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ARGENTINA - DEFINITIVE ANTI-DUMPING
(Continuation) 6.116 In addition to accounting for size differences, the DCD�s methodology took
account of two other physical differences affecting price comparability. As to
quality, the DCD collected data only on first-quality tiles, thereby avoiding
the need to make adjustments for tile quality. By the same token, the DCD�s
methodology made due allowance for the degree of processing, in that data were
collected only on unpolished tiles.106 In effect then, the DCD made due allowance
within the meaning of Article 2.4 for three physical differences affecting price
comparability. Nonetheless, other important differences remained, as the DCD
acknowledged in its final determination. We do not agree with Argentina�s view
that Article 2.4, through the qualifying language that due allowance shall be
made �in each case� �on its merits�, permits an investigating authority to
adjust only for the most important of the physical differences that affect price
comparability, even if making the remaining adjustments would have been, as the
parties agree, complex. The DCD chose not to conduct a model-by-model comparison
and it was then left to find other means to account for the remaining physical
differences affecting price comparability. It did not do so.
3. Conclusion
6.117 In conclusion, we consider that, in light of the facts on the record,
there were other factors significantly affecting price comparability. An
objective and unbiased evaluation of the facts of this case would have required
the DCD to make additional adjustments for physical differences affecting price
comparability. We therefore find that the DCD acted inconsistently with Article
2.4 by failing to make adjustments for physical differences affecting price
comparability.
G. CLAIM 4: ARTICLE 6.9: FAILURE TO INFORM THE EXPORTERS OF THE �ESSENTIAL
FACTS� ON WHICH THE DECISION IS BASED
6.118 The EC submits that Argentina failed to disclose the essential facts under
consideration which form the basis for the decision whether to apply definitive
measures as required by Article 6.9 of the AD Agreement. The EC argues that
Article 6.9 of the AD Agreement entails a positive action by the investigating
authorities, and requires the authorities to actively disclose those essential
facts on which the decision whether to apply definitive measures is based.
According to the EC, Argentina merely invited interested parties to examine the
public file.107 The EC asserts that the public file of an anti-dumping
investigation essentially consists of often contradictory questionnaire
responses and allegations of different interested parties and thus clearly does
not identify the �essential facts� on which the decision to impose a measure is
based. The EC argues that in this case the final dumping determination (unlike
the final injury determination) was not available in the public file. Nor did
the public file contain any other document prepared by the DCD which identified
the "essential facts" that would form the basis for the final dumping
determination.
6.119 Argentina argues that the DCD complied with the requirement of Article 6.9
of the AD Agreement to inform the interested parties of the essential facts
which form the basis for the decision whether to apply definitive measures by
inviting the exporters to view the complete file. According to Argentina, the
exporters viewed the file that contained all the information on which the
determination was based, including the essential facts. Argentina argues that
what is important is that the result envisaged by Article 6.9 is achieved, not
how this result was achieved. Argentina asserts that the Ad Hoc Group on
Implementation of the Committee on Anti-Dumping Practices has discussed the kind
of information which needs to be disclosed under Article 6.9. Argentina submits
that the fact that the Ad Hoc Group has not yet issued a recommendation on this
matter demonstrates the diversity of criteria used by the Members in complying
with this requirement. Finally, Argentina argues that in any case the exporters
did not suffer any injury from this alleged lack of notification of the
essential facts. In case the Panel were to find a violation of Article 6.9 of
the AD Agreement, Argentina submits this constituted a harmless error.
6.120 The EC submits that the requirement concerning the disclosure of essential
facts is not an empty formality, as Argentina seems to suggest, and therefore
rejects Argentina�s argument that the alleged failure to comply with Article 6.9
constituted a harmless error.
6.121 We also recall in this respect some of the arguments made by the third
parties on this matter. Japan, as a third party, fully supports the EC position
that the provisions of Article 6.9 of the AD Agreement must be read as imposing
obligations that go beyond those in Article 6.4 of the AD Agreement to provide
timely opportunities for interested parties to have access to all relevant
information. Japan asserts that the requirement of Article 6.9 to disclose the
essential facts that the authority will actually rely on is not satisfied by
merely opening for inspection a file that includes both facts that will be
relied upon and facts that will not be. Turkey, as a third party, also considers
that the requirement of Article 6.9 goes beyond the obligation to provide timely
opportunities to see all information as set out in Article 6.4 of the AD
Agreement.
