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Compendium of Antidumping and Countervailing Duty Laws in the Western Hemisphere


  1. Methodologies/Definitions

    1. Subsidy Rate


      WTO Standard: . . . any method used by the investigating authority to calculate the benefit to the recipient [...] shall be provided for in that national legislation or implementing regulations of the Member concerned and its application to each particular case shall be transparent and adequately explained. Furthermore, any such method shall be consistent with the following guidelines:

      (a) government provision of equity capital shall not be considered as conferring a benefit unless the investment decision can be regarded as inconsistent with the usual investment practice (including for the provision of risk capital) of private investors in the territory of that Member;

      (b) a loan by a government shall not be considered as conferring a benefit, unless there is a difference between the amount that the firm receiving the loan pays on the government loan and the amount the firm would pay on a comparable commercial loan which the firm could actually obtain on the market. In this case the benefit shall be the difference between these two amounts;

      (c) a loan guarantee by a government shall not be considered as conferring a benefit, unless there is a difference between the amount that the firm receiving the guarantee pays on a loan guaranteed by the government and the amount the firm would pay on a comparable commercial loan absent the government guarantee. In this case the benefit shall be the difference between these two amounts adjusted for any differences in fees;

      (d) the provision of goods or services or purchase of goods by a government shall not be considered as conferring a benefit unless the provision is made for less than adequate remuneration, or the purchase is made for more than adequate remuneration. The adequacy of remuneration shall be determined in relation to prevailing market conditions for the good or service in question in the country of provision or purchase (including price, quality, availability, marketability, transportation and other conditions of purchase or sale). (SCM Agreement, Art. 14)

Argentina | Bolivia | Brazil | Canada | Chile | Colombia | Costa Rica | Dominican Republic | Ecuador | El Salvador | Guatemala | Honduras | Jamaica | Mexico | Nicaragua | Panama | Paraguay | Peru | Saint Lucia | Trinidad & Tobago | United States | Uruguay | Venezuela

 


Argentina

   The cited standards of the WTO are applied. Articles 2, 31, and 32 of Decree 2121/94 which are cited below, are of supplementary application on this subject, as far as it does not contradict with the Agreement's provisions.

   A subsidy is deemed to exist if there is a financial contribution by a government or a public body of the exporting country or country of origin, such that it confers a benefit on the producer or exporter. (Decree No. 2121/94, Art. 2).

   Such contributions exist if:

         (1) a government or public body provides a direct transfer of funds, such as grants or loans and equity infusions, or potential direct transfers of funds or liabilities, e.g., loan guarantees;

         (2) government revenue that is otherwise due is foregone or not collected;

         (3) a government provides goods or services other than general infrastructure or purchases goods; and

         (4) there is any form of income or price support. (Id.).

   Subsidization also occurs when the financial contribution comes from a private body which is used by a government or public body to effect contributions which do not differ in practice from those normally granted by government or public bodies. (Id.).

   In determining the value of the subsidy, the competent implementing authority shall distinguish subsidies which are specifically aimed at exports of the product under investigation, and subsidies aimed at the general export activity of the receiving company.

   In the latter case, the value of the subsidy shall be calculated by determining the relation between the general sales of the enterprise and the specific sales of the product under investigation.

   The competent implementing authority shall also determine the relation between the subsidy received and the sales made by the producer or exporter in the period for which the subsidy was granted. (Decree No. 2121/94, Art. 31).

   When the subsidy involves loans granted at rates of interest or terms more favorable than those that the beneficiary could obtain in a freely negotiated agreements with commercial banks in the market concerned, the competent implementing authority shall distinguish between short, medium, and long-term loans.

   The subsidy value of the short-term loans shall be determined on the basis of the provisions of Article 31, noted above.

   The subsidy value of medium- and long-term loans shall be determined using the most appropriate financial method for the purpose of establishing the real impact of the subsidy on the goods entering the Argentine Republic.

   Loans shall normally be considered short-term when the repayment period is less than 2 years. Any loan with a repayment period of 2 or more years shall be considered medium- or long-term.

