WORLD TRADE  
ORGANIZATION  TN/RL/GEN/169 
14 October 2010 
 (10-5283) 
Negotiating Group on Rules Original:   English 
  
 
PROPOSAL ON THE USE OF THE FACTS AVAILABLE UNDER 
ARTICLE 12.7 OF ASCM 
 
Communication from China
 
 
 
 The following communication, dated 13 October 2010, is being circulated at the request of the Delegation of China.    
_______________ 
 
  The Delegation of China presents this proposal concerning the issue of application of facts 
available in a countervailing duty investig ation under Art. 12.7 of the ASCM.   
 Note
:  This proposal is without prejudice to the views or position that China may have on other parts 
of the text or has expressed in the past or may express in the future. 
 
I. INTRODUCTION 
 One of the goals of the rules negotiation under the DDA is to clarify and improve the existing 
rules and to strengthen the disciplines on counter vailing duty investigati ons under the multilateral 
trading system.  We share the view of the Appellate  Body that the object and purpose of the ASCM is 
to "strengthen and impr ove GATT disciplines relating to the use of both subsidies and countervailing 
measures".1  
  Article 12.7 of the ASCM provides that "in cases in which any interested Member or interested party refuses access to, or otherwise does not provide, necessary information within a 
reasonable period or significantly impedes the inve stigation, preliminary a nd final determinations, 
affirmative or negative, may be made on the basis of the facts available".  However, the ASCM does 
not include any specific rules on the use of the "facts available".  In contrast, the Antidumping 
Agreement contains specific provisions in its Anne x II which lays down guidelines for the use of best 
information available.  As the Appellate Body obser ved, "it would be anomalous if Artcle12.7 of the 
ASCM were to permit the use of "facts available" in countervailing duty investigations in a manner 
markedly different from that in anti-dumping investigations".
2  The Appellate Body also quoted the 
Annex II of ADA to explain that there are "limitati ons on an investigating authority's use of facts 
available in countervailing duty investigations".  
 It is our experience as well as the observation of many Members that, given the nature and the 
scope of the information requested by the investigating authorities for conducting the CVD 
investigations, the lack of specific rules and guidan ce in the ASCM concerni ng the use of the "facts 
available" would leave much space and broad scope fo r the investigating author ities to interpret it in a 
                                                     
 
1 Appellate Body Report on  US - Softwood Lumber IV , para. 64. 
2 Mexico - Definitive Anti-Dumping Measures on Beef and Rice , WT/DS295/AB/R, para. 295. TN/RL/GEN/169 
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  discretionary manner and thus make it more easily to  use the facts available to their determinations, 
affirmative or negative.  This may potentially lead  to the abuse of countervailing measures.  There 
may be another issue of consiste ncy of practice of the investigating authorities in considering the 
information requested and submitted.  In some case s the guidelines of Annex II of the ADA might be 
followed while others might not.  This, in par ticular, occurred in simultaneous anti-dumping and 
countervailing duty investigations. 
  As we have observed, many determinations  were made and countervailing measures thus 
taken on the basis of the use of the facts available in recent years.  This phenomenon is caused, in our 
view, due mostly to the situation that non-ideal information provided by one interested party or 
interested Member had a significant impact on the position and result of other interested parties. 
Therefore one of the important premises for the use of the facts available will be the consideration of 
evidentiary obligation of each individual inter ested party and interested Member during the 
investigation.  
 The issue of introducing provisions under Artic le 12.7 of the ASCM has been discussed in 
previous meetings of the Negotiating Group of Ru les regarding AD/CVD transposition with necessary 
modification on the basis of the Chair's second text  (TN/RL/W/240).  We would also refer to the 
submissions made respectively by the European Uni on and India on this issue, which may, together 
with this proposal, form the basis fo r further discussions in this Group. 
 
 We would stress that, by introducing certain provisions on the use of the "facts available" and 
amending relevant provisions of th e ASCM, a relatively clear guideline may help the investigating 
authorities examine and consider the information provid ed by relevant interested party and interested 
Member in an unbiased and objective manner thus to  prevent the abuse of the countervailing measure. 
In our view, this is one of the best ways to mainta in the effectiveness of the trade remedy mechanism. 
 
II. PROPOSED TEXTUAL AMENDMENTS 
 Therefore China proposes the textua l amendment to the ASCM as follows.  
 
1.  Modification to Article 12.7  
 12.7 In cases in which any interested Member or interested party refuses access to, or 
otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and fina l determinations, affirmative or negative, may 
be made on the basis of the facts available.  The provisions of Annex (x) shall be observed 
in the application of this paragraph.  
 
