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June 2014 / Issue 37

June2014

An e-newsletter from Lakshmikumaran & Sridharan, New Delhi, India

Dear ReadersYour esteemed newsletter - International Trade Amicus - is venturing into the 4th year of publication. I am reminded of the vision statement of our firm: “Exceeding Expectations”. Recently, I was in a meeting with the top officials of MOFCOM at Beijing, China. During our discussions, all of a sudden one of the officials said: “Your International Trade Amicus is handy in getting the latest information about various ongoing trade remedy cases. I use it regularly”. I received similar comments from a number of other readers from China and India. I am extremely thankful to the readers for sharing their opinion on their own, when I did not even refer to the Amicus in the discussions. Our basic tenet that we offer useful information to the readers has been proved. Receiving accolades from readers across the globe creates positive vibes and I am very happy to share the same with all of you.

The success of IT Amicus is wholly attributable to those who have spared their valuable time in contributing and creating content every month. I thank everyone of them for making this Amicus a success during the past 3 years. I enlist and count on their continued support during the fourth year as well.

Upon entering the fourth year, I assure the readers that your Amicus will continue to carry useful information and incisive articles and will reach you in a timely manner every month

S. Seetharaman,Executive Partner and CEO,Lakshmikumaran & Sridharan, India.

Third Anniversary Issue

2© 2014 Lakshmikumaran & Sridharan, IndiaAll rights reserved

INTERNATIONAL TRADE AMICUS / June, 2014

ArticleUnforeseen developments under safeguard investigations – International standard and Indian practiceBy Tarun BhatiIntroduction

WTO Members who initiate and conduct safeguard investigations are required to abide by the requirements of both, the WTO Safeguards Agreement as well as GATT, Article XIX. Article XIX: 1(a) of GATT states, in relevant part, as follows:

“If, as a result of unforeseen developments and of the effect of the obligations incurred by a contracting party under this Agreement, including tariff concessions, any product is being imported into the territory of that contracting party in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly competitive products, the contracting party shall be free, in respect of such product, and

to the extent and for such time as may be necessary to prevent or remedy such injury, to suspend the obligation in whole or in part or to withdraw or modify the concession.”

The object and purpose of Article XIX is, to allow a member to re-adjust temporarily, the balance in the level of concessions between that member and other exporting members when it is faced with ‘unexpected’ circumstances which cause or threaten serious injury to domestic producers of like or directly competitive products.

Three legal prerequisites as set out in Article XIX:1(a) of GATT are (a) unforeseen developments; (b) obligations undertaken under GATT, including tariff concessions;

ArticleUnforeseen developments under safeguard investigations – International standard and Indian practice

Trade Remedy NewsTrade remedy measures by India

Trade remedy actions against India

WTO News

News Nuggets

Ratio Decidendi

11

12

8

86

2

Contents



and (c) the two factors stated above cause increased imports.

Obligations

The Appellate Body in Argentina-Footwear (EC) opined that it must be demonstrated, that the importing member has incurred obligations under the GATT 1994, including tariff concessions 1. The contours of such “obligations”, however, have not been defined. Yet, the investigating authorities should not presume that by becoming members of the WTO and by binding themselves to some commitments other than tariff concessions, they automatically meet this requirement of Article XIX: 1(a). Instead, such an examination should be done on a case by case basis. In Dominican Republic – Polypropylene Bags and Tubular Fabrics, the Panel held that the importing Member must have incurred obligations under the GATT 1994, for example, tariff concessions with respect to the product in question; it then falls on the importing Member to identify those obligations incurred under the GATT 1994 that are linked with the increase in imports causing serious injury to its domestic industry; these findings and conclusions must be reflected in the report of the competent authority. India does not appear to have examined this aspect in this manner in any of its findings so far.

Unforeseen development

It means the circumstances which were

unforeseen or unexpected at the time of entry into force of WTO Agreement and at the time of incurring such obligation2. Mere listing of certain developments as unforeseen developments will not be sufficient. The investigating authority shall demonstrate why such developments are considered unforeseen. Therefore, if increased imports are caused by factors other than the unforeseen development identified by the investigating authority, the requirement of Article XIX: 1(a) remains unsatisfied.

