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Central American Regulations on Unfair Business Practices
Resolution No. 12-95 (COMRIEDRE II)
It is necessary to adapt regional regulations to the Uruguay Round Agreements following the creation of the World Trade Organization, in particular the Agreement on Implementation of Article VI of the GATT 1994 and the Agreement on Subsidies and Countervailing Measures;
By Resolution No. 9-94 (CEC), issued on 24 September 1994 in Montelimar, Nicaragua, the Central American Economic Council established as a priority matter on the Central American Agenda the preparation of the legal instruments to regulate trade that must be adopted in order to establish, as rapidly as possible, clear rules governing intra-Central American trade relations;
In accordance with the procedure established in the above-mentioned Resolution, the technical fora and meetings of Directors of Integration and Vice-Ministers of the Economy Responsible for Economic Integration Affairs gave their consent to the contents of the draft Central American Regulations on Unfair Business Practices and recommended that they be adopted;
Pursuant to Article 18 of the Protocol of Tegucigalpa to the Charter of the Organization of Central American States (OCAS), this forum is responsible for promoting integration policy in the Central American region, which implies assuming the functions of the Central American Economic Council and the Central American Tariff and Customs Council;
Pursuant to Article 18 of the Protocol of Tegucigalpa to the Charter of the Organization of Central American States and Articles 6, 7, 9, 12, 24 and 25 of the Convention on the Central American Tariff and Customs Regime;
1. To adopt the Central American Regulations on Unfair Business Practices in the form in which they appear in the Annex to this Resolution, which forms an integral part thereof.
2. The Central American Regulations on Unfair Business Practices shall enter into force thirty days following the date of this Resolution, which shall be published in full by the States.
San Pedro Sula, 12 December 1995
Marco Antonio Vargas Díaz
Eric Meza Duarte Eduardo Zablah Touché
TITLE I GENERAL PROVISIONS
Article 1. Definitions
Article 2. Object of the Regulations
Article 3. Initiation of proceedings
Article 4. Substantive rules
TITLE II PROCEDURES AND MEASURES IN CASES OF UNFAIR BUSINESS PRACTICES
Article 5. Purpose of the procedure
Article 6. Application
Article 7. Examination of the application
Article 8. Rejection of the application
Article 9. Notification of the exporting government
Article 10. Opportunity for holding consultations
Article 11. Resolution for the opening of an investigation
Article 12. Time-limit for the investigation
Article 13. Preliminary determination
Article 14. Provisional measures
Article 15. Requirements for the imposition of provisional measures
Article 16. Duration of provisional measures
Article 17. Termination of the investigation
Article 18. Final resolution
Article 19. Transmittal to the Executive Committee
Article 20. Convocation of the Executive Committee
Article 21. Statements by affected parties
Article 22. Review
Article 23. Recommendation of the Executive Committee
Article 24. Regional procedure
Article 25. Notification
Article 26. Continuation of procedure
Article 27. Time-limit for the investigation
Article 28. Convocation and final resolution
Article 29. Provisional measures
Article 30. Implementation of decisions
Article 31. Cost of the regional investigation
Article 32. Procedure
Article 33. Exceptional and provisional nature of measures
Article 34. Causal link
Article 35. Congruence
Article 36. Duration of definitive measures
Article 37. Collection of duties
Article 38. Guaranteed amount
Article 39. Conciliation meetings
Article 40. Suspension of the investigation
Article 41. Review of undertakings
Article 42. Publication
Article 43. Appeals
TITLE III FINAL PROVISIONS
Article 44. Amendments to these Regulations
Article 45. Suppletive application
Article 46. Implementing body
Article 47. Epigraphs
Article 48. Repeal clause
CENTRAL AMERICAN REGULATIONSON UNFAIR BUSINESS PRACTICES
Article 1: Definitions
For the purpose of these Regulations, the expressions indicated below shall have the following meaning:
The Directorate or Directorate-General of Integration of the Ministry of the Economy or, as the case may be, the Directorate competent for matters pertaining to Central American economic integration in each country, or the technical unit with responsibility for investigating unfair business practices. This shall be SIECA in the case of regional procedures.
WTO Agreements: The Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 and the Agreement on Subsidies and Countervailing Measures.
Executive Committee: The Executive Committee for Economic Integration set up by Article 37 of the Guatemala Protocol.
Council of Ministers: The Council of Ministers for Economic Integration set up by Article 37 of the Guatemala Protocol.
States Parties: The States party to the General Treaty on Central American Economic Integration, the Guatemala Protocol and the Convention on the Central American Tariff and Customs Regime.
GATT 1994: The General Agreement on Tariffs and Trade 1994, annexed to the Agreement Establishing the World Trade Organization.
