The Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the “AD Agreement”) governs the application of anti-dumping measures by Members of the WTO. Anti-dumping measures are unilateral remedies which may be applied by a Member after an investigation and determination by that Member, in accordance with the provisions of the AD Agreement, that an imported product is “dumped” and that the dumped imports are causing material injury to a domestic industry producing the like product.

The AD Agreement sets forth certain substantive requirements that must be fulfilled in order to impose an anti-dumping measure, as well as detailed procedural requirements regarding the conduct of anti-dumping investigations and the imposition and maintenance in place of anti-dumping measures. A failure to respect either the substantive or procedural requirements can be taken to dispute settlement and may be the basis for invalidation of the measure. Unlike the Agreement on Subsidies and Countervailing Measures, the AD Agreement does not establish any disciplines on dumping itself, primarily because dumping is a pricing practice engaged in by business enterprises, and thus not within the direct reach of multilateral disciplines.

 

Substantive rules

Article 1 of the AD Agreement establishes the basic principle that a Member may not impose an anti-dumping measure unless it determines, pursuant to an investigation conducted in conformity with the provisions of the AD Agreement, that there are dumped imports, material injury to a domestic industry, and a causal link between the dumped imports and the injury.
  

Determination of dumping

Article 2 contains substantive rules for the determination of dumping. Dumping is calculated on the basis of a “fair comparison” between normal value (the price of the imported product in the “ordinary course of trade” in the country of origin or export) and export price (the price of the product in the country of import). Article 2 contains detailed provisions governing the calculation of normal value and export price, and elements of the fair comparison that must be made.
  

Determination of injury

Article 3 of the AD Agreement contains rules regarding the determination of material injury caused by dumped imports. Material injury is defined as material injury itself, threat of material injury, or material retardation of the establishment of a domestic industry. The basic requirement for determinations of injury, is that there be an objective examination, based on positive evidence of the volume and price effects of dumped imports and the consequent impact of dumped imports on the domestic industry. Article 3 contains specific rules regarding factors to be considered in making determinations of material injury, while specifying that no one or several of the factors which must be considered is determinative. Article 3.5 requires, in establishing the causal link between dumped imports and material injury, known factors other than dumped imports which may be causing injury must be examined, and that injury caused by these factors must not be attributed to dumped imports.

A significant new provision, Article 3.3, establishes the conditions in which a cumulative evaluation of the effects of dumped imports from more than one country may be undertaken. Under the rules, authorities must determine that the margin of dumping from each country is not de minimis, that the volume of imports from each country is not negligible, and that a cumulative assessment is appropriate in light of the conditions of competition among the imports and between the imports and the domestic like product.
  

Definition of industry

Article 4 of the AD Agreement sets forth a definition of the domestic industry to be considered for purposes of assessing injury and causation. The domestic industry is defined as producers of a “like product”, which term is defined in Article 2.6 as a product that is identical to, or in the absence of such a product, one that has characteristics closely resembling those of, the imported dumped product under consideration. Article 4 contains special rules for defining a “regional” domestic industry in exceptional circumstances where production and consumption in the importing country are geographically isolated, and for the evaluation of injury and assessment of duties in such cases. Article 4 also establishes that domestic producers may be excluded from consideration as part of the domestic industry if they are “related” (defined as a situation of legal or effective control) to exporters or importers of the dumped product.
 
  

