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Compendium of Antidumping and Countervailing Duty Laws in the Western Hemisphere


Chile

 

I. Legal Authority to Impose Antidumping and Countervailing Duties

A. Treaties or Agreements

Article VI of the GATT 1995, the WTO Antidumping Agreement ("AD Agreement") and the Agreement on Subsidies and Countervailing Measures ("SCM Agreement").

These Agreements apply to all WTO signatories.

B. Legislation

   Chilean legislation on this subject consists of the following:

   Supreme Decree No.16 (Ministry of External Relations), published in the Diario Oficial of 17/05/95, by which the 1994 Agreement on Application of Article VI of the GATT and the Agreement on Subsidies and Countervailing Measures were incorporated into Chile's national legislation and acquired the force of law as of that date.

   Lay No.18.525, published in the Diario Oficial of 30/06/86, which created the National Commission, and Decree No.575 of the Ministry of Finance, published on 20/08/93, which approved the regulations under Article 11 of Law 18,525.

   Law 18,525 and Regulation 575 apply only to the extent that their provisions do not conflict with Supreme Decree No.16, above: under the hierarchy-of-laws principle, that decree takes precedence over all previous ones, because it deals with an international treaty that has been incorporated into national legislation by Supreme Decree.

C. Regulations

   Chilean legislation on this subject consists of the following:

             
  • Supreme Decree No.16 (Ministry of External Relations), published in the Diario Oficial of 17/05/95, by which the 1994 Agreement on Application of Article VI of the GATT and the Agreement on Subsidies and Countervailing Measures were incorporated into Chile's national legislation and acquired the force of law as of that date.
             
  • Law No.18,525, published in the Diario Oficial of 30/06/86, which created the National Commission, and Decree No. 575 of the Ministry of Finance, published on 20/08/93, which approved the regulations under Article 11 of Law 18,525.
             
  • Law 18,525 and Regulation 575 apply only to the extent that their provisions do not conflict with Supreme Decree No. 16, above: under the hierarchy-of-laws principle, that decree takes precedence over all previous ones, because it deals with an international treaty that has been incorporated into national legislation by Supreme Decree.

D. Administrative Practice, Handbook or Guide

   Chile has an unofficial guide which was prepared in November 1994 the purpose of which was to explain the functions of the investigating authority in Chile, its structure, and other general information on the necessary conditions for recommending the imposition of duties, the available ways to correct distortions, and the proceedings that are conducted.

   This guide does not reflect the WTO rules which were incorporated into Chilean law on May 17, 1995.

II. Authorities Responsible for Conducting Investigations

A. Injury

   The National Commission is responsible for investigating the existence of price distortions for imported goods. This Commission is comprised of the Fiscal Nacional Econůmico [a specially-appointed counselor], who chairs the Commission; two representatives of the Central Bank, appointed by the Bank's Board; one representative each from the Finance Ministry, the Ministry of Economy, Development and Reconstruction, and the Agriculture Ministry (Law 18,.525 was amended by Law 19,383 of the Ministry of Agriculture, published in the Diario Oficial of May 5, 1995), all of whom are appointed by resolution published in the Diario Oficial; the National Director of Customs; and a representative of the Ministry of External Relations. These members may have alternates, appointed by law or by resolution of the institution concerned, published in the Diario Oficial. (Article 11, Law No. 18,525)

B. Antidumping and Countervailing Duties

   The National Commission is responsible for investigating the existence of price distortions for imported goods. This Commission is comprised of the Fiscal Nacional Econůmico [a specially-appointed counselor], who chairs the Commission; two representatives of the Central Bank, appointed by the Bank's Board; one representative each from the Finance Ministry, the Ministry of Economy, Development and Reconstruction, and the Agriculture Ministry (Law 18,.525 was amended by Law 19,383 of the Ministry of Agriculture, published in the Diario Oficial of May 5, 1995), all of whom are appointed by resolution published in the Diario Oficial; the National Director of Customs; and a representative of the Ministry of External Relations. These members may have alternates, appointed by law or by resolution of the institution concerned, published in the Diario Oficial. (Article 11, Law No. 18,525).

