WORLD TRADE  
ORGANIZATION   
WT/DS425/R/Add.1 
26 February 2013  
 
(13-0972) 
 Original:   English 
 
 
 
     
 
  
 
CHINA – DEFINITIVE ANTI-DUMPING DUTIES  
ON X-RAY SECURITY INSPECTION EQUIPMENT 
FROM THE EUROPEAN UNION  
 
 
Report of the Panel 
 
 
Addendum 
  
 This addendum  contains Annexes A to G to the Report of the Panel to be found in document 
WT/DS425/R.      
_______________ 
 
  WT/DS425/R/Add.1 
 Page i 
 
 
  ANNEX A 
 
EXECUTIVE SUMMARIES OF THE FIRST WRITTEN  
SUBMISSIONS OF THE PARTIES 
 
 
Contents Page 
Annex A-1 Executive Summary of the First Written Submission of 
the European Union A-2 
Annex A-2 Executive Summary of the First Written Submission of China A-10 
 
 
ANNEX B 
 
EXECUTIVE SUMMARIES OF THE THIRD PARTIES  
WRITTEN SUBMISSIONS 
 
 
Contents Page 
Annex B-1 Executive Summary of the Third Party Written Submission of 
Japan B-2 
Annex B2 Executive Summary of the Third Party Written Submission of 
Norway B-7 
Annex B-3 Executive Summary of the Third Party Written Submission of 
the United States B-13 
 
 
ANNEX C 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF OF 
THE PARTIES AT THE FIRST SUBSTANTIVE MEETING 
 
 
Contents Page 
Annex C-1 Executive Summary of the Opening Statement of the 
European Union at the First Meeting of the Panel C-2 
Annex C-2 Executive Summary of the Opening Statement of China at the First 
Meeting of the Panel C-8 
Annex C-3 Closing Statement of China at the First Meeting of the Panel C-13 
 WT/DS425/R/Add.1 
Page ii  
 
  ANNEX D 
 
ORAL STATEMENTS OF THE THIRD PARTIES AT  
THE FIRST SUBSTANTIVE MEETING 
 
 
Contents Page 
Annex D-1 Third Party Oral Statement of Chile at the First Meeting of the 
Panel D-2 
Annex D-2 Third Party Oral Statement of Japan at the First Meeting of the 
Panel D-4 
Annex D-3 Third Party Oral Statement of Norway at the First Meeting of the 
Panel D-7 
 
 
ANNEX E 
 
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN 
SUBMISSIONS OF THE PARTIES 
 
Contents Page 
Annex-E-1 Executive Summary of the Second Written Submission of 
the European Union E-2 
Annex E-2 Executive Summary of the Second Written Submission of China E-11 
 
 
ANNEX F 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF, OF 
THE PARTIES AT THE SECOND SUBSTANTIVE MEETING 
 
Contents Page 
Annex F-1 Executive Summary of the Op ening Statement of China at the 
Second Meeting of the Panel F-2 
Annex F-2 Executive Summary of the Opening Statement of the 
European Union at the Second Mee ting of the Panel (BCI redacted) F-11 
Annex F-3 Closing Statement of the European Union at the Second Meeting of 
the Panel (BCI redacted) F-19 
Annex F-4 Closing Statement of China at the Second Meeting of the Panel F-22 
 
 
ANNEX G 
 
REQUEST FOR THE ESTABLISHMENT OF A PANEL 
 
Contents Page 
Annex G-1 Request for the Establishment of  a Panel by the European Union  G-2 
 
 
  WT/DS425/R/Add.1 
 Page A-1 
 
 
 ANNEX A 
  
EXECUTIVE SUMMARIES OF THE FIRST WRITTEN  
SUBMISSIONS OF THE PARTIES 
 
 
Contents Page 
Annex A-1 Executive Summary of the First Written Submission of 
the European Union A-2 
Annex A-2 Executive Summary of the First Written Submission of China A-10 
 WT/DS425/R/Add.1 
Page A-2  
 
 ANNEX A-1 
 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN  
SUBMISSION OF THE EUROPEAN UNION  
 
 
I. INTRODUCTION AND GENERAL FACTUAL BACKGROUND 
 
1. The present dispute concerns the definitive anti-dumping measure imposed by the Ministry of 
Commerce of the People's Republic of China ("MO FCOM") on imports of X-ray security inspection 
equipment originating in the European Union pursuant to Notice (2011) No 1 of 23 January 2011.   2. Low-energy scanners are primarily used in secu rity checks at transportation infrastructures, 
such as airports, railway stations and subways, as well as in the protection of public premises.  Low-
energy scanners for the aviation sector have to me et particularly demanding security requirements.  
For that reason, in that sector "competition tak es place not only on price but also on quality, track 
record, user friendliness and service".  As a result, the aviation sector is generally regarded as a high-
end segment commanding higher prices, as compared to  the other sectors of the market.  The Chinese 
market for low-energy scanners is supplied by several domestic producers as well as by imports, 
mainly from the European Union and the United Stat es.  The Petition was filed by Nuctech.  No other 
Chinese producer supported the Petition or cooperated in the investigation.  As a result, the injury 
determination is based on data pertaining to Nu ctech.  Unlike the other Chinese producers, Nuctech 
has historically focused on high-energy scanners , although it has developed a line of low-energy 
scanners in recent years.  During the POI (2006-2008) Nuchtec's domestic sales of low-energy 
scanners were concentrated in the low-end and interm ediate sectors.  Nuctech was a newcomer to the 
aviation sector and deliberately pursued an aggressi ve business strategy aimed at rapidly gaining 
market share.  Smiths was the only EU producer w ho exported the subject products to China during 
the POI.  Smiths did not export any high-energy scanners to China, but only and exclusively low-energy scanners. Unlike Nuctech, Smiths' sales were concentrated in the high-end aviation sector.   
 
3. In the course of the investigation leading to the imposition of the measure at issue the Chinese 
authorities disregarded some of the most fundamental procedural guarantees provided in the ADA.  As a result, the EU exporter was deprived of a fair opportunity to defend adequately its interests. In 
addition, the measure at issue is based on a manifest ly flawed determination of material injury.  While 
the European Union has not submitted any claim w ith regard to the substantive aspects of the 
determination of dumping made by the Chinese authorities, this does not mean that the European Union agrees with that determination. Rath er, due to the failure of the Chinese authorities to 
comply with even the most basic transpar ency requirements imposed by the ADA, the 
European Union has been unable to understa nd how the Chinese authorities reached that 
determination. 
 
II. LEGAL CLAIMS 
 
1. Claim under Articles 6.5.1, 6.4 and 6.2 ADA 
 4. The European Union submits that, contrary to  its obligations under Article 6.5.1 ADA, China 
failed to require a statement of reasons explaini ng the exceptional circumstances why summarisation 
was not possible in its injury analysis, in particular  with respect to the stat ement by the Chinese Public 
Security Bureau of the Civil Aviation Administra tion.  Furthermore, in certain instances where 
summaries of confidential information were provi ded, China, contrary to its obligations under 
Article 6.5.1 ADA, failed to ensure that they we re in sufficient detail to enable a reasonable 
understanding of the substance of the informati on submitted.  This was the case with respect to  WT/DS425/R/Add.1 
 Page A-3 
 
 
 product models in the Petition, Exhibits 8, 9, 10, 11 and 14 attached to the Petition and certain 
responses and attachments of the Petitioner in the non-confidential version of its Questionnaire 
Response.   5. Article 6.5.1 ADA imposes an obligation on the investigating authority to request and 
scrutinise the statements provided by  parties seeking confidential treatment for information submitted.  
The aim of this obligation is to determine whethe r exceptional circumstances have been established, 
and whether the reasons provided adequately e xplain why under the circumstances summarisation is 
not possible. In the investigation at issue, how ever, China accepted as adequate non-confidential 
summaries which did not provide sufficient detail to  permit a reasonable understanding.  Furthermore, 
it waived the obligation to provide a non-confiden tial summary without having requested - let alone 
having reviewed - the statement of exceptional circumstances that would justify what makes summarisation impossible.  6. In so doing, China also failed to provide a time ly and full opportunity for all interested parties 
to see all the information that was relevant to defe nd their interests and used by MOFCOM in the anti-
dumping investigation, and conse quently seriously compromised the ability of the respondents to 
respond to the petitioner's allegations and adequately defend their interest s, contrary to its obligations 
under Articles 6.4 and 6.2 ADA.   7. Article 6.4 lays down a fundamental due process right, i.e., the right for interested parties to 
have access to and to see all non-confidential eviden ce or information that is in the investigating 
authorities' files.  The European Union submits that even if interested parties do not have access to 
confidential information, they must still be gran ted access to the non-confidential summary thereof.  
 8. Depriving interested parties of the right to access non-confidential summaries by failing to 
comply with its obligations under Article 6.5.1 restricts the opportunity of interested parties to defend 
their interests, a right that is due to inte rested parties pursuant to Article 6.2 ADA.  
 
2. Claim under Articles 6.9, 6.4 and 6.2 ADA 
 
9. The European Union submits that China did not fully disclose all the essential facts which 
form the basis for the determination of the dum ping margin of the European Union's cooperating 
producer and the essential facts which form the basi s for the determination of the residual duty, 
contrary to its obligations under Article 6.9 ADA.  China also failed to disclose all the essential facts 
that form the basis for the determination of injury , including the analysis of the effects of dumped 
imports on prices.  
 
10. In addition, China also failed to provide a time ly opportunity for all interested parties to see 
all information that was relevant to defend their inte rests, and that was used by the authority in the 
anti-dumping investigation, as required by Article 6. 4 ADA.  Consequently, China also deprived the 
interested parties of their full opportunity to defend their interests, a right due under the first sentence 
of Article 6.2 ADA. 
 
11. First, MOFCOM did not disclose the underlying data and the methodology followed by them in order to establish the existence of price underc utting in the Injury Disclosure, nor the underlying 
data or the methodology followed in order to consider the existence of price depression.  MOFCOM asserted the existence and extent of price undercuttin g and price depression in its Final Determination 
and considered it as a factor in its injury determinat ion. As these are facts that form the basis for the 
decision whether to apply definitive measures, they constitute "essential facts" within the meaning of 
Article 6.9 ADA and must be disclosed in sufficient time  for the parties to defend their interests.  This 
was not done in this case.  As the case invol ves such heterogeneous products, knowing the 
methodology was of utmost importance for Smiths' defe nce. It was therefore especially important to WT/DS425/R/Add.1 
Page A-4  
 
 know, how the import and domestic pr ices were being compared and if MOFCOM ensured that those 
prices were comparable.  12. Second, MOFCOM did not fully disclose all the essential facts with respect to the export 
price and the adjustments made thereto.  The dump ing disclosure is drafted in very general terms 
which for the most part make the verification of the correctness of the facts and assertions included 
impossible.  With respect to the export price, MOFCOM did not disclose the underlying facts and criteria on the basis of which the adjustments to th e export price were made, like the specific amounts 
of adjustments items, including specific data on the adjusted proportions of expenses incurred by the 
affiliated distributor.  
 
13. Third, MOFCOM failed to provide to Smiths the actual dumping calculations that it performed for Smiths. The disclosure provides information about the methodology used to calculate the dumping margin and includes a reference to th e data used;  however, MOFCOM did not explain 
how the figures were calculated on the basis of th e information provided by Smiths and the reasons 
for the discrepancy between the figures.  The Europ ean Union submits that the calculations employed 
by an investigating authority to determine dumping margins, and the data underlying the authority's calculations, constitute "essential facts" within the meaning of Article 6.9.  Those calculations are 
both material to the authority's decision and important for the determination.  It is clear that without 
those calculations a decision on the defi nitive measure could not be taken.  
 
14. Fourth, MOFCOM failed to disclose the ess ential facts under consideration regarding its 
calculation of the "all others" dumping rate. MOFCOM  failed to disclose the facts forming the basis 
for its decision to apply the facts available in the first place.  Furthermore, MOFCOM did not disclose 
the facts that lead it to conclude that 78.1% is an  appropriate residual rate, especially considering that 
the dumping margin for the cooperating company was significantly lower (i.e. 33.5%).  The Dumping 
Disclosure also provides no explanation as to why MOFCOM could not have publicly summarised the 
information used or at least identified the calculation methodology it employed.   
3. Claim under Article 12.2.2 ADA 
 
15. The European Union submits that China vi olated Article 12.2.2 ADA because neither in its 
public notice of the imposition of definitive measure s, nor in a separate report, MOFCOM set forth 
sufficiently detailed explanations for the definitiv e determinations on dumping and injury, together 
with references to the matters of fact and law a nd reasons which led to arguments being accepted or 
rejected.   
16. The European Union makes claims with respect to two "categories" of information that China 
failed to include in the final public notice or sepa rate report:  (i) the reasons for the acceptance or 
rejection of relevant arguments or claims by Smiths;   and (ii) certain relevant information on the 
matters of fact and law which have le d to the imposition of final measures.  
 17. First, concerning the normal value determin ation, Smiths submitted in its Comments on the 
Preliminary Determination various reasons, which could show that the sales to the affiliated 
companies were not affected by the affiliation rela tionship, represented a fair market price and were 
made in the normal course of trade.  Although MO FCOM refers in passing to the comments made by 
Smiths in the context of the final disclosure, it do es not provide actual facts or reasoning which would 
address or rebut Smiths's arguments and evidence,  thereby leaving the issue open until the Final 
Determination.  The European Union submits that MOFCOM's Final Determination does not 
adequately address the submissions by Smiths.   18. Second, concerning the injury analysis, MOFCOM 's price effects analysis is based on several 
assertions about the alleged effects of the price of  imported subject products on the price of domestic  WT/DS425/R/Add.1 
 Page A-5 
 
 
 like products. MOFCOM's conclusion that the impor ts under investigation caused significant price 
effects is an essential component of its affirmative inju ry determination, which in turn is a prerequisite 
to China's imposition of definitive measures.  Howeve r, neither in the Preliminary Determination, nor 
in the Injury Disclosure, nor in the Final Determ ination did the investigating authority explain the 
methodology used in order to calculate the alleged price undercutting or price depression.  The 
European Union submits that the ADA requires that authorities provide more than cursory assertions 
to justify their decisions to impose definitive antidumping measures.  19. Third, MOFCOM also failed to satisfy its  obligation under Article 12.2.2 ADA to provide 
"the reasons for the acceptance or rejection of the re levant arguments or evidence by the exporters and 
importers".  Smiths questioned the credibility of the data submitted by the Petitioner on which the 
investigating authority based itself in order to find injury of domestic industr y.  In addition, Smiths 
also made a number of pertinent arguments concerni ng MOFCOM's injury analysis in view of China's 
obligations under Articles 3.4 ADA.  However, nowhere in the Inju ry Disclosure Document or the 
Final Determination did MOFCOM identify the facts underlying its conclusions.  
 
20. Fourth, MOFCOM's Injury Disclosure did not address the elements raised by Smiths and the 
reasons for the rejection of Smiths's arguments.  Smiths addressed the establishment of the causal link 
between the injury to the domestic industry and th e dumped imports in its Injury Brief and in its 
Comments on the Injury Disclosure.  In partic ular, Smiths listed several factors which the 
investigating authority should take into acc ount in assessing the existence of the causal link. 
 
21. Fifth, In the Preliminary Determination,  MOFCOM preliminarily arrived at a dumping 
margin of 48.2 % for Smiths and a residual duty of 71.8 %. MOFCOM provided some narrative 
explanation in the Preliminary Determination regard ing the dumping margins.  It did not, however, 
release the calculations it performed.  The Final Discl osure, prior to the Final Determination, also did 
not include the calculations performed by MOFCOM. In  the Final Determinati on, without releasing or 
making available the calculations upon which it ba sed its decision, MOFCOM determined a final 
dumping margin of 33.5 % for Smiths and imposed a residual duty of 71.8 %.  The European Union submits that where calculations, and the data unde rlying those calculations, have not been made 
available at the stage of disclosure within the meaning of Article 6.9 ADA, not only revisions or modifications of the calculations, and the data unde rlying them, but the calculations in their entirety 
constitute relevant information, which has lead to the imposition of the final measures and would 
consequently have to be set out  and explained in the public notice or through a separate report.  
MOFCOM's failure during the investigation to make  available the calculations and data it used to 
calculate the margins for the cooperating producer and all other producers respectively was therefore 
inconsistent with Article 12.2.2 ADA.
  
 
4. Claim under Articles 3.1 and 3.2 ADA 
 
22. The Final determination of injury rests upon th e findings that dumped imports had "an evident 
undercutting and depressing effect on the price of th e domestic like products".  The European Union 
submits that MOFCOM's findings of price undercu tting and price depression and, consequently, its 
determination of injury is not based on an "objec tive examination" of "positive evidence", contrary to 
the obligation imposed upon the investigating authorities by Articles 3.1 and 3.2 ADA.  Instead, the methodology used by the Chinese authorities in order to consider the existence of price undercutting 
and price depression was manifestly inaccura te and biased against the EU exporter. 
 
23. Throughout the investigation, Smiths explained repeatedly and at length that low-energy 
scanners and high-energy scanners have very differe nt physical characteristics, end uses and prices 
and do not compete with each other.  In spite of this, MOFCOM concluded in its Preliminary 
Determination that the characteristics and functions  of high-energy scanners and low-energy scanners 
are "almost the same" and that all the differences invoked by Smiths resulted, in essence, from mere WT/DS425/R/Add.1 
Page A-6  
 
 differences "in packaging".  MOFCOM also failed to  take into account the important differences 
among the various types of products falling within  the category of low-energy scanners, which are 
reflected in substantial price differences.  24. In their initial submissions to MOFCOM, neith er Nuctech nor Smiths had made any reference 
to the existence of price undercutting. MOFCOM nonetheless concluded in the Final Determination 
that in 2006 and 2007 undercutti ng was "large" and "serious", whereas in 2008 the prices of imported 
products were "slightly higher" than the prices of  domestic products, while still "at a low level".  
These findings  were reached by following a manif estly inadequate methodology involving the use of 
weighted average unit values for all the products under  investigation, which failed to take into account 
the differences between the di fferent types of scanners.  
 25. Likewise, MOFCOM's finding of price de pression was the result of applying a flawed 
methodology involving the use of weighted av erage unit values for all the products under 
investigation.  MOFCOM disregarded the opini on of Nuctech, which had stressed in various 
occasions that "because the prices of different types of  Subject Products vary significantly, the change 
in the average price cannot show a trend in prices" .  Furthermore, the levels of price depression 
mentioned by MOFCOM in the Final Determinat ion are about three times higher than those 
calculated by Nuctech on the basis of its own price da ta for its two most representative models of low-
energy scanners.  
26. In essence, in view of the manifest differences among the pr oducts covered by the 
investigation, and in particular between low- energy and high-energy scanners, it was clearly 
inadequate for the Chinese authorities to examin e the existence of price undercutting and price 
depression without taking into account those differe nces.  Regarding price undercutting and price 
depression, the glaring discrepancy between, on the one hand, the informed views of the two main 
interested parties with a direct knowledge of the ma rket and, on the other hand, the results yielded by 
MOFCOM's chosen methodology should have al erted any objective and unbiased investigating 
authority, had it still been necessary, to the fact  that the methodology was grossly inaccurate and 
unreliable.  
5. Claims under Articles 3.1 and 3.4 ADA 
 
27. The European Union submits that China vi olated Articles 3.1 and 3.4 ADA since MOFCOM 
failed to make an objective examination, on the basi s of positive evidence, of the effect of the dumped 
imports on prices in the domestic market for like pr oducts and the consequent impact of these imports 
on domestic producers of such products, including the factors listed in Article 3.4. 
 
28. First, MOFCOM failed to base its evaluation on positive evidence.  There are discrepancies 
between the information submitted by the domestic  industry (defined as Nuctech) and the data 
reflected in MOFCOM's Final Determination which called into question the reliability of such data. 
 29. Second, MOFCOM failed to examine all rele vant factors listed in Article 3.4 ADA.  In 
particular, MOFCOM did not refer explicitly or impl icitly, and thus failed to evaluate, the magnitude 
of the margin of dumping. As a consequence, MO FCOM failed to make a proper evaluation of the 
state of the domestic industry.   30. Third, MOFCOM failed to take into account  the differences between high-energy and low-
energy scanners when examining various injury fact ors.  MOFCOM's use of weighted average values 
in the injury factors was manifestly inadequate for considering the existence of material injury in the 
present case.   WT/DS425/R/Add.1 
 Page A-7 
 
 
 31. Fourth, MOFCOM failed to make a proper evalua tion of all injury factors in context and thus 
failed to reach a reasoned and ade quate conclusion with respect to the impact of dumped imports on 
the Chinese industry.  In particular, in view of  an overwhelming majority of factors showing a 
positive movement in the state of the domestic  industry, MOFCOM should have provided a 
compelling explanation of whether and how such positive movements were outweighed by any other 
factors and indices which might be moving in a negative direction during the POI.  Instead, 
MOFCOM merely referred to the positive factors in passing and then focused on some (allegedly) 
negative factors to conclude the existence of mate rial injury, without examining how positive factors 
were outweighed by other negative factors.  Moreove r, MOFCOM failed to examine all factors in the 
proper context, making contradictory observations in  a not-even-handed manner.  Finally, MOFCOM 
failed to take into account all facts and arguments on  the record relating to the state of the domestic 
industry.  Consequently, MOFCOM failed to reach a reasoned and adequate conclusion with respect 
to the impact of dumped imports on the Chinese industry.   32. In essence, MOFCOM ignored the actual stat e of the domestic industry (defined as the 
Petitioner, Nuctech). MOFCOM found material injury  based on some (arguably) negative factors and 
a doubtful overall evaluation of not even all the rele vant economic factors in this case.  The evidence 
on the record showed that Nuctech had recently ma de huge investments in order to enter the low-
energy scanner market. Its start-up situation together  with its aggressive pricing strategy led Nuctech 
to incur some losses between 2006 and 2008, although Nuctech already (or almost) achieved break-
even in 2008, despite the constant reduction of the domestic sales prices.  Nuctech's strategy proved 
successful in obtaining significant increases in sal es volume, sales revenue and market share.  
Moreover, at the same time, Nuctech was emba rking on expanding its business abroad, which 
generated some additional losses.  Likewise, such an  expansion led to an increase in inventory since, 
the bigger the market, the bigger the need to have  products in stock to quickly supply them to 
customers.  Thus, Nuctech reflected a state of an industry that was entering into a new product 
market, following an aggressive business strategy, also in an international context, and that was about 
to or already achieving profits towards the end of the POI.  Nuctech also reflected a state of an 
industry that was visibly growing, with increasing output, increasing sales volume and revenue, increasing market share and high productivity.   33. Rather than acknowledging this situation, MOFCOM found that Nuctech was in a state of 
suffering material injury.  And it did so by re lying on questionable figures, making contradictory 
statements, evaluating economic factors in a not-e ven-handed manner, ignoring the overall context of 
all the relevant economic factors having a beari ng on the state of the domestic industry and thus 
failing to provide reasoned and adequate expl anations on its material injury finding. 
 6. Claims under Articles 3.1 and 3.5 ADA 
 
34. The European Union submits that Chin a violated Articles 3.1 and 3.5 ADA because 
MOFCOM failed to make an objective determination, on the basis of all relevant evidence before the 
authorities, that the dumped imports were, through the effects of dumping, causing injury.  
35. First, MOFCOM failed to properly examine the causal relationship between dumped imports 
and the material injury found. In particular, MOFCOM's consideration of the volume of dumped 
imports as "large" or "great" was improper when examined in context.  Moreover, by evaluating evidence (specifically, i.a., domestic sales prices ) relating to both high-energy and low-energy 
scanners in its causation assessment, MOFCOM attri buted to the dumped imports (consisting only of 
low-energy scanners) effects that could not have been caused by them.  Further, MOFCOM's reliance 
on the low price of domestic sales was misguided in view of the uncontested fact that in 2008 the price of EU imports was higher than the domestic sales price.  MOFCOM also failed to provide a reasoned and adequate explanation in the present case, where there was no correlation between the 
dumped imports and the negative effect s observed on the domestic industry. WT/DS425/R/Add.1 
Page A-8  
 
 36. Second, MOFCOM also failed to conduct a proper non-attribution analysis.  MOFCOM 
provided a "check-list" of other factors, most of th em irrelevant to the case, and failed to evaluate the 
other possible known causal factors raised by inter ested parties. MOFCOM also failed to make an 
objective assessment of the relevant other known fact ors actually examined since there was evidence 
on the record manifestly contrary to its findings.  
 
37. Third, due to the inconsiste ncies with Articles 3.1, 3.2 and 3.4 mentioned in the previous 
Sections of this submission, the European Un ion equally considers that MOFCOM's causation 
determination is also inconsistent with Article 3.5 ADA.  
38. In essence, MOFCOM attributed all the negative effects observed under Articles 3.2 (price 
undercutting/price depression) and 3.4 (material inju ry) to the dumped imports, concluding that none 
of the other known factors were the source of injury .  In other words, MOFCOM found that the large 
volume of dumped imports caused serious effects on  the production and operations of domestic X-
Ray security inspection equipment, sharp reductions in sales price, huge losses of pre-tax profit, a 
negative rate of return, largely increased invent ory overhang, a 25.08% reduction (despite an initial 
increase) in workforce from the beginning to the end of the POI, and failure to recover huge 
investment.   39. The European Union considers that MOFCOM artif icially attributed the material injury to the 
dumped imports.  The EU imports were  not "large" or "great" in volume but modest when seen in the 
context of domestic consumption and the much hi gher increase in domestic sales volume.  Moreover, 
since in 2008 the price of EU imports was higher than the domestic sale price, the European Union 
fails to understand how MOFCOM's conclusion that the EU imports  caused all the price-related 
effects can meet the standard of providing a reasone d and adequate explanation.  Put simply, if there 
was no undercutting and there was nothing (other th an Nuctech's own aggressive pricing strategy) 
preventing the domestic industry from increasing its  prices and thus obtaining higher sales revenue 
and profits and a return on investment, the European  Union considers that MOFCOM's attribution of 
the material injury to the EU imports is inconsis tent with Articles 3.1 and 3.5 ADA.  Such violation 
becomes more flagrant when MOFCOM disregarde d the actual causes for any negative condition of 
the domestic industry, as stood out from the record.   III. CONCLUSIONS AND RELIEF REQUESTED 
 
40. The European Union requests the Panel to find th at the measure at issue is inconsistent with 
the following provisions of the ADA:  
(A) Articles 6.5.1, 6.4 and 6.2 ADA because the Chin ese authorities:  (i) failed to ensure with 
respect to certain confidential information s ubmitted by the petitioner in the petition and its 
annexes, and the investigation questionnaire and its annexes, that non-confidential summaries 
of confidential information were sufficiently detailed to enable a reasonable understanding of 
the substance of the information submitted;  a nd (ii) failed to require a statement of reasons 
explaining exceptional circumstances why summari sation was not possible with respect to a 
statement by the Chinese Public Security Bu reau of the Civil Aviation Administration. 
 (B) Articles 6.9, 6.4 and 6.2 ADA because the Chinese authorities:  (i) failed to provide interested 
parties with information about the essential facts under consideration for the determination of 
injury;  (ii) failed to provide interested par ties with information about the essential facts under 
consideration for the determination of normal va lue and export price;  (iii) failed to provide 
interested parties with information about the essential facts under consideration for the 
calculation of the dumping margin for the coope rating producer;  and (iv) failed to provide 
interested parties with information about the essential facts under consideration for the 
calculation of the residual duty.  WT/DS425/R/Add.1 
 Page A-9 
 
 
  
(C) Articles 12.2.2 ADA because:  (i) neither in the public notice of the imposition of definitive 
measures, nor in a separate report, the Chin ese authorities set forth sufficiently detailed 
explanations for the methodology used in the est ablishment of the normal value; together with 
references to the matters of fact and law a nd reasons which led to arguments being accepted 
or rejected;  (ii) neither in the public notice of the imposition of definitive measures, nor in a 
separate report, the Chinese authorities set forth sufficiently detailed expl anations for all the 
considerations relevant to the injury determina tion; together with references to the matters of 
fact and law and reasons which led to arguments  being accepted or rejected;  and (iii) neither 
in the public notice of the imposition of defin itive measures, nor in a separate report, the 
Chinese authorities made available the calculations and data used to calculate the margins for 
Smiths, as well as the calculations and underlyi ng data on which it relied to determine the 
residual duty. 
 (D) Articles 3.1 and 3.2 ADA, because the Chin ese authorities failed to make an objective 
examination on the basis of positive evidence of the price effects of dumped imports. 
 (E) Articles 3.1 and 3.4 ADA, since the Chinese author ities: (i) failed to base its evaluation of the 
relevant factors and indices having a bearing on the state of the domestic industry on positive 
evidence and thus failed to make an objective examination of the impact of dumped imports 
on the Chinese industry;  (ii) failed to examine all relevant factors listed in 3.4 ADA, in 
particular, the magnitude of the margin of dumping;  and (iii) failed to make a proper 
evaluation of all injury factors in context a nd thus failed to reach a reasoned and adequate 
conclusion with respect to the state of the Chinese industry.  
 (F) Articles 3.1 and 3.5 ADA, since the Chinese aut horities:  (i) failed to properly examine the 
causal relationship between dumpe d imports and injury;  and (ii) failed to examine the 
relevance of other known factors in its non-attribution analysis.  
 41. The European Union respectfully request s the Panel to recommend that the Dispute 
Settlement Body request China to bring the contested  measures into conformity with its obligations 
under the ADA. 
 WT/DS425/R/Add.1 
Page A-10  
 
 ANNEX A-2 
 
 
EXECUTIVE SUMMARY OF THE FIRST 
WRITTEN SUBMISSION OF CHINA 
 
 
1. INTRODUCTION 
 
1. In this proceeding, the European Union challenges several aspects of the anti-dumping 
measures imposed by the People's Republic of China ("China") on imports of x-ray security 
inspection equipment from the European Union.  Specifically, the Europ ean Union has raised 
three claims relating to alleged violations of proce dural obligations and three other claims relating to 
the injury and causality analysis.  China will examin e the European Union's claims in the order they 
were presented in the European Union's First Written Submission.  2. As a preliminary remark, China notes that  throughout its First Written Submission, the 
European Union refers to MOFCOM's analysis of  "price depression".  MOFCOM's analysis refers, 
however, to "price suppression" and not "price de pression".  The misunderstanding seems to flow 
from an erroneous translation from the original Ch inese versions of MOFCOM's determinations and 
findings.   
2. CLAIM 1:  CLAIM UNDER ARTICLES 6.5.1, 6.4 AND 6.2 OF THE AD 
AGREEMENT 
 
3. The European Union claims that China failed to ensure that interested parties provided non-
confidential summaries of confidential information and that where summaries were provided, China 
failed to ensure that they were in sufficient detail to enable a reasonable understanding of the 
substance of the information submitted, contrary to China's obligations under Article 6.5.1, and 
consequently also Articles 6.4 and 6.2.  4. More precisely, in the first place, the Europ ean Union claims that MOFCOM failed to ensure 
that summaries provided with respect to product mode ls in the Petition, Exhibits 8, 9, 10 and 11 
attached to the Petition and certain responses and attachments of Nuctech's Questionnaire Response, 
were in sufficient detail to enable a reasonable understanding of the substa nce of the information 
submitted.  China submits that all of these claims should be rejected.  5. As regards the product models in the Petition,  the identification of the models as the "main 
models of the Subject Product" is sufficient to permit a reasonable understanding that the data 
provided with respect to the normal value and export price were those of the subject product.  As to 
Exhibits 8, 9, 10 and 11 to the Petition, they clear ly indicate on which issues evidence is provided.  
Furthermore, their content is adequately su mmarised in the body of the Petition itself.  
 6. The quarterly indices provided in the non-c onfidential version of E xhibits 14, 16, 17, 18 
and 19 of Nuctech's Injury Questionnaire Response are also adequate, and in any event, annual trends 
regarding various injury factors are provided in  other Attachments to Nuctech's Questionnaire 
Response.  Finally, with regard to certain r esponses and Attachments to Nuctech's non-confidential 
injury Questionnaire Response, the European Union merely identifies the information for which there 
would not be an adequate summary without however substantiating its claim.  China therefore submits 
that the European Unio n has failed to make a prima facie  case.  In any case, the confidential 
information was adequately summarized and this is supported by the fact that Smiths commented 
extensively on the injury determination and did not  complain about an alleged lack of adequate non-
confidential summary of this information.   WT/DS425/R/Add.1 
 Page A-11 
 
 
 7. In the second place, the European Union claims  that MOFCOM failed to require a statement 
of reasons explaining the exceptional circumstances why summarisation was not possible with respect 
to the statement made by the Chinese Public Secur ity Bureau of the Civil Aviation Administration.  
China submits that the Bureau explained to MO FCOM the inherently sensitive character of the 
information contained in the document submitted in confidence and that any summary of such 
information risks disclosing elements of this information and could compromise the safety of air 
transport.  MOFCOM rightly held that the safety of public air transport overrules any concerns 
regarding the need for non-confidential summaries of commercial information and therefore treated 
these concerns as an exceptional circumstance.  MO FCOM was therefore satisfied that these public 
security concerns constituted exceptional circumstances and amounted also to a meaningful 
justification why a summary was not possible. 
 8. Thus, the European Union has failed to demons trate that China violated Article 6.5.1.  The 
claimed violations of Articles 6.4 and 6.2 ar e purely consequential to the claim concerning 
Article 6.5.1 and should therefore be rejected as we ll.  In any case, the European Union's claims under 
Articles 6.4 and 6.2 have to be rejected since th e European Union fails to demonstrate a separate 
violation of Articles 6.4 and 6.2 of the AD Agreement.  
3. CLAIM 2:  CLAIM UNDER ARTICLES 6.9, 6.4 AND 6.2 OF THE AD AGREEMENT 
 
9. The European Union claims that China violat ed Article 6.9 since China did not fully disclose 
the essential facts which form the basis for the determination of the dumping margin of the 
European Union's cooperating producer and the essential facts which form the basis for the 
determination of the residual duty as well as th e essential facts that form the basis for the 
determination of injury, including the analysis of the effects of dumped imports on prices, and that 
China, consequently also violated Articles 6.4 and 6.2. 
 
10. The European Union first argues that Chin a violated article 6.9 because MOFCOM did not 
disclose the underlying data and the methodology foll owed by MOFCOM in its price analysis.  China 
submits that this claim must be rejected for th e following reasons.  Regarding the methodology, China 
submits that the methodology followed by MOFCOM to  consider the existence of price undercutting 
and/or price suppression does not constitute an essentia l fact which forms the basis for the decision 
whether to apply definitive measure s within the meaning of Article 6.9 and therefore that MOFCOM 
was not required to disclose it pursuant to that provision.  As to the underlying data, there is no duty to precisely identify in the disclosure document th e source or evidence on which the essential facts are 
based.  MOFCOM fully complied with its obligati on under Article 6.9 with respect to its price 
analysis.  Indeed, as for price suppression, MOFCOM adequately disclosed the trends in the domestic 
prices over the POI.  As for its price undercutting analysis, MOFCOM disclosed the trends in the 
prices of the Subject Product and in the domestic prices and explained on that basis how undercutting 
is found.  Article 6.9 does not require an inves tigating authority to disclose the actual figures 
concerning domestic prices.  The non-disclosure of the actual price data was furthermore justified by 
the fact that such domestic prices c onstitute "confidential" information. 
 
