3. Methodologies/Definitions
   
   
   5. Normal Value
      
      
      WTO Standard: Normal value is the price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country. (AD Agreement, Art. 2.1) When there are no sales of the like product in the ordinary course of trade in the domestic market of the exporting country or when, because of the particular market situation or the low volume of the sales in the domestic market of the exporting country (footnote omitted), such sales do not permit a proper comparison, the margin of dumping shall be determined by comparison with a comparable price of the like product when exported to an appropriate third country, provided that this price is representative, or with the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and for profits. (AD Agreement, Art. 2.2)

      Sales of the like product in the domestic market of the exporting country or sales to a third country at prices below per unit (fixed and variable) costs of production plus administrative, selling and general costs may be treated as not being in the ordinary course of trade by reason of price and may be disregarded in determining normal value only if the authorities determine that such sales are made within an extended period of time in substantial quantities and are at prices which do not provide for the recovery of all costs within a reasonable period of time. If prices which are below per unit costs at the time of sale are above the weighted average per unit costs for the period of investigation, such prices shall be considered to provide for recovery of costs within a reasonable period of time. (footnotes omitted) (AD Agreement, Art. 2.2.1)

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 WTO standards are applied.

   Decree 2121/94 is of supplementary application in this subject as long as it does not contradict with the Agreement's provisions.

Bolivia

   "Normal value" means the amount actually paid or payable for a like product by comparison with the product imported, when sold for consumption or utilization in the country of origin or export, in the ordinary course of trade.

   When there are no sales of the like product in the ordinary course of trade in the domestic market of the country of origin or export, or such sales do not permit a proper determination of the normal value, it shall be calculated by considering the highest export price for the like product exported to a third country, provided it is representative; or by considering the constructed price of the like product, which shall be based on the cost of production. Bi-ministerial Decision, Art. 24; see also Decree, Art. 8.

Brazil

   Normal value shall be determined on the basis of the price of similar products sold in the ordinary course of trade destined for consumption in the home market of the exporting country. (Dec. 1602/95 - Art. 5 caput). Home market sales will normally be considered a sufficient quantity for the determination of the normal value when the similar product destined for the home market of the exporting country constitute at five percent or more of the sales of the product under consideration destined for sale in Brazil.

   A lower percentage will be considered sufficient when it is demonstrated that this quantity is sufficient to permit an adequate comparison. (Dec/1602/95 - Art. 5.3).

   Where there are no sales of the like product in the ordinary course of trade in the domestic market or when, because of the particular market situation or the low volume of the sales, an adequate comparison is not possible, normal value will be based either on:

         1) the price of the like product when exported to a third country, provided that this price is representative, or

         2) a constructed value in the country of origin i.e., the cost of production in the country of origin, plus a reasonable amount for administrative and selling costs and for margin of profits. Dec. 1602/95 - Art. 6 caput.

   Sales of the like products in the domestic market of the exporting country or sales to a third country at prices below per unit (fixed and variable) costs of production plus administrative and selling costs may be treated as not being in the ordinary course of trade by reason of price, and may be disregarded in determining normal value only if it is determined that the sales below per unit costs are made:

         1) within an extended period of time, normally one year, but never less than six months;

         2) in substantial quantities, i.e. when it is determined that the weighted average selling price of the transactions under consideration for determination of the normal value is below the weighted average per unit costs, or that the volume of sales below per units costs represents not less than 20 percent of the volume sold in the transaction under consideration for the determination of the normal value and

         3) at prices that do not provide for the recovery of all costs within a reasonable period of time.

   The price will be considered sufficient to permit recovery of costs within a reasonable period of time if it is below the average per unit costs at time of sale but above the average per unit costs for the period of investigation. (Dec. 1602/95 - Art. 6.1, 6.2 e 6.3).

   Sales between parties considered associated or that have a compensatory contractual relationship may be treated as not being in the ordinary coure of trade and may be disregarded in determining normal value unless it is demonstrated that the prices and costs related to that parties are comparable to those between unrelated parties. (Dec. 1602/95 - Art. 6-4).

