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WORLD TRADE
ORGANIZATION

WT/DS189/R
28 September 2001
(01-4470)

 
  Original: English

ARGENTINA - DEFINITIVE ANTI-DUMPING
MEASURES ON IMPORTS OF CERAMIC
FLOOR TILES FROM ITALY



Report of the Panel

(Continuation)



6.18 The EC refutes the procedural and substantive arguments presented by Argentina in defence of the DCD�s decision to reject the exporters� information. The EC argues that the exporters fully cooperated with the DCD and provided very detailed non-confidential summaries. Moreover, the EC asserts, the exporters provided supporting documentation for the information submitted to the extent they were requested to do so by the DCD. Finally, the EC argues that the exporters� questionnaire replies were submitted in a timely manner and in accordance with domestic procedures. The EC therefore submits that the DCD was not justified in resorting to the use of best information available since none of the conditions of Article 6.8 of the AD Agreement applied.

2. Analysis by the Panel

6.19 In considering this issue, we first note that Article 6.8 of the AD Agreement governs the use by an investigating authority in an anti-dumping investigation of the �facts available�. That article provides as follows:

"In case 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 facts available. The provisions of Annex II shall be observed in the application of this paragraph".

6.20 It is clear to us, and both parties agree, that an investigating authority may disregard the primary source information and resort to the facts available only under the specific conditions of Article 6.8 and Annex II of the AD Agreement.41 Thus, an investigating authority may resort to the facts available only where a party: (i) refuses access to necessary information; (ii) otherwise fails to provide necessary information within a reasonable period; or (iii) significantly impedes the investigation.

6.21 We recall that Article 6.8 provides that �the provisions of Annex II shall be observed in the application of this paragraph�. Paragraph 6 of Annex II is highly relevant to the case before us. It provides as follows:

"6. If evidence or information is not accepted, the supplying party should be informed forthwith of the reasons therefor, and should have an opportunity to provide further explanations within a reasonable period, due account being taken of the time-limits of the investigation. If the explanations are considered by the authorities as not being satisfactory, the reasons for the rejection of such evidence or information should be given in any published determinations".

Accordingly, Article 6.8, read in conjunction with paragraph 6 of Annex II, requires an investigating authority to inform the party supplying information of the reasons why evidence or information is not accepted, to provide an opportunity to provide further explanations within a reasonable period, and to give, in any published determinations, the reasons for the rejection of evidence or information.

6.22 Argentina advances four bases for its decision to disregard certain information submitted by the exporters and to resort to the use of facts available. First, Argentina asserts that the exporters failed to provide complete non-confidential summaries of confidential information submitted by them, as required by Article 6.5.1 of the AD Agreement. Second, Argentina contends that the exporters failed to provide sufficient documentation in support of the information provided in their questionnaire responses. Third, Argentina contends that the exporters failed to comply with the formal requirements of the questionnaire, such as requirements to translate materials into Spanish and to express value in US$. Finally, Argentina contends that the exporters failed to provide requested information within a reasonable period.

6.23 The EC notes that the arguments presented by Argentina to justify the DCD�s decision not to rely exclusively on information concerning normal value and export price provided by the exporters, are ex post justifications which are nowhere to be found in the DCD�s Final Determination or in any other documents on the record. Argentina disagrees and asserts that all the arguments it is presenting are present in the DCD�s determinations or other documents on the record.

