WORLD TRADE  
ORGANIZATION  G/ADP/Q2/TUR/2 
8 July 2009 
 (09-3350) 
Committee on Anti-Dumping Practices Original:   English 
  
 
TURKEY'S FINAL DUMPING DETERMINATION AGAINST SPUN YARNS  
MADE OUT OF MAN-MADE FIBRE FROM INDIA 
 
Replies to Questions from INDIA
1 to TURKEY  
 
 
 The following communication, dated 7 July 2009,  is being circulated at the request of the 
Delegation of Turkey.    
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 In the document G/ADP/Q2/TUR/1 dated 20 May 2009, India raised certain questions in the 
context of the dumping determinations made by  the Turkish Authorities in the anti dumping 
investigation against the imports of "certain yarns made out of man-made fiber" from India.  Turkey 
would like to clarify the issues raised in the said communication as follows:   
 Question 1   Does Turkey believe that any investigatio n on anti-dumping can address the issues of 
subsidy schemes without following the di sciplines of the Agreement on Subsidies & 
Countervailing Measures (ASCM)?  If yes, th e specific provision in the Anti-dumping 
Agreement which permits such treatment?    
Question 2 
  Under which provision of the Anti-dumping  Agreement, does Turkey consider that it 
can treat any tax neutralization scheme as a subs idy scheme without following the procedures of 
ASCM?   
 Question 3  
Can Turkey show how and where it has considered the duty Drawback and Excise 
Rebate as a subsidy scheme under the ASCM?   
 
Replies to questions 1-3
 
 
 With regard to questions 1 to 3 raised by India:   The goal of anti dumping investigations is to 
determine the existence of a price differentiati on between the export and domestic markets, and 
remove the material injury the dumping action causes.  However, the Anti Dumping Agreement does 
not make any differentiation among the actions to  be taken against dumpe d imports based on the 
possible factors behind them.  Therefore, accordi ng to the Anti Dumping Agreement, export prices 
below the normal value create dumping, and the Me mbers could take action against them (certainly 
where other affirmative determinations are also made) no matter what the reasons are.  Subsidies 
                                                      
1 G/ADP/Q2/TUR/1.   G/ADP/Q2/TUR/2 
Page 2  
 
  being among the causes do not preclude any author ities from acting against the resulting dumping 
behavior.  To the Turkish Anti Dumping Authorities' knowledge, there is no provision in any of the WTO Agreements including the ADA, SCM and GATT 94 prohibiting anti-dumping measures 
against dumping behavior caused, inter alia, by sp ecific subsidies granted to exporter/producers by 
exporting countries' governments.   
 
 Article VI.5 of the GATT 94 explicitly prohibits the use of both anti dumping and countervailing measures at the same time against the sa me export subsidization.  In fact, the provision 
provides a very clear understanding whether an anti dumping measure could be taken against 
subsidies granted by a WTO member government to its producers.   
 
 On the other hand, from the questions raised by India, it looks that India has got the impression that the Turkish Anti Dumping Authorities im posed the said measure as a direct result of a 
subsidy determination not made under the rules of th e SCM agreement.  If this is the case, there is a 
misunderstanding.   
 
a. Principally, the ADA does not have a provision which obliges the investigating authorities to 
accept any allowance claim without examination.  Article 2.4 provides that:   
 
"(…) Due allowance  shall be made in each case , on its merits , for differences 
which affect price comparability, includi ng differences in conditions and terms of 
sale, taxation (…) which are also demonstr ated to affect price comparability (…)" 
(emphasis added)  
  As it is seen, Article 2.4 does not require that an adjustment be made automatically in all 
cases where a difference is found to exist.  Normal ly in the anti-dumping investigations the related 
parties submits lots of elements for allowance.  C onceptually, the main aim is to show the reason for 
the alleged price differentiation.  At this point, as mentioned above, it can not be expected from the 
investigating authorities to accept all these demands  without any questioning.   The related parties 
should also show the due cause to the investigati ng authorities and the authorities should determine 
whether those claims are reasonabl e.  On the other hand, it should be understood that it is not the 
responsibility of the investigating authorities to find  out that who meets the cost of differentiated 
pricing policy of the related companies.  Before  imposing any measure, it is the investigating 
authorities' obligation to determine whether there are dumped prices and to calculate the dumping 
margin through a fair comparison.  Yet, for such a comparison, the related parties should also prove 
the fairness of their demands with regard to the allowances.    
b. As expressed in the relevant part of the "Final Disclosure" (Article 16.(3)) sent to the 
interested parties of the subject investigation pursuant to the provisions of Article 25 of the 
relevant Turkish Regulation, the requests of the Indian companies for adjustments to be made 
for the so called "refund of import duties and in ternal taxes" were rejected not because they 
were subsidies granted by the Indian Government, but the said companies did not show that what they were claiming as refunds were ref unds of what they allegedly paid to the 
government on their inputs as taxes or duties (payments).  In other words, had a direct relation 
between the claimed refunds and alleged payments  been demonstrated by the claimants, the 
relevant adjustments would have been made in order to make a fair comparison between the 
normal values and export prices.  But, since the companies were not able to demonstrate the direct link between the two, the claim was not deemed appropriate.   
 
