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ARGENTINA - DEFINITIVE ANTI-DUMPING
(Continuation) 4.1153 The United States also addressed certain arguments by Japan
which go well beyond what the EC and Turkey have argued with respect to Article
6.9. First, Japan states that Article 6.9 requires authorities to conduct a
so-called �disclosure conference� with exporters or their representatives.
However, Article 6.9 makes no mention of �disclosure conferences.� Indeed, as
discussed previously, Article 6.9 does not require any particular method for
informing parties of the essential facts under consideration.
4.1154 Second, Japan also appears to argue that in addition to requiring that
parties be informed of the essential facts under consideration, Article 6.9
requires that interested parties be informed of the authority�s reasoning prior
to its final determination. However, the language of Article 6.9 only addresses
facts and not legal reasoning. Moreover, this argument would, in essence,
require the investigating authorities to make multiple interim determinations,
contrary to what is contemplated by Articles 7 and 12.
5.1 On 20 August 2001, the EC submitted a written request for review by the
Panel of particular aspects of the interim report issued on 25 July 2001.
Argentina did not provide any comments on the interim report. Argentina
commented on the EC's request for interim review on 28 August 2001. Neither
party requested an additional meeting with the Panel.
5.2 We have reviewed the comments presented by the EC and the reaction thereto
by Argentina and have finalized our report, taking into account these comments
which we considered justified.
5.3 The EC notes that the second sentence of paragraph 6.30 of the Panel's
interim report does not accurately reflect its position and suggests certain
language to the Panel for completing the text. We are of the view that paragraph
6.30 is an accurate reflection of the EC's position on this issue. We note that
the language suggested by the EC in its interim review comments was not used by
the EC in its submissions to the Panel. Accordingly, we saw no reason to amend
the text as requested by the EC.
5.4 The EC states that the exporters had provided the evidence specifically
requested by the DCD and that therefore the Panel's statement in paragraph 6.62
of the interim report that "no documentary evidence of any kind was submitted"
is inaccurate. Argentina comments that the Panel's statement is correct in so
far as it refers to supporting documentation for the information supplied. We
decided to amend the text of this paragraph taking into account the comments
made.
5.5 The EC notes, in respect of footnote 89, that in United States �
Anti-Dumping Measures on Certain Hot Rolled Steel Products from Japan, the
Appellate Body has confirmed that in Article 9.4 the words �margins� means the
individual margin determined for each investigated exporter. The EC makes no
suggestion as to how the Panel should use the ruling cited. Argentina comments
that the EC should not be allowed to rely on this decision in support of its
argument since this decision was issued well after the time for presentation of
arguments by the parties. We considered that since footnote 89 refers to the
arguments presented by the EC on this issue, it would not be appropriate to
incorporate any reference to this decision which was not and could not have been
part of the EC's argument as it was issued only days before the issuance of the
interim report. Accordingly, we decided to leave footnote 89 unchanged.
5.6 The EC suggests that the Panel completes the last sentence of paragraph 6.89
by adding language used by the EC in its first submission to the Panel.
Argentina comments that it is up to the Panel to decide on the language chosen
to represent a party's position. In light of the EC's comments, we decided to
amend the report as suggested by the EC in order to fully reflect the EC's
position on this issue.
5.7 The EC notes that the first sentence of paragraph 6.90 should refer to
exporters who are selected for examination under the second sentence of Article
6.10, rather than the second paragraph. We considered it was appropriate to
amend the text as suggested by the EC.
5.8 The EC requests the Panel to redraft the last sentence of paragraph 6.118.
The EC proposes specific language which it believes more accurately reflects its
arguments. We have in response to this comment modified the text of this
paragraph.
5.9 The EC notes that, in its view, the interpretation of the Panel of the
requirements of Article 6.9 as offered in paragraph 6.125 is incorrect.
Argentina comments that it sees no problem with the Panel's interpretation of
the language of this provision, and requests the Panel to reject the EC's
comments and leave the text unchanged. In light of the EC's comments, we decided
it was appropriate to briefly clarify our interpretation of Article 6.9 and we
amended paragraph 6.125 accordingly.
