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Compendium of Antidumping and Countervailing Duty Laws in the Western Hemisphere


Venezuela

 

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

   On March 15, 1995, the Government of Venezuela notified the WTO that, as published in the Official Gazette of the Republic of Venezuela, No. 4.829, Special Edition, 29 December 1994, Venezuela had approved the Marrakech Agreement establishing the WTO, the AD Agreement and the SCM Agreement, and that the WTO Agreement prevails over any contrary or different provision contained in previous national laws.

   According to the Venezuelan Constitution, international agreements become a part of domestic legislation once they are

         (i) approved by the Congress of the Republic through a law approving the agreement;

         (ii) ratified by the President of the Republic;

         (iii) published in Venezuela's official gazette.

   Agreements in Venezuela, are therefore superior to any other legislation and, consequently, are given precedence over pre-existing law with regard to application.

   The same notification stated that Venezuela's "Law on Unfair Foreign Trade Practices" (as published in the Official Gazette, No. 4.441, Special Edition, 18 June 1992), conferred broad powers on the Administration to interpret and apply antidumping and countervailing duty measures.

   The notification also stated that the Venezuelan government is considering the possibility of adopting new regulations to facilitate the administration and application of anti-dumping and countervailing duty legislation.

   For investigations initiated prior to 12/29/94, Venezuelan law would be fully applicable, because Venezuela was not party to the agreements at that time. Also, in investigations involving imports from countries which are not party to the WTO agreements, Venezuelan law shall fully apply. Investigations initiated after 12/29/94 concerning imports from countries which are party to the WTO agreements, shall be governed by said agreements. Lastly, in investigations of imports from member countries of subregional agreements to which Venezuela is a party, the respective subregional legislation shall apply.

C. Regulations

   Venezuela has Regulations on Unfair International Trade Practices, which were published in the Gaceta Oficial of the Republic of Venezuela, No. 4.567 Extraordinary on April 26, 1993, hereafter referred to as the Regulations.

   These Regulations contain the basic procedural arrangements for the determination of dumping, subsidies and injury to domestic producers.

   In the specific case of Venezuela's subsidy and antidumping legislation, with the approval of the antidumping agreements and agreements on subsidies and countervailing measures, it is not technically necessary to approve additional laws or regulations to implement those agreements, since the said agreements are directly applied, as from 12/29/94, to investigations initiated after that date. That notwithstanding, Venezuela is currently in the process of reforming its regulations so that they will conform to the said agreements. If there is some inconsistency or conflict between Venezuelan legislation and the respective agreement, or if there are no provisions dealing with a particular aspect of the legislation, the WTO agreements shall immediately apply.

D. Administrative Practice, Handbook or Guide

   The Antidumping and Subsidies Commission does not have a manual or guide.

   Nevertheless, a manual of Antidumping and Subsidies procedures conducted by the CASS will be created in the future.

II. Authorities Responsible for Conducting Investigations

A. Injury

   The "Anti-Dumping and Subsidies Commission" (the "Commission") was established as a decentralized body under the Ministry of Trade and Industry (previously the Ministry of Development) with responsibility for "considering and deciding upon procedures related to dumping and subsidies that do not come under the board of the Cartagena Agreement in conformity with the Andean legal system". ("Law on Unfair Foreign Trade Practices", as published in the Official Gazette of the Republic of Venezuela, Special Edition No. 4.441, 18 June 1992 (hereinafter, the "1992 Law"), Art. 27).

   The Commission shall determine the existence or threat of material injury to the domestic industry producing like goods or material retardation of the start-up of such an industry due to the import of dumped or subsidized goods. (1992 Law, Art. 2(1) and Art. 11).

   The Commission's "Technical Secretariat" is the Commission's "verificatory and executive body" which receives petitions, carries out the procedures to determine dumping or subsides and the consequential injury, etc. (1992 Law, Arts. 35-36).

   "[T]he Commission shall consider whether the country of export or of origin, as appropriate, requires or might require proof of injury, threat of injury or material retardation caused to Venezuelan exports.

   If such proof is not required, it may be presumed that injury, threat of injury or material retardation exist, within the meaning of this Article." (1992 Law, Art. 11).