In terms of procedural obligation, the Appellate Body in US-Lamb has ruled that existence of “unforeseen developments” is a pertinent issue of fact and law under Article 3.1 of the Agreement on Safeguards (AoS) and it is necessary that the published report of the competent authorities, under that article, must contain a finding or reasoned conclusion on unforeseen developments3. Therefore, investigating agencies must clearly show in their finding that the issue of unforeseen development has been examined by the agencies and how the “unforeseen developments” resulted in the increase in imports of the subject goods causing serious injury to the domestic industry.

The demonstrat ion of “unforeseen developments” must be performed for each product subject to a safeguard measure4.

1 Appellate Body Report, Argentina-Safeguard Measures on Import of Footwear, para 912 Appellate Body Report, Argentina-Safeguard Measures on Import of Footwear, para 963 Appellate Body Report, US-Safeguard measures on imports of fresh, chilled or frozen lamb from New Zealand and

Australia, para 764 United States - Definitive Safeguard Measures on Imports of Certain Steel Products (DS248, DS249, DS251, DS252,

DS253, DS254, DS258, DS259)



It is not sufficient merely to demonstrate that “unforeseen developments” resulted in increased imports of a broad category of products that included the specific products subject to the respective determinations.

However, the Indian practice on existence of unforeseen developments is not in accordance with the AoS and WTO jurisprudence. For example, the panel in Argentina-Preserved Peaches emphasized that increase in imports should not be equated with unforeseen developments whereas the Indian Safeguard authority has held increase in imports itself as “unforeseen development” in a number of its decisions.

Analysis of the findings by India in the last 6 years

Some of decisions of the Indian Safeguard authority Directorate General of Safeguards (“DG Safeguards”) relating to the unforeseen developments are examined here.

Trade remedial actions by USA and EU against exports from China and unexpected drop in consumption in European Markets5 were considered to be “unforeseen developments” resulting in increased imports into India. However, the final findings do not contain any data relating to the drop in consumption in European markets and why such drop in consumption was considered unexpected. There is also no evaluation as to whether

trade remedy actions by USA is the cause or it is only a remedy to the underlying cause of low priced exports from China to those countries. Since the latter is the real cause, Indian authority has only examined the low export price of the Chinese producers as the unforeseen development.

Low price of raw material in China6 has been held to be an unforeseen development resulting in increased imports into India. However, there is no examination as to (a) why the low prices of raw materials in China are considered to be unforeseen; (b) whether the said prices in China were higher in the past and fell down unexpectedly or the prices existed at lower levels throughout. In fact this decision is contrary to what the Panel has stated in Chile – Price Band System and Safeguard Measures relating to certain agricultural products where Chile had not set forth reasoned findings as to as to why the reported “sizeable and rapid decrease in international prices” could be regarded as an unforeseen development.

Increase in production (of DOP) in China reduced the market opportunity to the producers in other countries such as Korea and Taiwan and these producers were forced to look around for other markets such as India that caused increased imports to India from Korea and Taiwan7. However, a perusal of the underlying data shows a somewhat skewed

5 Final finding dated 11th March 2014 issued by DG Safeguards concerning imports Seamless Pipes and Tubes into India, page 145

6 Final finding dated 31st July 2012 issued by DG Safeguards concerning imports of Carbon Black(China Specific safeguard measure)

7 Final finding dated 16th November 2012 issued by DG Safeguards concerning imports of Dioctyl Phthalate (DOP) into India, Para 39



trend. For instance drop in Korean exports of DOP to China from 2007 to 2011 was over 108,000 MT but exports to India rose only by 3,374 MT during the same period. Such an increase could be more appropriately attributed to the normal increase over the said period and could not be attributed to any “unforeseen developments”. Thus, the analysis and conclusions of the Indian authority were not supported by the underlying data.

