WTO issues panel report regarding Russian duties on vehicle imports from Germany and Italy

On 27 January the WTO issued the panel report in the case brought by the European Union in “Russia — Anti-Dumping Duties on Light Commercial Vehicles from Germany and Italy” (DS479).

Introduction

• The European Union challenges the imposition, by the Russian Federation, of anti-dumping duties on certain light commercial vehicles (LCVs) from Germany and Italy.  The measure at issue is Decision No. 113 of 14 May 2013 of the Board of the Eurasian Economic Commission (EEC), including annexes, notices and reports of the Department for Internal Market Defence of the EEC (DIMD) and any amendments.
• At issue is the DIMD’s definition of the domestic industry, the DIMD’s selection of investigation periods, and the DIMD’s determinations on price suppressive effects, injury and causation.  The European Union also challenges certain procedural aspects of the underlying investigation concerning confidential treatment of information, provision of non-confidential summaries of information treated as confidential, and the disclosure of essential facts.
• The Russian Federation requested that the Panel reject the European Union’s claims in this dispute in their entirety.

Claims concerning the definition of the domestic industry

• The European Union claimed that the DIMD did not conduct an objective examination based on positive evidence.  This is because it defined the domestic industry as consisting of one producer, Sollers, which accounted for about 87.8% of total domestic production of the like product during the POI and excluded a known producer, GAZ, from the definition of the domestic industry. The exclusion of GAZ from the domestic industry led to a risk of materially distorting the injury analysis and resulted in the violation of Articles 3.1 and 4.1.
• The Panel found that the DIMD defined the domestic industry as Sollers only after it received Questionnaire responses from both Sollers and GAZ. In this way, the DIMD risked materially distorting its own injury analysis and therefore acted inconsistently with Article 4.1. Because the DIMD made its injury and causation determinations on the basis of information related to an improperly defined domestic industry, the DIMD also acted inconsistently with Article 3.1, as a consequence of its breach of Article 4.1.

Claims concerning the selection of periods of investigation

• The European Union claimed that by selecting “non-consecutive periods of non-equal duration” for the examination of the trends for the domestic industry, the DIMD’s injury determination was not based on an objective examination of positive evidence, contrary to Article 3.1 of the Anti‑Dumping Agreement. In the light of the alleged breach of Article 3.1, the European Union also made consequential claims under Articles 3.2, 3.4, and 3.5.
• The Panel found that the DIMD did not compare or contrast half-year data with full calendar year data, nor did the approach of DIMD of splitting the investigation period have the intent or the effect of “artificially creating” negative trends. The Panel found that the European Union’s argument that the DIMD accepted the periods of investigation proposed by the Applicant is not supported by the record. Furthermore, the European Union had not established that the DIMD failed to explain its selection of the periods. For those reasons, the Panel concluded that the European Union had failed to establish that the DIMD acted inconsistently with Article 3.1 by the alleged use of “non-equal and non‑consecutive” period in its injury and causation analyses.

Claims concerning price suppressive effects

• The European Union claimed that the DIMD acted inconsistently with Articles 3.1 and 3.2 by failing to make an objective examination of the price suppressive effect of dumped imports based on positive evidence.
• The Panel found that the DIMD acted inconsistently with Articles 3.1 and 3.2 by failing to taken into account the impact of the financial crisis in determining the appropriate rate of return in its consideration of price suppression. However, the European Union did not establish that the DIMD acted inconsistently with Articles 3.1 and 3.2 because the DIMD “mixed up” data expressed in USD and RUB without any explanation in its consideration of price suppression. In addition, the European Union did not establish that the trends in dumped import prices and domestic prices called into question the “explanatory force” of dumped imports for price suppression, that the DIMD should have analysed whether the market would accept additional domestic price increases, that the DIMD failed to examine whether any price suppression was the effect of competitive pressure exerted by the other domestic producer, that the DIMD failed to examine the relevance of the 2009 increase in customs duties on imported LCVs from 10% to 25%, and that the DIMD did not demonstrate that the alleged price suppression was “to a significant degree”.

