 
  WORLD TRADE  
ORGANIZATION  G/ADP/AHG/W/162 
29 September 2004 
 
 (04-4090) 
Committee on Anti-Dumping Practices 
Working Group on Implementation Original:   Spanish 
 
 
 
ARTICLE 2.2 – CALCULATION OF NORMAL VALUE 
 
Paper by Venezuela  
 
 
 The following communication, dated 28 September 2004, is being circulated at the request of the delegation of Venezuela.  
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  In order to further the Working Group's discussion of the implementation of Article 2.2 of the WTO Anti-Dumping Agreement, Venezuela submits  this paper describing selection criteria for 
methods of calculating normal value, pursuant to document G/ADP/W/433.  
 GENERAL REMARK:   This paper is based on the experience of the Commission on Anti-
Dumping and Subsidies in investigations concerni ng unfair practices in international trade.  The 
methodologies described below are general guidelin es based on the implementation of the relevant 
provisions of the Anti-Dumping Agreement and curr ent domestic legislation, and may need to be 
adapted to the particularities of each case. 
 
I. APPLICABLE LEGISLATION 
 In an anti-dumping investigation, the competen t authority has to calculate normal value with 
reference to Article 2.2 of the AD Agreement, which provides:  
 "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, becau se 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 dumpi ng 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 administra tive, selling and general costs and for profits ."  
(Emphasis added). 
  On the same subject, the Regulations under th e Law on Unfair Foreign Trade Practices (Anti-
Dumping Regulations) provide: 
 
 "Article 10:  The Commission shall calculate the normal value using the comparable price 
actually paid or payable, in the ordinary course of trade, for the good allegedly dumped 
which is intended for consumption in the country of  export or of origin.  When sales cannot be 
considered as being in the ordinary course of trade in accordance with the provisions of 
Article 8 of these Regulations, the Commission shall calculate the normal value according to 
the following sequence of priority : G/ADP/AHG/W/162 
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 (1) By using the compared export value method; 
 
 (2) where the compared export value is not  suitable, by using the computed value 
method …"   (Emphasis added). 
 
 According to both the AD Agreement and the Anti-Dumping Regulations, for the calculation of normal value it is necessary to determine the existe nce of ordinary or normal trade in the domestic 
market of the country of origin or of export.  For the purpose of this determination, Venezuela's 
legislation lays down specific guidelines, which in clude the non-existence of a relationship between 
the importer and the exporter;  the co-existence of  volumes of sales to purchasers in the country of 
export similar to the volumes of the good allegedly dum ped in Venezuela;  the presence of sales of the 
like product destined for consumption in the domestic  market of the country of export amounting to at 
least 5 per cent of the sales to the importing Member;  sales in the country of export effected in conditions of free competition;  and sales effected in  the domestic market within, at most, the two 
months immediately preceding or following the sales of the allegedly dumped good. 
  As to selecting the methods for calculating th e normal value in instances other than those 
referred to above, the Venezuelan investigating aut hority is able to use the export price to third 
countries and the constructed normal value method,  both of which are provided for in the Anti-
Dumping Agreement and the national legislation.  However, the Anti-Dumping Regulations require 
an order of priority to be observed (see Article 10,  cited above);  in other words, in instances where 
the investigating authority determines the non-existen ce of sales made in the ordinary course of trade 
in the domestic market of the country of origin, it  must resort first to the compared export value 
method in order to calculate the normal value.  II. EXPORT PRICE TO THIRD COUNTRIES 
 In the case of a market economy ( Example 1 ), the authority gathers information on the 
exports made by the country under investigation to  third countries other than Venezuela, for the 
purpose of selecting the one whose volume of imports is closest to the volume of Venezuela's imports of the product in question from the country under investigation.  
 For example, if Venezuela is investigating co untry A and determines that there have been no 
sales in the ordinary course of trade in the domestic  market, it will proceed to investigate the volume 
of exports to other countries.  Let us suppose that it obtained the following results:  
Exporting 
country Importing 
country Volume of 
imports from 
country A 
(Units) 
A B 3,000 
A C 4,500 
A D 2,000 
A E 10,000 
A Venezuela 2,900 
  On the basis of the above, the Venezuelan au thority will select B, as the volume that B 
imported from A is the closest to the volume that  Venezuela imported from A, making any necessary 
adjustments, depending on the particularities of the case.   G/ADP/AHG/W/162 
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  Where the goods under investigation are from countries with non-market economies or 
economies in transition ( Example 2 ), in order to calculate the norma l value the investigating authority 
will select a third country and, as prescribed by Article 10 of the Anti-Dumping Regulations, will use 
the compared export value method.  In selecting th e country that is to replace the non-market 
economy country under investigation, it is essential to know what criteria are to be applied.  Thus, the 
country selected must:  (1) have a market economy;  (2 ) have a level of development similar to that of 
the countries investigated;  and (3) produce and export the goods under investigation. 
  The first two of the above conditions are e xpressly prescribed in the relevant Venezuelan 
legislation, i.e. Article 10 of the Anti-Dumping Regulations, which says: 
 
