the number of actual or potentialG/SCM/N/1/LVA/2
Page 14
exporters is too large, or also due to other reasons.  If the State Trade Defence Bureau decides not to
accept the price adjustments proposed, the exporting state or exporters shall be informed of the
reasons due to which the acceptance of the price adjustments is considered to be ineffective.  The
exporting state or exporter has the right to express its views regarding such decision.
Section 33. Termination of an Investigation if Price Adjustments are Accepted
(1) If price adjustments have been accepted, an investigation of subsidies and injury in respect of
a specific exporter shall be terminated. In such case, if the State Trade Defence Bureau has taken a
decision that the countervailable subsidy and in jury do not exist, the price adjustments shall
immediately lose effect, except in cases when such decision has largely been influenced by the
existence of the price adjustments. If the decision of the State Trade Defence Bureau concerningsubsidies and injury is affirmative, the price adjustments shall remain in effect.
(2) The State Trade Defence Bureau shall require an exporter, from whom price adjustments have
been accepted, to periodically provide information on the fulfilment of the price adjustments, as well
as to permit verification of relevant data.  The provisions of Section 20 of this Law regardingrestricted access information shall apply to the distribution of such data.
(3) Failure to comply with the provisions of Paragraph two of this Section shall be considered to
be a violation of price adjustments and in that case, the provisions of Section 34 of this Law shall
apply.
Section 34. Violations of Price Adjustments
If price adjustments have been violated or cancelled, a final decision on subsidies and injury
has been taken and an exporter has been given the opportunity to express his or her view, inaccordance with the provisions of this Law countervailing duties shall be applied without delay.  If
price adjustments have been violated and there is reason to believe that they have been violated, and
the investigation, as a result of which the price adjustments have been made, is not yet completed,
immediate provisional measures in accordance with the conditions of Section 25 of this Law shall be
taken, as well as on the basis of the facts which have been determined during the investigation and
which have been taken as a basis for acceptance of the price adjustments.
Chapter VI
Application of Countervailing Duties
Section 35. Countervailing Duties and their Amounts
(1) Countervailing duties shall be applied in addition to other customs duties specified for
relevant imported goods.  In respect of subsidized imports causing injury, the customs authorities
shall collect countervailing duties in specified amounts from all states to which an investigation
applies, except for imports from the states whose proposed price adjustments have been accepted in
accordance with the provisions of this Law.  The countervailing duties shall be included in the Statebasic budget.
(2) The amount of a countervailing duty may not exceed the amount of a countervailable subsidy.
The State Trade Defence Bureau shall evaluate whether a duty, which is less than the total amount of
the countervailable subsidy, would be sufficient in order to rectify the injury to domestic producers.If it is determined that such a lesser duty may be  sufficient to rectify the injury, the amount of the
countervailable subsidy may not exceed the lesser duty.G/SCM/N/1/LVA/2
Page 15
Section 36. Procedures for Application of Countervailing Duties and Evaluation of
Interests of the State
(1) When the State Trade Defence Bureau has taken a final decision on a countervailable subsidy,
injury and a causal link between subsidized imports a nd injury, as well as when it is determined that
all the conditions for application of countervailing  duties exist, the State Trade Defence Bureau shall
evaluate whether the application of such duties is in the interests of the State.  If the State Trade
Defence Bureau, on the basis of all the information received, takes a decision that the application of
the countervailing duties is not in the interests of the State, such duties shall not be applied.
(2) The State Trade Defence Bureau shall take a decision concerning the interests of the State
only after interested parties have been given an opportunity to express their views on such issues bysubmitting information or requesting a hearing within the term specified in the public notice of
initiation of an investigation, as well as after opinions from other State government institutions have
been received.
(3) The Cabinet shall take a decision on the application of countervailing duties on the basis of
information provided by the State Trade Defence Bureau. Countervailing duties shall be collected
according to general procedures as a customs duty.