2. A New Annex (x) Adding to ASCM 
 
ANNEX (x) 
BEST INFORMATION AVAILABLE IN TERMS  
OF PARAGRAPH 7 OF ARTICLE 12 
 
1. As soon as possible after the initiation of the investigation, the investigating authorities 
should shall specify in detail the information required from any interested Member and  interested 
party, and the manner in which that information should be structured by the interested Member or  
the interested party in its response.  The authorities shall should  also ensure that the Member and  the 
party are aware that if information is not supplied within a reasonable time, the authorities will be free 
to may make determinations on the basis of the facts available, including those contained in the 
application for the initiation of the inv estigation by the domestic industry.  
  TN/RL/GEN/169 
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  2. The authorities may request that an interested Member or  an interested party provide its 
response in a particular medium (e.g. computer tape ) or computer language.  Where such a request is 
made, the authorities shall should  consider the reasonable ability of the interested Member or  the 
interested party to respond in the preferred medium or computer language, and shall should  not 
request the Member or  the party to use for its response a computer system other than that used by the 
Member or  the party.  The authority ies shall should  not maintain a request for a computerized 
response if the interested Member or  the interested party does not maintain computerized accounts 
and if presenting the response as requested woul d result in an unreasonable extra burden on the 
interested Member or  the interested party, e.g. it would entail unreasonable additional cost and 
trouble.  The authorities should shall not maintain a request for a response in a particular medium or 
computer language if the interested Member or  the interested party does not maintain its 
computerized accounts in such medium or computer language and if presenting the response as requested would result in an unreasonable extra burden on the interested Member or
 the interested 
party, e.g. it would entail unreasonable additional cost and trouble.  
3. All information which is verifiable, which is a ppropriately submitted so that it can be used in 
the investigation without undue difficulties
3, which is supplied in a timely fashion, and, where 
applicable, which is supplied in a medium or com puter language requested by the authorities, should  
shall be taken into account when dete rminations are made.  If a Me mber or a party does not respond 
in the preferred medium or computer language but the authorities find that the circumstances set out 
in paragraph 2 have been satisfied, the failure to respond in the preferred medium or computer 
language should  shall  not be considered to significantly impede the investigation. 
 4. Where the authorities do not have the ability to process information if provided in a particular 
medium (e.g. computer tape), the information should
 shall  be supplied in the form of written material 
or any other form acceptable to the authorities. 
 
5. When requesting information pursuant to the paragraph 1, the authorities shall 
consider the reasonable ability of the interested Member or the interested party to supply a 
response to such request.  The authorities shall not maintain a request for the information, or 
for the particular manner in which that inform ation should be structured, if presenting the 
information as requested would result in an unreasonable extra burden on the interested 
Member or the interested party.   Even though the information provided may not be ideal in all 
respects, this should  shall not justify the authorities from disregarding it, provided the interested 
Member or interested party has act ed to the best of its ability. 
 6. If evidence or information is not accepted, the supplying Member or
 party should  shall  be 
informed forthwith of the reasons  therefor, and should  shall  have an opportunity to submit further 
evidence or information, or to provide further explanations,  within a reasonable period, due account 
being taken of the time-limits of the investigation.4  If the further evidence or information submitted, 
or the  explanations provided, are considered by the authorities as not being satisfactory, the 
authorities shall inform the interested Member and interested party concerned of the reasons for the 
rejection of such the evidence or information and should shall set forth such reasons be given  in any 
published determinations. 
 7. If the authorities have to base their findings, including those with respect to subsidies
, on 
information from a secondary source, including th e information supplied in the application for the 
                                                      
3 Submitted information cannot be used without undue difficulties if, inter alia , an assessment of the 
accuracy or relevance of that information is dependent upon other information that  has not been supplied or 
cannot be verified.    
4 Provided that the authorities need not consider any further evidence or information that is not 
submitted in time such that it can be verified during any on-site investigation conducted pursuant to Article 6.7.  TN/RL/GEN/169 
Page 4  
 
  initiation of the investigation, they should
 shall  do so with special circumspection.  In such cases, the 
authorities should  shall , where practicable, check the information from other independent sources at 
their disposal or reasonably available to them , such as  information published by the authorities, 
official import statistics and customs returns, and from the information obtained from other interested 
parties during the investigation.5  It is clear, however, that if an interested Member or  interested 
party does not cooperate and thus relevant informat ion is being withheld from the authorities, this 
situation could lead to a result which is less favourable to the interested Member or  the interested 
party than if the Member or  the party did cooperate. 
  
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5 The sources consulted shall be identified in the disclosure conducted pursuant to Article 12.8 .