WORLD TRADE  
ORGANIZATION  G/ADP/AHG/W/184 
13 April 2010 
 
 (10-1896) 
Committee on Anti-Dumping Practices 
Working Group on Implementation Original:   English 
 
 
 
ARTICLE 11.3 – DETERMINATION ON THE LIKELIHOOD OF  
CONTINUATION OR RECURRENCE OF DUMPING AND  
INJURY IN SUNSET REVIEWS 
 
Communication from the Republic of Korea  
   The following communication, dated 13 April 2010,  is being circulated at the request of the 
Delegation of the Republic of Korea. 
 
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  At its last autumn meeting, the Working Group on Implementation agreed upon the following topic for further discussion.   
 
"Determination on the likelihood of con tinuation or recurrence of dumping and 
injury in the sunset reviews under Article 11.3" 
 
 The Republic of Korea is pleased to be the firs t Member to share its experience on this issue. 
 
 Article 11.3 of the Anti-Dumping Agreement ("ADA") provides: 
 
"Notwithstanding the provisions of paragr aphs 1 and 2, any definitive anti-dumping 
duty shall be terminated on a date not later than five years from the imposition 
(or from the date of the most recent revi ew under paragraph 1 if  that review has 
covered both dumping and injury, or under this paragraph), unless the authorities 
determine, in a review initiated before that date on their own initiative or upon a duly 
substantiated request made by or on be half of the domestic industry within a 
reasonable period of time prior to that date, th at the expiry of the duty would be likely 
to lead to continuation or recurrence of dumping and injury.  The duty may remain in force pending the outcome of such a review." 
 
Korea's Legal Framework 
  Korean Customs Act, together with the ADA, governs the conduct of anti-dumping 
investigations.  Article 56 of the Korean Customs Act states that:  
"When necessary, the Minister of Stra tegy and Finance may conduct reviews on the 
imposition of anti-dumping duties….accord ing to the presidential decree and take 
necessary measures regarding the im position of anti-dumping duties…..in 
accordance with the findings of the reviews." 
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   Further details regarding sunset reviews are pr ovided in Article 70 of the Presidential Decree 
on the Customs Act, which states that:  
"The Minister of Strategy and Finance shall decide whether to initiate reviews on the 
imposition of anti-dumping duties when the minister approves it is necessary or when 
there is a duly substantiated request made by interested parties or other Ministers 
who are in charge of relevant industries.  The request has to be made in such a way 
that it includes an evidence that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury."  
  Based on the ADA, Customs Act and the relevant  Presidential Decree, Korea's Investigating 
Authority has identified, through its practice, a numb er of specific factors the Investigating Authority 
should consider in sunset review proceedings – with different factors identified for purposes of 
determining the likelihood of continuation or recurre nce of dumping, and for purposes of determining 
the likelihood of continuation or recurrence of injury.  In addition, other relevant factors presented by 
the interested parties may be taken into account in the review proceedings. 
 
The Practice of the Investigating Authority 
 
Likelihood of Continuation or Recurrence of Dumping 
  The Investigating Authority normally consid ers three main factors in determining the 
likelihood of continuation or recurrence of dumping:  
• The dumping margin calculated in the sunset review proceedings;   
• Changes in the quantity of imported products;  and 
• The performance and capacity of the exporters  and changes in market conditions in 
the exporting country. 
 
 In considering the dumping margins determined  in the sunset review, the Investigating 
Authority will give significant weight to findings  that dumping has continued after the duty was 
imposed.  In Korea's view, the continued existence of dumping while the measure is in effect provides 
an indication that dumping will continue if the anti-dumping measure expires.  On the other hand, the absence of dumping while the measure is in effect  may not necessarily indicate that dumping will not 
recur if the anti-dumping measure expires, since it is possible that exporters might revert to prior 
pricing practices once the discipline of the anti-dumping measure is removed.   New dumping margins will normally be calculated in sunset review proceedings when the interested parties provide the Investigating Au thority with the necessary information in their 
responses to the questionnaires issued by the Authority.  If exporters do not respond to the 
questionnaires or fail to provide the necessary inform ation, the Investigating Authority will generally 
maintain the dumping margins found in  the original investigations.  
  The Investigating Authority may also consid er evidence of changes in the quantity of 
imported products as an important indicator of the likelihood that dumping will continue or recur if 
the duty expires.  For example, evidence that exporters have been  able to maintain exports in 
quantities similar to their historical experience befo re the anti-dumping measure may be an indication 
that the exporters will be able to export similar qua ntities without dumping in the future regardless of 
the existence of the anti-dumping measure.  On the other hand, a significant decrease or 
discontinuation of the imports after the imposition of the duty may imply that the product would lack competitiveness if it were not dumped.   
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   If there has been a significant decrease or di scontinuation of imports after the imposition of 
the anti-dumping duty, it may be difficult to calcu late meaningful dumping margins in the sunset 
review, and the Investigating Authority may need to put more weight on factors such as the performance and capacity of the exporters and the ch anges in the market conditions of the exporting 
country.  For the assessment of the performance of exporters, the elements to be considered include 
production capacity, capacity utilization, the level of inventories, and the potential to shift to 
production of the product under investigation at faci lities currently used to produce other products.  
For the assessment of market conditions in the expor ting country, the elements to be considered 
include changes in demand for like products in th e exporting country and the existence or absence of 
anti-dumping duties on the product imposed in other countries. 
 