6.24 Under the applicable standard of review of Article 17.6 of the AD Agreement, we are to examine whether the investigating authority properly established the facts and whether its evaluation of those facts was unbiased and objective. Our review of the measure is based on all the facts on the record, and we examined both the Final Determination42 as well as other documents on the record in order to determine whether the evaluation of the DCD was unbiased and objective. Upon careful examination, we find that neither in the Final Determination nor in any other document on the record does the investigating authority explain its evaluation of the information that apparently led it to the conclusion that it was allowed to disregard the exporters� information and resort to the use of facts available. While it is true that the Final Determination contains a discussion of the use of confidential information as an insufficient basis for the public determination, and the subsequent request for additional non-confidential summaries, the report does not draw any conclusions from these or other considerations. With regard to normal value, the report also mentions certain factual considerations concerning supporting documentation, or problems relating to the reliability of the information provided. But again, the DCD does not draw any conclusions from these factual considerations in its report or in any other document on the record. It does not explain anywhere how it evaluated these facts and what weight it accorded to each of these factual considerations. The DCD merely states that: �subject to the qualifications mentioned in each item with respect to the merits of the evidence submitted in general and in particular the evidence set forth in the item on normal value in Italy, it is possible to establish the following percentage margins of dumping� 43 and then provides the two sets of margins of dumping mentioned above, one based in part on exporters� information concerning normal value mixed with petitioner and importer information, and a second one not using any of the information provided by the exporters. In both sets, the information from the exporters concerning export price is completely disregarded.

6.25 We are mindful of the Appellate Body�s findings in the case of Thailand � Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from Poland (�Thailand � H-Beams�) that the procedural and due process provisions of Articles 12 and 6 should not be mistaken for the substantive provisions of the Agreement. However, it is important to recall that the legal issue before the Appellate Body was:

"whether the terms �positive evidence� and �objective examination� in Article 3.1 require that �the reasoning supporting the determination be �formally or explicitly stated� in documents in the record of the investigation to which interested parties (and/or their legal counsel) have access at least from the time of the final determination�, and, further, that �the factual basis relied upon by the authorities must be discernible from those documents"". (footnotes omitted)44

6.26 We further note that the Appellate Body stated that:

"[�] The �facts� referred to in Articles 17.5(ii) and 17.6(i) thus embrace �all facts confidential and non-confidential�, made available to the authorities of the importing Member in conformity with the domestic procedures of that Member. Article 17.6(i) places a limitation on the panel in the circumstances defined by the Article. The aim of Article 17.6(i) is to prevent a panel from �second-guessing� a determination of a national authority when the establishment of the facts is proper and the evaluation of those facts is unbiased and objective. Whether evidence or reasoning is disclosed or made discernible to interested parties by the final determination is a matter of procedure and due process. These matters are very important, but they are comprehensively dealt with in other provisions, notably Articles 6 and 12 of the Anti-Dumping Agreement.

118. Articles 17.5 and 17.6(i) require a panel to examine the facts made available to the investigating authority of the importing Member. These provisions do not prevent a panel from examining facts that were not disclosed to, or discernible by, the interested parties at the time of the final determination".45 (emphasis added)

6.27 The question before us, however, is not whether the evaluation of the authority is provided in a public document or not, but rather whether any such reasoning has been provided in any document on the record.46 Under Article 17.6 of the AD Agreement we are to determine whether the DCD established the facts properly and whether the evaluation performed by the DCD was unbiased and objective. In other words, we are asked to review the evaluation of the DCD made at the time of the determination as set forth in a public notice or in any other document of a public or confidential nature. We do not believe that, as a panel reviewing the evaluation of the investigating authority, we are to take into consideration any arguments and reasons that did not form part of the evaluation process of the investigating authority, but instead are ex post facto justifications which were not provided at the time the determination was made.

6.28 We find that the DCD failed to provide any evaluation of the facts on the record that could have formed the basis for its apparent decision to disregard in large part the information provided by the exporters. We consider that on this basis alone we could have reached the conclusion that the DCD failed to perform an objective and unbiased evaluation of the facts. Nevertheless, for the sake of completeness, we will continue our analysis and discuss the arguments presented by Argentina in its submissions to the Panel in defence of the DCD�s decision to disregard the exporters� information.47

(a) Confidentiality of the information submitted and the failure to provide non-confidential summaries