B. Antidumping and Countervailing Duties

   The same Anti-Dumping and Subsidies Commission which determines injury also investigates and determines the existence of dumping or subsidies and, where appropriate, imposes antidumping or countervailing duties. (1992 Law, Art. 33).

   The Commission's "Technical Secretariat" is the Commission's "verificatory and executive body" which receives petitions, carries out the procedures to determine dumping or subsidies and the consequential injury, etc. (1992 Law, Arts. 35-36).

III. Methodologies/Definitions

A. Like Product

   "Like goods" means:

         (1) identical goods (alike in all respects);

         (2)oods which compare in large measure to the product which is the object of dumping or subsidies when, in addition to the existence of a high degree of similarity in their specific use, a same degree of similarity may be ascertained between the other characteristics;

         (3) goods which are substitutes for the good allegedly dumped or subsidized when their use or function leads to results identical to those of the dumped or subsidized good.

   "Regulations Under the Law on Unfair Foreign Trade Practices," published in the Gaceta Oficial of the Republic of Venezuela Extraordinary No. 4.567 on April 26, 1993. (hereinafter, "Regulations") Article 4.

B. Domestic Producers

   For the purposes of determining the existence or threat of injury, the term "domestic industry" shall be interpreted as referring to domestic producers as a whole of like goods, or to those of them whose collective output constitutes a major proportion of the total domestic production of these goods.

   For the purposes of this determination, producers associated with exporters or who are themselves importers of the dumped or subsidized goods shall not be taken into consideration. (1992 Law, Art. 14).

   The "major proportion of domestic industry" shall mean those producers representing at least 30 percent of domestic industry.

   Exceptionally, if the special circumstances of the production structure in question so require, the Commission may use as a benchmark a higher percentage (up to 40%), or a lower percentage (down to 20%). (1993 Regulations, Art. 47).

   Under certain circumstances (outlined in 1992 Law, Art. 14), the Commission may determine regional injury, "provided that there is a concentration of dumped or subsidized imports destined to be marketed or consumed in the region in question, which are causing injury to all or a major part of the production of like goods in the region". (1992 Law, Art. 14). Certain producers shall not be included in the domestic industry for purposes of determining injury or threat of injury (including "producers associated with exporters" and "producers who themselves import the dumped or subsidized good"). (1993 Regulations, Art. 48).

C. Standing

   Any natural or legal person who produces in Venezuela goods identical or similar to those allegedly dumped or subsidized may submit to the Technical Secretariat of the Commission an application for the initiation of the corresponding investigation. (1992 Law, Art. 37).

D. Polling

E. Normal Value

   Normal value "means the comparable price actually paid or payable, in the ordinary course of trade, for the allegedly dumped good when destined for consumption in the country of export or of origin, as appropriate". (1992 Law, Art. 2(14)).

   The comparable price "shall be net after deduction of the discounts, refunds and other reductions granted to the buyer, provided that the exporter or producer requests the corresponding adjustment and proves to the Commission's satisfaction that such discounts have actually been made". (1993 Regulations, Art. 9).

   The ordinary course of trade "shall mean sales of like goods usually effected by the exporter or producer of the good allegedly dumped to buyers in the country of export or of origin" which meet certain requirements (itemized in 1993 Regulations, Art. 8, including, inter alia: the buyer is not related; and the exporter/producers of like goods sell in the country of export/origin a volume equivalent to at least 20 per cent of the total volume of global sales, including those to Venezuela (there are certain exceptions)).

   If sales cannot be considered as being in the ordinary course of trade, the Commission shall calculate the normal value using third country sales or the computed value or "on the basis of sales in the country of origin by producers or sellers of like goods to buyers in the country of export or of origin, for which purpose it may use statistical information available in that country". (1993 Regulations, Art. 10).

   The Commission may consider that such sales have not been made in the ordinary course of trade if the "real selling price is below production costs" [defined as a total of fixed and variable costs with a "reasonable margin for selling, administrative and other general costs"] over a period of not less than six months nor more than 18 months in quantities exceeding 80 per cent of total sales and at prices which do not allow recovery of all costs within a reasonable period.

   This last circumstance shall be established when below-cost prices at the time of sale are higher than the weighted average costs during the period.