Slowdown in the end markets of Europe and America from 2009 onwards and the crises in Spain, Italy, Portugal, Greece and Ireland resulted in surplus production worldwide in comparison to available capacity since plants had to operate at sufficient run rates to achieve economies of scale. The surpluses for the industry were channeled into India. These developments were held to be unforeseen. In addition, imposition of antidumping duty by China and Pakistan on the imports from Korea and Taiwan was also considered to be an unexpected development8. The first reasoning appears to be ‘unforeseen’ but the second one was a remedy instituted by a government and not a cause as stated earlier.

Excess capacity in major exporting countries and increasing Indian demand were found to be the reasons for increase in imports. Without assigning any reasons and without examination, the Indian authority has held that the said developments to be ‘unforeseen

developments’9.

Special relationship between a Chinese and a South Korean producer as well as recession in the global market leading to significant drop in demand for the product in developed countries and China10 were considered to be “unforeseen developments” resulting in increased imports into India. However, the final finding does not contain any data on how the special relationship between the two companies resulted in an increase in imports into India.

Unexpected fall in demand worldwide on account of recession coupled with the imposition of export duty on basic raw material from which users in exporting country are immune11 were considered to be “unforeseen development” resulting in increased imports into India. However, the final finding does contain any analysis on how the imposition of export duty on the basic raw material has resulted in increase in imports of the finished product into India. Also simply listing unexpected fall in demand worldwide on account of recession without analyzing how it would lead to increased imports into India is not sufficient to meet the requirements of WTO law and jurisprudence.

Interestingly, India has also held that “additional capacities in China PR and new capacities planned in United States and unforeseeably low pricing of imports despite

8 Final finding dated 29th March 2012 issued by DG Safeguards concerning imports of Phthalic Anhydride (PAN) into India9 Final finding dated 17th September 2013 issued by DG Safeguards concerning imports of Sodium Nitrite into India, para 5210 Final finding dated 6th June 2011 issued by DG Safeguards concerning imports of PX-13 or 6-PPD into India, para 21411 Final finding dated 14th May 2009 issued by DG Safeguards concerning imports of Dimethoate Technical into India



increase in material cost”12 did not constitute unforeseen developments. Thus, no consistent trend emerges as to what would constitute ‘unforeseen developments’. Conclusion

It can be concluded that the safeguard measure should only be applied in emergency situations as a measure to protect the domestic industry against increased imports, resulting from unforeseen developments under such conditions

to cause serious injury to the domestic industry. India’s determinations with regard to ‘unforeseen development’ have improved over time but lack consistency in application. Further, India is yet to determine whether the increased imports were an effect of obligations undertaken under GATT including tariff concessions. [The author is an Associate, International Trade Team, Lakshmikumaran & Sridharan, New Delhi]

12 Final finding dated 11th March 2014 issued by DG Safeguards in Seamless Pipes & Tubes investigation, page 145

Trade Remedy NewsTrade remedy measures by India

Product Date of Notification RemarksNotification No.Country

Glass fibre

Fully drawn yarn

Flexible Slabstock Polyol (FSP)

Flax Fabric

Diclofenac Sodium

C o l d r o l l e d f l a t products of stainless steel

Ceftriaxone Sodium Sterile

Castings for wind operated electricity generators

China

China and Thailand

All countries

China and Hong Kong

China

China, Korea, EU, South Africa, Taiwan, Thailand and USA

China

China

19/2014-Cus. (ADD)

18/2014-Cus. (ADD)

F.No. D-22011/ 04/2014

17/2014-Cus. (ADD)

15/3/2013-DGAD

20/2014-Cus. (ADD)

15/12/2012-DGAD

17/6/2013-DGAD

9-5-2014

9-5-2014

22-5-2014

9-5-2014

9-5-2014

12-5-2014

20-5-2014

29-5-2014

Glass fibre with fibre in diameter in the range of 0.3-2.5 microns excluded from ambit of ADD pursuant to Mid-term Review