Canada

   Generally, normal value is the price of like goods -- in the same or substantially the same quantities as the sale of goods to the importer and in the ordinary course of trade -- sold by the exporter in the home market to purchasers with whom the exporter has no association at the time of sale and who are at the same or substantially the same level of trade as the importer (SIMA, Sec. 15).

   Differences in terms and conditions of sale, in taxation and other differences relating to price comparability between the goods sold to the Canadian importer and the domestic sales by the exporter are taken into consideration in determining normal value.

   Allowances may be made for differences in quantities, trade level, quality, structure, design, material and other such differences.

   Allowances may also be made for deferred and cash discounts.

   The SIMA regulations provide for such adjustments to establish the normal value.

   However, where the normal value cannot be determined in this manner, SIMA section 19(a) specifies that the authorities may construct the normal value by using the price of goods exported to third countries adjusted in the prescribed manner and circumstances to reflect the differences in terms and conditions of sale, in taxation and other differences relating to price comparability between the goods sold to the importer in Canada and the like goods sold by the exporter to importers in the third country.

   Alternatively, SIMA section 19(b) directs the authorities to construct the normal value as the aggregate of the cost of production of the goods, plus a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.

Chile

   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).

Colombia

   A product shall be considered to be dumped, i.e. brought into the Colombian market at a price below its normal value, when its export price, upon export to Colombia, is less than the comparable price in the course of normal operations of a like product sold for consumption in the exporting country.

   Normal value is the comparable price actually paid or to be paid for the product like the product exported to Colombia, when it is sold for consumption in the country of origin or export. Where none is available, the normal value shall be established bearing in mind the price of export to a third country or the constructed value.

   In the case of a centrally-planned economy, the normal value shall be the domestic price or export price in a third country with a market economy. Normal value is understood to mean the price actually paid or to be paid for a product like that imported into Colombia when it is sold for consumption in the domestic market of the country of origin or export, in normal commercial operations.

   When the like product is not sold in the course of normal commercial operations in the domestic market of the country of origin or export, or when, because of the low volume of sales in the domestic market of the country of origin or export, or a special situation in the market, they do not allow for an adequate comparison, the normal value may be obtained as follows:          

• Considering the export price of a like product that is exported to an appropriate third country, from the same country, so long as it is representative, or
           
• Considering the calculated price of a like product.

   This shall be obtained from the cost of production in the country of origin, plus a reasonable margin for administrative and sales expenses, and profit. For this purpose, the data from the producer of the product under investigation, or average figures from the data of other producers of goods like that under investigation, or arrived at by another reasonable method, shall be taken into account. The profit shall not be greater than what is generally obtained in the sale of products of the same category in the domestic market of the country of origin. Normally a quantity sufficient to determine the normal value shall be considered to be the sales of the like product sold for consumption in the domestic market of the exporting country, if those sales represent five percent or more of the sales of the product in question to Colombia; nonetheless, a lesser proportion shall be accepted when there is evidence showing that the sales in the domestic market, though they represent such a lesser proportion, are of sufficient magnitude to allow for an adequate comparison.

   Without prejudice to the provisions of the previous article for calculating the normal value, all those sales in the country of export or origin, or exports to third countries, that do not constitute normal commercial operations, and specifically those that reflect the losses sustained, may be excluded. Sales that reflect losses sustained shall be understood to mean those in which the weighted average of the prices is less than the weighted average of the unit costs, and that such sales have been made within a time period that will normally be one year and never less than six months, and when the sales are undertaken in such conditions that they account for a significant volume, i.e. not less than 20% of the total sales volume considered in calculating the normal value.

   For imports from or originating in countries with centrally-planned economies, the normal value shall be obtained based on the comparable price in the course of normal commercial operations at which a like product is actually sold in a third country with a market economy, for domestic consumption, or, if there is none, for export, or based on any other measure deemed appropriate by the investigating authority.

   In these cases, in selecting and evaluating the advisability of selecting a given country with a market economy as the basis from which the normal value shall be obtained, INCOMEX should bear in mind the following criteria, among others:

         1) the production processes in the country with a market economy and the country with the centrally-planned economy;

         2) the scale of production;

         3) the quality of the products.