11. The European Union's second claim under Article  6.9 is that MOFCOM did not disclose the 
underlying facts and criteria on the basis of which the adjustments to the export price were made.  Such a claim is, however, directly contradicted by the documents in the file.  Indeed, MOFCOM 
provided explanations in its Disclosure Documents (Preliminary and Final) as to which adjustments 
were made, the reasons for making such adjustment s as well as the level of such adjustments. In 
addition, MOFCOM explained the allocation met hod.  It is also clear from these Disclosure 
Documents that the data used were taken from the company's own Questionnaire Responses.  The 
Disclosure Documents even precisely identify which data were used at which stage.  WT/DS425/R/Add.1 
Page A-12  
 
 12. The third claim made by the European Uni on under Article 6.9 concerns MOFCOM's alleged 
failure to provide to Smiths the actual dumping calculation of its dumping margin.  That claim should equally be rejected.  Indeed, MO FCOM fully complied with the requirements of Article 6.9 since in 
its Preliminary and Final Dumping Disclosures, MO FCOM provided to Smiths the explanations as to 
how the comparison between normal value and export pr ice has been carried out, it identified the data 
which were used to calculate the normal value and export price and provided in a table the figures of 
normal value and export price for each model of the Subject Product.   13. The fourth claim under Article 6.9 relates to MOFCOM's alleged fa ilure to disclose the 
essential facts regarding its calculation of the "all ot hers" dumping rate.  That claim must also be 
rejected. Indeed, in its Disclosure Documents, MO FCOM explained that it used "facts available" for 
the EU companies which did not respond to the pe tition or questionnaire, in accordance with China's 
Anti-Dumping Regulation.  Furthermore, MOFCOM explained that the residual duty was calculated 
on the basis of "the sales data of products of re levant models reported by the respondent Company", 
thus disclosing the essential facts concerning the calculation of the "all others" dumping rate.  
 
14. Thus, the European Union has failed to demonstrate a violation of Article 6.9.  The European Union's claims under Articles 6.4 and 6.2 are purely consequential to its claims under Article 6.9, and should therefore be rejected as we ll.  In any case, the European Union's claims under 
Articles 6.4 and 6.2 have to be rejected since th e European Union fails to demonstrate a separate 
violation of Articles 6.4 and 6.2 of the AD Agreement.   
 
4. CLAIM 3:  CLAIM UNDER ARTICLE 12.2.2 OF THE AD AGREEMENT 
 
15. The European Union claims that China violat ed Article 12.2.2 because neither in its public 
notice of the imposition of definitive measures, nor in a separate report, MOFCOM set forth 
sufficiently detailed explanations for the definitiv e determinations on dumping and injury, together 
with references to the matters of fact and law a nd reasons which led to arguments being accepted or 
rejected.  More precisely, the European Union ma kes four different claims which should all be 
rejected.   16. First, the European Union claims that MOFCOM  failed to provide reasons for the rejection of 
relevant arguments or claims made by Smiths whic h could show that the sales to the affiliated 
companies were not affected by the affiliation rela tionship, represented a fair market price and were 
made in the normal course of trade.  This claim must be rejected since the Final Determination contains the reasons for MOFCOM's rejection of the arguments raised by Smiths, namely the fact that 
MOFCOM's verification established that the pric ing and sales processes as well as the actual sales 
prices of Smiths Heimann to affiliated distributors in  the EU during the POI were clearly affected by 
the affiliation relationship and that Smiths did not have sufficient evidence to prove that the price 
differences were merely the result of sales expens es which it saved.  The European Union's argument 
is in fact based on its substan tive disagreement with MOFCOM's determination, and not a lack of 
understanding as to information or lack of clar ity of MOFCOM's reasons for rejecting Smiths' 
arguments. 
 
17. Second, the European Union claims that MOFC OM failed to include all relevant information 
on facts and law concerning its price analysis in the injury determination, a nd that MOFCOM failed to 
provide reasons for the rejection of relevant ar guments or claims made by Smiths on the injury 
determination during the investigation.  As to MO FCOM's alleged failure to include all relevant 
information on facts and law, China submits that the methodology used by MOFCOM for its price 
undercutting or price suppression analysis is neither  a "matter of fact" nor is it "relevant" and 
MOFCOM therefore had no duty of disclosure with regard to it.  The information provided by 
MOFCOM concerning price undercutting and price suppression in its Final Determination provides 
sufficient background and reasons for its injury dete rmination and as such, it is therefore consistent  WT/DS425/R/Add.1 
 Page A-13 
 
 
 with Article 12.2.2 of the AD Agreement.  As to the European Union's claim that MOFCOM's Final 
Determination did not contain the reasons for the re jection of the relevant arguments made by Smiths 
concerning the credibility of data submitted by Nuct ech, China submits in the first place that such 
arguments cannot be regarded as "relevant" w ithin the meaning of Article 12.2.2 of the 
AD Agreement.  In any case, those arguments we re fully addressed by MOFCOM in its Final 
Determination.  As to the other arguments th at would have been made by Smiths concerning 
MOFCOM's injury analysis, since the European Union does not even identify them, China is not in a 
position to rebut it.  The European Union has thus failed to make a prima facie case.  
 18. Third, the European Union claims that MOFC OM failed to provide reasons for the rejection 
of Smiths' arguments concerning the causal link.  China notes that once again this claim is not 
properly substantiated since the European Union do es not precisely identify the arguments regarding 
the existence of the causal link that would have been  raised by Smiths during the investigation and for 
which MOFCOM would not have provided reasons fo r their rejection in the Final Determination.  A 
fortiori , the European Union fails to demonstrate why these arguments would be "relevant". The 
European Union's claim should therefore be rejected.  
 19. Fourth, the European Union claims that Chin a acted inconsistently with Article 12.2.2 since 
its Final Determination did not make available th e calculations it performed and the underlying data 
concerning Smiths' dumping margin and the residual duty.   This claim is to be rejected.  First, the 
calculations and underlying data of the dumpi ng margin determination undoubtedly contain 
confidential information which falls out  of the scope of Article 12.2.2. Second, it is clear that neither 
the calculation nor the underlying data of Smiths' dumping margin and the residual duty constitute relevant information on matters of fact and law or reasons which ha ve led to the imposition of final 
measures within the meaning of Article 12.2.2.   
20. For all the reasons set out above, China s ubmits that the European Union's claim under 
Article 12.2.2 should be rejected.  
5. CLAIM 4:  CLAIM UNDER ARTICLES 3.1 AND 3.2 OF THE AD AGREEMENT 
 
21. The European Union claims that China violated Articles 3.1 and 3.2 of the AD Agreement 
since MOFCOM used in its price undercutting and price suppression analysis a methodology which 
involved the comparison of weighted average unit va lues for the entire range of products covered by 
the investigation.  According to the European Uni on, this methodology was manifestly inaccurate and 
biased against the EU exporter and is not therefor e based on an "objective examination" of "positive 
evidence".  The European Union claims that MOFC OM should have taken in to account in its price 
analysis the differences between so-called "low-ene rgy" and "high-energy" scanners and even also 
among various types of low-energy scanners.   22. As a preliminary remark, China notes that th e alleged differences between "low-energy" and 
"high-energy" scanners were only raised by Smiths in  the context of the product scope determination 
and that Smiths never claimed during the investiga tion that the price analysis should be carried out 
separately for "low-energy" and "high-energy" scanners. 
 23. As to the requirements pursuant to Articles 3.1 and 3.2, China notes that Articles 3.1 and 3.2 
do not set out any specific methodology that the i nvestigating authorities must follow in order to 
examine the effects of the dumped imports on prices in  the domestic market and also that previous 
panels rejected the view that the methodological obligations included in Article 2 for the dumping 
margin determination apply to the price undercutting analysis of Article 3.2.  
 WT/DS425/R/Add.1 
Page A-14  
 
 24. China submits that the European Union fails to demonstrate that the price analysis made by 
MOFCOM was not objective in the sense that MOFC OM would not have ensured an even-handed 
treatment of the information and data on the record of the investigation.   25. First, by claiming that there were differen ces affecting the price comparability between "low-
energy" and "high-energy" scanners and between the various models within each category, the 
European Union seeks to transpose the obligations  arising in the context of the dumping margin 
determination into the price analysis.  The methodol ogical obligations of Article 2.4 cannot, however, 
simply be transposed in the context of the price analysis.   
26. Second, it is not sufficient to allege that the investigating authority could have used a different 
methodology that would have produced a different result that the methodology effectively used is 
biased.  In the present case, MOFCOM compared th e prices of products which had been found as 
being "like".  It was therefore reasonable for MOFC OM to assess the effects of the prices of the 
dumped imports by using the weighted average methodology.  Although MOFCOM was aware that 
prices may differ from model to model or even from transaction to transaction – this is indeed a 
common feature of all anti-dumping investigations - it concluded that these price differences were not 
of a nature to overturn the conclusion that the price undercutting was "significant".  Furthermore, 
Smiths did not even claim during the investigatio n that MOFCOM should have made adjustments 
when making the price comparison.  There was thus  no reason for MOFCOM to consider that the use 
of averages was unreasonable. 
 
27. The European Union claims that the methodol ogy was biased against the EU exporter because 
of the considerable differences between "low-energy"  and "high-energy" scanners as reflected in their 
price differences.  However, the European Un ion does not provide detailed evidence as to the 
allegedly substantial differences in prices.  Furthe rmore, the fact that there are price differences 
between products included in the average is not an indi cation of bias.  In addition, even the fact that a 
specific methodology would increase, in certain circ umstances, the likelihood of a price undercutting 
finding does not render the methodology inconsistent with Articles 3.1 and 3.2 of the AD Agreement.  
 28. In light of the foregoing, China submits that it did not violate Articles 3.1 and 3.2 in its price 
analysis by using an average-to-average comparison method.  
 
29. Regarding price undercutting, China notes that, contrary to what the European Union alleges, 
Nuctech claimed that there was price undercutting.  China also notes that the example provided by the 
European Union is purely hypothetical  and, in any case, irrelevant. Indeed, MOFCOM did not need to 
quantify precisely the price difference.  It was sufficien t for it to be able to consider that the available 
price evidence showed the existence of significan t price undercutting.  Regarding price suppression, 
China again notes that the example provided by the European Union is purely hypothetical.  Actually, the average unit value for the product under cons ideration in the example may go down or up 
depending on the transactions or the models included.   In order to prove its point, the European Union 
would need to demonstrate that MOFCOM had inten tionally selected certain models or transactions in 
order to achieve a certain result. 
 
30. For all these reasons, the European Uni on's claim under Articles 3.1 and 3.2 should be 
rejected.  
6. CLAIM 5:  CLAIM UNDER ARTICLES 3.1 AND 3.4 OF THE AD AGREEMENT 
 
31. The European Union claims that contrary to  its obligations under Articles 3.1 and 3.4, China 
failed to make an objective examination, on the basi s of positive evidence, of the effect of the dumped 
imports on prices in the domestic market for like pr oducts and the consequent impact of these imports  WT/DS425/R/Add.1 
 Page A-15 
 
 
 on domestic producers of such products, including the factors listed in Article 3.4.  In particular, the 
European Union presents four sets of claims.  All of these claims are to be rejected. 
 32. First, the European Union claims that MO FCOM failed to base its evaluation of certain 
factors, namely cash flow, investment and return  on investment, on positive evidence.  That claim 
should be rejected.  Indeed, the alleged existen ce of discrepancies between MOFCOM's findings as 
reflected in its Final Determination and the fi gures reported by Nuctech in its Petition and its 
Questionnaire Response cannot by itself demonstrat e that the "evidence" on which MOFCOM based 
itself is not positive.  Actually, MOFCOM carried out  on-site verifications and adjusted the figures 
provided by Nuctech in its Questionnaire Respon se for the three factors referred to by the 
European Union after the on-site verification.  
 33. Second, the European Union claims that MO FCOM failed to examine all factors listed in 
Article 3.4.  China submits that, contrary to wh at the European Union argues, MOFCOM examined 
all relevant factors as listed in Article 3.4 of the AD Agreement, including the magnitude of the 
dumping margin which MOFCOM found to exceed the " de minimis " threshold of Article 5.8 of the 
AD Agreement as set out clearly in the Final Determination.   34. The European Union's third claim that MOFC OM failed to make an objective examination of 
the state of the domestic industry because it failed to take into account the differences between high-
energy and low-energy scanners when examining various injury factors is  to be rejected as well.  Such 
a claim must fail on a factual basis since MOFCOM investigated the issue of alleged differences 
between "low-energy" and "high-energy" scanners a nd concluded that they were almost the same.  
Such a claim must also fail on a legal basis since the analysis of the impact of the dumped imports on the domestic industry pursuant to Article 3.4 must fo cus on the totality of the domestic industry.  An 
investigating authority cannot focus on only one segment or sector of the industry.  Thus, while 
investigating authorities may examine certain parts or segments of the market, they are not required to 
do so.  The European Union's claim should therefore be rejected.  
 35. Fourth, the European Union claims that MO FCOM failed to make a proper evaluation of all 
injury factors in context for three reasons which should all be rejected.   
36. First, the European Union's argument that most injury factors examined by MOFCOM were 
positive is factually incorrect as MOFCOM's analys is reveals a negative assessment of a significant 
number of factors.  Furthermore, MOFCOM provi ded a detailed and reasonable explanation of how 
the negative factors supported an affirmative inju ry determination and why the presence of several 
factors that showed positive trends could not overturn this conclusion.  
 
37. Second, the European Union's argument that MOFCOM made contradict ory observations in a 
not-even-handed manner is misplace d and not supported by the elements as reflected in MOFCOM's 
Final Determination.  Furthermore, contrary to the European Union's allegation, MOFCOM 
considered how the factors relate to each other and to the wider economic context and thus properly 
examined all relevant injury factors in their context.   
 
38. Third, the European Union's argument that MO FCOM failed to take into account all facts and 
arguments on the record relating to the state of th e domestic industry, in particular the start-up 
situation of Nuctech and Nuctech's aggressive pric ing policy, should equally be rejected.  These 
elements are not factors that may have a bearing on the state of the domestic industry within the 
meaning of Article 3.4.  In any case, the European Union has failed to demonstrate that those factors 
were relevant in assessing the impact of the dumpe d imports on the state of the domestic industry.  
Regarding the alleged start-up situation of Nuct ech, the element provided by Smiths during the 
investigation appear to contradict each other, are not in line with the arguments put forward by the 
European Union and is unsubstan tiated by any evidence.  Regarding Nuctech's alleged aggressive WT/DS425/R/Add.1 
Page A-16  
 
 pricing policy, not only are the arguments unconvi ncing but also the allegations made by Smiths 
during the investigation on that issue and to whic h the European Union refers are unsubstantiated.  
Obviously, investigation authorities are not under an  obligation to discuss every argument put forward 
by the interested parties, in particular not if an  argument is unsubstantiated or contradicted by data 
collected and verified by the investigation authority.  
 
39. For all these reasons, the European Uni on's claim under Articles 3.1 and 3.4 should be 
rejected.  
7. CLAIM 6:  CLAIM UNDER ARTICLES 3.1 AND 3.5 OF THE AD AGREEMENT 
 
40. The European Union claims that MOFCOM's  determination of the causal link between the 
dumped imports and the material injury found is inconsistent with Articles 3.1 and 3.5 of the 
AD Agreement for three reasons.  They should all be dismissed. 
 
41. First, the European Union claims that MOFCOM failed to properly examine the causal 
relationship between dumped imports and the injury in three aspects which should all be rejected.  
Regarding the volume of the dumped imports, MOFCOM  correctly analysed the trends in the volume 
of dumped imports over the POI a nd appropriately concluded that the volume of dumped imports was 
"large" or "great".  Furthermore, Article 3 of  the AD Agreement does not require investigating 
authorities to necessarily consider the increase of  the dumped imports in relation to domestic 
consumption and/or domestic sales volume.  As to the import prices, there is no requirement to 
distinguish between segments or sectors and thus MOFCOM correctly carried out its injury and 
causation analysis with respect to th e "like product" as identified by it.  Finally, the European Union 
erroneously claims that there was no temporal corre lation between the movement in the prices of the 
dumped imports and the domestic prices.  MOFCOM clearly indicated the temporal correlation 
between, on the one hand, the rapidly growing imports  of the Subject product at very low prices over 
the POI and on the other hand the domestic prices whic h sharply declined over the POI.  Furthermore, 
what is relevant is the overall trends in imports and the overall trends in serious injury factors.  
MOFCOM determined the existence of a tempor al correlation between the rapid and significant 
increase in the volume of the dumped imports as well as the low level of their prices and the injured 
stated of the domestic industry as reflected in numerous factors. 
 
42. Second, the European Union claims that MOFCOM's evaluation of factors other than the dumped imports as possible causes of injury was inc onsistent with Articles 3.1 and 3.5 since, in 
particular, MOFCOM ignored other known factors ra ised by Smiths and since MOFCOM failed to 
consider several arguments made by Smiths in this co ntext.  Both arguments should be rejected.  As to 
the other known factors raised by Smiths to whic h the European Union refers, namely the global 
economic crisis, Nuctech's aggressive business expansion, fair competition, Nuctech's start-up situation and Nuctech's aggressive pricing policy, Ch ina submits that either they were examined by 
MOFCOM during the investigation or there was no n eed to examine them because they rested on a 
factual assumption that had already been rejected by MOFCOM.  As to the arguments that would have been made by Smiths during the investigati on, China notes that they have been properly 
examined by MOFCOM.  
 43. Third, the European Union claims that Chin a violated Article 3.5 as a consequence of the 
inconsistencies with Articles 3.1, 3.2 and 3.4.  Sin ce there are no inconsistencies with Articles 3.1, 3.2 
and 3.4, this purely consequential claim under Artic le 3.5 should therefore be dismissed as well.  WT/DS425/R/Add.1 
 Page A-17 
 
 
 8. CONCLUSION 
 
44. China requests the Panel to reject all of th e European Union's claims and arguments, finding 
instead that, with respect to each of them, China acted consistently with all its obligations under the 
AD Agreement and the GATT 1994. 
 
  WT/DS425/R/Add.1 
 Page B-1 
 
 
 ANNEX B 
 
 
EXECUTIVE SUMMARIES OF THE THIRD PARTIES  
WRITTEN SUBMISSIONS 
 
 
Contents Page 
Annex B-1 Executive Summary of the Third Party Written Submission of 
Japan B-2 
Annex B2 Executive Summary of the Third Party Written Submission of 
Norway B-7 
Annex B-3 Executive Summary of the Third Party Written Submission of 
the United States B-13 
 WT/DS425/R/Add.1 
Page B-2  
 
 ANNEX B-1 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY  
WRITTEN SUBMISSION OF JAPAN 
 
 
A. Disclosure of Essential Facts before the Final Determination under Article 6.9 of the 
AD Agreement  
 
1. An Investigating Authority's Obligation to  Disclose the Essential Facts before the Final 
Determination 
 
1. The EU alleges that China did not fully discl ose all of the essential facts which would form 
the basis of the final determination, contrary  to its obligation under Article 6.9 of the AD Agreement .  
The EU argues that China's disclosure of the essentia l facts was insufficient with respect to dumping 
margins, the residual duty (in the EU's term, or the "a ll-others" rate in China's term), and the effects of 
dumped imports on the prices of the domestic like products.
1   
 2. The first sentence of Article 6.9 of the AD Agreement  provides that "the authorities shall, 
before a final determination is made, inform all interested parties of the essential facts under 
consideration which form the basis for the decisi on whether to apply definitive measure".  In the 
context of Article 12.8 of the SCM Agreement, the panel in Mexico – Olive Oil  described the essential 
facts that must be disclosed to be "the specific f acts that underlie the investigating authority's final 
findings and conclusions in respect of the thre e essential elements – subsidization, injury and 
causation".
2  The same rationale applies to the essentia l facts for the decision of whether to apply 
definitive antidumping measures because th e provision of Article 6.9 of the AD Agreement is 
substantively identical to the provision of Article 12.8 of the SCM Agreement .  In the case of an 
antidumping investigation, the authorities are requi red to disclose specific facts that underlie the 
investigating authority's final findings and conclusions in respect to the existence of dumping, injury , 
and causation.  3. The second sentence of Article 6.9 of the AD Agreement clarifie s the depth o f the essential 
facts that the authorities must positively inform  interested parties.  As the panel in EC - Salmon 
(Norway) correctly analyzed, the disclosure must "provi de the interested parties with the necessary 
information to enable them to comment on the completeness and correctness of the facts being 
considered by the investigating authority, provide additional information or correct perceived errors, 
and comment on or make arguments as to th e proper interpretation of those facts".
3   
 
2. Disclosure of Information on Price Effects in Connection with the Injury Determination 
 
4. In its EU FWS, the EU alleges that MOFO CM did not disclose facts that would support the 
analysis of "the existence and extent of price undercutting and price depression".4  According to 
the EU, MOFCOM stated in the final determinat ion its analysis that the price undercutting was 
"large" and "serious" in 2006 and 2007, and "sligh tly higher" than the prices of the domestic like 
products in 2008.  MOFCOM also found that "the prices of domestic like products declined by a large 
margin with a 72.68% decrease in 2008 compared to 2006".5  According to the EU, however, 
                                                      
1 The First Written Submission by the European Union,  submitt ed on 13 April 2012 (the "EU FWS"), 
para. 83. 
2  Panel Report, Mexico – Olive Oil , para. 7.110.  (WT/DS341/R) 
3  Panel Report, EC – Salmon (Norway) , para. 7.805. 
4 EU FWS, para. 107. 
5 EU FWS, para. 106, quoting Final Determination, p. 23 (Exhibit EU-2).   WT/DS425/R/Add.1 
 Page B-3 
 
 
 MOFCOM failed to disclose "the methodology used in  determining the existence of the alleged price 
undercutting and price depression", even though such methodology constitutes an essential fact within 
the meaning of Article 6.9 ADA and must be disclosed.6  
 5. Article 3.5 of the AD Agreement provides that causation must be demonstrated through the 
effects of dumping as set forth in paragraphs 2 and 4.  Article 3.2 obliges authorities to consider 
whether the price effect of the dumped imports is to undercut, depress or suppress the price of the domestic like product to a significant degree.  Accordi ngly, the findings upon analysis of the raw data 
on prices of dumped imports and the domestic like product by the investigating authorities on the 
price effects are "specific facts that underlie the investigating authority's final findings and 
conclusions in respect of … causation".
7   
 6. Indeed, the disclosure of these facts would be  indispensable for exporters/producers and the 
exporting Member to defend their interests effe ctively with respect to the completeness and 
correctness of the authorities' analysis of the pri ce effect of imports on the price of the domestic like 
product.  Accordingly, such information is "necessary  information to enable [interested parties] to 
comment on the completeness and correctness of th e facts being considered by the investigating 
authority".
8  Such information, therefore, is a type of fact that Article 6.9 of the AD Agreement 
envisages as requiring disclosure by the authorities to the interested parties.    7. Japan notes that the confidential nature of certain facts would not allow the authorities to 
disclose the same to all interested parties.  The confidentiality requirement, however, would not 
release the authority completely from its obligatio n to disclose the essential facts under Article 6.9. 
 
3. Findings on Normal Value, Ex port Price, and Dumping Margins 
 8. The EU alleges that the pr ice adjustments that were made and the normal value and export 
price calculations are facts that were essential to th e determination of the normal value, export price, 
and the dumping margin on which China relied in order to impose anti-dumping measures".
9  I n  
particular, the EU argues that "MOFCOM did not explain how the figures were calculated on the 
basis of the information provided by Smiths an d the reasons for the discrepancy between the 
figures."10 
 
9. The Appellate Body has clarified that the existence of dumping must be determined on an 
exporter/producer-specific basis in  accordance with the margin of  dumping calculated on that basis.11  
The calculated individual margin is, therefore, one of the "final findings" found by the authority to reach the conclusion on the existence of dumping.  Accordingly, specific facts underlying the final 
findings must be disclosed to all interested parties in accordance with Article 6.9 of the 
AD Agreement .   
 
                                                      
6 EU FWS, para. 107. 
7 Panel Report, Mexico – Olive Oil , para. 7.110.   
8 Panel Report, EC – Salmon (Norway) , para. 7.805. 
9 EU FWS, para. 109. 
10 EU FWS, para. 114. 
11 See Appellate Body Report, US – Zeroing (Japan) , para. 111 ("the Anti-Dumping Agreement  
prescribes that dumping determinations be made  in respect of each exporter or foreign producer  examined.  …  
Margins of dumping are established accordingly for each exporter or foreign producer on the basis of a comparison between normal value and export prices.").
 WT/DS425/R/Add.1 
Page B-4  
 
 10. Japan recalls the panel's analysis in Argentina – Poultry Anti-Dumping Duties , it stated that 
"the normal value and export price data ultimately u sed in the final determination are essential facts 
which form the basis for the decision whether to apply definitive measures".12   
 11. Japan notes that the requirements related to confidentiality would not be a sufficient reason 
for the authorities vis-à-vis the exporter or producer  not to disclose its dumping margin calculation.  
Information which an interested party submitted to  the authority is not confidential vis-à-vis the 
submitter.  B. The Sufficiency of the Description in the Notice Final Determination under 
Article 12.2.2 of the AD Agreement  
 
1. The Investigating Authority's Obligation to Provide a Sufficiently-Detailed Explanation 
in Its Public Notice of the Final Determination 
 12. In its FWS, the EU argues that China provided insufficient explanation on dumping and 
injury in its public notice or separ ate report of the final determination.
13  
 13. Article 12.2 of the AD Agreement  requires the issuance of a public notice or separate report of 
the final determination, setting forth "in sufficient detail  the findings and conclusion reached on all 
issues  of fact and law considered materi al by the investigating authorities".
14  In this context, the 
panel in EC – Tube or Pipe Fittings explained that "a 'material' issue [i s] an issue that has arisen in the 
course of the investigation that must necessarily be resolved in order for th e investigating authorities 
to be able to reach their determination".15  Recently, the panel in EU – Footwear (China) agreed with 
the view of the panel in EC – Tube or Pipe Fittings .16  Accordingly, authorities are required to provide 
a sufficiently-detailed explanation in the public no tice of the final determination on both factual and 
legal issues, without exception, which the authoriti es had to resolve in order to reach their final 
determination either affi rmative or negative.   
 14. Article 12.2.2 of the AD Agreement requires that the public notice of such final determination 
must contain "all relevant informa tion on the matters of fact and la w and reasons" as well as "the 
reasons for the acceptance or rejection of relevant  arguments" made by exporters or by interested 
Members.  These rules, however, must be under stood in the context of the general rules in 
Article 12.2 that the authorities are required to set  forth explanations on "all issues of fact and law 
considered material by the investigating authorities".   The panel in EU – Footwear (China)  clarified 
this requirement, stating:  
In our view, the notions of "material" a nd "relevant" in Article 12.2.2 must be 
judged primarily from the perspective of the actual final determination of which notice is being given, and not th e entirety of the investigative process.   
Other provisions of the AD Agreement, notably Articles 6.1.2, 6.2, 6.4, and 6.9 
address the obligations of the investigating authority to make information available 
to parties, disclose information, and prov ide opportunities for parties to defend their 
interests.  In our view, Article 12.2.2 does not replicate these provisions, but 
rather, requires the investigating authority to explain its final determination, 
                                                      
12  Panel Report, Argentina – Poultry Anti-Dumping Duties , para. 7.223 (emphasis in original). 
13 EU FWS, para. 128. 
14 Emphasis added. 
15  Panel Report, EC – Tube or Pipe Fittings , para. 7.424. 
16 Panel Report, EU – Footwear (China) , para. 7.844.   WT/DS425/R/Add.1 
 Page B-5 
 
 
 providing sufficient background and reasons for that determination, such that 
its reasons for concluding as it di d can be discerned and are understood.17 
 15. As clarified by the panel in EU – Footwear (China) , the question of whether an issue is 
"relevant" and "material" must be reviewed from the perspective of the authorities' actual final 
determination.  If the issue is relevant to, and ma terial in the authorities' final determination, the 
authorities must provide sufficient background and r easons for their conclusion of the issue in the 
public notice or a separate report of the final dete rmination for readers of the notice to discern and 
understand the reasons.   
16. The requirement of the authorities' explanation "in sufficient detail" in the public notice of the 
final determination must also be  understood in the light of the restrictions imposed by the 
requirements for the protection of confidential inform ation.  Accordingly, the authorities' explanation 
would not be found inconsistent with Article 12.2.2 due to an insufficiency of the explanation to the 
extent that such insufficiency is  justified by the observance of th e confidentiality requirement for the 
underlying information.   
 
2. The Alleged Failure to Explain the Reason s for the Rejection of Sales to Affiliated 
Distributors from the Normal Value Calculation 
 
17. In its FWS, the EU argues that MOFCOM di d not explain the reasons for the rejection of 
relevant arguments presented by Smith Heimann, an EU producer, related to MOFCOM's exclusion 
of Smith's sales to its affiliated distributors in the EU from the normal value calculation.  According to 
the EU, MOFCOM stated merely that "the sal es prices of Smiths Heimann through affiliated 
distributors in the EU during the POI were clearly affected by the affiliation relationship, and that 
Smiths Heimann did not have sufficient evidence to pr ove that the price differences were merely sales 
expenses which it saved".
18  The EU alleges that such an e xplanation is insufficient and thus 
inconsistent with Article 12.2.2.   18. With respect to the determination of dumpi ng, Article 12.2.2 requires that the public notice 
contain information for "the margins of dumping est ablished and a full explanation of the reasons for 
the methodology used in the establishment and comparison of the export price and the normal value 
under Article 2".
19  The authorities have the obligation to ensu re that the basis of the normal value is 
those transactions "in the ordinary course of trade", as  set forth in Article 2.1.  Whether certain sales 
are in the ordinary course of trade or not is, theref ore, a "relevant" question of fact for the authorities 
to establish the normal value to reach to the final determination of dumping.   
 
19. The issue of the exclusion of sales to an  affiliated distributor from the normal value 
calculation would be particularly relevant to the actual final determination of dumping in question.  
MOFCOM found that the prices of sales to affiliated distributors were lower than the prices of other sales to non-affiliated companies.
20  Accordingly, the decision to  exclude these sales would increase 
the normal value, resulting in a higher dumping margin and the higher AD duty.  Such a decision would be material for MOFCOM's actual final dete rmination of dumping.  Therefore, MOFCOM was 
obliged to provide the reasons for the acceptance or rejection of the interested party's argument on the 
inclusion of affiliated party transac tions in the final determination. 
                                                      
17 Panel Report, EU – Footwear (China) , para. 7.844 (emphasis added). 
18 EU FWS, para. 145, quoting the Final Determination, p. 17. 
19 Article 12.2.1(iii) of the AD Agreement (incorporated by reference into Article 12.2.2). 
20 EU FWS, para. 145, quoting MOFCOM's final determination, p. 17.  The EU did not raise any 
objection to this fact-finding.  WT/DS425/R/Add.1 
Page B-6  
 
 3. The Alleged Insufficient Explanation on the Injury Determination 
 
20. The EU alleges that MOFCOM failed to "expl ain the methodology used in order to calculate 
the alleged price undercutting or price depression".
21  The EU also alleges that MOFCOM failed to 
provide reasons for the rejection of Smith's ques tion on the credibility of the data submitted by the 
petitioner.22  The EU further argues that MOFCOM did not provide any reasons for the rejection of 
Smith's arguments related to several other factor s which would also have caused injury to the 
domestic industry.23 
 21. The overarching provision of Article 3.1 requires authorities to make an objective 
examination of positive evidence.  Article 3.2 of the AD Agreement sets forth that "the authorities 
shall consider whether there has been a significant pr ice undercutting".  Article 3.5 sets forth that "the 
authorities shall also examine all known factors ot her than the dumped imports …, and the injuries 
caused by these other factors must not be attribut ed to the dumped imports".  Article 12.2.2 then 
provides that "the notice or report shall contain th e information described in  subparagraph 2.1", which 
includes "consideration relevant to the injury determ ination as set out in Article 3".  As such, issues 
raised by the EU would all be releva nt to the final determination.   
 22. Furthermore, the factual issue of the pri ce undercutting would be material to the final 
determination.  As discussed above, the factual fi ndings of the price undercutting are essential facts 
for the final determination.  The factual issue ess ential to the final determination would also be 
material to the actual final determination.  Anal ysis on causation between other factors and the injury 
to the domestic industry would also be material to  the final determination.  Article 3.5 explicitly 
requires the authorities "to separate and distinguish th e injurious effects of different causal factors".
24  
Without such analysis, "the investigating authorities would have no rational basis to conclude that the 
dumped imports are indeed causing the injury which, under the Anti-Dumping Agreement , justifies the 
imposition of anti-dumping duties".25  Accordingly, these issues would be material to the final 
determination, and thus should be explained in the public notice or a separate report of the final 
determination.  
                                                      
21 EU FWS, para. 148. 
22 EU FWS, para. 150. 
23 EU FWS, paras. 154, 155, and 312-314. 
24 Appellate Body Report, US – Hot-Rolled Steel, para. 223. 
25 Ibid.  WT/DS425/R/Add.1 
 Page B-7 
 
 
  ANNEX B-2 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY  
WRITTEN SUBMISSION OF NORWAY 
 
 
Table of Contents  
 
I. INTRODUCTION ...............................................................................................................  B-9 
II. ARTICLE 6.5.1 ............................................................................................................. ....... B-9 
III. ARTICLE 6.9 .............................................................................................................. ....... B-10 
IV. ARTICLE 6.4 ............................................................................................................... ...... B-10 
V. ARTICLE 6.2 ................................................................................................................ ..... B-11 
VI. CONCLUSION ................................................................................................................ .. B-12 
 
 WT/DS425/R/Add.1  
Page B-8  
 
  Table of cases cited in this submission 
 
 
Short Title Full Case Title and Citation 
Argentina – Ceramic Tiles  Panel Report, Argentina – Definitive Anti-Dumping Measures on Imports of Ceramic 
Floor Tiles from Italy , WT/DS189/R, adopted 5 November 2001, DSR 2001:XII, 
6241 
Argentina – Poultry Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from Brazil ,
WT/DS241/R, adopted 19 May 2003 
EC – Fasteners  Appellate Body Report, European Communities – Definitive Anti-Dumpin g
Measures on Certain Iron or Steel Fasteners from China , WT/DS397/AB/R, adopte d
28 July 2011 
EC – Salmon Panel Report, European Communities – Anti-Dumping Measure on Farmed Salmon
from Norway , WT/DS337/R, adopted 15 January 2008 
EC – Tube or Pipe Fittings  Appellate Body Report, European Communities – Anti-Dumping Duties on Malleabl e
Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/AB/R, adopte d
18 August 2003, DSR 2003:VI, 2613 
Guatemala – Cement II Panel Report, Guatemala – Definitive Anti-Dumping Measures on Grey Portlan d
Cement from Mexico , WT/DS156/R, adopted 17 November 2000, DSR 2000:XI, 5295
Mexico – Olive Oil Panel Report, Mexico – Definitive Countervailing Measures on Olive Oil from th e
European Communities , WT/DS431/R, adopted 21 October 2008, DSR 2008:IX, 3179
Mexico – Steel Pipes and Tubes Panel Report, Mexico – Anti-Dumping Duties on Steel Pipes and Tubes from
Guatemala , WT/DS331/R, adopted 24 July 2007, DSR2007:IV, 1207 
US – Oil Country Tubular 
Goods Sunset Reviews 
(Article 21.5 – Argentina) Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on Oi l
Country Tubular Goods from Argentina – Recourse to Article 21.5 of the DSU b y
Argentina , WT/DS268/RW, adopted 11 May 2007, as modified by Appellate Bod y
Report WT/DS268/AB/RW, DSR 2007:IX-X, 3609 
  WT/DS425/R/Add.1 
 Page B-9 
 
 
  I. INTRODUCTION 
 
1. As a third party to this dispute, Norway  would in the following like to address certain 
interpretative issues, discussed  in the First Written Submissions of the EU and China.  
 II. ARTICLE 6.5.1 
 
A. What constitutes an adequate summary in accordance with Article 6.5.1 
 
2. The EU claims that several of the non-confidential versions of documents submitted 
contained inadequate summaries, ther eby violating Article 6.5.1 of the Anti-Dumping Agreement , 
specifying that, in at least th ree cases, the replies to question 32, 33 and 38 of Nuctech's non-
confidential Questionnaire Response, the confidenti al passages were simply marked "confidential".
1  
 3. Article 6.5.1 feeds into the important minimum standard of  due process rights of an anti-
dumping investigation, and is aimed at making it possibl e for interested parties to defend their interest 
and to make "rebuttal" arguments, even towards information in confidential submissions.  As the 
wording indicates ("thereof"), it is the confidential in formation that is to be summarised.  In Norway's 
view, the disclosure of a document with the confiden tial parts simply deleted, whether this deletion is 
marked "confidential" or not, would thus not fulf il the requirement of summarising the confidential 
information.  There may of course be some exceptions to this, inter alia if the original document itself 
summarises the deleted confidential sec tions in question.  The panel in Mexico – Olive Oil  supports 
this interpretation, and indicates that the circum stances where such a document would be sufficient 
are not likely to be abundant.  
 4. If the content of the information is of such a nature that summarisation is not possible, Article 6.5.1 requires that a statement of the reasons explaining the exceptional circumstances why 
this is so needs to be provided.   B. Whether Article 6.5.1 requires that the stat ement of reasons why summarisation is not 
possible be made public 
 
5. The EU claims that China failed to require a statement of reasons explaining why summarisation was not possible in its injury analysis, in  particular with respect to the statement by the 
Chinese Public Security Bureau of the Civil Aviation Administration.
2  China, on the other hand, 
argues that, as long as the interested party provid es a statement explaining why summarisation is not 
possible and the investigating authority assesses this  statement, Article 6.5.1 does not confer an 
obligation to make such a statement public in the non-confidential file.3  
 
6. Norway disagrees with Chinas argument.  In EC – Fasteners , the Appellate Body confirmed 
the Panel's finding that the investigating author ity must scrutinise the statement provided, as 
otherwise, "the potential for abuse under Article 6.5.1 would be unchecked unless and until the matter 
were reviewed by a panel".4  For the same reasons, Norway holds  that it is not sufficient that the 
investigating authority scrutinises the statement; this must also be made public.  In Norway's view, the 
mere structure of Article 6.5.1 indicates that the st atement needs to be public.  Norway reiterates the 
serious effects anti-dumping investigations may have , and the corresponding need to ensure that the 
investigation follows certain rules of procedural justice and fairness.  When information is kept 
                                                      
1 EU's First Written Submission, para. 75. 
2 EU's First Written Submission, para. 78. 
3 China's First Written Submission, para. 104. 
4 Appellate Body Report, EC – Fasteners , para. 544. WT/DS425/R/Add.1  
Page B-10  
 
  confidential, it is thus of great importance to ensu re that this is done for the right reasons.  If the 
investigating authority is not required to make  public statements containing the reasons why 
summarisation of confidential information is not possi ble, the potential for abuse would be significant.  
 