Minister: The Minister of each State Party having responsibility for matters relating to Central American economic integration or, as the case may be, the investigation of unfair business practices.
WTO: The World Trade Organization
Interested Parties: Those referred to in Article 6.11 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 and in Article 12.9 of the Agreement on Subsidies and Countervailing Measures, respectively.
Guatemala Protocol: The Protocol to the General Treaty on Central American Economic Integration, signed on 29 October 1993.
Region: All of the States Parties as a whole.
SIECA: The Secretariat for Central American Economic Integration.
Third Countries: Countries that are not States Parties.
Article 2: Object of the Regulations
These Regulations develop the provisions established in the WTO Agreements and, as appropriate, the provisions of the Guatemala Protocol and the Central American Tariff and Customs Regime.
Article 3: Initiation of proceedings
The process of investigation for the purpose of establishing the existence and effects of unfair business practices may be initiated on application by an interested party or ex officio, in accordance with the provisions of the WTO Agreements.
When the investigating authority proceeds ex officio, it shall notify the domestic industry for confirmation of its consent to the continuation of the investigation.
Article 4: Substantive rules
All substantive aspects relating to unfair business practices shall be determined by the provisions of the instruments referred to in Article 2 of these Regulations.
Article 5: Purpose of the procedure
The investigating authority shall be responsible for investigating, analysing and evaluating allegedly unfair business practices and deciding whether it is appropriate to recommend the imposition of "anti-dumping duties" or "countervailing duties", as the case may be.
Such measures shall be imposed when unfair business practices cause or threaten to cause material injury or serious prejudice to a domestic industry or material retardation of the establishment of such an industry, in accordance with the criteria set out in the WTO Agreements.
Article 6: Application
Applications for the initiation of an investigation may be made by representatives of the domestic industry producing the product injured by the imports in relation to which the investigation is requested and producer associations which consider that they are being affected or threatened by imports which are allegedly the object of unfair business practices.
The application shall be submitted to the investigating authority and shall comply with the following formal requirements:
Article 7: Examination of the application
Within thirty days of receiving the application, the investigating authority shall examine it in order to establish whether it fulfils the requirements laid out in these Regulations. If the authority determines that the application is incomplete, it shall notify the interested party within ten days to enable the latter to fulfil the relevant requirements within thirty days of this notification. At the request of the interested party, this period may be extended for a further thirty days.
If the interested party fails to comply within the stipulated period, the application shall be considered abandoned and shall be filed, without prejudice to the right of the party concerned subsequently to resubmit the case.
If the interested party provides the additional information, the investigating authority shall, within fifteen days, proceed in accordance with Article 11 of these Regulations.
Article 8: Rejection of the application
After having examined the application within the time-limit established in the previous Article, the investigating authority shall reject it by means of a reasoned resolution in the following cases:
The resolution rejecting an application shall be notified, within ten days of its date of issue, to the interested party, who may use the legal remedies provided for in the legislation of the State party concerned against it.
Article 9: Notification of the exporting government
The investigating authority shall notify the government of the country of origin or export of the product under investigation of the application for the initiation of an investigation into unfair business practices. This notification shall be made prior to the initiation of the investigation.
Article 10: Opportunity for holding consultations
In the case of subsidies, together with the notification provided for in the previous Article or at any time prior to the initiation of the investigation, the investigating authority shall afford an opportunity to the governments of the countries of origin or export of the product under investigation to hold consultations for the purpose of clarifying the facts raised in the application and arriving at a mutually agreed solution. Consultations for this same purpose may be held during the investigation.
Article 11: Resolution for the opening of an investigation
When, following the examination referred to in Article 7 above, the investigating authority decides that there is sufficient evidence to justify opening an investigation, it shall issue a resolution announcing the initiation of the respective investigation procedure. The resolution shall contain at least the following information:
This resolution shall be notified within ten days of its date of issue to the interested parties, who shall have a period of thirty days from the day following the notification in which to object.
Article 12: Time-limit for the investigation
The investigation shall be concluded within twelve months of the date of its initiation, but may, in exceptional circumstances, be extended for a further period of up to six months on the initiative of the investigating authority or at the request of an interested party.
Article 13: Preliminary determination
The investigating authority shall issue an affirmative or negative preliminary determination as to the existence of unfair business practices and the existence of injury, threat of injury or retardation of the establishment of a domestic industry.
This determination shall take the form of an opinion issued by the investigating authority within a period of sixty days of the initiation of the investigation.
Article 14: Provisional measures
During the investigation, the investigating authority may recommend to the Minister the adoption of provisional measures in cases of alleged dumping or subsidization, in conformity with the provisions of the WTO Agreement.
