THIRD PARTY ORAL STATEMENT OF CHINA

D. THIRD PARTY ORAL STATEMENT OF CHINA

  5.27 The following summarizes China's arguments in its third party oral statement.

  5.28 China believes that this dispute raises a number of important questions in respect of the interpretation of the Agreement. China wishes to comment on the following issues which China believes to be important.

  (a)

  Issue 1: Necessary information in the context of the application of “facts available”

  5.29 In the alleged antidumping investigation, the KTC determined that since the two respondents to the alleged investigation, namely “Pindo Deli” and “Indah Kiat”, failed to “submit data such as financial statements and account documents” of CMI, which was deemed by the KTC as an affiliate of the two respondents, the individual normal value of each of them was calculated therefore based on facts available.

  5.30 China understands that Article 6.8 of the Agreement in essence is a sort of “trigger term” for the adoption of “facts available”, exhaustively provides the circumstances under which the investigating authorities can resort to facts available. China will hereby limit its comment only to the circumstance involving “necessary information” provided in Article 6.8 of the Agreement which is the main focus of the alleged dispute described above.

  5.31 China notes that there are no provisions in the Agreement expressly defining the “necessary information” referred to in Article 6.8 of the Agreement and therefore believes that the investigating authorities shall have the discretion to determine what information is necessary for a specific investigation. However, such discretion is subject to certain limitations and procedural requirements 5.31 China notes that there are no provisions in the Agreement expressly defining the “necessary information” referred to in Article 6.8 of the Agreement and therefore believes that the investigating authorities shall have the discretion to determine what information is necessary for a specific investigation. However, such discretion is subject to certain limitations and procedural requirements

  5.32 China agrees that in the event that some of the required information necessary for the investigation has not been submitted or, although provided, has been otherwise rejected, the investigating authorities shall not therefore reject the entire information provided regardless of the accuracy of that information. The investigating authorities shall determine on the basis of the specific facts and circumstances of the investigation at hand as to whether the fact that some information not properly submitted or is rejected otherwise has consequences for the remainder of the information submitted and therefore facts available can be resorted to.

  (b)

  Issue 2: Whether the obligation of the investigating authorities under paragraph 7 of Annex II can be released by compliance of the investigating authorities with Article 5.3 before the initiation of the investigation

  5.33 Indonesia claimed that, in the alleged antidumping investigation, the KTC failed to check the information from the applicants on which it relied against the information obtained from other sources during the course of the investigation as required under Paragraph 7 of Annex II of the Agreement. Korea contended that as part of the initiation process, the KTC had examined the information contained in the application and found that it was accurate and adequate as required by Article 5.3 of the Agreement and therefore Indonesia should not challenge the investigating authorities’ reliance on that information as “facts available”.

  5.34 China notes that the dispute in this regard mainly lies in the point that whether the investigating authorities’ implementation of the obligations under Article 5.3 of the Agreement at the initiation stage will necessarily release their obligations under Paragraph 7 of Annex II of the Agreement when using the information in the application to determine the dumping margin in the later part of the investigation.

  5.35 From the plain language of Article 5.3 of the Agreement, it is clear that the obligations required there-under for the investigating authorities to examine the application information are right at the initiation stage before the investigation really starts. The purpose of such examination is none other than determining whether evidence in the application is sufficient to justify the initiation of an investigation. However, the obligations required under Paragraph 7 of Annex II for the investigating authorities to use special circumspection are in the later part of an initiated investigation, the purpose of which is to reach findings and justify determination.

  5.36 By comparing the different scenarios implied respectively in Article 5.3 and Paragraph 7 of Annex II, it is noteworthy that, due to the lapse of time, it is undoubted that there will definitely come out more “new” information, i.e. information provided by respondents, which is available for the investigating authorities to use for the investigation after the initiation. If the investigating authorities are permitted to refuse to implement their obligations under Paragraph 7 of Annex II with the sole excuse that they have implemented the obligations under Article 5.3 of the Agreement, the opportunity for the interested parties to defend their interests as secured by Article 6.2 of the

  Agreement will definitely be deprived of. Therefore, China concludes that the investigating authorities’ implementation of the obligations under Article 5.3 of the Agreement at the initiation

  (c)

  Issue 3: The “collapsing” of affiliated respondents

  5.37 In the alleged antidumping investigation, the KTC treated, or “collapsed” in another word, the three respondents as a single entity for purposes of calculating the final dumping margin, which was claimed by Indonesia to be inconsistent with Article 6.10 of the Agreement.

  5.38 In China’s view, there is no reason to believe that the Agreement absolutely excludes and prohibits the “collapsing” of affiliated respondents in any situations. Considering it is a spirit of the Agreement to conduct a “fair comparison” between the export price and the normal value when determining dumping margins, if the existence of affiliation to any extent damages the “fair comparison”, the investigating authorities shall be permitted to collapse such affiliation. In addition, a reference of this Article 9.5 of the Agreement can also imply, to some extent, in the whole context of the Agreement that the Agreement actually does not exclude the consideration of collapsing affiliated parties when determining dumping margins. Therefore, the investigating authorities shall have discretion as to collapse affiliated responding corporations and determine a single dumping margin for them.