   The competent implementing authority may consider loans with a shorter repayment period as medium or long-term if it is shown in good faith that the debtor's consistent practice is one of automatic renewal or extension of the repayment period to exceed a total of 2 years. (Id., Art. 32).

Bolivia

   An import is considered to be subsidized when the production, manufacture, transport, or export of the imported good or its raw materials or inputs has directly or indirectly received any bonus, aid, award, or subsidy in the country of origin or the exporting country. This shall also apply to subsidized goods marketed on the international market, which cause distortions in prices relative to production costs and impose international prices that cause other countries to export at prices directly affected by these circumstances.

   When multiple exchange rates for commercial and financial transactions in the country of origin or of export have the effect of a subsidy, such rates shall be deemed to be subsidies.

         a. Capital investment by governments which is inconsistent with the usual investment practice of private investors in Bolivia (including for the provision of risk capital).

         b. Government loans shall be deemed to confer a benefit when there is a difference between the amount paid by the enterprise receiving the loan and the amount it would have to pay on a comparable commercial loan actually obtainable on the market.

   In such cases, the benefit shall be the difference between the two amounts.

         c. A loan guarantee granted by the government when there is a difference between the amount which the firm receiving the guarantee pays on a loan guaranteed by the government and the amount it would have paid on a commercial loan without government guarantee. In such cases, the benefit shall be the difference between the two amounts.

         d. The existence of multiple foreign exchange rates applying to commercial and financial transactions, so as to confer a benefit in the country of origin or exports.

         e. The provision by a government of goods and services at prices lower than those corresponding to normal remuneration or government purchase of goods at prices higher than those corresponding to adequate remuneration.

   Adequate remuneration shall be determined in relation to the prevailing market conditions for the goods or services concerned in the country of provision or purchase (including price, quality, availability, marketability, transportation and other conditions of purchase or sale). Bi-ministerial Decision, Art 28.

   The amount of the subsidy shall be calculated in monetary units on the basis of ad valorem per unit of the subsidized product.

Brazil

   A subsidy shall be deemed to exist when a benefit is conferred as

         a) the exporting country provides income or price supports, directly or indirectly, which increase exports or reduce imports of whatever product, or

         b) there is a financial contribution by the government or any public body within the exporting country's territory where:

               i) the government practice involves a direct transfer of funds, potential direct transfers of funds or liabilities; or

               ii) government revenue that is otherwise due is foregone or not collected.

   The exemption of an exported product from duties or taxes borne by the like product when destined for domestic consumption, or the remission of such duties or taxes in amounts not in excess or those which have accrued, shall not be deemed to be a subsidy, in accordance with the provisions of Article XVI of GATT 1994 and the provisions of Annexes I through III of the Agreement on Subsidies and Countervailing Measures; or

               iii) the government provides goods or services other than general infrastructure, or purchases goods; or

               iv) the government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the functions described above which would normally be vested in the government and in no real sense differs from practices normally followed by governments. (Dec. 1751/95 - Art. 4).

   The subsidies defined in the preceding paragraph, specific subsidies, and prohibited subsidies (as defined in Article 3 of the Agreement on Subsidies and Countervailing Measures) shall be deemed to be countervailable, i.e. subject to countervailing measures.

   The non-actionable subsidies listed in Part IV of the 1994 GATT Agreement on Subsidies and Countervailing Measures (Dec. 1751/95 - Arts. 5-13) shall not be deemed to be countervailable.

   The amount of the countervailable subsidy shall be calculated per unit of subsidized product exported to Brazil, based on the benefit enjoyed during the period covered by the investigation into the existence of countervailable subsidies. (Dec. 1751/95 - Art. 14). Government participation in equity capital, government loans, loan guarantees provided by the Government and supplies of goods or services or purchases of goods by the Government shall not be deemed to be benefits, provided that they meet the conditions of Art. 15 of Dec. 1751/95.

   The following may be deducted from the total subsidy to calculate the amount of the countervailable subsidy:

         a) expenses necessarily incurred to qualify for or benefit from the subsidy; and

         b) taxes levied on exports of the product to Brazil, when such taxes are designed specifically to neutralize the subsidy. (Dec. 1751/95 - Art. 16). Articles 17-19 of Dec. 1751/95 define the methodology for calculating the amount of the subsidy per unit of product in cases where the subsidy:

         a) was not granted on the basis of the quantities produced, exported, or shipped; or

         b) was not granted for the present or future acquisition of fixed assets.