[7 December 2000]
Section 37. Conditions for Application of Countervailing Duties
Except for the cases provided for in Sections 31, 38 and 39 of this Law, countervailing duties
shall be applied only to those goods which are delivered for consumption on or after the respective
date of publication of an affirmative preliminary or final decision in an investigation or review which
has been conducted in accordance with the provisions of Chapter VII of this Law.
Section 38. Collection of Duties Determined as a Result of Provisional Measures
(1) If provisional measures have been implemented and a final decision concerning
countervailable subsidies and injury has been taken, the Cabinet, irrespective of whether or not
countervailing duties are applied, shall decide what amount of duties determined as a result of
provisional measures shall be collected.  For the purpose of collection of the provisional duties it shallbe deemed that the injury does not include material retardation of the establishment of some industrial
sector and threat of injury, except in cases when it is determined that without the implementation of
provisional measures the impact of the subsidized imports may result in injury.
(2) If a countervailing duty is greater than the duty determined during implementation of
provisional measures, the difference shall not be collected.  If a countervailing duty is less than the
duty determined during implementation of provisional measures, it shall be recalculated.
(3) If a decision is taken concerning a threat of injury or material retardation of the establishment
of some industrial sector (but no injury has yet occurred), a countervailing duty may be applied onlyfrom the day when such decision has been taken, except in the cases specified in Paragraph one of this
Section.  A guarantee submitted during implementation of provisional measures shall be declared
void.
(4) If a decision on the application of a countervailing duty is negative, provisional measures
shall not be approved and a guarantee submitted during the period of the provisional measures shall
be declared void.G/SCM/N/1/LVA/2
Page 16
(5) The Customs Administration of the State Revenue Service shall annul the guarantee
submitted during the period of the relevant provisional measure if it has received a notification from
the State Trade Defence Bureau regarding the a nnulment of such guarantee in accordance with
Paragraphs three and four of this Section.
[7 December 2000]
Section 39. Application of a Countervailing Duty with Retroactive Effect
(1) A countervailing duty may be applied to goods which have been brought in for consumption
not more than 90 days prior to the date of initiation of provisional measures, but not prior to the
initiation of an investigation, if such goods are subject to registration procedures in accordance with
Paragraph two of this Section and if it is determined that:
(1) critical circumstances exist under which substantial subsidized import has caused
difficult to compensate injury in a relatively short period of time;  and
(2) in order to prevent a recurrence of injury, it is necessary to apply a countervailing duty
retroactively.
(2) The customs authorities shall register investigated goods, in accordance with procedures
determined by the Cabinet, for a period of up to nine months in order that countervailing duties may
thereafter be applied to such goods, taking into account the date of their registration.
(3) In cases specified by Section 34 of this Law, and in accordance with the provisions of this
Law, countervailing duties may be applied to goods that have been available for consumption for not
more than 90 days before the implementation of provisional measures with the condition that the
goods have been registered and that such retroactive evaluation shall not apply to the imports of goodsthat were brought in prior to the violation of price adjustments.
Chapter VII
Validity and Review of Countervailing Duties and Price Adjustments
Section 40. Validity of Countervailing Duties
Countervailing duties shall remain in effect only as long as and in the amount which is
necessary, in order to compensate for injury caused by a subsidy.
Section 41. Review prior to Expiration of a Time Limit for Application of Countervailing
Duties
The application of countervailing duties shall be discontinued not later than five years after the
day of commencement of their implementation or not later than five years from the very last day of
review in accordance with this Section, including bot h subsidies and injury.  However, the application
of countervailing duties shall not be terminated within this period if the State Trade Defence Bureaudecides, in conducting a review which was commenced  before the day of expiration of the term for
measures, pursuant to its own initiative or based upon a duly substantiated submission, which was
submitted by domestic producers not later than three months before the expiration of a five-year
period, that the termination of collection of the duty may cause a continuation or a recurrence of
subsidies or injury.  The countervailing duty shall remain in effect until results of the review areacquired.G/SCM/N/1/LVA/2
Page 17
Section 42. Review in the Case of a Change of Circumstances
(1) The State Trade Defence Bureau shall review the necessity of further application of
countervailing duties pursuant to its own initiative or, if at least one year has elapsed since the
application of the final countervailing duties, after receipt from an interested party of a submission inwriting, which supports the necessity of the review.