III. Methodologies/Definitions

A. Like Product

   Like product signifies a product that is identical, i.e. the same in all respects as the product in question, or where no such product exists, a product that, while not identical in all respects, has characteristics very similar to those of the product under consideration. (Supreme Decree No. 16 of the Ministry of External Relations, published on May 17, 1995, in the Diario Oficial).

B. Domestic Producers

   The expression "Domestic Industry" is understood to include all domestic producers of like goods, or those among them whose combined production represents a major portion of the total domestic output of such goods. Nonetheless:

         i) where some producers are related to exporters or importers, or are themselves importers of the product that is allegedly being dumped or subsidized, the expression "Domestic Industry" may be interpreted to refer to all other producers than those;

         ii) under exceptional circumstances, the national territory may be divided, for purposes of the product in question, into two or more competing markets, and the producers within each market may be considered as a separate industry in their own right, provided that:

               a) the producers in that market sell all or substantially all of their output of the product in question within that market, and that

               b) existing demand in that market is not covered to any substantial degree by producers of the product in question located in another part of the country.

   Under these circumstances, injury may be deemed to exist even if there is no injury to a significant portion of the overall domestic industry, provided that the dumped imports are concentrated in that isolated market, and, in addition, that such imports are causing injury to producers who account for all or substantially all production within that market. (Supreme Decree No. 16, Ministry of External Relations, published on May 17, 1995, in the Diario Oficial).

C. Standing

   The Commission will not undertake any investigation until it is satisfied, on the basis of the degree of support or opposition to the complaint filed by domestic producers of a like good, that the complaint has been brought by, or on behalf of, the domestic industry as a whole. The complaint is deemed to have been brought by the domestic industry, or on its behalf, if it is supported by domestic producers who together account for more than 50 per cent of the total output of the like good that is produced by that portion of the domestic industry that has expressed itself for or against the complaint. Nonetheless, no investigation will be undertaken if the domestic producers who expressly support the complaint represent less than 25 per cent of the domestic industry's total output of the like good. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

D. Polling

   Where the domestic industry is fragmented to the point where there are an exceptionally large number of producers, the Commission may determine the degree of support and opposition for the complaint by means of statistically valid sampling techniques. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

E. Normal Value

   A product is deemed to have been dumped, i.e. entered into the market of another country at a price below its normal value, when its export price, upon shipment to Chile, is lower than the comparable price, under normal conditions of trade, of a like good destined for consumption within the exporting country's own market.

   Where the like good is not sold under normal conditions of trade in the domestic market of the exporting country, or where, because of special market conditions or low sales volumes in the exporting country's domestic market, such sales do not allow for proper comparison, the margin of dumping is determined by comparison against a comparable price for the like good when it is exported to a suitable third country, provided that that price is representative, or against the cost of production of that good in the country of origin, plus a reasonable amount to cover administrative, sales and general costs and an amount for profit.

   Sales of the like good in the domestic market of the exporting country, or sales to a third country, at prices lower than unit costs (fixed and variable costs) of production, plus administrative, sales and general costs, may be deemed not to have been transacted under normal conditions of trade by reason of price, and may be excluded from calculation of the normal value, only where the authorities determine that such sales were transacted over a prolonged period and in substantial quantities, at prices that do not provide for recovery of all costs within a reasonable period of time. If prices that are below unit costs at time of sale are nevertheless higher than the corresponding weighted-average unit costs for the whole period under investigation, those prices will be deemed to provide for recovery of costs within a reasonable period of time. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

F. Calculation of Cost of Production

   Costs are normally calculated on the basis of records kept by the exporter or producer under investigation, provided that such records are kept in accordance with generally accepted accounting principles of the exporting country, and that they reflect fairly the costs of producing and marketing the product in question.

   The Commission will take into account any available evidence to demonstrate that costs have been properly attributed, including evidence submitted by the exporter or producer during the investigation, provided that such attributions are those traditionally used by the exporter or producer, in particular as regards the setting of appropriate amortization and depreciation periods and deductions for capital costs and other product development costs.