   For the purposes of the provisions of Article 12 of this decree, INCOMEX may make adjustments related to the following factors, among others:

         1. The amount corresponding to a reasonable estimate of the value of the difference in the characteristics of the product in question.

         2. The amount corresponding to the import duties or indirect taxes that must be paid by a like product and the materials physically incorporated into it, when sold for consumption in the country of origin or export and that are not paid or are returned when the product is exported to Colombia.

         3. The following sales expenses:

               
• Expenses for transportation, insurance, maintenance, unloading, and accessory costs incurred on transporting the product in question from the exporter's warehouses to the first independent buyer.
                 
• Costs of wrapping and packaging of the product in question.
                 
• Costs of the loans made for the sales in question. The volume of the refund shall be calculated in relation to the currency in which the invoice was expressed.
                 
• Expenses corresponding to the fees paid in relation to the sales in question.
                 
• Also, the salaries paid to the personnel employed full-time in direct sales activities shall be deducted.
                 
• Direct expenses incurred for providing guarantees, technical assistance, and other post-sales services.

   In order to determine the normal value in investigations of products from countries with which Colombia has not signed trade treaties or agreements, INCOMEX may select, without conditions, either the price paid when the like product is sold for consumption in the domestic market of the country of origin or the exporting country, in the course of normal trade, or the representative price or the calculated price of a like product.

   In determining the normal value, INCOMEX may depart from the criteria established in Article 9 of Decree 991/98 to exclude sales in the country of origin or the exporting country.

Costa Rica

   A product is to be considered as being dumped, i.e., introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.

   When there are no sales of the like product in the ordinary course of trade in the domestic market of the exporting country or when, because of the particular market situation or the low volume of the sales in the domestic market of the exporting country, such sales do not permit a proper comparison, the margin of dumping shall be determined by comparison with a comparable price of the like product when exported to an appropriate third country provided that this price is representative, or with the cost of product in the country of origin plus a reasonable amount for administrative, selling and any other costs and for profits.

   Sales of the like product in the domestic market of the exporting country or sales to a third country at prices below per unit (fixed and variable) costs of production plus selling, general and administrative costs may be treated as not being in the ordinary course of trade by reason of price and may be disregarded in determining normal value only if the authorities determine that such sales are made within an extended period of time in substantial quantities and are at prices which do not provide for the recovery of all costs within a reasonable period of time.

   If prices which are below costs at the time of sale are above weighted average costs for the period of investigation, such prices shall be considered to provide for recovery of costs within a reasonable period of time.

Dominican Republic

Ecuador

   An import is considered as being at a dumped price if the export price is less than the normal value of a like product destined for consumption in the country of origin or of export in the ordinary course of trade, when compared at the same market level. The normal value of a product exported to Ecuador is the price actually paid or payable for a like product when sold for consumption or use in the domestic market of the country of origin or of export in the ordinary course of trade. In the absence of such ordinary course of trade, as in the case of centrally-planned economies, the point of reference shall be the normal value of a market economy country with characteristics similar to the country with a centrally planned economy that is under investigation.

   The following shall be taken into account for the purposes of determining the normal value:

         1. When there are no sales of the like product in the ordinary course of trade in the domestic market of the exporting country or when, because of the particular market situation or the low volume of the sales in the domestic market of the exporting country, such sales do not permit a proper comparison, the margin of dumping shall be determined by comparison with a comparable price of the like product when exported to an appropriate third country, provided that this price is representative, or with the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and for profits.

         2. Sales of the like product in the domestic market of the exporting country or sales to a third country at prices below per unit (fixed and variable) costs of production plus administrative, selling and general costs may be treated as not being in the ordinary course of trade by reason of price and may be disregarded in determining normal value only if the authorities determine that such sales are made within an extended period of time in substantial quantities and are at prices which do not provide for the recovery of all costs within a reasonable period of time.

   If prices which are below per unit price at the time of sale are above weighted average per unit costs for the period of investigation, such prices shall be considered to provide for recovery of costs within a reasonable period of time.