6.122 The United States, as a third party, does not take a position on whether,
under the facts of this case, the measure is consistent with Article 6.9 of the
AD Agreement. However, the United States agrees with Argentina that Article 6.9
requires only that interested parties be informed of the essential facts and
that this requirement does not impose a particular means of disclosure.
According to the United States, Members may implement the obligation under
Article 6.9 in a variety of ways. In particular, the United States argues,
Members may choose to establish an investigative process which allows interested
parties to be presented with all of the facts as they are presented to the
authority, as well as arguments made about those facts.
6.123 We note that there does not exist any disagreement between the parties
concerning the relevant facts in respect of this claim. The record shows that
the exporters were invited to view the information on the record, and made use
of this possibility on 18 June 1999, 3 September 1999 and 21 September 1999. The
EC submits, however, that by merely being given the opportunity to view the
complete file the exporters were not informed of the essential facts under
consideration which form the basis for the decision whether to apply definitive
measures as required by Article 6.9 of the AD Agreement.
6.124 Article 6.9 provides that:
"The authorities shall, before a final determination is made, inform all
interested parties of the essential facts under consideration which form the
basis for the decision whether to apply definitive measures. Such disclosure
should take place in sufficient time for the parties to defend their interests".
6.125 We agree with Argentina that the requirement to inform all interested
parties of the essential facts under consideration may be complied with in a
number of ways. Article 6.9 of the AD Agreement does not prescribe the manner in
which the authority is to comply with this disclosure obligation. The
requirement to disclose the �essential facts under consideration� may well be
met, for example, by disclosing a specially prepared document summarizing the
essential facts under consideration by the investigating authority or through
the inclusion in the record of documents � such as verification reports, a
preliminary determination, or correspondence exchanged between the investigating
authorities and individual exporters � which actually disclose to the interested
parties the essential facts which, being under consideration, are anticipated by
the authorities as being those which will form the basis for the decision
whether to apply definitive measures. This view is based on our understanding
that Article 6.9 anticipates that a final determination will be made and that
the authorities have identified and are considering the essential facts on which
that decision is to be made. Under Article 6.9, these facts must be disclosed so
that parties can defend their interests, for example by commenting on the
completeness of the essential facts under consideration.
6.126 The question before us is whether, under the facts of this case, the DCD
complied with its obligation under Article 6.9 of the AD Agreement to inform the
interested parties of the essential facts under consideration which form the
basis for the determination whether to apply definitive measures. The DCD in
this case invited the exporters to view the entire file.
6.127 In this case, the DCD relied primarily upon evidence submitted by
petitioners and derived from secondary sources, rather than upon information
provided by the exporters, as the factual basis for a determination of the
existence of dumping. Thus, petitioner and secondary source information, rather
than exporters' information, represented (with respect to the existence of
dumping) the essential facts which formed the basis for the decision whether to
apply definitive measures. We therefore examined the record in order to
determine whether exporters were informed by the Argentine authority, through
access to the file, that it was on these facts that the authority would
primarily rely in its determination regarding the existence of dumping.
6.128 In considering this question, we observe that the file contained inter alia the Preliminary Dumping Determination, in which the DCD explained that it
considered that the confidential nature of the information supplied by the
exporters in the questionnaire responses concerning normal value and export
price limited the use it could make of this information. In the Preliminary
Determination, the DCD calculated the dumping margin without relying on any of
the information supplied by the exporters in confidence. The file also contained
the three letters the DCD sent to the exporters following the preliminary
determination with the requests for declassification of the information
discussed above in paras. 6.41 � 6.47. The exporters were further advised of the
DCD�s request for additional supporting documentation, as discussed above in
paras. 6.59 - 6.65. We note in this regard that a meeting took place between the
exporters� representatives and the case-handlers. As Argentina clarified, this
was an informal meeting convened at the request of the exporters and no official
record, which could have been included in the file, exists of what was agreed
upon at that meeting. The exporters nonetheless supplied the invoices covering
about 50 per cent of their reported domestic sales which they considered had
been requested by the DCD.108 We found above that the exporters also complied with
the various requests for declassification of the information and never received
any deficiency letters nor were any such deficiency notices put on the record.