   In general, an individual amount of countervailable subsidy shall be determined for each known individual exporter or producer concerned of the product under investigation. (Dec. 1751/95 - Art. 20 caput).

   In cases where the number of types of products or of known exporters, producers and importers involved is so large that it is impractical to calculate individual amounts of countervailable subsidy, the investigation may be limited to a reasonable number of interested parties, transactions or products based on statistically valid sampling techniques (based on the information available at the moment the sample is selected) or to the largest volume of production, sales or exports which is representative and which can be investigated within the time-limits of the investigation. (Dec. 1751/95 - Art. 20.1).

Canada

   Section 30.4 of the SIMA provides the statutory authority for the regulations prescribing the determination of the amount of subsidy.

   In accordance with the definition provided in the WTO Agreement on Subsidies and Countervailing Measures (under Article 1and the guidelines under Article 14) of "subsidy", the amount of subsidy is calculated on the basis of the benefit to the recipient.

   Consistent with the "benefit to the recipient" principle, the SIMA regulations (section 26, Part II) requires that the following be deducted when calculating the amount of subsidy:

         (a) the amount of any fees or other expenses necessarily incurred by the recipient of the subsidy to obtain the subsidy,

         (b) the amount of any tax/duty/other charges levied by a government against the recipient to offset the subsidy, and

         (c) the amount of any loss in the value of the subsidy resulting from deferred receipt of the subsidy.

   Whether any of the above deductions are warranted depends on the unique circumstances of each case and, in particular, whether there is a sufficient basis for relating any fees, taxes, duties or other charges paid by the recipient and the subsidy received.

   In addition, the amount of the benefit should normally not exceed, on a per unit basis, the amount of the financial contribution by the government.

   The detailed methodologies for the calculation of amounts of subsidy for various forms of subsidies, (e.g., grants, preferential loans, loan guarantees, etc.) are prescribed in Part II of the SIMA regulations. While it is expected that the regulations will cover most cases, where no manner of determining an amount of subsidy has been prescribed, the amount of subsidy can be determined by Ministerial specification pursuant to subsection 30.4(2) of the SIMA.

   Section 30 also specifies that an amount of subsidy does not include any amount attributable to a non-actionable subsidy.

   Part I.2 of the SIMA regulations specifies subsidies which are to be treated as non-actionable (i.e., industrial research and pre-competitive development assistance, assistance to disadvantaged regions and assistance for the adaptation of existing facilities to new environmental standards.

Chile

   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).

Colombia

   The amount of a duty may generally be expressed in one of the following forms, or in a combination of same, if necessary: in ad-valorem percentage; or in accordance with a base price.

   If there are no applicable international obligations on this matter, countervailing duties may be determined, prior to the establishment of the subsidy, and consideration will be given as to whether the exporting country or the country of origin would provide evidence of injury to Colombian exports.

Costa Rica

   [...] Any method used by the investigating authority to calculate the benefit to the recipient [...] shall be provided for in the national legislation or implementing regulations of the Member concerned and its application to each particular case shall be transparent and adequately explained.

   Furthermore any such method shall be consistent with the following guidelines:

         (a) Government provision of equity capital shall not be considered as conferring a benefit, unless the investment decision can be regarded as inconsistent with the usual investment practice (including for the provision of risk capital) of private investors in the territory of that Member;

         (b) A loan by a government shall not be considered as conferring a benefit, unless there is a difference between the amount that the firm receiving the loan pays on the government loan and a comparable commercial loan which the firm could actually obtain on the market. In this case the benefit shall be the difference between these two amounts;

         (c) A loan guarantee by a government shall not be considered as conferring a benefit, unless there is a difference between the amount that the firm receiving the guarantee pays on a loan guaranteed by the government and the amount that the firm would pay for a comparable commercial loan absent the government guarantee.