(2) A review in the case of a change of circumstances shall be initiated, if a submission includes
evidence that further application of the countervailing duties is no longer necessary and in case of
cancellation or a change of countervailing duties the continuation or recurrence of injury is not
possible, or the duty in effect is no longer sufficient to compensate for injury caused by a subsidy.
(3) The State Trade Defence Bureau, in conducting a review in accordance with the provisions of
this Section, shall evaluate whether the circumstances in respect of the subsidy and injury have
substantially changed, as well as whether the countervailing duty in effect will provider the expected
results for compensation of the injury.
(4) If, as a result of a review, the State Trade Defence Bureau determines that countervailing
duties are no longer justifiable, the Cabinet, on th e basis of a proposal from the State Trade Defence
Bureau, in accordance with the prescribed procedures, shall take a decision to revoke the
countervailing duties.
Section 43. Review for Determining an Individual Countervailing Duty
If goods are subject to a countervailing duty, the State Trade Defence Bureau, pursuant to a
request from an exporter, shall conduct a review w ithout delay in order to determine the amount of an
individual countervailing duty for an exporter wh ose goods have not been individually investigated
during the course of an investigation due to reasons which are not connected with non-co-operation as
specified in Section 19 of this Law.
Section 44. Validity and Reviewing Procedures for Price Adjustments
The provisions of Sections 40, 41 and 42 of this Law shall also apply to those price
adjustments, which have been accepted in accordance with the provisions of Chapter V of this Law.
Section 45. Refunds of Countervailing Duties
Countervailing duties collected shall be refunde d to an importer in accordance with the
procedures specified by the Customs Law, if a submission from the importer for a refund has beenreceived and the State Trade Defence Bureau determines that the amount of the countervailable
subsidy on the basis of which the duties have been paid, is eliminated or reduced to a level which is
below the level of the countervailing duty in effect.
[7 December 2000]
Section 46. Suspension of Countervailing Measures
In the interests of the State, the implementation of specified countervailing measures may be
suspended for a period not exceeding nine months.  The suspension may be extended up to one year.
The implementation of countervailing measures may be suspended in cases when the marketcircumstances have temporarily changed and the State Trade Defence Bureau determines that the
implementation of the countervailing measures is not in the interests of the State, and gives the
domestic producers the opportunity to express their views.  The countervailing measures may be
reinstated if the circumstances due to which their implementation was suspended no longer exist.G/SCM/N/1/LVA/2
Page 18
Section 47. Appeal
An interested party, who participates in an inve stigation, a review or in the procedure for refund
of countervailing duties, may appeal decisions of the State Trade Defence Bureau in accordance withthe procedures determined by law.
This Law shall enter into force on 1 January 2001.The Saeima  has adopted this Law on 11 May 2000.
On behalf of the President,
Chairman of the Saeima J.Straume
Riga, 25 May 2000G/SCM/N/1/LVA/2
Page 19
Republic of Latvia
Cabinet
Regulation No. 2
Adopted 2 January 2001
Procedures for the Application of  Certain Provisions of the Law On
Protection Against Subsidized Imports
Issued pursuant to Section 7, Paragraph two; Section 13, Paragraph five;
Section 16, Paragraph one; Section 31 and Section 39, Paragraph two
of the Law On Protection Against Subsidized Imports
I. General Provisions
1. These Regulations prescribe the procedures for calculation of the amount of the
countervailable subsidy, the determination of injury, the establishment of the causal link between
subsidized imports and injury, the performance of investigations in foreign states, the requesting of
information from the interested parties, the proposal and adoption of price adjustments, as well as the
registration of the investigated goods.