 "In the case of imports originating in or  coming from countries with centrally-planned 
economies, the Commission shall calculate th e normal value according to the methods 
provided for in paragraphs 1 and 2 of this Article, on the basis of sales by producers or 
sellers of like goods in a third country w ith a market economy and a similar level of 
development to that of the former ."  (Emphasis added). 
  Article 10 of Venezuela's Anti-Dumping Regula tions affords a basis for application of the 
third criterion:  the substitute country must produce and export the product under investigation.  This 
criterion has been used by Venezuela's investigati ng authority in procedures where the product under 
investigation is from non-market economy countries. 
 
 The following example illustrates the situa tion.  Let us suppose that Venezuela is 
investigating a non-market economy country (country Z).  According to Venezuelan legislation, the 
method to be used first is the export price to thir d countries.  The Venezuelan authority will have to 
identify a country with a market economy that has a level of development si milar to Z and produces 
and exports the good under investigation.  For the pu rpose of this example, Venezuela determined that 
country W possesses these character istics, so W will be the substitute of Z for the purposes of 
calculating the normal value.   Thereafter, the authority applies the met hodology described above, which applies to cases 
where the product under investigation is from a market -economy country;  in other words, it follows 
the methodology illustrated in Example 1 . 
 
III. CONSTRUCTED NORMAL VALUE 
 There are cases in which the investigating author ity has been unable to use the export price to 
third countries to calculate the nor mal value.  The main reasons may have to do with the export price 
to third countries being unsuitable because it is not  reliable enough (for example where prices are low 
as a result of unfair practice), or the presence of other distorting factors, such as an anti-dumping investigation concerning the exports .  This situation can be more clearly illustrated by the following 
example:   Example 3 :  Venezuela is investigating country A, which has a market economy and 
determines that the export price to a third market (country B) is not reliable because the exports are 
being sold at dumped prices or because they are th e subject of anti-dumping measures;  in other words 
country B imposed such measures on exports of th e product from country A or it is found that the 
exports from country A are being sold at dumped pr ices.  Consequently, the authority will have to 
move on to the second method of calculation prescribed  in the Anti-Dumping Regulations, namely the 
computed value method, and will accordingly take in to account production costs, meaning the total of 
fixed and variable costs for the inputs utilized and the manufacturing process, in the ordinary course 
of trade in the country of origin, plus a reasonable profit margin reckoned on the basis of the costs and 
earnings of the producer or exporter. G/ADP/AHG/W/162 
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 Lastly, it should be pointed out that this methodology will apply where the country under investigation has a non-market economy or a trans ition economy.  In this case, the Venezuelan 
authority will select a substitute country on th e basis of the above-mentioned guidelines for 
calculating the export price for third countries and will apply the methodology described in 
Example 3 , i.e. the method applied to market economies. 
 
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