VI. FINDINGS
A. STANDARD OF REVIEW
6.1 Article 17.6 of the AD Agreement sets forth the special standard of review
applicable to anti-dumping cases. With regard to factual issues, Article 17.6(i)
provides:
"(i) in its assessment of the facts of the matter, the panel shall determine
whether the authorities� establishment of the facts was proper and whether their
evaluation of those facts was unbiased and objective. If the establishment of
the facts was proper and the evaluation was unbiased and objective, even though
the panel might have reached a different conclusion, the evaluation shall not be
overturned"; (emphasis added).
6.2 We note that the Panel in the case United States � Anti-Dumping Measures on
Stainless Steel Plate in Coils and Stainless Steel Sheet and Strip from Korea
considered that Article 17.6(i):
"speaks not only to the establishment of the facts, but also to their
evaluation. Therefore, the Panel must check not merely whether the national
authorities have properly established the relevant facts but also the value or
weight attached to those facts and whether this was done in an unbiased and
objective manner. This concerns the according of a certain weight to the facts
in their relation to each other; it is not a legal evaluation".13
6.3 Accordingly, it is not our role as a panel to perform a de novo review of
the evidence which was before the investigating authority at the time it made
its determination. Rather, we must review the determination the investigating
authority made on the basis of the information before it in order to determine
whether the establishment of the facts was proper and the evaluation of the
facts was unbiased and objective. With respect to the latter aspect of our
review, we consider that the task before us is to examine whether, on the basis
of the information before it, an unbiased and objective investigating authority
evaluating that evidence could have reached the conclusions it did.14
6.4 With respect to questions of the interpretation of the AD Agreement, Article
17.6(ii) provides:
"(ii) the panel shall interpret the relevant provisions of the Agreement in
accordance with customary rules of interpretation of public international law.
Where the panel finds that a relevant provision of the Agreement admits of more
than one permissible interpretation, the panel shall find the authorities�
measure to be in conformity with the Agreement if it rests upon one of those
permissible interpretations".
6.5 We consider the first part of this subparagraph to be a clear reference to
the customary rules of interpretation as laid down in Articles 31-32 of the
Vienna Convention on the Law of Treaties. Article 31 of the Vienna Convention
provides that a treaty shall be interpreted in accordance with the ordinary
meaning to be given to the terms of the treaty in their context and in light of
its object and purpose. Article 17.6(ii) of the AD Agreement provides that in
the case where this method leads the panel to the conclusion that the provision
in question admits of more than one permissible interpretation, the panel shall
find the measure in conformity if it is based on one such permissible
interpretation.
B. BURDEN OF PROOF
6.6 We recall that the burden of proof in WTO dispute settlement proceedings
rests with the party that asserts the affirmative of a particular claim or
defence.15 It implies that the complaining party will be required to make a prima
facie case of violation of the relevant provisions of the WTO AD Agreement,
which is for the defendant, in this case Argentina, to refute.16 In this regard,
the Appellate Body has stated that �... a prima facie case is one which, in the
absence of effective refutation by the defending party, requires a panel, as a
matter of law, to rule in favour of the complaining party presenting the prima
facie case�.17 Our role as a panel is not to make the case for either party, but
we may pose questions to the parties �in order to clarify and distill the legal
arguments�.18
C. FACTUAL INTRODUCTION
6.7 This dispute concerns the imposition of definitive anti-dumping measures by
the Argentine Ministry of the Economy on imports of ceramic floor tiles (�porcellanato�)
from Italy. The European Community raises claims with respect to several aspects
of those measures. In particular, the European Community considers that the
measures concerned are inconsistent with Articles 6.8 (in conjunction with Annex
II), 6.10, 2.4 and 6.9 of the AD Agreement.
