RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/IG/W/38
13 June 2001
(01-2927)
Committee on Anti-Dumping Practices
Informal Group on Anti-CircumventionOriginal:  English
TOPIC 2 – WHAT IS BEING DONE BY MEMBERS CONFRONTED
BY WHAT THEY CONSIDER TO BE CIRCUMVENTION?
REPLIES TO CIRCUMVENTION SCENARI OS PRESENTED IN THE MEETING
OF THE INFORMAL GROUP ON CIRCUMVENTION OF NOVEMBER 2000
Questions Posed by HONG KONG, CHINA
Regarding the Paper by the EUROPEAN COMMUNITIES1
The following communication, dated 11 June 2001, has been received from the Hong Kong
Economic and Trade Office.
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At the meeting of November 2000 of the Informal Group, the European Communities
submitted a list of six factual examples of "circumvention" situations and requested Members to share
their experience and practice of their investigating authorities in responding to the six factualscenarios.
Hong Kong, China hopes that by discussing such examples, Members will be able to gain a
better understanding of the nature and the scope of situations which some Members consider to be
"circumvention".
Example 1:  Fibre and tow
1. We note that tow is classified under a different customs heading from that of fibre and was
not caught under the AD investigation of the fibre.  We would like to know whether tow existed at the
time of the original AD inve stigation.  If it did exist, why hadn’t it been included in the original AD
investigation on fibre?
2. During the circumvention investigation, would th e investigating authority find out if tow had
been imported at dumped prices?
3. When the investigation authority examined the injury issue during the original investigation
on fibre, would they investigate whether there was injury to producers of tow in addition to those of
fibre?
4. Would the EC investigating authority contemplate handling this case by initiating a fresh AD
investigation on tow, as suggested by New Zealand in G/ADP/IG/W/35?
                                                     
1 G/ADP/IG/W/30G/ADP/IG/W/38
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Example 2:  Motorcycles and motorcycle parts
5. Before determining the scenario as circumvention of AD duty on motorcycles, would the
investigating authority examine whether there were  any legitimate commercial reasons which resulted
in the shift of assembly location of motorcycles from Country B2 to Country A?3
6. New Zealand suggests in G/ADP/IG/W/35 that this example would depend on the
classification of the parts shipments.  We are interested to know whether the EC investigatingauthority would consider solving this case of alleged circumvention by applying General Rule 2(a) of
the Harmonised System
4.
7. When the investigating authority examined the injury issue during the original investigation
on motorcycles, would they examine whether there had been injury to the producers of parts for
motorcycles as well?  Would it be possible that the "domestic industry" of motorcycle parts might be
different from that of motorcycles? For instance, the industry producing parts might also produce
parts for other vehicles or industrial users, rather than producing complete motorcycles.
8. In this case, the shipments of motorcycle parts are spread over various containers and
shipments and they are routed to several custom s entry points.  We wonder whether the problem of
split consignment is unique to AD.  To what extent could the problem be addressed at the level of
customs classification and customs investigation under customs-to-customs cooperation?
Example 3:  Mobile phones from a third country assembled from parts from Country B
9. To what extent could this scenario be resolved through the application of rules of origin on
the mobile phones concerned?  If assembly operations in Country C5 are too minor to be origin-
conferring, the phones imported from Country C should still fall within the scope of the AD order on
phones from Country B after the minor assembling work.
Example 4:   Steel pipes from Country C
10. Would the investigating authority consider the r eaction of the importers in Country A to start
importing from Country C as genuine and legitimate market operations in response to the rise in costs
resulting from the imposition of AD duties on steel pipes from Country B?
11. This example may be divided into two possibilities.  The first possibility would be where
origin-conferring manufacturing operations did take place in Country C.  In this case, would theinvestigating authority consider whether businessmen might be simply making the most of different
countries’ comparative advantage by locating their market operations at the most cost-effective place?
12. This may also be an example of "goods in transit", as suggested by New Zealand.  In this
case, the goods would retain their country B origin.  In this situation, could the alleged circumvention
be dealt with by an origin investigation under relevant customs rules?
                                                     
2 Country B means the exporting country.
3 Country A means the importing country.
4 General Rule 2(a) of the Harmonised System provides that “ any reference in a heading to an article
shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, theincomplete or unfinished article has the essential characte r of the complete or finished article.  It shall also be
taken to include a reference to that article complete or finished (or falling to be classified as complete orfinished by virtue of this Rule), presented unassembled or disassembled. ”
5 Country C is a third country, other than Country A and Country B.G/ADP/IG/W/38
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Example 5:   Laptop computers from Count ry C by assembling parts from Country B
13. To what extent could the situation in this example be dealt with by applying rules of origin?
14. Would the investigating authority consider the replacement of imports by laptop computers
from Country C a legitimate response to the rise in costs resulting from the imposition of the AD duty
against Country B?
15. Were there imports of laptop computers from Country C at the time of the original
investigation on imports of Country B?  Why hadn't laptops from Country C been included in the
original AD order?
16. During the circumvention investigation, would the investigating authority find out if laptop
computers from Country C had been imported at dumped prices?
Example 6:  Chemical and newly classified chemical
17. We note that the modified product is under a different customs classification from that of the
product subject to the AD order.  Would the investigating authority consider whether they are in factdifferent products and targeting at different markets?
18. Did the chemical with additive exist at the time of original investigation?  If it did exist, why
hadn't it been included in the AD investigation on the original chemical?  Was the exclusion of the
chemical with additive in the investigation simply an omission or a considered decision by the
petitioning industry or the investigating authority?
19. When the investigating authority examined the injury issue during the original investigation
on the original chemical, would they consider whether there was injury to the producers of the altered
chemical?  Would it be possible that the "domestic industry" of the altered chemical was different
from that of the original chemical?
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