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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II DETERMINATION OF INJURY CHAPTER III INDUSTRY INJURY INVESTIGATION CHAPTER IV SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PROVISIONS Article 1. In order to regulate the countervailing investigation of industry injury, the present Provisions are formulated in accordance with the Countervailing Regulation of the People's Republic of China (hereinafter referred to Countervailing Regulation). Article 2. The present Provisions shall be applicable to the activities related to the countervailing investigation of industry injury in accordance with the Countervailing Regulation. Article 3. The Ministry of Commerce of the People's Republic of China (hereinafter referred to MOFCOM) shall be responsible for the countervailing investigations of industry injury. The countervailing investigations of industry injury involving agricultural products shall be conducted by the MOFCOM jointly with the Ministry of Agriculture. CHAPTER II DETERMINATION OF INJURY Article 4. The term "industry injury" refers to a material injury or a threat of material injury to an established domestic industry, or the material retardation of the establishment of a domestic industry caused by subsidies. The term "material injury" mentioned in the present Provisions means that non-negligible injury has already been caused by subsidies to an established domestic industry. The term "threat of material injury" means that the subsidies hasn't caused material injury to the domestic industry, but evidence shows that material injury to a domestic industry is clearly foreseeable and imminent unless measures are taken against it. The term "material retardation" refers to the retardation of the formation and development of a to-be-established domestic industry, which causes the failure of the establishment the domestic industry. Article 5. In the determination of injury to a domestic industry caused by subsidies, the following matters shall be examined: (1) The volume of the subsidized imports and the consequential impact of subsidized imports on the price of the domestic like products; and (2) The consequential impact of subsidized imports on the domestic industry. The examination of the subsidized imports shall include whether there has been a significant increase in the subsidized imports either in absolute terms or in relation to production or consumption of the domestic like product. The examination of the consequential impact of the subsidized imports on the price of the domestic like products shall include whether there has been a significant price cut on the subsidized imports or whether the subsidized imports have caused a significant depression in prices of the domestic like product or prevented price increase of the domestic like product that would have occurred. Article 6. The examination of the impact of subsidized imports on a domestic industry shall include an evaluation of all relevant economic factors and indicators which have a bearing on the situation of industry. These factors and indicators include the actual and potential decline in sales, profits, output, market share, productivity, the return on investment, or equipment utilization; the factors that affect domestic prices; the seriousness of the subsidized imports; the actual or potential adverse effects on the inventories, employment, wages, growth, ability to raise capital or to make investment etc. As for a case involving agricultural products, one should take account of the factor of whether a heavier burden is placed on the government's support plans. Article 7. In the determination of the material injury caused to a domestic industry by subsidies, the nature of the subsidies and the consequential impact on trade shall be also examined. Article 8. The determination of a material injury shall be based on clearly foreseeable and imminent situation, in which if no measure is taken, material injury will occur. The determination of a threat of material injury shall be based on the facts, rather than simply on complaint, conjecture or remote possibility. Moreover, when determining a threat of material injury, examination shall be made but not limited to the following factors: (1) The nature of the subsidies and the possible consequential impact on trade; (2) A significant increase rate of subsidized imports that shows a likely material increase of imports; (3) An increase of the productive capacity of the producers of the subsidized imports that shows a likely material increase of imports. When adopting this indicator, one should consider the factor whether there exist any other export markets that may take in any additional exports; (4) Whether the imported product are being imported at prices that significantly depressing or suppressing the prices of domestic like product, and it is likely to cause an increase of the demands of imports; and (5) The inventories of the product under investigation. Article 9. When determining a material retardation of the establishment of a domestic industry, examination shall be made but not limited to the following factors: (1) The establishment and preparatory establishment of the domestic industry; (2) The increase of domestic demands and the consequential effects; (3) The impact of the subsidized imports on the situation of domestic market; and (4) The follow-up productive capacity of the subsidized imported product and the development trends in the domestic market. Article 10. Like product is defined as a product that is identical to, or in the absence of such a product, one that has characteristics closely similar to those of the subsidized product in question. Article 11. In the determination of like products, one may take factors