WORLD TRADE  
ORGANIZATION  TN/RL/GEN/44/Suppl.1 
19 July 2005 
 (05-3220) 
Negotiating Group on Rules Original:   English 
  
 
FURTHER EXPLANATIONS ON THE APPLICABLITY OF ARTICLES 2  
AND 6 AND THE DE MINIMIS RULE TO THE PROCEEDINGS  
UNDER ARTICLES 9.3 AND 9.5 
  
Paper from Chile;  Costa Rica;  Hong Kong, China;  Japan;  Korea, Rep. of;  Norway;  
 
Switzerland;  Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu;   
Thailand;  and Turkey  
 
Supplement  
 
 The following communication, dated 18 July 2005, is being circulated at the request of the Delegations of Chile;  Costa Rica;  Hong Kong, China;  Japan;  Korea, Rep. of;  Norway;  
Switzerland;  Separate Customs Territory of Taiw an, Penghu, Kinmen and Matsu;  Thailand;  and 
Turkey.  
 The submitting delegations have requested that this paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(05)/ 80/Suppl.1), also be circulated as a formal 
document.  
_______________ 
 
 1. This paper is submitted to provide some deta iled explanations regarding the proposals on the 
applicability of the existing rules to Article 9 pr oceedings in the document TN/RL/GEN/44.  This 
paper addresses the question of what rules should apply to proceedings conducted under Articles 9.3 
and 9.5, and whether the existing rules, in particular , Articles 2 and 6, can apply to such proceedings.  
This paper does not
 propose to add or diminish Members’ rights and obligations in how they craft 
their own systems required by Articles 9.3 or 9. 5 or how they decide whether to conduct such 
proceedings.1  Further reflections are annexed on the implic ation of Members’ various practices to the 
scope and contents of this paper ( see Annex I. ) 
 
I.  Applicability of Article 2 to Article 9 proceedings2 
 
2. As it cannot be emphasized enough, the essence of  the Articles 9.3 and 9.5 proceedings is the 
calculation of dumping margins: actual dumping margins of the past import entries (Article 9.3), and 
individual dumping margins for new shippers (Article  9.5).  Therefore, provisions of Article 2 on 
determination of dumping should a pply to Article 9 proceedings: Definition of dumping (Para. 1); 
Methodology for calculating normal value such as 5 per cent viability test, constructed value, below 
                                                      
1 For instance, under Article 9.3.2 procedures, refund claims are made by importers who think 
excessively paid the anti-dumping duty. Authorities conduct refund proceedings when the request for a refund is 
duly supported by the evidence. The intention here is not to require authorities to initiate refund proceedings in 
every case. 
2 A summary table is annexed. ( see Annex II. ) TN/RL/GEN/44/Suppl.1 
Page 2  
 
 cost test, use of respondent’s record, SG&A and pr ofit (Para. 2); Definition and condition of the CEP 
(Para. 3); Requirement for the authorities to make  a fair comparison and provide due allowance for 
differences affecting price comparability (Para. 4); Condition and methodology of conversion of 
currency (Subpara. 4.1); Methodology of comparison fo r the indirect exports (Para. 5); Definition of 
like product (Para. 6); and Exception for the calcula tion of the margin of dumping under a non-market 
economy (Para. 7). 
 3. Further elaboration might be beneficial with respect to Subparagraph 4.2 (Article 2.4.2) 
providing for the comparison methodologies.  Article 2.4.2 provides for three comparison methods following the leading phrase requiring fair comparis on.  The first sentence provides that weighted 
average-to-weighted average method (W-to-W) or transaction-to-transaction method (T-to-T) should 
normally be used.  The second sentence provides th at weighted average-to-transaction method (W-to-
T) can be used under the circumstances described in  the provision (i.e. in a so called “target dumping” 
situation). 
 
4. If Article 2.4.2 only applies in the initial inves tigation but not in the subsequent proceedings, 
such as Articles 9.3 and 9.5, the result will beco me fundamentally unfair and absurd, because the 
dumping margin in the later stages will be subject to  the arbitrary selection of methods.  Especially in 
a retrospective duty assessment system where the final duty liability is determin ed by the subsequent 
reviews, if Article 2.4.2 does not apply, the final liability will be calculated by an arbitrary selection 
of methods, and the result will nullify the effect of  the application of Article 2.4.2 in the initial 
investigation.  Equally, in the prospective syst em, although the refund is usually requested by a 
limited number of importers, Article 2.4.2, as a rule, must apply.  5. The intention here is not to prohibit a certain me thod in a certain proceeding, nor to require the 
use of the same methods regardless of the changes in facts and circumstances.  For instance, even 
when a W-to-W method was used in the initial inv estigation, a T-to-T method can be used in a 
subsequent proceeding if it is appropriate becau se the transactions during the period of review are 
scarce or limited.
3 
 