III. ARTICLE 6.9 
 
7. The EU claims that China is in breach of Ar ticle 6.9, as the investigating authority did not 
disclose the essential facts which fo rmed the basis for the determina tion of i) the dumping margin of 
the EU's cooperating producer, ii) the residual duty and iii) injury.
5  
 
8. Panels have held that the requirement to  disclose essential facts cannot be complied with 
simply by providing access to all information in the file.6  Rather, the investigating authority must 
actively identify  the facts on which it will rely in making its determination, for instance by "disclosing 
a specially prepared document  summarizing the essential facts under consideration".7  
 
9. The core of the duty of disclosure under Article 6.9 relates to "essential facts".  The panel in 
Argentina – Poultry  distinguished "facts" from "reasons".  The duty of disclosure thus relates to 
evidence .  As to what evidence the investigating author ity has an obligation to disclose, the panel in 
EC -Salmon  specified that "they are the facts necessary to  the process of analysis and decision making 
by the investigating authority, not only t hose that support decision ultimately reached".8 
 
10. Article 6.9 is meant to place interested parties in a position where they can properly 
understand, verify, and challenge the facts that are lik ely to lead the investigating authority to impose 
definitive measures.  Absent disclosure of the essential facts, interested parties are left guessing at the 
factual basis in the record for the authority's factual and legal determ inations.  In that event, they 
cannot make effective comments on the factual basis for the authority's intended decision. 
 
IV. ARTICLE 6.4 
 
11. The EU claims that China faile d to provide a timely opportunity  for all interested parties to 
see all information that was relevant to defend their in terests, and that was used by the authority in the 
anti-dumping investigation, thereby violating Article 6.4 of the Anti-Dumping Agreement .9  
 
12. Article 6.4 of the Anti-Dumping Agreement  confers on interested parties a right of access to 
evidence in the non-confidential record of the inves tigation.  The Appellate Body has ruled that the 
relevance of information must be assessed from the perspective of the interested parties.10  The 
essence of due process is that interested parties must be in a position to defend their interests in light 
of the views of other parties and the information befo re the authority.  If one interested party has taken 
the time to put a document on the record, that part y clearly considers it to be relevant and the 
authority should not deny another interested party the opportunity to comment upon it.  13. The Appellate Body has also held that the phrase "used by the authorities" in Article 6.4 
refers to information that the authority must evaluate  in making its determinations.
11  An authorit y 
                                                      
5 EU's First Written Submission, para. 83. 
6 Panel report, Guatemala – Cement II, para. 8.230. 
7 Panel report, Argentina – Ceramic Tiles , para. 6.125. 
8 Panel report, EC – Salmon , para. 7.807. 
9 EU's First Written Submission, paras. 43 and 84. 
10 Appellate Body Report, EC – Tube or Pipe Fitting , para. 145. 
11 Appellate Body Report, EC – Tube or Pipe Fittings , para. 145. Information submitted regarding 
injury factors listed in Article 3.4 was information that must "be used by the authorities" in making its 
determination.  WT/DS425/R/Add.1 
 Page B-11 
 
 
  must evaluate all of the information submitted to it th at relates to its determinations, and cannot ignore 
any of it.  14. The duty to allow interested parties to "see" relevant information is subject to limitations in 
the case of confidential information, which the au thorities cannot disclose.  Article 6.5.1 provides 
certain mechanisms to ensure due process rights are taken care of in these cases.  China argues that, as 
the scope of Articles 6.4 and 6.5.1 are different, th ere may exist confidential information for which a 
non-confidential summary must be provided which is not used by the authorities and therefore does 
not fall within the scope of Article 6.4.
12  
 
15. As the non-confidential summary of the confidential information must be included in the 
record, and the investigating authority therefore must  evaluate it, as with all information submitted to 
it, Norway holds that all such summaries must  be disclosed according to Article 6.4.  The 
investigating authorities have an obligation to scr utinise the non-confidential summaries provided, in 
order to ensure that they fulfil the requirement of  Article 6.5.1.  The Appellate Body has confirmed 
such an obligation.13  Hence, non-confidential summaries mu st always be evaluated by the 
investigating authorities, and therefore are always "u sed by the authorities", as set out in Article 6.4.  
The duty of disclosure as prescribed by Article 6.4 therefore clearly applies to non-confidential 
summaries of confidential information.   
V. ARTICLE 6.2 
 
16. The EU claims that, by violating Articles 6.5.1 and 6.9 of the Anti-Dumping Agreement , 
China also deprived the interested parties of their full opportunity to defend their interests, contrary to 
Article 6.2 of the Anti-Dumping Agreement .
14  Furthermore, the EU argues that the obligation set out 
in Article 6.2 is so broad that a finding of viola tion of Article 6.4 necessarily entails a violation of 
Article. 6.2 in the present case.15  
 17. The effective exercise of the rights under Artic le 6.2 requires that interested parties have 
access to information submitted by the other interested  parties, as well as to information obtained by 
the authority during the investigation.  Absent access to this information, an interested party cannot 
formulate an "opposing view", make "rebuttal ar guments", or generally make effective comments on 
the evidence in the record and on the authority's determinations.  
 18. On these grounds, there is a mutually depende nt relationship between Article 6.2 and several 
of the other procedural rules contained in the Anti-Dumping Agreement .  Articles 6.4, 6.5.1 and 6.9 
serve, among others, the purpose of enabling interested  parties to defend their interests as set forth in 
Article 6.2. 
 19. For its part, Article 6.2 requires that inter ested parties be given full opportunity for the 
defence of their interests throughout the anti-dumping investigation .  In other words, whenever an 
interested party is not given full opportunity to defend its interests, during an anti-dumping 
investigation, the obligation in Article 6.2 is infri nged.  As a result, it is Norway's view that any 
violation of the obligation under Articles 6.5.1, 6. 4 and 6.9 entails a violation of Article 6.2. 
                                                      
12 China's First Written Submission, para.113. 
13 Appellate Body Report, EC – Fasteners , para. 544. 
14 EU's First Written Submission, paras. 43 and 84. 
15 EU's First Written Submission, para. 66. WT/DS425/R/Add.1  
Page B-12  
 
  VI. CONCLUSION 
 
20. Norway respectfully requests the Panel to take account of the considerations set out above in 
interpreting the relevant provisions of the Anti-Dumping Agreement . 
 
 
  WT/DS425/R/Add.1 
 Page B-13 
 
 
  ANNEX B-3 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY WRITTEN 
SUBMISSION OF THE UNITED STATES 
 
 
I. Procedural and Transparency Require ments of Article 6 of the AD Agreement  
 
1. The EU alleges that China failed to ensu re that confidential information provided by 
interested parties was summarized according to Artic le 6.5.1 of the AD Agreement.  The EU further 
argues that, in so doing, China also failed to provide a timely opportunity for interested parties to see 
information relevant to their defense and a full oppor tunity to defend their interests in contravention 
of Articles 6.4 and 6.2 of the AD Agreement.  A ba sic tenet of the AD Agreement, as reflected in 
Article 6, is that the parties to an investigation mu st be given a full and fair opportunity to see relevant 
information and to defend their interests.  Thus, Ar ticle 6.2 sets forth requirements inherent in a "full 
opportunity for the defense" of all interested parties'  interests.  This includes the opportunity to meet 
adverse parties, present opposing views, offer rebutta l arguments, and the right to present information 
orally.  2. Article 6.4 complements Article 6.2, by cr eating the obligation for authorities to provide 
"timely opportunities" for interested parties to see relevant information and to prepare presentations 
on the basis of this information.  Both Articles 6. 2 and 6.4 recognize that, in fulfilling the obligations 
of these Articles, authorities may need to protect co nfidential information.  Those Articles therefore 
allow for a limited exception to the disclosure requirements for confidential information.  
 
3. Indeed, in anti-dumping investigations, the submission of confidential information is a 
necessary and frequent occurrence.  Article 6.5 thus requires that investigating authorities ensure the 
confidential treatment of such information.  At the same time, Article 6.5.1 balances the need to 
protect such information against the disclosure requ irements of other Article 6 provisions.  Thus, 
Article 6.5.1 provides that an investigating aut hority, if it accepts confidential information, must 
provide or otherwise assure that confidential inform ation is summarized in sufficient detail to permit a 
reasonable understanding of the substance of the information. 
 4. As the Appellate Body explained in EC – Fasteners (China)  (para 542), "Articles 6.5 
and 6.5.1 accommodate the concerns  of confidentiality, transparency, and due process by protecting 
information that is by nature confidential or  is submitted on a confiden tial basis and upon "good 
cause" shown, but establishing an alternative met hod for communicating its content so as to satisfy 
the right of other parties to the investigation to  obtain a reasonable understanding of the substance of 
the confidential information, and to defend their in terests".  Where the investigating authority accepts 
confidential information without providing or ot herwise assuring timely adequate non-confidential 
summaries, significant prejudice to the ability of companies and Members to defend their interests could occur. 
 
II. Article 6.9 of the AD Agreement 
 
5. The EU alleges that China violated Article  6.9 of the AD Agreement by failing to disclose 
certain of the essential facts forming the basis for the determination of the dumping margin, including 
data and calculations which form the basis for th e determination of normal value and export prices 
and the determination of the dumping margin.  Artic le 6.9 requires the investigating authority to 
disclose to interested parties the "essential facts" forming the basis of the investigating authority's 
decision to apply anti-dumping duties.  The obligation imposed on the investigating authority by Article 6.9 pertains to the disclosure of "facts", as opposed to the disclosure of the "reasoning" of the WT/DS425/R/Add.1 
Page B-14  
 
  investigating authority.  A "fact" is "[a] thing know n for certain to have occurred or to be true;  a 
datum of experience" and "[e]vents or circumstanc es as distinct from their legal interpretation."  The 
use of the adjective "essential", which modifies "facts", indicates that this obligation does not 
encompass "any and all" facts, but only the "essentia l facts".  The ordinary meaning of "essential" 
includes "of or pertaining to a thing's essence" and "absolutely indispensable or necessary".   
 
6. Moreover, the obligation to disclose "essential facts" encompasses tho se essential facts "under 
consideration which form the basis for the decision whether to apply definitive measures".  The term 
"consideration" has been defined, inter alia , as "the action of taking into account".  Thus, for purposes 
of the dumping determination, the essential facts under Article 6.9 are the "indispensable and 
necessary" facts considered by the investigating au thority in determining wh ether definitive measures 
are warranted, i.e., whether dumping has occurred and, if so, the magnitude of such dumping. 
 7. In order to determine whether definitive measu res are warranted, an investigating authority 
must compare a respondent's normal value to its expo rt price.  An affirmative dumping determination 
is made only if the normal value exceeds the export price, and the margin of dumping is based on the 
extent to which it does so.  This comparison, howev er, represents merely the final stages of a dumping 
determination.  The investigating authority must fi rst calculate the normal value and the export price. 
 8. The calculations relied on by an investigati ng authority to determine the normal value and 
export prices, as well as the data underlying those calcu lations, constitute "essential facts" forming the 
basis of the investigating authority's imposition of fi nal measures within the meaning of Article 6.9.  
The calculations and data are facts that are "absol utely indispensable" to the determination of the 
existence and magnitude of dumping.  Without such  information, no affirmative determination could 
be made and no definitive duties could be imposed.   
9. Article 6.9 requires that investigating author ities inform interested parties of essential facts 
under consideration prior to making a final de termination of dumping.  As Article 6.9 
expressly provides, the aim of the requirement is to  permit "parties to defend their interests".  The 
Panel in EC – Salmon  (para 7.805) stated that "the purpose of disclosure under Article 6.9 is to 
provide the interested parties with the necessary information to enable them to comment on the 
completeness and correctness of the facts being cons idered by the investigating authority, provide 
additional information or correct perceived errors, and comment on or make arguments as to the 
proper interpretation of those facts."  10. If interested parties are not provided access to facts used by the investigating authority on a 
timely basis, they cannot defend their interests.  If, fo r example, an interested party is not provided the 
calculations used by the investigating authorit y to address dumping, or the data underlying those 
calculations, the interested party can not review the investigating author ity's calculations to determine 
whether they contain errors, or whether the inves tigating authority actually did what it purported to 
do.  Unless an interested party is provided with  these essential facts, it cannot adequately defend its 
interests.  
11. Thus, to the extent that the underlying reco rd reveals that China's investigating authority 
failed to make available the underlying data and cal culations it performed to determine the existence 
and margin of dumping, including the calculation of the normal value and export price for the respondents, it would have failed to meet its obligations under Article 6.9 of the AD Agreement. 
 III. Article 12.2.2 of the AD Agreement 
 
12. The EU alleges that China violated Article  12.2.2 of the AD Agreement because it failed to 
set forth sufficiently detailed explanations for definitive determinations on dumping and injury, 
including references to matters of fact and law whic h led to the acceptance or rejection of arguments.   WT/DS425/R/Add.1 
 Page B-15 
 
 
  Article 12.2.2 requires that investigating authorities provide reasons for the acceptance or rejection of 
claims by exporters or importers, either through public notice or a separate report.   13. Authorities are required to provide more than cursory assertions to justify decisions to impose 
definitive antidumping duty measures.  The calculations employed by an investigating authority to 
determine dumping margins, and the data underlying the calculations, constitute "relevant information 
on matters of fact and law and reas ons which have led to the imposition of final measures" within the 
meaning of Article 12.2.2.  Calculations are th e mathematical basis for arriving at the dumping 
margins, and therefore, they are highly "relevant" to the decision to apply definitive measures.  They 
are "matters of fact" because they consist of sales and cost data and mathematical uses of these data.  
Further, they lead to the imposition of definitive m easures, because if they result in an affirmative 
dumping margin, then an investigating author ity may apply definitive measures.    
 14. The requirements of Article 12.2.2 avoid opac ity in decision making.  Consequently, where 
the record reveals that an inves tigating authority provided only curs ory assertions to justify a decision 
to impose definitive antidumping duty measures, th at investigating authority will have acted 
inconsistently with its oblig ations under this provision. 
 
IV. Article 3.2 of the AD Agreement  
 
15. The EU contends that China's findings on price effects, specifically price undercutting and 
price depression, are inconsistent with Articles 3. 1 and 3.2 of the AD Agreement. Article 3.2 provides 
that, with respect to the effects of dumped imports  on prices, authorities must examine whether there 
has been significant price undercutting or whether the effect of the imports has been significantly to 
depress subject import prices or prevent price increa ses, while Article 3.1 requires an investigating 
authority to base its determination of injury on pos itive evidence and to objectively examine the effect 
of dumped imports on prices. 
 16. Article 3.1 imposes two requirements on author ities that make injury determinations.  The 
first is that the determination be based on "positiv e evidence".  The Appellate Body has referenced 
with approval a description of "positive evidence" as "evidence that is relevant and pertinent with 
respect to the issue being decided, and that has th e characteristics of being inherently reliable and 
trustworthy".  The second requirement is that th e injury determination involve an "objective 
examination" of the volume of the dumped imports, their price effects, and their impact on the domestic industry.  The Appellate Body has stated that , to be "objective", an injury analysis must be 
"based on data which provides an accurate and unbiased picture of what it is that one is examining" 
and be conducted "without favouring the interests of any interested party, or group of interested 
parties, in the investigation".  Furthermore, th e requirement that the examination be "objective" 
mandates that "the ‘examination' process must conf orm to the dictates of the basic principles of good 
faith and fundamental fairness".  17. Article 3.2 of the AD Agreement describes further the examination that authorities must 
conduct to determine the price effects of dumped imports.  As the Panel in EC – Pipe Fittings  
emphasized, Article 3.2 does not require an authority  to use any particular type of price undercutting 
analysis.  There is no single correct methodology fo r examining price comparisons in conducting such 
an analysis.  Nor is a finding of price undercutting a prerequisite to finding price depression.  Rather, 
Article 3.2 states that authorities are to examine whether there has been significant price undercutting 
by the dumped imports or whether the effect of the imports has been significantly to depress subject 
import prices or prevent price increases that woul d have otherwise occurred.  The use of the 
disjunctive indicates that authorities can find significant undercutting without finding significant price depression or suppression, or that they can find significant price depression or suppression without finding significant undercutting. WT/DS425/R/Add.1 
Page B-16  
 
  18. Accordingly, authorities are required to consid er whether there is price undercutting, as well 
as whether there is price depression or price suppression, but are not required to make any particular findings about any of these inquiries.  To the extent an authority relies on findings of any type of price 
effects, however, Article 3.1 requires that t hose findings be supported by positive evidence. 
 
19. Furthermore, the analytical methodology an au thority uses in its price effects analysis must 
conform with the "objective examination" standard specified in Article 3.1 of the AD Agreement.  
This requirement pertains both to comparisons of  prices between domestically produced and imported 
products to examine price undercutting, and compar isons of prices of domestically produced products 
over time to examine price depression.  To satisfy  the objective examination standard, the authority 
must compare equivalent products sold at the same level of trade. 
 20. In this respect, the United States shares the EU's concern that use of average unit values 
(AUVs) in making pricing comparisons may fail to  yield objective price comparisons in certain 
circumstances.  Generally, AUVs provide a poor b asis for pricing comparisons when the domestic 
like product and/or imports under investigation ar e not homogenous products but instead reflect a 
range of products with different characteristics a nd end-use applications.  In such circumstances, 
differences in AUVs between domestically produced and imported products, or changes over time in 
AUVs of domestically produced products, may re flect differences in product mix rather than 
differences in pricing and thus would not provide an objective measure of price differences. 
 V. Article 3.4 of the AD Agreement  
 
21. The EU claims that China's analysis of the imports under investigation violates Articles 3.1 
and 3.4 of the AD Agreement.  Article 3.4 requires investigating authorities to evaluate the factors 
enumerated in that provision, although it does not in struct in what manner an investigation authority 
must undertake that evaluation. 
 22. Article 3.4 specifies an authority's obligati on to ascertain the impact of dumped imports on 
the domestic industry.  In addition to requiring an  analysis of "all relevant economic factors and 
indices having a bearing on the state of the industry", the article enumerates certain specific factors which an authority must include in its analysis. 
 
23. The Appellate Body in EC – Pipe Fittings (para. 156) found that it is mandatory for an 
authority to evaluate each of the factors set out in Article 3.4.  The Appellate Body has also indicated, 
however, that Article 3.4 does not address the manne r in which an authority's analysis of each 
individual factor must be set out in the documents  providing the explanation for its determination.  
Instead, whether an authority has satisfied its obliga tion to perform the requisite  examination is to be 
ascertained under the particular fact s and circumstances of each case. 
 
VI. Causal Link Claims under Articles 3.1 and 3.5 of the AD Agreement  
 
24. The EU makes several claims that China's causation analysis violates Articles 3.1 and 3.5 of 
the AD Agreement.  Articles 3.1 and 3.5 require an  investigating authority to examine the causal 
relationship between dumped imports and injury, and to examine any known factors, other than the dumped imports, which are causing injury to the domestic industry.    25. Article 3.5 specifies an authority's obligati on to ascertain that dumped imports are causing 
injury.  Additionally, an authority's factual findings  under Article 3.5 must comply with the "positive 
evidence" and "objective examination" requirements articulated in Article 3.1.   26. The first sentence of Article 3.5 sets out th e general requirement for a demonstration that 
dumped imports are causing injury under the AD Agre ement, and – importantly – contains an explicit  WT/DS425/R/Add.1 
 Page B-17 
 
 
  link back to Articles 3.2 (volume and price effects)  and 3.4 (impact on domestic industries).  If the 
volume or price effects findings are found to be in consistent with Articles 3.1 and 3.2 and/or the 
impact findings are found to be inconsistent with Articles 3.1 and 3.4, an Article 3.5 causal link 
analysis relying on such findings would also fail.  That is, if an authority relies on a price effects 
finding to support its impact and injury determin ations, its decision must be supported by positive 
evidence on these counts.  In such ci rcumstances, a failure to demonstrate significant price effects or 
significant impact constitutes a failure to demons trate that dumped imports are causing injury, as 
required by the first sentence of Article 3.5.  27. The second and third sentences of Article 3.5 re quire an authority to examine "all relevant 
evidence" before it, both to ascertain whether ther e was a causal link between the dumped imports and 
the injury experienced by the domestic industry a nd to examine whether factors other than the 
dumped imports were also causing injury.   28. The third sentence provides that, before re aching the conclusion that the dumped imports 
were a cause of any difficulties experienced by th e domestic industry, an authority must examine 
other known factors which are injuring the domestic industry.  As the Appellate Body found in US – 
Hot-Rolled Steel (paras. 223-24), if a factor other than dumped imports is a cause of injury, the 
third sentence of Article 3.5 requires the authority to  engage in a non-attribution analysis to ensure 
that the effects of that other factor are not attri buted to the dumped imports.  The Appellate Body has 
further stated that the AD Agre ement does not specify the particular methods and approaches an 
authority may use to conduct a non-attribution analysis.  
 29. Under Article 3.5, the premise of a non-attribu tion analysis is that there is at least one known 
factor other than the dumped imports that is inju ring the domestic industry.  If there are no other 
known factors other than the dumped imports that are injuring the domestic industry, Article 3.5 
would neither require nor contemplate that an authority will conduct a non-attribution analysis.  
Indeed, in such a circumstance, the authority can appropriately attribute all injury to the dumped 
imports.    WT/DS425/R/Add.1 
 Page C-1 
 
 
  ANNEX C 
  
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF OF 
THE PARTIES AT THE FIRST SUBSTANTIVE MEETING 
 
 
Contents Page 
Annex C-1 Executive Summary of the Opening Statement of the 
European Union at the First Meeting of the Panel C-2 
Annex C-2 Executive Summary of the Opening Statement of China at the First 
Meeting of the Panel C-8 
Annex C-3 Closing Statement of China at the First Meeting of the Panel C-13 WT/DS425/R/Add.1 
Page C-2  
 
  ANNEX C-1 
 
 
EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF  
THE EUROPEAN UNION AT THE FIRST  
MEETING OF THE PANEL 
  
I. INTRODUCTION 
 1. The antidumping duties at issue before this Pa nel were imposed following an investigation in 
which the Chinese authorities disregarded some of the most fundamental procedural guarantees provided in the Anti-dumping Agreement (ADA) and this  despite the fact that the EU exporter fully 
cooperated with the Chinese authorities.  The duties are based on manifestly flawed determinations 
relating to injury and causality which could not have been reached by an objective and unbiased 
authority.  A particularly striking example of this  is MOFCOM's complete failure to take into account 
the existence of large and manifest differences between product types when considering the price 
effects of imports.   2. This dispute is concerned with what a ppears to be recurrent features in MOFCOM's 
investigations and raise important systemic issu es.  If the way in which MOFCOM conducted this 
investigation and reached its findings were to be  condoned, safeguards and disciplines set out in the 
Anti-Dumping Agreement would be substantially weakened.   
II. CLAIMS UNDER ARTICLES 6.5.1, 6.4 AND 6.2 ADA 
 3. The European Union submits that the inves tigation conducted by China has failed to comply 
with the requirements laid out in Articles 6.5.1, 6.4 and 6.2 ADA. Under Article 6.5.1 ADA, when an interested party claims that certain inform ation must be treated as confidential, the investigating 
authority  must require the party to provide adequate non-confidential summaries  of the confidential 
information.  In exceptional circumstances only, where an interested party cannot adequately 
summarise the confidential information, an explanation of why the inform ation was not susceptible to 
summarisation  must be provided. 
 4. China alleges in its first written submission th at summaries were in fact adequate.  However, 
China attempts to distort the EU's arguments in an effort to divert attention from the real issue.  
 
5. Article 6.5 and 6.5.1 ADA aim to strike a ba lance between the often conflicting interests of 
ensuring due process and transpar ency on the one hand and ensuring confidentiality of sensitive 
information on the other.  The obligation on the party submitting the information in confidence to 
provide a non-confidential summary or a statemen t explaining why summarisation is not possible, 
coupled with an obligation on the investigating author ity to scrutinise such statements, are only part of 
guarantees against the abusive use of the right to confidential treatment.  The other important 
safeguard lies in the role of the other interested pa rties, who in their turn scrutinise the adequacy of 
non-confidential summaries or reasons why summaries could not be provided.  Keeping statements 
about summarisation confidential would do away with those guarantees and create a significant 
potential for abuse, thus affecting the delicate balance established by Article 6.5 between the 
protection of confidential information and transparency. 
 
III. CLAIMS UNDER ARTICLES 6.9, 6.4 AND 6.2 ADA 
 
6. MOFCOM's Injury Disclosure and Dumping Disclosure did not include all the essential 
facts under consideration forming the basis for the final determination, violating inter alia  Article 6.9  WT/DS425/R/Add.1 
 Page C-3 
 
 
  ADA.  Article 6.9 ADA imposes an obligation on inves tigating authorities to inform interested parties 
of the essential facts with the aim of informing th em which information the investigating authority 
will rely upon in deciding whether to apply a de finitive measure and thereby allowing interested 
parties an opportunity to verify the completene ss and accurateness of those facts and submit any 
comments to the investigating authorities.  
 
7. The obligation under Article 6.9 applies to facts as opposed to the reasoning of the 
investigating authorities, and more specifically to "essential facts".  Furthermore, Article 6.9 makes it clear that the disclosure obligation relates to the essen tial facts "that form the basis of the authorities' 
decisions whether to apply definitive measures".  Purs uant to Article 6.9, investigating authorities are 
under an obligation to disclose to interested parties the body of facts that are important to the analysis 
and decision making  of the investigating authority for deci ding whether to apply definitive measures 
and at what level.   8. The EU submits that MOFCOM failed to disclose the methodology  it employed to consider 
price undercutting and price suppression. If one were to follow China's reasoning, the essential facts 
within the meaning of Article 6.9 in the context of an Article 3.2 assessment of price effects of 
dumped imports, would – in the interest of administrative efficiency  – be reduced to unverifiable 
assertions .  Contrary to China's position, a methodology is not reasoning , but rather a tool.  To have 
an analysis, the methodology must first be applied to the raw data.  The EU further submits that 
MOFCOM failed to disclose the underlying data  for the price analysis.  While we recognize that the 
confidential nature of certain facts would not allo w the authorities to disclose all the underlying data, 
confidentiality does not appear on the record, as the reason for lack of di sclosure.  In any event, China 
could have provided a mean ingful summary describing the approach chosen.   
 9. The calculations  relied upon by an investigating author ity to determine the normal value and 
export prices, as well as the data underlying those calculations , constitute "essential facts" forming 
the basis of the investigating authority's impos ition of final measures within the meaning of 
Article 6.9.  The calculations and underlying data are facts that are "essential" to the determination of 
the existence and level of dumping.  Without this information, no affirmative determination could be 
made and no definitive duties could be imposed .  
 IV. CLAIMS UNDER ARTICLES 12.2.2 ADA 
 
10. Regarding Article 12.2.2 ADA, the EU makes cl aims with respect to two "categories" of 
information that China failed to include in the fina l public notice or separate report:  (i) the reasons for 
the acceptance or rejection of relevant arguments or  claims by Smiths;  and (ii) certain relevant 
information on the matters of fact and law which ha ve led to the imposition of final measures.    
 11. First, Article 12.2.2 requires that the public notice contain "all relevant information on matters 
of fact and law" as well as the "reasons which have led to the imposition of final measures".  The EU recognises that there is a degree of subjectivity and discretion on the part of the investigating 
authorities implied in the language of Article 12.2.2, when it comes to determining what is "relevant".  
But it notes that the ADA also imposes certain objectiv e requirements that would require reflection in 
the published report of the investigation.  Th e second sentence of Article 12.2.2 reduces the 
"discretion" of the investigating authority on what  constitutes "relevant information", when it comes 
to dealing with the information d escribed in Article 12.2.1 and the reasons for acceptance or rejection 
of relevant arguments or claims, and the basis for certain decisions. 
 
12. Secondly, the EU is bringing claims against Ch ina with respect to the lack of disclosure of 
calculations of the individual dumping margin and its underlying data for the cooperating producer 
and the calculation of the residual duty rate under both Article 6.9 and Article 12.2.2.  The ADA 
requires the investigating authority to disclose to the interested parties the essential facts under WT/DS425/R/Add.1 
Page C-4  
 
  consideration before the final de termination is made.  "Essential facts" within the meaning of 
Article 6.9 ADA include calculations and th e data underlying those calculations.  
 13. Furthermore, as our first written submission explains, the calculations employed by an 
investigating authority to determine dumping marg ins, and the data underlying the authority's 
calculations, constitute "relevant information on matter s of fact and law and reasons which have led to 
the imposition of final measures" within the meani ng of Article 12.2.2.  This is so because the 
calculations themselves are the mathematical basis for arriving at the dumping margins imposed by an 
investigating authority.  Therefore, they are "relev ant" to the decision to apply definitive measures.  
Lastly, they lead to the imposition of definitive measures, because only when  they result in an 
affirmative dumping margin could an investig ating authority apply definitive measures.  
 
V. CLAIMS UNDER ARTICLES 3.1 AND 3.2 ADA 
 
14. MOFCOM's determination of injury is b ased upon two findings with regard to the price 
effects of the dumped imports:  first, that ther e was "large" and "serious" price undercutting;  and 
second, that Nuctech's prices fell by as much as 72.68% during the POI.  China has acknowledged that MOFCOM reached these two findings by a pplying a methodology involving a comparison of 
weighted average unit values for the entire range of  scanners covered by the investigation.  This 
methodology was inadequate because it failed to take  into account the considerable differences among 
the various types of scanners covered by the investig ation, and in particular between high-energy and 
low-energy scanners.  For this reason, the EU clai ms that MOFCOM's assessment of the price effects 
of the imports and, consequen tly, its determination of injury  is not based on an "objective 
examination" of "positive evidence", contrary to  the requirements imposed by Articles 3.1 and 3.2 
ADA.  
15. Articles 3.1 and 3.2 ADA do not set out any specific methodology in order to examine the 
effects of the dumped imports. But, as emphasised by the Appellate Body, this does not mean that the investigating authorities enjoy unfettered discreti on.  The EU does not seek to impose any specific 
methodology. Nor does the EU challenge as such  the methodology applied by MOFCOM.  The 
comparison of average unit values can be an appropriate methodology where the product under investigation is sufficiently homogeneous.  On the other hand, it is inadequate where the subject 
product includes very different product types with wide ly diverging prices.  In those circumstances, 
the observed differences between average unit valu es may reflect differences between the mix of 
product types, rather than genuine price undercutting or price depression.  16. In the present case, the Chinese authorities cho se to make a very broad definition of the 
subject product covering two distinct categories of  scanners:  low-energy scanners and high-energy 
scanners.  Whereas low-energy scanners are used for screening relatively small objects, such as 
parcels or baggage, high-energy scanners serve to scan  much larger objects, such as containers, trucks 
and rail carriages.  The differences in physical characteristics and uses between these two categories of scanners are manifest and considerable and translat e into very large price differentials.  In addition, 
there are also important differences among the scanne rs falling within each of those two categories.  
All those differences were obvious from the record  of the investigation and could not have been 
ignored by MOFCOM.  Given these differences, th e averaging methodology used by MOFCOM was 
plainly inadequate to make a meaningful, let alone  accurate, assessment of the price effects of dumped 
imports.  The EU does not have access to the sales da ta of Nuctech which would be necessary in order 
to quantify precisely the distortions introduced by  MOFCOM's methodology.  Nevertheless, the EU 
has illustrated by means of two numerical examples  how even small differences, or variations over 
time, in the mix of product types can have a very large impact on the outcome of MOFCOM's 
methodology.  China does have access to this data  but it has not even attempted to rebut the EU 
arguments on that point.   WT/DS425/R/Add.1 
 Page C-5 
 
 
  17. China appears to contend that MOFCOM's me thodology is consistent with Articles 3.1 and 
3.2 ADA because it is "reasonable", and this essentially for two reasons.  In the first place , because 
MOFCOM had determined previously that the im ported subject product and the inspection equipment 
produced in China were "like", within the meaning of Article 2.6 ADA.  This argument, however, is 
misguided because it confuses two separate and distin ct issues under the ADA.  Previous panels have 
clarified that there is no requirement under the ADA that each product type covered by an 
investigation must be "like" any other covered pr oduct type.  Therefore, MOFCOM's finding that the 
subject product was "like" the equipment made in China does not imply that the various product types 
covered by the investigation are "like" each other.  Certainly, the EU would not agree that all types of 
scanners are "like".  
 