Procedural requirements

Overview

A principal objective of the procedural requirements of the AD Agreement is to ensure transparency of proceedings, a full opportunity for parties to defend their interests, and adequate explanations by investigating authorities of their determinations. The extensive and detailed procedural requirements relating to investigations focus on the sufficiency of petitions (through minimum information and “standing” requirements) to ensure that meritless investigations are not initiated, on the establishment of time periods for the completion of investigations, and on the provision of access to information to all interested parties, along with reasonable opportunities to present their views and arguments. Additional procedural requirements relate to the offering, acceptance, and administration of price undertakings by exporters in lieu of the imposition of anti-dumping measures. The AD Agreement requires investigating authorities to give public notice of and explain their determinations at various stages of the investigative process in substantial detail. It also establishes rules for the timing of the imposition of anti-dumping duties, the duration of such duties, and obliges Members to periodically review the continuing need for anti-dumping duties and price undertakings. There are detailed provisions guiding the imposition and collection of duties under various duty assessment systems, intended to ensure that anti-dumping duties in excess of the margin of dumping are not collected, and that individual exporters are not subjected to anti-dumping duties in excess of their individual margin of dumping. Article 13 of the AD Agreement requires Members to provide for judicial review of final determinations in anti-dumping investigations and reviews. Other provisions establish that Members may, at their discretion, take anti-dumping actions on behalf of and at the request of a third country, and recognise that “special regard” must be given by developed country Members to the situation of developing country Members when considering the application of anti-dumping duties.
 
  

Specific Provisions

Initiation and conduct of investigations

Article 5 establishes the requirements for the initiation of investigations. The AD Agreement specifies that investigations should generally be initiated based on a written request submitted “by or on behalf of” a domestic industry. This “standing” requirement is supported by numeric limits for determining whether there is sufficient support by domestic producers to conclude that the request is made by or on behalf of the domestic industry, and thereby warrants initiation. The AD Agreement establishes requirements for evidence of dumping, injury, and causality, as well as other information regarding the product, industry, importers, exporters, and other matters, in written applications for anti-dumping relief, and specifies that, in special circumstances when authorities initiate without a written application from a domestic industry, they shall proceed only if they have sufficient evidence of dumping, injury, and causality. In order to ensure that meritless investigations are not continued, potentially disrupting legitimate trade, Article 5.8 provides for immediate termination of investigations in the event the volume of imports is negligible or the margin of dumping is de minimis, and establishes numeric thresholds for these determinations. In order to minimize the trade disruptive effect of investigations, Article 5.10 specifies that investigations shall be completed within one year, and in no case more than 18 months, after initiation.

Article 6 sets forth detailed rules on the process of investigation, including the collection of evidence and the use of sampling techniques. It requires authorities to guarantee the confidentiality of sensitive information and verify the information on which determinations are based. In addition, to ensure the transparency of proceedings, authorities are required to disclose the information on which determinations are to be based to interested parties and provide them with adequate opportunity to comment, and establishes the rights of parties to participate in the investigation, including the right to meet with parties with adverse interests, for instance in a public hearing.
  

Imposition of provisional measures

Article 7 relates to the imposition of provisional measures. Article 7 includes the requirement that authorities make a preliminary affirmative determination of dumping, injury, and causality before applying provisional measures, and the requirement that no provisional measures may be applied sooner than 60 days after initiation of an investigation.
  

Price undertakings

Article 8 establishes the principle that undertakings to revise prices or cease exports at dumped prices may be entered into to settle an investigation, but only after a preliminary affirmative determination of dumping, injury, and causality has been made. It also establishes that undertakings are voluntary on the part of both exporters and investigating authorities. In addition, an exporter may request that the investigation be continued after an undertaking has been accepted, and if a final determination of no dumping, no injury, or no causality results, the undertaking shall automatically lapse.
  

Imposition and collection of duties

Article 9 establishes the general principle that imposition of anti-dumping duties is optional, even if all the requirements for imposition have been met, and establishes the desirability of application a “lesser duty” rule. Under a lesser duty rule, authorities impose duties at a level lower than the margin of dumping but adequate to remove injury. Article 9.3 establishes that anti-dumping duties may not exceed the dumping margin calculated during the investigation. In order to ensure that anti-dumping duties in excess of the margin of dumping are not collected, Article 9.3 requires procedures for determination of the actual amount of duty owed, or refund of excess duties paid, depending on the duty assessment system of a Member, normally within 12 months of a request, and in no case more than 18 months. Article 9.4 establishes rules for calculating the amount of duties to be imposed on exporters not individually examined during the investigation. Article 9.5 provides for expedited reviews to calculate individual margins of dumping for exporters or producers newly entering the market of the importing Member.