   In this case the benefit shall be the difference between these two amounts adjusted for any difference in fees;

         (d) The provision of goods or services or purchase of goods by a government shall not be considered as conferring a benefit unless the provision is made for less than adequate remuneration, or the purchase is made for more than adequate remuneration.

   The adequacy of remuneration shall be determined in relation to prevailing market conditions for the good or service in question in the country of provision or purchase (including price, quality, availability, marketability, transportation and other conditions of purchase or sale).

   In addition to this provision, Costa Rica also has Decree 24868-MEIC, which stipulates that:

   The amount of any anti-dumping or countervailing duty applied shall be sufficient to redress the injury or harm and never more than the margin of dumping or the amount of the subsidy.

Dominican Republic

Ecuador

El Salvador

   There is no specific provision but El Salvador applies the rules in accordance with the WTO Antidumping and Countervailing Duty Agreements.

Guatemala

Honduras

Jamaica

"Subsidy" in relation to goods that are exported to Jamaica means a financial contribution that is made in connection with the production, manufacture or export of those goods for the purpose of conferring a benefit in relation to those goods

         (a) by

               (i) a government of the country of export or country of origin of those goods; or

               (ii) a public body of that country or of which that government is a member; or

               (iii) a private body entrusted or directed by that government or public body to carry out a government function;

         (b) by means of

               (i) a direct transfer of funds by the government or body as aforesaid to the enterprise by whom the goods are produced, manufactured or exported; or

               (ii) the acceptance of liabilities (whether actual or potential) of that enterprise by that government or body; or

               (iii) the foregoing or non-collection, of revenue other than allowable exemption or remission due to that government or body by that enterprise; or

               (iv) the provision by that government or body of goods or services or other benefits to that enterprise otherwise than in the course of providing general infrastructure; or

               (v) the purchase by that government or body of goods provided by that enterprise; or

               (vi) the provision to the exporter of the goods of any form of income or price support as referred to in Article XVI of the General Agreement on Tariffs and Trade, 1994 that is received from such a government or body.

Mexico

   The Ministry shall fix the amount of the duties which shall be equivalent, in cases of subsidization, to the amount of the benefit.

   The duties may be less than such difference, however, "provided they are sufficient to discourage imports of goods in circumstances involving unfair international trade practices".

   If it is impracticable to name all the suppliers affected by the duties, "the Ministry may order its application to the country or countries concerned". (I/62).    A subsidy is a benefit conferred by a foreign government, its public or semi-public agencies or its entities, either directly or indirectly, on producers, processors, marketing agents or exporters of goods for the purpose of inequitably strengthening their international competitiveness, except where such practices are regarded internationally as acceptable.

   This benefit may take the form of inducements, incentives, premiums, grants or support of any kind. (I/37).

   The Ministry shall issue a list of export subsidies, which shall be non-exhaustive, in an order published in the Diario Oficial de la Federacion. (I/37).

   The total of any export taxes, duties or other charges payable on the export operation in the country of origin and designed to offset the subsidy shall be deducted. (I/38).

Nicaragua

Panama

Paraguay

Peru

   For the purposes of the Subsidies Agreement, a subsidy shall be deemed to exist if:

         1. There is a financial contribution by a government or any public body within the territory of a Member, which involves a direct transfer of funds, potential direct transfer of funds or liabilities or, when government revenue that is otherwise due is foregone or not collected, or if a government provides goods or services - other than general infrastructure - or purchases goods at prices higher than the market price, or if the government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments and benefit is thereby conferred.

         2. There is any form of income or price support in the sense of Article XVI of the General Agreement on Tariffs and Trade 1994 and a benefit is thereby conferred.

   A subsidy as defined in the preceding Article may be specific or non-specific. A specific subsidy shall be a subsidy that benefits an enterprise or industry or group of enterprises or industries. A subsidy which benefits certain enterprises located within a designated geographical region within the jurisdiction of the granting government shall be specific. A subsidy that benefits all industries in general shall be non-specific. The Subsidies Agreement establishes the criteria on which to determine whether a subsidy is specific or not.

Santa Lucia

Trinidad and Tobago

   A Subsidy shall be subject to countervailing measures only if it is specific to an enterprise.

