. /.   WORLD TRADE  
ORGANIZATION  TN/RL/GEN/120 
21 April 2006 
 (06-1866) 
Negotiating Group on Rules Original:   English 
  
CURRENCY CONVERSION 
 
Communication from Egypt
 
  
 The following communication, dated 20 April 2006,  is being circulated at the request of the 
Delegation of Egypt. 
  The submitting delegation has requested that th is paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(06)/ 103), also be circulated as a formal document. 
 
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The present proposal aims at establishing a common approach to the terms “ fluctuation ” and 
“sustained movement ” within the meaning of Article 2.4.1 as well as fixing the maximum period 
within which exchange rate moveme nts should be taken into considera tion.  The necessity for a clear 
circumscription of these concepts results from the fact  that, although of primordial importance in most 
anti-dumping investigations, the provisions of Article 2.4.1 do not give any specific guidance of how to take into account exchange rate movements.
1  In fact, while it is generally agreed that currency 
fluctuations may affect the comparability of the export price and the normal value, there is no provision that specifies the above-mentioned terms.  
 
Egypt understands that, on the one hand, inves tigating authorities should be granted flexibility 
in minimising the effects of exchange rate moveme nts.  On the other hand, it believes that Members 
should agree on certain basic principles in order to ensure the consistent implementation of 
Article 2.4.1.  
 
Definition of the terms “ fluctuation ” and “ sustained movement ” 
  
Since Article 2.4.1 contains a reference to a minimum 60-day period within which exporters 
should have adjusted their export prices to reflect  sustained movements in exchange rates, Egypt 
proposes to use a 60-day period to define when fluc tuations or sustained movements are occurring.  
While it remains open to discussing the appropria te reference period to assess exchange rates 
movements, Egypt is of the opinion that a 60-da y period constitutes a proper basis to distinguish 
between short-term fluctuati ons and long-term trends.  
 It is therefore proposed to that fluctuations be defined as “ minor deviations from the moving 
average of the daily exchange rates for the prior 60 days ”.  Sustained movements could be found 
where “ the exchange rate significantly exceeds the movi ng average of the daily exchange rates for the 
prior 60 days ”.  
 
                                                     
 
1 See also the comments on Article 2.4.1 that were made in the documents TN/RL/W/130, 
TN/RL/W/47, TN/RL/GEN/5 and TN/RL/GEN/107.  TN/RL/GEN/120 
Page 2  
 
  These definitions of, on the one side, exchange ra tes’ variations that do not have a significant 
impact the comparison between the normal value and the export price and, on the other side, 
movements that are the result of persistent cha nges and that may have a great impact on dumping 
determinations, would ensure that Members apply similar standards for thei r dumping determinations. 
 
Definition of a specific time period for exchange rate movements  
 
Article 2.4.1 stipulates that “the authorities shall allow exporters at least 60 days to have 
adjusted their export prices to reflect sustained movements in exchange ra tes during the period of 
investigation”.  It provides a minimum time period but no maximum for exporters to adjust their 
export prices to reflect sustained movement. In order to ensure that investigating authorities are in a 
position to examine the export prices reflecting the su stained movements in exchange rate within a 
reasonable period of time, it is proposed to repl ace the minimum 60 day-period by a maximum 80-day 
period.  Indeed, if the reference period of 60 days th at is proposed by Egypt was to be accepted, it is 
submitted that 20 days should be sufficient for expor ters to reflect sustained movements in exchange 
rates.  The 80-day period within which export prices reflecting sustained movements in exchange 
rates would have to be provided should, however , not prevent exporters from replying to the anti-
dumping questionnaire within the deadline set by  the investigating authorities pursuant to 
Article 6.1.1.  In order not to delay the investig ating process, exporters that wish to submit revised 
export prices reflecting sustained movements in ex change rates may do so after the submission of 
their questionnaire response.  Proposed Changes in Article 2.4.1 
 
In view of the foregoing, it is proposed to amend Article 2.4.1 of the Anti-Dumping 
Agreement as follows: 
 
When the comparison under paragraph 4 requires a conversion of currencies, such conversion 
should be made using the rate of  exchange on the date of sale
8, provided that when a sale of 
foreign currency on forward markets is directly linked to the export sale involved, the rate of exchange in the forward sale shall be used.  Fluctuations in exchange rates
9 shall be ignored 
and in an investigation the authoriti es shall allow exporters at least 60  days not more than 80 
days from the date of sale10 to have adjusted their export prices to reflect sustained 
movements11 in exchange rates during the period of investigation. 
 
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8 Normally, the date of sale would be the date of contract, purchase order, order confirmation, or 
invoice, whichever establishes the material terms of sale.    
9 “Fluctuations in exchange rates” shall mean minor deviations from the moving average of the daily 
exchange rates for the prior 60 days.  
10 Exporters shall nonetheless comply with the dead line set for the submission of their questionnaire 
responses.  
11”Sustained movements” shall be found where exchan ge rate significantly exceeds the moving average 
of the daily exchange rates for the prior 60 days.