   Costs shall normally be calculated on the basis of records kept by the exporter or producer under investigation, provided that such records are in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production and sale of the product under consideration.

   Authorities shall consider all available evidence on the proper allocation of costs, including that which is made available by the exporter or producer, in particular in relation to establishing appropriate amortization and depreciation periods and allowances for capital expenditures and other development costs.

   Unless already reflected in the cost allocations under this paragraph, costs shall be adjusted appropriately for those non-recurring items of cost, which benefit future and/or current production, or for circumstances in which costs during the period of investigation are affected by start-up operations. The amounts for administrative, selling and general costs and for profits shall be based on actual data pertaining to production and sales in the ordinary course of trade of the like product by the exporter or producer under investigation.

   When such amounts cannot be determined on this basis, the amounts may be determined on the basis of:

         (a) The actual amounts incurred and realized by the exporter or producer in question in respect of production and sales in the domestic market of the country of origin of the same or general category of products;

         (b) the weighted average of the actual amounts incurred and realized by other exporters or producers subject investigation in respect of production and sales of the like product in the domestic market of the country of origin;

         (c) any other reasonable method, provided that the amount for profit so established shall not exceed the profit normally realized by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin.

El Salvador

   The WTO standard is applied, in accordance with Article 2 of the Central American Regulations on Unfair Trade Practices.

Guatemala

   The WTO standard is applied, in accordance with Article 2 of the CARUTP.

Honduras

   The WTO standard is applied, in accordance with Article 2 of the CARUTP.

Jamaica

   The fair market price is determined in accordance with regulations made under section 35 which states that the Minister may make regulations subject to affirmative resolution generally for giving effect to the provisions of this Act.

Mexico

   Normal value is "the comparable price, in the ordinary course of trade, for identical or like goods when destined for the domestic market of the country of origin." (Annex I, Art. 31).

   "Ordinary course of trade" means "commercial transactions which reflect market conditions in the country or origin and which are concluded customarily, or within a representative period, between independent buyers and sellers." (I/32).

   For a centrally planned economy, prices are used from a surrogate market "which may be regarded as a substitute . . . for the purposes of the investigation" (I/33).

   When there are no sales of identical or like goods in the country of origin, "or when such sales do not permit a proper comparison", normal value is either

         (1) a comparable price of identical or similar goods exported to a third country in the ordinary course of trade, or

         (2) a computed value (e.g., when the transactions which generate profits are "insufficient to be described as representative") -- which is the "sum of the cost of production, general costs and a reasonable profit, all in the ordinary course of trade in the country of origin, in that order". (I/31-32).

   As a general rule, the comparable prices of identical or like goods in the domestic market or, where appropriate, for export to a third country, shall be deemed to be representative when they account for at least 15% of the total volume of sales of the subject merchandise. (II/42).

   Sales in the domestic or third country market "which reflect sustained losses shall be disregarded in calculating the normal value. Such sales . . . include transactions whose prices are insufficient to cover the costs of production and general costs incurred in the ordinary course of trade within a reasonable period of time, which may be more extensive than the period of investigation". (I/32).

Nicaragua

   The WTO standard is applied, in accordance with Article 2 of the CARUTP.

Panama

Paraguay

   For the purposes of this provision, a product will be considered as being dumped, i.e., introduced into the Paraguayan market at less than its normal value, if the export price when exported to the Paraguayan market is less than the comparable price, in the ordinary course of trade, for the like product when manufactured for consumption in the exporting country.

   When there are no sales of the like product in the ordinary course of trade in the domestic market of the country of origin or export, or when, because of the particular market situation or low sales volume in the country of origin or export, such sales do not allow for adequate comparison of prices, the Ministry of Industry and Commerce shall determine the normal value by making comparisons with:

         
• the export price of a like product to a third country in the ordinary course of trade;
           
• the cost of production in the country of origin, plus a reasonable sum for administrative expenses, sales, and general expenses, as well as for profit, pursuant to Article 2.2 of the Agreement on Implementation of Article VI of GATT 1994.