   In that case, the Commission may calculate the normal value using the most appropriate of four methods:

         (1) other domestic market sales at prices that are not lower than production costs;

         (2) third country sales ("the compared export value");

         (3) the "computed value" (production costs, as noted above, plus a "reasonable margin for profit, calculated in relation to the respective costs and earnings of the producer or exporter . . ."); or

         (4) "adjustment of the price below production costs so as to eliminate losses and provide for a reasonable margin of profit." (1993 Regulations, Arts. 12, 13 and 14).

F. Calculation of Cost of Production

   The "constructed value" is the total of the following elements "related to the allegedly dumped good or a like good (1993 Regulations, Art. 12):

         1. Production costs, meaning the total of fixed and variable costs for the inputs utilized and the manufacturing process, in the ordinary course of trade in the country of origin, with a reasonable margin for selling, administrative and other general costs;

         2. A reasonable margin of profit, calculated in relation to the respective costs and earnings of the producer or exporter, for sales for profit other than associated persons in the country of origin or of export.

   If this information is not reliable or is insufficient, the Commission shall use "the production costs and the related profit of other producers or exporters in the country of origin or of export for sales for profit of a like good.

   If such information is still not sufficient, the value may be calculated on the basis of sales of other goods by the exporter or other manufacturers within the same economic sector in the country of origin or of export, or on any other reasonable basis determined by the Commission".

G. Export Price

   The "export price" is the price "actually paid or payable for the good sold for export to Venezuela, net of taxes, discounts and reductions actually granted and directly related to the sales concerned" (1992 Law, Art. 6) and only "if the interested party requests the corresponding adjustment and provides justification therefor to the Commission". (1993 Regulations, Art. 16).

   The Commission shall calculate the export price on the basis of:

         (1) "direct export price";

         (2) if there is no direct export price, the "indirect export price" (the price at which the importer sells the good to the first independent buyer in Venezuela); or

         (3) the "export price for subsequent processing" in those cases in which the good which is the supposed object of dumping has undergone changes after its importation and before its sale to the first independent vendor in Venezuela. (1993 Regulations, Arts. 15, 18, 19, and 21).

H. Export Price - Adjustments

"[T]he normal value and the export price shall be compared fairly.

   The comparison shall be made at the same level of trade, usually at the ex-factory level, taking into account the nearest possible dates and making the adjustments which the Commission considers necessary for any differences in the physical characteristics of the goods, the import duties and indirect taxes, selling costs for sales at different levels of trade, in varying quantities or under different conditions". (1992 Law, Art. 7).

(Details regarding adjustments to be made are provided in the 1993 Regulations, Articles 17 and 20 through 38 (includes adjustments for differences in physical characteristics, differences in taxes, selling costs for different levels of trade, selling costs for different quantities, and selling costs for different conditions of sale)).

I. Injury

   It must be demonstrated to the Commission's satisfaction that there is a causal relationship between the dumped or subsidized imports and "material injury" or "threat of material injury" or "appreciable material retardation of the start-up of the domestic industry producing like goods...". (1993 Regulations, Art. 46).

   Material injury will be found when at least two of the following conditions are met (1993 Regulations, Art. 50):

         1. The volume of dumped or subsidized imports is significant and has increased in absolute terms or relative to the domestic production of like goods [Percentage guidelines are given];

         2. Prices are "considerably lower than those for like goods produced in the country" or have the effect of depressing or suppressing prices;

         3. The subject imports have an adverse impact on producers of domestic like goods, taking into account volume, sales, market share, profits, return on investment, etc.

J. Threat of Injury

   A determination of threat of injury shall be made only when a particular situation may become a situation of actual injury.

   Consequently, the determination shall not be based on allegation, conjecture or remote possibility. (1992 Law, Art. 13).

   The Commission shall determine threat of material injury "when it considers that the threat is real and certain and that the injury is imminent", taking into account the following factors (1993 Regulations, Art. 51):

             
  • The nature of the subsidy (if applicable);
             
  • Production capacity increases or idle capacity, provided that there are sufficient indications that such increases may result in an increase of exports to Venezuela);
             
  • Accelerated increases in the share of the domestic market;
             
  • Inventory build-up in Venezuela, or in the country of origin "with the likelihood that they will be exported to Venezuela";
             
  • Product substitution capability;
             
  • Evidence of a trend toward an increase in exports to Venezuela;
             
  • Any other factors deemed relevant by the Commission.