18. In the second place , China argues that the averaging methodology used by MOFCOM was 
"unbiased" because, in different circumstances, the same methodology might work to the exporter's 
advantage.  However, the mere fact that a met hodology is "unbiased", in the limited sense given by 
China to that term, is not sufficient to make it compliant with Articles 3.1 and 3.2 ADA.  A 
methodology may be "unbiased", in the sense postulate d by China, and still wholly inapt to yield 
meaningful results.  Furthermore, MOFCOM's choi ce of methodology was "biased" even by China's 
own standard.  High-energy scanners do not comp ete with low-energy scanners. Since there were no 
imports of high-energy scanners, there was no re asonable ground for including Nuctech's sales of 
high-energy scanners in the calculation of Nuctech 's average unit values.  At the same time, 
MOFCOM was well aware that doing so would make  more likely a finding of price undercutting and 
magnify the reduction of the domestic industry's prices.  
 19. Finally, China makes much of the fact that  Smiths did not make a similar claim during the 
investigation.  But this argument is irrelevant b ecause it is well-established th at the complaining party 
is not confined to the arguments made by the exporte r during the anti-dumping investigation. It is also 
disingenuous because MOFCOM never disclosed duri ng the investigation the methodologies that it 
used for assessing the price effects of imports.  Moreover, Smiths did request repeatedly that 
MOFCOM exclude high-energy products from the investigation on the grounds that they were not comparable to low-energy scanners.  Had MOFCOM  granted Smiths' request, it would have been 
unnecessary to take into account the differences between  the two categories of products at the stage of 
considering the price effects of imports.  
 
VI. CLAIMS UNDER ARTICLES 3.1 AND 3.4 ADA 
 
20. The EU maintains that MOFCOM's determina tion that the domestic industry, i.e., the single 
company Nuctech, was in a state of material injury is  blatantly wrong.  In violation of Articles 3.1 and 
3.4 of the ADA, it is unfounded on the actual fact s and lacking the most basic requirements of 
providing a compelling explanation of all factors in  context and a reasoned a nd adequate explanation 
of positive evidence.  The evidence  on the record showed a state of an industry that was visibly 
growing, with production capacity, capacity utilisa tion and output increasing, even well above the 
increasing levels of domestic consumption.  MOFCOM  ignored all the positive factors in this case 
and decided to focus primarily on the downward tr end of domestic sales pric es to support its finding 
of material injury.  Moreover, MOFCOM ignored key facts provided by Smiths showing the actual 
state of the domestic industry.   21. First, MOFCOM ignored the actual facts and twisted the reality to make a finding of material 
injury .  It did so by relying on questionable figures, making contradictory statements, evaluating 
economic factors in a not-even-handed manner, i gnoring the overall context of all the relevant 
economic factors having a bearing on the state of  the domestic industry, and failing to provide a 
compelling, reasoned and adequate explana tions on its material injury finding.  
 WT/DS425/R/Add.1 
Page C-6  
 
  22. Second, MOFCOM failed to base its evaluation on positive evidence .  The reality still is that 
we do not know how MOFCOM came up with its fi gures.  The explanation provided by China in 
these panel proceedings, in particular that some e xport data generating substa ntial profits were taken 
out of the information provided by Nuctech, is in apposite.  Indeed, China makes such a statement 
without any evidence and in blatant contradiction with the information that was on the record showing 
that one of the reasons for Nuctech's losses was precisely its losses  in the export market.  Similarly, 
China appears to avoid engaging in  factual issues such as what was the percentage of Nuctech's 
scanner business within the totality of its products.  Based on Smiths' estimate, the EU alleges that 
scanners amounted to around 90% of Nuctech's prod ucts during the POI. China does not provide any 
evidence in this respect.  The EU considers that China is in a be tter position to provide the necessary 
data for the Panel to make an objective assessment of this matter.  Thus, the Panel, in accordance with 
its duties under Article 11 of the DSU, should make u se of its authority pursuant to Article 13 of the 
DSU and put the relevant question to China.  23. Third, MOFCOM failed to provide a compelling, reasoned and adequate explanation  of its 
material injury determination even on the basis of MOFCOM's own factual determination.  In its first 
written submission China attempts to rewrite MOFCOM's Final Dete rmination by selectively quoting 
certain sentences in an effort to make ex-post  sense of its reasoning.  The structure chosen by 
MOFCOM already denotes the lack of a compelling explanation in this case.  Positive factors were 
not put in context but merely disregarded.  More over, China does not contest the fact that MOFCOM 
did not even refer to some important positive f actors, such as productivity.  Likewise, MOFCOM 
ignored the fact that Nuctech's capacity, output, and domestic sales were increasing well in excess of 
the growth in demand.  Again, these show a fa ilure by MOFCOM to provide a very compelling 
explanation in this case.  24. Similarly, China fails to provide adequate support to its findings that Nuctech was in a state of 
material injury.  In a situation where the market was expanding, the fact that domestic sales prices 
constantly decreased indicated that Nuctech sacrifi ced potential profits in order to increase its sales 
and gain more market share.  Indeed, otherwise, Nu ctech could have increased its prices (and profits) 
at least up to the (higher) level of the import pric es.  Even on the basis of the facts as found by 
MOFCOM, Nuctech's state was indicating an industry that was taking advantage of its high productivity and economies of scale to reduce its sales prices, even below the prices of imports.  In 
the EU's view, this cannot support a finding of mate rial injury that is reasoned and adequate.  
 25. Fourth, MOFCOM's disregard of all facts and argumen ts on the record relating to the state of 
the domestic industry .  Indeed, Smiths brought to MOFCOM's attention some factors which were 
relevant to understand the state of Nuctech during the POI.  In particular, Smiths referred to the start-
up situation of Nuctech with respect to the low- energy scanner market and its aggressive pricing 
policy.  Smiths also referred to Nuctech's business expansion to foreign markets.  In its first written 
submission, China attempts to explain why those facts were not addressed by MOFCOM.  However, 
those ex-post  explanations are irrelevant.  The truth of th e matter is that none of those factors were 
referred to, summarised or addressed in MOFCOM's determination.  In the EU's view, they were relevant factors that MOFCOM should have consid ered for its finding of material injury to be 
reasoned and adequate.  
 
VII. CLAIMS UNDER ARTICLES 3.1 AND 3.5 ADA 
 
26. Finally, contrary to what  is required by Articles 3.1 and 3.5 ADA, MOFCOM failed to 
conduct a proper causation analysis.  MOFCOM attributed all the negative effects observed under 
Articles 3.2 (price undercutting/price depression) and 3.4 (material injury) to the dumped imports, concluding that none of the other known factors we re the source of injury. MOFCOM explicitly found 
that none of the other known factors examined could be a cause of the effects found.  Further,  WT/DS425/R/Add.1 
 Page C-7 
 
 
  MOFCOM did not examine any of the other known factor s alleged by the interested parties that were 
causing the effects found.  27. With respect to the attribution analysis , MOFCOM considered that the "large" or "great" 
volume of dumped imports together with their low pr ices were the cause of all negative effects found.  
Article 3.5 states that the demonstration of causation shall be based on "an examination of all relevant 
evidence before the authorities".  In  this respect, the evidence on the record indicated that the volume 
of EU imports was not so "large" or "great" when  seen in the context of domestic consumption and 
domestic sales volume. Domestic sales volume wa s booming in comparison to the volume of EU 
imports.  This is a relevant fact  that MOFCOM ignored when making its conclusion as to the "large" 
or "great" volume of EU imports.  Moreover, a nd more importantly, MOFCOM did not examine the 
nature of those imports in its attribution analysis.  By attributing all the effects found with respect to 
both high-energy and low-energy scanners to imports  exclusively relating to low-energy scanners, 
MOFCOM failed to carry out an appropriat e attribution analysis in this case.  
 
28. Second, with respect to the prices of EU im ports, MOFCOM also ignored the fact that import 
prices were constantly increasing throughout the POI and were even above domestic sales prices 
in 2008.  In that context, the fact that EU impor ts were dumped (allegedly), as China asserts, is beside 
the point.  Indeed, the dumped level of imports is i rrelevant in this context.  What matters is the 
undercutting, which did not exist in this case, and certainly did not take place in 2008.  In particular, 
MOFCOM failed to explain how import prices consis tently going up and reaching a level even above 
domestic sales prices could be the only cause of domestic sale prices consistently declining by an 
amount significantly more substantial.   29. In sum, the EU considers that MOFCOM's attr ibution analysis runs short of the requirements 
under Articles 3.1 and 3.5 ADA. 
 
30. The same should be concluded with respect to the non-attribution analysis . MOFCOM 
disregarded the actual causes for any negative conditi on of the domestic industry, as stood out from 
the record.  In particular, there is no consideration of factors such as the impact of the global crisis 
in 2008, the start-up situation of Nuctech, Nuctech 's aggressive pricing policy, Nuctech's aggressive 
business expansion, and the fair competition between Nu ctech and other producers.  There is not even 
a reference to these arguments in MOFCOM's Fina l Determination.  To say now in these panel 
proceedings for the very first time that MOFCOM decided to reject and no t even address explicitly 
any of the causation arguments raised by Smiths amounts to ex-post  rationalisation which should be 
rejected.  
31. Therefore, the EU requests the Panel to find  that MOFCOM's non-attribution determination, 
as well as MOFCOM's causation determination in gene ral, are inconsistent with Articles 3.1 and 3.5 
ADA.      WT/DS425/R/Add.1 
Page C-8  
 
 ANNEX C-2 
 
 
EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF CHINA 
AT THE FIRST MEETING OF THE PANEL 
 
 
1. Introduction 
 
1. As a preliminary remark, China would like to express its concerns with respect to the various 
claims that the European Union has failed to prop erly substantiate in its First Written Submission, 
making it impossible for China to effectively rebut th em.  It is, however, for the European Union to 
present claims that are understandable and supported by  the necessary arguments and evidence.  Only 
then can China be in a position to properly defend itself and the Panel in a position to rule on these 
claims.  China considers that to the extent the Eu ropean Union has failed to properly substantiate its 
claims, it has failed to make a prima facie  case with respect to these cl aims and such claims should 
accordingly be rejected by the Panel.   2. In this Oral Statement, China will briefl y summarise the main points and highlight certain 
essential issues on which, in China's view, the discussions should focus. 
 2. The European Union's claim under Articl es 6.5.1, 6.4 and 6.2 of the AD Agreement 
 
3. The European Union's first claim concerns Article 6.5.1 and Articles 6.4 and 6.2 of the AD Agreement.   
4. The European Union alleges that China violat ed Article 6.5.1 since it would have failed to 
ensure adequate non-confidential summaries or to  require a statement of reasons explaining 
exceptional circumstances why summarization was not possible.   5. As a preliminary remark, China notes that no claim has been made by  the European Union 
pursuant to Article 6.5.  It is thus not disputed  that the information concerned has been properly 
treated as "confidential" and that the only issue for th e Panel is to determine whether there has been a 
violation of Article 6.5.1.   6. The European Union's claim that no ade quate non-confidential summary was provided by 
Nuctech for various items contained in the Petitio n and in its Questionnaire Response is without 
merit.  Indeed, for the different items identified by  the European Union, an adequate non-confidential 
summary, that is a non-confidential summary which is in sufficient detail to permit a reasonable 
understanding of the substance of the informatio n submitted in confidence, has been provided.  
Furthermore, China notes that Smiths and the Euro pean Union extensively commented on the injury 
determination, thereby invalidating the European Unio n's allegation that the lack of an adequate non-
confidential summary hampered Smiths' rights of defence. 
 
7. The European Union's claim that MOFCOM allegedly failed to request that the Chinese 
Public Security Bureau of the Civil Aviation Admi nistration provide a statement of reasons explaining 
the exceptional circumstances why su mmarization was not possible should equally be rejected.  The 
non-confidential version of the statement explai ns the exceptional circumstance why summarization 
was not possible, namely "the nature of the info rmation" submitted in confidence, which concerned 
the "use of X-ray security inspection equipment in the civil aviation system".  The Chinese Public 
Security Bureau of the Civil Aviation Administra tion further explained to MOFCOM the inherently 
highly sensitive character of the information cont ained in the document submitted in confidence 
which relates to the number and types of security sy stems used in Chinese airports and in the aviation  WT/DS425/R/Add.1 
 Page C-9 
 
 
 sector which, for obvious public security reasons, cannot be summarised without risking disclosing 
the highly sensitive information.  Thus, MOFCOM scr utinised this explanation to determine whether 
it established exceptional circumstances and appropria tely explained why in these circumstances, no 
summary was possible.  
8. The European Union claims that, consequently, China also violated Artic les 6.4 and 6.2.  For 
China, the due process and transpar ency obligations laid down in those provisions are of fundamental 
importance and must strictly be complied with  during anti-dumping investigations.  In the 
investigation at issue, contrary to the European Union's allegations, China fully complied with these 
obligations.  
 
9. Finally, the European Union fails to substan tiate its claims under Articles 6.4 and 6.2 which it 
presents as purely consequential claims to the Article  6.5.1 claim.  Since the European Union fails to 
do so, these claims should be rejected.  3. The European Union's claim under Articl es 6.9, 6.4 and 6.2 of the AD Agreement 
 
10. The European Union argues that China violat ed Article 6.9 and consequently Articles 6.4 
and 6.2 since it failed to disclose the essential facts which form the basis for the determination of the 
dumping margins and the determination of injury, including the analysis of price effects.  
11. Regarding the first claim under Article 6.9, China submits that neither the methodology used 
for the price undercutting/price suppression anal ysis nor the underlying evidence from which 
MOFCOM derived the factual basis on which it made its price analysis come within the scope of 
Article 6.9.  The European Union apparently igno res that Article 6.9 is limited in scope and only 
applies to the essential facts under consideration wh ich form the basis for the decision whether to 
apply definitive measures. 
 12. The European Union's second claim regarding the failure to disclose the underlying facts and 
criteria on the basis of which the adjustments to the export price were made, should also be rejected.  Indeed, the Final Dumping Disclosure adequately a nd fully disclosed all the essential facts concerning 
the export price adjustments.  This is even clearer when the Final Dumping Disclosure is read together 
with the Preliminary Dumping Disclosure which the European Union intentionally ignores in its First 
Written Submission.   13. The European Union's further argument on the fa ilure to disclose the ess ential facts relating to 
Smiths' dumping margin and to the residual duty must equally be rejected.  Again, the European 
Union deliberately fails to mention the Preliminary Dumping Disclosures that were sent to Smiths and 
to the European Union and that contain essentia l facts concerning the determination of Smiths' 
dumping margin and of the residual duty.  Since MOFCOM identified the data which were used, 
explained how the calculations had been made on the basis of such data and disclosed the final figures 
of normal value, export price and the dumping marg in, the requirement of Article 6.9 has been 
complied with. 
 
14. With respect to the alleged violations of Ar ticles 6.4 and 6.2, China emphasises again that a 
violation of Article 6.9 – quod non  – would not necessarily entail a violation of Article 6.4 and/or 6.2.  
The European Union has failed to substantiate its claims.  4. The European Union's claim under Article 12.2.2 of the AD Agreement 
 
15. The European Union claims that China violated Article 12.2.2 of the AD Agreement primarily because it did not provide the reasons whic h led to arguments being accepted or rejected in 
connection with the determination of normal value, injury and cau sation.  Regarding the argument WT/DS425/R/Add.1 
Page C-10  
 
 raised by Smiths on its relationship with its affilia ted companies in the context of the normal value 
determination, this issue has been fully addressed by MOFCOM and the reasons for rejecting Smiths' 
argument are set out in its Final Determination.  Si milarly, Smiths' arguments on the credibility of the 
data submitted by Nuctech were also examin ed in MOFCOM's Final Determination.  The 
European Union fails to precisely identify in its  First Written Submission the other arguments that 
Smiths would allegedly have raised in connection with MOFCOM's injury and causation analysis.  
Moreover, the European Union fails to establish th at those arguments were "relevant" within the 
meaning of Article 12.2.2.   16. Second, the European Union also claims th at the Final Determination does not contain all 
relevant information on the matters of fact and la w and reasons which have led to the imposition of 
final measures in connection with the injury dete rmination and the calculations of Smiths' dumping 
margin and the residual duty.   17. As to MOFCOM's alleged failure to explain in its Final Determination the methodology used 
in the price undercutting and price suppression analysis, that claim should be rejected since it does not 
come within the scope of Article 12.2.2 as it is neither  a "matter of fact" nor is it "relevant" within the 
meaning of Article 12.2.2.  Furthermore, the calc ulations of Smiths' dumping margin and of the 
residual duty and the data underlying those calcu lations do not come within the scope of 
Article 12.2.2. As acknowledged by the Eu ropean Union, these calculations and - a fortiori  - their 
underlying data contain confidential information, th e disclosure of which is necessarily inconsistent 
with Article 6.5 of the AD Agreement.  The Euro pean Union nevertheless claims that China should 
have made available to Smiths the calculations it used to determine its individual dumping margin.  
Article 12 does not contain obligations concerning the content of a disclosure to specific interested parties but concerns instead the content of the public notice to be published at the end of the 
investigation.  Such notice is by definition public  and cannot contain confidential information.  For 
that sole reason, the European Un ion's claim must be rejected.  In any case, the calculations of the 
dumping margin and their underlying data do not cons titute "relevant informati on on matters of fact 
and law and reasons whic h have led to the imposition of final measures" within the meaning of 
Article 12.2.2 of the AD Agreement.  
5. The European Union's claim under Articles 3.2 and 3.1 of the AD Agreement 
 
18. The European Union claims that MOFCOM's anal ysis of the price effects is inconsistent with 
Articles 3.2 and 3.1 of the AD Agreement since it failed to make a price undercutting and/or price suppression analysis distinguishing between so-calle d "low-energy" and "high-energy" scanners and 
even among the different models of "low-energy" scanners.  It claims that MOFCOM should have 
made its price analysis on a m odel-by-model basis. Article 3.2, however, does not require the 
investigating authority to use any particular met hodology for its price analysis.  The investigating 
authority enjoys discretion with respect to the methodology it will follow.  Furthermore, Article 3 
does not contain any requirement to make adjust ments similar to those normally made for the 
dumping margin pursuant to Article 2.4.  This ma kes sense since, pursuant to Article 3.2, the 
investigating authority is not even required to ma ke any quantitative findings or determinations on the 
price effects but merely needs to "consider" the price effects.  
 19. The European Union fails to demonstrate th at MOFCOM's price analysis was not objective 
because MOFCOM would not have ensured an even-h anded treatment of the information and data on 
the record of the investigation.  MOFCOM defined the product under c onsideration.  After 
examination of the domestic product, it concluded th at they were "like". It was thus reasonable for 
MOFCOM to assess the effects of the dumped impor ts on prices by using the weighted average unit 
methodology.  During the investigation, Smiths never claimed that the price analysis should be made 
separately for "high-energy" and "low-energy" scanners  nor requested certain adjustments to be made.  
In any case, there is no clear-cut criterion to differe ntiate "high-energy" from "low-energy" apparatus.  WT/DS425/R/Add.1 
 Page C-11 
 
 
 20. The fact that there are price differences be tween products which all constitute the like product 
does not render the use of the weighted average me thodology unreasonable.  In fact, in most anti-
dumping cases, there are price differences due to differ ences in, e.g. model types, the date of sale or 
the type of customers.  Following the European Uni on's logic would lead to a prohibition of the use of 
the weighted average methodology in nearly all an ti-dumping cases.  Actually, the use of averages 
may in certain cases be favourable to the e xporter while negative on other occasions.  The 
European Union fails to demonstr ate that MOFCOM did not ensure an even-handed treatment of the 
information and data in that MOFCOM would ha ve intentionally selected certain models or 
transactions to achieve a certain result in its analysis.  MOFCOM applied the weighted average 
methodology in an even-handed and objective manner.  Therefore, the Europe an Union's claim that 
China acted in violation of Articles 3.1 and 3.2 should be rejected. 
 
6. The European Union's claim under Articles 3.4 and 3.1 of the AD Agreement 
 
21. China submits that the four European Uni on's claims under Articles 3.4 and 3.1 concerning 
MOFCOM's injury analysis should be rejected. 
 22. First, regarding the claim that MOFCOM fa iled to base its evaluation on positive evidence 
because of alleged discrepancies between the data in MOFCOM's Final Determination and the information submitted by Nuctech or available from ot her sources, China submits that the mere fact 
that there may be discrepancies between those data does not demonstrate that the "evidence" on which 
MOFCOM based itself is not "positive".  Actually , the figures and data in a Questionnaire Response 
are checked by the investigating authority, in par ticular through on-site verifications.  Following such 
verifications, MOFCOM adjusted Nuctech's data and,  for instance, excluded the data relating to the 
exports of the like product as well as to other produc ts.  As to the discrepancies with certain figures 
from other sources, MOFCOM explained that those data included informati on on other products as 
well. 
 23. Second, the claim regarding China's failure to examine all factors listed in Article 3.4 and, in 
particular, the magnitude of the margin of dumping should equally be rejected.  As set out clearly in the Final Determination, MOFCOM evaluated the ma gnitude of the margin of dumping in the Final 
Determination and found that it exceeded the " de minimis " threshold of Article 5.8 of the 
AD Agreement. 
 24. Third, the European Union ar gues that China failed to make an objective examination of the 
state of the domestic industry because it disregarded the differences between "low-energy" and "high-
energy" scanners.  This claim is baseless in both fact and law.  There is no requirement in Article 3 
that the investigating authority carries out a separat e analysis for alleged different categories of the 
"like product".  On the contrary, the obligation to make an objective examinat ion of the state of the 
domestic industry pursuant to Articles 3.1 and 3.4 means that the domestic industry has to be investigated "as a whole" and that an investigating authority cannot focus only on one segment or sector of the domestic industry.  Moreover, no clear  cut difference between separate segments exists 
in this case. 
 
25. Fourth, the European Union assertion that MOFC OM failed to make a proper evaluation of all 
injury factors in context is groundless.  The Eur opean Union first argues that MOFCOM failed to 
provide a compelling explanation of whether and ho w the overwhelming majority of positive factors 
were outweighed by any other negativ e factors.  The European Union's presentation of the facts is not 
correct. It is not so that most injury factors were positive or showed a positive trend.  In fact, the Final 
Determination shows that a significant number of factors were negative.  Furthermore, MOFCOM 
provided a reasoned and reasonable explanation as to how and why the facts and elements on the 
record support its finding of injury, including an  explanation why the allegedly positive factors were 
insufficient to change this overall conclusion.  The European Union is simply requesting the Panel to WT/DS425/R/Add.1 
Page C-12  
 
 re-examine the facts on the record and to dete rmine whether it would have reached the same 
conclusion on injury as MOFCOM did.  This, however , is not the role of the Panel as is clear from 
Article 17.6 of the AD Agreement and Article 11 of the DSU.   26. The claim that MOFCOM made  contradictory observations in a not even-handed manner is 
entirely misplaced and contradicted by the evidence  in MOFCOM's Final Determination.  Moreover, 
it flows from the Final Determination that MOFCOM analysed not only each factor individually but 
considered also how the factors relate to each  other and to the wider economic context.  
 27. Finally, the European Union's claim that MO FCOM failed to take into account all facts and 
arguments on the record relating to the state of th e domestic industry should equally be rejected.  The 
European Union has not submitted any evidence rega rding Nuctech's alleged start-up situation and 
alleged aggressive pricing policy.  In any event, these are not factors having a bearing on the state of the domestic industry within the meaning of Article 3.4.  Those factors were rightly considered irrelevant in assessing the impact of the dumped imports on the state of the domestic industry. 
 
7. The European Union's claim under Articles 3.1 and 3.5 of the AD Agreement 
 
28. The European Union argues that  China violated Articles 3.5 and 3.1 since it failed to properly 
examine the causal relationship between the dumped im ports and the material injury found and failed 
to conduct a proper non-attribution analysis. 
 
29. Regarding the causal relationship between the dumped imports and the material injury found, 
the European Union fails to point to any flaw s in MOFCOM's reasonable and reasoned findings.  
Indeed, MOFCOM carried out an adequate analysis of the volume of the dumped imports and of their 
effects on domestic prices.  Furthermore, as evidenced by the Final Determination, MOFCOM 
established the existence of a temporal correlation between, on the one hand, the rapid and significant 
increase in the volume of the dumped imports as well as the low level of their prices and, on the other hand, the injured state of the domestic industry as reflected in numerous factors such as declining 
prices, losses, negative investment and rate of return, increasing stocks, etc.   30. With respect to the non-attribution require ment, the European Union's allegation that 
MOFCOM ignored other known factors raised by Sm iths and failed to consider several arguments 
made by Smiths is equally unsubstantiated.  It is  clear from Article 3.5 that the non-attribution 
requirement only applies to factors other than dumped imports which are known to the investigating authority and are injuring the domestic industry at the same time as the dumped imports.  The 
European Union simply fails to demonstrate this with  respect to the five alleged other known factors.  
In any case, theses five factors were either examined  by MOFCOM or did not need to be because they 
rested on a factual assumption that had already been rejected by MOFCOM.        WT/DS425/R/Add.1 
 Page C-13 
 
 
 ANNEX C-3 
 
 
CLOSING STATEMENT OF CHINA AT THE FIRST  
MEETING OF THE PANEL 
 
 1. Mr. Chairman, Distinguished Members of the Panel, China would like to thank you for all your efforts.  
2. In this Closing Statement, we would like to correct some of the misleading statements made 
by the European Union.  This is important for the proper assessment of the matter before you.  We 
would like to refer you to our First Written Submis sion, which contains more detailed evidence to 
rebut the EU's groundless allegations.  We wa nt, however, to emphasise the following points. 
 
3. First, China is aggrieved by the very seri ous allegations made by the European Union that 
China would have acted in a biased manner and would have disregarded "some of the most fundamental procedural guarantees provided in the Anti-Dumping Agreement."
1  China cannot accept 
these insinuations.  Throughout the proceedings, Chin a respected all due process guarantees.  As you 
know, China is one of the main targets of trade defe nce investigations.  China has therefore a systemic 
interest in safeguarding the procedural rights of pa rties involved in such investigations.  China would 
like to reiterate its strong commitment to the princi ples of transparency and procedural fairness in 
carrying out anti-dumping investigations.  China's inv estigating authority has always paid the utmost 
attention to safeguarding the rights of al l parties in anti-dumping investigations. 
 4. Moreover, China would also like to point out that the accusations made by the 
European Union as to alleged "serious" violations  of due process obligations frequently concern 
practices routinely followed by the EU's own i nvestigating authority and are even directly 
recommended in the EU's investigative guidelines.   5. Second, the European Union's repeated claims  concerning the allegedly blatant violations of 
due process obligations by China is insufficient to mask the lack of factual evidence supporting these 
serious allegations.  As an example, throughout th e investigation, China gave ample opportunity to 
Smiths to correct and complete its deficient submi ssions.  China also made considerable efforts to 
inform the parties with all the essential facts which formed the basis of its determinations.  Finally 
throughout the investigation, Smiths has ampl e opportunities to consult all non-confidential 
information.  
 
6. Third, the European Union' s statement that this case would have been initiated by MOFCOM 
in retaliation for the anti-dumping measures imposed  by the European Union on similar products is 
pure speculation.  In fact, the petition was subm itted to MOFCOM several months before the 
European Union imposed any anti-du mping measures.  The European Union also appears to forget 
that the present anti-dumping investigation has not been initiated ex officio  by MOFCOM but on the 
basis of a duly substantiated claim by the petitioner.  As in the EU, China's investigating authority is 
under the obligation to accept petitions that contain sufficient prima facie  evidence. 
 7. Fourth, the European Union on several  occasions has accused China of making " ex post 
facto " explanations.  However, as explained in our First Written Submission, the explanations were 
either provided or there was no need to provide such explanation since the arguments raised by 
Smiths were manifestly irrelevant or lacking sup porting evidence.  Just one example.  During the 
investigation, Smiths argued that Nuctech was in a start-up phase.  The notion of a start-up phase is 
                                                      
1 EU Opening Statement, para. 2. WT/DS425/R/Add.1 
Page C-14  
 
 found in the AD Agreement in the context of the determination of the normal value and is a well 
defined concept.  Smiths, however, has not subm itted any evidence whatsoever that Nuctech would 
have found itself in a start-up phase.  The statements made by Smiths were moreover completely contradictory.  First, Smiths argued that Nuctech wo uld have recently started a production of so-called 
low-energy scanners.  Then, Smiths explained that Nuctech would have been producing low-energy 
scanners but would not have been present in the aviation sector.  Later on, Smiths also argued that 
Nuctech was present in the aviation sector but was tryi ng to get additional market share.  Again, no 
evidence of any of the foregoing statements has been  given by Smiths.  It is clear that one cannot 
expect that an investigating authority would take this kind of unsubstantiated and conflicting claims 
more seriously than the evidence obtai ned from the company's own records. 
 
8. Fifth, the European Union also seems to consid er that there is a clear and manifest distinction 
between the so-called categories of "high-energy" and "low-energy" scanners.  There is, however, no 
clear-cut criterion for differentiating categories of scanners.  In fact, it seems that this categorisation is self-serving and has been invented by Smiths for the purposes of this case.  Indeed, in a previous case 
by the European Union, Smiths argued that the cut- off level was an energy level of 250 KeV instead 
of above 300KeV, as in the present case.  Furtherm ore, no clear-cutting categorisation of scanners can 
be made on the basis of sizes, prices, uses or technol ogies.  Contrary to what Smiths alleges, there are 
no distinct categories of scanners and the various  types of scanners form a single continuum.  
Producers, such as Smiths generally offer a full range of products meeting the varied needs of their costumers.  
 
9. Finally, we are surprised that the Europ ean Union argues that no injury can occur when 
import prices are increasing or are even higher th an the domestic prices.  The European Union 
conveniently overlooks its many dete rminations in which it concluded to the existence of material 
injury in similar circumstances.  Indeed, the fact that import prices are increasing and are higher than 
the domestic prices does not prevent such prices from depressing or suppressing the prices of the 
domestic industry.  This is particularly the case wher e the prices relate to imports which are rapidly 
increasing and capturing additional market share.  10. Mr Chairman, Distinguished Members of the Pa nel, this concludes our closing statement.  
Thank you. 
 
    WT/DS425/R/Add.1 
Page D-1 
 
 
  ANNEX D 
  
ORAL STATEMENTS OF THE THIRD PARTIES AT  
THE FIRST SUBSTANTIVE MEETING 
 
 
Contents Page 
Annex D-1 Third Party Oral Statement of Chile at the First Meeting of the 
Panel D-2 
Annex D-2 Third Party Oral Statement of Japan at the First Meeting of the 
Panel D-4 
Annex D-3 Third Party Oral Statement of Norway at the First Meeting of the 
Panel D-7 
 
  WT/DS425/R/Add.1 
Page D-2  
 
  ANNEX D-1 
 
THIRD PARTY ORAL STATEMENT OF CHILE AT THE  
FIRST MEETING OF THE PANEL* 
 
 
1. Mr Chairman, distinguished members of the Pane l, the delegation of Chile, as a third party to 
this dispute, is grateful for the opportunity to pr esent its views on certain systemic aspects of this case. 
 2. Chile notes that this dispute involves matters that have a considerable bearing on the proper 
application and interpretation of the Anti-Dumping Agreement , particularly as regards the provisions 
governing transparency and those that guarantee the right of parties to a full opportunity to defend their interests, a prerequisite  for any anti-dumping investigation. 
 3. To begin with, Chile would like to stress the importance of the obligation contained in 
Article 6.5.1 of the Anti-dumping Agreement for interested parties to furnish non-confidential 
summaries and for those summaries to be in su fficient detail.  As stated by the Panel in Argentina – 
Ceramic Tiles
1, this obligation is important in that th e purpose of ensuring access to these summaries 
is to enable the interested parties to defend thei r interests in the framework  of an investigation, 
thereby guaranteeing their right to due process.   
4. As regards the allegation by the European Un ion that the reasons why summarization of the 
confidential information was not possible, Chile, like Norway in its third party submission, takes the 
view that the Panel must rule on whether the oblig ation contained in the said provision implies that 
these reasons must be made public for those involved in the investigation.  We agree that the only 
useful interpretation of the provision would be that  the interested parties should have access to these 
reasons, which they can only obtain if the information is effectively placed at their disposal by being 
made public.  5. Moreover, in cases where it is not possible to  summarize the confidential information, it is the 
investigating authority's obligation, even if the provision does not expressly say so, to require the 
interested party to indicate the reasons and grounds why such summarization is not possible.
2  I n  
Chile's view, this obligation cannot be fulfilled merely by describing the nature of the information or 
assets protected by confidentiality - to accept this w ould be tantamount to circumventing or failing to 
apply the provision in question.  6. Secondly, Chile would like to refer to th e obligation contained in Article 6.9 of the 
AD Agreement to inform all interested parties, be fore a final determination is made, of the essential 
facts under consideration which form the basis for the decision whether to apply definitive measures. 
 7. The purpose of this obligation is clearly to di sclose to the interested parties the information 
that the investigating authority will be considering as a basis for its final decision, so that the parties 
can be in a position to comment on or seek to correct th at information.  It is important to stress that 
the investigating authority's obligation does not extend to, or cover, all of the information it has had 
before it during the investigation, but only the re levant information that it will be taking into 
consideration when reaching its fina l decision and which relates to th e facts, and not to the reasoning 
used.  
                                                      
* This Oral Statement was originally made in Spanish.   
1 Report of the Panel in Argentina – Ceramic Tiles , paragraph 6.39. 
2 See the Report of the Panel in Guatemala – Cement II , paragraph 8.123.  WT/DS425/R/Add.1 
Page D-3 
 
 
  8. Moreover, the panel needs to analyse a nd take account of the manner in which the 
investigating authority claims to have disclosed  the information and the alleged timing of that 
disclosure.  Compliance has to be analysed in the light of the purpose of the obligation, since it is 
essential that the timing of the disclosure and the manner  in which it is done must be such as to enable 
the interested parties to defend their interests.  To accept any inferior standard  would be to deprive the 
provision in question of all effectiveness. 
 9. Without wishing to evaluate the substance of the dispute or to question the procedures by which the challenged definitive measures were impo sed, Chile considers that for these provisions to 
be applied correctly, all of the in terested parties must be guaranteed access to the information they 
need to better defend their interests and to be able to influence the final decision.  Consequently, we 
would ask the Panel to conduct its examin ation in the light of that objective. 
 10. Finally, leaving aside the question of whethe r the investigating authority failed to conduct an 
objective examination on the basis of positive evidence w ith respect to the determination of injury as 
required by Article 3.1 of the Anti-Dumping Agreement,  Chile would like to suggest that the Panel, in 
making its assessment of the effect of the dumped imports on prices in the domestic market for like products, consider the conditions of competition between those products.  The analysis of those 
conditions of competition must be based, inter alia , on the physical characteristics of the products, 
including technical and quality specifications, and on the characteristics of their markets, including 
their end-use, substitutability, pri ce level and forms of distribution. 
 
