. /.   WORLD TRADE  
ORGANIZATION  TN/RL/GEN/160 
4 December 2009 
 (09-6209) 
Negotiating Group on Rules Original:   English 
 
 
 
TREATMENT OF NEW SUBSIDY ALLEGATIONS IN THE COURSE  
OF AN ON-GOING INVESTIGATION 
 
Communication from China  
  
The following communication, dated 30 November 2 009, is being circulated at the request of 
the Delegation of China. 
 
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 China presents this proposal concerning the issu e of treatment of new subsidy allegations in 
the course of an on-going investigation under the SCM Agreement.   
 
 Note :  This proposal is without prejudice to th e views or position that China may have on 
other parts of the text or has expressed or may express in the future in any WTO body.  
 
I. INTRODUCTION 
 
 One of the goals of the DDA rules' negotiati ons is to clarify the current rules and to 
strengthen the multilateral disciplines on counterva iling duty investigations.  To ensure that 
investigations are conducted in a transparent manner and that the rules are fully respected, as provided 
in the SCM Agreement, the investigating authority is required to issue a public notice regarding the 
alleged subsidies to be investigated prior to initia tion of an investigation.  However, it has happened 
in recent years that authorities investigate newly alle ged subsidies in the course of an investigation, 
which were not included in the written application which formed the basis for the initiation of the 
investigation.    
 
 China is concerned about the increasing tende ncy to investigate such subsidies on the 
following grounds:  
 
(1) The authorities are not in a position to exam ine whether the requirements of accuracy and 
adequacy of the evidence as well as the time li mit for an application and initiation of an 
investigation are met;  
 
(2)  The consultations requirement prior to the initiation of any investigation in accordance with 
Article 13.1 of the SCM Agreement is bypassed; and  
 
(3)  Interested parties and interested Members do not have sufficient time and full opportunity to 
obtain relevant and adequate in formation regarding the new alle gation(s) in question or to 
respond to the questionnaires. 
 
 These practices have created a burden for the in terested parties and/or interested Members 
and significantly prejudiced procedural rights of  the Member(s) concerned as well as the other 
interested parties. TN/RL/GEN/160 
Page 2  
 
    
 
 To ensure that the investigation procedure is conducted in an equitable, fair, and transparent 
manner and that the rights and obligations of the inte rested parties are well balanced, China is of the 
view that:   
(1)  as a general rule , the investigating authorities shall not investigate an alleged subsidy which 
is not included in the original application and/or the notice of initiation.   
 
(2)  in exceptional circumstances , such newly alleged subsidies ma y be investigated, but only if: 
(i) the interested Members are invited for consulta tions regarding the alleged subsidy;  (ii) the 
interested parties and interested Members ar e provided with adequate information on the 
alleged subsidies and (iii) a reasonable peri od of time is given for responding to the 
questionnaires, prior to an investigati on of the newly alleged subsidies.  
 
II. PROPOSED TEXTUAL AMENDM ENT TO THE SCM AGREEMENT 
 
 China proposes the following new language to  be inserted in Article 11 of the SCM 
Agreement, immediately after paragraph 6:  
 11.x  The Authorities shall not investigate subsidy programmes not included in the notice 
of initiation, unless:  
 
  (1) The domestic industry files a written application for initiation of an 
investigation of the newly alleged su bsidy programmes.  Such application 
shall contain sufficient evidence of the ex istence of subsidization, injury, and 
a causal link between the subsidized imports and the alleged injury in 
accordance with paragraph 2.  
 
  (2) The domestic industry shall substantia te the reasons why it could not obtain 
any information regarding such subsidy prior to the submission of the written 
application.  
 
  (3) The written application shall be filed at least 40 days prior to the scheduled 
preliminary determination date.  Where the preliminary determination is not 
scheduled or in the absence of a pr eliminary determination, the written 
application shall be filed no later than 90 days after the investigation has been 
initiated.  
 
  (4) The authorities shall invite the inte rested Members for consultations prior to 
initiation of an investigation into a ne w subsidy allegation in accordance with 
paragraph 1 of Article 13.  
 
  (5) When the authorities are satisfied th at there is sufficien t evidence to justify 
the initiation of an investigation of the newly alleged subsidy programmes 
pursuant to Article 11.x(1) and 11.x.(2), the Member or Members the 
products of which are subject to such investigation and other interested 
parties known to the investigating authoriti es to have an interest therein shall 
be notified and a public notice containing the information provided in 
paragraph 2 of Article  22 shall be given.  
 
 11.y The authorities shall follow the provisions of paragraph x and shall not initiate an 
investigation on their own initiative.  
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