WORLD TRADE
ORGANIZATIONWT/DS211/R
8 August 2002
(02-4200)
Original:  English
EGYPT – DEFINITIVE ANTI-DUMPING MEASURES ON
STEEL REBAR FROM TURKEY
Report of the Panel
The report of the Panel on Egypt – Definitive Anti-Dumping Measures on Steel Rebar from Turkey  is
being circulated to all Members, pursuant to the DSU.  The report is being circulated as an
unrestricted document from 8 August 2002, pursuant to the Procedures for the Circulation and
Derestriction of WTO Documents (WT/L/452).  Memb ers are reminded that in accordance with the
DSU only parties to the dispute may appeal a panel report.  An appeal shall be limited to issues of law
covered in the Panel report and legal interpretations developed by the Panel.  There shall be no
ex parte  communications with the Panel or Appellate Body concerning matters under consideration by
the Panel or Appellate Body.
Note by the Secretariat:  This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within 60 days after the
date of its circulation unless a party to the dispute decides to appeal or the DSB decides by consensus not to adopt the report .
If the Panel Report is appealed to the Appellate Body, it sha ll not be considered for adoption by the DSB until after the
completion of the appeal.  Information on the current status of the Panel Report is available from the WTO Secretariat.WT/DS211/R
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TABLE OF CONTENTS
I. INTRO DUCTION ................................................................................................................. ...1
A. C OMPLAINT OF TURKEY ...........................................................................................................1
B. E STABLISHMENT AND COMPOSITION OF THE PANEL .............................................................1
C. P ANEL PROCEEDINGS ................................................................................................................1
II. FACTUAL ASPECTS ............................................................................................................. .2
III. PARTIES' REQUESTS FOR FINDINGS AND RECO MMENDATIONS ........................2
A. TURKEY ............................................................................................................................... .......2
B. E GYPT ............................................................................................................................... ..........3
IV. ARGUMENTS OF THE PART IES ........................................................................................3
V. ARGUMENTS OF THE THIRD PART IES ..........................................................................3
VI. INTERIM  REVI EW.............................................................................................................. ...3
A. REQUEST OF TURKEY .................................................................................................................3
1. Claim under Annex II, paragraph 7 ............................................................................................ 3
2. Claim under Article 2.4 ...................................................................................................... ........3
3. Claim under Articles 2.2.1.1 and 2.2.2 ....................................................................................... 3
REQUEST OF EGYPT ............................................................................................................................... ...4
VII. FINDINGS................................................................................................................... ..............4
A. I NTRODUCTION ..........................................................................................................................4
B. P RELIMINARY OBJECTIONS ......................................................................................................5
1. Alleged failure of Turkey to present a prima facie  case .............................................................5
2. Alleged request by Turkey for a de novo  review........................................................................6
3. Introduction of evidence that was not be fore the Investiga ting Authority..................................7
4. Request for dismissa l of certai n claims...................................................................................... .9
C. C LAIMS RELATING TO INJURY AND CAUSATION ...................................................................12
1. Claims under Article 3.4 of the AD Agreement .......................................................................12
(a) Alleged failure to examine factors sp ecifically listed in  Article 3.4.........................................12
(b) Alleged failure to examine "all relevant economic factors and indices having a
bearing on the state of  the industry" .........................................................................................1 8
2. Claim under Articles 3.1 and 3.2 – Alleged failure to base the finding of price
undercutting on posi tive evid ence ............................................................................................21
3. Claim under Articles 6.1 and 6.2 – Alleged violation due to "change" in the "scope"
of the injury investigation from th reat to present ma terial in jury .............................................23
4. Claim under Articles 3.5 and 3.1 – Alleged failure to develop specific evidence
linking imports to adverse volume and price effects upon the domestic industry, and
consequent failure to base the finding of a causal link on positive ev idence ...........................28WT/DS211/R
Page ii
5. Claim under Article 3.5 – Alleged failure to take account of, and attribution to
dumped imports of, the effects of other "known factors" injuring the domestic
industry ....................................................................................................................... ..............30
6. Claim under Articles 3.5 and 3.1 – Alleged failure to demonstrate that the imports
caused injury "through the effects of dumping" .......................................................................35
D. C LAIMS RELATING TO THE DUMPING INVESTIGATION – "FACTS AVAILABLE ".................36
1. Factual background........................................................................................................... ........36