 Once again, many thanks for this opportunity. WT/DS425/R/Add.1 
Page D-4  
 
 ANNEX D-2 
 
THIRD PARTY ORAL STATEMENT OF JAPAN AT THE  
FIRST MEETING OF THE PANEL 
 
 
I. INTRODUCTION 
 
1. Mr. Chair, and distinguished Members of the Panel, on behalf of the Government of Japan, I 
thank you for your attention to this dispute involving important systemic issues in the AD Agreement .  
Among issues raised by the EU, Japan would like to address with respect to the injury determination 
the disclosure of essential facts and the public notice of the final determination, taking into account 
arguments of parties.  
II. DISCUSSION 
 
A. The Disclosure of Essential Facts under Article 6.9 of the AD Agreement 
 
2. The EU alleges that China did not fully di sclose essential facts related to the investigating 
authority's analysis of the effects of dumped imports on the prices of the domestic like products.
1  
China disagrees with this allegation.2 
 
3. Article 6.9 of the AD Agreement  sets forth a specific procedural rule to ensure the 
transparency of AD investigations and the observa nce of the due process rights of the interested 
parties.  This Article requires the investigating aut hority to identify and disclose those facts that would 
be essential for the authority's final determination.  At the same time, this disclosure must be in 
sufficient detail to enable the interested parties to make an effective defense of their interest. 
 4. With respect to the scope of the essential facts,  a dispute panel explained in the context of the 
SCM Agreement  that a specific fact would be essential if it "underlie[s] the inv estigating authority's 
final findings and conclusions in respect of the th ree essential elements – subs idization, injury and 
causation".
3  In the case of an antidumping investigation,  the essential elements are dumping, injury, 
and causation. 
 5. Article 3.5 requires the authority to demons trate the causation between dumped imports and 
the injury to the domestic industry "through the e ffects of dumping, as set forth in paragraphs 2 
and 4".  This provision explicitly necessitates an analysis of the effects of dumped imports in 
accordance with Article 3.2 in order for the authorit y to reach the causation determination.  Facts, on 
which the authority based its analysis of the effect s under Article 3.2, are therefore essential to the 
causation determination, and thus must be discl osed to interested parties under Article 6.9. 
 6. China argues that Article 3.2 does not set fo rth any methodologies to analyze the effects of 
dumped imports, and thus the authority has cons iderable discretion to decide an appropriate 
methodology.
4  This does not mean, however, that the authority's discretion is unlimited.  "The 
general requirements of objective examination and positive evidence of Article 3.1 limit an 
investigating authority's discretion in th e conduct of a price undercutting analysis".5  This discretion 
                                                      
1 First Written Submission by the Europ ean Union (the "EU FWS"), para. 83. 
2 First Written Submission of the People’s Republic of China (the "China FWS"), paras. 132-163. 
3 Panel Report, Mexico – Olive Oil , para. 7.110. 
4 China FWS, para. 145. 
5 Panel Report, EC – Fasteners (China) , para. 7.328.  WT/DS425/R/Add.1 
 Page D-5 
 
 
 must be exercised "in an unbiased manner, without fa vouring the interests of any interested party, or 
group of interested parties, in the investigation".6 
 7. These requirements inform the authority's obligation to disclose the essential facts under 
Article 6.9.  The second sentence of Article 6.9 requ ires the authority to disclose to the interested 
parties the information that enables them to co mment on the completeness and correctness of the 
facts, provide additional information or correct pe rceived errors, and comment on or make arguments 
as to the proper interpretation of those facts.
7  Facts, which the authority fo und to make its analysis of 
the effects of dumped import, must also be disclosed in such detail so as to allow the interested parties 
to make such examination and arguments in light  of the authority's obligation of an objective 
examination in an unbiased manner without favour ing the interests of any interested party. 
 
B. The Sufficiency of the Public Notice under Articles 12.2 and 12.2.2 
 
8. The EU alleges that MOFCOM  failed to explain the methodology used for analysis of the 
price undercutting or price depression in the public notice.8  China disagrees.9 
 9. Article 12.2 sets forth the investigating aut hority's general obligati on for public notices of 
preliminary and final determinati ons.  The investigating authority must explain in the notice "the 
findings and conclusions reached on all issues of fact and law considered material by the investigating 
authority".  Such explanation must be given irresp ective of whether interested parties presented any 
arguments to the authority. 
 10. The panel in EC – Tube or Pipe Fittings  analyzed this general obligation that "a "material" 
issue [is] an issue … that must n ecessarily be resolved in order for the investigating authorities to be 
able to reach their determination".
10  The panel in EU – Footwear (China) further stated that the 
materiality of issues "must be judged primarily from the perspective of the actual final determination 
of which notice is being given".11  These panels clarified that an issue must be explained in the public 
notice when it is judged as material to the actual fina l determination upon an objective analysis of the 
final determination, and not based on the s ubjective consideration by the authority. 
 11. As discussed earlier, the facts on which th e authorities analyzed the effects of dumped 
imports to determine causation are "essential" facts.   As the Appellate Body pointed out, "[t]he 
'essential facts' under Article 6.9, which form the b asis for a final determination, are those that are 
material for the authority's decision".
12  The factual issue on the analysis accordingly thus must be 
explained in the public notice.  
12. The EU also alleges that MOFCOM did not state the reasons for the rejection of certain 
arguments by an exporter in the public notice .
13  China rejected these allegations.14 
 13. Article 12.2.2 sets forth rules applicable onl y to the public notice of an affirmative final 
determination imposing a definitive duty.  The auth ority must explain the "reasons for accepting or 
rejecting relevant  arguments" by the exporters.  The ordinary meaning of "relevant" means "closely 
                                                      
6 Appellate Body Report, US – Hot-Rolled Steel , para. 193. 
7 See Panel Report, EC – Salmon (Norway) , para. 7.805. 
8 EU FWS, para. 148. 
9 China FWS, paras. 233-242. 
10 Panel Report, EC – Tube or Pipe Fittings , para. 7.424, as quoted in China FWS, para. 212. 
11 Panel Report, EU – Footwear (China) , para. 7.844. 
12 Appellate Body Report, EC – Fasteners (China) , para. 483. 
13 EU FWS, paras. 150, 154, 155, and 312-314. 
14 China FWS, paras. 243-250. WT/DS425/R/Add.1 
Page D-6  
 
 connected or appropriate to the matter in hand".
15  In the context of Article 12.2.2, an argument would 
be "relevant" if the argument is closely connected to "matters of facts and law and reasons which have 
led to the imposition of final measures".  The scope of these matters of facts and law should also be understood in the context of the authority's general obligation to explain issues of material fact and 
law, not every single issue, in the public notice.  As the panel in EU – Footwear (China)  stated, "the 
notions of 'material' and 'relevant' in Article 12.2. 2 must be judged primarily  from the perspective of 
the actual final determination of  which notice is being given".
16  In the context of Articles 12.2 
and 12.2.2, therefore, an argument by an exporter is  "relevant" and thus the authorities must explain 
the reasons for the acceptance or rejection when th e argument is closely conn ected to an issue of 
material fact or law from the perspec tive of the actual final determination. 
 
III. CONCLUSION 
 
14. As stated in the third party submission, Japan does not take any particular position on the 
factual aspects of this dispute.  Japan respectfully  requests the Panel to examine carefully the facts 
presented by the parties to this dispute in light of Japan's comments above and in the third party 
submission to ensure the fair and objective application of the provisions of the AD Agreement .  Japan 
would be pleased to respond any qu estions that the Panel may have. 
  
                                                      
15 Concise Oxford dictionary, tenth edition, revised, p. 1209. 
16 Panel Report, EU – Footwear (China) , para. 7.844. (emphasis given)  WT/DS425/R/Add.1 
 Page D-7 
 
 
 ANNEX D-3 
 
THIRD PARTY ORAL STATEMENT OF NORWAY AT THE  
FIRST MEETING OF THE PANEL 
 
 
Mr. Chairman, Members of the Panel,  1. Norway welcomes this opportunity to present its views on the issues raised in these panel 
proceedings.  
 
2. In its written statement, Norway addressed a nu mber of interpretative issues raised by the EU 
and China.  Norway focused on the non-confidentia l summarisation of confidential information, the 
disclosure of essential facts forming the basis of certain determinations, the disclosure of all non-
confidential information relevant for interested par ties to defend their interests and the provision of 
full opportunity for the defence of interested parties' rights.  With regard to these issues, I shall refer 
you to the arguments in our written submission.  3. Today, Norway would like to  address one additional issue raised by the EU and China in their 
written submissions;  the standard of review.  More  precisely, the EU's claim that China violated 
Article 12.2.2 of the Anti-Dumping Agreement  because the investigating authority failed to provide an 
adequate explanation for some of its determinations, as well as referenc es to the matters of fact and 
law and reasons which led to argumen ts being accepted or rejected.
1  Norway will not address the 
issue of whether China has fulfilled the obligations set out in Article 12.2.2 in this case, but will 
highlight certain arguments that may be of importa nce to the Panel when interpreting the relevant 
Article. 
 
4. Under the provisions of Article  12.2 and Article 12.2.2 of the Anti-Dumping Agreement , the 
investigating authority is given a comprehensive ob ligation to provide a transparent statement of the 
reasons for the imposition of definitive anti-dumping duties.  Thus, the authority must set forth the relevant facts in the record, and must explain "in sufficient detail", as set out in Article 12.2, the factual and legal determin ations made on the basis of the evid ence in the record that led to the 
imposition of duties.  
 5. Articles 12.2 and 12.2.2 therefore serve the same function as similar provisions in other 
covered agreements relating to trade reme dy measures, namely, Article 3.1 of the Agreement on 
Safeguards  and Articles 22.3 and 22.5 of the Agreement on Subsidies and Countervailing Measures .  
The Appellate Body and panels have  consistently ruled that these provisions require the investigating 
authorities to provide a reasoned and adequate explanation , among others, of how the evidence in the 
record supports the authority's determination.
2  The authority's explanation must demonstrate in a 
"clear and unambiguous" manner that the substan tive conditions for imposition of trade remedy 
measures have been satisfied.3  The authority must provide "sufficient background and reasons for 
that determination, such that its reasons for concluding as it did can be discerned and are 
understood".4 
 
                                                      
1 The EU's First Written Submission, para. 128. 
2 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 99. 
3 Appellate Body Report, US – Line Pipe , para 217. 
4 Panel Report, EU – Footwear , para.7.844. WT/DS425/R/Add.1 
Page D-8  
 
 6. Furthermore, the Appellate Body has emphasised  that "the evidentiary path that led to the 
inferences and overall conclusions of the investigat ing authority must be clearly discernible in the 
reasoning and explanations found in its report".
5 
 7. In sum, the investigating authority must provi de an explanation that does not leave the reader 
guessing why the authority made its determinations.  If an authority fails to explain itself adequately, 
it cannot demonstrate that it has respected  the substantive requirements of the Anti-Dumping 
Agreement  governing those determinations. 
 8. In conclusion, Norway submits that the Appe llate Body – with regard to the standard of 
review – has stated that a panel must examine whether the authority has provided a "reasoned and 
adequate explanation" of "how individual pieces of evidence can be reasonably relied on in support of 
particular inferences, and how the evidence in the record supports its factual findings".
6 
 Mr. Chairman, distinguished Members of the Panel, 
 
9. This concludes Norway's statement today.  Thank you for your attention.    
                                                      
5 Appellate Body Report, US – Softwood Lumber (Article 21.5 – Canada),  para. 97. 
6 Appellate Body Report, US – Softwood Lumber (Article 21.5 – Canada) , para. 99.  WT/DS425/R/Add.1 
 Page E-1 
 
 
 ANNEX E 
  
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN 
SUBMISSIONS OF THE PARTIES 
 
Contents Page 
Annex-E-1 Executive Summary of the Second Written Submission of 
the European Union E-2 
Annex E-2 Executive Summary of the Second Written Submission of China E-11 
 WT/DS425/R/Add.1 
Page E-2  
 
 ANNEX E-1 
 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION  
OF THE EUROPEAN UNION 
  1. Claim under Articles 6.5.1, 6.4 and 6.2 ADA 
 1.1 Introduction 
  China breached its obligations under Article 6. 5.1 ADA by failing to ensure that interested 
parties provided non-confidential summaries of conf idential information or a statement of reasons 
explaining why summarization is impossible.  Wh ere summaries were provided, China failed to 
ensure that they were in suffici ent detail to enable a reasonable unde rstanding of the substance of the 
information submitted.  This also constitutes a viol ation of Article 6.4 to the extent it amounts to a 
failure to provide a timely opportunity to interest ed parties to see and comment upon the information 
that the authority used in the antidumping investig ation and that is relevant for the presentation of 
their case.  Where interested par ties are denied an opportunity to see all relevant information in the 
record, including adequate non-confidential summaries or statements justifying the impossibility of 
summarisation, they are denied the right to an opportunity to fully defend their interests, as required 
by Article 6.2 ADA. 
 1.2. MOFCOM failed to ensure ad equate non-confidential summaries 
 
 China violated Article 6.5.1, because MOFCOM did not ensure that all information submitted 
in confidence was accompanied by an adequate non-confidential summary .  There is no explanation 
from the domestic interested parties on the record  as to why the information would have been 
impossible to summarise.  Information subject to the European Union's claims was relevant, not 
confidential and used by the authorities in the anti-dum ping investigation.  While it is correct that the 
text of Article 6.5.1 does not prescribe a specific fo rmat, it is clear that it requires that the summary 
enables a reasonable understanding with the aim of enabling rebuttal. 
 
1.3. MOFCOM failed to require a non-confiden tial summary or a statement of reasons why 
summarisation of the statement by the Aviation Administration was not possible 
 
 China violated Article 6.5.1 ADA due to MO FCOM's failure to require a non-confidential 
summary or a statement of reasons explaining th e exceptional circumstances why summarization was 
not possible with respect to the statement made by the Aviation Administration.  China's argument 
that the statement of exceptional circumstances ne eds only be made available to MOFCOM is based 
on a misguided interpretation of Article 6.5.1 and th erefore be should be rejected. China's attempt to 
invoke security concerns for the lack of summarizati on is ex post rationalization which contradicts the 
facts on the record. 
 
2. Claim under Articles 6.9, 6.4 and 6.2 ADA 
 
2.1. Introduction 
 
 Contrary to its obligations under the ADA Chin a failed to disclose the underlying data and the 
methodology for price undercutting and price depr ession/suppression.  China also failed to fully 
disclose all essential facts which form the basis for the determination of the dumping margin for the 
cooperating producer and the essential facts which form the basis for the determination of the residual 
duty.   WT/DS425/R/Add.1 
 Page E-3 
 
 
 2.2. MOFCOM failed to disclose the underlying data and the methodology for price undercutting 
and price depression/suppression 
 
 MOFCOM failed to disclose the underlying data and methodologies it followed in determining the existence of (i) price undercutti ng and (ii) price depression/suppression. Because the 
underlying data and the methodologies for pr ice undercutting and price depression/suppression 
constitute "essential facts", which form the basis for the decision whether to a pply definitive measures 
within the meaning of Article 6.9 ADA, China act ed inconsistently with Article 6.9 ADA by not 
disclosing them prior to the final determination.   
2.3. MOFCOM failed to disclose the calcu lation of the individual dumping margin 
 
 The calculations relied upon by an investigati ng authority to determine the normal value and 
export prices, as well as the data underlying those calcu lations, constitute "essential facts" forming the 
basis of the investigating authority's imposition of fi nal measures within the meaning of Article 6.9.  
The calculations and underlying data are facts that ar e "essential" to the determination of the existence 
and level of dumping.  Without this  information, no affirmative dete rmination could be made and no 
definitive duties could be imposed.  China's ar gument that Smiths was provided with sufficient 
information to replicate the calculations should be rejected.  MOFCOM's disc losure at best allowed 
Smiths's to guess or approximate the calculations, wh ich is not sufficient to meet the requirements of 
Article 6.9. 
 
2.4. MOFCOM failed to disclose the essential f acts under consideration regarding its calculation 
of the "all others" dumping rate 
 
 As confirmed by China's attempt to prove an ex post  explanation of how the "all others" duty 
rate was determined, MOFCOM failed to identify in its preliminary and final disclosures to the 
European Commission the essential facts under consid eration regarding its calculation of the "all 
others" duty rate and in so doing violated Articles 6. 9, 6.4 and 6.2.  Interested parties can only assess 
whether the investigating authority acts in a reas onable, objective and impa rtial manner, and hence 
take an informed decision inter alia  about the need for challenging it under Article 6.8 ADA, if they 
have access to the essential facts under consideration whic h form the basis for the decision to resort to 
a determination based on available facts.  The Euro pean Union submits that this was not the case in 
this investigation, which constitutes a fa ilure to comply with Article 6.9 ADA. 
 
3. Claim under Article 12.2.2 ADA 
 
3.1. Introduction 
 
 Neither in its public notice of the imposition of  definitive measures, nor in a separate report, 
did MOFCOM set forth sufficiently detailed explanati ons together with references to the matters of 
fact and law and reasons which led to arguments being accepted or rejected with respect to the 
determinations of normal value and injury, the est ablishment of causal link and the establishment of 
the residual duty rate and the dumping margin for the cooperating producer. 
 3.2. Normal value determination 
  MOFCOM did not provide any reasons in its public notice, which would address arguments 
and evidence presented by Smiths in the course of the investigation concerning the normal value 
determination.  MOFCOM concl uded without any explanation that  "the sales prices of Smiths 
Heimann through affiliated distributors in the EU during the POI were clearly affected by the 
affiliation relationship, and that Smiths Heimann did not have sufficient evidence" to prove otherwise. 
 WT/DS425/R/Add.1 
Page E-4  
 
 3.3. Injury determination 
 
 The ADA requires that authorities provide more than cursory assertions to justify their decisions to impose definitive antidumping measures.  China acted in violation of Article 12.2.2 ADA 
because its final determination did not contain suff icient information regarding the price effects 
analysis, but was instead limited to MOFCOM's c onclusions in that regard.  MOFCOM furthermore 
ignored the arguments, duly supported by evidence, rai sed by Smiths in relation to the factors as to the 
state of domestic industry.  MOFCOM should have  provided a reasoned and ad equate explanation to 
address all the arguments and evidence on the record about Nuctech's start-up situation, Nuctech's 
aggressive pricing strategy a nd Nuctech's business expansion. 
 
3.4. Establishment of the causal link 
  Smiths listed several factors which MOFCOM  should have considered in assessing the 
existence of the causal link.  The arguments rai sed by Smiths concerning factors for causation were 
relevant, but have nonetheless not been addres sed adequately by MOFCOM in its Final 
Determination.  3.5. Determination of the dumping margin for Smiths and the residual duty 
  MOFCOM did not make available the calculati ons it performed for Smiths, which themselves 
are the mathematical basis for arriving at the dumpi ng margins imposed by an investigating authority.  
The requirement to pay due regard to the protection of confidential information can be respected by 
including the information in separate reports.  MO FCOM also failed to publish the rationale for its 
decision to resort to facts available in calcula ting the residual duty, as well as the methodology it 
applied in establishing the residual duty rate and data it relied upon.  
 
4. Claim under Articles 3.1 and 3.2 ADA 
 
4.1 The requirements imposed by Articles 3.1 and 3.2 ADA 
 
 Nothing in previous panel reports supports the proposition that the investigating authority is 
under no requirement to take into account the diffe rences between various types or models of the 
product under investigation when examining th e effects of the dumped imports pursuant to 
Articles 3.1 and 3.2 ADA.  While Articles 3.1 and 3.2 ADA do not prescribe any specific methodology, they require that, whatever methodolog y is chosen, the investigating authority must 
ensure that a determination of injury is made on th e basis of "positive evidence" of the effects of the 
dumped imports and involves an "objective examina tion" of such evidence.  Second, it is also 
uncontroversial that, as observed by the panel in EC – Pipe Fittings , the requirements imposed by 
Article 2.4 ADA cannot be "transposed wholesale".  But this does not imply that the investigating 
authority may disregard all differences among prod uct types or models under Articles 3.1 and 3.2 
ADA.  The panel in EC – Pipe Fittings  recognised expressly that it may be necessary to take into 
account such differences when conducting a price undercu tting analysis to the extent that they have "a 
perceived importance to customers".  Similarly, while the panel in EC – Fasteners  noted that the 
requirements of Article 2.4 ADA with respect to "due allowance" for differences affecting price 
comparability were not applicable in the context of  Articles 3.1 and 3.2 ADA, that panel did not imply 
that any such differences are irrelevant under Artic les 3.1 and 3.2 ADA. Rather, the point made by 
that panel, was that such differences could be ta ken into account by means other than making "due 
allowance" in the sense of Article 2.4 ADA. Fo r example, by defining product categories.  
  MOFCOM did make a very precise "quantifica tion" of both the level of price undercutting 
and the extent to which Nuctech's prices declined , which in turn provided the basis for MOFCOM's 
finding of price depression/suppression.  China cannot  base its determination of injury on certain  WT/DS425/R/Add.1 
 Page E-5 
 
 
 quantitative findings with regard to the price e ffects of dumped imports and then, when the 
consistency of those findings with Articles 3.1 a nd 3.2 ADA is challenged, argue that under the ADA 
a finding of injury need not ha ve been based on those findings, bu t might instead had been based on 
different considerations.  MOFCOM 's Final Determination did not re ly on those other considerations, 
but on the quantitative findings at issue, which mu st therefore be fully consistent with the 
requirements imposed by Article 3.1 ADA.  
  The report issued by the panel in China – GOES  has confirmed that, when examining the 
price effects of dumped imports, the investigating authority is required by Articles 3.1 and 3.2 ADA 
to ensure that the prices used for the comparison ar e properly comparable.  On that basis, that panel 
concluded that the Chinese authorities had acted in consistently with Articles 3.1 and 3.2 ADA by 
relying on the comparison of average unit values ( AUV) in order to establish the existence of price 
undercutting without taking into account inter alia  that "the relevant AUVs included products of 
different grades, without any attempt by MOFC OM to adjust for diff erences in physical 
characteristics".  
 
4.2 MOFCOM did not conduct its analysis  "in an objective and unbiased manner" 
 
 A finding of "likeness" under Article 2.6 ADA does not render the differences between the 
various types of scanners irrele vant under Articles 3.1 and 3.2  
 
 Previous panels have clarified that there is  no requirement under the ADA that each type or 
model covered by an investigation must be "like"  any other covered type or model.  Therefore, 
MOFCOM's finding that the subject product was "like"  the equipment made in China neither implies 
nor requires that each of the various product types c overed by the investigation is "like" any other 
type. For that reason, a finding of "likeness" under Article 2.6 ADA does not exempt the investigating 
authority from taking into account the relevant di fferences between product types when assessing the 
price effects of dumped imports under Articles 3.1 and 3.2 ADA.   
 
 In any event, it is manifest that the various ty pes of scanners covered by the investigation are 
not "like" each other within the meaning of Article  2.6 ADA.  The differences are particularly striking 
between high-energy and low-energy scanners.  In response to the detailed argumentation and 
evidence submitted by Smiths, MOFCOM limited itsel f to provide a rather concise response.  In 
essence, MOFCOM gave three reasons for considering that low-energy scanners are fully comparable 
to high-energy scanners.  None of them st ands even the most cursory examination. 
 
China has provided no evidence of  the existence of the pretended "single continuum".  While 
one might quibble about whether the dividing line should be drawn at precisely 300 KeV or at a 
somewhat higher level, there is a wide and easily  recognisable "gap" between high-energy and low-
energy scanners.  The energy level of the scanners  used for screening large objects, such as cargo 
containers, trucks or railway carriages is always much higher than that of  the scanners used for 
screening baggage, parcels or other small objects.  A nd this difference is always reflected in very 
large price differentials.  The distinction between high-energy and low-energy scanners is well-known 
in the industry.  Nuctech itself u ses the terms "high-energy".  The ex istence of a distinct and large 
"gap" becomes evident when  comparing the images and technical specifications of the models shown 
in Attachment 2 to Nuctech's Questionnaire res ponse, which Nuchtech described as its "major 
products".   
 In their own investigation, the EU author ities covered high-energy scanners, as well as some 
low-energy scanners (those above 250 KeV).  In  doing so, they were exercising the discretion 
accorded to the investigating authority under the A DA for defining the product under consideration.  
This does not mean, however, that the EU authorities placed a "dividing line" at the level of 250 KeV for the purposes of examining the price effects of the dumped imports.  Unlike MOFCOM, the EU WT/DS425/R/Add.1 
Page E-6  
 
 investigating authorities did use a methodology for examining those effects which was adequate to 
take fully into account all the relevant differences between the various types of scanners covered by 
the investigation.   Even assuming that, as alleged by China, th e dividing line between high-energy and low-
energy scanners was not "hard and clear", this could never be a valid justification for disregarding all 
the differences among the various ty pes of scanners covered by the investigation.  If as China appears 
to be arguing now, MOFCOM had been of the view that the level of energy was, of itself, an 
insufficient criterion for segmenting the product under consideration, then MOFCOM would have been required, in order to comply with Article s 3.1 and 3.2 ADA, to take into account any other 
relevant criteria, rather than taking the shortcut of  disregarding completely all differences in physical 
characteristics and uses affecting price comparability.   The mere fact that a methodology is "unbiased",  in the very limited sense given by China to 
that term, is not sufficient to make it compliant  with Articles 3.1 and 3.2 ADA.  A methodology may 
be "unbiased", in the sense postulated by China, and s till wholly inapt to yield meaningful results.  In 
any event, MOFCOM's choice of methodology was "b iased" even by China's own narrow standard.  
High-energy scanners do not compete with low-energy scanners.  Since there were no imports of high-energy scanners, there was no reasonable ground for including Nuctech's sales of high-energy scanners in the calculation of Nuchtec's average un it values.  At the same time, MOFCOM was well 
aware that doing so would make more likely a finding of price undercutting and price 
depression/suppression.  
  China dismisses the numerical examples pr ovided by the European Union for being 
hypothetical.  But the European Union cannot quantify the impact of the methodology applied by MOFCOM because China has not di sclosed the necessary information.   The purpose of the examples 
was to demonstrate how even small differences or  variations in the product mix can have a 
considerable impact on the outcome of the me thodology applied by MOFCOM.  The hypothetical 
counter-examples offered by China would fail to rebut  this.  While criticising the EU examples, China 
has failed to provide any evidence in order to show  that, in practice, the use of the methodology at 
issue had no adverse impact for Smiths.  
 It is well-established that the complaining part y is not confined to the arguments made by the 
exporter during the anti-dumping investigation.  Moreover, MOFCOM never disclosed during the 
investigation the averaging methodology that it u sed for assessing the prices effects of imports.  To 
the contrary, in one of the questionnaires addressed to Smiths, MOFCOM had explained that Smiths' 
export prices would be compared by MOFCOM to th e prices for comparable models made in China 
and requested Smiths to identify which domestic mode ls it considered to be comparable to its own 
models.  Furthermore, Smiths di d request repeatedly that MOFCOM exclude high-energy products 
from the investigation on the grounds that they we re not comparable to low-energy scanners.  Had 
MOFCOM granted Smiths' request, it would have been unnecessary to take into account the differences between the two categories of scanners at the stage of considering the price effects of imports.  
 
 This is the very first time that China has advan ced any suggestion to the effect that the use of 
the methodology at issue was a response to Smiths' lack of cooperation.  Moreover, contrary to 
China's contention, the relevant issue is not whether the methodology applied by MOFCOM was the "most reasonable" in view of the information supplie d by Smiths, but rather whether the use of that 
methodology was "reasonable" at all.  If the defici encies of the information supplied by Smiths had 
made it impossible for MOFCOM to use any methodology which was compliant with the 
requirements of Articles 3.1 and 3.2 ADA, MOFCOM should have given appropriate notice to Smiths 
and, if necessary, resorted to "facts availabl e" in accordance with Article 6.8 ADA. MOFCOM, 
however, did none of this.   WT/DS425/R/Add.1 
 Page E-7 
 
 
  At any rate, it is incorrect, as a matter of fact, that MOFCOM had no option but to use the 
averaging methodology at issue.  In the first place, MOFCOM's findings of price depression/suppression were based exclusively on pr ice data provided by Nuctech.  Second, the 
export price data for 2008 provided by Smiths as part of its response to MOFCOM's dumping 
questionnaire would have been sufficient to allow MOFCOM to calculate unit average export prices 
for all the models exported by Smiths to China.  Indeed, MOFCOM, did calculate such unit prices per 
model as part of the dumping margin calculation.  Thir d, while it is true that Smiths did not supply the 
annual average unit export prices on a model basis fo r 2006 and 2007, it did provide to MOFCOM the 
annual average unit prices for all its export sales to  China of the product under consideration made 
during each of those two years. MOFCOM was well aware that Smiths did not export any high-energy 
scanners to China and, therefore, that the annua l average unit prices for 2006 and 2007 reported by 
Smiths did not include any such exports.  In view of this, MOFCOM could, at a minimum, have excluded high-energy scanners from the calculation of Nuctech's average unit prices for the same 
years which were used in the price undercutting comparison.  5. Claims under Articles 3.1 and 3.4 ADA  
5.1. MOFCOM failed to base its evaluation on positive evidence  
 
 The European Union disagrees w ith China's characterisation of the scope of the EU's claim. 
The European Union has not only contested the da ta reflected in MOFCOM's Final Determination 
with respect to cash flow, investments and return of investment.  There is more indicia on the record 
questioning the reliability of the data employed by MOFCOM with respect to other injury factors, 
profits and employment.  China's explanation of the figures reflected in MOFCOM's Final 
Determination is that they are the result of the verifications made to the information provided by 
Nuctech.  This cannot be it.  Nowhere in its determ inations did MOFCOM alert interested parties to 
those discrepancies or stated that some of the da ta collected was "modified" pursuant to the on-site 
verification.  Simply, there is no evidence of the fact China asserts in these proceedings. 
 5.2. MOFCOM failed to examine all factors listed in Article 3.4 ADA 
  China did not examine the magnitude of the margin of dumping in the present case explicitly 
or implicitly, contrary to the rep eated case-law in this respect and that equally applies in the present 
case.   5.3. MOFCOM failed to take into account the di fferences between different types of the product 
concerned when evaluating various injury factors 
 
 There are considerable differences in physical characteristics and uses between high-energy and low-energy scanners which also lead to differen ces in prices and cost of production.  They do not 
compete with each other and thus belong to distin ct markets.  Thus, MOFCOM's finding that both 
categories were "almost the same" is factually incorrect.  Moreover, the European Union does not argue that MOFCOM was required to carry out a separate examination of all factors having a bearing 
on the state of the domestic industry per segment or  sector.  Rather, the European Union focuses its 
argument primarily on injury factors relating to prices and costs.  Further, the European Union 
maintains that, in a situation like the present case, where the products made by the domestic industry 
are so different, the combination of price and cost data relating to all categories (e.g., high-energy and 
low-energy scanners) would lead to data which is not representative of the state of the domestic 
industry as a whole.  By combining information wi th respect to different product categories in the 
context of the present investigation, MOFCOM failed  to make an objective examination of the actual 
state of the domestic industry.    WT/DS425/R/Add.1 
Page E-8  
 
 5.4. MOFCOM failed to make a proper evaluati on of the overall development and interaction 
among injury factors taken together 
 
 MOFCOM wrongly characterised certain factor s as "negative", when seeing as "trends" and 
in the specific context of the market and other factors.  Moreover, MOFCOM failed to provide a 
compelling explanation of whether and how the ove rwhelming majority of positive movements were 
outweighed by any other factors and indices which mi ght be moving in a negative direction.  China 
does not dispute that the majority of factors showed a positive state of the domestic industry.  However, China argues that it put the positive factor s in context by stating that capacity, output, sales 
volume and market share should be viewed in light  of the context of the market, namely a fast 
growing market.  But this is not the examination th at is required in a situation where there is an 
overwhelming majority of positive movements.  The very compelling explanatio n is required in order 
to show whether and how those positive factors we re outweighed by any other factors and indices 
which might be moving in a negative direction. MOFCOM's Final Determination does not contain 
such a balanced consideration.  Indeed, a si mple opposition of factors (positive and negative) 
separated by "however" does not amount to "a thor ough and persuasive explanation as to whether and 
how such positive movements were outweighed by  any other factors and indices which might be 
moving in a negative direction during the IP".  More over, it is quite telling that China does not dispute 
the fact that MOFCOM did not refer and thus fa iled to examine some positive factors which were 
relevant, such as productivity and wages.  The failure  to examine those positive factors again indicates 
that MOFCOM failed to put all positive factors in the relevant context of the investigation at issue.  
 
