4.547 The EC first written submission notes that paragraph 6 of Annex II of the AD Agreement provides that if evidence or information is not accepted, the party supplying it should be informed �forthwith� of the reasons for the refusal to accept, and should be given an opportunity to provide further explanations within a �reasonable period;� if the authorities consider these explanations as not being satisfactory, the reasons for the rejection of such evidence or information should be given in any published determination.

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.

4. Third Parties: Turkey

(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.

Continuation: 5. Third Parties: United States

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