ADD extended till 25-3-2015, consequent to initiation of sunset review

Safeguard investigation initiated

ADD extended till 25-3-2015, consequent to initiation of Sunset review

Time limit for completing investigation (SSR) extended up to 8-7-2014


A D D s u n s e t r e v i e w recommends continuation of anti-dumping duty

C o u n t e r v a i l i n g d u t y investigation initiated




Injection presses China 15/2/14-DGAD 9-5-2014 ADD sunset review initiated

Vitamin E

Sulphur Black

Solar cells

Sodium Nitrite

Sodium di-chromate

S a t u r a t e d Fa t t y Alcohols

Phthalic Anhydride

Phenol

Phenol

Persulphates

Pentaerythritol

Nylon Tyre Cord Fabric (NTCF)

Methylene Chloride

Measuring tapes

China

China

Malaysia, China, Chinese Taipei and USA

European Union

All countries

All countries except developing countries other than Malaysia, T h a i l a n d a n d Indonesia

Russia and Japan

Chinese Taipei and USA

Chinese Taipei and USA

Taiwan, Turkey and USA

China

China

EU, USA and Korea RP

China

16/2014-Cus. (ADD)

15/18/2012-DGAD

14/5/2012-DGAD

15/1009/2012- DGAD

F.No. D-22011/ 05/2014

F.No. D-22011/ 26/2013

14/6/2014-DGAD

23/2014-Cus. (ADD)

14/17/2012-DGAD

22/2014-Cus. (ADD)

15/19/2012-DGAD

21/2014-Cus. (ADD)

24/2014-Cus. (ADD)

15/9/2014- DGAD

9-5-2014

8-5-2014

22-5-2014

12-5-2014

26-5-2014

26-5-2014

9-5-2014

16-5-2014

29-5-2014

16-5-2014

9-5-2014

16-5-2014

21-5-2014

9-5-2014


Time limit for completing investigation extended up to 3-7- 2014

Definitive ADD recommended for 5 years

ADD sunset review recommends continuation of anti-dumping duty

Safeguard investigation initiated

Provisional safeguard duty recommended @ 20% ad valorem for 200 days

ADD investigation initiated

Provisional anti-dumping duty imposed for 6 months

Time limit for completing investigation extended up to 6-8-2014

Definitive anti-dumping duty imposed for 5 years

Time limit for completing investigation (SSR) extended up to 24-7-2014


Definitive anti-dumping duty imposed for 5 years

ADD sunset review initiated




Lined Paper Products

Lined Paper Products

Single-mode Optical Fibers

USA

USA

China

79 FR 26205[A-533-843]

79 FR 26205[A-533-844]

MOFCOM Announcement No. 33 of 2014

7-5-2014

12-5-2014

19-5-2014

Final Results of ADD Administrative Review 2011-12 – Determination tha t sa l e by M/ s . Navnee t Publications (India) Ltd. was not less than normal value. M/s. A.R. Printing, the sole non-selected respondent, received non-selected margin of 11.01%.

Final Results of Countervailing Duty Administrative Review, 2011 – Determination of net subsidy rate of 2.94% ad valorem for M/s. A.R. Printing for the period Jan’11 through Dec’11.

A D D P r e l i m i n a r y R u l i n g announced – Security deposit to be made

Trade remedy actions against India

WTO NewsSolar energy dispute between India and USA enters next level

After deferring establishment of a WTO Panel in US-India Solar dispute on April 25, 2014, the Dispute Settlement Body (DSB) in its meeting on May 23, 2014, has finally established a panel to adjudicate on this dispute (DS456). The two countries had initiated consultations in February 2013 over India’s ambitious solar energy programme - Jawaharlal Nehru National Solar Mission that aims to harness 20,000 MW of grid connected solar power by 2022 [Refer International Trade Amicus – March 2013 issue]. The United States is particularly challenging domestic content requirements in India’s solar policies that discriminate against imported solar modules and solar cells. The Indian provisions

are alleged to be in violation of Article III:4 of the GATT 1994, Article 2.1 of the TRIMs Agreement and Articles 3.1(b), 3.2, 5(c), 6.3(a) and (c), and 25 of the SCM Agreement. It may be noted that consultations were recently supplemented in February 2014 with respect to phase-II of the Mission [Refer International Trade Amicus – March 2014 issue]. India and United States are also awaiting panel report in another dispute where India has challenged United States’ countervailing measures on imports of hot-rolled carbon steel products from India.Seal products dispute – Appellate body partly upholds panel report