6.29 Argentina argues that in order to reach objective and valid conclusions, an investigating authority may base its determination on confidential information only if a sufficiently detailed summary of this information is provided in accordance with Article 6.5.1 of the AD Agreement.48 According to Argentina, the exporters failed to provide complete non-confidential summaries. Argentina submits that the summaries provided for certain annexes of the questionnaire relating to normal value and export price information (Annexes VII-XI) were not sufficiently detailed so as to permit a reasonable understanding of the substance of the information, and could therefore not be used by the DCD as a basis for its final determination.49 Moreover, Argentina asserts, even after the declassification of the information concerning product codes and cost of production, substantial information to determine normal value and export price remained confidential. Further, Argentina argues that the exporters failed to provide sufficiently detailed public summaries with regard to certain other essential questionnaire annexes (Annexes IV, V and VI).50 According to Argentina, by failing to provide sufficiently detailed non-confidential summaries, the exporters withheld necessary information and significantly impeded the investigation, and the DCD was therefore allowed under Article 6.8 to resort to facts available.

6.30 The EC considers that the exporters fully cooperated with the investigating authority and, instead of merely providing a detailed non-confidential summary, even disclosed all of the relevant confidential information. The EC also takes issue with Argentina�s argument that in the absence of a detailed non-confidential summary the authorities are not to rely on the confidential information submitted. In sum, the EC argues, the DCD was not entitled to resort to facts available for reasons relating to the confidentiality of the information supplied.

6.31 We note that, in effect, Argentina argues that an investigating authority may not base its determination on confidentially submitted exporter information. Argentina contends that unless a non-confidential summary is provided that is sufficiently detailed to permit the calculation of normal value, export price and the margin of dumping51 confidential information may not form the basis for the authority�s determination.52 Therefore, Argentina argues, the failure to provide such a detailed non-confidential summary amounts to a refusal to provide access to information that is necessary for the authority in the determination of a dumping margin determination.

6.32 In considering this question, we first look to the text of Article 6.5 of the AD Agreement, which is the key provision with regard to the protection of confidential information. Article 6.5 provides as follows:

"6.5 Any information which is by nature confidential (for example, because its disclosure would be of significant competitive advantage to a competitor or because its disclosure would have a significantly adverse effect upon a person supplying the information or upon a person from whom that person acquired the information), or which is provided on a confidential basis by parties to an investigation shall, upon good cause shown, be treated as such by the authorities. Such information shall not be disclosed without specific permission of the party submitting it.17

6.5.1 The authorities shall require interested parties providing confidential information to furnish non-confidential summaries thereof. These summaries shall be in sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence. In exceptional circumstances, such parties may indicate that such information is not susceptible of summary. In such exceptional circumstances, a statement of the reasons why summarization is not possible must be provided.

6.5.2 If the authorities find that a request for confidentiality is not warranted and if the supplier of the information is either unwilling to make the information public or to authorize its disclosure in generalized or summary form, the authorities may disregard such information unless it can be demonstrated to their satisfaction from appropriate sources that the information is correct".18

17Members are aware that in the territory of certain Members disclosure pursuant to a narrowly drawn protective order may be required.

18Members agree that requests for confidentiality should not be arbitrarily rejected.

6.33 Article 6.5 of the AD Agreement thus requires an investigating authority to treat information which is by nature confidential or which is provided on a confidential basis as confidential information and prescribes that such information shall not be disclosed without specific permission of the party submitting it.

6.34 In our view, the presence in the AD Agreement of a requirement to protect confidential information indicates that investigating authorities might need to rely on such information in making the determinations required under the AD Agreement. The AD Agreement therefore contains a mechanism that allows parties to provide investigating authorities with such information for the purposes of making their determinations, while ensuring that the information is not used for other purposes. In accordance with the accepted principles of treaty interpretation, we are to give meaning to all the terms of the Agreement.53 It would be contradictory to suggest that the AD Agreement creates a mechanism for the protection of confidential information, but precludes investigating authorities from relying on such information in making its determinations. If that were the case, then there would be no reason for the investigating authority to seek such information in the first place.

