WORLD TRADE  
ORGANIZATION  G/ADP/AHG/W/186 
14 October 2010 
 (10-5271) 
Committee on Anti-Dumping Practices 
Working Group on Implementation Original:   English 
 
 
 
ARTICLE 2.3 – CONSTRUCTED EXPORT PRICE 
 
Paper by Egypt  
 
 
 The following communication, dated 12 October 2010, is being circulated at the request of the Delegation of Egypt.  
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  Further to the decision of the Committee on Anti-Dumping Practices of 21 October 2009 to refer the topic " Article 3.2 – Constr ucted export price " to the Working Group on Implementation, 
Egypt is pleased to submit the following paper descr ibing when its Investigating Authority considers 
the export price unreliable and how it constructs the  export price.   
 
1. Article 2.3 of the Anti-Dumping Agreement  
 
 Article 2.3 of the Anti-Dumping Agreement, provides:    
"In cases where there is no export price or  where it appears to the authorities 
concerned that the export price is un reliable because of association or a 
compensatory arrangement be tween the exporter and the importer or a third party, 
the export price may be constructed on the basis of the price at which the imported 
products are first resold to an independent buyer, or if the products are not resold to 
an independent buyer, or not resold in th e condition as imported, on such reasonable 
basis as the authorities may determine."   
2. The Egyptian legislative framework 
 
 Article 33 of the Regulation of Law no. 161/ 1998 Concerning the Protection of the National 
Economy from Injurious Effects of Unfair Practices in  International Trade (the "Regulation"), which 
is directly inspired from Article 2.3 of the Anti-Dumping Agreement, stipulates:   
 
"In cases where there is no export price fo r the product concerned or where it 
appears to the Investigating Authority that the export price is unreliable because of 
association, relationship or a compensa tory agreement between the exporter and the 
importer or a third party, the export price may be calculated on the basis of the 
selling price to the first independent buyer in  the domestic market or any other basis 
the authority deems appropriate." G/ADP/AHG/W/186 
Page 2  
 
  3. The practice of the Investigating Authority 
 
3.1 Circumstances in which the export price may be constructed 
 
 In line with Article 33 of the Regulation, the Investigating Authority has disregarded the price 
paid or payable by the importer when determining the export price when the latter was found 
unreliable because of an association or relationship.   Even though it has not been confronted to such 
situations yet, the Investigating Authority could disr egard the price paid or payable by the importer if 
the product concerned was not resold to an independent buyer or not resold in the condition as imported. 
 
3.1.1 The export price is unreliable because of an association or relationship   The export price has been constructed after th e Investigating Authority established, in the 
course of its investigation, that (i) because of an association or relationship, (ii) the export price was 
unreliable.  
 
 3.1.1.1 Association or relationship 
 
 An association or relationship has been found to exist where the exporter/foreign 
producer and the parties involved in the export transactions, e.g., importers or intermediate 
exporters, were: 
 
 - members of a family;    - an officer or director of the other; 
 
 - partners;    - employers or employees;   
- directly or indirectly owning, contro lling, or holding with power to vote, 5 
percent or more of the outstanding voting stock or shares of the other; or, 
  - controlling the other or under common control.  
 
 "Control" exists where one person or orga nisation is legally or operationally in a 
position to exercise restraint or direction over the other person or organisation. 
  The concept of "association or relationship"  is defined in the questionnaire that the 
Investigating Authority sends to exporters / fo reign producers shortly after the initiation of an 
anti-dumping investigation. 
   3.1.1.2 Unreliable export price 
 
  In order to determine whether or not the export price is reliable, i.e., whether it is 
made at arm's-length, the Investigating Authority will examine the role of the different parties 
involved in export transactions, their functions and responsibilities as well as the price levels 
to associated or related parties and independe nt parties. An arms-length transaction is 
considered a voluntary sale involving two parties acting independently from each other. The analysis of the export price reliability has be en based on the information contained in the 
questionnaire responses, responses to deficien cy letters and information obtained during 
verification visits.  G/ADP/AHG/W/186 
 Page 3 
 
 
  3.1.2 The product is not resold to an independen t buyer or not resold in the condition as imported 
 
 Pursuant to Article 2.3 of the Anti-Dumping Agreement, the export price may be constructed 
where (i) the product is not resold to an independent  buyer or (ii) where it is not resold in the 
condition as imported.  
 
 3.1.2.1 Independent buyer 
 
  If faced with a situation where no imports were been made to independent buyers in 
Egypt, the Investigating Authority would certainly  consider criteria similar to those used to 
determine whether or not parties involved in an export transaction are associated or related to 
determine whether or not a buyer is independent.  A buyer is, thus, unlikely to be considered 
independent from exporters or foreign producers if they are: 
   - members of a family;  
 
  - an officer or director of the other;    - partners;     - employers or employees;  
 
- directly or indirectly owning, controlling, or holding with power to vote, 
5 per cent or more of the outstanding voting stock or shares of the other; or, 
   - controlling the other or under common control.  
  
 3.1.2.2 The product is not resold in the condition as imported 
 
 The product will be considered not reso ld in the condition as imported if it was 
processed into another product or significantly modified after importation into Egypt and before resale to an independent buyer.  
 
3.2 Basis for the construction of the export price 
 
3.2.1 Construction of the export price when it is unreliable because of an association or relationship 
 
 When the export price has been found unreliabl e because of an association or relationship, the 
Investigating Authority has constructed the export pr ice on the basis of the price at which the product 
was first resold to an independent buyer. All th e costs between the associated/related parties and a 
reasonable profit were deducted as follows:   
Selling price to the first in dependent buyer in Egypt XXX 
Minus
  
Costs incurred by the asso ciated/related party XXX 
Reasonable profit of the associated/related party XXX  
Constructed export price XXX 
 G/ADP/AHG/W/186 
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  3.2.2 Construction of the export price where the product is not resold to an independent buyer or 
not resold in the condition as imported 
 
 If the product is not resold to an independent buyer or not resold in the condition as imported, 
the Investigating Authority will construct the e xport price on any basis it determines appropriate.  
 
 In all cases, after constructing the export pr ice, the Investigating Authority makes the 
necessary adjustments to the export price to allow a fair comparison.  As a general rule, the export 
price is adjusted to ex-works level.  
 The findings concerning all of the above matters  are clearly set forth in the Essential Facts 
and Conclusion Report that is circulated to all inter ested parties by the Investigating Authority prior to 
reaching its final determination.  
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