2. Claim under Article 17.6( I).......................................................................................................37
3. Claim under Article 6.8 and Annex II, paragraphs 5 and 6  - Resort to "facts
available" ..................................................................................................................... .............39
(a) Article 6.8 and Annex II .................................................................................................... .......40
(b) Was the cost information requested by the IA on 19 August and 23 September 1999
"necessary in formatio n"?....................................................................................................... ...57
(c) Did the respondents “refuse access to” or “otherwise fail to provide” “necessary
informa tion”?.................................................................................................................. ..........61
4. Claim under Article 2.2.1.1, 2.2.2 and 2.4 due to alleged unjustified resort to facts
available...................................................................................................................... ..............68
5. Claim under Article 6.1.1, Annex II, paragraph 6, and Article 6.2 – Deadline for
response to 19 August 1999 request .........................................................................................69
(a) Claim under Article 6.1.1................................................................................................... .......69
(b) Alternative claim under Annex II , paragraph 6 and Article 6.2................................................71
6. Claim under Article 6.1.1, Annex II, paragraph 6, and Article 6.2 - Deadline for the
responses of Habas, Diler and Colakoglu to the 23 September le tter of the IA........................72
7. Claim under Annex II, paragraph 7 due to the addition of 5 per cent for inflation to
Habas' highest reporte d monthly costs......................................................................................73
8. Claim under Annex II, paragraphs 3 and 7 du e to failure to use Icdas' September –
October 1998 sc rap costs ....................................................................................................... ...76
9. Claim under Annex II, paragraphs 3 and 7 du e to calculation of the highest monthly
interest cost  for IDC.......................................................................................................... ........77
E. O THER CLAIMS R ELATING TO THE DUMPING INVESTIGATION ............................................77
1. Claim under Annex II, paragraph 1; Annex II, paragraph 6; and Article 6.7, Annex I,
paragraph 7 – Alleged failure to verify the cost data during the "on-the-spot"
verification, and conduct of "ma il order" verifica tion instead..................................................77
2. Claim under Article 2.4 – Request for detailed cost information late in the
investigation allegedly imposed an unreasonable burden of proof on the respondents............79
3. Claim under Article 6.2 and Annex II, paragr aph 6 – Alleged denial of requests for
meetings....................................................................................................................... .............81
4. Claim under Article 2.4 – Alleged failure to make an adjustment to normal value for
differences in terms of  sale ................................................................................................... ....84
(a) Factual background.......................................................................................................... .........86
(b) Assessment by  the Panel..................................................................................................... ......93
5. Claim under of Articles 2.2.1.1 and 2.2.2 – Interest income offset ..........................................95WT/DS211/R
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(a) Factual background.......................................................................................................... .........97
(b) Assessment by  the Panel..................................................................................................... ....104
F. CLAIM UNDER ARTICLE X:3 OF GATT 1994 .......................................................................105
VIII. CONCLUSIONS ............................................................................................................... ....106
IX. RECOMME NDATION........................................................................................................108WT/DS211/R
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LIST OF ANNEXES
Annex 1 First written submissions of Turkey and Egypt – Executive summaries
Annex 2 First oral statements of Turkey and Egypt – Executive summaries
Annex 3 Restatement by Turkey of its claims in response to a request from the
Panel
Annex 4 Turkey's and Egypt's responses to questions posed in the context of the
first substantive meeting of the Panel
Annex 5 Rebuttal submissions of Turkey and Egypt – Executive summaries
Annex 6 Second oral statements of Egypt and Turkey – Executive summaries
Annex 7 Concluding oral remarks of Turkey and Egypt
Annex 8 Turkey's and Egypt's responses to questions posed in the context of the
second substantive meeting of the Panel
Annex 9 Third party oral statement of Chile
Annex 10 Third party written submission, oral statement and responses to questions
of the European Communities
Annex 11 Third party written submission and responses to questions of Japan
Annex 12 Third party written submission, oral statement and responses to questions
of the United States
Annex 13 Supplemental working procedures of the Panel concerning certain
business confidential informationWT/DS211/R
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I. INTRODUCTION
A. COMPLAINT OF TURKEY
1.1 On 6 November 2000, Turkey requested consultations with Egypt pursuant to Article 4 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes ("the DSU"),
Article XXIII of the General Agreement on Tari ffs and Trade 1994 ("GATT 1994"), and Article 17.3
of the Agreement on Implementation of Article VI of the GATT 1994 ("the Anti-Dumping
Agreement" or "the AD Agreement"), with regard to the definitive anti-dumping measures imposed
by Egypt on imports of concrete steel reinforcing bar ("rebar") from Turkey1.
