G/ADP/Q1/EU/8  
G/SCM/Q1/EU/8  
 
14 May  2018 
(18-2883) Page: 1/2 
Committee on Anti -Dumping Practices  
Committee on Subsidies and Countervailing Measures  Original: English  
 
NOTIFICATION OF LAWS  AND REGULATIONS UNDE R 
ARTICLE S 18.5 AND 32.6 OF THE AGREEMENT S 
QUEST IONS POSED BY KAZAKHSTAN  REGARDING  
THE NOTIFICATION OF THE EUROPEAN UNION1 
The following communication, dated 14 May  2018, is being circulated at the request of the 
Delegation of Kazakhstan . 
 
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The Republic of Kazakhstan would like to thank the European Union for its notification of 
Regulation (EU) 2017/2321 of the European Parliament and the Council of 12 December 2017 
amending Regulation (EU) 2016/10 36 on protection against dumped imports from countries not 
members of the European Union (hereinafter – Regulation) in time.  
 
Regulation (EU) 2017/2321 includes certain amendments to the methodology of normal value 
determination in anti -dumping investigati ons. The amendments raise serious concerns with respect 
to WTO consistency of the Regulation. In this connection, the Republic of Kazakhstan kindly asks 
the European Union to respond to the following questions:  
 
Question 1  
 
Recital (3) of the Regulation elucidates, "in light of experience gained in past proceedings, it is 
appropriate to clarify the circumstances in which significant distortions affecting to a considerable 
extent free market forces may be deemed to exist ". Cou ld the European Union, please, explain 
what kind of experiences are implies in this provision? If it is possible, please indicate the exact 
cases and / or situations.  
 
Question 2  
 
Amendments introduced by the Regulation include, inter alia, a new paragraph  6(a) into Article 2, 
which determines the specific circumstances in which it is not appropriate to use domestic prices 
and costs in the exporting country in the anti -dumping investigations. Kazakhstan kindly asks the 
European Union to clarify how the prov isions reflected in subparagraph (b) of Article 2.6(a) of the 
Regulation comply with WTO norms, including Article 2 of the Agreement on implementation of 
Article VI of the GATT 1994?  
 
Question 3  
 
Taking into account the above -mentioned questions 1 -2, Kazak hstan would like to ask the 
European Union to clarify what was the legal basis to adopt mentioned in Regulation amendments: 
gained experiences or WTO norms? In addition, which provisions of WTO rules justify these 
amendments, in particular, Article 2.6a (b ) of the Regulation?  
 
                                                
1 G/ADP/N/1/EU/3/Suppl.2 -G/SCM/N/1/EU/2/Suppl.2.  G/ADP/Q1/EU/8 • G/SCM/Q1/EU/8  
 
- 2 - 
 
  Question 4  
 
Paragraph 6a(a) of Article 2 of the Regulation mentions that "it is not appropriate to use domestic 
prices and costs in the exporting country  due to the existence in that country  of significant 
distortions within the meaning of point (b), the normal value shall be constructed exclusively on 
the basis of costs of production and sale reflecting undistorted prices or benchmarks , subject to 
the following rules ". The Republic of Kazakh stan kindly asks the European Union to clarify how the 
above -mentioned provision is in -line with the sixth indent of Article 2.6a(a) establishing to be 
"without prejudice to Article 17 assessment shall be done  for each exporter and producer 
separately "? 
 
Question 5  
 
Paragraph 6a(a) of Article 2 of the Regulation determines that "the normal value shall be 
constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or 
benchmarks, and the sources the Commission may use in clude:… if it considers appropriate , 
undistorted international prices, costs, or benchmarks ". Could the European Union explain the 
precise meaning of the phrase "if it considers it appropriate " in this particular context?  How the 
European Union intends to determine whether it is appropriate to use undistorted international 
prices, costs, benchmarks or not? In addition, please clarify is there a definition of "undistorted 
international prices, costs, benchmarks "? Could you please give examples of distorted international 
prices, costs, benchmarks "? Please provide a WTO provision or a WTO jurisprudence that allows 
the European Union to substitute normal value incurred with international prices, costs, 
benchmarks? Could the Eur opean Union please clarify this?  
 
Question 6  
 
Paragraph 6a(a) Article 2 of the Regulation sets out that "significant distortions are those 
distortions which occur when reported prices or costs, including the costs of raw materials and 
energy, are not the r esult of free market forces because they are affected by substantial 
government intervention. In assessing the existence of significant distortions regard shall be had, 
inter alia, to the potential impact of one or more of the following elements:  …". 
 
a. Please explain does the Agreement on implementation of Article VI of the GATT 1994 give 
opportunity of constructing normal value in the case of "significant distortions "? 
 
b. In particular, as one of the elements that provide an opportunity to believe that significant 
distortions exist, the European Union indicates the presence of significant number of enterprises 
operating under the ownership, control or policy supervision or guidance of the authorities of the 
exporting country.  
 
Please clarify whether thi s element is based on the provisions of Article 2.7 of the Anti -Dumping 
Agreement and (or) the second Supplementary Provision to paragraph 1 of Article VI of GATT 1994 
contained in Annex I to GATT 1994 (Notes and Supplementary Provisions)?  
 
If the reply i s positive, Kazakhstan would like to remind that allegedly significant role of 
government in the sector is not equal to the monopoly and the government ownership does not 
necessarily demonstrate the existence of government control. In the dispute United St ates – 
Countervailing Duty Measures On Certain Products From China , Panel concluded that "evidence of 
government ownership, in itself, is not evidence of meaningful control of an entity by 
government ". 
 
If the reply is negative, please explain what is the legal basis of the abovementioned provision?  
 
 
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