6.35 We find confirmation for this conclusion in Article 12 of the AD Agreement, which sets forth requirements regarding the contents of public notices:

"12.2.1 A public notice of the imposition of provisional measures shall set forth, or otherwise make available through a separate report, sufficiently detailed explanations for the preliminary determinations on dumping and injury and shall refer to the matters of fact and law which have led to arguments being accepted or rejected. Such a notice or report shall, due regard being paid to the requirement for the protection of confidential information, contain in particular:

(i) the names of the suppliers, or when this is impracticable, the supplying countries involved;

(ii) a description of the product which is sufficient for customs purposes;

(iii) the margins of dumping established and a full explanation of the reasons for the methodology used in the establishment and comparison of the export price and the normal value under Article 2;

(iv) considerations relevant to the injury determination as set out in Article 3;

(v) the main reasons leading to the determination.

12.2.2 A public notice of conclusion or suspension of an investigation in the case of an affirmative determination providing for the imposition of a definitive duty or the acceptance of a price undertaking shall contain, or otherwise make available through a separate report, all relevant information on the matters of fact and law and reasons which have led to the imposition of final measures or the acceptance of a price undertaking, due regard being paid to the requirement for the protection of confidential information. In particular, the notice or report shall contain the information described in subparagraph 2.1, as well as the reasons for the acceptance or rejection of relevant arguments or claims made by the exporters and importers, and the basis for any decision made under subparagraph 10.2 of Article 6". (emphasis added)

6.36 Thus, the transparency requirement which obligates the authority to explain its determination in a public notice is subject to the need to have regard to the requirement for the protection of confidential information of Article 6.5 of the AD Agreement. Confidentiality of the information submitted therefore limits the manner in which the authority explains its decision and supports its determination in a public notice. In sum, Article 12 implies, to our mind, that an investigating authority may rely on confidential information in making determinations while respecting its obligation to protect the confidentiality of that information.

6.37 We find support for our view in a recent Appellate Body Report on Thailand � Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from Poland (�Thailand � H-Beams�) which addressed the question of the use of confidential information by the investigating authority as a basis for its final determination. The Appellate Body stated that:

"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".54


41 Argentina�s answers to questions from the Panel at the first meeting, question 1, p. 1; EC�s first written submission, para. 47.

42 In accordance with Article 12 of the AD Agreement this public determination of the authorities is to set out the finding on fact and law of the authority. Since we have not been asked to rule on the question whether the explanations provided in the DCD�s Final Determination are sufficient under Article 12 of the AD Agreement, we will not make any findings as to whether the Final Determination as a public report complies with the requirements of Article 12 of the AD Agreement.

43 Final Dumping Determination, p. 44. Exhibit EC-2.

44 Appellate Body Report, Thailand � H-Beams, para. 107.

45 Appellate Body Report, Thailand � H-Beams, paras. 117-118.

46 In the past, this has also been the view of panels reviewing the determination of injury by the authorities. We refer for example to the report of the Panel in the case Mexico � Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States, WT/DS132/R, adopted 24 February 2000, para. 7.140. The Panel stated as follows:

"7.140 The final determination reflects no meaningful analysis of a number of the Article 3.4 factors: the Mexican sugar industry's profits, output, productivity, utilization of capacity, employment, wages, growth, or ability to raise capital.610 Moreover, there is no analysis of the condition of the Mexican sugar industry during the period of investigation, or projected for the near future. It is therefore not possible, by reading the final determination, to understand the overall condition of the domestic industry with respect to the Article 3.4 factors. Yet without an understanding of the condition of the industry, it is not possible, in our view, for SECOFI to have come to a reasoned conclusion, based on an objective evaluation of the facts, concerning the likely impact of dumped imports. Such a conclusion must, in our view, reflect the projected impact of further imports on the particular domestic industry, in light of its condition. In order to conclude that there is a threat of material injury to a domestic industry that is apparently not currently injured, despite the effects of dumped imports during the period of investigation, it is necessary to have an understanding of the current condition of the industry as a background".

