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ARGENTINA - DEFINITIVE ANTI-DUMPING
(Continuation)
4.548 According to the EC, the DCD never informed the exporters at any time
during the investigation that the information they had supplied on normal value
and export prices had been disregarded. In this case, if DCD did not verify this
information, in spite of the fact that the four firms had consented in advance
to verification, the firms were reasonably entitled to assume that DCD was
satisfied with the information and would rely entirely on it in its dumping
calculations. The DCD final dumping determination provides no explanation of why
DCD failed to rely entirely on the information submitted when it computed the
normal values in this case. Moreover, Resoluci�n 1385/99 provides no explanation
at all of the basis on which the normal values therein were derived, what
factors were taken into account or what treatment was accorded to the
information received from the four exporters in the agreed sample.
4.549 Article 6.8 of the AD Agreement specifically requires that the provisions
of Annex II be observed. Respect for the provisions of Annex II is not only an
obligation itself, since (under Article 18.7) Annex II is an integral part of
the AD Agreement; it is also a limiting condition on recourse to Article 6.8. If
the facts are as alleged by the EC, then DCD�s failure to inform the four
exporters that their information would not be taken into account, its failure to
accord them opportunities to supply more information, and its failure to publish
any explanation why DCD did not wholly rely on the submitted information would
therefore appear to constitute not only violations of Annex II, but additional
reasons why this determination was in violation of Article 6.8.
(b) Arguments of Japan in its oral statement relating to the EC�s claim under
Article 6.8 of the AD Agreement
4.550 In its oral statement, Japan made the following arguments relating to the
EC�s claim under Article 6.8 of the AD Agreement.
4.551 The parties to this dispute disagree concerning whether the Italian
respondents cooperated fully with Argentina�s investigation. It is for the Panel
to determine the facts of this case and to apply the appropriate burden of
proof. However, Japan has a few further legal points on Annex II and Article
6.8.
(i) Information requested in the questionnaire
4.552 Argentina claims that the questionnaire responses received by DCD were
non-responsive because the Italian producers did not provide supporting
documentation for their home market sales. However, if DCD requested that
respondents submit complete documentation for each such sale reported, this
request goes well beyond any reasonable demand on the respondent. Checking
documentary proof for transactions is for the verification process, not for the
questionnaire. Submissions are verified by reviewing a sample of invoices during
an on-the-spot investigation.
4.553 Paragraph 3 of Annex II requires the investigating authority to take into
account �all information which is verifiable.� As the panel in Guatemala �
Cement (II) found, ��best information available� should not be used when
information is �verifiable,� and when �it can be used in the investigation
without undue difficulties�� (Panel Report, Guatemala � Definitive Anti-Dumping
Measures on Grey Portland Cement from Mexico, WT/DS156/R, adopted 17 November
2000, at para. 8.252).
4.554 Respondents� alleged failure to provide supporting documentation in
questionnaire responses does not mean the information they submitted was not
verifiable, since the sales information could have been verified by conducting
an on-the-spot investigation in Italy under Article 6.7. If Argentina chose not
to conduct such an investigation, for reasons that did not relate to any action
by the respondents unreasonably impeding the investigation, Argentina cannot now
claim the information was not �verifiable.� Moreover, under paragraph 5 of Annex
II, if the EC provides a prima facie case that the Italian respondents did act
to the best of their ability, then Argentina was not justified in rejecting the
information that the respondents did supply, unless Argentina can rebut that
prima facie case.
(ii) Demands to waive claims of confidential status
4.555 Argentina�s first written submission discusses in paragraphs 20-21, 25-27
and 30-42 correspondence in which DCD appears to have demanded that Italian
respondents waive claims of confidential status for certain sensitive
information. Argentina appears to have taken the position that DCD could only
make a final determination based on non-confidential information, and if DCD did
not have the respondents� information in non-confidential form, then DCD was
entitled to proceed on the basis of the �facts available.�
4.556 This position is legally unfounded (and unusual). Antidumping authorities
in many Members reach and announce final dumping determinations based strictly
on information submitted in confidence. The provisions on public notice in
Article 12.2 of the AD Agreement specifically defer to the �requirement for the
protection of confidential information�(see Articles 12.2.1, 12.2.2, and
12.2.3). Article 6.5 of the AD Agreement recognizes that antidumping
investigations necessarily concern issues and data deeply sensitive to
interested parties from a business standpoint, and requires authorities to keep
such information confidential. A recent Appellate Body report on Thailand-H
Beams also made clear that the AD Agreement �permits an investigating authority
making an injury determination to base its determination on all relevant
reasoning and facts before it�, inclusive of the 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. 111).