1.2 On 3-5 December 2000 and 3-4 January 2001, Turkey and Egypt held the requested
consultations, but failed to reach a mutually satisfactory resolution of the matter.
1.3 On 3 May 2001, Turkey requested the establishment of a panel to examine the matter2.
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL
1.4 At its meeting of 20 June 2001, the Dispute Settlement Body ("the DSB") established a panel
in accordance with the request made by Turkey in document WT/DS/211/2 and Corr. 1, and in
accordance with Article 6 of the DSU.
1.5 At that meeting, the parties to the dispute also agreed that the Panel should have standard
terms of reference.  The terms of reference therefore are the following:
"To examine, in the light of the relevant provisions of the covered agreements cited
by Turkey in document WT/DS211/2 and Co rr.1, the matter referred to the DSB by
Turkey in that document, and to make such findings as will assist the DSB in making
the recommendations or in giving the rulings provided for in those agreements."
1.6 On 18 July 2001, the parties agreed to the following composition of the Panel:
Chairman: Mr. Peter Palecka
Members: Mr. Daniel Moulis
Mr. Virachai Plasai
1.7 Chile, the European Communities, Japan and the United States reserved their rights to
participate in the panel proceedings as third parties.
C. PANEL PROCEEDINGS
1.8 The Panel met with the parties on 27-28 November 2001 and 25-26 February 2002.  The
Panel met with third parties on 27 November 2001.
1.9 On 21 May 2002, the Panel provided its interim report to the parties  ( See Section VI, infra ).
                                                     
1 WT/DS/211/1.
2 WT/DS/211/2 and Corr.1.WT/DS211/R
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II. FACTUAL ASPECTS
2.1 This dispute concerns the imposition of a definitive anti-dumping measure by Egypt on
imports of rebar from Turkey, imported under heading 72.14.00.00, and its subheadings, of the
Harmonized Tariff Schedule of Egypt.
2.2 On 23 and 26 December 1998, two applications were filed, by Ezz Steel Company ("Al Ezz")
and Alexandria National Iron and Steel Company ("Alexandria National") with Egypt's International
Trade Policy Department ("the ITPD"), the Egyptian Investigating Authority ("IA").  The applicants
alleged that imports of rebar originating in Turk ey were being dumped in Egypt and threatened to
cause material injury to the domestic industry since the second half of 1998.  On 6 February 1999, a
notice of initiation of an anti-dumping investigation was published in the Official Gazette of Egypt.
