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ARGENTINA - DEFINITIVE ANTI-DUMPING
(Continuation)
Article 6.8 and a mistaken link with Article 6.10
4.492 The EC has also stated in its defence that the circumstances provided for
in Article 6.8 were not met, claiming that Article 6.10 does not allow the
authority to base its determination on the facts available.
4.493 Its argument focuses on the alternatives offered by Article 6.10, which
assume that there is such a great number of exporters and producers that it is
impossible to carry out a determination. Thus, it allows the authority to limit
the examination to a reasonable number of interested parties using (1) a
statistically valid sample of exporters; or (2) the largest percentage of the
volume of exports.
4.494 In the present case Assopiastrelle offered a sample which was, in fact,
valid for the investigation (four exporting enterprises which, as stated by
Assopiastrelle, represented 70 per cent of exports to Argentina). However, the
EC appears to interpret Article 6.10 to imply that once the sample is limited to
a reasonable number of interested parties, the implementing authority cannot
weigh the quantity and quality of the information supplied.
4.495 Nor does Argentina agree with the EC�s interpretation in paragraph 49 of
its first oral statement � among the claims with respect to Article 6.8 �
according to which Article 6.10 establishes the possibility of (1) enlarging the
sample; (2) choosing a new sample; or (3) extending the examination to all
exporters.
4.496 This raises a question: if the DCD accepts a sample methodology, at the
request of the exporters, because it considers the sample to be representative
of the exporters, and the sample companies do not provide sufficient information
to enable it to arrive at a reasoned conclusion � refusal of access to
information � does the EC maintain that at this point in the investigation
(almost eight months after its initiation) the implementing authority should
enlarge the sample, choose a new sample or extend the examination to cover all
exporters, to request what they failed to request?
4.497 In any case, what led the implementing authority to use the facts
available was precisely that the four companies in question supplied
documentation for approximately 1.35 per cent of the value of domestic market
sales. Clearly, as Argentina said in paragraph 34 of our first oral statement,
the exporters submitted as the universe of their sales in the domestic market
precisely what is usually considered to be the margin of error � which cannot
exceed two or three per cent of the sample � in any statistical data.
4.498 In short, Argentina submits that the scant information provided in the way
of supporting documentation relates to Article 6.8 in that it implies a refusal
of access to necessary information. When the parties act in accordance with the
circumstances described in Article 6.8, the authority may use the facts
available to reach a determination.
4.499 Indeed, as Argentina stated in paragraph 24 of its second written
submission, what links Article 6.8 and 6.10 of the AD Agreement is the fact that
in normal circumstances, Article 6.10 applies, whereas if the authority does not
have sufficient information, Article 6.8 applies. In other words, if the
implementing authority had had the said information at its disposal in order to
make a dumping determination in accordance with Article 6.10, it would not have
had to apply Article 6.8 to Article 6.10.
(g) Replies of Argentina to the second set of questions by the Panel relating to
the EC�s claim under Article 6.8 of the AD Agreement
4.500 Argentina replied to the second set of questions by the Panel relating to
the EC�s claim under Article 6.8 of the AD Agreement as follows:
4.501 The Panel recalled that, in its reply a question by the Panel following
the first meeting, Argentina argues that �As stated in Exhibit ARG-19, the
confidentiality requested in the submission contained in File No. 061-010305/98
of 10 December 1998 was maintained throughout the proceedings. Although in the
last submission of 4 June 1999, the company provided information on exports to
Argentina, it could not be used, since the information provided in the lists
could not be checked against the information in the official registers or
against that submitted by the importers in their questionnaire responses. This
prevented the implementing authority from checking the accuracy of the
information provided.� The Panel asked Argentina to clarify why it believed that
this information could still not be used by DCD. Could the information still not
be used for reasons relating to the confidentiality of the information or does
this remark relate to Argentina�s argument concerning lack of supporting
documentation? The Panel further asked Argentina to explain why the DCD felt it
was necessary to cross-check the information and documentation provided by the
exporters with information from the official registers.
4.502 To this question, Argentina provided the following reply.
4.503 Throughout the proceedings, Argentina was faced with two different
situations. On the one hand, the confidentiality of much of the documentation
supplied was maintained. On the other hand, there was a failure to comply with
the formal requirements for the supporting documentation relating to export
transactions. More specifically, the documentation in question was submitted
without the consular certification required under Article 28 of the Argentine
Law on Administrative Procedures (Law No. 19549).