Appellate Body of the WTO’s Dispute Settlement Body has partly upheld the panel report in the dispute involving some of the



measures put in force by the European Union against specified imports of seal products, “European Communities – Measures Prohibiting the Importation and Marketing of Seal Products” (DS400 / DS401). Upholding that legal standard of non-discrimination obligations under Article 2.1 of the TBT Agreement does not apply uniformly to claims under Articles I:1 and III:4 of the GATT 1994, it was held that the EU’s measures were inconsistent with Article I:1 of GATT inasmuch as they do not extend the same advantage to products from Canada and Norway as they accord to like products originating from Greenland. The Appellate Body upheld the panel’s finding that the measures are deemed necessary within the meaning of Article XX(a) of the GATT 1994, as were designed to protect public morals. It was, in this regard, held that the term “to protect”, when used in relation to “public morals” under Article XX(a), did not require the Panel to identify the existence of a risk to EU public moral concerns regarding seal welfare. However, the Appellate Body of the DSB found that EU had not demonstrated that the measures are designed and applied in a manner that meets the requirements of the chapeau of Article XX and that the EU has not justified the measure under Article XX(a). Panel’s finding that the EU’s measures constituted “technical regulation” within the meaning of Annex 1.1 to the TBT Agreement was also reversed by the Appellate Body in its report circulated on 22-5-2014.Chinese duties on US automobiles held inconsistent by DSB panel

Chinese anti-dumping and countervailing duties on specified automobiles from USA

have been found to be inconsistent with various provisions of the Anti-dumping Agreement and the SCM Agreement. The US had raised claims regarding China’s procedural and substantive obligations under these agreements. The Panel report in DS440 circulated on 23-5-2014 made the following findings among other observations:� MOFCOM erred in its determination of the

residual anti-dumping and countervailing duty rates for unknown exporters of the subject product, thereby not conforming to the requirements under Article 6.8 and Annex II of the Anti-dumping Agreement, and Article 12.7 of the SCM Agreement.

� Inconsistencies in MOFCOM’s price effects and causation determinations are contrary to the requirements of Articles 3.1, 3.2 and 3.5 of the Anti-dumping Agreement, and Articles 15.1, 15.2 and 15.5 of the SCM Agreement.

� MOFCOM’s failure to provide interested parties with adequate non-confidential summaries of cer tain confidential information in the petition was contrary to the requirements of Article 6.5.1 of the Anti-dumping Agreement and Article 12.4.1 of the SCM Agreement.

� The Panel also found that MOFCOM failed to disclose to US respondents the essential facts which formed the basis of its decision to impose definitive anti-dumping duties, as required under Article 6.9 of the Anti-dumping Agreement.

As a consequence of these violations, the Panel also found that China acted inconsistently



with the general obligations set forth in Article 1 of the Anti-dumping Agreement and Article 10 of the SCM Agreement to conduct investigations consistently with the provisions of these Agreements. However, it was observed that USA could not establish that China acted inconsistently with the provisions in respect of disclosure of essential facts and public notice for determination of residual rates. USA’s contention that MOFCOM’s definition of the domestic industry was inconsistent with Articles 3.1 and 4.1 of the Anti-Dumping Agreement and Articles 15.1 and 16.1 of the SCM Agreement, was further not agreed with by the Panel.

EU disputes Russian duties on light automobiles from Germany and Italy

In another dispute relating to certain duties on automobiles, and the second one between EU and Russia, the European Union has dragged the Russian Federation to the Dispute Settlement Body of the WTO (DS479). According to the EU’s communication dated 21-5-2014, it has sought consultations with Russia with respect to the College of the Eurasian Economic Commission’s (EAEC) Decision No. 113 of May 14, 2013 by which EAEC has levied anti-dumping duties on light commercial vehicles from Germany and Italy. EU has challenged EAEC’s decision under the WTO Anti-dumping Agreement on the following, among other, grounds: i) Russia’s failure to determine normal value, the export price and the dumping margin for each known exporter; ii) injury to Russian domestic industry was not determined based on positive evidence and lacked objective examination of injury factors; iii) as a result causal link determination,