II.  Relevance of the de minimis  rule to Article 9 proceedings  
 6. The definition of a de minimis  margin in Article 5.8 should apply to reviews under Articles 9.3 
and 9.5 as well as to investigations.  For all purposes of the anti-dumping system, the de minimis  rule 
should operate to prevent the imposition of duti es where minimal dumping has occurred and duties 
are not warranted.
4  Under the retrospective assessment system where the definitive duties are 
determined later in a subparagra ph 9.3.1 review, the importing Member should not levy anti-dumping 
duties on imports from an exporter or producer  whose final liabilities were found to be de minimis .  
Although, under the prospective assessment system , the definite anti-dumping duties have already 
been levied, an exporter that has reduced dumping to de minimis  levels should be treated like an 
exporter that has been found in an investigation to be dumping at de minimis levels.5 
 
                                                      
3 It must be noted that the general rule proposed in TN/RL/GEN/44 is that "(t)he authorities shall 
normally use the same met hodologies consistently….  If the authorities use a different methodology, the parties 
concerned shall be provided with opportunities to make  comments, and a full explanation shall be given why 
such different methodology was used." 
4 This statement does not mean that the AD measure must be im mediately terminated due to the 
determination of a de minimis amount of duty assessment pursuant to Article 9.3.  Whether to terminate an anti-
dumping measure is not an essential element of the Article 9.3 proceeding. 
5 The fact that additional collection for the past entries is not allowed in the prospective system, even 
where the actual dumping margin exceeds the duties paid does not affect the consideration of this matter.  The 
de minimis  rule sets out the floor of the anti-dumping duty, that is, the anti-dumping duties, only if above the de 
minimis  level can finally be assessed.  TN/RL/GEN/44/Suppl.1 
 Page 3 
 
 
 7. The effect of de minimis  finding in Article 9.5 reviews should be the same as in the initial 
investigation, because Article 9.5 reviews function as substitutes for the initial investigation for “new 
shippers.”  As an individual exporter who receive d a de minimis margin of dumping in the initial 
investigation would be free from the anti-dumping measure, so too should another individual exporter 
receiving a de minimis margin in the new shipper review be free from such a measure. 
 
III.  Applicability of Article 6 to Article 9 proceedings 
 
8. Article 6 of the Agreement lays out in some detail the rules of evidence and procedure that 
govern investigations under Article 5.  The Agre ement, through paragraph 11.4, also expressly notes 
that the rules of evidence and procedure in Ar ticle 6 also apply to reviews authorized under 
Article 11.  However, additional types of proceed ings are also authorized by the Agreement – 
particularly assessments under para graph 9.3 and “new shipper” re views in paragraph 9.5.  The 
Agreement, however, does not expressly state that the rules in Article 6 shall apply to the proceedings 
authorized in Article 9, as a result of which th e practice among Members varies with respect to the 
applicability of Article 6 rules to  Article 9 proceedings.     
 9. To eliminate confusion regarding this poi nt, the Agreement should make explicit the 
requirement that the rules in Article 6 apply to  proceedings under Article 9 as well as reviews under 
Article 11.
6  Elaborations on certain paragraphs where its  applicability to Article 9 proceedings might 
be questioned are as follows7: 
 
10. Para 1.3: This paragraph provides for a requi rement that the full text of the “written 
application” be provided to interested parties.  Th is is one of the examples that show that it is not 
always the case that all of the provisions in Article  6 apply in any case, anytime.  When a proceeding 
does not necessitate a “written application” from th e domestic industry, this paragraph plays no role 
and thus imposes no obligations on Members.  This paragraph can be simply  omitted in, but is not 
contradictory to, Article 9 proceedings.  11. Para 2: This paragraph, from the second sente nce, provides for a meeting between adversary 
parties.  The applicability of this paragra ph is connected to Para 11 of Article 6 ( see below ), 
specifically, whether the domestic industry should be c onsidered as an interested party in the Article 9 
proceedings.  In that case, the rule in Pa ra 2 has relevance and must be observed. 
 12. Para 8 and Para 10: Some provisions of Article  6 function as a permission to the investigating 
Authority, while others are obligations.  Para 8 (facts available) and the second sentence of Para 10 
(sampling) are examples of permissions that help th e Authority and facilitates the investigation.  We 
believe that these permissive provisions are also applicable to reviews.
8  It should be noted that if an 
Authority does not want to use the permission, it  is free to do so.  Fo r instance, the “limited 
examination” provisions of pa ragraph 6.10 may not be normally  invoked in proceedings under 
Article 9, because each exporter or producer th at requests a review is  entitled to independent 
consideration.  However, rules must be generically  applicable.  If, although unlikely, an exceptionally 
large number of exporters are involved in Articles 9. 3 or 9.5 proceedings, the Authority might have to 
                                                      