4.504 To illustrate this pointed, Argentina quoted the relevant part of the
instructions to exporters� questionnaire:
GENERAL INSTRUCTIONS FOR COMPLETING THE QUESTIONNAIRE:
2. The replies and documentation attached hereto must be submitted in Spanish.
Where other languages are used, a translation by a registered translator must be
provided. Documents issued by foreign authorities must be authenticated by
consular or diplomatic officials of the Republic. The signatures must, in turn,
be authenticated by the Ministry of Foreign Affairs, International Trade and
Worship of Argentina (Article 28 and related articles of the System of
Administrative Procedures � Law No. 19.549, Regulatory Decree No. 1759/72,
Regulatory Enactment of 1991 by Decree No. 1883/91).
4.505 In spite of the above, and given that it was not the intention of the
investigating authority to reject the information submitted, the DCD proceeded
to cross-check the information with the documentation in the record obtained
from the official registers and from the other parties involved in the
proceedings, specifically the importers. It is all of this information that made
up the 30 sets of documentation in these proceedings and thus constituted the
essential facts of the investigation which determined the conclusions reached.
4.506 In fact, this cross-checking revealed differences. For example, the
implementing authority found information that had been submitted by the
importer, in this particular case Quadri y Cia. S.A., which had not been
supplied by the exporter, as well as the information on exports from the
exporter that was not supplied by the importer. In other cases, the implementing
authority detected export and import transactions that had not been notified by
any of the parties, but that appeared in the official Argentine customs
registers.
4.507 Cross-checking of information from different sources enables the
implementing authority to bring together elements with a view to providing a
full picture of trade operations with the participation of the exporting firm,
the importers and the official Argentine registers. Thus the authority is able
to double check every aspect of the facts and weed out the conjectures,
contributing to the reliability of its conclusions as to what actually took
place.
4.508 The Panel recalled that Argentina replied to a question by the Panel
following the first meeting as follows: �The DCD�s concern with regard to the
confidential nature of the information during the preliminary investigation
persisted even after the confidentiality of the product code and costs of
production was removed, since the substantial information needed to determine
the normal value, the export value and the margin of dumping remained
confidential until the final determination (and is still confidential)�. The
Panel asked Argentina to explain which substantial information remained
confidential until the final determination.
4.509 To this question, Argentina gave the following reply.
4.510 In its reply to a question by the Panel following the first meeting,
Argentina provided an exhaustive list of information submitted by the exporters
making up the sample and of the accompanying Annexes for which confidentiality
was requested, indicating for each case whether a non-confidential summary was
provided.
4.511 However, as it regards normal value, Argentina wished to explain that the
supporting information was not only confidential, and remained that way
throughout the proceedings, but in fact it was inappropriate and ill-suited for
the purposes of determining the normal value. In other words, in this specific
case, the most important problem was the lack of representativeness of the
supporting documentation provided for the purposes of determining the normal
value.
4.512 As regards the export price, the supporting documentation supplied did not
enable the authority to carry out the task mentioned in the preceding question.
This explains why the implementing authority proceeded the way it did.
4.513 The Panel recalled that, with respect to Annexes IV-VI, the exporters
provided information for which they requested confidential treatment, as well as
a non-confidential summary of the information concerned. The Panel recalled
further that this summary was prepared by way of indexing all the figures
provided in those Annexes. The Panel asked the parties why the DCD was of the
view that indexation did not permit a �reasonable understanding of the substance
of the information submitted in confidence�.
4.514 In replying to this question by the Panel, Argentina recalled that Exhibit
ARG-20 contained, as an illustration, the non-confidential summaries submitted
by the exporting firms for Annexes III, VII, VIII, IX, X and XI to the
questionnaires. In addition, Argentina wished to submit Exhibit ARG-24,
containing the non-confidential summaries for Annexes IV, V and VI. Thus, in the
opinion of Argentina, the Panel had before it all of the relevant
non-confidential summaries provided by the exporting firms and would be able to
appreciate that it was impossible, in view of their nature, to arrive at any
public conclusions on the basis thereof.
4.515 The Panel recalled that, with respect to Annexes III and VII-XI of the
investigation questionnaire, the exporters provided information for which they
requested confidential treatment, although they did not provide a
non-confidential summary of the information concerned. The Panel asked the
parties whether the exporters provided a justification as to why such
information was not capable of summarization (that is, a justification separate
from the statement that the information in question required confidential
treatment). If this was so, the Panel asked the parties to provide it with
copies of the relevant evidence in the record.