into account, such as the physical characteristics of the products, chemical features, manufacturing equipment and techniques, purposes of use, substitutability, appraisal of consumers and producers, conduit of distribution, price, etc. Article 12. The impact of subsidized imports on the domestic industry shall be evaluated on the basis of a separate definition of the production of the domestic like product. If, on the basis of the techniques of production and the producers' sales and profits, one cannot distinguish the production of domestic like product from the production of other products, the impact of subsidized imports shall be determined by reference to the production of the narrowest product group or scope which include the domestic like product insofar as the product group or scope can provide sufficient information. Article 13. When determining a domestic industry, one should take account of all producers of the domestic like product in China, or the producers whose total output forms the principal part of the total output of domestic like product; however, if a domestic producer is associated with an export business operator or import business operator, or he himself is an import business operator of the subsidized imports, he may be excluded from the domestic industry. The term "is associated with" mentioned in the preceding paragraph means that one party directly or indirectly controls or influences another party, or both parties are controlled or influenced by a third party, or both parties jointly control or influence a third party directly or indirectly. Article 14. When determining a regional industry, the following factors shall be taken into account: (1) The producers have sold all or nearly all of the like product manufactured by them in the regional market; (2) The demands of the regional market aren't satisfied or aren't largely satisfied by the like-product producers in other domestic areas; and (3) Other factors. Article 15. An accumulative assessment of the impact of subsidized imports on domestic industry may be conducted if the subsidized imports come from two or more countries (regions) and meet concurrently the following requirements: (1) The amount of the subsidy for an imported product from a country (region) isn't de minimis and the volume of the imports isn't negligible; (2) According to the competition conditions among the subsidized imports and those between the subsidized imports and domestic like product, it is reasonable to conduct an accumulative assessment. The term "de minimis" mentioned in the preceding paragraph refers to a subsidy whose amount is less than 1% of the value of the product; but for the subsidized product imported from a developing country (region), de minimis subsidy refers to one whose amount is less than 2% of the value of the product. Article 16. When making accumulative assessment, the following factors may be taken into account: (1) The continuity and possibility of the impact of subsidized imports from different countries (regions) on the domestic industry; (2) The substitutability between the subsidized imports from different countries and the domestic like product, including the demands of special clients, the product quality and other relevant factors; (3) The sales prices, sellers' quotations and actual transaction prices of the subsidized imports from different countries (regions) and the domestic like product in the same market of area; (4) Whether there exist identical or similar conduits of distribution for a subsidized product imported from different countries (regions) and the domestic like product, and whether they appear in the market at the same time; (5) Other competition conditions that exist among the subsidized imports and between the subsidized import product and the domestic like product; and (6) Other factors. Article 17. When conducting countervailing investigation of industry injury, the MOFCOM shall give users or consumers of the subsidized imports a chance to present their views and proofs. Article 18. As a general rule, the period subject to countervailing investigation of industry injury shall be 3-5 years before the investigation commences. CHAPTER III INDUSTRY INJURY INVESTIGATION Article 19. Where any interested party intends to answer the countervailing investigation of industry injury, it shall file an application to the MOFCOM within 20 days from the day when an announcement on the initiation of countervailing investigation of industry injury is made, and shall go through relevant registration formalities. At the same time, the applicant shall offer the information concerning its productive capacity, output, inventories, construction and expansion plans, the volume and amount of the product exported to China, the volume and amount of the product imported by the import business operators. Article 20. The interested parties may be: (1) foreign producers, export business operators, and domestic import business operators of the products under investigation, or guilds or other organizations of the producers, export business operators and import business operators of the products under investigation; (2) the government of the country (region) of origin and the export country (region) of the products under investigation and the representatives thereof; (3) producers and business operators of domestic like product, or guilds or other organizations of the producers and business operators of the products; and (4) others. Article 21. Where an interested party participates in the investigation, he shall present his identification certificate. If the interested party is an enterprise or any other organization, it shall present its business license and other registration certificates, and the identification certificate of the