Article 15: Requirements for the imposition of provisional measures
Provisional measures shall be imposed only if the following conditions are fulfilled:
Article 16: Duration of provisional measures
The application of provisional measures shall be limited to as short a period as possible, not exceeding four months or, with respect to dumping, by decision of the authorities concerned and at the request of exporters representing a significant percentage of the trade involved, for a period not exceeding six months.
When the authorities, in the course of an investigation, examine whether a duty lower than the margin of dumping would be sufficient to remove injury, these periods may be six and nine months, respectively.
Within ten days of its adoption, the resolution imposing provisional measures shall be notified to the interested parties and to the competent authority for implementation.
Article 17: Termination of the investigation
The investigation shall be terminated if it is determined that the margin of dumping or amount of subsidy is de minimis or that the volume of imports or the injury is negligible.
Article 18: Final resolution
Within three days of concluding its investigation, the investigating authority shall submit the technical study together with the relevant recommendations to the Minister, who shall, within three working days of its receipt and by means of a reasoned resolution, declare the investigation concluded, state whether or not a definitive anti-dumping or countervailing duty should be imposed and, if applicable, revoke any provisional measure adopted.
The resolution imposing a definitive anti-dumping or countervailing duty shall be put into effect in accordance with the domestic law of each country and shall be notified within ten days of issue to the interested parties and to SIECA, for the latter to bring it to the attention of the Executive Committee.
Article 19: Transmittal to the Executive Committee
In the case of products originating in Central America, once the application has been processed in accordance with the preceding Chapter, the investigating authority shall, together with the notification of the resolution referred to in the last paragraph of the preceding Article and within the same time-limit indicated therein, transmit to SIECA a summary of the file, for the latter to notify the other States and convene the Executive Committee to examine the matter.
Article 20: Convocation of the Executive Committee
Within eight days of receiving the summary, SIECA shall convene the Executive Committee to a meeting to be held within thirty days of the date of the convocation and shall transmit to its members a copy of the summary.
Article 21: Statements by affected parties
The State Party affected by the adopted measure shall, within fifteen days of being notified of the convocation, submit to the Executive Committee through SIECA a duly substantiated statement of the case.
Article 22: Review
When, after receiving the reports, the Executive Committee at its meeting nevertheless considers that it requires further items of evidence, it may collect such items through SIECA, which shall submit its report to the Committee within thirty days.
Article 23: Recommendation of the Executive Committee
Within thirty days of receipt of the corresponding report from SIECA, the Executive Committee shall make whatever recommendations it sees fit with a view to resolving the problem.
The State Party which considers itself affected may have recourse to the regional dispute settlement procedures or to the corresponding procedures of the WTO.
Article 24: Regional procedure
Where the industry of a State Party other than the importer is affected, at the request of the Government concerned, a regional procedure shall be opened and conducted through SIECA. The procedure shall be initiated as of the moment when SIECA receives the request of the State concerned, which shall be submitted in the original plus five copies and, as appropriate, in compliance with Article 6 of these Regulations.
Article 25: Notification
Within ten days of receipt of the request, SIECA shall adopt a resolution to proceed with the case and, within the next ten days, shall forward a copy of the file to the administrative authority of the importing State Party, which shall proceed with the case in accordance with the provisions of Chapter I of this Title. The authority shall begin the review of the case as from the eighth day after SIECA transmitted the file.
Article 26: Continuation of procedure
If the importing State Party does not initiate the investigation within the time-limit established in the preceding Article, SIECA shall, within the following ten days, transmit a copy of the file to the other States Parties and officially notify the interested parties, thus initiating the regional procedure.
Article 27: Time-limit for the investigation
SIECA shall carry out the relevant investigation within the period established in Article 12 of this instrument and may gather and request any evidence and reports it considers necessary, in particular from the exporters who are the subject of the complaint and from Central American producers and importers. During the investigation period, any interested party may submit information or present written submissions.
Article 28: Convocation and final resolution
Within five days of the conclusion of the investigation, SIECA shall issue a convocation of the Executive Committee and transmit the file, together with a technical report and whatever recommendations it considers pertinent. The Committee shall meet within the following fifteen days in order to settle the dispute definitively, determining the individual or joint actions to be taken by the States Parties.
Article 29: Provisional measures
At any stage in the investigation, and provided that the conditions set forth in Article 15 of these Regulations are fulfilled, SIECA may recommend the adoption of provisional measures. The Executive Committee shall examine and decide on this recommendation at its subsequent meeting.
Article 30: Implementation of decisions
The decisions of the Executive Committee establishing provisional or final anti-dumping or countervailing duties shall be implemented by the States Parties in accordance with their domestic law.