   A sufficient amount shall be considered, for determining the normal value of sales of the like product earmarked for consumption in the domestic market of the exporting country if such sales account for at least 5% of sales of the product in question to the importing country, unless in the view of the Ministry of Industry and Commerce it is shown that, although it is a lesser proportion, it is of sufficient magnitude to allow for an adequate comparison.

   The sales of the like product in the domestic market of the exporting country or the sales to a third country at prices below unit cost of production (fixed or variable), plus administrative, sales, and general expenses, may be considered not realized in the ordinary course of trade for reasons of price and may be ignored in calculating the normal value only if the authorities determine that such sales have been made

         (1) during a period that will normally be one year, and never less than six months,

         (2) in a significant volume, i.e., that accounts for at least 20% of sales in operations considered for calculating the normal value, and

         (3) at prices that do not allow for recovering costs within a reasonable period.

   If the prices below unit cost when sold are higher than the weighted average unit costs for the period under investigation, it is considered that these prices make it possible to recover the costs within a reasonable period.

Peru

   For the purposes of this Supreme Decree, a product shall be considered as being dumped if its export price is less than its normal value or comparable price, in the ordinary course of trade, for a like product when destined for consumption in the exporting country.

   The export price, the normal value or the comparable price referred to in the preceding paragraph shall be determined in conformity with Article 2 of the Anti-Dumping Agreement.

   A particular market situation in the sense of Article 2.2 of the Anti-Dumping Agreement shall mean the following situations:

         I. Where the level of openness in the country of origin resulting from tariff or para-tariff barriers does not permit a proper comparison because it causes distortion of domestic prices.

         II. Where other special factors exist in the domestic market of the country of origin which, in the opinion of the Commission, do not permit a proper comparison because they cause distortion of domestic prices.

   Where imports come from or originate in countries where there are distortions in the economy that do not permit them to be considered market economy countries, the normal value shall be determined on the basis of the comparable price in the ordinary course of trade at which the like product is actually sold in a third country with a market economy for domestic consumption, or, failing that, for export, or on the basis of any other method deemed appropriate by the Commission. For the purpose of determining the normal value, the Commission shall take into account the following criteria inter alia:

         I. The production processes in the country with a free market economy and the country whose economy has distortions.

         II. Scale of production.

         III. Quality of the products.

   Bearing in mind the foregoing factors, the choice of the country must not entail disadvantages for the producer or exporter in the country of origin.

Santa Lucia

   The determination of value is derived from Section 2.

   For the purposes of this Ordinance imported goods shall be regarded as having been dumped

         (a) if the export price from the country in which the goods originated is less than the fair market price of the goods of that country, or

         (b) in the case where the country from which the goods were exported to the Colony is different from the country in which they originated

               (i) if the export price from the country in which the goods originated is less than the fair market price of those goods in that country, or

               (ii) if the export price from the country from which the goods were so exported is less than the fair market price of those goods in that country.

Trinidad and Tobago

   Normal value is the price paid for like goods sold in the ordinary course of trade for home consumption in the country of export in sales that are arm's length transactions by the exporter or, if like goods are not sold by the exporter, by other sellers of like goods. (Sec. 12(1)).

   In order to maintain a fair comparison, the Minister will compare the normal value and the export price

         (1) at the same level of trade;

         (2) in respect of sales made at the same time as nearly as possible; and

         (3) with due allowance made as appropriate for any differences in terms and conditions of sales, differences in taxation, and any other differences which affect price comparability. (Sec 12(7)).

   If the normal value of goods exported or intended to be exported to Trinidad and Tobago cannot be determined because

         (1) an absence of sales that would be relevant for the purpose of determining a price;

         (2) the sales in the relevant market are not suitable for use in determining a price;

         (3) like goods are not sold in the ordinary course of trade in the home market for home consumption in the country of export in sales that are arm's length transactions by the exporter, then normal value is determined by the sum of an amount determined by the Ministers as the cost of production of the subject goods in the country of export. (Sec. 12(2) and 12(3)).