4.557 Article 6.5.1 requires the investigating authority to require interested
parties submitting confidential information to furnish non-confidential
summaries or to provide a statement of the reasons why summarization is not
possible (Panel Report, Guatemala � Definitive Anti-Dumping Measures on Grey
Portland Cement from Mexico, WT/DS156/R, adopted 17 November 2000, at para.
8.213). However, it only requires that the non-confidential summary must �be in
sufficient detail to permit a reasonable understanding of the substance of the
information submitted in confidence� (for instance, if a respondent submits a
series of prices, its non-confidential summary could present the numerical
information in grouped form, or in terms of indices or ranges, or approximate
figures). If an investigating authority demands that the respondent submit a
summary disclosing the essence of what is confidential in the information
submitted, the investigating authority is not requesting a non-confidential
summary under Article 6.5.1, but is violating its duties under Article 6.5.
4.558 Article 6.5.1 also recognizes that some information is not susceptible of
summary. For instance, customer lists may well not be susceptible of summary,
whether submitted by a respondent in a dumping investigation, or by a petitioner
in an injury investigation. In Guatemala � Cement (II), at para. 8.211, the
panel found that information of the following sort is �not generally capable of
summarization �in sufficient detail to permit a reasonable understanding of the
substance�: technical information on Cementos Progreso�s principal equipment, a
contract between Cementos Progreso and F.L. Smith & Co., and tables used to
prepare questionnaires and reconcile the cost structure calculated for
production of grey portland cement with the accounting statements.
4.559 Article 6.5.2 provides that if the authorities find that a request for
confidentiality is not warranted, and if the supplier is unwilling either to
make the information in question public or to authorize its disclosure in
generalized or summary form, the authorities may disregard the information
unless it is demonstrated that the information is correct. However, footnote 18
provides that Members may not act in an arbitrary manner with regard to requests
for confidentiality, and Article 6.5.1 recognizes that some requests for
confidentiality are genuinely warranted, in situations where information is �by
nature confidential� under Article 6.5, and the information submitted to the
authorities is genuinely not capable of summary. In such a case, an unbiased and
objective investigating authority could not find that a request for
confidentiality is not warranted, and it could not force a respondent to choose
between disclosing company secrets to its competitors and being subjected to
�best information available.� As the panel in Guatemala � Cement (II) found,
�the Antidumping Agreement does not require cooperation by interested parties at
any cost. Although there are certain consequences (under Article 6.8) for
interested parties if they fail to cooperate with an investigating authority, in
our view such consequences only arise if the investigating authority itself has
acted in a reasonable, objective and impartial manner� (Panel Report, Guatemala
� Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico
(WT/DS156/R), adopted 17 November 2000, at para. 8.251).
(iii) Consequences following from Article 6.5.2
4.560 Argentina also mischaracterizes the legal consequences when investigating
authorities may disregard information under Article 6.5.2. The authorities may
not disregard the information if it can be �demonstrated to their satisfaction
from appropriate sources that the information is correct,� and they remain
subject to Article 6.6 of the AD Agreement, which applies except in
circumstances provided for under Article 6.8 (on Article 6.6, see Panel Report,
Guatemala � Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico
(WT/DS156/R), adopted 17 November 2000, at para. 8.172).
4.561 Argentina appears to argue in paragraph 20 that failure to submit a
non-confidential summary ipso facto impedes the antidumping investigation,
creates circumstances provided for in Article 6.8, and thereby authorizes the
investigating authority to make determinations on the basis of the �facts
available�. This argument must be rejected.
4.562 Failure to submit a non-confidential summary does not impede an
investigation by the antidumping authorities in the meaning of Article 6.8. The
antidumping authorities are fully capable of drawing conclusions based on the
confidential information if it can be demonstrated to their satisfaction from
appropriate sources that it is correct. Therefore, even if lack of a
non-confidential summary impedes access to information by other interested
parties, this is still not a basis for finding that the investigation has been
impeded in the sense of Article 6.8.