6.8 On 30 January 1998, Cer�mica Zanon filed an application for an anti-dumping
investigation with the Direcci�n de Competencia Desleal (DCD � Directorate of
Unfair Trade) of the Ministry of the Economy alleging that ceramic tiles were
being exported to Argentina at dumped prices.19 On 25 September 1998, the Ministry
of the Economy published a public notice announcing the initiation of an
anti-dumping investigation on imports of ceramic tiles from Italy. The DCD
selected the years 1997 and 1998 as the period of investigation. At initiation,
as in the subsequent stages of the investigation, the DCD divided the subject
product into 3 size categories (tiles of 20 x 20 cm, tiles of 30 x 30 cm and
tiles of 40 x 40 cm), and determined a dumping margin specific to each size
category.20 For the purposes of initiation, the DCD calculated normal values for
each size category by averaging several estimates of domestic prices taken from
price lists and specialized publications submitted by the petitioner.21 In turn,
the DCD determined the export price for each size category according to two
sources: a unit price calculated by the petitioner on the basis of import
documents, and a unit price calculated by the DCD itself on the basis of
official import statistics.22
6.9 On 30 November 1998, Assopiastrelle, the association of Italian producers of
ceramic tiles, requested that the DCD limit the calculation of individual
dumping margins to 4 or 5 exporters accounting for around 70 per cent of the
exports of the subject product from Italy to Argentina.23 On 12 December 1998, the DCD accepted this request.24 On 10 December 1998, four Italian exporters (Ceramica
Bismantova, Ceramiche Casalgrande, Ceramiche Caesar, and Marazzi Ceramiche)
filed responses to the investigation questionnaire. On 24 March 1999, the DCD
issued an affirmative preliminary determination.25 In that determination, the DCD
disregarded the questionnaire replies submitted by the above-mentioned
exporters.26 The DCD determined the dumping margin on the basis of the information
available on the record, other than that presented by the exporters. In
particular, for each size category, the DCD calculated normal value on the basis
of an average domestic price drawn from price lists (i.e., the price lists
submitted by the petitioner in the complaint, and supplementary price lists
submitted by the petitioner and by one of the importers following initiation)
and sale invoices (submitted by the petitioner following initiation).27 In turn,
for each size-category, the DCD calculated the export price according to the
unit price derived from official import statistics.28
6.10 On 23 September 1999, the DCD issued an affirmative final determination. In
this determination, the DCD relied predominantly on the information available on
the record, other than that submitted by the exporters. Specifically, for each
size category, the DCD determined two dumping margins. Both calculations used
the same export price but different normal values.29 The first normal value was an
average domestic price drawn from the price lists and sale invoices referred to
above.30 This was the same pricing information used by the DCD for the purpose of
the preliminary determination.31 The second normal value was an average domestic
price that reflected the same price lists and sales invoices, plus the pricing
information submitted by the exporters, taken as a whole.32 In the latter
calculation, the pricing information submitted by the exporters received a
weight of one third.33 The DCD did not provide any justification for this approach
of combining the information on normal value submitted by the exporters with the
information on normal value filed by other parties.34 The DCD simply stated that
for its normal value calculations it was relying on the totality of the
information at hand.35 The final determination does not explain with clarity how
the DCD calculated the export price.36 However, from an annex to the Final
Determination, we can conclude that the DCD calculated the export price by
averaging the unit price drawn from official import statistics37 and the import
prices reported by two importers. The DCD did not explain why it had disregarded
entirely the information submitted by the exporters with regard to the export
price, even though for calculating normal value it had relied upon their data to
some degree.
6.11 On 12 November 1999, the Ministry of the Economy, based upon the
affirmative Final Determination regarding the existence of dumping issued by the DCD on 23 September 1999, and the affirmative Final Determination regarding the
existence of injury and causality issued by the CNCE on 3 September 1999,
imposed definitive anti-dumping measures on imports of ceramic tiles originating
in Italy.38 The measures were fixed for a period of 3 years and took the form of
specific anti-dumping duties applied in variable amounts. In particular, under
this system importers are subject to an anti-dumping duty equivalent to the
absolute difference between the FOB export price invoiced in any one shipment
and a designated �minimum export value�, also fixed in FOB terms, provided that
the export price concerned is lower than the designated �minimum export value�.