   This amount would include a reasonable amount for administrative and selling costs, delivery charges, the rate of profit, and other charges incurred in the sale. (Sec. 12(3)(b)).

   Normal value may also be the price that is representative of the price paid in sales of like goods being sold at arm's length in the ordinary course of trade in the country of export for export to a third country. (Sec. 12(4)).

   In this situation, normal value may be the highest price paid for such like goods. (Id.)

   If the Minister determines that it is inappropriate to ascertain the normal value of goods because the government of the exporting country

         (1) has a monopoly, or substantial monopoly, of the trade of the country and

         (2) determines or substantially influences the domestic price of goods in that country, then the Minister may determine normal value as

               (1) a value equal to the price of like goods produced in a third country determined by the Minister and sold at arm's length transactions for home consumption in the ordinary course of trade in that third country; or

               (2) a value equal to the price of those like goods which are produced in a third country and sold for export from that country to another country in the ordinary course of trade when that price is representative of the price paid in such sales of the like goods; or

               (3) a value equal to the sum of the cost of production, amounts for administrative and selling costs, delivery charges, rate of profit, and other charges necessarily incurred in the selling of the like goods which are produced in a third country and sold for home consumption in the ordinary course of trade in that country. (Sec. 12(5) and 12(6)).

United States

The normal value is the reference against which U.S. sales prices of imported merchandise are compared to determine whether dumping is occurring.

   Normal value is based upon one of three methods:

         1) if an adequate volume of the foreign like product is sold in the exporting country for home consumption, then normal value is based on the exporter's home market prices;

         2) if home market sales do not exist or are too few to provide an adequate comparison, then normal value is the price at which the foreign like product is sold for exportation to third countries; or

         3) if neither home market sales nor third country sales form an adequate basis of comparison, then normal value is based on the constructed value of the imported merchandise.

   Constructed value consists of the cost of production, plus the actual amount for profit and for selling, general, and administrative expenses.

   In certain circumstances, home market or third country sales at prices below the cost of production may be disregarded in the calculation of normal value.

   Commerce will initiate a cost of production ("COP") investigation if it has "reasonable grounds to believe or suspect" that below-cost sales have occurred.

   Commerce will exclude below-cost sales from the calculation of normal value if such sales occurred

         (1) in substantial quantities, which is defined as 20 percent or more of the sales of a discrete product or model;

         (2) within an extended period of time; and

         (3) at prices which do not permit the recovery of all costs within the period of investigation.

   The U.S. statute limits the period for cost recovery to the period of investigation or review.

   The U.S. statute states that if prices which are below the per unit cost of production at the time of sale are above the weighted average per unit cost of production for the period of investigation or review, such prices will be considered to provide for recovery of all costs within a reasonable period of time.

   U.S. law permits, but does not require, the Commerce Department to base normal value on sales to affiliated parties in the home or third country markets.

   Commerce ignores sales to affiliated parties that are not shown to be at arm's length prices.

   The statute also provides for Commerce to calculate normal value, to the extent practicable, on the basis of home market (or third country, if applicable) sales at the same level of trade as the U.S. comparison sale. U.S. law prohibits Commerce from calculating normal value based on home market sales which were made to establish a "fictitious market".

   That is, Commerce will not base normal value on pretended sales or offers intended to establish a fictitious market.

   Adjustments: The following elements are deducted from normal value:

         (1) the cost of packing for shipment in the exporting country or to a third country;

         (2) if included in the starting price, transportation, insurance and other expenses incurred in bringing the merchandise from the original place of shipment in the exporting country (e.g., the factory) to the place of delivery in the exporting country or third country (e.g., customer's warehouse);

         (3) the amount of any indirect taxes imposed on the foreign like product or components thereof that have been rebated or not collected, but only to the extent that such taxes are added to or included in the price of the merchandise sold in the exporting country or to a third country. In addition, normal value is increased to include U.S. packing costs, which permits a comparison of prices in the home or third country market on the basis of a packed, ready for shipment price to the U.S. Commerce also adjusts normal value to account for other differences between the export price (or the constructed export price) and normal value that are either entirely or partly due to differences in quantities, physical characteristics of the merchandise (limited to differences in the variable costs of manufacture), or other differences in the circumstances of sale.