_________________

610There is some information concerning some of these elements reflected in the determination. However, the mere recitation of data does not constitute explanation, or findings and conclusions, sufficient to satisfy the requirements of Article 12.2 of the AD Agreement. Mexico also pointed to certain working papers in the administrative file which contain information on certain of the Article 3.4 factors. However, unless consideration of a factor is reflected in the final determination, we do not take cognizance of underlying evidence in the record. See Korea � Resins Panel Report, paras. 210, 212, Argentina � Footwear Safeguard Panel Report, para. 8.126. Moreover, as discussed further below, SECOFI�s references to this information are limited to a discussion of that part of domestic production of sugar sold in the industrial market.

47 We note that our view is similar to that of the Panel in the case of Guatemala � Cement (II) which stated as follows:

    "8.245. Before determining whether the Ministry was justified in having recourse to the �best information available� for the purpose of calculating normal value, we note that Guatemala's justification for the Ministry's use of �best information available� does not correspond to that provided by the Ministry in its final Resolution of 17 January 1997. In that Resolution, the Ministry considered that:

    the information submitted by the exporter cannot be taken into account when calculating the normal value of the product investigated because it could not be verified and the technical accounting evidence submitted by the exporter on 18 December 1996 (confidential information) could not replace verification of the information by the Guatemalan investigating authority, as required by Article 6.6 of the Anti-Dumping Code (emphasis supplied, footnote omitted).
Thus, the Ministry clearly based its recourse to the �best information available� on its inability to verify the data submitted by Cruz Azul. The Ministry did not, according to its final Resolution, rely on the �best information available� because of Cruz Azul�s failure to provide certain sales and cost data, as alleged by Guatemala in these Panel proceedings. Even if the additional factors identified by Guatemala before the Panel could justify the use of �best information available�, such ex post justification by Guatemala should not form part of our assessment of the conduct of the Ministry leading up to the imposition of the January 1997 definitive anti-dumping measure. The issue before us is whether the Ministry complied with the AD Agreement. In examining that issue, we shall confine ourselves to the reasoning provided by the Ministry in its determinations. We note that this approach is similar to that adopted by the panel in Korea � Definitive Safeguard Measure on Imports of Certain Dairy Products, which ignored explanatory statements made in Korea�s first submission to the panel that were not reflected in the Korean authorities' analysis at the time of the investigation". (footnotes omitted);
Panel Report, Guatemala � Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico (�Guatemala � Cement (II)�), WT/DS156/R, adopted 17 November 2000, para. 8.245. We note that the Panel in this case nevertheless continued to discuss the ex post justifications given by Guatemala and found that even if its findings were to have been based on those justifications, the authorities would still not have been entitled to use facts available. (Panel report, Guatemala � Cement (II), para. 8.254.)

48 Argentina�s answers to questions from the Panel at the first meeting, question 3, p. 15.

49 Argentina�s oral statement at the first meeting, para. 18.

50 Argentina�s first submission, paras. 19-21.

51 Argentina�s answers to questions from the Panel at the first meeting, question 7, page 17.

52 According to Argentina, "confidentiality imposes a limit on the authority by preventing it from relying on public elements that can be invoked against the parties or third parties, particularly when the information in question is not accompanied by non-confidential summaries in sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence and hence to allow the determination reached, which must be public, to be backed". Argentina's answers to questions from the Panel at the first meeting, question 3, p. 16.

53 As the Appellate Body noted in the case of United States � Standards for reformulated and Conventional Gasoline, �one of the corollaries of the �general rule of interpretation� in the Vienna Convention is that interpretation must give meaning and effect to all terms of the treaty. An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility.� Appellate Body Report, United States � Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted on 20 May 1996, p. 21.

54 Appellate Body Report, Thailand � H-Beams, para. 107.
 


Continuation: Section 6.38

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