4.563 Thus, an investigating authority cannot automatically go to �facts
available� even if an interested party failed to comply with Article 6.5.1
(though such is not the case with the Italian respondents in this
investigation). That argument dangerously confuses two different concepts within
Article 6, and compromises the rights of respondents under the AD Agreement. The
panel must reject it.
4.564 It is for the Panel to probe the facts of this case, which appear so
differently in the presentations of the two parties. However, the Panel might
raise the following issues:
- Argentina argues in paragraph 22 that failure to supply information in US$
constitutes a lack of cooperation. Historical US dollar and Italian lira
exchange rates are a matter of public record. Why was Argentina unable to
perform this calculation on its own? Does a failure to provide data converted
into US$ justify use of entirely different data?
- In paragraph 50, Argentina seems to imply that because the sales in a sample
were less than 2 per cent of total Italian domestic market sales, the sample was
ipso facto unreliable for determining normal value. This argument is wrong. The
AD Agreement recognizes that there may be some antidumping investigations with
very large numbers of exporters and importers (such as cases involving
horticultural products). Article 6.10 provides for use in such situations of
�samples which are statistically valid on the basis of information available to
the authorities at the time of the selection.� The legal requirement is that the
sample must be statistically valid, not that it must meet or exceed some
arbitrary minimum percentage of the universe sampled.
(a) Arguments of Turkey in its written submission relating to the EC�s claim
under Article 6.8 of the AD Agreement
4.565 In its written submission, Turkey made the following arguments relating to
the EC�s claim under Article 6.8 of the AD Agreement.
(i) Facts available
4.566 The EC submits that Argentina acted inconsistently with Article 6.8 and
Annex II of the AD Agreement by disregarding the normal value and export price
information provided by the Italian exporters and substituting information from
other sources, including the petitioner. The EC, further contends that, Article
6.8 and Annex II of the AD Agreement, only allow the investigating authorities
to resort to �facts available� in those cases where the exporters do not provide
timely necessary information or significantly impede the investigation.
4.567 Turkey submits that the wording of Article 6.8 makes clear the
circumstances under which an investigating authority may have resort to the
�facts available� provisions of the AD Agreement. If an interested party
�refuses access to� necessary information within a reasonable period, �otherwise
does not provide� necessary information within a reasonable period, or
�significantly impedes the investigation� the investigating authority may make
determinations on the basis of the facts available.
4.568 Turkey considers that, taking into account the above mentioned conditions,
the investigating authorities shall avoid the discretionary implementation of
�facts available� and given the provisions of paragraph 5 of Annex II, shall
refrain from disregarding the information of the parties, provided that it is
timely and the interested party had acted to its best ability. Recourse to facts
available should not be punitive, instead the authorities should implement it
with due caution to supply the lacking information not made available to them by
the interested parties.
4.569 Turkey further submits that, investigating authorities are not free to
choose between information supplied by the parties without giving any reason and
any opportunity to respondents to provide explanations. On the contrary, the
authorities may use information other than that supplied by the interested
parties, only if they �have to� and �with special circumspection� as required by
the provisions of paragraph 7 of Annex II. Thus, this Article does not give the
authority the right to choose between the primary and secondary source of
information, contrariwise limits the usage of information from a secondary
source.
4.570 Moreover, it is also worth noting that paragraph 3 of Annex II, provides
that, �All information which is verifiable, which is appropriately submitted so
that it can be used in the investigation without undue difficulties, which is
supplied in a timely fashion, (...) should be taken into account when
determinations are made.� Particularly, as stated clearly in this Article, where
information is actually submitted in a timely fashion and is verifiable, Turkey
considers that it should be accepted, unless doing so prevents the timely
completion of the investigation.
(ii) Failure to inform the interested parties that their information was
rejected
4.571 The EC submits that, the Argentinean authorities had acted inconsistently
with paragraph 6 of Annex II of the AD Agreement by failing to explain the
reasons of rejection of the information provided by the respondents.