6 In their domestic regulation on anti-dumping, Members must have established evidentiary procedures 
for the original investigation in accordance with the Article 6 of the ADA. We do not, however, request 
Members to apply the same domestic evidentiary procedur es to Article 9 proceedings without any modification. 
Since the magnitude and nature of the review may be different from the original investigation, more simplified procedures and requirements could be applied in Article 9 proceedings, as long as the minimum requirements 
and principles of Article 6 are met. 
7 The rest of the provisions of Article 6 might be less controversial in terms of their applicability to 
proceedings other than the initial investigation. 
8 If other Members believe otherwise, we are flexible on this point. TN/RL/GEN/44/Suppl.1 
Page 4  
 
 use Article 6.10.  Again, the Authority is alwa ys free to give individual dumping margins to each 
exporter.  However, if the Authority is to use the sampling method, it will have to abide by the rules in 
Article 6.10.  13. Para 9: The language of the provision (“… the decision whether to apply definitive measures .”) 
is pertinent to the initial investigation.  This pr ovision might have to be applied to reviews in a mutatis 
mutandis  manner.  The quoted phrase above could be read as meaning “the decision on the final 
liability”, “the decision on the amount of refund”, or “the decision on the individual margins of dumping” (Articles 9.3.1, 9.3.2, and 9.5 proceedings respectively).  
14. Para 11: There is no dispute to the point that th e exporters/importers provi ded for in sub-para (i) 
should be interested parties.  However, it might  be questioned whether the domestic industry as 
provided for in sub-para (iii) should be include d as an interested party in the duty assessment 
procedure or in the new shipper review.  We gene rally believe that the interested parties should 
include the domestic industry becau se the processes affect their interests by determining the level of 
effectiveness of an anti-dumping measure.
9  Regarding the government of the exporting Member in 
sub-para (ii), we also believe that it has an interest in the review process.  15. Para 12: The provisions of this paragraph concer ning the role of industrial users and consumers 
in investigations may be less relevant, because their ro le is limited to injury investigations, which do 
not occur in the proceedings under Article 9.  
 
                                                     
 
9 If other Members believe otherwise, we  are flexible on this point, too.  TN/RL/GEN/44/Suppl.1 
 Page 5 
 
 
 ANNEX I 
 
Different Systems of WTO Members 
 
1. Different anti-dumping systems in terms of duty collection and duty assessment can be 
summarized as follows.  
 
Duty Assessment Systems  
Retrospective 
(9.3.1) Prospective(9.3.2) 
Fixed Duty Rate Combination 1 Combination 2 Duty 
Collection 
Systems Variable Duty Rate 
(9.4(ii)) Combination 3 Combination 4 
 
2. As to the difference in the duty collection syst ems of Members, the following clarification 
might be beneficial in further understanding the scope of  the paper.  “Collection” as used in this paper 
means the administrative action of a Customs Author ity to receive duties from each import entry.  
Depending on the method used to determine the amount  to collect, there are two different practices: i) 
a fixed ( ad valorem or per unit) duty system where the amount is determined at x% of the import price 
or $x per kg (M/T, unit, and so on); and ii) th e variable duty system (also known as prospective 
normal value system or basic price system) where the amount is determined as the difference between the import price and the basic price.  As the duty rate (in the fixed duty system) and the basic price (in the variable duty system) were pre-determined in  the initial investigation, the collection is not 
normally based on the actual dumping margin for which at least a contemporaneous normal value is 
necessary.  Therefore, Articles 2 and 6 have little bear ing at this stage of duty collection.  Article 9.3 
proceedings and proposals in th is paper kick in only after
 the Authority decides to conduct a review 
responding to requests from importers (in the prosp ective duty assessment system) or the review to 
determine the final liability is initiated (in the retrosp ective duty assessment system). 
 3. As to the difference in the duty assessment sy stems, the Agreement recognizes two different 
systems.  In a retrospective system, at the time of entry of each import into the territory of the 
importing Member, the importer pays a cash deposit of the estimated amount of anti-dumping duty, 
and the entry is “liquida ted” only after the final liability is  retrospectively assessed in a duty 
assessment review.  Depending on whether the final li ability exceeds or falls short of the cash deposit 
previously paid, either a refund or an additional colle ction of duties will result.  On the other hand, in 
a prospective system, at the time of entry of each import into the territory of the importing Member, 
the importer pays a duty that is definite at the ti me of imposition. The entry is liquidated immediately 
or within a certain number of days following the entry (the period in which an appeal of the customs decision may be taken).
10  This paper does not propose any alterations in either of these duty 
assessment systems. This paper addresses only the question of what rules should apply if the duty 
assessment is properly requested pursuant to each Member’s own system and it is decided that a 
review (or a process) will be conducted for that pu rpose.  From a financial perspective (i.e., the 
financial implications to exporters/importers), in both systems the duties are paid and collected at a 
pre-determined level, and an actual dumping margin  is newly established by the assessment process.  
The parallel time limits provided in Articles 9.3. 1 and 9.3.2 might partially reflect this aspect. 
                                                      