 In addition, when evaluating some injury f actors, MOFCOM made contradictory observations 
in a not even-handed manner.  Statements such as "severe" depression of sales revenue growth, "serious" losses throughout the period, the rate of  return being "negative throughout the period", 
"consistent" net cash outflow, "diminished" inv estment and financing capacity, and the observed 
reduction in employment, were partia l or unfounded, in contradiction with the information and data as 
previously found by MOFCOM.    In the present case, the European Union main tains that MOFCOM failed to evaluate the 
relevant data through placing it in context in terms of  the particular evolution of the data pertaining to 
each factor individually, as well as in relation to ot her factors examined.  More concretely, MOFCOM 
failed to address how and why domestic sales prices were decreasing, even in 2008 (by 46.7%), when 
the import prices of the Subject Products c onsistently increased throughout the period 
(including 2008, by 14%) and were higher than tho se of the domestic products in 2008.  When import 
prices were higher than domestic sales prices, the fact that domestic sales prices constantly decreased indicates that domestic producers sacrificed potential pr ofits in order to increase their sales and gain 
more market share.  Indeed, otherwise, domestic  producers could have increased their prices (and 
profits) at least up to the (higher) level of the import prices.  Further, MOFCOM ignored the fact that Nuctech was growing well in excess of the growth in demand.  In a situation where Nuctech was 
expanding faster than domestic demand, in orde r to sell its products domestically Nuctech had to 
reduce its domestic sales prices.  Moreover, and impor tantly, in the face of positive trends in so many 
injury factors, MOFCOM should have confirme d the basis for its own statement about the 
"expectations" of the domestic indus try, and more so when such e xpectations were fundamental to 
support its conclusion that the industry was depressed .  Those "expectations" were key and relevant 
context to support MOFCOM's injury  determination.  The European Union notes that China has failed 
to address this issue in its submissions.  
 Moreover, China failed to take into account a ll facts and arguments on the record relating to 
the state of the industry .  The three factors raised by Smith s (i.e., Nuctech's start-up situation, 
Nuctech's aggressive pricing policy, and Nuctech's bu siness expansion) were factors or indices having 
a bearing on the state of the domestic industry within the meaning of Article 3.4 ADA.  MOFCOM failed to considered the three factors raised by Smiths having a bearing on the state of the domestic  WT/DS425/R/Add.1 
 Page E-9 
 
 
 industry.  In view of the importance given to effects such as domestic sales prices, losses and 
inventories, the European Union considers that  MOFCOM should have provided a reasoned and 
adequate explanation to address all the evidence on  the record about Nuctech's start-up situation, 
Nuctech's aggressive pricing strategy and Nuctech's business expansion.   
5.5. Conclusion  
 
 The European Union requests the Panel to find  that MOFCOM's determination of injury is 
inconsistent with China's obligatio ns under Articles 3.1 and 3.4 ADA. 
 6. Claims under Articles 3.1 and 3.5 ADA 
 
6.1. MOFCOM failed to properly examine the ca usal relationship between dumped imports and 
injury  
 
 The European Union maintains that MOFCOM 's characterisation of the volume of EU 
imports as "large" or "great" was improper, partia l and non-even handed.  Indeed, the import volume 
of the Subject Products increased in absolute term s and in comparison with domestic consumption.  
However, the increase of EU imports was much lower than the skyrocket trend showed with respect to 
the domestic like products.  The fact that domestic  sales volume was booming in comparison to the 
volume of EU imports, when put in relation with domestic consumpti on, was relevant evidence before 
MOFCOM when making its determination about the "significance" of the volume of EU imports in 
this case.    MOFCOM's assessment of the prices of EU imports was also improper.  The European Union maintains that by attributing all the effects found with respect to domestic industry making both high-
energy and low-energy scanners to imports excl usively relating to low-energy scanners, MOFCOM 
failed to carry out an appropriate attribution analysis  in this case.  The effects found with respect to an 
industry that produces two different categories of pr oducts with wide price differences, such as cars 
and buses, cannot be attributed to imports of car s or imports of buses exclusively.  Since those 
products do not compete with each other, the attri bution of the effects found with respect to both 
categories in cases where only one category was im ported is inconsistent with Article 3.5 ADA.  
 
 MOFCOM also failed to provide a very compelling explanation in a case where there was no correlation between import prices going up by almo st 10% and domestic sale prices going down by 
73% during the POI.  Quite telling as well, there was no correlation between EU import prices going 
up in 2008 by 14%, even above domestic sales prices, when domestic sales pric es went down by more 
than 50% in the same year.  MOFCOM failed to explain how import prices consistently going up and 
reaching a level even above domestic sales prices c ould be the only cause of domestic sale prices 
consistently declining by an amount significantly more  substantial.  This is the point we are making 
and not, as China stated in its first written submi ssion, whether there should be a correlation in the 
sense of overall coincidence between overall trends in  imports and overall trends in injury factors. 
 
 In its response to Question 49, China explains that Nuctech was "forced" to maintain its prices 
at low levels in order to be able to compete with  Smiths, who was able to capture additional market 
share during the POI.  Otherwise, according to Ch ina, Nuctech would have lost even more sales to 
Smiths.  But this story does not match with MO FCOM's findings.  MOFCOM found that Nuctech had 
increased its market share every year, beyond any in crease in the market share of EU imports in 
relative terms.  It also found that Nuctech had incr eased its sales volume and sales revenue every year 
by more than 50%.  In a context where EU im port prices were constantly increasing, the 
European Union still wonders how MOFCOM's finding that such prices "forced" the domestic sales 
prices to maintain their downward trend during the POI can stand the compelling, reasoned and 
adequate explanation that is re quired from investigating authorities under Article 3.5 ADA.  In a WT/DS425/R/Add.1 
Page E-10  
 
 market that was expanding (i.e., domestic consump tion was growing), the EU imports grew but the 
domestic sales and output grew even more than th e growth of the EU impor ts.  The downward trend 
of domestic sales prices was not the consequence of the EU imports prices, but of Nuctech's aggressive pricing policy and the fact that Nuct ech was expanding well in excess of the growth in 
domestic demand.  In any event, it cannot be said th at Nuctech was forced to maintain its prices low 
in a situation where the EU import prices were above.   Simply put, Nuctech decided to maintain its 
low price policy also in 2008 in order to capture  more market share in the years including and 
preceding the Olympic games and other important events taking place in China.     Consequently, with respect to the import pri ces, MOFCOM erroneously attributed the effects 
observed on the domestic industry to EU imports, in particular by failing to distinguish between high-
energy and low-energy scanners, by relying on findings of price undercutting and price 
depression/price suppression that were unreliable, a nd in any event by failing to provide a reasoned 
and adequate explanation of how the increasing price of EU imports could force domestic sales prices 
to go down.  
 
6.2. MOFCOM failed to examine the relevance of other known factors 
  MOFCOM made a pro-forma examination of other known factors.  Interested parties (in particular Smiths) raised other known factors in the c ourse of the investigation, in particular the global 
crisis in 2008, Nuctech's start-up situation, Nuctech 's aggressive pricing policy, Nuctech's aggressive 
business expansion and the fair competition between Nuctech and other producers.  MOFCOM's Final 
Determination did not mention any of those factors, limiting its analysis to the pro-forma list of other 
factors (most of them irrelevant to the present case) contained in the Anti-Dumping Questionnaire 
addressed to Nuctech.   
 The other factors raised by Smiths were "other known factors" under Article 3.5 ADA and 
MOFCOM failed to examine the other known factors ra ised by Smiths.  There is no explicit reference 
as to why MOFCOM rejected the factual basis of the allegations made by Smiths.  Even if there are, 
those references were not supported by the evid ence on the record (as found by MOFCOM) or 
directly contradicted the evidence brought by Sm iths without any referen ce to what evidence 
MOFCOM relied upon to make its findings.  MOFCOM remained silent on these factors and failed to 
make an objective examination of the other kn own factors raised by Smiths in the present 
investigation.    Finally, MOFCOM failed to properly consider  the arguments and evidence raised by Smiths 
in connection with the other known factors that  MOFCOM explicitly examined, in particular 
Nuctech's export performance (i.e., that exports were  the cause, not the cure, of Nuctech's financial 
difficulties) and the product quality and technology factors.  6.3. Conclusion 
  Based on the above, the European Union reite rates its views that MOFCOM's causation and 
non-attribution analysis is inconsis tent with Articles 3.1 and 3.5 ADA.  WT/DS425/R/Add.1 
 Page E-11 
 
 
 ANNEX E-2 
 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN  
SUBMISSION OF CHINA 
 
 
1. CLAIM 1:  CLAIM UNDER ARTICLES 6.5.1, 6.4 AND 6.2 OF THE 
AD AGREEMENT 
 
1. The European Union claims that China vi olated Article 6.5.1 since MOFCOM failed to 
ensure adequate non-confidential su mmaries with respect to product m odels referred to in the Petition, 
Exhibits 8, 9, 10, 11 and 14 attached to the Petition and certain responses and attachments of 
Nuctech's Questionnaire Response, and since MOFCOM  failed to require the provision of a statement 
of reasons explaining the exceptional circumstanc es why summarization was not possible with respect 
to a statement of the Chinese Public Security Bur eau of the Civil Aviation Administration.  China 
submits that all these claims should be rejected.   2. As regards the product models in the Petiti on, described as "main models of the Subject 
Product", China submits that Smiths was perfectly able  to identify to which product type the chosen 
models corresponded.  In any case, taking into acc ount the context, the identification of the two 
models as the "main models of the Subject Product" was sufficient to permit a reasonable 
understanding that the data provided for normal valu e and export price were those of the subject 
product.  Finally, no further information could have been given without carrying the risk of disclosing 
price information to other parties and making it po ssible for Smiths to identi fy the entity that had 
supplied the information.  As to Exhibits 8, 9, 10 and 11 to the Petition, China maintains that their 
content is adequately summarised. Similarly, E xhibit 14 to the Petition clearly indicates its content 
and is thus adequately summarised.   3. The non-confidential summaries of Attachments 14, 16, 17, 18 and 19 of Nuctech's Injury 
Questionnaire Response are adequate since they corr ectly reflect the substance of the information 
provided in confidence which was itself provided on a quarterly basis and since, in any case, annual 
trends concerning the factors concerned were pr ovided in other attachments of the Questionnaire 
Response.  Moreover, Smiths was fully able to proper ly defend its interests during the investigation.  
Similarly, the non-confidential summaries of the responses and attachments to Nuctech's Injury 
Questionnaire Response which the European Union cl aims as being inadequate are sufficient to 
permit a reasonable understanding of the information submitted in confidence.  Furthermore, since 
Smiths and the European Commission did not comp lain about the alleged insufficiency but 
commented extensively on the injury determination,  Smiths' rights of defense were not hampered.   
 4. Regarding the statement by the Chinese Pub lic Security Bureau of the Civil Aviation 
Administration, MOFCOM duly scrutinised the st atement consisting of the written declaration 
incorporated in the statement placed by MOFCOM in  the Public Reading Room as well as further oral 
explanation as regards the highly sensitive nature of  the information concerning airport security to 
MOFCOM during the hearing of domestic end-user s.  MOFCOM was under an obligation to do so 
before the document could have been placed in th e Public Reading Room.  The fact that MOFCOM 
itself placed the document in the Public Reading Room demonstrates that MOFCOM scrutinized and 
accepted the explanation.  5. Thus, China fully complied with its obligati ons under Article 6.5.1 of the AD Agreement.  
The claimed violations of Articles 6.4 and 6.2 wh ich are purely consequential to the Article 6.5.1 
claims should therefore be rejected as well.  
 WT/DS425/R/Add.1 
Page E-12  
 
 6. Even if a violation of Article 6.5.1 was found by the Panel with respect  to Article 6.5.1, the 
European Union's claims under Articles 6.4 and 6.2 ha ve to be rejected since the European Union fails 
to demonstrate a violation of Article s 6.4 and 6.2 of the AD Agreement.  With respect to Article 6.4, 
the European Union has not established that its cl aim meets the requirements under Article 6.4 of the 
AD Agreement:  the European Union has not identif ied which information in terested parties should 
have been given the opportunity to see; if an ade quate non-confidential summary was not in the file, it 
was impossible and thus not "practicable" for MOFCOM  to give to interested parties the opportunity 
to see it;  the European Union has failed to demons trate that the information was "relevant" and 
"used" by MOFCOM and not confidential.  Moreover,  the European Union has failed to demonstrate 
that interested parties requested to see each  of the pieces of information concerned.  
 
7. Regarding the claim under Article 6.2 of the AD Agreement, there is no automatic violation 
of Article 6.2 in case of a violation of Article 6.5.1.  Since the European Union has failed to 
demonstrate why the fact that no adequate non-c onfidential summary was provided for each identified 
item deprived Smiths of the full opportunity to defe nd its interests, its claim should be rejected.  
 
2. CLAIM 2:  CLAIM UNDER ARTICLES 6.9, 6.4 AND 6.2 OF THE AD AGREEMENT 
 
8. The European Union claims that China violat ed Article 6.9 since China did not fully disclose 
the essential facts which form the basis of its in jury determination and dumping determination and 
that China, consequently, also  violated Articles 6.4 and 6.2 of the AD Agreement.  The 
European Union makes four claims  which should all be rejected. 
 9. The European Union first argues that Chin a violated Article 6.9 because MOFCOM did not 
disclose the underlying data and methodology rega rding the price undercutting and price depression 
analysis.  This claim should be rejected.  First,  China submits that the methodology is similar to 
reasoning.  The methodology is the way facts are processed and is thus not a "fact".  Moreover, the methodology is certainly not an essential fact which forms the basis for the de cision whether to apply 
definitive measures, taking into account the context of the injury determination.  Regarding the 
underlying evidence or underlying data, China su bmits that MOFCOM was under no obligation to 
disclose the actual domestic prices underlying its pric e analysis. In particular, the non-disclosure was 
required by the fact that there was only one do mestic producer and that such domestic prices 
constituted confidential information.  MOFCOM expressly explained that reason in its Final 
Determination and provided a meaningful summary in the form of trends in the domestic prices in its 
Preliminary Determination.   
10. The second claim is that China did not disclo se essential facts regarding the normal value and 
export price determinations.  The European Union has confirmed that it will not make any argument 
regarding the normal value determin ation.  Regarding the export pri ce determination, China notes that 
MOFCOM fully disclosed to Smiths which adjust ments were made, the reasons for making such 
adjustments as well as the level of such adjustme nts in the Preliminary Dumping Disclosure and the 
Final Dumping Disclosure.   
 
11. The third claim made by the European Uni on under Article 6.9 concerns MOFCOM's alleged 
failure to provide to Smiths the dumping margin calculation.  China submits that MOFCOM fully 
explained to Smiths how the comparison between th e normal value and the export price was made in 
the Preliminary and Final Dumping Disclosure to Smiths, which precisely identify the formula and 
describe the methodology.  Regarding the actual calculations made by MOFCOM for the normal 
value and the export price, China submits that such calculations do not constitute  "essential facts".  In 
any case, MOFCOM precisely identified the elements of  the calculations in such a way that, even in 
the absence of the calculation sheets, it was easy for Smiths to make the calculations themselves.  WT/DS425/R/Add.1 
 Page E-13 
 
 
 12. The fourth claim under Article 6.9 relates to MOFCOM's alleged fa ilure to disclose the 
essential facts regarding the calculation of the residua l duty.  China maintains that in its Disclosure 
Documents, MOFCOM adequately informed the EU delegation of all the essential facts that formed 
the basis for the determination of the residual duty.   In particular, MOFCOM explained the basis for 
the use of "facts available" and that it used "the sal es data of products of relevant models reported by 
the respondent Company".  
 13. In conclusion, the European Union has failed to  demonstrate a violation of Article 6.9.  Since 
the European Union's claims under Articles 6.4 and 6.2 are purely consequential to its claims under 
Article 6.9, they should therefore be rejected as we ll.  In any case, the Eur opean Union's claims under 
Articles 6.4 and 6.2 have to be rejected since the European Union fails to demonstrate a violation of 
Articles 6.4 and 6.2. Regarding Article 6.4, China submits that Articles 6.4 and 6.9 have different 
scopes and, in particular, while Article 6.9 re quires an active disclosure by the investigating 
authorities, Article 6.4 does not.  Therefore, it is clear that a violation of Article 6.9 does not automatically demonstrate that Article 6.4 has also  been violated.  The European Union fails to 
establish the elements of its claim under Article 6.4 a nd, in particular, that Smiths requested to see the 
information concerned.  Regarding the claim under Article 6.2, China maintains that there is no 
automatic violation of Article 6.2 in case there is a violation of Article 6.9.  Since the European Union 
did not demonstrate why the lack of disclosure of certain essential facts by MOFCOM deprived 
Smiths of the fully opportunity to defend its interests, it has failed to make a prima facie  case of 
violation of Article 6.2 of the AD Agreement.  
 
3. CLAIM 3:  CLAIM UNDER ARTICLE 12.2.2 OF THE AD AGREEMENT 
 
14. The European Union claims that China violat ed Article 12.2.2 because neither in its public 
notice of the imposition of definitive measures, nor in a separate report, MOFCOM set forth 
sufficiently detailed explanations for the definitiv e determinations on dumping and injury, together 
with references to the matters of fact and law a nd reasons which led to arguments being accepted or 
rejected.  The European Union makes four diffe rent claims which should all be rejected.  
 15. The European Union first claims that MOFCOM failed to provide reasons for the rejection of 
relevant arguments or claims concerning the norma l value determination.  This claim should be 
rejected since the Final Determination contains the reasons for the rejection of the arguments raised 
by Smiths during the investigation with respect to th e relationship with its affiliated distributors.  The 
explanations of MOFCOM were amply sufficient in  view of Smiths own express recognition that its 
prices and sales process to affiliated distributors were clearly affected by the relationship.  
 
16. Second, the European Union claims that MOFCOM failed to explain the methodology used 
for the price undercutting and price suppression and to provide reasons for the rejection of arguments 
or claims made with respect to the injury determ ination.  As to the methodology used for the price 
analysis, China submits that such methodology is not a "matter of fact" and is not "relevant" within the meaning of Article 12.2.2 of the AD Agreemen t.  Not any information relating to the injury 
determination constitutes "relevant information on the matters of fact and law and reasons which have 
led to the imposition of final measures".  In particular , in light of Article 12.2.1 (iv), since there is no 
obligation to use a calculation methodology to consid er what have been the effects of the import 
prices on domestic prices in Article 3, there is no basis for an obliga tion to disclose such a 
methodology.  Furthermore, the explanation of  the methodology is not necessary to discern and 
understand the reasons for concluding that anti-dum ping measures must be imposed and is thus not 
required pursuant to Article 12.2.2.  As to MOFCOM 's alleged failure to provide the reasons for the 
rejection of Smiths' arguments concerning the inju ry analysis, China notes, with respect to the 
arguments concerning the credibility of Nuctech's da ta, that they cannot be regarded as "relevant" 
within the meaning of Article 12.2.2 and that, in  any case, they were fully addressed in the Final 
Determination.  As to the other arguments, China co nsiders that despite the European Union's reply to WT/DS425/R/Add.1 
Page E-14  
 
 Panel's Question 14, it is still not in a position to  understand which specific arguments of Smiths the 
European Union refers to and therefore, since th e European Union has failed to properly identify the 
facts of its claim, its claim should be rejected.   17. The third claim concerns MOFCOM's alleged fa ilure to provide reasons for the rejection of 
Smiths' arguments concerning the causal link.  The European Union has failed to identify the precise 
arguments that Smiths would have raised and wh ich MOFCOM allegedly failed to address.  The 
European Union has thus not substantiated its claim,  which should therefore be rejected.  In any case, 
the Final Notice must only contain the reasons for th e acceptance or rejection of relevant arguments or 
claims.  It is for the European Union to establish th at the arguments raised by Smiths were "relevant".  
Since it failed to do it, its claim should be rejected. 
 18. The fourth claim of the European Union is th at China acted inconsistently with Article 12.2.2 
by failing to make available the calculations it perfo rmed for Smiths and its underlying data and the 
calculations and underlying data for the residual dut y.  China submits that the dumping calculations 
and their underlying data do not constitute "relev ant information on matters of fact and law and 
reasons which have led to the imposition of the fina l measures".  Indeed, Article 12.2.1 only requires 
the final notice to contain the margins of dumping est ablished and a full explanation of the reasons for 
the methodology used, but not the calculations and the underlying data.  Furthermore, such calculations are not necessary to understand the reas ons why the investigating authority imposes anti-
dumping measures.  Finally, the dumping calcul ations and their underl ying data constitute 
confidential information that can not be included in the Public Notice or in a Separate Report within 
the meaning of Article 12.2.2 of the AD Agreement.   19. For all the reasons set out above, China s ubmits that the European Union's claims under 
Article 12.2.2 should be rejected. 
 
4. THE DISTINCTION BETWEEN SO-CALLED "LOW-ENERGY" AND "HIGH-
ENERGY" SCANNERS IS ARTIFICIAL AND IRRELEVANT 
 
20. The European Union bases several claims on th e argument that MOFCOM failed to take into 
account the existence of two alleged categories of sca nners, i.e. "low-energy" scanners (scanners with 
an energy of or below 300 KeV) and "high-energy" scanners (scanners with an energy level 
exceeding 300 KeV).  The European Union claims th at there are clear-cut differences between these 
two "categories" of scanners in terms of physi cal characteristics, uses, technological features, 
manufacturing processes and prices.  As China explai ns, this is not so. In fact, there are many 
examples of scanners with an energy level of or  below 300 KeV which have the characteristics that 
Smiths described as belonging to the scanners with an energy level above 300 KeV and vice-versa .  
This demonstrates the artificial nature of this distinction.   21. As to the differences in physical characteristi cs, China provides examples showing that:  there 
are no striking physical differences between "low-e nergy" and "high-energy" scanners;  scanners of a 
certain energy level do not have a standard weight;  it is not correct that "high-energy" scanners are 
many times larger and heavier than low-energy scanne rs, that the products are completely different in 
construction and that the installation of "high-en ergy" scanners is a construction project requiring 
several days or weeks by an experienced crew;  it is not correct that "low-energy" scanners necessarily 
contain a conveyor system supporting a load of onl y 50 Kg to 2 tonnes and that if a "high-energy" 
scanner contains a conveyor, it is installed apart from the rest of the system.  
 
22. Regarding the uses of scanners, there is no particular use which would be specific for 
scanners below 300 Kev and scanners above 300 KeV.  Furthermore, the European Union incorrectly 
alleges that "low-energy" scanners would be used  for screening "small parcels" while "high-energy" 
scanners would be used for screening larger objects.   WT/DS425/R/Add.1 
 Page E-15 
 
 
 23. Furthermore, the alleged differences in t echnological features, mechanical features and 
manufacturing process again are factually incorrect.  Fi nally, with respect to prices, China shows that 
the European Union incorrectly states that the pri ce of scanners with an energy level above 300 KeV 
is necessarily higher than the price of scanners with an  energy level of or below 300 KeV.  In fact, the 
price of a scanner depends on several factors, including its physical characteristics, uses, 
configuration, quality, etc.  
 24. In sum, China demonstrates that the fact th at a scanner has an energy level below or above 
300 KeV does not imply that it has certain physical ch aracteristics, specific uses or prices.  In fact, 
each producer offers a range of models of scanners, which vary in terms of their use, their physical 
characteristics, their prices, etc. It is not possi ble to identify two clearly different categories of 
scanners on the basis of their energy level.   
5. CLAIM 4:  CLAIM UNDER ARTICLES 3.1 AND 3.2 OF THE AD AGREEMENT 
 25. The European Union claims that China violated Articles 3.1 and 3.2 of the AD Agreement 
since MOFCOM used in its price undercutting and price suppression analysis a methodology which involved the comparison of weighted average unit va lues for the entire range of products covered by 
the investigation.  According to the European Un ion, this methodology was manifestly inadequate 
because it failed to take into account the existen ce of considerable differences among the products 
covered by the investigation, and in particular between "high-energy" and "low-energy" scanners.  
China submits that these claims should be rejected.   26. First, to the extent that the European Union' s claim is merely based on the argument that since 
there were physical differences between diffe rent types of products which affected price 
comparability, such differences should have been taken into account, it must fail. 
 27. Second, the European Union does not demonstrate that MOFCOM's price analysis was not "objective" in that MOFCOM did not ensure an ev en handed treatment of the information and data on 
the record of the investigation.  In particul ar, China notes that MOFCOM did not in any way 
manipulate data or figures.  MOFCOM applied th e same methodology for the Subject Product and the 
Like Product including in the weighted average un it all data relating to a ll models falling in the 
Subject Product and in the Like Product.  Thus MOFCOM ensured an even-handed treatment of the 
information and data on the record.  Moreover, th e use of the weighted average unit methodology was 
reasonable and unbiased.  Since Smiths never requested that certain adjustments had to be made with 
respect to the price analysis carried out by MO FCOM, there was no reason for MOFCOM to consider 
that the use of averages was unreasonable.  Furtherm ore, the claim is based on a factually erroneous 
premise, namely that there are considerable di fferences between "low-ene rgy" and "high-energy" 
scanners and that there are very large price differences between both types of scanners.  Given that there are no clear-cut price differences between scanne rs of an energy level of or below 300 KeV and 
scanners of an energy level above 300 KeV, ther e can be no bias even if the imported scanners 
consisted only of scanners of an energy level of or below 300 KeV while dome stic scanners consisted 
of scanners of an energy level below and above 300 KeV.  Finally, the use of the weighted average 
unit methodology was the most reasonable methodology av ailable in view of the deficient and limited 
information and data provided by Smiths.   28. For all the reasons set out above, China s ubmits that the European Union's claims under 
Articles 3.1 and 3.2 should be rejected.  
 
6. CLAIM 5:  CLAIM UNDER ARTICLES 3.1 AND 3.4 OF THE AD AGREEMENT 
 
29. The European Union claims that China violated Articles 3.1 and 3.4 of the AD Agreement 
because it failed to make an objective examination, on  the basis of positive evidence, of the effect of WT/DS425/R/Add.1 
Page E-16  
 
 the dumped imports on prices in the domestic market  for like products and the consequent impact of 
these imports on domestic producers of such products, including the factors listed in Article 3.4.  The European Union makes four sets of claims with r espect to the injury determination which should all 
be rejected.  
30. First, the European Union claims that MO FCOM failed to base its evaluation on "positive 
evidence" since the trends provided by MOFCOM in  its findings about certain injury factors do not 
coincide with the trends provided by Nuctech.  Ch ina explains that the findings made by MOFCOM 
regarding the various injury factors were based on the figures and data provided by Nuctech as 
adjusted where necessary after ca reful examination and scrutiny a nd thus were based on "positive 
evidence".  These data were available to all parties since they have been reported and examined by 
MOFCOM in the Preliminary Determination, Inju ry Disclosure and the Final Determination.  
Furthermore, MOFCOM expressly indicated in its Preliminary Determination that supplementary 
evidence and material had been provided by Nuctech after verification.   
31. The European Union's second claim concerns  MOFCOM's alleged failure to examine the 
magnitude of the margin of dumping.  MOFCOM, how ever, examined that factor and found margins 
that exceeded the " de minimis " threshold of Article 5.8 of the AD Agreement as set out clearly in the 
Final Determination.   32. The European Union's third claim that MOFC OM failed to make an objective examination of 
the state of the domestic industry because it failed to  take into account the differences between "high-
energy" and "low-energy" scanners when evaluating vari ous injury factors is to be rejected as well.  
The claim lacks any factual basis since there are no clear-cut and/or considerable differences in 
physical characteristics, uses or prices between "hi gh-energy" and "low-energy"  scanners.  This claim 
also lacks any legal basis since the analysis of the impact of the dumped imports on the domestic 
industry pursuant to Article 3.4 must focus on the domestic industry as a whole.  There is no 
requirement for the investigating authority to carry  out a separate analysis  for allegedly different 
categories of the like product.   33. Fourth, the European Union claims that MO FCOM failed to make a proper evaluation of all 
injury factors in context for three reasons which should all be rejected.  China makes the following 
two observations.  
 34. First, MOFCOM provided a reasoned and reas onable explanation as to how and why the facts 
and elements on the record support its finding of in jury.  MOFCOM's analysis shows that it properly 
examined all the factors in context.  Agains t the background of a ra pidly expanding demand and 
growing market with logical positively evolving capacity, output, sales and market share, MOFCOM 
explained how the factors showing a negative tre nd supported a finding of injury.  MOFCOM found 
that while the price of the EU imports increased  by 9%, from 2006 to 2008, the import prices 
significantly undercut the domestic prices in 2006 and 2007 and that, even if in 2008 the import price 
was slightly above the domestic price, it remained at a low level and prevented Nuctech from reaching 
profitability.  It also found that the sales impor ts increased by 88% and captured additional market 
share in a rapidly expanding market.  Thus, Nuctech was forces to keep low prices in order to remain 
competitive.   35. Second, the European Union's argument that  MOFCOM failed to take into account all facts 
and arguments on the record relating to the state of  the domestic industry, in particular the alleged 
start-up situation and aggressive pricing policy of  Nuctech, should equally be rejected.  China 
maintains that these elements do not constitute fact ors or indices having a bearing on the state of the 
domestic industry within the meaning of Article 3.4.  In any case, they were not relevant in assessing 
the impact of the dumped imports on the state of the domestic industry.   WT/DS425/R/Add.1 
 Page E-17 
 
 
 36. Regarding the alleged start-up situation of Nuctech, the elements provided by Smiths during 
the investigation appear to contradict each other, are not in line with the arguments put forward by the 
European Union and are unsubstantiated by any eviden ce.  A detailed analysis of Smiths' allegations 
concerning the alleged start-up situation of Nuct ech shows that these allegations are either not 
supported by any evidence or the evidence referred to does not in any way demonstrate that Nuctech 
was in a start-up situation.  In fact, China s ubmitted evidence showing that Nuctech was producing 
scanners of an energy level below 300 KeV well before 2006.  Finally, the very fact that Nuctech made investments does not demonstrate that it was in a start-up situation.   37. Regarding Nuctech's alleged aggressive prici ng policy, the allegations made by Smiths during 
the investigation on that issue and to which the Eu ropean Union refers are unsubstantiated. Moreover 
the argument is unconvincing.   38. Obviously, not every factor raised by an in terested party needs to be examined by the 
investigating authority but only those that constitu te "relevant economic factors and indices having a 
bearing on the state of the industry".  In the ab sence of any evidence showing that these elements 
constitute such "relevant economic factors", MOFCOM was not required to examine them in its injury 
analysis.   39. For all these reasons, the European Uni on's claim under Articles 3.1 and 3.4 should be 
rejected. 
 
7. CLAIM 6:  CLAIM UNDER ARTICLES 3.1 AND 3.5 OF THE AD AGREEMENT 
 
40. The European Union claims that MOFCOM's  determination of the causal link between the 
dumped imports and the material injury found is inconsistent with Articles 3.1 and 3.5 of the 
AD Agreement for two main reasons which should both be rejected.  
 41. First, the European Union claims that MOFCOM failed to properly examine the causal 
relationship between dumped imports and the material injury found in three aspects.   42. Regarding the volume of dumped imports, the European Union claims that the evidence on 
the record indicated that the import volume was not so  "large" or "great" when seen in the context of 
domestic consumption and domestic sales volume.  Ch ina submits that Article 3.2 only requires the 
investigating authority to consider whether there has been a significant increase in dumped imports in 
absolute terms or relative to prod uction or relative to consumption.  No additional obligation can be 
added.  Furthermore, MOFCOM took into consider ation the volume of imports in the context of 
domestic consumption and the domestic sales volume.  Finally, the European Union fails to explain 
why the fact that the domestic sales volume is increasing would have a bearing on the causal link between the dumped imports and the material injury found.   43. Regarding the alleged distinction between "low-energy" and "high-energy" scanners, China 
submits that there is no obligation in Article 3.5 to  carry out separate injury/causation analysis for 
"low-energy" and "high-energy" sca nners.  Furthermore, in any case, since the factual premise on 
which the European Union bases its claim is inco rrect, it is not even necessary to examine whether 
Article 3.5 contains such an obligation.   44. With respect to MOFCOM's analysis of the import prices, China notes that the negative effect 
of the import prices on the domestic prices may take the form of price undercutting or price 
depression or price suppression.  In this case, MO FCOM found price undercu tting in 2006 and 2007 
and, while there was no undercutti ng in 2008, price suppression was found.  China also notes that the 
relevant point is not the trend followed by the import prices and the domestic prices separately but the interaction between both, including the level of the pr ices.  Furthermore, China maintains that what is WT/DS425/R/Add.1 
Page E-18  
 
 relevant is the "overall trends in imports" and the "overall trends in serious injury factors".  
MOFCOM's analysis shows that the downward pressure  is the result of Smiths' low prices combined 
with the rapid increase in the volume of imports and market share.   45. Second, the European Union claims th at MOFCOM's non-attribution analysis was 
inconsistent with Articles 3.1 and 3.5 since, in  particular, MOFCOM ignored other known factors 
raised by Smiths and several arguments made by Sm iths in this context.  This claim should be 
rejected. As to the other known factors raised by Sm iths to which the European Union refers, namely 
the global economic crisis, Nuctech's aggressive busin ess expansion, fair competition, Nuctech's start-
up situation and Nuctech's aggressive pricing policy, China submits that to the extent these factors 
were presented by Smiths without appropriate ev idence, they cannot be regarded as constituting 
another known factor within the meaning of Artic le 3.5.  In any case, these factors were either 
examined by MOFCOM during the investigation or there was no need to exam ine them because they 
rested on a factual assumption that had already been rejected by MOFCOM.   
46. The European Union's claims under Articl es 3.1 and 3.5 should therefore be rejected. 
 
8. CONCLUSION 
 
47. China requests the Panel to reject all of th e European Union's claims and arguments, finding 
instead that, with respect to each of them, China acted consistently with all its obligations under the 
AD Agreement and the GATT 1994. 
  
  WT/DS425/R/Add.1 
 Page F-1 
 
 
  
ANNEX F 
 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF, OF 
THE PARTIES AT THE SECOND SUBSTANTIVE MEETING 
  
Contents Page 
Annex F-1 Executive Summary of the Op ening Statement of China at the 
Second Meeting of the Panel F-2 
Annex F-2 Executive Summary of the Op ening Statement of the European 
Union at the Second Meeting of the Panel F-11 
Annex F-3 Closing Statement of the European Union at the Second Meeting of 
the Panel (BCI redacted) F-19 
Annex F-4 Closing Statement of China at the Second Meeting of the Panel F-22 
 WT/DS425/R/Add.1 
Page F-2  
 
 ANNEX F-1 
 
 
EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF 
CHINA AT THE SECOND MEETING OF THE PANEL 
 
 
I. THE EUROPEAN UNION'S CLAIM UNDER ARTICLES 6.5.1, 6.4 AND 6.2 OF THE 
AD AGREEMENT 
 1. The European Union claims that China vi olated Article 6.5.1 since MOFCOM failed to 
ensure adequate non-confidential summaries of vari ous elements of the Petition and of Nuctech's 
Questionnaire Response or to require a statement of reasons explaining exceptional circumstances 
why summarization was not possible .  
 
2. First, with regard to the non-confidential su mmaries of the product models in the Petition, the 
European Union distorts China's argument when st ating that China has alleged that the summaries 
were adequate because greater detail would have di sclosed confidential information. China did not 
make such an argument. China submitted that the description as "main models" was adequate since it 
gave sufficient detail to understand the informati on submitted in confidence. The fact that the 
provision of further detail would have led to the disclosure of confidential information is only an 
additional observation.  
 3. Second, with respect to Exhibits 8, 9, 10, 11 and 14 to the Petition, contrary to what the European Union argues, the obligation under Article  6.5.1 of the AD Agreement does not require the 
disclosure of the "type of evidence". Indeed, Article 6.5.1 only requires that the summary be in 
sufficient detail to permit a reas onable understanding of the "substa nce" of the information which 
refers to the content as opposed to  the form. Moreover, the European Union's allegation that the result 
of China's reasoning is that it would be the responsibi lity of the interested parties to piece together the 
information into a summary is groundless since Ch ina has demonstrated where precisely in the 
Petition the summaries could be found in the corres ponding sections of the body of the Petition.  
 
