WORLD TRADE  
ORGANIZATION   
WT/DS425/1 
G/L/958 
G/ADP/D89/1 
28 July 2011 
 (11-3873) 
 Original:   English 
  
 
CHINA – DEFINITIVE ANTI-DUMPING DUTIES  
ON X-RAY SECURITY INSPECTION EQUIPMENT 
FROM THE EUROPEAN UNION 
 
Request for Consultations by the European Union 
  
 The following communication, dated 25 July 2011, from the delegation of the European Union to the delegation of China and to the Chairperson of the Dispute Settlement Body, is 
circulated in accordance with  Article 4.4 of the DSU. 
 
_______________ 
 
  The European Union ("EU") hereby requests consultations with the Government of the 
People's Republic of China ("China") pursuant to XXIII:1 of the General Agreement on Tariffs and 
Trade 1994  ("GATT 1994"), Article 17.3 of the Agreemen t 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").  The issues which the European Union 
would like to raise in the course of the consultatio ns include, but are not limited to, the following 
measure: 
 
– the imposition of definitive anti-dumping duti es on x-ray security inspection equipment from 
the European Union, pursuant to Ministry of Commerce of the People's Republic of China, 
Notice No. 1(2011), including its annex. 
 
The EU considers the measure at issue to be  inconsistent, among others, with China's 
obligations under the following provisions of the Anti-Dumping Agreement  and the GATT 1994: 
  1. Articles 6.1, 6.2, 6.4 and 6.5 of the Anti-Dumping Agreement  because China failed to 
provide timely opportunities for all inter ested parties to see all non-confidential 
information relevant to the defence of their interests  with regard to, inter alia,  the 
methodology used to calculate the dumping margin including the adjustments made 
to the export price and the methodology used  to calculate the residual duty as well as 
the material injury analysis.  
  2. Article 6.5.1 of the Anti-Dumping Agreement  because China failed to ensure the 
provision of non-confidential summaries of confidential information or, where 
provided, failed to give summaries in sufficient detail to enable a reasonable 
understanding of that information with regard to, inter alia,  the calculation of the 
dumping margin as well as the price analys is in the injury investigation.  
  3. Article 6.9 of the Anti-Dumping Agreement  because China failed to  provide interested 
parties with information about the essentia l facts under consideration which form the 
basis for the decision to impose definitive anti-dumping measures. In particular, WT/DS425/1 
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  inter alia , China did not fully disclose the essential facts, which form the basis of the 
dumping margin and injury determination, nota bly with regard to the price analysis.  
 
4. Article 12.2.2 of the Anti-Dumping Agreement  because neither in its public notice of 
the imposition of definitive measures, nor in a separate report, China set forth 
sufficiently detailed explanations for the definitive determinations on  the dumping 
margin and injury, together with references to the matters of fact and law which have 
led to arguments being accepted or rejected.  In particular, China failed to include in 
relation to the margins of dumping established, 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) ; considerations 
relevant to the injury determina tion (Article 12.2.1(iv) of the Anti-Dumping 
Agreement) , and with regard to the main re asons leading to the determination 
(Article 12.2.1(v) of the Anti-Dumping Agreement) . 
 
5. Article 2.4 of the Anti-Dumping Agreement  and Article VI:1 of the GATT 1994 
because China failed to make a fair comp arison between the export price and the 
normal value and did not make the appropr iate adjustments to the export price by 
deducting also non relevant expenses.  
 
6. Articles 3.1 and 3.2 of the Anti-Dumping Agreement , because China failed to make an 
objective examination, on the basis of positiv e evidence, of the effect of the dumped 
imports on prices in the domestic market for like products as define d in Article 2.6 of 
the Anti-Dumping Agreement. In particular, it appears from the very limited 
information disclosed by the Chinese authorities that the finding that EU imports had 
the effect of undercutting and depressing the price of domestic products is not based 
on an objective examination of positive evidence. Although the Chinese authorities defined the scope of the investigation as including x-ray security inspection equipment of an energy level above 300Ke V (high energy scanners), exports from the 
EU consisted exclusively of "low energy  scanners". These two categories of scanners 
have very different physical characteristics,  uses and prices. In addition, the Chinese 
authorities included in the scope of the investigation also automated explosive detection systems (EDS) scanners, which differ from other low energy scanners by reason of their higher image quality a nd performance standards and which are 
exported from the EU to China but not produ ced in China. Yet the prices of EU 
imports appear to have been compared to the prices of domestic high energy scanners 
or to average domestic prices for all scanners, despite the manifest differences between the two categories of products a nd within the category of "low energy 
scanners" between EDS scanners and the other "low energy scanners". 
 
7. Articles 3.1 and 3.4 of the Anti-Dumping Agreement  because China failed to make an 
objective examination, on the basis of positiv e 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 listed in Article 3.4, as the overwhelming majority  of injury indicators were positive or 
showed positive trends.   
 
8. Articles 3.5 of the Anti-Dumping Agreement  and Article VI:6(a) of the GATT 1994 
because China failed to make an objective dete rmination, on the basis of all relevant 
evidence before the authorities, that the dumped imports were, through the effects of dumping, causing injury. The causality determin ation is flawed because it is based on  WT/DS425/1 
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  findings of price undercutting and price depression by EU imports which are 
themselves not based on an objective exam ination of positive evidence. Moreover, 
China did not consider other relevant factors having a bearing on the state of the 
industry and/or affecting the domestic pri ces. China included in the scope of the 
investigation x-ray security inspection equi pment of an energy level above 300KeV 
(high energy scanners) which were not expor ted from the EU to China. Therefore, 
any injury suffered in respect of "high en ergy scanners" cannot be attributed to EU 
imports. In addition, the Chinese authorities in cluded in the scope of the investigation 
also automated explosive detection system s (EDS) scanners, which differ from other 
"low energy scanners" by reason of th eir higher image quality and performance 
standards and which are exported from the EU  to China but not produced in China. 
Yet, China's determination of causality fails  to distinguish between the two categories 
of scanners, and within the category of "low  energy scanners" between EDS scanners 
and the other "low energy scanners". 
 
The European Union reserves the right to address additional measures and claims under other 
provisions of the WTO Agreement regarding the above matters during the course of the consultations.   
 
The European Union looks forward to receivi ng in due course a reply from China to this 
request.  The European Union is ready to consid er with China mutually convenient dates to hold 
consultations in Geneva.   
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