II. Calculation of the Amount of a Countervailable Subsidy
2. The amount of a countervailable subsidy shall be equivalent to the financial benefit of the
recipient during the investigation period of the subsid y, which shall be the last financial year of the
recipient or at least a period of six months before the initiation of the investigation, regarding which
relevant data is accessible.
3. The State Trade Defence Bureau (hereinafter – Bureau) shall calculate the amount of a
countervailable subsidy per one unit of the subsidized goods exported to Latvia.  On performing the
calculation referred to, the following shall be deducted from the total amount of the subsidy:
3.1. any fees for the submission of an application, or other costs that are necessary in order to
apply for a subsidy or to receive it;  and
3.2. export taxes (fees) or other payments that are collected for the export of products to
Latvia and are specially intended for the compensation of a subsidy.
4. If an interested person requests the deduction referred to in Paragraph 3 of these Regulations,
he or she shall prove the substantiality for such request.
5. If a subsidy is granted regardless of the quantity of the goods produced, exported or
transported, the amount of the countervailable subsidy shall be determined by dividing the total valueof the subsidy according to the level of production, sales or exports of the relevant goods during the
investigation period of the subsidy.
6. If a subsidy is linked to the purchase of fixed assets (also purchase of fixed assets intended in
the future) the amount of the countervailable subsidy shall be calculated by dividing the total value of
the subsidy according to the depreciation period of th e relevant capital in the particular production
sector.  The amount of the subsidy calculated in such manner, which is attributable to theinvestigation period (also the amount of the subsidy arising from the fixed assets that were obtainedG/SCM/N/1/LVA/2
Page 20
before the period referred to), shall be divided in accordance with the conditions of Paragraph 5 of
these Regulations.
7. If the fixed assets cannot be depreciated, the subsidy shall be evaluated as an interest-free
loan, and Section 7, Paragraph one, Clause 2 of the Law On Protection Against Subsidized Imports
shall be applied.
8. If a subsidy is not linked to the purchase of fixed assets, the financial benefit of the recipient
shall be attributed to the investigation period a nd be divided in accordance with the conditions of
Paragraph 5 of these Regulations, unless the circumstances of the relevant investigation justify
division in another time period.
III. Determination of Injury
9. Determination of injury shall be based on evidence and shall include the following
investigations:
9.1. the volume of subsidized imports;
9.2. the impact of subsidized imports on the prices of like goods in Latvia;  and9.3. the impact of subsidized imports on the domestic production.
10. In evaluating the volume of subsidized imports, the Bureau shall determine whether a
substantial increase of subsidized imports has occurred  in terms of absolute or relative indicators with
respect to domestic production or consumption in Latvia.
11. In evaluating the impact of subsidized imports on prices in the domestic market of Latvia, the
Bureau shall determine:
11.1. whether the prices of imported goods are significantly lower than the prices of like
domestic goods;  and
11.2. whether, due to imports, a substantial decrease of prices occurs or an increase of
prices that would have occurred in other circumstances is being significantly hindered.
12. If imports of the relevant goods from two or more states are being investigated at the same
time, the Bureau shall evaluate the impact of such imports as a whole only if:
12.1. the amount of the countervailable subsidy that is specified for the imports of each
state shall be greater than the amount of the minimum countervailable subsidy, and the volume of
imports from each state shall not be considered as negligible in accordance with Section 23 of the
Law On Protection Against Subsidized Imports;  and
12.2. the impact of imports as a whole shall be evaluated, taking into account the mutual
competition of the imported goods and the competition of the imported goods and the like domestic
goods.
13. In investigating the impact of subsidized imports on the relevant domestic sector, the Bureau
shall evaluate the factors and indicators that characterise the state of the domestic production,
including:G/SCM/N/1/LVA/2
Page 21
13.1. the fact that the production sector is still recovering from the impact of subsidies or
dumping in the past;
13.2. the amount of countervailable subsidies;
13.3. the actual and possible decrease of sales, profits, production volume, market shares,
productivity, profit from investments or  utilization of production capacity;
13.4. the factors which affect prices in the domestic market of Latvia;  and13.5. the actual and possible negative consequences in respect to cash flow, stocks of
goods, employment, work remuneration, economic development and attraction of capital orinvestments.  With respect to agriculture it shall be evaluated whether the costs of State aid
programmes have increased.