2.3 On 21 October 1999, Egypt published in the Official Gazette a notice concerning the
imposition of definitive anti-dumping duties on imports of steel rebar originating in or exported fromTurkey.  The anti-dumping duties imposed were as follows:
Manufacturer/Exporter Duty (%)
Habas 22.63
Diler 27
Colakoglu 45
ICDAS 30
IDC 61
Ekinciler 61
Others* 61
*Egypt's published notice states that the "Others" rate was calculated according to the
highest rate, and that according to Article 37.3 of the Regulation of Law No 161/1998
Concerning the Protection of the National Economy From the Effect of Injurious
Practices in International Trade, should a company wish to commence exporting, the
applicable rate would be the highest rate. 3
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
A. TURKEY
3.1 Turkey requests the Panel to find that Egypt's anti-dumping duty investigation and final anti-
dumping determination was inconsistent with Article X:3 of the GATT 1994 and with Articles 2.2,
2.4, 3.1, 3.2, 3.4, 3.5, 6.1, 6.2, 6.6, 6.7, and 6.8, and Annex II, paragraphs 1, 3, 5, 6, and 7, andAnnex I, paragraph 7 of the Anti-Dumping Agreement, and that as a result the measures nullify and
impair the benefits accruing to Turkey under the GATT 1994 and the Anti-Dumping Agreement.
                                                     
3 Exh. TUR-17, p.4.WT/DS211/R
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B. EGYPT
3.2 Egypt requests the Panel (1)to find that Egypt's anti-dumping measures on imports of rebar
from Turkey are in compliance with Egypt's obligations under the GATT 1994 and the Anti-Dumping
Agreement, and (2) thus to reject the claims as put forward by Turkey.
IV. ARGUMENTS OF THE PARTIES
4.1 The arguments of the parties are set out in their submissions to the Panel.  The parties'
executive summaries of their submissions are attached to this Report as Annexes ( See List of
Annexes, page iv).  Also attached as Annexes are the full texts of the parties' responses to questions
posed by the Panel and by the other party.
V. ARGUMENTS OF THE THIRD PARTIES
5.1 The arguments of the third parties, Chile, the European Communities, Japan and the
United States, are set out in their submissions to the Panel, the full texts of which are attached to this
Report as Annexes 9, 10, 11 and 12, respectively ( See List of Annexes, page iv).
VI. INTERIM REVIEW
6.1 On 21 May 2002, we submitted our interim report to the parties.  Both parties submitted
written requests for review of precise aspects of the interim report.  Neither party requested an interim
review meeting, and neither party submitted written comments on the other party's request for interimreview.
A. 
REQUEST OF TURKEY
1. Claim under Annex II, paragraph 7
6.2 In its request for interim review, Turkey stated that paragraph 7.300 mischaracterized the
claim addressed therein as raising only the issue of the estimated rate of inflation in Turkey during therelevant period.  Turkey maintains that this claim also raises the issue of arbitrary adjustments to
submitted cost data in the context of facts available.
6.3 We have modified paragraph 7.300 to indicate that the estimated rate of inflation is the main
issue raised by the claim.  We note that the second aspect identified by Turkey, is addressed in
paragraph 7.303, which we have not modified.  Finally, we have modified paragraph 7.305 to takeinto account the second aspect of Turkey's claim.
2. Claim under Article 2.4
6.4 In its request for interim review, Turkey questioned our characterization in paragraph 7.384 of
the significance of references in certain companies' anti-dumping questionnaire responses to the
treatment of credit costs in their cost accounting records.
6.5 We have modified paragraph 7.384 to remove the characterization referred to by Turkey.
3. Claim under Articles 2.2.1.1 and 2.2.2
6.6 In its request for interim review, Turkey questioned the accuracy of the characterization in
paragraph 7.423 of the IA's request for information concerning the issue of interest income offset, and
of the responses of certain companies to that request.  We have modified the punctuation of the
sentence in question, and added a footnote, to clarify the nature of the information request referred toWT/DS211/R
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in that paragraph.  We also have modified paragraph 7.426 to refer to the point in the investigation at
which the question of the relationship to production of interest income arose and how it was addressed
by the respondent companies.
B. REQUEST OF EGYPT
6.7 In its request for interim review, Egypt identified certain erroneous references, in
paragraphs 7.250 through 7.252 to two of the companies that were respondents in the anti-dumping
investigation.  We have modified these paragraphs to correct these errors.
C. 