K. Material Retardation

   "The Commission shall determine the existence or threat of material injury to the domestic industry producing like goods or material retardation of the start-up of such an industry due to the import of dumped or subsidized goods". (1992 Law, Art. 11).

   A determination of appreciable material retardation shall be based on evaluation of the potential of the domestic industry at the time when imports of the subject goods commence or are imminent to establish whether or not such imports had an adverse effect on the probably development of this potential.

   The following factors concerning the domestic industry shall be taken into account (1993 Regulations, Art. 52):

             
  • projected performance compared with actual performance;
             
  • utilization of production capacity;
             
  • orders and deliveries;
             
  • the financial situation; and
             
  • other circumstances which the Commission deems relevant.

L. Cumulation

   "[I]mports coming from or originating in two or more countries may be cumulated to assess the effect of these imports on domestic industry if the imports from the countries in question have been the subject of an anti-dumping or subsidy investigation during the year prior to the date of the initiation of the corresponding anti-dumping or subsidy procedure". (1992 Law, Art. 12).

M. De Minimis Provision

1. Antidumping

2. Countervailing

N. Margin of Dumping

   The dumping margin is the amount by which the normal value exceeds the export price. (1992 Law, Art. 2.5).

   "[T]he normal value and the export price shall be compared fairly. The comparison shall be made at the same level of trade, usually at the ex-factory level, taking into account the nearest possible dates and making the adjustments which the Commission considers necessary for any differences in the physical characteristics of the goods, the import duties and indirect taxes, selling costs for sales at different levels of trade, in varying quantities or under different conditions". (Id. Art. 7).

   "In comparing prices, where the prices vary, the Commission shall adopt the following guidelines, inter alia:

         1. The normal value shall be calculated on a weighted average;

         2. The export price shall be compared with the normal value on a transaction-to-transaction basis if the use of weighted averages materially affects the findings of the investigation; and

         3. Sampling techniques may be used, for example, by taking into account the prices that most frequently occur or are deemed to be most representative, in cases where there is a large number of transactions". (1992 Law, Art. 8).

O. Subsidy Rate

   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).

IV. Steps of the Investigation

A. Petition Filing

   Any natural or legal person who produces in Venezuela goods identical or similar to those allegedly dumped or subsidized may submit to the Technical Secretariat of the Commission an application for the initiation of the corresponding investigation. (1992 Law, Art. 37).

   The Commission may also initiate an investigation ex officio when it considers that there are signs of such practices. (1992 Law, Art. 38).

   The application to initiate an investigation shall contain the following requisites:

         "1. The elements laid down in Article 49 of the Basic Law on Administrative Procedure;

         2. The name, specifications, characteristics, use or end-use of the foreign good concerned;

         3. The name, specifications, characteristics, use or end-use of the like good produced in Venezuela, together with its manufacturing cost, market price and production cost; and

         4. Any other facts or evidence proving the alleged dumping or subsidies, the injury and the causal relationship between them". (1992 Law, Art. 39.)

   "To the extent possible", the application shall also give the name and other information identifying the producer or producers of the allegedly dumped or subsidized good; information identifying the exporter or exporters of the said good to Venezuela, statistical data on such exports and their growth potential; the manufacturing cost and market price of the good concerned in the country of export to Venezuela and to third countries; information identifying the domestic producer or producers of the like good, as well as any other information considered useful in support of the application. (1992 Law, Art. 39).

   The 1993 Regulations, Arts. 61 through 68, elaborate on the information that is to be included: information on the normal value (with supporting documentation such as quotations, price lists, commercial invoices, etc.), the export price (confirmed by quotations, commercial invoices, price lists, where possible), the type of subsidy and the producer's entitlement to same (including the legal instrument conferring the subsidy), and evidence of injury based on the applicant's production for the past two years, its decreases in volume, market share, profits, and prices.

Continue with Initiation of Investigation

 
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