14. The Bureau shall determine whether subsidized imports are the cause of injury on the basis of
all the material evidence that has been obtained while performing the investigations referred to in
Paragraph 9 of these Regulations.
15. In addition to subsidized imports, the Bureau shall evaluate all other factors known to be
simultaneously causing injury to the domestic producers, including:
15.1. the volume and prices of imports which are not subsidized;
15.2. the decrease of demand or changes in consumption patterns;15.3. trade restrictions and competition between a third country and domestic producers;
and
15.4. technological development and the export capacity and productivity of domestic
producers.
16. The Bureau shall evaluate the impact of subsidized imports upon the production of like goods
if the data available allows separate determination of the production of like domestic goods on thebasis of the production process, volume of sales and profits.  If such investigation is not possible, the
impact of subsidized imports shall be evaluated by investigating a group or assortment of goods
divided as detailedly as possible, which contains like goods and regarding which the necessary
information is available.
17. Determination of the threat of serious injury shall be based on facts, and not on allegations,
assumptions or possibilities.  If circumstances have arisen that might give rise to a situation in which a
subsidy would cause injury, the changes must be clearly foreseeable and imminent.  In order to
determine threat of serious injury, the Bureau shall evaluate the following factors:
17.1. the nature and impact of the relevant subsidy (subsidies) on trade;
17.2. the substantial rate of increase of subsidized imports in the domestic market of Latvia
which indicates the possibility of a substantial incr ease of imports in absolute or relative terms in
relation to domestic production or consumption in Latvia;
17.3. whether the capacity of exporters to sell their production substantially increases
which indicates that the possibility of subsidized exports to Latvia is increasing, taking into account
the availability of other export markets to receive any additional exports;G/SCM/N/1/LVA/2
Page 22
17.4. whether the goods are imported at prices which will significantly reduce prices in the
domestic market or hinder an increase in prices that would have otherwise occurred and the demand
for such imports in the future increases;  and
17.5. the stocks of the investigated goods.
18.  Evaluation of the causal link between the subsidized imports and the injury shall be based on
data, which pertains to the investigation period specified in Paragraph 2 of these Regulations.
IV. Acquisition and Investigation of Information in Foreign States
19. Concurrently with the initiation of an inves tigation, the Bureau shall send questionnaires to all
persons, who may have access to information necessary for the investigation (for example, known
domestic producers, importers, exporters), and also to foreign producers.  Exporters and domestic
producers who have received the questionnaires shall have 37 days in which to provide the answers.
20. If necessary, the Bureau shall send, during the course of the investigation, an additional
questionnaire or a written request to the interested persons to clarify or supplement the information
received. In such cases, the date by which the information is to be submitted shall be indicated.
21. Where necessary, the Bureau shall investigate information, as provided by exporters and
foreign producers, in foreign states or obtain additional data.
22. The Bureau shall take a decision on the performance of an investigation in foreign states after
the receipt of answers to questionnaires sent in accordance with Paragraph 19 of these Regulations.
23. After taking a decision on conducting an investigation in a foreign state, the Ministry of
Foreign Affairs shall notify the government of the exporting state and the relevant undertakings
thereof, indicating the purpose of the visit.  After agreement is reached with the relevant undertakings,
the government of the relevant exporting state shall be notified thereof.  An investigation shall be
performed if an affirmative answer is received.
24. If, within 14 days from the time of forwarding  a notification, an affirmative answer is not
received from the government of the exporting stat e, the Bureau shall not perform an investigation in
the relevant exporting state.
25. If an affirmative answer is received from th e government of the exporting state, the Ministry
of Foreign Affairs shall notify, after the co-ord ination of the dates for the investigation, the
government of the exporting state of the name and address of undertakings to be visited and of the
dates of the investigation.