   Except where they are already reflected in the attribution of the costs referred to in this section, costs must be duly adjusted to take account of those portions of non-recurrent costs that are related to future and/or current production, or to take account of circumstances where costs relating to the period under investigation have been affected by start-up operations.

   The amounts for administrative, sales and general costs, and the amount for profits, are to be based on actual data related to production and sales of like goods in the normal course of trade, conducted by the exporter or the producer under investigation. Where such amounts cannot be determined on this basis, the following bases may be used:

         i) actual amounts spent and recovered by the exporter or the producer in question with respect to production and sales of the same general category of goods in the domestic market of the country of origin;

         ii) the weighted average of actual amounts spent and recovered by other exporters or producers that have been subject to investigation in relation to the production and sale of like goods in the domestic market of the country of origin;

         iii) any other reasonable method, provided that the amount for profits so determined does not exceed the profit normally earned by other exporters or producers from sales of products of the same general category in the domestic market of the country of origin. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

G. Export Price

   Where no export price exists, or where, in the opinion of the Commission, the export price is rendered unreliable by the existence of an association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported goods are resold for the first time to an independent buyer, or on such other reasonable basis as the authorities may determine, if the goods are not re-sold to an independent buyer or are not resold in the same condition in which they were imported. (Supreme Decree No. 16, Ministry of External relations, published in the Diario Oficial on May 17, 1995).

H. Export Price - Adjustments

   A fair comparison is to be made between the export price and the normal value. This comparison is made at the same level of trade, normally the ex factory level, and on the basis of the most recent sales data available. In each case, depending on the individual circumstances, due consideration is taken of any differences that may affect price comparability, including differences in the conditions of sale, tax treatment, levels of trade, quantities and physical characteristics, and any other differences that can be shown to have an influence on price comparability.

   In the cases described in Paragraph 3, account will also be taken of expenses, including duties and taxes, that are incurred between importation and resale, and any corresponding benefits received. Where price comparability has been affected in such cases, the Commission will establish the normal value at a level of trade equivalent to the corresponding constructed export price, or may take due account of any elements permitted by this paragraph. The Commission will inform the interested parties of any information needed to ensure a fair comparison, and shall take care not to impose on them any unreasonable burden of proof. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

I. Injury

   In order to be actionable, there must be:

         (i) the existence of a distortion of prices,

         (ii) evidence that the distortion causes or threatens actual imminent serious injury to the domestic industry; and

         (iii) a ususal link between the imports and the alleged injury. (Decree 575, Title II, Art. 10).

   The final decision shall contain the findings relating to the margin of price distortion, the considerations relating to the determination of the injury, and the considerations relating to the determination of the causal link between the price distortion investigated and the injury caused or threatened to the domestic industry. (Decree 575, Title II, Art. 15).

   The Commission makes its decision based on information provided by the interested parties or third persons.

J. Threat of Injury

   The determination that there exists a threat of material injury must be based on facts, and not simply on allegations, conjecture or remote possibilities. Any change in circumstances whereby dumping or subsidies could be expected to cause injury must be clearly identified and imminent. In arriving at a determination that there exists a threat of material injury, the Commission will take into consideration the following factors, among others:

         i) significant rate of increase in the importation of dumped or subsidized goods into the internal market, such as to indicate the probability that imports are growing substantially;

         ii) sufficient freely available capacity on the part of the exporter, or an imminent and substantial increase in that capacity, to indicate the probability of a substantial increase in exports of dumped or subsidized goods to the Chilean market, taking into account the existence of other export markets that might absorb such an increase in exports.

         iii) the fact that goods are being imported at prices that will have the effect of significantly lowering domestic prices, or restraining their rise, and the likelihood that this will create higher demand for further imports; and

         iv) the size of inventories or stocks of the product under investigation.

   While no one of these factors may necessarily be enough by itself to establish a definitive trend, they may, when taken together, lead to the conclusion that further exports are imminent, at dumped or subsidized prices, and that, in the absence of protective measures, material injury will result.