Claims concerning the state of the domestic industry

• The European Union claimed that the DIMD’s examination of the impact of the dumped imports on the state of the domestic industry does not constitute an objective examination based on positive evidence.
• The Panel found that the European Union did not demonstrate in what way the identified discrepancy brought into question the probative value of the evidence actually relied upon by the DIMD or the reasonableness and objectivity of the determination based on that evidence. A lack of consistency in the selection of beginning or ending points in an end-point to end-point comparison does not in itself gives rise to an inconsistency with Articles 3.1 and 3.4. On the facts of this case, the European Union did not demonstrate that the DIMD acted inconsistently with Articles 3.1 and 3.4 by failing to systematically compare data for 2011 with data for 2008 for all economic indicators. The European Union also did not demonstrate that DIMD failed to base its evaluation on an objective examination of the evidence concerning the domestic industry’s profit/profitability during the POI, that the DIMD assumed that the exceptional positive developments in the domestic industry during 2009 could continue during 2010-2011 without more explanation, and “base[d] its conclusions on a comparison between these two time periods”, and that the DIMD failed to consider two sets of facts and arguments relevant to the state of the domestic industry that were before it. Concerning the European Union’s argument that the DIMD failed to examine all relevant factors under Article 3.4, the Panel found that the DIMD examined the return on investments, actual and potential effects on cash flow, and the ability to raise capital or investments, but failed to examine the magnitude of the margin of dumping.

Claims concerning causation

• The European Union claimed that the DIMD acted inconsistently with Articles 3.1 and 3.5 by failing to properly establish a causal link between the dumped imports and the alleged injury, and by failing to conduct a proper non-attribution analysis of factors other than the dumped imports that were known to the DIMD and that were injuring the domestic industry at the same time as dumped imports. The European Union further argues that, insofar as the DIMD relied on its price suppression analysis in determining causation, that inadequate analysis also undermined the causation analysis.
• The Panel found that the DIMD acted inconsistently with Articles 3.1 and 3.5 insofar as it relied on price suppression in its causation determination. However, the Panel found that the European Union did not establish that the causation determination of the DIMD was one that a reasonable and objective investigating authority could not have reached on the basis of the evidence and arguments before it. Concerning the DIMD’s non-attribution analysis, the Panel found that the European Union did not establish that the DIMD’s non-attribution analysis of the termination of the licence agreement and the competition from GAZ was inconsistent with Articles 3.1 and 3.5.  The Panel found, however, that by failing to address PCA’s argument regarding the possible cause of Sollers’ low capacity utilisation during the period of consideration in its non‑attribution analysis, the DIMD acted inconsistently with Articles 3.1 and 3.5.

Claims concerning the confidential treatment of information

• The European Union claimed that confidential treatment by the DIMD of certain information submitted by interested parties was inconsistent with Articles 6.5 and 6.5.1 because, with respect to each item of information in question, one or more of the following occurred:
• the DIMD failed to require a showing of good cause for confidential treatment;
• the DIMD did not assess whether the cause shown was sufficient to warrant the confidential treatment;
• there was no “meaningful” summary of the confidential information submitted; or
• no explanation of why a summary was not possible was provided.
• The Panel found that in respect of certain items of information treated as confidential by the DIMD at issue in this dispute, the European Union demonstrated that the submitters of that information did not show good cause for confidential treatment. On that basis, in respect of all the information at issue, treated as confidential by the DIMD, the DIMD did not act consistently with Article 6.5.  The Panel did not find it necessary to address the claims of the European Union under Article 6.5.1 to resolve this dispute.

Claims concerning disclosure of essential facts

• The European Union claimed a violation of Article 6.9 on the basis that the DIMD failed to inform interested parties of essential facts under consideration concerning all aspects of the decision to impose the definitive measure. The Panel found that the DIMD did not act inconsistently with Article 6.9 by not informing all interested parties of certain information, but acted inconsistently with Article 6.9 by failing to inform all interested parties of the rest of the information at issue.

 

Pages: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200