VII. FINDINGS
A. INTRODUCTION
7.1 Throughout these proceedings we have found ourselves confronted by having to address the
relationship between, on the one hand, what an investigating authority is obligated by the provisionsof the Anti-Dumping Agreement to do when conducting an anti-dumping investigation and making
the required determinations, and on the other hand, what interested parties should themselves
contribute to the process of the investigation, in the way of evidence or argumentation, for issues of
concern to them to be considered and taken into account during the course of the investigation and in
the determinations made by the relevant authorities.
7.2 We note in this respect that the AD Agreement appears to impose two types of procedural
obligations on an investigating authority, namely, on the one hand, those that are stipulated explicitly
and in detail, and which have to be performed in a particular way in every investigation, and, on the
other hand, those that establish certain due process or procedural principles, but leave to the discretion
of the investigating authority exactly how they will be performed.  In our view, the first type ofobligation must be performed by the investigating authority on its own initiative, and exactly as
specified in the AD Agreement.  There is no need for and no obligation on interested parties to raise
these issues and obligations during the course of an investigation in order to protect their rights under
the AD Agreement.
7.3 In respect of the second type of obligation, however, the actions of an interested party during
the course of an investigation are critical to its protection of its rights under the AD Agreement.  As
the Appellate Body observed in US – Hot-Rolled Steel4, "in order to complete their investigations,
investigating authorities are entitled to expect a very  significant degree of effort to the best of their
abilities from investigated exporters".5  The Appellate Body went on to state  that "cooperation is
indeed a two-way process involving joint effort".6  In the context of this two-way process of
developing the information on which determinations ultimately are based, where an investigating
authority has an obligation to "provide opportunities " to interested parties to present evidence and/or
arguments on a given issue, and the interested parties themselves have made no effort during the
investigation to present such evidence and/or arguments, there may be no factual basis in the record
on which a panel could judge whether or not an "opportunity" either was not "provided" or was
denied.  Similarly, where a given point is left by the AD Agreement to the judgement and discretion
of the investigating authority to resolve on the basis of the record before it, and where opportunitieshave been provided by the authority for interested  parties to submit into the record information and
arguments on that point, the decision by an interested party not to make such submissions is its own
                                                     
4 Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel
Products from Japan("US – Hot-Rolled Steel"), WT/DS184/AB/R, adopted 23 August 2001.
5 Ibid, para.102.
6 Ibid, para .104.WT/DS211/R
Page 5
responsibility, and not that of the investigating authority, and cannot later be reversed by a WTO
dispute settlement panel7.
B. PRELIMINARY OBJECTIONS
7.4 Egypt raised three issues as preliminary objections, but did not request us to rule on these
issues on a preliminary basis.  Egypt's preliminary objections are (i) that Turkey has failed to present aprima facie  case of a violation of the relevant Articles of GATT 1994 and of the AD Agreement,
(ii) that Turkey is trying to lead us to conduct a de novo review of the evidence submitted to the
Egyptian IA and to act contrary to the required standard of review as set out in Article 17.6(i) of the
AD Agreement
8, and (iii), that Turkey has introduced certain new evidence in the context of these
proceedings which was not before the IA during the course of the investigation.9  Egypt also requested
us to dismiss certain claims as being outside our terms of reference.
1. Alleged failure of Turkey to present a prima facie  case
7.5 Regarding Egypt's assertion that Turkey has failed to establish a prima facie case of violation,
it is clear to us that  whether a party raises the is sue or not, in any WTO dispute the burden of proof is
on the complaining party to make a prima facie  case.  We recall in this regard that in EC - Hormones
the Appellate Body stated:
"The initial burden lies on the complaining party, which must establish a prima facie
case of inconsistency with a particular provision of the SPS Agreement on the part of
the defending party, or more precisely, of its SPS measure or measures complained
about.  When that prima facie  case is made, the burden of proof moves to the
defending party, which must in turn counter or refute the claimed inconsistency."10
7.6 The Appellate Body furthermore stated in Korea - Dairy :
"We find no provision in the DSU or in the Agreement on Safeguards that requires a
panel to make an explicit ruling on whether the complainant has established a prima
facie  case of violation before a panel may proceed to examine the respondent's
defence and evidence."11
7.7 We agree with the Appellate Body, and as we could find no such a provision in the AD
Agreement either, we will refrain from making a ruling at this stage on whether Turkey has made a
prima facie  case or not, but will proceed by reviewing the substantive elements of Turkey's case
before us.