c. As explained in Article 16.(3) of the Co mmuniqué publicizing the results of the subject 
investigation published in accordance with Article  31 of the relevant Turkish Regulation, the 
Indian companies made different claims with rega rd to this subject.  It was also expressed in 
the said Communiqué that in the context of the relevant Turkish legislation the refunds were  G/ADP/Q2/TUR/2 
 Page 3 
 
 
  export subsidies.  However, the reason for rejec ting the said claims were, in fact, as stated in 
the same paragraph of the Communiqué, that th ere were no direct relation between the so 
called refunds from and claimed paymen ts to the Indian Government.   
 
Question 4 
 
Can Turkey show the legal provision und er the Anti-dumping Agreement where it is 
necessary for the exporter to demonstrate a di rect transaction-wise link between the claimed 
amounts and the expenses claimed to have been in curred for the inputs used for production and 
sales for claiming an adjustment under Article 2.4 of the Anti-dumping Agreement?    Question 5 
 
Can Turkey specifically point out to the form at or the document which was addressed to 
the cooperating exporters wherein details of the direct transaction-wise link between the 
claimed amounts and the expenses claimed to have been incurred for the inputs used for 
production and sales for claiming an adjustment under Article 2.4 of the Anti-dumping Agreement, were asked for?   
 
Question 6  
Can Turkey demonstrate where during the pro ceedings it has fulfilled its obligations 
under the last sentence of Article 2.4 which requires that "The authorities shall indicate to the 
parties in question what information is necessary  to ensure a fair comparison and shall not 
impose an unreasonable burden of proof on those Parties"?   
 
Question 7  
What is the procedure followed by Turkey to  allow adjustment claimed by an exporter, 
within the meaning of Article 2.4, in respect of "duty rebate", "duty drawback", central excise 
rebate or any other duty neutralization availed from the export price or normal value for 
calculating the dumping margin?   
 Replies to questions 4-7
 
  Questions 4 to 7 raised by India give us the impression that there is another misunderstanding.  
The expression "… not being in transaction-wise dir ect connection …" used in Article 16.(3) of the 
said Communiqué was to explain that the specifi c amounts claimed as refunds for export transactions 
were not shown to be directly related with th e actual payment made by the companies to the 
government for the claimed purpose.  In other wo rds, Turkish Anti-Dumping Authorities did not look 
for specific duty or tax payment documents to check  the refund figures claimed by the companies for 
each export transactions, nor it made such a request to the companies to submit such documents.   
 
 Undoubtedly, as Article 2.4 provides, the authorities "shall not impose an unreasonable 
burden of proof" on interested parties.  However, it should not be ignored that, this does not mean that 
interested parties have the burden to substantiate  their assertions concerning claimed adjustments.  
According to the ADA, investigating authorities have  the obligation of making fair comparisons based 
on the merits of claims made by the parties, not the obligation of accepting any claimed adjustment.   G/ADP/Q2/TUR/2 
Page 4  
 
  Question 8 
 
Can Turkey demonstrate the provision under wh ich it is permitted to take only the 
profitable sales into account for determining the reasonable level of profit under Article 2.2.2 of 
the Anti-dumping Agreement for the pur pose of constructed normal value?   
 Question 9 
 
 Under which provision of the Anti-dumping Agreement, can the concept of "ordinary course of trade" from Article 2.2.1 read with  footnote 5 be borrowed for the purpose of 
Article 2.2.2?   
 
Replies to questions 8 & 9
 
  In questions 8 and 9, India raises the ques tion of how the Turkish Anti Dumping Authorities 
calculated the reasonable amount of profit where calculation of normal value required constructed 
values for certain product types.  In those cases, Turk ey, in contrast with what India implied, did not 
employ a methodology which used only profitable sales in calculating the "reasonable profit".  The methodology used in calculating the reasonable pr ofit for a producer took into account all the 
domestic sales of the subject producer in the ordinary course of trade.    
 We believe that this issue is  a "misunderstanding" since it would not be conceivable that India 
claims that Article 2.2.2 prohibits the use of sales in the ordinary course of trade in calculating the 
reasonable profit where the normal value calculation requires the use of constructed values.  Because, the chapeau of Article 2.2.2 reads as follows:    
"For the purpose of paragraph 2, the amounts  for administrative, selling and 
general costs and for profits shall be based on  actual data pertaining to production 
and sales in the ordinary course of trade  of the like product by the exporter or 
producer under  investigation."  (emphasis added) 
  We think there is no doubt that this wording a llows the use of sales of the product concerned 
made by the producer/exporters in the ordinary c ourse of trade in calculation of "the reasonable 
amounts for profits".      
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