4.491 The EC�s claim should cause the Panel to have serious doubts with respect to its assertion that it provided sufficient supporting documentation.

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.

3. Third Parties: Japan

(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.

Continuation: Section 4.547

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