4. Third, the argument that the quarterly indexes in Attachments 14, 16, 17, 18 and 19 of 
Nuctech's Questionnaire Response are insufficient summaries since MOFCOM based itself on annual 
trends in the investigation should be rejected. How data were processed by MOFCOM is not relevant 
in order to assess whether a non-confidential summary is meaningful. Furthermore, the fact that both Smiths and the European Union commented extensiv ely on MOFCOM's findings of injury and never 
complained about a lack of appropriate summary of data in Nuctech's Questionnaire Response shows 
that Smiths was fully able to properly defend its interests during the investigation.   5. Fourth, the European Union's arguments c oncerning certain responses and attachments of 
Nuctech's Questionnaire Response should equally be re jected. Where the confidential information is a 
reply to a yes/no question, it is obvious that a summary cannot be provided without disclosing the 
confidential information and therefore a statement of  reason is not required. As to the reply to the 
other questions, the non-confidential version cons titutes an adequate summary of the information 
submitted in confidence.   6. Fifth, regarding the Statement of the Chin ese Public Security Bureau of Civil Aviation 
Administration, contrary to what the European Un ion alleges, China pointed out that the record 
included a statement of reason which was supplemen ted orally. Furthermore, the European Union 
erroneously claims that there would be a cont radiction between the argument invoked about the 
inherently sensitive character of the information and the request included in the public file. Indeed, the 
second sentence of the request included in the public file which contains the statement of reason why  WT/DS425/R/Add.1 
 Page F-3 
 
 
 summarization was not possible invokes the "nature of the information". It refers to the highly 
sensitive character of the information relating to air transport safety as this flows from the name of the 
entity itself. There is therefore no contradiction. Finally, the European Union manifestly ignores the 
fundamental differences regarding safety between railw ay and air transport sectors when it claims that 
the fact that the railway administrations did not inv oke safety or the risk of material adverse effects 
demonstrate that these reasons could not objectively justify why it was impossible to summarize the 
information concerned.   7. The European Union's claims under Articles 6. 4 and 6.2 should be rejected as well. China 
refers to the detailed arguments pr esented in its earlier submissions.   
 
II. THE EUROPEAN UNION'S CLAIM UNDER ARTICLES 6.9, 6.4 AND 6.2 OF THE 
AD AGREEMENT 
 
8. The European Union's claims under Article 6. 9, 6.4 and 6.2 of the AD Agreement should all 
be rejected.  
 9. China will start with the European Union' s claim that MOFCOM failed to disclose the 
methodology and underlying data for pr ice undercutting and price suppression. 
 10. First, with respect to the methodology used  by MOFCOM for the price undercutting and price 
suppression analysis, the European Union claims that this methodology is a "fact" since it is not "legal 
reasoning" and that there can be no other category than "facts" and "reasoning". This is manifestly 
wrong since "reasoning" is not limited to "legal reasoni ng" and since there is no indication that there 
can only be two categories. The methodology used  by MOFCOM is similar to "reasoning" and 
reflects the way facts were being processed or orga nised and thus does not constitute a "fact". The 
Panel's findings in EC – Salmon,  contrary to what the European  Union argues, do not support the 
view that the methodology used by MOFCOM should  be regarded as an e ssential fact. The words 
"essential" or "necessary" refer to issues for whic h a determination is mandatory under the AD 
Agreement and Article 3.2 does not refer to any "methodology" or type of comparison that would 
need to be undertaken.   
11. Second, regarding the underlying data, contra ry to what the European Union argues, China 
did not state that the essential facts are limited to conclusions that the inve stigating authority has 
reached. Furthermore, China notes that the European Union's claim is rather vague and unclear as it 
never clarified which underlying data  MOFCOM failed to disclose. To the extent that the underlying 
data which, according to the European Union, s hould have been disclosed are Nuctech's domestic 
prices, such disclosure was not possible for reasons  of confidentiality. MOFCOM, however, disclosed 
domestic price information in the form of tre nds. The entirely new argument that MOFCOM should 
have disclosed prices ranges to show that domestic and imported prices were comparable is misplaced 
in the context of an Article 6.9 claim and instead re lates to the form in which certain data could have 
been summarized within the meaning of  Article 6.5.1 of the AD Agreement. 
 
12. The claim concerning the alleged lack of di sclosure of the calculation of Smiths' dumping 
margin should equally be dismisse d. As a preliminary remark, China notes that the European Union 
has extended the scope of its claim. Indeed, the Eu ropean Union has now started to claim a lack of 
disclosure of data on transactions and adjustments us ed in the calculation of normal value and export 
price while, in its Reply to Question 11 from the Panel,  the European Union had stated that it will not 
make arguments with respect to a lack of disclos ure regarding the normal value determination. This 
aspect of the claim should therefore be rejected by  the Panel. In any case, since the European Union 
did not submit any argument concerning this claim, it has failed to make a prima facie  case.  
 WT/DS425/R/Add.1 
Page F-4  
 
 13. Assuming that the data on transactions and adjustments used to calculate the normal value 
and export price are "essential facts", MOFCOM met its disclos ure obligation since it precisely 
identified the data used for the determination of th e normal value and the export price, the nature and 
level of the adjustments, it explained the methodol ogy followed to make the comparison between the 
normal value and export price and provided a table which reported th e data of normal value, export 
price, quantity, CIF price and dumping margin fo r each model of the Subject product. The disclosure 
was made in MOFCOM's customary disclosure method, i.e. a narrative disclosure, which is consistent 
with Article 6.9 that does not prescribe a specific form for the disclosure.  
 14. The claim regarding the deficient disclosur e concerning the calculation of the "all others" 
dumping rate should also be dismissed. While Chin a already addressed all arguments put forward by 
the European Union, the latter did not reply to any of China's arguments but merely claimed they were 
"misguided". China has shown that MOFCOM disclo sed all the essential facts in relation to the all 
others duty rate.   
15. As to the consequential claims under Articles 6.4 and 6.2, the European Union has failed to 
demonstrate precisely how a violation of Article 6. 9 also amounts to a violation of Article 6.4 and 
Article 6.2 for each item specifically. With respect to  its Article 6.4 claim, the European Union even 
fails to precisely identify the "information" fo r which MOFCOM should have provided to the 
interested parties timely opportunities to see and a fortiori  that such information was not confidential.  
 III. THE EUROPEAN UNION'S CLAIM UNDER ARTICLE 12.2.2 OF THE AD 
AGREEMENT 
 
16. The European Union's claims under Article 12.2.2 of the AD Agreement should also be 
rejected in their entirety.  
 
17. China will not comment on the first claim re lating to the absence of reasons in the public 
notice which led to arguments being accepted or re jected concerning the normal value determination 
since no new argument has been developed by the European Union.   18. As to the second claim which relates to the injury determination, China notes that, with 
respect to the methodology used, not every question or issue which arises during an investigation 
must necessarily be regarded as having led to the imposition of the anti-dumping duty within the 
meaning of Article 12.2.2. The information provided  in the Final Determination concerning the price 
analysis is detailed, precise and complete and provides sufficient background and reasons to 
understand MOFCOM's injury determ ination. As to the arguments in relation to the injury 
determination that would have been made by Smith s during the investigation, China notes that it is 
still not in a position to understand which specific ar guments of Smiths the European Union refers to 
and cannot therefore comment on this claim. China can only make two general comments. First, not 
all arguments of an interested party can automatical ly be regarded as "relev ant" merely because they 
were raised in the context of the injury determina tion. Second, arguments concerning a factor which is 
not a factor having a bearing on the state of the industry within the meaning of Article 3.4 can 
certainly not be regarded as "relevant" within th e meaning of Article 12.2.2 of the AD Agreement. 
 19. The European Union's third claim relates to sev eral comments raised by Smiths with regard to 
the determination of the causal link. This claim should be rejected since these comments were not 
properly identified and the claim remains unsubstantiate d. On substance, the European Union fails to 
demonstrate that the arguments were relevant. In  any case, since Smiths did not substantiate its 
comments by relevant evidence, there was no obliga tion for MOFCOM to examine them in the Final 
Determination.    WT/DS425/R/Add.1 
 Page F-5 
 
 
 20. The last claim concerning the calculation of Smiths' dumping margin and the determination of 
the residual duty should also be rejected. The Eur opean Union makes a new line of arguments with 
respect to the determination of the residual duty, namely that MOFCOM failed to publish the rationale 
for its decision to resort to facts available in calculating the residual duty. The Final Determination 
contains, however, MOFCOM's explan ation of its decision to resort to facts available in calculating 
the residual duty. As to the calculations and th e underlying data, MOFCOM was under no obligation 
to include them in its Final Determination.   
IV. THE EUROPEAN UNION'S CLAIM UNDER ARTICLES 3.1 AND 3.2 OF THE AD 
AGREEMENT 
 
21. China will address several issues with respect to the European Union's claim under Articles 
3.1 and 3.2.   22. First, China notes that the European Union h as changed the focus of its claim. The European 
Union's claim in its First Written Submission mainly  focused on the existen ce of differences between 
"high-energy" and "low-energy" scanners. The Eur opean Union claimed that the use of weighted 
average unit values was inadequate due to consider able differences between "high-energy" and "low-
energy" scanners. China pointed out that the distin ction between scanners on the basis of the energy-
level is purely artificial. China noted that there are no clear-cut differenc es between the two product 
categories in terms of their physical characteristics, uses, technological features, manufacturing 
processes and prices. Thus, to the extent that the European Union's claim is based on this factually 
incorrect premise it must necessarily fail.   23. The European Union now seems to acknowle dge that there is no clear-cut dividing line 
between scanners with an energy level of or be low 300 KeV and scanners with an energy level above 
300 KeV. It has therefore decided to focus its cl aim on the existence of differences between product 
types in general. It claims that MOFCOM should have taken these differences into account in its price 
effects analysis .  
 
24. The European Union fails, however, to precisel y identify which differences should have been 
taken into account in the price effects analysis. A re ference to differences in physical characteristics, 
uses and prices in the abstract is not sufficient to  properly substantiate a claim. Without precisely 
identifying the differences, the European Union di d not and cannot establish that MOFCOM failed to 
make an objective examination in the sense that it favour ed the interests of certain interested parties in 
its injury analysis.  
25. Second, the European Union claims that Ch ina violated Article 3.1 since the use of the 
average unit value methodology was "inadequate" du e to the "highly heterogeneous" nature of the 
product. The requirement under Article 3.1 is, however , whether the investigating authority has made 
an "objective examination" based on "positive eviden ce" and not whether the use of a methodology is 
adequate.   
26. MOFCOM ensured an even-handed treatment of  the information and data on the record since 
it did not manipulate or select in any way the data a nd information used in the price effects analysis. 
The European Union's claim that since there were  no imports of "high-energy" scanners and that 
MOFCOM was allegedly aware that including su ch scanners would make a finding of price 
undercutting and price depression/suppression more likely, MOFCOM intentionally selected to 
include certain models to achieve a certain result, is  incorrect. It is based on the artificial distinction 
between "low-energy" and "high-energy" scanne rs and on the erroneous assumption that "high-
energy" scanners are always more expensive than  "low-energy" scanners. Moreover, the European 
Union did not provide evidence of the absence of imports of "high-energy scanners" over the entire POI, thereby failing to substantiate its claim concer ning price undercutting findings. Finally, contrary WT/DS425/R/Add.1 
Page F-6  
 
 to what the European Union claims, the product mix does not and cannot affect findings on price 
suppression.   27. Furthermore, the European Union does not show that MOFCOM's use of the average unit value methodology favoured the interests of the domestic industry. Indeed, the use of such a 
methodology cannot be fou nd non-objective or biased merely because the product under investigation 
included different types or models.   28. Third, contrary to the European Union's allegation, the differences between the dumping 
margin determination pursuant to Ar ticle 2.4 and the price effects analysis pursuant to Article 3.2 of 
the AD Agreement are important to properly interpre t the obligations of Articles 3.2 and 3.1 of the 
AD Agreement and to not unduly impose obligations on WTO Members that do not flow from this provision.   29. Fourth, the European Union's argument th at MOFCOM price effects examination was not 
objective is merely based on a hypothetical situati on which in any case would not affect MOFCOM's 
findings regarding "price suppression". In the present case, MOFCOM found price suppression, which is characterized by the relationship between the co sts of production and the prices. For a given year, 
both the costs of production and the prices are base d on data relating to the same set of products. 
Thus, the use of weighted average unit values cannot  magnify the effects of price suppression or show 
price suppression while there is none, as claimed by th e European Union. Indeed, the fact that the 
product mix varies or may vary over the POI cannot impact the assessment of price suppression since 
it depends on whether the prices of  a certain product mix have or have not been able to match 
increases in the costs or to follow decreases in the costs for the same product mix.  
 30. Regarding China's argument that Smiths did not claim during the investigation that 
MOFCOM should have taken the di fferences in products types into  account in its price effects 
analysis, the European Union unconvincingly attempts  to justify this failure by stating that the 
dumping questionnaire for Smiths suggested that MOFCOM intended to make a model-to-model 
comparison. This argument is unconvincing. The Eu ropean Union's additional argument that Smiths' 
request to exclude high-energy products from the scope of the investigation should have alerted 
MOFCOM to the importance of the differences betw een "low-energy" and "high-energy" scanners for 
the price analysis is equally irrelevant. Knowi ng that MOFCOM decided not to exclude the latter 
from the scope of the investigation, Smiths should have made comments on this point in the price 
effects context. Moreover, Smiths never claimed dur ing the investigation that there were important 
and serious differences among diffe rent types of products and a fortiori  that such differences should 
have been taken into account by MOFC OM for the price effects analysis. 
 
31. The European Union disputes China's argumen t that the use of the weighted average unit 
methodology was the most reasonable methodology av ailable in view of the deficient and limited 
information and data provided by Smiths. According to the European Union, the issue is whether the 
use of the methodology was reasonable at all. China submits that an "objective examination" depends 
on the specific circumstances of the case, including the information and data that were available to the 
investigation authority. In this case, the methodol ogy based on weighted average data per year was 
objective since weighted average figures per year were the only available data.   32. In conclusion, China reiterates that MOFCOM 's consideration of the price effects of the 
dumped imports on the domestic prices was fully c onsistent with China's obligations pursuant to 
Articles 3.1 and 3.2 of the AD Agreement.   WT/DS425/R/Add.1 
 Page F-7 
 
 
 V. THE EUROPEAN UNION'S CLAIM UNDER ARTICLES 3.1 AND 3.4 OF THE AD 
AGREEMENT 
 
33. China will now address the European Uni on's claims under Articles 3.1 and 3.4.  
 
34. In the first place, the European Union has cl aimed that MOFCOM failed to base its evaluation 
on positive evidence because of alleged discrepan cies between the data in MOFCOM's Final 
Determination and the informa tion submitted by Nuctech or available from other sources. The 
European Union has extended its claim to the injury factors sales revenue and profit. The alleged 
discrepancies between Nuctech's Questionnaire Response and MOFCOM's findings in the Final 
Determination regarding these two factors can be explained by the adjustments made after 
verification, in particular, the exclusion of data  relating to exports of the domestic like product and 
sales of products other than the like product.   35. Further, regarding the alleged discrepan cies between figures concerning gross profit and 
employment in certain publicly available informatio n, China has already explained that the issue has 
been expressly addressed by MOFCOM in its Final Determination and that the reports concerned 
cover not only the sales of the Like Products but also the sales of other products. The European Union seeks to challenge this explanation by stating that  scanners amounted to around 90% of Nuctech's 
products during the POI. As the European Union, however, acknowledges, this estimate of 90% is 
entirely unsubstantiated and, as China demonstrated, is in fact contradicted by the data on the record 
as verified by MOFCOM.  
 36. Regarding the alleged discrepancies, China has explained that MOFCOM's findings regarding 
various injury factors were based on the figur es and data provided by Nuctech which, after 
verification, had been amended and thus are based on "positive evidence" . The European Union 
disputes this by claiming that interested parties have not been informed that so me of the data collected 
were modified pursuant to on-site verification and th is claims that there is no evidence of what China 
asserts in these proceedings. First, contrary to th e European Union's alle gations, MOFCOM expressly 
stated that Nuctech provided supplementary evid ence and materials after verification. Second, 
MOFCOM did not disregard the figures on the record since it based its determinations on the amended data and figures provided by Nuctech after on -site verification. Third, the European Union is 
confusing two different issues, namely, whether inter ested parties have been informed of which data 
have been used and whether the decision is based  on "positive evidence". Contrary to the European 
Union's claim, data will not become "positive ev idence" after the investigating authorities have 
informed the interested parties of the fact that th e data used were data which have been modified 
pursuant to verification. 
 
37. The second claim raised by the European Union under Articles 3.1 and 3.4 that MOFCOM did not examine all factors listed in Article 3.4 should be rejected since MOFCOM examined the 
magnitude of the margin of dumping and found margins that exceeded the " de minimis " threshold of 
Article 5.8 of the AD Agreement.   
38. The European Union's third claim that China failed to make an objective examination of the 
state of the domestic industry because MOFCOM fa iled to distinguish between "low-energy" and 
"high-energy" scanners is based on the incorrect factual premise that there are considerable differences in physical characteristics and uses be tween high-energy and low-energy scanners which 
also lead to differences in prices and cost of production. Furthermore, the claim that MOFCOM 
should have made a separate examination for "low -energy" and "high-energy" scanners regarding the 
injury factors relating to prices or costs must fa il since there is no requirement in the AD Agreement 
to examine the domestic industry per sector or segment of the market, whether for all injury factors or for only some of them. Moreover, the European Uni on fails to demonstrate on which basis the injury 
analysis fails to be objective. While claiming that th e use of weighted average data for the entire range WT/DS425/R/Add.1 
Page F-8  
 
 of scanners did not lead to data representative of th e actual state of such industry, it fails to provide 
any evidence on what then would have been the actual state of the domestic industry and why the 
methodology used made it more likely to find injury.  39. The fourth claim raised by the European Union relates to MOFCOM's failure to make a 
proper evaluation of the overall development and in teraction among injury factors taken together.  
 40. The European Union's first argument was that MOFCOM did not provide a compelling explanation of whether and how the overwhelming ma jority of positive factors were outweighed by 
any other negative factor. China submitted that the European Union incorrectly considered that the 
only negative factors were the domestic sales pric es and inventories and re ferred to the Panel's 
findings in EC – Fasteners  which, contrary to what the European  Union argues, are applicable in the 
present case.   41. The European Union's second argument that MO FCOM made contradictory observations in a 
not even-handed manner should equally be rejected . Indeed, the fact that the European Union 
disagrees with the qualifications used by MOFC OM in its injury anal ysis does not cause the 
evaluation of the factors concerned to be biased.  42. As to the argument that MOFCOM failed to examine all factors in their proper context, the 
European Union seeks to impose an additional obliga tion on the investigating authorities which in fact 
relates to the causality issue. The claim that MOFCOM should have addressed the relationship 
between the domestic prices and import prices and the fact that Nuctech was growing well in excess of growth in demand relate to the causality determination.   43. Regarding the last argument raised by the Eu ropean Union that MOFCOM failed to take into 
account in its injury analysis Nuctech's alleged st art-up situation, aggressive  pricing strategy and 
business expansion, China considers that these three factors are not "factors having a bearing on the 
state of the industry" within the meaning of Article  3.4 of the AD Agreement but rather factors which 
may have caused certain effects on the state of the industry.  
 44. The European Union erroneously claims that the explanations provided by China with respect 
to these three factors are ex-post  explanations. In fact, these factors are unsubstantiated allegations 
and MOFCOM was therefore not required to examine th em. Not every factor raised by an interested 
party needs to be examined by the investigating authority, but only those that constitute "relevant 
economic factors and indices having a bearing on the state of the industry."  
45. With respect to the alleged start-up situa tion of Nuctech, China noted the contradictions 
between Smiths' submissions and the European Un ion's arguments, which the European Union has 
failed to rebut. Moreover, the allege d evidence referred to by the Eur opean Union consists in either 
unsubstantiated allegations made  by Smiths or the evidence referred to does not in any way 
demonstrate that Nuctech was in a start-up situation during the POI. In order to avoid this obvious 
lack of evidence, the European Union claims that th e start-up situation of Nuctech is demonstrated by 
the high productivity levels, reduction in losses and increasing rates of return. The European Union is, 
however, confusing causes with consequences. While  various indicators may describe the state of a 
domestic industry, it can not be concluded that an industry is in a start-up situation merely because 
certain indicators are present. In contrast, there is  clear evidence on the record showing that Nuctech 
was not in a start-up situation but was producing a nd selling low-energy scanners already years before 
the POI.  
 46. As evidence of Nuctech's aggressive pricing po licy, the European Union refers to the decrease 
in prices and the fact that import prices increased  during the POI and were above domestic sales 
prices in 2008. These data do not, however, show in  any way that the state of the domestic industry  WT/DS425/R/Add.1 
 Page F-9 
 
 
 resulted from an aggressive pricing policy. The Eu ropean Union confuses the effect, namely the 
decrease in the domestic prices, with a possible cause,  i.e. an alleged aggressive pricing policy. In 
fact, the only piece of evidence is a Report which was not even attached as an exhibit and not produced in these proceedings.   
47. As to Nuctech's aggressive business expansion,  the only evidence referred to by the European 
Union are excerpts of Tsinghua Tongfang Annual Report. As explained by MOFCOM during the 
investigation, this document does not constitute relevant evidence in  regard of the domestic sales of 
the domestic like product.   
48. Therefore, MOFCOM was entitled and even requi red to ignore all these allegations since they 
were not properly substantiated by verifiable evidence and therefore di d not constitute "positive 
evidence" within the meaning of Article 3.1 of the AD Agreement. 
 
VI. THE EUROPEAN UNION'S CLAIM UNDER ARTICLES 3.1 AND 3.5 OF THE AD 
AGREEMENT 
 
49. In this last part, China will address the Eur opean Union's claim under Articles 3.1 and 3.5 of 
the AD Agreement.   50. The European Union does not develop an y real new arguments in its Second Written 
Submission regarding the causal relationship betwee n the dumped imports and the material injury. 
China will therefore limit itself to three comment s concerning MOFCOM's assessment of the price 
effects of the dumped imports.  51. First, contrary to the European Union's a llegations, China expressly addressed the argument 
raised by the European Union that MOFCOM attribut ed to the EU imports effects that could not have 
been caused by them. Indeed, China's position is that  the injury and causation analysis must be carried 
out with respect to the domestic industry as a whole and that there is no requirement to distinguish between segments or sectors. In any case, since the European Union's claim is based on the erroneous 
factual premise of a distinction between "low-energ y" and "high-energy" scanners, this claim must be 
rejected. 
 
52. Second, the European Union's argument re lating to a lack of correlation between import 
prices going up and domestic sales prices doing down must  fail since it ignores that what matters are 
not only the trends in the prices but also thei r level as well as the volume of the dumped imports.  
 
53. Third, when disputing China's explanation that Nuctech was "forced" to maintain its prices at 
low level, the European Union manifestly ignores the other essential factors referred to by MOFCOM 
in its findings, i.e. the very low prices and at  dumped levels of the im ports, the significant price 
undercutting in 2006 and 2007 and the substantial increase in absolute and relative terms of the 
imports.   
 
54. As to the non-attribution analysis, MOFCOM was not under an obligation to examine any of 
the five factors referred to by the European Union since no relevant evidence was provided. In any 
case, these factors were either examined by MOFC OM during the investigation or there was no need 
to examine them because they rested on a factua l assumption that had already been rejected by 
MOFCOM.  
 
55. First, concerning the global economic crisis, Smiths provided evidence that was not relevant 
since it referred to a period of time after the end of the POI. In any case, MOFCOM's finding of the domestic industry's good export performance directly  addressed and invalidated Smiths' claim.  
 WT/DS425/R/Add.1 
Page F-10  
 
 56. Second, there was no evidence at all that woul d somehow show that Nuctech was in a start-up 
phase. Thus, there was no obligation for MOFCOM to even examine this issue as a possible other 
known factor that might have caused injury to the domestic industry.  57. Third, Smiths' allegation re garding Nuctech's aggressive pric ing policy was not substantiated 
but based on a Study which was not even provided to MOFCOM and only pur portedly concerned an 
alleged pricing strategy concerni ng so-called "high-energy" scanners on the export markets, therefore 
hardly transposable to domestic market sales of the like product. The fact that domestic sales prices 
decreased by more than 70% dur ing the POI does not constitute evidence showing that Nuctech was 
pursuing an aggressive pricing policy.  
 
58. Fourth, Smiths' arguments pertaining to fair  competition remained unsubstantiated and in the 
absence of evidence, there was thus no obligation for MOFCOM to examine this issue. In any case, 
MOFCOM had already dismissed the factual premise of Smiths' claim when noting that there was no evidence showing that the Subject Product is superi or to domestic Like Products with respect to 
quality and service.   
 59. Fifth, Smiths' argument regarding Nuctech's  aggressive business expans ion was not supported 
by evidence since the Reports referred to are documents  which are not relevant since they contain data 
concerning export sales and other products. The Eur opean Union's explanation that the aggressive 
business expansion is demonstrated by the fact that  the domestic industry was growing well in excess 
of the growth in demand is inapposite. The fact that domestic sales volume and market share 
increased more than the increase in consumption do not demonstrate that this was the result of an 
aggressive business expansion.   60. Regarding the European Union's claim that MOFCOM failed to address Smiths' argument that 
exports were the cause, not the cure, of Nuctech's financial difficulties, China notes that the argument 
was unsubstantiated since the evidence submitted was irrelevant. By contrast, Nuctech provided to 
MOFCOM data and figures on the basis of whic h MOFCOM could assess the export performance of 
Nuctech in relation to the domestic like product.   61. The European Union's claim that MOFCOM i gnored Smiths' arguments about the differences 
in product quality and technology factors should be dismissed since MOFCOM examined Smiths' 
arguments at length in the Final Determination. MOFCOM thus carried out a proper non-attribution 
analysis and, in particular, properly addressed Sm iths' arguments concerning the export performance 
and product quality and technology effects, in co mpliance with the requirements under Articles 3.1 
and 3.5 of the AD Agreement.  
  WT/DS425/R/Add.1 
 Page F-11 
 
 
  
ANNEX F-2 
 
 
EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF THE 
EUROPEAN UNION AT THE SECOND MEETING OF THE PANEL 
 
[[Business Confidential Information "BCI" redacted ]] 
 
 
I. CLAIMS UNDER ARTICLES 6.5.1, 6.4 AND 6.2 ADA  
A. SUMMARIES FOR PRODUCT MODELS ARE INADEQUATE AND THE PANEL SHOULD REJECT 
CHINA 'S ATTEMPT AT EX POST RATIONALISATION  
 
1. The EU challenges the adequacy of summarisation of the product models referred to in the 
dumping section of the Petition. The summaries provided by the Petitioner are neither clear, nor 
meaningful and China's attempt to provide an ex post  rationalisation only further exposes how 
inadequate the summarisation really was. Even in  following China's "hardly disputable" explanation 
of what "main product" stands for, the summary provided in the Petition does not make sense. The 
normal value and export price for the 4 "main" mo dels sold in significan t quantities on the Chinese 
market do not fall within but are considerably lowe r than the price range of [60,000-100,000] for the 
normal value and of [50,000-90,000] for the export price of "[Model 1] and [Model 2]" provided by 
the Petitioner. Indeed, based on the normal value and export price established by MOFCOM for the 
purpose of the final disclosure only 2 models fall (roughly) within the price ranges provided by the 
Petitioner. Yet, those two have been sold in only very small quantities. 
 
B. NON-CONFIDENTIAL SUMMARIES MUST BE  SUFFICIENTLY CLEARLY IDENTIFIED  
 2. The alleged summaries of evidence included in Exhibits 8, 9, 10, 11 and 14 attached to the 
Petition lack the level of detail necessary to enable  interested parties to understand the information 
summarised therein and comment upon it. Even if we accept arguendo  China's position that the 
summary is contained in the body of the Petition, MO FCOM should have ensured that this was clearly 
cross-referenced. Similarly, what China now s ubmits constituted the "ade quate" non-confidential 
summary of Attachments 14, 16, 17, 18 and 19 to  the Petitioner's Questionnaire, has not been 
identified as such by Nuctech.   
3. The EU notes that panel in China – GOES  recently confirmed that respondents may not be 
left guessing whether and where the confidential in formation has been summarised and whether the 
alleged summary, like in this case, is based on the same data source as the redacted information and 
thus represents the "non-confidential" summary. Th e Panel should therefore confirm that while the 
form of a non-confidential summary is not prescribed  by Article 6.5.1, the non-confidential summary 
of confidential information must be sufficiently clearly identified. 
 
C. THE EFFORTS OF INTERESTED PARTIES TO DE FEND THEIR INTERESTS DO NOT CURE A BREACH 
OF ARTICLE 6.5.1 
 4. China appears to have suggested on a number of occasions that in determining the adequacy 
of non-confidential summaries the Pane l should take into account the fact that Smiths and/or the EU 
commented on aspects of the injury determinati on and did allegedly not complain about the 
inadequacy of summarisation. This reasoning is without basis
1 and should be rejected by the Panel. 
                                                      
1 Panel Report, China - GOES , para. 7.191. WT/DS425/R/Add.1 
Page F-12  
 
 Moreover, it is clear from the record that even wher e complaints had been made they fell on deaf ears, 
as MOFCOM failed to request adequate summaries as a result. The efforts of Smiths and the EU to 
defend their interests and submit comments despite th e patchy information they were presented with 
do not cure the breach of Article 6.5.1.  
D. CHINA FAILS TO PRODUCE EVIDENCE THAT TH E AVIATION AUTHORITY STATED REASONS WHY 
SUMMARISATION IS NOT POSSIBLE AND THAT THIS STATEMENT WAS DULY SCRUTINISED BY MOFCOM 
 
 5. The EU asks the Panel to be wary of Ch ina's attempt to water down the Article 6.5.1 
disciplines. As explained in our submissions, China misinterprets Article 6.5.1 and in an effort to 
justify its obvious breach even provides factual statem ents that contradict the facts on the record. The 
Appellate Body provided useful guidance in EC – Fasteners on the importance of maintaining the 
delicate balance struck in Article 6.5. and 6.5.1 and made it clear that stated reasons why summarisation is not possible are subject to the investigating authority's as well as the panel's 
scrutiny
2. China alleges that a statement was made and scrutinised, but even where prompted to do so 
by the Panel, appears to be unable to produce act ual evidence of the statement or its scrutiny by 
MOFCOM.  
E. CLAIM UNDER ARTICLES 6.4 AND 6.2 
 
6. China raises two new arguments regarding th e Article 6.4 claim; namely, that the EU (i) 
failed to identify the information to which access sh ould have been given; and (ii) failed to provide 
reasoning with respect to the condition that the au thorities are only required to provide information 
under Article 6.4 "whenever practicable". China's argu ment that the information was not sufficiently 
identified should be rejected. As China itself con cedes, the EU provided a general description which 
was then further elaborated in the sections dealing with the specific summaries or statements. In light 
of the fact that the information was unduly withhe ld from the EU (and/or Smiths), providing a more 
specific description would not be possible. Second, China's attempt to argument its failure to make available all the relevant information by submitting th at it was "not practicable" to do so, should also 
be rejected. When the information is not available as  a result of a violation of an ADA obligation, this 
very violation cannot serve as a shield for the author ity from a finding of violation under Article 6.4.  
 
II. CLAIMS UNDER ARTICLES 6.9, 6.4 AND 6.2 ADA 
 
A. METHODOLOGIES AND UNDERLYING DATA RELIED UPON FOR MOFCOM 'S PRICE ANALYSIS 
CONSTITUTE ESSENTIAL FACTS  
 
7. In paragraphs 88 and 89 of its  second written submission, China tr ies to deal with one of the 
inconsistencies in its position that a "methodology" conceptually cannot constitute an essential fact. 
The inconsistency streaming from the fact that Ch ina considers the methodology for the calculation of 
the dumping margin as an essential fact and has even referred in the course of these proceedings to its 
disclosure as evidence of its compliance with its oblig ations under Article 6.9. China relies on the fact 
that the choice of methodologies is prescribed in th e context of Article 2.4, whereas the authority has 
discretion under Article 3.2, to conclude that  a methodology relied upon in the context of price 
analysis needs not be disclosed. In doing so Ch ina entirely ignores the obligation under Article 3.1 
ADA. If one were to accept China's position, inter ested parties would be deprived of the right to 
comment on the completeness and accurateness of the evidence relied upon, as well as on the 
objectiveness of the price analysis by the investigating authority. 
 
                                                      
2 Appellate Body Report, EC - Fasteners , para. 544 (footnotes omitted, emphasis added).  WT/DS425/R/Add.1 
 Page F-13 
 
 
 B. SCOPE OF THE CLAIMS CONCERNING NORMAL VALUE AND EXPORT PRICE DETERMINATIONS 
AND CALCULATIONS OF THE INDIVIDUAL DUMPING MARGIN  
 8. In view of China's attempt to distort the EU's submission, it is important to clarify that the EU requests this Panel to make findings with respect to  China's lacking disclosure of data and criteria on 
the basis of which MOFCOM made adjustment to the export price, as well as for failing to disclose 
individual dumping calculations.  
C. CALCULATIONS OF THE NORMAL VALUE AND EXPORT PRICE AND DATA UNDERLYING THOSE 
CALCULATIONS CONSTITUTE "ESSENTIAL FACTS " WITHIN THE MEANING OF ARTICLE 6.9 
 
9. China appears to suggest that the disclosur e of the calculations was not necessary for Smiths 
since sufficient information was disclosed for Smit hs to be in a position to reverse-engineer the 
calculations. The EU disagrees (and so did Smiths). Th e purpose of disclosure is to place interested 
parties in a position where they can properly unders tand, verify, and challenge the facts that are likely 
to lead the investigating author ity to impose definitiv e measures. If the calculations performed to 
determine the existence and margin of dumping, a nd the data underpinning these calculations, are not 
disclosed, interested parties ca nnot assess whether the final determ ination has been reached in a 
correct manner. This is not a matter of convenien ce for the interested part ies, as China seems to 
imply, but is indeed essential for the legitimacy of the process – to ensure th at the investigation has 
been carried out in accordance with the relevant substantive obligations, but also as a safeguard 
mechanism for the correctness of the actual numbers and data relied upon.  
 
D. MOFCOM FAILED TO DISCLOSE ESSENT IAL FACTS CONCERNING THE RESIDUAL DUTY 
DETERMINATION  
 
10. When the authorities decide to apply facts av ailable in the calculation of the dumping margin, 
they are required to disclose such facts available. In addition, as the panel in China – GOES 
concluded upon reviewing a factual s ituation similar to this case, "in order to allow […] an interested 
party, to defend its interests, it was vital that MO FCOM disclose the factual basis for its use of best 
information available."3 China failed to do so in this case.  
 
E. CLAIM UNDER ARTICLES 6.4 AND 6.2 
 11. Differences in the nature and scope of the obligations under Article 6.9 on the one hand and 
Articles 6.4 and 6.2 on the other are not such as to make it conceptually impossible for the obligations 
to apply to the same factual circumstances and hen ce - as we submit was the case in this dispute - be 
infringed at the same time.  
 