4.516 Argentina replied that it had dealt with this question exhaustively
before, but for the purposes of further clarification it wished to refer the
Panel to the documentation provided in Annexes ARG 20 and ARG-24.
4.517 Argentina added that, as could be seen in Annexes III, IV, V, VI, VII,
VIII, IX, X and XI, the request was justified in the following terms: �The
request for confidentiality of this information is based on reasons of
competition�.
4.518 If the exporters did provide a justification as to why the information for
which confidential treatment was requested was not capable of summarization, the
Panel asked whether the parties were of the view that under Article 6.5.1 of the
AD Agreement investigating authorities have the right to contest such
justifications. If so, the Panel asked further, did the DCD conclude, contrary
to the exporters, that the information in question could in effect be
summarized? If the DCD made this conclusion, could Argentina explain the DCD�s
reasoning?
4.519 Argentina replied to this question by saying that it was understood that
the parties concerned must do their utmost to provide the implementing authority
with the elements it needed to reach public conclusions (as required in
investigations such as this one to avoid further consultations such as those
that took place subsequently because the confidential nature of the information
made it impossible for the authority to provide a full report of how it had
proceeded � for example, in the case of the 1.92 per cent).
4.520 The Panel asked the parties to comment on the following statement in
paragraph 107 of the report of the Appellate Body in the case Thailand �
H-Beams, in which the Appellate Body addressed the question of the use of
confidential information by the investigating authority as a basis for an
authority�s final determination:
An anti-dumping investigation involves the commercial behaviour of firms, and,
under the provisions of the Anti-Dumping Agreement, involves the collection and
assessment of both confidential and non-confidential information. An injury
determination conducted pursuant to the provisions of Article 3 of the
Anti-Dumping Agreement must be based on the totality of that evidence. We see
nothing in Article 3.1 which limits an investigating authority to base an injury
determination only upon non-confidential information (Appellate Body Report,
Thailand � Anti-Dumping Duties on Angles, Shapes and Sections of Iron or
Non-Alloy Steel and H-Beams from Poland, WT/DS122/AB/R, adopted 5 April 2001, at para. 107).
4.521 Argentina replied that the DCD had proceeded in accordance with the
legislation in force for the investigation of alleged dumping. This was
reflected in the comprehensive survey conducted by the DCD with respect to the
documentation in the record of the proceedings and to its status.
4.522 The impossibility of reflecting all of the information supplied in the
technical reports did not imply that the implementing authority ignored the
information. However, it was the status of the information and the possibility
of arriving at conclusions on the basis thereof that determined whether it could
be considered.
4.523 The Panel recalled that Exhibit EC-10 was a report of the meeting with the
case-handlers on 11 May 1999 from the representatives of the exporters in
Argentina to the exporters� lawyers in Brussels. The report reflected the
discussions with the case handlers, concerning the non-confidential information
that needed to be provided, in the following manner:
Additionally, this information must cover an �important� part of total sales in
the domestic market (you said 50 per cent � I don�t know, I guess that is
largely enough), the coverage must be September 1997 � October 1998, and we have
to present invoices (with confidential status) supporting this non-confidential
version.
4.524 The Panel asked Argentina whether this was an accurate reflection of what
was said during that meeting and of the requests for information that were made.
Further, the Panel asked Argentina whether the case-handlers at the 11 May
meeting requested invoices from two exporters only (Casalgrande and Bismantova).
The Panel asked the parties next whether the 50 per cent coverage mentioned in
this paragraph related to the provision of non-confidential information, or to
the documentation supporting the information provided. The Panel also asked the
parties whether the 50 per cent related to all sales made in the home market, or
only to the sales reported by the exporters.
4.525 To this question, Argentina provided the following reply.
4.526 The meeting held on 11 May 1999 was in fact an information meeting held at
the request of the Italian exporting firms for the purpose of clarifying, for
the legal representatives of the exporting firms, the points they considered to
be of interest to them. Thus, the results and exact terms used in this meeting
were not recorded in writing in the record of the proceedings.
4.527 Although it is impossible to be certain of the actual terms used, the
terms reflected in the quoted statement correspond fairly closely to what would
be in the interests of any anti-dumping proceeding. Thus, it is helpful in all
anti-dumping proceedings to have supporting documentation corresponding to a
high percentage of trade transactions in respect of the goods under
investigation. In this case, it would be understood that what the investigating
authority wanted was to have information corresponding to sales transactions in
the Italian domestic market, and in view of the proposal submitted with respect
to the Italian producing firms, this would mean documentation in respect of the
four firms making up the sample.