Article 10 establishes the general principle that both provisional and final anti-dumping duties may be applied only as of the date on which the determinations of dumping, injury, and causality have been made. However, recognizing that injury may have occurred during the period of investigation, or that exporters may have taken actions to avoid the imposition of an anti-dumping duty, Article 10 contains rules for the retroactive imposition of dumping duties in specified circumstances. If the imposition of anti-dumping duties is based on a finding of material injury, as opposed to threat of material injury or material retardation of the establishment of a domestic industry, anti-dumping duties may be collected as of the date provisional measures were imposed. If provisional duties were collected in an amount greater than the amount of the final duty, or if the imposition of duties is based on a finding of threat of material injury or material retardation, a refund of provisional duties is required. Article 10.6 provides for retroactive application of final duties to a date not more than 90 days prior to the application of provisional measures in certain exceptional circumstances involving a history of dumping, massive dumped imports, and potential undermining of the remedial effects of the final duty.
  

Duration, termination, and review of anti-dumping measures

Article 11 establishes rules for the duration of anti-dumping duties, and requirements for periodic review of the continuing need, if any, for the imposition of anti-dumping duties or price undertakings. These requirements respond to the concern raised by the practice of some countries of leaving anti-dumping duties in place indefinitely. The “sunset” requirement establishes that dumping duties shall normally terminate no later than five years after first being applied, unless a review investigation prior to that date establishes that expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury. This five year “sunset” provision also applies to price undertakings. The AD Agreement requires authorities to review the need for the continued imposition of a duty upon request of an interested party.
  

Public notice

Article 12 sets forth detailed requirements for public notice by investigating authorities of the initiation of investigations, preliminary and final determinations, and undertakings. The public notice must disclose non-confidential information concerning the parties, the product, the margins of dumping, the facts revealed during the investigation, and the reasons for the determinations made by the authorities, including the reasons for accepting and rejecting relevant arguments or claims made by exporters or importers. These public notice requirements are intended to increase the transparency of determinations, with the hope that this will increase the extent to which determinations are based on fact and solid reasoning.
 
  

The committee and dispute settlement

Article 16 establishes the Committee on Anti-dumping Practices, and sets forth requirements for Members to notify without delay all preliminary and final actions taken in anti-dumping investigations, and notify semi-annually all actions taken during the relevant reporting period.

Article 17 establishes that the Dispute Settlement Understanding is applicable to disputes under the AD Agreement. However, Article 17.6 establishes a special standard of review to be applied by panels in examining disputes in anti-dumping cases with regard both to matters of fact and questions of interpretation of the Agreement. This standard gives a degree of deference to the factual decisions and legal interpretations of national authorities, and is intended to prevent dispute settlement panels from making decisions based purely on their own views. A Ministerial Decision, which is not part of the AD Agreement, regarding this provision establishes that its operation will be reviewed after three years with a view to consideration whether it is capable of general application.
 
  

Final provisions

Article 18.3 establishes the effective date of the AD Agreement, providing that it is applicable to investigations and reviews of existing measures initiated pursuant to applications made on or after the entry into force of the AD Agreement. Article 18.4 requires Members to bring their laws into conformity with the AD Agreement by the date of entry into force of the AD Agreement. Under Article 18.5, Members are required to notify their anti-dumping laws and regulations to the Committee.

Annex I to the AD Agreement establishes procedures for “on-the-spot” investigations, which are generally undertaken in the territory of an exporting Member to verify information provided by foreign producers or exporters. Annex II to the AD Agreement sets forth provisions on the use of “best information available” in investigations, specifying the conditions under which investigating authorities may rely on information from a source other than the person concerned.

The Ministerial Decision on Anti-Circumvention, which is not part of the AD Agreement, noted that the negotiators had been unable to agree on a specific text dealing with the problem of anti-circumvention, recognized the desirability of applying uniform rules in this area as soon as possible, and referred the matter to the Committee for resolution. The Committee has established an Informal Group on Anti-Circumvention, which is open to participation by all Members, to carry out the task assigned by the Ministers.