III. CLAIMS UNDER ARTICLES 12.2.2 ADA 
 
12. China argues in paragraph 149 of its second wr itten submission that the explanations for the 
rejection of relevant arguments made by Smith s concerning the normal value determination were 
adequate in view of what it describes as Smiths "own express recognition". In doing so China is 
changing the facts and reasoning MOFCOM relied upon in the final determination from "Smiths 
Heimann did not have sufficient evidence" to wh at would now seem to be a decision based on an 
explicit recognition by Smiths. The EU recalls that  the investigating authority must provide an 
explanation in the notice pursuant to Article 12.2. 2 that does not leave the reader guessing why the 
authority made its determinations.  
 
                                                      
3 Panel Report, China – GOES , para. 7.408. WT/DS425/R/Add.1 
Page F-14  
 
 13. The EU further submits that the China violated Article 12.2.2, because the Final 
Determination does not include the investigating au thority's explanation of the methodology used for 
price undercutting or price depression nor any inform ation on the underlying facts. In paragraph 156 
of its second written submission China argues that  the obligation under Article 12.2.2 should be 
interpreted in conjunction with Artic le 12.2.1 and concludes that "[t]here is, however, no obligation to 
use a calculation methodology to consider what have  been the effects of the import prices on domestic 
prices. Accordingly, there is no basis for an obliga tion to make such disclosure or explanation." The 
EU clarified in the context of its parallel claim under Article 6.9 that  the term methodology is used as 
shorthand for tool or method used by an authority to process facts and reach a preliminary conclusion 
with respect to those facts. A methodology woul d therefore not necessarily be one that relies on 
calculations. While the investigating authority "enj oys a certain discretion" in adopting a methodology 
for examining the price effects of the dumped imports
4; it does not enjoy unfettered discretion5. In 
exercising its discretion the authority must comply with the obligations under Article 3.1 ADA and this should be apparent from the public notice.  
14. China submits that calculations and underlyi ng data fall outside the scope of Article 12.2.2 
because they contain confidential in formation. The EU submits that the mere fact that information 
which is relevant within the meaning of Article 12.2.2 also constitutes confidential information, does 
not release the investigating authority from its oblig ation to make this information available. While 
the obligation to make relevant information availabl e is qualified by the requirement to pay due regard 
to the protection of confidential information, this  requirement can be respected by including the 
information in separate reports and keep the separat e report, or the information on matters of fact 
contained therein, confidential to the extent  necessary. If the only approach for reconciling 
confidentiality with the obligation to make a pub lic notice, was leaving out anything that is 
confidential, these notices would soon cease to have an y useful purpose. As explained in response to 
the Panel's question 16, the EU believes that it woul d be untenable to argue that Article 12.2.2 only 
has as its objective informing the public in general. The public notice serves an important role also in 
making possible the exercise of the concerned companies'  right of defence. This is why it is generally 
accepted that confidential information is not simp ly omitted from a public notice, but is instead 
presented in a non-confidential format or – in the ca se of individual margin calculations – disclosed 
only to the company concerned.  IV. CLAIM UNDER ARTICLES 3.1 AND 3.2 ADA 
 
15. China's second written submission makes a much  belated and failed a ttempt to demonstrate 
the existence of the alleged single continuum of scanners.  
 
16. China relies on a very limited and fragmentary selection of evidence. Furthermore, to a large 
extent, the selected evidence pertains to producers of  scanners other than Nuctech and falls outside the 
POI. China's reluctance to disclo se evidence on the record strongly s uggests that such evidence would 
contradict China's new found argument. China should not be allowed to make up its case ex-post  by 
substituting a piecemeal and unrepresentative choice of evidence to the eviden ce on the record of the 
investigation.  
 
17. China invokes as evidence of the alleged continuum  the existence of a few models of scanners 
of 320 KeV, as well as of one single instance of a scanner of 450 KeV (the model CX-450P DV of the 
manufacturer L.3com). However, none of these models was manufactured by either Nuctech or Smiths. Furthermore, all of them appear to be relatively recent models, which were not marketed 
during the POI. Even more tellingly, China has been  unable to find even a single example of a scanner 
between 450 KeV and 1000 KeV. At most, the evidence invoked by China would warrant to draw the 
                                                      
4 Appellate Body Report, Mexico – Rice AD measures , para. 204.  
5 Appellate Body Report, EC – Bed Linen , para. 113; Panel Report, EC – Fasteners , para. 7.325.  WT/DS425/R/Add.1 
 Page F-15 
 
 
 line between low-energy and high-energy scanners at  450 KeV, rather than at 300 KeV. But this 
would have been ultimately inconsequential, give n that neither Smiths nor Nuctech sold any low-
energy scanner above 300 KeV in China during the POI. On the other hand, China's failure to 
establish the existence of any scanners between 450 KeV and 1000 KeV confirms that, contrary to 
China's allegations, there is a distinct and wide gap between low-energy an d high-energy scanners.  
 
18. The European Union draws once again the Panel's attention to Nuctech's Questionnaire 
response, where Nuctech identified as its "major prod ucts" the ten models shown in Attachment 2 to 
that response. Those models include five models of  the CX series of low-energy scanners (the models 
CX6550B, CX100100T, CX150180S, CX6040BI, CX100100TI) and five models of high-energy 
scanners (the models AC6000, MB1215HL, MT1213LH, RF, FS3000 and PB2028TD). The 
brochures for all those models included in Exhibit CHN – 10 confirm that, whereas none of the CX models was above 300KeV, all the high-energ y models were betwee n 2.5 MeV and 9 MeV. 
 19. China also argues that some of the physical  characteristics which Smiths had attributed to 
low-energy scanners are shared by some high-ener gy scanners. However, many of the arguments 
submitted by China in this regard (for exampl e, those concerning appearance and size) rely 
exclusively on the technical features of just one single model: the 450 KeV model of L.3com. In other 
instances, the examples cited by China fail to a ddress Smiths' arguments. For example, Smith had 
noted that high-energy scanners "often occupy a de signated building" and that, for this reason, their 
installation may require several days' or even week s' work. It is correct that some high-energy 
scanners are mobile or semi-mobile. But it remains true that, whereas many static high-energy 
scanners require a designated building, low-energy sc anners never do so and can always be installed 
very easily and quickly. Similarly, Smiths had pointed out that high-energy scanners do not 
"generally" include a conveyor belt. Therefore, th e fact that, exceptionally, a few models of high-
energy scanners include a conveyor belt (only 1 of  5 Nuctech's "major products" does so) does not 
render Smith's observation inaccurate. 
 20. As regards differences in uses, China alleg es that, according to the statements included in 
their brochures, some models of low-energy scanners can  be used to inspect 'l arge' objects, such as air 
cargo containers. But, in the first place, Smiths ha d never contested that some low-energy scanners 
can be used to inspect some, relatively small, ai r cargo containers. Moreover, descriptive terms such 
as 'large' or 'small' lack in themselves sufficient pr ecision. They are relative terms, which can have a 
very different meaning. Nuctech's smallest hi gh energy model included in Exhibit CHN-10 (the 
AC6000) can inspect objects of up to 2.44 m x 3.18 m, whereas Nuctech's FS scanners can inspect objects of up to 3.75 m x 5.2 m. None of Nuctech's low-energy "major products" can inspect objects even approaching such dimensions. China further argues that the model ZBV of Nuctech and AS&E 
(225 KeV) "can be used to insp ect articles such as containers and vehicles". But China omits to 
mention the crucial fact that this model uses a very  different and novel technology, with very specific 
uses: so-called 'backscattering' imaging.   21. China also contends that the price of low- energy scanners may in some cases be higher than 
the price of high energy scanners. Yet all the eviden ce which China has been able to gather in support 
of this contention consists exclusively of just one single sale of each of the two categories. It is 
obvious that the price for a single transaction may be abnormally low for a variety of reasons. 
Moreover, those two transactions took place in 20 11. In addition, the models concerned are not 
among the "major products" of Nuctech and do not appear to be sufficiently representative. In 
particular, it should be noted that the low-energy model (the [[BCI]]) appears to use 'backscattering' 
technology. In order to establish whether the pri ces for low-energy scanners may indeed be as high as 
those for high-energy scanners, as alleged now by China, it would have been both possible and 
necessary to produce far more robust evidence.   WT/DS425/R/Add.1 
Page F-16  
 
 22. China has criticised the EU for not substan tiating its claim that the prices for high-energy 
models are much higher than for low-energy models . However, the EU is merely restating arguments 
and evidence submitted by Smiths during the underlying investigation. Such arguments and evidence 
were not contested during the investigation by Nuctech. Furthermore, the Final Determination 
contains no finding or reasoning sugg esting that MOFCOM was of the view that the prices of the two 
categories were similar. China also argues that "w hat would count is the difference between prices on 
the Chinese domestic market". However, that type  of evidence was not available to Smiths, and 
consequently to the EU. On the other hand, the reco rd of the investigation should contain information 
supplied by Nuctech on the prices charged by that  company on the domestic market during the POI 
for both low-energy and high-energy models. China should explain why it has chosen not to disclose 
it, instead of the very limited and unrepresentative price evidence made available in its second written 
submission.   23. The European Union considers that, for the above reasons, China has failed to establish the 
existence of the alleged continuum . In any event, the existence of the alleged continuum  could never 
be a valid justification for disregarding all th e differences among the various types of scanners 
covered by the investigation. If MOFCOM had been of the view that the level of energy was, of itself, 
an insufficient criterion for segmenting the product u nder consideration because the energy level is 
not a reliable proxy for other relevant differences, then MOFCOM would have been required, in order 
to comply with Articles 3.1 and 3.2 ADA, to ta ke into account any other relevant criteria. 
 
24. China complains, again, that the European Union is raising new ar guments that Smiths did 
not make during the underlying investigation and that  Smiths failed to provide requested information, 
which would have been necessary in order to appl y a different methodology. China's argument is 
factually wrong for the reasons explained in our sec ond written submission. In addition, it is legally 
mistaken. First, nothing in the ADA precludes th e European Union from asserting arguments under 
Articles 3.1 and 3.2 that MOFCOM's findings were not based on positive evidence or reflect an 
objective examination. Certain provisions in the ADA contain language limiting an investigating 
authority's responsibilities to those of addressing arguments or information presented to it. For 
example, Article 3.5 or Article 12.2.2 ADA. In contrast, Article 3.1 ADA contains no similar limitation. The Appellate Body has characterised the obligations of Article 3.1 as "absolute." Moreover, According to the Appellate Body, those obligations "provide for no exceptions, and they 
include no qualifications. They must be met by ever y investigating authority in every determination". 
In view of this, the respondent's failure to rais e an argument can never be an excuse for applying a 
methodology which is not based on an obj ective examination of positive evidence.
6 Nor can the lack 
of information justify the application by the inv estigating authority of a methodology which is not 
"based on an objective examina tion of positive evidence".7 
 
V. CLAIM UNDER ARTICLES 3.1 AND 3.4 ADA 
 
25. We will now address some of the comments ma de by China in its Second Written Submission 
regarding our claims under Articles 3.1 and 3.4 ADA. First, China maintains that "positive evidence" 
merely requires investigating authorities to "inform" interested parties of the data used for the purpose 
of making a determination. In other words, accord ing to China, an inv estigating authority may 
disregard the data in the public file and use other information, even in blatant contradiction with the 
information available to interested parties. Th e EU disagrees. Not because the information on the 
basis of which a determination is made is disclosed to interested parties, a determination can be said 
to be based on "positive evidence". Likewise, not si mply because such inform ation is confidential, a 
determination can be said to be based on "positive evidence". "Positive evidence " means that the data 
has to be verifiable and credible, which is not the case here. It is not even the case that the information 
                                                      
6 Panel Report, Mexico – Steel Pipes , para. 7.259.  
7 Panel Report, Mexico – Rice , para. 7.114.  WT/DS425/R/Add.1 
 Page F-17 
 
 
 was confidential, as Nuctech provided some inform ation, as contained in the public record, in 
contradiction with the data used by MOFCOM in  its determination. And indeed Smiths alerted 
MOFCOM of some contradictions during the investig ation. The truth of the matter is that China has 
failed to explain the contradictions between the info rmation in the public record and the data used by 
MOFCOM in its determination. Therefore, the EU submits that MOFCOM failed to base its 
examination of various injury factors on the positi ve evidence, as required by Articles 3.1 and 3.4 
ADA.   26. Second, China's ex-post explanation that Nuctech  was forced to keep its prices low in order to 
remain competitive is unattainable. The uncontested reality is that Nuctech was growing well in 
excess of the growth in demand. MOFCOM itself found that Nuctech had increased its market share 
every year, and that Nuctech had increased its sales volume and sales revenue every year by more than 50%. In a market situation where EU import pr ices were constantly increasing, it is hard to see 
how domestic prices going down, and at a level even below the EU import prices, could be considered relevant to support a finding of a state of a domestic industry as suffering material injury. Rather, it 
appears that Nuctech decided to maintain its low pr ice policy also in 2008 in order to capture more 
market share in the years including and precedi ng the Olympic games and other important events 
taking place in China.   27. Moreover, a situation where a domestic indus try is taking advantage of economies of scale, 
having high productivity levels and growing well in excess of domestic demand cannot be described 
as an industry suffering material injury. Rather, this  situation fits better with a description of an 
industry that is expanding in an aggressive ma nner and growing even above domestic demand. 
Consequently, the EU claims that MOFCOM's de termination in the present case does not meet the 
standard of a compelling, reasoned and adequate e xplanation when all relevant factors are examined 
in their proper context.  
 
28. Third, the EU considers that the eviden ce on the record as well as MOFCOM's own findings 
with respect to Nuctech's state indicated that Nuct ech was in an economic stage similar to a start-up 
company. Indeed, high productivity le vels, dramatic reduction in losses, increasing rates of return, etc. 
all fit with a company in a start-up situation, as o pposed to an industry su ffering material injury. 
However, MOFCOM failed to examine this factor, as well as other relevant factors (such as Nuctech's 
aggressive pricing strategy and Nuctech's business expans ion) that were relevant for the determination 
of the state of the domestic industry. By failing to  examine this evidence, MOFCOM failed to make 
an objective assessment of the impact of dumpe d imports on the Chinese industry as required by 
Articles 3.1 and 3.4 ADA.  VI. CLAIM UNDER ARTICLES 3.1 AND 3.5 ADA 
 
29. Finally, a few words on our claims under Articles 3.1 and 3.5 ADA. First, China wrongly 
attempts to escape its obligations under Article 3.5 ADA by arguing that MOFCOM was not obliged 
under that provision to examine all the relevant ev idence indicating that the volume of EU imports 
was not "large" or "great" when compared to the sk yrocket trend showed with  respect to the domestic 
like products. In the EU's view, the characterisation of the volume of EU imports as "large" or "great" 
squarely falls under the scope of Article 3.5 ADA, as part of the causation analysis, which is different 
to the examination carried out under Article 3.2 A DA or, for that matter, Article 3.4 ADA. And in 
fact, in this case, it is worth noting that MOFCOM itself qualified the EU imports as "large" or "great" 
as part of its causation analysis. 
 
30. Second, China maintains that the low priced EU imports still prevented domestic sales prices 
from increasing, even in 2008, to a profitable leve l. However, China fails to explain how can it 
reasonably be found that the alleged low price of the EU imports was the only cause of the observed 
trend regarding domestic sales prices. To recall, Nuctech maintained the sa me strategy in 2008 by WT/DS425/R/Add.1 
Page F-18  
 
 reducing its prices by more than 50% when the EU  import prices went up by 14% and were above the 
domestic sales prices. In the EU's view, this fa ct should have alerted MOFCOM that there was 
something else (other than the alleged dumped imports) which was causing the observed sales price decrease. And more so in view of the specific allegation supported by evidence brought by Smiths during the investigation about, inter alia , Nuctech's aggressive pricing policy. 
 
31. Third, the EU has also explained in detail,  contrary to what China asserts, that MOFCOM 
failed to consider other factors raised by inter ested parties which were causing the same effects 
observed and thus injuring the domestic industry at the same time as the alleged dumped imports.  
 
32. In sum, the EU reiterates its views that MOFCOM's causation and non-attribution analyses 
are inconsistent with Articles 3.1 and 3.5 ADA.    WT/DS425/R/Add.1 
 Page F-19 
 
 
  
ANNEX F-3 
 
 
CLOSING STATEMENT OF THE EUROPEAN UNION AT THE 
SECOND MEETING OF THE PANEL 
 
[[Business Confidential Information "BCI" redacted ]] 
 1. The European Union is bringing a number of claims against China in this dispute on account 
of the lack of transparency in the anti-dumping investigation at issue. Many of those procedural 
claims have been brought in parallel with claims  concerning breaches of substantive obligations. 
Discussions in that context have been particularly helpful in giving at least an insight at just how 
difficult it is for an interested party in the course of an investigation to have a full opportunity to defend its interests when crucial information is with held from it. Indeed many of the questions as to 
how MOFCOM reached certain conclusions in the c ontext of the injury determination should have 
already been answered by MOFCOM in its disclosure documents and/or public notice. 
 2. In one of its earlier interventions. China has d eclared itself "aggrieved" by the allegations of 
procedural breaches and "strongly committed to th e principles of transparency and procedural 
fairness".
1 Yet, this principled position did not get refl ected in the interpretations advanced by China 
for the procedural provisions at issue. 
 3. Can it really be that "essential facts" which form the basis for a decision to apply duties and 
"information that is relevant" to the presentation of ones case are interpreted so narrowly that the 
parties would only be given access to the investig ating authority's conclusions on a given issue 
without knowing how and on what basi s it was reached? And even if arguendo  information, such as 
methods employed in the context of price analysis , were not subject to disclosure to the company, 
because they constitute reasoning (or something alik e it, as China submitted), can they also fall 
outside the scope of Article 12.2.2, which requires disclosure of "relevant information on facts, law 
and reasons"? The European Union has explained that this can certainly not be the case. Transparency 
standards cannot be reduced, as China suggests, to a level where exercising ones right of defence and 
even checking compliance with substantive ob ligations becomes difficult or impossible. 
 4. Similarly, according to China, calculations which constitute the mathematical basis for the 
dumping margin are neither essential facts under Artic le 6.9, nor relevant information within the 
meaning of Article 6.4 and are, again according to China, entirely outside the scope of Article 12.2.2 
due to their confidential nature. All this despite th e fact that the summary ta bles that China identifies 
as facts disclosed in comp liance with its obligations under the ADA differ considerably between the 
stage of preliminary determination and final disclosur e and also despite the fact that Smiths explicitly 
noted that it was unable to reproduce MOFCOM's cal culations itself based on the table and on the 
narratives provided by MOFCOM in the context of fi nal disclosure. If the calculations performed to 
determine the existence and margin of dumping, a nd the data underpinning these calculations, are not 
disclosed, interested parties ca nnot assess whether the final determ ination has been reached in a 
correct manner. We stress again that disclosure of th e calculations is not a matter of convenience, as 
China seems to imply, but is indeed essential for th e legitimacy of the investigation process – to show 
that it was carried out in accordance with the substantive obligations, but also as a safeguard 
mechanism against unintended errors. The latter is not a theoretical problem, as the fact that a WTO 
dispute had already been brought concerning a calcu lation error by an investigating authority in 
establishing the dumping margin.  
                                                      
1 China's closing statement at the first meeting of the Panel with the Parties, para. 3.  WT/DS425/R/Add.1 
Page F-20  
 
 5. Transparency is not an administrative formality , but is indeed the cornerstone of the system. 
We therefore call on the Panel to enforce the ADA transparency disciplines strictly. 
 6. China has acknowledged that the product unde r investigation was highly heterogeneous and 
covered scanners with very different physical charac teristics, uses and prices. Yet, when making its 
injury determination, MOFCOM totally disregar ded those differences. In the course of these 
proceedings, China has advanced different, and somewhat incoherent, grounds for justifying 
MOFCOM's decision to ignore those differences. None of them is credible, let alone convincing. All 
of them have the distinct flavour of hastily improvised ex-post rationalizations. 
 
7. At the first hearing, we were told that there was no clear distinction between high and low-
energy scanners but instead a single continuum . As we have shown, however, China has failed to 
prove the existence of that alleged continuum . Indeed, China's evidence ra ther confirms the opposite. 
Moreover, the existence of the alleged continuum  would not be a reason for disregarding all the 
differences in physical characteristics. If the ener gy level is not an adequate proxy for other 
differences affecting comparability, it was MOFCOM 's duty to identify, if necessary on its own 
initiative, the proper criteria for ensuring price comparability.  
 8. China also contends that MOFCOM was for ced to disregard the differences in physical 
characteristics affecting price comparability becau se Smiths failed to cooperate by not providing 
certain requested information. Howe ver, we have shown that the information provided by Smiths, and 
by Nuctech, would have allowed MOFCOM to ap ply other methodologies. Moreover, it must be 
stressed once again that MOFCOM did not resort to  facts available. It did not even consider it 
necessary to send a deficiency letter to Smiths. There is simply no trace on the record of the 
investigation that MOFCOM's choice of methodolog y was related in any manner to the quality of 
Smiths´ response.  
 
9. China's most recent argument is that the inju ry determination was based on a finding of price 
suppression and that in order to make such findi ng it is not necessary to take into account the 
differences between physical characteristics. Howeve r, MOFCOM's final determination does include 
and relies upon findings of both price undercutting and a sharp decline in the prices of the domestic 
industry (and it matters little whether China calls this price depression or something else). Without 
those two findings, MOFCOM's Final Determina tion would simply collapse. Moreover, China 
misunderstands the notion of price suppression. Chin a appears to consider that there is price 
suppression whenever the domestic industry incurs an  overall loss. But Article 3.2 requires more than 
that. It has to be shown that the effect of the du mped imports is to prevent price increases that would 
otherwise have taken place. Yet, in the present cas e, the prices of the domestic industry would have 
declined in any event to reflect a substantial re duction in costs of production. Moreover, imports of 
low energy scanners cannot have the effect of preventing increases in the prices of high energy 
scanners because they did not even compete with them.   10. With respect to China's comments on our claims under Articles 3.1, 3.4 and 3.5 ADA, we have the following brief observations.  
 
11. First, in our submissions, the EU has shown how it had arrived at its estimate that scanners 
amounted to around 90% of Nuctech's products during th e POI: i.e., on the basis of various statements 
contained in documents directly relating to Nuctech 's business, in addition to Smiths' best market 
knowledge. In its oral statement, China has disclosed the figures provided by Nuctech which, quite 
tellingly, are very close to such estimate with respec t to two out of the three years of the POI. In any 
event, China has proven our point: in a situation wh ere the majority of products made by Nuctech 
were scanners (i.e., [[BCI]] when averaging the three years of the POI), the EU fails to understand on 
what basis MOFCOM could obviate the discrepanci es between the public information available to 
interested parties about Nuctech and th e data used in its determinations.   WT/DS425/R/Add.1 
 Page F-21 
 
 
 12. Second, the EU maintains its claim that MO FCOM failed to examine the magnitude of the 
margin of dumping as required under Article 3. 4 ADA. China's defense on this issue cannot be 
considered seriously.  13. Third, and importantly, China has faile d to address several big holes in MOFCOM's 
determination. In particular, China still blames the EU imports for the low domestic sales prices, 
ignoring that the market share of domestic produ cers was well above the EU imports and, quite 
significantly, ignoring also that domestic produc tion increased well above the growth in demand 
during the POI. When all relevant factors are seen  in a proper context, the EU fails to see how 
MOFCOM's determination of the state of the domes tic industry as suffering material injury can be 
upheld. Moreover, China has still failed to address the basis for MOFCOM's counterfactual about 
Nuctech. In other words, China has not explained the basis of the alleged "expected" e.g. profits or 
growth MOFCOM found Nuctech shoul d have reached during the POI. 
 14. Fourth, China contests the characterisation of several factors raised by Smiths as falling under 
Articles 3.4 or 3.5 ADA. However, China's arguments are circular.  
 15. A careful reading of China's opening oral st atement shows that China already assumes that 
those factors are causality factors (e.g., para. 89, wh en using the term "resulted"). We leave the Panel 
to be the judge of that. In any event, be it as 3.4 or 3.5 factors, the truth of the matter is that 
MOFCOM failed to consider them properly in its determinations, as required by those provisions.  
 
16. Fifth, the EU strongly maintains its views that  by attributing to the EU imports of low-energy 
scanners the price effects found (i.e., price underc utting/price depression) on the domestic industry 
producing both high-energy and low-energy scanners, MOFCOM  failed to comply with its obligations 
under Articles 3.1 and 3.5 ADA. China has merely re peated its position about the erroneous factual 
premise of our claim, thereby conceding the legal question behind our claim. 
 17. Finally, the EU observes that China has attempted in its oral statement to provide 
justifications to MOFCOM's lack of examinati on of several other known factors. Those ex-post 
explanations are good examples of how MOFCOM could  have tried to address them during the 
investigation. However, MOFCOM decided to blat antly ignore them. The explanations now provided 
by China reinforces the EU's claim that MOFCOM failed to examine those factors as required by 
Article 3.5 ADA, thereby undermining once more MOFCOM's injury analysis in this case.  18. We thank the Panel once more for the work they have done and will done in the present case 
and look forward to answer any remaining questions  you may have in writing in the course of the 
following weeks. 
  WT/DS425/R/Add.1 
Page F-22  
 
  
ANNEX F-4 
 
 
CLOSING STATEMENT OF CHINA AT THE 
SECOND MEETING OF THE PANEL 
  1. Mr. Chairman, Distinguished Members of the Panel, China would like to thank the Panel and 
the Secretariat for the hard work it has done so far and will still need to be doing in order to resolve 
this dispute, especially for the questions that th e Secretariat came up with and the Panel addressed to 
the parties during the Second Substantive Meeting w ith the parties. China would like to make the 
following brief comments.   2. First, as China repeated in its written subm issions and oral statements, there is no such 
distinction between so-called "high-energy" and "low -energy" scanners. There is no scientific basis in 
this regard. There is no dividing line to be draw n between so-called "high-energy" and "low-energy" 
scanners. It is clear that China provided sufficient ev idences that there are no decisive criteria to make 
such a distinction. As shown in China's subm issions, neither prices, functions, uses, sizes, 
visualisation techniques nor energy-level could be appropriate criteria to distinguish the scanners 
under investigation. Even the EU admits that the energy level criterion may be a moving target in 
order to distinguish the scanners under this dispute.  MOFCOM would have liked to but failed to find 
criteria that could allow for a distinction of a product that is of a single continuum.   3. Second, we think that the question of a co mpetitive relationship is dealt with when the 
investigating authority defines the product scope. There is no legal basis to examine it under Article 
3.2 of the AD Agreement after the product defi nition was decided. Even Smiths did not raise 
objections in the framework of the Article 3.2 dete rmination. Even if MOFCOM would have liked to 
make such a comparison, it was not possible since th e data were not available in a detailed manner to 
undertake a model-by-model or smaller group comp arison. Smith did not provide information per 
models for the years 2006 and 2007. Thus, since the data were not known to MOFCOM during the 
investigation, it could not, even if it wanted, undertake such a comparison.  
 
4. It is also clear that there is no requirement  to follow a specific methodology under Article 3.2 
of the AD Agreement. Given the facts and data that  are available before MOFCOM, we believe China 
has made an "objective examination" based on " positive evidence" in acco rdance with Art. 3.2. 
 
5. Another important fact I would like to address is the EU's attempt to raise the threshold for 
the procedural requirements under Article 6.5.1 and 6.9 of the AD Agreement. For instance, what is 
required in a Petition is prima facie  evidence for the initiation of an i nvestigation. This information is 
submitted by the petitioner, a private party with only a limited ability to obtain the information. Thus, 
the obligation for the petitioner under Article 6 is different from the obligation imposed on the 
investigating authority.  
 
6. Another important comment I would like to ma ke is that China itself is the victim of anti-
dumping investigations by many WTO members, including the European Union. In fact, half of the anti-dumping measures by all WTO members were imposed on Chinese products.   
7. In many cases, China has consultations with  the European Commission regarding issues of 
transparency, especially with respect to Article  6.5.1, and Chinese exporters face even a worse 
situation in EU investigations and if this decision will raise the transparency standard, China will be 
happy if the EU will apply this higher standard with respect to investigations concerning Chinese 
exporters as well.   WT/DS425/R/Add.1 
 Page F-23 
 
 
  
8. The Chinese anti-dumping investigation author ity understands and complies with the rules. 
The Bureau investigates importers but at the sa me time defends Chinese exporters. We therefore 
understand the rules and the need for transparency  and we respect and abide by them in our 
investigations.  
 
9. We hope the Panel renders a neutral and objective decision, within the boundaries of the 
provisions. The decision should not impose more obligations on the Members as the provisions foresee. If all Members will respect the decision, Ch ina would be benefiting from the decision. We 
would be happy if other Members do not apply a d ouble standard and will comply with the Panel's 
findings in an honest manner.  
 Thank you.    
 
  WT/DS425/R/Add.1 
 Page G-1 
 
 
 ANNEX G 
  
REQUEST FOR THE ESTABLISHMENT OF A PANEL 
 
 
Contents Page 
Annex G-1 Request for the Establishment of  a Panel by the European Union  G-2 
 
 WT/DS425/R/Add.1 
Page G-2  
 
 ANNEX G-1 
 
 
REQUEST FOR THE ESTABLISHMENT OF A PANEL  
BY THE EUROPEAN UNION 
 
 
WORLD TRADE  
ORGANIZATION   
WT/DS425/2 
9 December 2011 
 
 (11-6394) 
 Original:   English 
   
CHINA – DEFINITIVE ANTI-DUMPING DUTIES  
ON X-RAY SECURITY INSPECTION EQUIPMENT 
FROM THE EUROPEAN UNION 
 
Request for the Establishment of a Panel by the European Union 
 
 
 The following communication, dated 8 Decemb er 2011, from the delegation of the European 
Union to the Chairperson of the Dispute Settlement Bo dy, is circulated pursuant to Article 6.2 of the 
DSU.  
_______________ 
 
 
On 25 July 2011 the European Union ("EU") reque sted consultations with the Government of 
the Peoples' Republic of China ("China" ) pursuant to Article XXIII:1 of the General Agreement on 
Tariffs and Trade 1994  ("GATT 1994"), Article 17.3 of the Agreement on Implementation of Article 
VI of the GATT 1994 (" Anti-Dumping Agreement ") and Article 4 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes  ("DSU") with respect to the imposition of definitive 
anti-dumping duties on x-ray security inspection equi pment from the European Union, pursuant to 
Ministry of Commerce of the People's Republic of China, Notice No. 1(2011), including its annex. 
The European Union held consultations with  China on 19 September and 18 October 2011. 
Those consultations unfortunately did not resolve the dispute. 
The EU considers the measure at issue to be in consistent with China's obligations under the 
following provisions of the Anti-Dumping Agreement : 
1. Articles 6.2, 6.4 and 6.5.1 of the Anti-Dumping Agreement  because China failed to ensure that 
interested parties provided non-confidential su mmaries of confidential information or, where 
provided, that the summaries were in sufficient de tail to enable a reasonable understanding of the 
substance of the information submitted with regard  to (i) the existence of dumping, including the 
establishment and comparison of the normal value a nd the export price; and (ii) the existence of 
injury, including the effects of dumped imports on prices, the state of the domestic industry and the 
causal relationship between the dumped imports and the injury allegedly suffered by the domestic  WT/DS425/R/Add.1 
 Page G-3 
 
 
 industry. In doing so, China failed to provide a timely  and full opportunity for all interested parties to 
see all information that is not confiden tial as defined by Article 6.5 of the Anti-Dumping Agreement  
and that was relevant to defend their interests, a nd that was used by the authority in the anti-dumping 
investigation, and to prepare presentations on the b asis of this information for the defence of their 
interests.  
2. Articles 6.2, 6.4 and 6.9 of the Anti-Dumping Agreement  because China failed to provide 
interested parties with information about the essen tial facts under considerati on which would form the 
basis for the decision to impose definitive anti-dumpi ng measures. In particular, China did not fully 
disclose the essential facts, which fo rm the basis for the determination of the dumping margin of the 
EU cooperating producer, including the calculation of  the normal value and the adjustments made to 
the export price, and the determination of the resi dual duty. China also failed to disclose the essential 
facts that formed the basis for th e determination of injury, includi ng the analysis of the effects of 
dumped imports on prices, the state of the domestic industry and the causal relationship between the dumped imports and the injury suffered by the domes tic industry. In doing so, China failed to provide 
a timely and full opportunity for all interested parti es to see all information that was relevant to defend 
their interests, and that was used by the authorit y in the anti-dumping investigation, and to prepare 
presentations on the basis of this informa tion for the defence of their interests. 
3. Article 12.2.2 of the Anti-Dumping Agreement  because neither in its public notice of the 
imposition of definitive measures, nor in a separat e report, China set forth sufficiently detailed 
explanations for the definitive determinations on  dumping and injury, together with references to the 
matters of fact and law which  led to arguments being accepted or rejected.  Specifically, China failed 
to provide: a) a full explanation of the reasons for the methodology used in the establishment and 
comparison of the export price and normal value (Article 12.2.1(iii) of the Anti-Dumping Agreement ); 
b) all the considerations relevant to the inju ry determination as set out in Article 3 of the Antidumping 
Agreement  (Article 12.2.1(iv) of the Anti-Dumping Agreement ); and c) the main reasons leading to the 
determination (Article 12.2.1(v) of the Anti-Dumping Agreement) .   
4. Articles 3.1 and 3.2 of the Anti-Dumping Agreement , because China failed to make an 
objective examination, on the basis of positive evidence,  of the effect of the dumped imports on prices 
in the domestic market for like products. Specifica lly, it appears from the very limited information 
disclosed by the Chinese authorities that the finding  that EU imports had the effect of undercutting 
and suppressing and/or depressing the price of dom estic products is not based on an objective 
examination of positive evidence because it failed to take into account the differences between 
various types of products c overed by the investigation. 
5. Articles 3.1 and 3.4 of the Anti-Dumping Agreement  because China failed to make an 
objective examination, on the basis of positive evidence,  of the effect of the dumped imports on prices 
in the domestic market for like products and the consequent impact of these imports on domestic 
producers of such products, including the factors lis ted in Article 3.4, as the overwhelming majority 
of injury indicators were positive or showed positive trends.   
6. Articles 3.1 and 3.5 of the Anti-Dumping Agreement  because China failed to make an 
objective determination, on the basis of all releva nt evidence before the authorities that the dumped 
imports were, through the effects of dumping, causi ng injury. The causality determination is flawed 
because it is based on findings of price undercuttin g and price suppression and/or depression by EU 
imports which are themselves not based on an object ive examination of positive evidence. Moreover, 
China did not consider all known relevant factors other than dumped imports having a bearing on the 
state of the industry and/or affecting the domestic prices. WT/DS425/R/Add.1 
Page G-4  
 
 Accordingly the European Uni on respectfully requests that, pursuant to Article 6 of the DSU  
and Article 17.4 of the Anti-Dumping Agreement , the Dispute Settlement Body establish a panel to 
examine this matter, with the standard terms of reference as set out in Article 7.1 of the DSU . 
The European Union asks that this request be placed on the agenda for the meeting of the 
Dispute Settlement Body to be  held on 19 December 2011. 
 
__________