which is the relation between injury to domestic industry and dumped imports from Germany and Italy, was flawed; iv) Russia failed to examine factors other than dumped imports which have been injuring the domestic industry in Russia. Imposition of duty was contended as inconsistent with Articles 2.2, 2.3, 2.4, 3.1, 3.2, 3.4, 3.5, 4.1, 6.2, 6.4, 6.5, 6.8, 6.9, 6.10, 9.2, 9.3 and 12.2 of the Anti-dumping Agreement. This is the third dispute filed by EU against Russia since last year, with one filed just last month [Refer, International Trade Amicus – May 2014 issue]. Other dispute concerning EU’s automobiles relates to certain, alleged to be discriminatory, ‘Recycling Fee’ imposed by Russia on imported motor vehicles (DS462).

Indonesia at centre of number of disputes

After last year’s first ground-breaking major WTO agreement in Indonesia, Indonesia was again in news at the WTO last month. While Indonesia has requested for establishment of panel, on 12-5-2014, against Pakistan’s initiation and continuation of certain anti-dumping and countervailing duties on imports of certain paper products from Indonesia (DS470), it has been dragged to the dispute settlement by New Zealand and USA, on 8-5-2014, on the issue of certain Indonesian prohibitions or restrictions on imports of horticultural products, animals, and animal products (DS477 and DS478).

In the dispute relating to animal products, New Zealand and USA contend that Indonesia, (1) imposes prohibitions or restrictions on imports of horticultural products, animals, and animal products; (2) imposes unjustified



and trade-restrictive non-automatic import licensing requirements on imports of such products; (3) accords less favorable treatment to imported products than to like products of national origin; (4) has imposed unreasonable and discriminatory pre-shipment inspection requirements; and (5) has failed to notify and publish sufficient information concerning its import licensing measures. The measures are alleged to be inconsistent with various provisions of GATT, 1994, Agriculture Agreement, Import Licensing Agreement and Agreement on Pre-shipment Inspection.

This licensing regime was also before the Committee on Import Licensing, where

Indonesia in response to various queries put up by Canada, EU, Japan, New Zealand and USA has on 13-5-2014 stated that the import licensing procedure is automatic inasmuch as license to import animal and animal products is granted to all applicants if applications fulfill the specified requirements. It may be noted that these restrictions were disputed earlier also by New Zealand and USA (DS466 and DS465) in August last year. Further, a Panel has been established, but not composed, in a similar dispute between USA and Indonesia (DS455) in April 2013 subsequent to which Indonesia has revised its provisions which are still seen as violative of WTO Agreements.

News NuggetsMultilateralism to stay despite RTAs - WTO Annual Report, 2014

The WTO released its Annual Report on 28-5-2014. Not surprisingly, the ‘Bali Package’ has been highlighted as an important milestone in negotiations. The WTO is now 159 member strong – notable new entrants being, Russia, Laos and Tajikistan. Yemen is also joining the WTO to take the tally to 160.

On dispute settlement, the report states that although the number fell as compared to 2012, there were 20 requests for consultation and use of the dispute settlement mechanism was significant. The adjudicating bodies examined 28 disputes, and the DSB established 12 panels. Further, the greatest number of disputes, eight in total, concerned either local content requirements in subsidies and investment measures or trade remedies, such

as anti-dumping and countervailing duties. From 1995 till end of 2013 USA has been the largest complainant and respondent. China has filed 12 complaints compared to being respondent in 31 cases.

An interesting observation in the report is that according to a World Bank study exports from least-developed countries’ (LDCs) are being constrained by higher SPS standards being used by BRICs (Brazil, Russia, India and China). However, SPS have been at issue in India-US (Poultry) and EU-US (use of hormones in livestock) disputes also. 122 anti-dumping actions were initiated for the period from January to June 2013 by members compared to115 in the same period in 2012.



Overa l l the repor t indicates that multilateralism is in place and despite the spurt in Regional Trade Agreements (RTAs), transparency and inclusiveness ensure that RTAs can take in more members like the Trans Atlantic Trade Partnership.