The file further contained a large variety of data from various sources such as
the petitioner, importers and official registers.
3. Conclusion
6.129 In light of the state of the record, we find that the exporters could not
be aware in this case, simply by reviewing the complete record of the
investigation, that evidence submitted by petitioners and derived from secondary
sources, rather than facts submitted by the exporters, would, despite the
responses of the exporters to the DCD�s information requests as summarized
above, form the primary basis for the determination of the existence and extent
of dumping. The DCD thus failed to put the exporters on notice of an essential
fact under consideration. As a result, the exporters were unable to defend their
interests within the meaning of Article 6.9, for example, by giving reasons why
their responses should not be rejected and by suggesting alternative sources for
facts available if their responses were nonetheless disregarded. Under these
circumstances, we find that the DCD did not, by referring the exporters to the
complete file of the investigation, fulfil its obligation under Article 6.9 to
inform the exporters of the �essential facts under consideration which form the
basis for the decision whether to apply definitive measures�.109
6.130 Argentina again raises the concept of harmless error as a defence. As
discussed above, in our view it does not suffice to merely raise the issue of
harmless error. Indeed, Article 3.8 of the DSU provides for a presumption that,
in the case of an infringement of the obligations assumed under a covered
agreement, the action is considered prima facie to constitute a case of
nullification or impairment. Article 3.8 of the DSU also provides for the
possibility that the Member found to have violated a provision may rebut the
presumption. In light of the presumption of Article 3.8 of the DSU, the EC
having established that Argentina has acted in a manner inconsistent with the AD
Agreement, it is up to Argentina to show that the failure to determine an
individual dumping margin has not nullified or impaired benefits accruing to the
EC under the Agreement. Argentina has failed to adduce any evidence in this
respect. Accordingly, we find that the presumption of nullification or
impairment of benefits caused by the violation of Article 6.9 of the AD
Agreement has not been rebutted by Argentina.
6.131 In conclusion, we find that the DCD acted inconsistently with Article 6.9
as it failed to inform the interested parties of the essential facts under
consideration which form the basis for the decision whether to apply definitive
measures thereby failing to allow the exporters to defend their interests.
VII. CONCLUSIONS AND RECOMMENDATION
7.1 In light of the findings above, we conclude
(a) that Argentina acted inconsistently with Article 6.8 and Annex II AD
Agreement by disregarding in large part the information provided by the
exporters for the determination of normal value and export price, and this
without informing the exporters of the reasons for the rejection;
(b) that Argentina acted inconsistently with Article 6.10 AD Agreement by not
determining an individual margin of dumping for each exporter included in the
sample for the product under investigation;
(c) that Argentina acted inconsistently with Article 2.4 AD Agreement by failing
to make due allowance for differences in physical characteristics affecting
price comparability;
(d) that Argentina acted inconsistently with Article 6.9 AD Agreement by not
disclosing to the exporters the essential facts under consideration which form
the basis for the decision whether to apply definitive measures.
7.2 Under Article 3.8 of the DSU, in cases where there is infringement of the
obligations assumed under a covered agreement, the action is considered prima
facie to constitute a case of nullification or impairment of benefits under that
agreement. Argentina has failed to adduce any evidence to rebut this
presumption. Accordingly, we conclude that, to the extent Argentina has acted
inconsistently with the provisions of the AD Agreement, it has nullified or
impaired benefits accruing to the EC under that Agreement.
7.3 We recommend that the Dispute Settlement Body request Argentina to bring its
measure into conformity with its obligations under the AD Agreement.
104
Preliminary Dumping Determination, p. 34, Exhibit ARG-8.
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