   Under the new statute, Commerce will only deduct indirect selling expenses from normal value when a claimed level of trade adjustment cannot otherwise be made.

   If Commerce is unable to compare sales in the normal value market with U.S. sales at the same level of trade, a level of trade adjustment may be made to normal value.

   This adjustment may either increase or decrease normal value. Commerce will make this adjustment only when:

         (1) there is a difference in the level of trade (as demonstrated by a difference between the actual functions performed by the seller at different levels of trade in the two markets), and

         (2) the difference is shown to affect price comparability.

Uruguay

   For the purpose of this Decree, a product shall be considered as being dumped when it is introduced into the domestic market, including under the temporary admission procedure, at an export price that is less than its normal value. The normal value is the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country. Normally, sales of the like product destined for consumption in the domestic market of the exporting country that constitute at least 5 per cent of the sales of the product exported to Uruguay shall be considered a sufficient quantity for the determination of the normal value. However, a lower percentage shall also be considered where it can be shown that this percentage nonetheless represents a quantity sufficient to provide for a proper comparison.

   When there are no sales of the like product in the ordinary course of trade in the domestic market of the exporting country or when, because of the particular market situation or the low volume of sales in the domestic market of the exporting country, such sales do not permit a proper comparison, the margin of dumping shall be determined by comparison with a comparable price of the like product when exported to a third country, provided that this price is representative, or with the cost of production in the country of origin plus a reasonable amount for administrative, marketing and general costs and for profits.

   For the purpose of determining normal value, sales of the like product in the domestic market of the exporting country or to a third country at prices below per unit (fixed and variable) costs plus administrative and marketing costs may be treated as not being in the ordinary course of trade.

   The provisions of the preceding paragraph shall apply only if the said sales are made:

         (a) Within an extended period of time, normally one year but in no case less than six months;

         (b) in substantial quantities, that is when:

               (i) the weighted average selling price of the transactions under consideration for the determination of the normal value is below the weighted average per unit costs, or

               (ii) the volume of sales below per unit costs represents not less than 20 per cent of the volume sold in the transactions under consideration for the determination of the normal value; and

         (c) at prices which do not provide for the recovery of costs within a reasonable period of time.

   When prices which are below per unit costs at the time of sale are above weighted average per unit costs for the period of investigation, such prices shall be considered to provide for recovery of costs within a reasonable period of time. For the purposes of Article 7, the amounts for administrative, marketing and general costs and for profits shall be based on actual data pertaining to production and sales in the ordinary course of trade of the like product by the exporter or producer under investigation. When such amounts cannot be determined on this basis, the amounts may be determined from:

         (a) The amounts actually incurred and realized by the exporter or producer in question in respect of production and sales in the domestic market of the exporting country of the same general category of products;

         (b) the weighted average of the amounts actually incurred and realized by other exporters or producers subject to investigation in respect of production and sales of the like product in the domestic market of the exporting country; or

         (c) any other reasonable method, provided that the amount for profit so established shall not exceed the profit normally realized by other exporters or producers on sales of products of the same general category in the domestic market of the exporting country.

   When the products under investigation are exported from or originate in countries which do not have a predominantly market economy and in which domestic prices are mainly set by the State, so that price comparability is difficult to establish, the normal value shall be determined on the basis of:

         (a) The price at which a like product of a third market-economy country is actually sold for consumption in the domestic market of that country or to other countries, including Uruguay itself, or failing that;

         (b) on some reasonable basis, including the price actually paid or payable in the Uruguayan market for the like product, duly adjusted if necessary, to include a reasonable margin of profit.

   For the purposes of the preceding Article, the third market-economy country shall be selected by taking into consideration the characteristics of the market for the product in question, the productive structures and the level of development. Provided that it constitutes an appropriate choice, the third country selected shall be one that is subject to the same investigation. Once an investigation has been initiated, the interested parties shall be informed of the criteria used to select the third market-economy country and may make any comments they consider relevant within a period of 10 days.

Venezuela

   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).

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