The measures were established according to the three size categories described
above. However, the notice of imposition of definitive measures does not explain
which of the two normal values calculated by the DCD in its Final Determination
for each size category was retained as �minimum export value� in each case, nor
how the calculated normal values were converted into �minimum export values�.39
D. CLAIM 1: FACTS AVAILABLE UNDER ARTICLE 6.8 AND ANNEX II OF THE AD AGREEMENT
6.12 The EC argues that the DCD disregarded the information concerning normal
value and export price provided by the four Italian exporters included in the
sample and instead relied on information from other sources such as the
petitioner and importers. The EC submits that under Article 6.8 of the AD
Agreement, an investigating authority may make a determination on the basis of
the facts available and resort to secondary source information only where the
exporter: (i) refuses access to necessary information; (ii) does not timely
submit the necessary information; or (iii) significantly impedes the
investigation. The EC asserts that all four exporters included in the sample
provided complete and timely responses to the questionnaires and agreed to the
verification of the information submitted. Nevertheless, the EC submits, the
Argentine authority discarded the information and made a dumping determination
on the basis of facts available.
6.13 According to the EC, the DCD considered the exporters� responses on an
equal footing with the information from the petitioner and eventually decided to
rely on the latter. The EC submits that the DCD cannot pick and choose data from
different sources in the establishment of the dumping margin, since this would
render Article 6.8 and Annex II totally redundant. In particular, the EC points
to paragraph 7 of Annex II which, according to the EC, explicitly recognises the
hierarchy between primary and secondary sources. The EC argues that the primary
source of information is the normal value and export price information supplied
by the exporters concerned, and only under the specific circumstances set out in
Article 6.8 is an authority allowed to resort to secondary source information.
6.14 The EC further submits that the Argentine authority never informed the
exporters that their responses had been rejected, nor did it explain why the
information was rejected, as required by paragraph 6 of Annex II of the AD
Agreement.
6.15 Argentina submits that the DCD was forced to resort to the use of facts
available since the exporters significantly impeded the investigation and failed
to provide the necessary information within a reasonable period, thereby de
facto refusing access to necessary information. Argentina argues that all three
of the conditions of Article 6.8 of the AD Agreement applied. Argentina
identifies the following problems concerning the information supplied by the
exporters included in the sample which, in its view, justified the use of facts
available by the DCD. First, according to Argentina, the exporters did not
provide sufficiently detailed non-confidential summaries for the confidential
information in the questionnaire replies, thereby making it impossible for the
DCD to rely on this confidential information in its public determination.
Second, Argentina argues that the exporters failed to provide supporting
documentation for the information they were supplying, in spite of being
explicitly requested to do so by the DCD. Third, according to Argentina, the
exporters failed to comply with a number of formal requirements set forth in the
questionnaire, concerning translation of documents and the need to provide the
information in US$. Argentina further asserts that the information was provided
late, and proved to be incomplete. For these reasons, Argentina submits, the
exporters significantly impeded the investigation and refused access to
information which was necessary for the DCD�s final determination of dumping.
The DCD was therefore entitled to resort to facts available under Article 6.8 of
the AD Agreement.
6.16 Argentina asserts that the DCD applied facts available so meticulously that
it was willing to take the deficient exporter information into account as far as
possible, thereby in fact reducing the margin of dumping. Argentina submits that
the willingness to accommodate the exporters by extending deadlines and
requesting additional information to complement the questionnaire replies show
that the Argentine authorities complied with the requirement of paragraph 7 of
Annex II to use secondary sources with special circumspection.
6.17 Argentina submits that the DCD informed the exporters on several occasions
that they had not provided the necessary information. Argentina points to the
DCD�s letter of 30 April 1999 in which additional elements of proof and
additional public information were requested. A further letter was sent to the
exporters on 22 June 1999 with a request to withdraw the request for
confidential treatment of certain information or to provide more detailed
summaries. A third and final letter of a similar nature was sent on 3 August
1999 with regard to cost of production information. Argentina submits that these
letters were warnings that the information provided was not sufficient.40
Argentina argues that in any case, and even if we were to find that the DCD did
not comply with the requirement to inform the supplying party that its
information was rejected as set forth in paragraph 6 of Annex II, this
constituted �harmless error� of a procedural nature which did not cause any
prejudice to the exporters.
13 Panel Report, United States �
Anti-Dumping Measures on Stainless Steel Plate in Coils and Stainless Steel
Sheet and Strip from Korea, WT/DS179/R, adopted 1 February 2001, para. 6.18. Return to
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