26. Not later than 14 days before the agreed date of the investigation the Bureau shall notify the
relevant undertaking of the exporting state of the general character of the information to beinvestigated, indicate the name and position of the representatives of the Bureau who will conduct the
investigation, as well as the additional information to be provided during the investigation.
Information that is not included in the notification, but is necessary for the clarification of
circumstances in accordance with acquired information, shall be requested during the investigation.
27. Answers to questions asked by the government of the exporting state or by the relevant
undertakings, related to the conduct of the investigation in the exporting state, shall, if possible, be
provided before the performance of the investigation.G/SCM/N/1/LVA/2
Page 23
28. The provisions referred to in Paragraphs 19, 20, 21, 22, 23, 24, 25 and 26 of these Regulations
shall not restrict the right of the Bureau to obtain information and evidence in any other lawful way.
V. Proposal and Adoption of Price Adjustments
29. The Bureau shall propose price adjustments by sending a written draft of price adjustments to
the exporting state or to the exporter.  If the Bureau receives back a signed draft of the relevant price
adjustments, the price adjustments have been accepted.
30. If price adjustments are proposed by an exporting state or an exporter, by submitting a draft of
the price adjustments to the Bureau, the Bureau shall evaluate the proposed price adjustments and take
a relevant decision.
31. Before proposing or adopting price adjustments, the Bureau shall consult domestic producers
regarding the effectiveness of the price adjustments.
32. A draft of price adjustments shall provide for:
32.1. the readiness of the exporting state or the state of the origin of the goods to
discontinue or reduce subsidies, or to take other equivalent measures;
32.2.  the readiness of the exporter to discontinue exports or to increase prices for as long as
such exports benefits from the countervailable subsidy;
32.3. the readiness of the exporting state or the exporter to refrain from non-compliance
with the price adjustments;
32.4. the readiness of the exporting state to prov ide to the Bureau all necessary information
regarding the course of and changes in the subsidy programme;
32.5. the readiness of the exporter to provide to the Bureau all necessary information
regarding transactions with the investigated goods;
32.6. the readiness of the exporting state or the exporter to periodically inform the Bureau
of the volume of sales of the investigated goods and price of such in the market of the exportingcountry and in the domestic market of Latvia;
32.7. the readiness of the exporting state or the exporter to co-operate and permit the
Bureau to perform an examination of the relevant data;
32.8.  the right of the Bureau to cancel the price adjustments at any time, as well as the right
of the exporting state or the exporter to cancel the price adjustments, upon giving notice to the Bureau
prior thereto;
32.9. provisions regarding mutual consultations between the Bureau and the exporting state
or the exporter;
32.10. requirements for the contents of price adjustment invoices; and32.11. other necessary conditions regarding the performance of price adjustments.
33. The Bureau shall notify the interested parties and customs authorities of the adoption of price
adjustments.G/SCM/N/1/LVA/2
Page 24
34. In the notification regarding adoption of price adjustments the Bureau shall provide the
following information:
34.1. the part of the price adjustments that is not restricted access information and a
detailed presentation of the  information obtained and the conclusions regarding the specific matter;
34.2. the time period within which the interested parties are to submit information and
comments;  and
34.3. a decision on continuation or termination of the investigation in accordance with
Section 33 of the Law On Protection Against Subsidized Imports.
VI. Registration of Investigated Goods
35. Within seven days from the day of initiation of the investigation, the Bureau shall notify the
customs authorities of the initiation of registration of the investigated goods.
36. Registration of the investigated goods is the entering into the customs authority registers the
date of import, volume, price, state of origin, name of the exporter and of the importer and other data
regarding the investigated goods, so that a subsequent retroactive application of the countervailing
duties would be possible in accordance with Sect ions 39 and 43 of the Law On Protection Against
Subsidized Imports.
Prime Minister A. B ērziņš
Minister for Economics A. Kalv ītis
__________