4.528 As regards the question of whether the information was requested from Bismantova and Casalgrande only, the answer is that it was requested for the
four firms making up the sample.
4.529 In other words, the sample having been accepted, the high percentage of
supporting information to be provided concerned the exporters making up the
sample.
4.530 In this connection, while Argentina recognized the possibility of
requesting confidentiality for documentation that warrants such treatment, such
requests could only be considered, and taken into account in conjunction with
the overall treatment of the other elements in the proceedings, provided an
adequate non-confidential summary was supplied.
4.531 Regarding the volume of the supporting documentation requested (required
percentage), this applies to the totality of information concerning trade in the
product under investigation, and domestic market sales of the four firms making
up the sample, with full details of the transactions carried out during the
period defined and where they are reflected. The non-confidential summary
requested refers to the totality of sales of the product at issue during the
period in question, with a reservation as to the publication of data which might
be sensitive for the firms concerned.
4.532 The Panel recalled that, in replying to a question by the Panel following
the first meeting, Argentina stated that the 1.92 per cent figure mentioned on
page 29 of the DCD�s Final Determination, referred to the supporting
documentation covering domestic market sales reported by the four companies
participating in the investigation. The Panel asked Argentina to explain how
this figure was calculated. Specifically, the Panel wished to know whether the
total home market sales (the denominator in this calculation):
included sales by all producers in Italy, independently of whether they exported
to Argentina?
included sales by exporters not in the sample?
included sales of models not exported in significant quantities to Argentina?
included all of the sales made of any given model? (that is, they did not refer
to a sample of sales)
4.533 Likewise, the Panel wished to know if the sales for which invoices were
provided (the numerator in the calculation):
- related to all four companies?
- excluded sales to related parties and sales at prices below cost?
4.534 The Panel asked Argentina to provide it, if possible, with the figures
that went into the calculation.
4.535 Argentina replied that, as already stated on several occasions, the DCD
interrelated the information available in the questionnaires provided in the
course of the proceedings, and concluded that the documentation supplied covered
that percentage in relation to total sales on the Italian domestic market.
4.536 Unfortunately, this was a good example of the limitations facing the
implementing authority as a result of the request for confidentiality of the
information provided. In this case, the Argentine authority was limited in the
reply it could give to the question, in that it could not reveal the numerical
calculation made, but for the purposes of that calculation, it considered the
information corresponding to the aggregate total amount of sales reported for
the Italian domestic market by the four firms in relation to the total obtained
from the documentation contributed by those firms during the proceedings.
(a) Arguments of Japan in its written submission relating to the EC�s claim
under Article 6.8 of the AD Agreement
4.537 In its written submission, Japan made the following arguments relating to
the EC�s claim under Article 6.8 of the AD Agreement.
4.538 The EC claimed that the DCD disregard the normal value and export price
information provided by the exporters inconsistently with Article 6.8 and Annex
II. The relevant legal provisions are those in AD Agreement Article 6.8:
In cases in which any interested party refuses access to, or otherwise does not
provide, necessary information within a reasonable period or significantly
impedes the investigation, preliminary and final determinations, affirmative or
negative, may be made on the basis of the facts available. The provisions of
Annex II shall be observed in the application of this paragraph.
4.539 Article 6.8 must be read in context with the other provisions on evidence
in Article 6 and the provisions of Annex II. When so read, it is clear that
Article 6 as a whole establishes a strong preference for using actual
information collected from interested parties in an antidumping investigation.
Article 6.1, for instance, provides the right for interested parties to submit
information and to obtain the information submitted by other interested parties.
Article 6.7 provides for the investigations in the territory of other Members to
verify the information submitted. Article 6.8 provides for recourse to �the
facts available,� but only in limited circumstances when an interested party has
failed to cooperate. Annex II further develops conditions on the use of such
�best information available.� All of these provisions are premised on a
preference for real information collected during the investigation and
determined to be accurate. It follows that antidumping authorities can only rely
on the allegations in an antidumping petition or other �facts available� when
real information is simply not available. Where real information has been
submitted within a reasonable period and found to be accurate during the course
of an investigation, antidumping authorities must rely on it, and cannot give
preferential treatment, or even equal treatment to unverified allegations by the
petitioner.