Customs valuation of software imported through USBs

As per GATT document VAL/M/10 dated 5-11-1984, decision regarding Valuation of Carrier Media Bearing Software for Data Processing Equipment, states that to determine customs value of imported carrier media bearing software, only the cost of carrier media shall be taken into account and not the cost of data/instructions carried on the media. In its proposal, Uruguay seeks an amendment that ‘carrier media’ will include USBs and similar devices which are presented to customs solely as a means of temporary storage of data for transfer of such data. The current definition of carrier media excludes

integrated circuits, semiconductors and similar devices or articles incorporating such circuits or devices.

Uruguay reasons that the definition of carrier media as it exists has given rise to a situation where data imported using a CD may be valued at USD 5 where as customs would value data imported using USB at USD 1000. It is understood that most members including Mexico, US, EU and Argentina support this view. The Technical Committee on Customs Valuation had also opined that the importer is interested in the data stored in the carrier media and subject to technical competences, the same may also be imported through satellite etc, without any bearing on customs duties. Hence, if the 1984 decision were to be implemented as such, certain anomalies could arise. A point mentioned by China was that the 1984 decision also excluded songs and movies from such valuation. China has also requested for data on trade volumes involved.

ADD – Disclosure of related company not producing/marketing said product, necessary

Authorities conducting anti-dumping investigations must be informed not only of the existence and identity of companies that are related and involved in the production and sale to the European Union of the product concerned, but also of all other related companies, so that it can assess requirement of verification of their possible involvement with the product

Ratio Decidendiconcerned. The appellant in the case before the EU’s General Court had contended that it was immaterial that they had not disclosed the existence of the two related companies, since those companies did not produce the product concerned and were related only indirectly to the applicants, through private holdings. It was also contended that one of the two companies though did market the product concerned, it had not exported it to the European Union during the investigation period and hence the information



Disclaimer: International Trade Amicus is meant for informational purpose only and does not purport to be advice or opinion, legal or otherwise, whatsoever. The information provided is not intended to create an attorney-client relationship and not for advertising or soliciting. Lakshmikumaran & Sridharan does not intend to advertise its services or solicit work through this newsletter. Lakshmikumaran & Sridharan or its associates are not responsible for any error or omission in this newsletter or for any action taken based on its contents. The views expressed in the article(s) in this newsletter are personal views of the author(s). Unsolicited mails or information sent to Lakshmikumaran & Sridharan will not be treated as confidential and do not create attorney-client relationship with Lakshmikumaran & Sridharan. This issue covers news and developments till 2nd June, 2014. To unsubscribe e-mail Knowledge Management Team at [email protected]

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that was omitted was not ‘necessary’ within the meaning of Article 18 of EU’s Basic Regulation, since the data for the companies that were related but not involved with the product concerned was not taken into account in calculating the dumping margin for the Group.

The court, however, noted that in order to prevent circumvention of ADD, the final individual dumping margins are calculated not by companies but by groups of related companies as a weighted average of the dumping margins of the companies which those groups comprise. Noting the WTO panel report in ‘United States — Anti-dumping and countervailing measures on steel plate from India’ (DS206), it was held that lack of full and wholly reliable information regarding the precise composition of the whole group of companies in question makes Commission’s entire calculation doubtful and hence undermines usefulness of the information submitted previously by the appellant. Since the information in question

was disclosed only after the verification visit, the court held that the authorities were correct in resorting to the facts available.

Further, on the question of time-limits within which any interested party must reply to an anti-dumping questionnaire, the court while placing reliance on the DSB’s Appellate Body Report in the dispute ‘United States — Anti-dumping measures on certain hot-rolled steel products from Japan’ (DS184) observed that though information cannot be rejected just because the deadlines have been missed, reasonableness of delay should be defined on a case-by-case basis, in the light of the specific circumstances of each investigation. Analysing various factors, as provided for in the WTO dispute between USA and Japan, the court found that period of 10 months within which the information was furnished was unreasonable. [Guangdong Kito Ceramics Co. Ltd. v. Council of the European Union – Judgment dated 22-5-2014 in case T-633/11, EU’s General Court (Second Chamber)]

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