 
9 Suggested topic for discussion:  The calculat ion of dumping margins in sunset reviews 
 
- Korea is interested in knowing how Member s calculate dumping margins in the review 
proceedings.  Do Members maintain the du mping margins calculated in the original 
investigations or calculate new dumping marg ins?  In case of new calculation, do Members 
apply the same methodology as in the original investigation?  
 
 
 
Likelihood of Continuation or Recurrence of Injury 
 
The Investigating Authority normally examines the likelihood of continuation or recurrence 
of injury in two phases:  First, it evaluates the actual impact of the imposition of the anti-dumping 
duty on the domestic market.  Then, based in part on the results of the first phase of the evaluation, it 
makes a prospective assessment of the likelihood of continuation or recurrence of injury in the event 
that the measure expires.   
Although the determination of likelihood of continuation or recurrence of injury is, in 
principle, a prospective assessment, it is difficult to  envisage how this determination can be completed 
without an accurate assessment of the market c onditions after the anti-dumping duty was imposed.  
Evidence regarding changes in the volume of imports , prices, and overall market conditions after the 
imposition of the anti-dumping duty are considered by the Investigating Authority as indicators regarding the likely future effects of expiration of the duty. 
 
The impact of the imposition of anti-dumping duties on the domestic market
 
 
The Investigating Authority will normally consid er three factors when it examines the impact 
of the imposition of anti-dumping duty on the domestic market: 
 
• Characteristics of the relevant industry, and of supply and demand conditions for the 
imports; 
• The impact of the anti-dumping duty on the volume of imports, prices and the 
domestic industry;  and  
• The impact of other products (other th an dumped imports) on the domestic industry. 
 This examination is conducted in a manner sim ilar to the injury assessment used in original 
investigations under Articles 3.1, 3.2, and 3.3 of the ADA.  The Investigating Authority compares any 
changes in import volumes, prices, and overall i ndustry performance before and after the imposition 
of the anti-dumping duty.  To assess the industry perfo rmance, the Investigating Authority looks into G/ADP/AHG/W/184 
Page 4  
 
  the changes in production capacity, total domestic sal es, inventory, revenues and profits, employment, 
and capital investment of the relevant domestic industry. 
Likelihood of continuation or recurrence of injury if anti-dumping duty expires
 
 The Investigating Authority considers three factors when it examines the likelihood of 
continuation or recurrence of injury if measures expire: 
 
• Likely increase in the volume of dumped imports; 
• Likely impact of such imports on the prices of domestic products;  and  
• Likely impact of such imports on the domestic industry in general. 
 The Investigating Authority's findings concerning the impact of the imposition of an 
anti-dumping duty (in the first phase of the analys is) provides context for the assessment of the 
likelihood of continuation or recurrence of injury if the anti-dumping duty expires (in the second 
phase of the analysis).  For exampl e, evidence that the price of the dumped imports has continued to 
be well below the price of domestic like products  even after the imposition of duty may provide a 
strong indication that expiry of the duty will lead to further price suppression. 
 
However, the findings concerning the impact of the imposition of the anti-dumping duty are 
not the only factors that may be relevant to the as sessment of the likelihood of future injury.  For 
example, the assessment of the likely increase in the volume of dumped imports usually requires an 
analysis not only of the current and past effect of the duty on the level of imports, but also consideration of: 
 
• Production capacity, inventory, and capacity u tilization of the relevant industry in the 
exporting country; 
• Overall world market conditions with respect to the dumped products;  and  
• The existence of anti-dumping measures, if an y, in other countries that apply to the 
dumped product. 
 Furthermore, the assessment of the likely imp act of expiry on the domestic industry may 
require consideration of other factor s in addition to the analysis of the current and past performance of 
the domestic industry.  For example, the Investiga ting Authority may consider the efforts the domestic 
industry has made to improve its competitiveness.  
 
9 Suggested topic for discussion:  "likelihood test" 
 
- Although the determination of the likelihood of c ontinuation and recurrence of injury is of 
prospective nature, Investigating Authorities te nd to rely heavily on the data concerning the 
past and current performance of the industries and market conditions wh en they conduct the 
likelihood analysis.  It is often presumed that th e trends found in such data will continue in 
future.  In a sense, it is understandable that Investigating Authorities prefer to make 
determinations based on the objec tive and concrete data.  Howeve r, such reliance on the data 
could nullify the prospective nature of the anal ysis and result in a flawed determination of 
the likelihood of continuation or recurrence of dumping and injury.  Korea wishes to know the methods adopted by other Members to ensure th at the analysis of "likelihood" is, in fact, 
prospective in nature. 
 
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  Transparency during Review Proceedings 
 
The lack of detailed guidelines in the ADA and th e prospective nature of the sunset review 
proceedings have led to substan tial discrepancies in sunset review practices among Members.  In 
particular, due to the prospective nature, it is often challenging to establish objective criteria and 
obtain appropriate information to determine the likelihood of continuation and recurrence of dumping 
and injury.  Therefore, transparen cy is especially important in order to guarantee predictability and 
security for the interested parties in  the sunset review proceedings.  In  this context, the Investigating 
Authority exerts its best efforts to provide the interested parties with sufficient opportunities to 
express their views through questionnaires, public hear ings, and on-site investigations comparable to 
the opportunities in original investigations as well as making the overall review procedures 
transparent. 
 
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