10 Besides the difference between the prospective and retrospective system s that the Agreement 
recognizes, it must be noted that Artic le 9.3 practices of some Members incl ude a decision or a consideration to 
change the anti-dumping duty rate that will be applied to future import entries.  This part of the determination is rather forward-looking, as is the case in Article 11 reviews.  This paper does not address how Members 
implement the various requirements of the Agreement in their domestic system.  
 TN/RL/GEN/44/Suppl.1 
Page 6 
ANNEX II 
 
Applicability of Article 2 to Proceed ings under Articles 9.3.1 and 9.3.2 
 
Explanations  
Article Retrospective system 
(Article 9.3.1) Prospective Ad Valorem System
(Article 9.3.2) Prospective Normal Value  
System (Article 9.3.2) 
Definition of 
dumping(2.1) Since Article 2.1 provides for “for the pu rpose of this agreement,” the definition of  dumping shall apply to Article 9 reviews under all 
three systems.  
Normal Value 
(2.2) The methodology for calculating normal value such as 5% viability test, constructed value, below cost test, use of respondent’s  
record, SG&A and profit can be applied to Article 9 reviews under all three systems.  
CEP (2.3)  The definition and condition of the CEP can be applied to Article 9 reviews under all three systems.  
Fair comparison 
(2.4) The requirement for the authorities to make a fair comparison a nd provide due allowance for differences affecting price compara bility 
can be applied to Article 9 reviews under all three systems.  
Currency fluctuation(2.4.1) The condition and methodology of conversion of currency can be applied to Article 9 reviews under all three systems.  
Comparison 
Methodology (2.4.2) 1) Deposit rate 
When an authority makes an assessment 
of the margin of dumping for each exporter, the authority collects relevant data for establishing normal value as 
established under Article 2.2 and all 
export transaction data for the exporter, Article 2.4.2 can be applied to Article 9 reviews under a retrospective system. When an authority makes an assessment in 
a refund procedure upon request of an importer (applicant), the authority collect data for establishing normal value as established under Article 2.2 and all export 
transactions imported by the single 
applicant, Article 2.4.2 can be applied to Article 9 reviews under a prospective ad valorem system. When an authority makes an assessment in 
a refund procedure upon request of an importer (applicant), the authority collect data for establishing normal value as established under Article 2.2 and all export 
transactions imported by the single 
applicant, Article 2.4.2 can be applied to Article 9 reviews under a prospective normal value system. On the other hand, we 
                                                      
11 This statement does not intend to require that an authority to impose the same rate in the determination pursuant to Article 9 .3.1 on all importers.  
The authority may allocate the anti-dumping duties in accordance with the difference of the dumping margin among importers, as long as the total amount of  
the duty does not exceed th e margin of dumping as established under Article 2.  
  TN/RL/GEN/44/Suppl.1
 Page 7Explanations  
Article Retrospective system 
(Article 9.3.1) Prospective Ad Valorem System
(Article 9.3.2) Prospective Normal Value  
System (Article 9.3.2) 
 
2) Final liability Since an authority has relevant data which involves all export transactions for the exporter, Article 2.4.2 can be applied for determining final liability as established under Article 9.3.1.
11 are ready to discuss its implication on 
prospective normal value system, in which Article 9.4 (ii) explicitly allows an authority to compare prospective normal value with export prices of exporters or producers.    
Indirect export (2.5) The methodology of comparison for the indirect exports can be applied to Article 9 reviews under all three systems.  
Like product 
(2.6) This is the only provision that sets forth definition of like product and can be applied to Article 9 reviews under all three s ystems.  
NME exception 
(2.7) The exception for the calculation of the margin of dumping under non-market economy can be applied to Article 9 reviews under a ll 
three systems.  
 
 
__________