   In cases where dumped imports are found to threaten injury, the imposition of antidumping measures must be examined and decided with particular care. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

K. Material Retardation

   Chilean legislation takes material retardation into account in determining the existence of injury. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

L. Cumulation

   Where imports of a good originating in more than one country are simultaneously under antidumping or subsidy countervail investigation, the Commission may assess the effects of such imports cumulatively, only if it determines that:

         a) the margin of dumping or the amount of subsidy established with respect to the imports from each supplying country is more than de minimis, in accordance with the definition of this term found in each of the Agreements (on Antidumping and on Subsidies), and the volume of imports from each country is not insignificant, and

         b) it is appropriate to assess the effects of the imports cumulatively, in light of the conditions of competition prevailing between the imported goods and domestically produced like goods. (Supreme Decree No. 16, Ministry of External relations, published in the Diario Oficial on May 17, 1995).

M. De Minimis Provision

1. Antidumping

   The Commission shall reject a petition and terminate the investigation without delay, if it finds that the evidence of dumping or of injury is insufficient to justify continuation of the proceedings. Where the Commission determines that the margin of dumping is de minimis, or that the volume of actual or potential imports of dumped goods or the degree of injury is insignificant, it shall terminate the investigation immediately. The margin of dumping shall be deemed de minimis if it less than 2 per cent, expressed as a percentage of the export price. The volume of imports of dumped goods will normally be deemed insignificant if it is determined that shipments from a given country represent less than 3 per cent of the imports of like goods into Chile, except where those countries that individually represent less than 3 per cent of imports of like goods into Chile account collectively for more than 7 per cent of such imports. (Supreme Decree No. 16. Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

2. Countervailing

The Commission shall reject a petition and terminate the investigation without delay, if it finds that the evidence of subsidy or of injury is insufficient to justify continuation of the proceedings. Where the amount of the subsidy is de minimis, or the volume of actual or potential imports of subsidized goods or the degree of injury is not significant, it shall terminate the investigation immediately. The amount of subsidy shall be deemed de minimis if it less than 1 per cent ad valorem. (Supreme Decree No. 16. Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

N. Margin of Dumping

   Without prejudice to the provisions governing fair comparison, the existence of margins of dumping during the period under investigation is normally established on the basis of a comparison between the weighted average of the normal value and the weighted average of the prices of all comparable export transactions, or a comparison between the normal value and the export price, transaction by transaction. A normal value established on the basis of the weighted average may be used for comparison with prices for individual export transactions, if the Commission finds that there is a pattern of export prices that differ significantly among individual buyers, regions or periods of time, and if evidence is submitted to explain why these differences cannot be properly taken into account by means of a comparison exclusively between weighted averages, or transaction by transaction. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

O. Subsidy Rate

   There is no specific legal provision governing this point, but the topic will be the subject of a draft regulation. In any case, the provisions of Article 14 of the Agreement on Subsidies and Countervailing Measures are currently applicable and in force. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

IV. Steps of the Investigation

A. Petition Filing

   Investigations to determine the existence, degree and impact of alleged dumping or subsidies are initiated in response to a written petition submitted by the domestic industry or on its behalf.

   The petition must be accompanied by evidence of the existence of

         a) dumping or subsidy;

         b) injury in the meaning of GATT Article VI (1994), and

         c) a causal relationship between dumped or subsidized imports and the presumed injury. A simple declaration, unsupported by relevant evidence, is not sufficient grounds for initiating an investigation.

   The petition must contain all information reasonably accessible to the petitioner on the following points:

         i) identity of the petitioner and the petitioner's own description of the volume and value of domestic production of like goods. Where the written petition is submitted on behalf of the entire domestic industry, the industry on whose behalf the petition is submitted must be identified with a listing of all known domestic producers of like goods (or of associations of domestic producers of like goods), and as complete a description as possible of the volume and value of domestic production of like goods accounted for by those producers;

         ii) a complete description of the allegedly dumped or subsidized goods, the names of the country or countries of origin or export of those goods, the identity of each known foreign exporter or producer and a list of persons known to be importing the goods in question;

         iii) data on the prices at which the goods in question are being sold for consumption in the domestic markets of the country or countries of origin or export (or, where relevant, data on the prices at which the goods are sold from the country or countries of origin or export to a third country or countries, or data on the constructed value of the goods), as well as data on export prices or, where relevant, on the prices at which the goods are resold for the first time to an independent buyer within Chile.