4.572 Turkey submits that paragraph 6 of Annex II clearly sets forth the
obligation of the investigating authority to inform the interested party of the
reasons of rejection and grant them an opportunity to provide further
explanations within a reasonable period.
4.573 In Turkey�s view failure to do so, should be deemed to impair the right of defence of respondents and be inconsistent with the provisions of the paragraph
6 of Annex II.
(b) Arguments of Turkey in its oral statement relating to the EC�s claim under
Article 6.8 of the AD Agreement
4.574 In its oral statement, Turkey made the following arguments relating to the
EC�s claim under Article 6.8 of the AD Agreement.
(i) Facts Available
4.575 Considering the first issue, Turkey�s submission, in general, covered
Turkey�s understanding of the requirements of Article 6.8 and Annex II.
4.576 In this respect, Turkey submits that, although conditions for recourse to
facts available is mentioned in Article 6.8 in connection with Annex II, rising
number of members are using this provision in many cases to create artificial
dumping margins.
4.577 Turkey considers that, the wording of Article 6.8, puts forward the only
cases where the investigating authorities may make use of the facts available.
4.578 Only where, the interested parties, �refuses access to� or �doesn�t
provide necessary information� �within a reasonable period� or �significantly
impedes the investigation�, authorities may recourse to �facts available� and
preliminary and final determinations affirmative or negative may be made on such
basis. This explicit wording in Article 6.8 and other paragraphs of both Article
6 and Annex II, leave no room for misinterpretations and they actually
demonstrate that the preference should be given by the authorities to make use
of �actual information� obtained in the course of the investigation and
determined to be accurate.
4.579 In this respect, in accordance with paragraph 3 of Annex II, the
investigating authorities, when making determinations are required to take into
account all information which is verifiable and supplied in a timely fashion,
appropriately submitted so that it can be used in the investigation without
undue difficulties.
4.580 Likewise, paragraph 7 of Annex II, explicitly puts forward the conditions
�have to� and �special circumspection� referring to the usage of information
from a secondary source which, in other words, limits the freedom of
substitution of the information supplied by the respondents.
4.581 Furthermore, paragraph 1 of Annex II, for use of �facts available� and in
particular, information in the application, puts forward the condition if
information is not supplied within a �reasonable time�.
4.582 To sum up, generally speaking, authorities recourse to �facts available�
in an investigation should not be of punitive feature. Thus, Turkey submits
that, in any given case where information submitted is not lacking or misleading
and timely submitted so that it can be verified, should be dealt with.
4.583 Nevertheless, considering the EC�s submission, it appears to Turkey in
this case that the investigating authorities� recourse to �facts available� is
not justified, taking into account the above mentioned reasons and EC�s
submission which states that the responses of the parties concerned were
sufficient, verifiable and timely submitted.
(ii) Failure to inform the interested parties that their information were
rejected.
4.584 Turkey views the provisions of paragraph 6 of Annex II as an important
element for proper conduction of anti-dumping investigations. It is deemed
essential for proper functioning of a healthy decision making process by the
authorities and, on part of interested parties, for predictability and
transparency of decisions taken. Considering the growing number of new
investigations initiated, the vitality of the very function of this provision
becomes even more important.
4.585 In this regard, Turkey submits that this paragraph clearly sets forth the
obligation of the investigating authority to inform the interested party of the
reasons of rejection and grant them an opportunity to provide further
explanations within a reasonable period.
4.586 Turkey considers that, failure to inform the interested parties that their
information were rejected may be deemed to be violation of right of defence of
the respondent. As a matter of fact, this provision should be dealt together
with Article 6.8, since in many cases recourse to facts available comes along
with such practice.
4.587 From the respondent�s point of view, having not received any notice of
rejection, one may consider that, its own information was deemed sufficient for
the purposes of investigation, thus may not necessarily be in need of supplying
further explanatory information or supporting evidence to the authority.
Eventually, the respondent might be informed about the rejection of its
information at the final disclosure stage, at the earliest, which would
significantly limit its right to defend.
4.588 Turkey concludes that, as alleged by the EC, if the exporters own
information was not used and exporters were not timely informed of such practice
and reasons thereby, this behavior may well be deemed inconsistent not only with
paragraph 6 of Annex II but also with Article 6.8 of the Agreement.
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