   The following subsidies are deemed to be specific:

         (a) subsidies contingent, in law or in fact, whether solely or as one of several other conditions, upon export performance; and

         (b) subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.

United States

   To determine the net countervailable subsidy, Commerce may subtract from the gross countervailable subsidy the amount of

         (1) any application fee, deposit, or similar payment paid in order to qualify for, or to receive, the benefit of the countervailable subsidy;

         (2) any loss in the value of the countervailable subsidy resulting from its deferred receipt, if the deferral is mandated by government order; and

         (3) export taxes, duties, or other charges levied on the export of merchandise to the U.S. specifically intended to offset any countervailable subsidy received.

   Under the pre-URAA statute, there was a presumption in favor of a single, country-wide CVD rate.

   Under the URAA, however, there is a general rule in favor of calculating individual CVD rates for each exporter or producer individually investigated.

   There is an exception to this general rule for cases involving a large number of producers and exporters.

   In such situations, Commerce may limit its investigation to a reasonable number of exporters or producers by using statistically valid sampling techniques or by examining those exporters or producers accounting for the largest volume of the merchandise that Commerce is reasonably able to investigate.

   Commerce retains the authority to calculate a country-wide CVD rate on the basis of aggregate data when appropriate.

   For those exporters and producers not individually investigated, Commerce will calculate an "all others" rate to be applied to imports from those companies.

   The "all others" rate is based on the weighted-average individual CVD rates established for those exporters and producers individually investigated, excluding any de minimis and zero rates and rates determined entirely the basis of the facts available.

Uruguay

Venezuela

   A subsidy is "any financial contribution, bounty, aid, form of subvention or premium established by a government or a public or mixed body in a foreign country, or any form of income or price support, through which a benefit is conferred on specific enterprises or branches of industry in addition to those conferred on other enterprises or branches of industry". (1992 Law, Art. 2.13).

   The 1992 Law lists 11 examples of government measures "that shall be considered subsidies" and also covers "[a]ny others as may be determined by the Commission in conformity with paragraph 13 of Article 2 of this Law". (1992 Law, Art. 9).

   Equity is covered by the 1993 Regulations (which also contain additional details regarding subsidy methodology at Articles 39 through 45).

   The following examples of subsidies are especially relevant in light of the WTO guidelines:

             
  • The purchase of shares or other forms of capital investment by public or mixed bodies on terms that are less favorable to them than those prevailing in the market. [Provides method of determining market value]. (1993 Regulations, Article 40(3)).
             
  • "The provision by governments or their agencies either directly or indirectly of imported or domestic goods or services for use in the production of goods to be exported or sold on the domestic market on terms or conditions more favorable than for provision of like goods or services, if such terms or conditions are more favorable than those commercially available on world markets to their exporters;" (1992 Law, Art. 9, No. 4).
             
  • "The provision by governments or special institutions controlled by governments of export credit guarantee or insurance programs, of insurance or guarantee programs against increases in the cost of exported products or of exchange risk programs, at premium rates which are manifestly inadequate to cover the long-term operating costs and losses of the programs". (1992 Law, Art. 9, No. 10).
             
  • "The grant by governments or special institutions controlled by and acting under the authority of governments of export credits at rates below those which they actually have to pay for the funds so employed, or would have to pay if they borrowed on international capital markets in order to obtain funds of the same maturity and their credit terms and denominated in the same currency as the export credit, or the payment by them of all or part of the costs incurred by exporters or financial institutions in obtaining credits, in so far as they are used to secure a material advantage in the field of export credit terms;" (Id., No. 11). [as for goods, uses "international capital markets" as basis for comparison].

   The amount of the subsidy shall be calculated in monetary units or ad valorem percentages per unit of the subsidized product imported.

   The following deductions shall be made from the total subsidy:

         (1) any cost necessarily incurred in order to be entitled to the subsidy or to benefit therefrom; and

         (2) taxes, duties and other levies charged on export to Venezuela with the aim of offsetting the subsidy.

   Any person requesting such deductions "shall prove to the satisfaction of the Commission that there are grounds for making them". (1992 Law, Art. 10).

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