4.540 The practical reasons for this hierarchy of factual sources in the AD
Agreement are well illustrated by the DCD�s final dumping determination in the
ceramic tiles investigation. Rather than rely on real, verifiable information
about actual prices paid for ceramic tile in the Italian market, DCD appears to
have relied wholly or in part on published lists of prices to end-users supplied
by the petitioner. According to the EC written submission, these prices to
end-users bear little resemblance to the prices actually charged to distributors
and wholesalers, who normally receive large discounts of up to 75 per cent of
the list price. These end-user prices were compared not to end-user prices in
the Argentine market but to prices for export sales to distributors and
wholesalers in Argentina. Apparently there was no on-the-spot verification of
these price list data.
4.541 Paragraph 7 of Annex II provides that �if an interested party does not
cooperate and thus relevant information is being withheld from the authorities,
this situation could lead to a result which is less favourable to the party than
if the party did cooperate.� As the panel noted in the recent dispute on United
States � Hot-Rolled Steel, �any �less favourable� result under paragraph 7 of
Annex II may only be appropriate in the case of an interested party who does not
cooperate� (Panel Report, United States � Anti-Dumping Measures on Certain
Hot-Rolled Steel Products from Japan, WT/DS184/R, circulated on 28 February
2001, at para. 7.71). The facts as presented by the EC indicate that the four
Italian respondent tile exporters did cooperate; if this is in fact the case,
the use to any extent of �facts available� was inconsistent with Argentina�s
obligations under Article 6.8 of the AD Agreement.
4.542 Article 6, and the information collection exercise it provides for, must
be interpreted in a manner that gives them meaning. If antidumping authorities
were free to disregard the information collected, then this information
collection exercise would be pointless. The provisions of Article 6.1 would be a
nullity, and the limitations specified in Article 6.8 would be meaningless as
well. Article 6, and Annex II, reflect the concept that the legal regime of
antidumping is based on an investigative process in which respondents cooperate
with the investigating authority to produce real data, relating to verifiable
facts, so as to arrive at an antidumping margin that reflects as closely as
possible the actual degree of dumping that may or may not have taken place. If
investigating authorities can simply disregard with no explanation the data
collected from respondents, respondents have no incentive to cooperate, and the
purposes of this regime are frustrated.
4.543 The DCD final determination indicates that the deadline set for receipt of
information from the four responding firms was 9 December 1998, and the
information was received only on 10 December 1998. A similar situation occurred
in the antidumping investigation examined in United States � Hot-Rolled Steel.
In that case, certain information requested was supplied after the deadline set
by the US Department of Commerce (DOC) but well before the time of verification;
DOC then rejected this information and applied the �facts available� instead.
The panel in that case noted that the AD Agreement:
establishes that facts available may be used if necessary information is not
provided within a reasonable period. What is a �reasonable period� will not, in
all instances be commensurate with pre-established deadlines � a rigid adherence
to such deadlines does not in all cases suffice as the basis for a conclusion
that information was not submitted within a reasonable period and consequently
that facts available may be applied (Panel Report, United States � Anti-Dumping
Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/R, circulated
on 28 February 2001, at para. 7.54).
4.544 Noting the provisions in paragraph 3 of Annex II, the panel went on to
find:
Particularly where information is actually submitted in time to be verified, and
actually could be verified, we consider that it should generally be accepted,
unless to do so would impede the ability of the investigating authority to
complete the investigation within the time limits established by the Agreement
(Panel Report, United States � Anti-Dumping Measures on Certain Hot-Rolled Steel
Products from Japan, WT/DS184/R, circulated on 28 February 2001, at para. 7.55).
4.545 The panel then determined that an unbiased and objective investigating
authority could not have reached the conclusion that the company concerned had
failed to provide necessary information within a reasonable period. On this
basis, the panel concluded that DOC had acted inconsistently with Article 6.8 in
applying facts available in making its dumping determination.
4.546 In the ceramic tiles investigation, the DCD final dumping determination
states that DCD received responses from the four firms in the agreed sample of
respondent exporters on 10 December 1998. While this was one day later than the
deadline, the information was clearly submitted within a �reasonable period� in
terms of Article 6.8. Since the purpose of timely submission is to enable the
authorities to verify the information and complete their investigation in a
timely manner, if DCD did not conduct any verification then Argentina cannot now
claim that it had a right to disregard this information, to give equal status to
unverified allegations by the petitioner or to give such allegations any status
at all in its investigation. In consequence, it appears that Argentina�s
treatment of information on normal values was inconsistent with Article 6.8 and
Annex II of the AD Agreement.
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