Article 31: Cost of the regional investigation
The costs of the regional investigation shall be borne by the person or persons who brought the action before the complainant State Party.
Article 32: Procedure
In addition to the special provisions established in this Chapter, the provisions of Chapters I and II of this Title shall apply, where appropriate, to the regional procedure.
Article 33: Exceptional and provisional nature of measures
Measures imposed pursuant to these Regulations shall be exceptional and temporary in character as they shall be in force as long as is necessary to counteract the situation which caused them to be applied.
Article 34: Causal link
For a measure to be adopted, there must be a causal link within the meaning of the WTO Agreements.
Article 35: Congruence
Where any anti-dumping or countervailing duty is applied, its amount shall be sufficient to redress the injury or prejudice and never greater than the estimated margin of dumping or the amount of the subsidy.
Article 36: Duration of definitive measures
Any definitive anti-dumping or countervailing measure shall be eliminated within a period of five years from the date of imposition of the provisional measure or, failing that, of the final resolution.
This time-limit may be extended exceptionally when it is demonstrated that the conditions which gave rise to the measure continue to exist.
Once a measure has been adopted, it may be reviewed at any moment during its implementation.
Article 37: Collection of duties
Where an anti-dumping or countervailing duty is imposed on a product, it shall be collected on imports that are dumped or subsidized and causing or threatening to cause material injury or serious prejudice to a domestic industry or material retardation of the establishment of a domestic industry, in accordance with these Regulations. Insofar as possible, it shall be applied to the supplier or suppliers of the product concerned. If, however, all of the suppliers are involved in the unfair business practice concerned or it is impossible to distinguish between them, the measure shall apply to all suppliers in the country or countries in question.
Article 38: Guaranteed amount
If the definitive countervailing or anti-dumping duty exceeds the guaranteed amount, the difference shall not be demanded. If the definitive duty is less than the guaranteed amount, an order shall be issued for prompt reimbursement of the excess.
Article 39: Conciliation meetings
At any stage of the investigation until such time as a definitive measure is adopted, and without interrupting the investigation, conciliation meetings may be held ex officio or at the request of a party in order to achieve a direct settlement.
Article 40: Suspension of the investigation
At the proposal of the investigating authority, the Minister may suspend or terminate the investigation at any stage when there are sufficient grounds for doing so, by issuing the corresponding resolution which shall be notified within ten days of its issue to the interested parties and SIECA, for the latter to bring it to the attention of the Executive Committee.
Article 41: Review of undertakings
The implementation of the undertakings agreed by conciliation meetings may be reviewed ex officio or at the request of a party, and periodic information may be requested concerning such implementation. If the review reveals non-compliance, a recommendation shall be made to the Minister to apply provisional measures on the basis of the information available, and the interested parties shall be notified within ten days of the date on which the measure was adopted.
Article 42: Publication
Resolutions on the opening, suspension or conclusion of an investigation and on the application or non-application of countervailing or anti-dumping duties or the modification of such measures shall, at the moment of their notification, be published, once only, at the cost of the interested party, in the Official Journal and one of the daily newspapers with national circulation of the country concerned and, where appropriate, in the Official Journal of the Central American Integration System, to enable any persons concerned by the investigation process to exercise their rights.
Article 43: Appeals
The appeals provided for in the domestic legislation of each country may be entered against the resolutions adopted by the national authorities.
The appeals provided for in the legal instruments of Central American integration may be entered against the resolutions adopted by the regional bodies.
Article 44: Amendments to these Regulations
The Council of Ministers shall have responsibility for amending the provisions of these Regulations at the request of States Parties or SIECA.
Each State Party shall submit a six-monthly report to the Executive Committee, through SIECA, on the implementation of this instrument.
Article 45: Suppletive application
In cases not covered by these Regulations, States Parties may apply on a supplementary basis the provisions and principles of Central American integration, the provisions of public international law, and the general principles of law.
Article 46: Implementing body
Pending the entry into force of the Guatemala Protocol for all States Parties, the body competent in matters pertaining to economic integration, in accordance with the legal instruments of Central American integration, shall have responsibility for implementing this instrument, where applicable.
Article 47: Epigraphs
The epigraphs preceding the Articles of these Regulations are exclusively indicative and therefore have no effect on their interpretation.
Article 48: Repeal clause
Upon the entry into force of these Regulations, the Regulations of Articles 25 and 26 of the Convention on the Central American Tariff and Customs Regime, "Unfair Business Practices" and "Safeguard Clause", dated 10 September 1987, the Central American Regulations on Unfair Business Practices and Safeguard Clause, dated 29 January 1993, as well as any other provision inconsistent with these Regulations as far as unfair business practices are concerned are hereby repealed.