legal representative thereof. Where an interested party entrusts a proxy to participate in the investigation, it shall present identification certificate of the proxy and a power of attorney. Where an interested party entrusts a lawyer as his proxy, the lawyer shall come from a law firm in China and shall practice law in China, and a power of attorney, the business license of the law firm and the law-practice certification of the lawyer shall be presented. Article 22. The object of the MOFCOM's antidumping investigation of industry injury include domestic producers, domestic import business operators, domestic purchasers, domestic end consumers, foreign export business operators, foreign producers, etc. Article 23. Whenever the MOFCOM considers necessary, it may hire experts in the fields of the relevant industry, accounting, economic and trade and law to provide consultation services. The pertinent experts shall keep the secrets to themselves. Article 24. The MOFCOM shall adopt questionnaires, sampling, hearings, technical authentications, on-the-spot examination and other forms to conduct an industry injury investigation. Article 25. The questionnaires issued by the MOFCOM to the interested parties include domestic producer questionnaires, domestic importer questionnaires, domestic consumer questionnaires, foreign producer and foreign exporter questionnaires, and other types of questionnaires Article 26. An interested party shall submit answers to the questionnaires according to the method and time limit specified in the questionnaires. If it needs to extend the time limit, it shall, 7 days prior to the time limit for the submission of answers, file a written application to the MOFCOM and give an explanation. Whether to extend the time limit or not, it shall be decided by the MOFCOM. Article 27. The MOFCOM may conduct on-the-spot examination to the interested parties. Prior to the on-the-spot examination, it shall notify the relevant interested parties of the principal purposes and content of the examination. Article 28. Where it is requested by the interested parties or the investigation, the MOFCOM may, upon the approval of the relevant country (region), dispatch persons to the said country (region) to conduct investigations on the productive capacity, investments in expanding production, inventories, place of origin or entrepot, the affiliation among the enterprises and other information related to the product. Article 29. The MOFCOM may demand the interested parties to submit or supplement written materials according to the relevant requirements, and the interested party may offer to submit written materials to the MOFCOM. Article 30. When it is requested by an interested party, or whenever the MOFCOM considers it necessary, a hearing of industry injury may be held. Article 31. Where an interested party who participates in the industry injury investigation considers it necessary to keep the materials and the relevant evidence secret, it shall, when submitting the materials to the MOFCOM, attach a non-confidential summary of the materials, or submit the confidential text and an open text of the materials. The non-confidential summary and open text shall contain reasonable substantial content of the confidential information. In the absence of substantial content, the MOFCOM may order the interested party to make up relevant content and evidential materials. Article 32. Where any interested party who participates in the industry injury investigation fails to provide non-confidential summary or open texts of the materials submitted by it, or fails to do so without good reasons, the MOFCOM may refuse to take the materials into account. If the MOFCOM considers it unnecessary to keep the materials submitted by an interested party secret, it may demand the interested party to withdraw its secrecy application. Article 33. During the process of industry injury investigation, any interested party subject to the industry injury investigation shall faithfully state the information and offer relevant materials. Where any interested party fails to do so, or fails to provide necessary information within a reasonable time limit, or seriously interferes with the investigation by any other means, the MOFCOM may make a ruling on the basis of the facts it has already obtained and the best information available. CHAPTER IV SUPPLEMENTARY PROVISIONS Article 34. When an interested party, who participates in the industry injury investigation, submits any document or evidential material to the MOFCOM, it shall submit the original Chinese text in quintuplicate accompanied by the corresponding electronic text (computer floppy disks or CDs) in triplicate. Article 35. The industry injury investigation of the MOFCOM shall take the prevailing Chinese language prescribed by the administrative department of languages of the state as the formal language. Any document, materials or information offered by any interested party shall be written in standard Chinese. As for any materials in any other language, a Chinese translation and the original text shall be submitted, and the Chinese translation shall prevail. Any materials in the non-prevailing languages without attaching a Chinese translation shall not be considered valid and lawful evidential material Article 36. The power to interpret the present Provisions shall remain with the Ministry of Commerce. Article 37. The present Provisions shall be implemented 30 days after the date of promulgation. On the same day when the present Provisions are implemented, the Provisions on the Countervailing Investigation of Industry Injury and Determination(Order No. 46 (2002) of the former State Economic and Trade Commission shall be abolished. |
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