         iv) In the case of subsidy investigations, there must be sufficient evidence of the existence of a subsidy, its amount and nature.

         v) Data on changes in the volume of allegedly dumped or subsidized imports, the impact of these imports on the prices of like goods in the domestic market, and the repercussions of such imports on the domestic industry. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

B. Initiation of Investigation

   Investigations to determine the existence, degree and impact of alleged dumping or subsidies are initiated upon submission of a written petition by the domestic industry or on its behalf.

   Under special circumstances, the Commission may decide to initiate an investigation without having received a written petition submitted by the domestic industry or on its behalf. In this case, it shall proceed only if it has sufficient evidence of dumping, of injury and of a causal relationship between them, to justify initiation of an investigation. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

C. Issuance of Questionnaire

   All interested parties to an antidumping or subsidy investigation shall be given notice of the information required by the Commission, and shall have ample opportunity to submit, in writing, any evidence they consider relevant to the investigation in question. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

D. Response to Questionnaire

   Foreign exporters and producers and, in the case of subsidies, foreign governments to whom antidumping investigation questionnaires are sent shall be given a period of at least 30 days to respond. Any request for extension of this 30-day period must be given due consideration, and such extension must be granted whenever justified and feasible. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

E. Preliminary Determination

1. Injury

   If the petition seeks the imposition of provisional measures, the Commission shall issue a preliminary determination of dumping or subsidization, and of the consequent injury to the domestic industry. No provisional measures may be applied until 60 days have elapsed from the date of initiation of the investigation.

   Provisional measures may only be applied where:

         i) an investigation has been initiated pursuant to the provisions of article 5, public notice to this effect has been given, and the interested parties have been given adequate opportunity to submit information and observations;

         ii) a positive preliminary determination has been made with respect to the existence of dumping and consequent injury to the domestic industry, and the Commission deems that such measures are necessary to prevent further injury during the course of the investigation. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

2. Antidumping

   If the petition seeks the imposition of provisional measures, the Commission shall issue a preliminary determination of dumping or subsidization, and of the consequent injury to the domestic industry. No provisional measures may be applied until 60 days have elapsed from the date of initiation of the investigation.

   Provisional measures may only be applied where:

         i) an investigation has been initiated pursuant to the provisions of article 5, public notice to this effect has been given, and the interested parties have been given adequate opportunity to submit information and observations;

         ii) a positive preliminary determination has been made with respect to the existence of dumping and consequent injury to the domestic industry, and the Commission deems that such measures are necessary to prevent further injury during the course of the investigation. (Supreme Decree No. 16, Ministry of External Relations, published in the Diario Oficial on May 17, 1995).

3. Countervailing

   Before reaching its final determination, the Commission may, at any stage in the investigation and within a period of 60 days of its initiation, when it is necessary to avoid or prevent injury to the domestic industry, request the President of the Republic to establish provisional minimum customs duties, surcharge anti-dumping duties or countervailing duties. (Decree 575, Title III, Art. 19).

   The Commission shall provide the interested party with an explanation of its recommendation to the President after the President's action with respect to provisional measures is published in the Diario Oficial. Id. at Art. 21.

   The explanation shall include the following:

         (1) the date of the formal lodging of the complaint;

         (2) the products covered by the complaint and their tariff classification,

         (3) the identity of the complainant(s),

         (4.4) the identity of the producers, exporters and importers of the goods,

         (4.5) the country of origin of the corresponding product(s),

         (4.6) a description of the practice or indication of the measure causing the alleged distortion of prices,

         (4.7) a brief analysis of the factors allegedly causing the injury to the domestic industry, and

         (4.8) a summary of the considerations relevant to the Commission's decision. (Decree No. 575, Art. 21).

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