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Complaint by Brazil.
On 21 December 2000,
Brazil requested consultations with the EC as regards definitive
anti-dumping duties imposed by Council Regulation (EC) No. 1784/2000
concerning imports of malleable cast iron tube or pipe fittings
originating, inter alia, in Brazil.
- Brazil considered that the EC’s establishment of the
facts was not proper and that its evaluation of these facts was not
unbiased and objective, both at the provisional and definitive stage,
particularly in relation to the initiation and conduct of the
investigation (including the evaluation, findings and determination of
dumping, injury and causal link between them).
- Brazil also challenged the evaluation and findings made
in relation to the “community interest”.
- In sum, Brazil considered that the EC had infringed
Article VI of GATT 1994 and Articles 1, 2, 3, 4 ,5 , 6, 7, 9, 11, 12 and
15 of the Anti-dumping Agreement.
Panel and Appellate Body proceedings
Further to Brazil’s request, the DSB established a
panel at its meeting of 24 July 2001. Chile, Japan, Mexico and the US
reserved their third-party rights. The Panel was composed on 5 September
On 15 January 2002, both parties requested the Panel to
suspend its work until 1 March 2002 with a view to reaching a mutually
agreed solution. The Panel agreed to the request. On 28 February 2002,
both parties requested the Panel to further suspend its work until 5 April
2002 with a view to reaching a mutually agreed solution. The Panel agreed
to this request. On 22 April 2002, the Panel resumed its work, in
accordance with Brazil’s request. On 3 May 2002, the Chairman of the Panel
notified the DSB that it would not be possible to complete its work in six
months in light of, inter alia, scheduling conflicts. The Panel expects to
complete its work in December 2002. On 7 March 2003, the Panel circulated
its Report to the Members. The Panel concluded that the EC had acted
inconsistently with its obligations under:
- Article 2.4.2 of the Anti-Dumping Agreement in
“zeroing” negative dumping margins in its dumping determination;
- Article 12.2 and 12.2.2 in that it is not directly
discernible from the published Provisional or Definitive Determination
that the European Communities addressed or explained the lack of
significance of certain injury factors listed in Article 3.4.
The Panel ruled against Brazil on all other claims. On
23 April 2003, Brazil notified its decision to appeal certain issues of
law as well as certain legal interpretations developed by the Panel.
On 22 July 2003, the Appellate Body Report was
circulated to Members. Of the seven issues appealed by Brazil, the
Appellate Body rejected Brazil’s claims with respect to six issues. The
Appellate Body upheld the Panel’s findings that the European
Communities did not act inconsistently with Article VI:2 of the GATT 1994
or with Articles 1, 2.2.2, 3.1, 3.2, 3.3, 3.4, or 3.5 of the Anti-Dumping
Agreement. In the course of upholding these findings, the Appellate Body
also rejected Brazil’s claim that the Panel, contrary to its obligation
under Article 17.6(i) of the Anti-Dumping Agreement, failed to assess
properly the facts of the matter before it when admitting into evidence
the document referred to as Exhibit EC-12. The Appellate Body reversed
the Panel’s finding with respect to one issue. The Appellate Body found,
in contrast to the Panel, that the European Communities acted
inconsistently with Articles 6.2 and 6.4 of the Anti-Dumping Agreement by
failing to disclose to interested parties during the anti-dumping
investigation certain information related to the evaluation of the state
of the domestic industry, which was contained in document Exhibit EC-12.
On 18 August 2003, the DSB adopted the Appellate Body
report and the Panel report, as modified by the Appellate Body Report.
Implementation of adopted reports
On 15 September 2003, the European Communities
confirmed in a communication to the DSB its intention to implement the
recommendations and rulings of the DSB.
On 1 October 2003, the EC and Brazil informed that DSB
that they had agreed that the reasonable period of time for the EC to
implement the DSB’s recommendations and rulings would be 7 months; i.e.
until 19 March 2004.
On 17 March 2004, the EC informed the DSB that it had
reassessed its findings related to the contested measure by taking fully
into account the findings and conclusions set out in the Panel and
Appellate Body Reports, as explained in the Council Regulation (EC) No
436/2004 of 8 March 2004, and thus had fully complied with the DSB rulings
and recommendations in this dispute and within the deadline agreed upon
between the disputing parties. At the DSB meeting on 20 April 2004, Brazil
contested the claim by the EC that it had fully implemented the
recommendations and rulings of the DSB in this case. Brazil stated that
whereas it was true that the EC had recalculated the dumping margin
without using the “zeroing” methodology, it had not fully
implemented the findings of the Appellate Body relating to the due process
requirements contained in the Anti-dumping Agreement. The EC
disputed this claim by Brazil and stated that the EC was ready to provide
further explanations to Brazil if that would be helpful and make it accept
that it had correctly implemented the recommendations and rulings of the
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