4.1152 Japan also argues that the logical consequence of not adopting its interpretation of Article 6.9 is that it would nullify a panel�s ability to determine whether the authority�s establishment of the facts was proper and whether the authority�s evaluation of the facts was unbiased and objective, in accordance with Article 17.6 of the AD Agreement. The United States respectfully disagrees. As long as the investigating authority has chosen a method which informs the interested parties of the essential facts under consideration and the authority sets forth in its final determination its reasoning in support of its decision, a reviewing panel should be able to make the necessary determinations under Article 17.6.

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.

V. INTERIM REVIEW

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

1. Arguments of the parties

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.

<sup>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.

14 We note that this is the same standard as that applied by the Panel in Mexico � Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the US (�Mexico � HFCS�), which, in considering whether the Mexican investigating authorities had acted consistently with Article 5.3 in determining that there was sufficient evidence to justify initiation, stated: �Our approach in this dispute will � be to examine whether the evidence before SECOFI at the time it initiated the investigation was such that an unbiased and objective investigating authority evaluating that evidence could properly have determined that sufficient evidence of dumping, injury and causal link existed to justify initiation.� Panel Report, Mexico � HFCS, WT/DS132/R, adopted 24 February 2000, para. 7.95.

15 Appellate Body Report, United States � Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, p. 14.

16 We note that the Appellate Body stated in Korea � Definitive Safeguard Measures on Imports of Certain Dairy Products (�Korea � Dairy Safeguards�): �We find no provision in the DSU or in the Agreement on Safeguards that requires a Panel to make an explicit ruling on whether the complainant has established a prima facie case of violation before a panel may proceed to examine the respondent�s defence and evidence.� Appellate Body Report, Korea � Dairy Safeguards,WT/DS98/AB/R, adopted 12 January 2000, para. 145. The Appellate Body confirmed this view in the Thailand � Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from Poland (�Thailand � H-Beams�) case: �In our view a panel is not required to make a separate and specific finding in each and every instance that a party has met its burden of proof in respect of a particular claim, or that a party has rebutted a prima facie case.�
Appellate Body Report, Thailand � Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from Poland (�Thailand � H-Beams�), WT/DS122AB/R, adopted 5 April 2001, para. 134.

17 Appellate Body Report, European Communities � Measures Concerning Meat and Meat Products (�EC � Hormones�), WT/DS26/AB/R � WT/DS48/AB/R, adopted 13 February 1998, para. 104.

18 Appellate Body Report, Thailand � H-Beams, para. 136.

19 The DCD was responsible for conducting the dumping investigation. The injury investigation was conducted separately by the Comisi�n Nacional de Comercio Exterior (CNCE � National Foreign Trade Commission). As the EC did not make any injury claims, no reference is made here to the injury aspects of the investigation.

20 Final Dumping Determination, p. 43. Exhibit EC-2.

21 Final Dumping Determination, pages 20 �22. Exhibit EC-2. In the case of the 20 x 20 cm size-category, when calculating normal value the DCD only relied on estimates of domestic prices taken from specialized publications.

22 Final Dumping Determination, pages 30 �32. Exhibit EC-2.

23 Exhibit EC-3A.

24 Exhibit EC-3B.

25 Preliminary Dumping Determination. Exhibit ARG-8.

26 Preliminary Dumping Determination, p. 34. Exhibit ARG-8. Final Dumping Determination, p. 23. Exhibit EC-2.

27 Final Dumping Determination, pages 23 �24 and p. 44. Exhibit EC-2. In the case of the 20 x 20 cm category, when calculating normal value the DCD only relied on estimates of domestic prices taken from price lists.

28 Final Dumping Determination, pages 32-34 and p. 44. Exhibit EC-2. These import statistics referred to the period January-September 1998. We note that following the preliminary determination, the DCD sent three letters to the exporters requesting that additional public information be provided. See Exhibits ARG-7, Exhibit ARG-10 and Exhibit ARG-11.

29 Final Dumping Determination, p. 45. Exhibit EC-2.

30 Final Dumping Determination, pages 44 � 45. Exhibit EC-2.

31 Final Dumping Determination, pages 44 and 24. Exhibit EC-2.

32 Final Dumping Determination, p. 45. Exhibit EC-2.

33 Final Dumping Determination, p. 30. Exhibit EC-2. As an exception, in the case of the 20 x 20 cm category, the pricing information submitted by the exporters received a weight of one-half, given that there was only one alternative source of information (price lists) for the calculation of normal value.

34 The DCD did not explain either why it considered the normal value information submitted by the exporters as a block, instead of considering that information by individual exporter (we recall in this connection the fact that the exporters filed individual questionnaire replies).

35 Final Dumping Determination, p. 30. Exhibit EC-2.

36 Final Dumping Determination, p. 37. Exhibit EC-2.

37 For the period October 1997-September 1998.

38 Exhibit EC-1.

39 It would appear that the �minimum export values� are the FOB-adjusted normal values. However, as pointed out above, this is not clear in the text of the notice of imposition of definitive measures.

40 Argentina refers to pages 29 and 39 of the DCD�s Final Dumping Determination (Exhibit EC-2) in this respect.</sup>

Continuation: Section 6.18

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