DS: Colombia — Anti-Dumping Duties on Frozen Fries from Belgium, Germany and the Netherlands

The dispute concerns anti-dumping measures applied by Colombia on imports of potatoes, prepared or preserved (otherwise than by vinegar or acetic acid), frozen, classified under tariff subheading 2004.10.00.00 (“frozen fries”) originating in Belgium, Germany, and the Netherlands.

With respect to the initiation of the investigation, the Panel found that Colombia acted inconsistently with Article 5.3 of the Anti-Dumping Agreement because the Colombian investigating authority (MINCIT) failed to examine whether the use of third-country sales prices, instead of domestic sales prices, for determining “normal value” as part of the initiation was “appropriate” in the specific facts and circumstances of the underlying investigation. The Panel either rejected or declined to consider the remainder of the European Union's claims under Article 5.3 challenging MINCIT's decision to initiate the investigation.

As to the European Union's challenge against the confidential treatment of information by MINCIT, the Panel found that Colombia acted inconsistently with Article 6.5 of the Anti-Dumping Agreement by granting confidential treatment to certain information in the revised application. The Panel also found that Colombia acted inconsistently with Article 6.5.1 of the Anti-Dumping Agreement because, inter alia, it failed to “require” the applicant to furnish non-confidential summaries of certain information deemed to be confidential.

With respect to the European Union's claims concerning MINCIT's alleged use of “facts available” for calculating margins of dumping, the Panel found that Colombia acted inconsistently with its obligations under Article 6.8 of the Anti-Dumping Agreement because MINCIT disregarded the export prices that the investigated companies had provided in their questionnaire responses, without determining that the conditions under Article 6.8 to resort to “facts available” were satisfied. The Panel did not consider it necessary to address the European Union's other claims challenging the use of facts available under paragraphs 3 and 6 of Annex II and Article 2.1 of the Anti-Dumping Agreement.

The Panel also concluded that Colombia acted inconsistently with Article 2.4 of the Anti-Dumping Agreement because MINCIT improperly denied certain exporters' requests for adjustments in the dumping calculations.

As to claims focused on MINCIT's injury and causation determinations, the Panel found that Colombia acted inconsistently with Articles 3.1, 3.2, 3.4, and 3.5 of the Anti-Dumping Agreement, because MINCIT included in its injury and causation determinations imports from the exporters that were determined to have final de minimis margins of dumping and final negative margins of dumping. Given this, the Panel was not called upon to make further findings on the other grounds presented by the European Union in support of its claims challenging MINCIT's analysis of the “price effects” under Articles 3.2 and 3.1; the impact on the domestic industry under Articles 3.4 and 3.1; and the causal link under Articles 3.5 and 3.1.

Colombia challenged four findings of inconsistency by the Panel. With respect to the initiation of investigation, the Arbitrators agreed with the Panel that Colombia's interpretation of the phrase “where appropriate” in Article 5.2(iii) was not “permissible” within the meaning of Article 17.6(ii), but considered that the Panel applied the legal standard in an overly stringent manner. The Arbitrators considered that an unbiased and objective authority could have found the use of third-country sales prices in the application at issue to be “sufficient” to initiate the investigation. The Arbitrators therefore reversed the Panel's finding and found that the European Union had not established that Colombia acted inconsistently with the obligation under Article 5.3 of the Anti-Dumping Agreement to determine the “sufficiency” of evidence to justify the initiation.

With respect to MINCIT's confidential treatment of information, the Arbitrators found that the information at issue was “provided on a confidential basis” by the applicant and “treated” by MINCIT as confidential. The Arbitrators therefore upheld the Panel's finding that, given the lack of a showing of “good cause” for the confidential treatment, MINCIT acted in a manner inconsistent with Article 6.5 of the Anti-Dumping Agreement.

With respect to exporters' requests for adjustment, the Arbitrators disagreed with Colombia that part of the European Union's “packaging cost-related claim” under Article 2.4 fell outside the Panel's terms of reference because it was not identified in the panel request. Rather, the Arbitrators considered that the allegation at issue concerned factual details that led to Colombia's failure to perform a fair comparison and need not be spelt out in the panel request. The Arbitrators therefore upheld the Panel's finding that the claim fell within its terms of reference.

With respect to MINCIT's injury and causation determinations, Colombia contended that the term “dumped imports” in Article 3 refers to any imports for which an authority calculates a positive dumping margin, including de minimis margins (i.e. less than 2 %). The Arbitrators considered that such an interpretation would render ineffective the requirement under Article 5.8 to immediately terminate an investigation where an authority determines a de minimis dumping margin, and was not supported by other arguments based on context and negotiating history. The Arbitrators concluded that Colombia's interpretation was not “permissible” within the meaning of Article 17.6(ii), and upheld the Panel's finding that Colombia acted inconsistently with Articles 3.1, 3.2, 3.4 and 3.5 of the Anti-Dumping Agreement.