. /.  WORLD TRADE  
ORGANIZATION  TN/RL/W/183 
1 July 2005 
 (05-2845) 
Negotiating Group on Rules Original:   English 
 
 
CURRENCY CONVERSIONS 
 
Paper from Egypt  
  The following submission, dated 30 June 2005, is being circulated at the request of the 
Delegation of Egypt. 
 
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  The determination of dumping almost always require a currency conversion since the normal 
value and the export price are normally not expressed in the same currency. Currency conversions for 
the purpose of determinations are governed by Ar ticle 2.4.1 of the WTO Anti-Dumping Agreement 
(hereinafter, the "AD Agreement").  This Article provides that when a conversion of currencies is 
required, it should be made using the rate of exchan ge on the date of sale or, when a sale of foreign 
currency on forward markets is directly linked to an export sale, the rate of exchange in the forward 
sale should be used. 
 
 Since currencies fluctuate in relation to one another, and these fluctuations can have a 
significant impact on dumping margin determinati ons, Article 2.4.1 further provides that, when 
sustained movements in exchange rates occurred du ring the period of investigation, investigating 
authorities should allow exporters at least 60 days to adjust their export prices to reflect these 
sustained movements. Article 2.4.1 also provides that fluctuations in exchange rates shall be ignored.   
  Article 2.4.1 provides no guidance on what cons titutes "sustained movements"; how sustained 
exchange rates fluctuations should be reflected and which "fluctuations  in exchange rates" should be 
ignored. Egypt
1 and other Members2 have already identified this ma tter as one that requires to be 
clarified and improved in the framework of the curre nt negotiations. Egypt reserves its right to modify 
or complement its paper, as appropriate. 
 
Issue: Currency conversions 
 
Relevant Provisions : 
 
 Article 2.4.1 of the AD Agreement.  Description of Problems
: 
 
 The absence of definition of the terms "fluct uations" and "sustained movements" make it 
difficult for exporting producers and investigating au thorities to determine when they should depart 
from the general currency conversion methodology set forth in the first sentence of Article 2.4.1. 
Also, in the absence of definitions, Members rema in free to determine, on a case-by-case basis, 
whether or not exchange rates fluctuations shoul d be ignored or sustained movements reflected.  
                                                      
1 See TN/RL/W/105.  
2 See TN/RL/W/130 and TN/RL/W/149/Rev. 1. TN/RL/W/183 
Page 2  
 
 Elements of a Solution
: 
  - Define the term "fluctuations" and pr ecisely set forth when currency conversion 
fluctuations are to be ignored pursuant to Article 2.4.1. 
 
 - Define the terms "sustained movements"  and set forth how sustained movements in 
exchange rates should be reflected. Also, clarify the time periods during which these 
sustained movements should be reflected.  
 Explanation
: 
 
 In order to ensure that exporting producers re ceive a fair and similar treatment in all anti-
dumping investigations with respect to currency conversions and also, to assist investigating 
authorities in performing the necessary currency co nversions to only determine the actual dumping 
margin, it is submitted that it is necessary to clarif y and improve the second sentence of Article 2.4.1 
of the AD Agreement. The aim of Egypt is not to en sure that investigating authorities be required to 
apply identical rules concerning currency conversions in all circumstances. Exchange rate fluctuations 
must be analysed on a cases-by-case basis in order to  ensure that their effects on the dumping margin 
calculations are minimised. However, it is importa nt that Members agree on a common definition of 
the basic terms of Article 2.4.1 to en sure its consistent implementation. 
 
 Before proposing specific elements of a soluti on to the problems that it has identified, Egypt 
would welcome information from Members on the rules and practices followed when performing 
currency conversions. Egypt believes that this excha nge of information will be helpful to determine 
the elements shared by most Members with respect to this matter.   
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