                                                     
7 As the panel noted in, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel From
Japan("US – Hot-Rolled Steel") , "errors made during the investigation cannot be rectified in subsequent
submissions before a WTO panel".  (Panel Report, WT/DS184/R, adopted 23 August 2001 as modified by the
Appellate Body, WT/DS184/AB/R, para.7.246.).  Although this quotation was in respect of the investigatingauthority in that case, we find the principle involved to be relevant here.
8 First Written Submission of Egypt, p.16-18.
9 Ibid, p.73.
10 Appellate Body Report, European Communities - Measures Concerning Meat and Meat Products
(Hormones)("EC – Hormones") , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998: I,
135, para.98.
11 Appellate Body Report, Definitive Safeguard Measure on Imports of Certain Dairy Products("Korea
– Dairy") , WT/DS98/AB/R, adopted 12 January 2000, para.145.WT/DS211/R
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2. Alleged request by Turkey for a de novo  review
7.8 Concerning Egypt's assertion that Turkey is seeking a de novo  review by the Panel of the
evidence submitted to the IA, it is clear that in any dispute under the AD Agreement, a panel must
adhere to the standard of review set forth in Article 17.6(i) of that agreement, which precludes a de
novo  review by a panel.
7.9 Article 17.6(i) of the AD Agreement provides:
7.10 "In examining the matter referred to in paragraph 5:
(i) in its assessment of the facts of the matter, the panel shall determine
whether the authorities' establishment of the facts was proper and whether
their evaluation of those facts was unbiased and objective.  If the
establishment of the facts was proper and the evaluation was unbiased and
objective, even though the panel might have reached a different conclusion,the evaluation shall not be overturned;"
7.11 Although Article 17.6(i) of the AD Agreement specifically addresses this point, we also find
guidance on this issue in the Appellate Body's comm ents on the provisions of Article 11 of the DSU
in EC – Hormones,  with reference to the "objective assessment" of the facts to be made by a panel:
"So far as fact-finding by panels is concerned, their activities are always constrained by the
mandate of Article 11 of the DSU: the applicable standard is neither de novo  review as
such, nor "total deference", but rather the "objective assessment of the facts".  Many panels
have in the past refused to undertake de novo  review, wisely, since under current practice
and systems, they are in any case poorly suited to engage in such a review.  On the other
hand, "total deference to the findings of the national authorities", it has been well said,"could not ensure an 'objective assessment' as foreseen by Article 11 of the DSU."
12
7.12 We also note the ruling by the Appellate Body in US – Lamb  where it is stated13:
"We wish to emphasize that, although panels are not entitled to conduct a de novo  review
of evidence, nor to substitute  their own conclusions for those of the competent authorities,
this does  not m e a n  t h a t  p a n e l s  m u s t  s i m p l y  accept the conclusions of the competent
authorities."
7.13 This was confirmed in an anti-dumping context by the panel in Guatemala – Cement II,  in
which the panel stated:
"We consider that it is not our role to perform a de novo  review of the evidence which was
before the investigating authority in this case.  Rather, Article 17 makes it clear that our task
is to review the determination of the investigating authorities.  Specifically, we must
determine whether its establishment of the facts was proper and the evaluation of those factswas unbiased and objective."
14
7.14 In light of the above, we are therefore conscious that we should not involve ourselves in a
denovo  review of the facts as submitted to the competent Egyptian authorities.  Rather, our task is to
                                                     
12 Ibid, para.117.
13 Appellate Body Report, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen
Lamb Meat from New Zealand and Australia("US – Lamb") , WT/DS177/AB/R, WT/DS178/AB/R, adopted 16
May 2001, para.106.
14 Panel Report, Guatemala – Definitive Anti-Dumping Measures on Grey Portland Cement from
Mexico("Guatemala Cement II") , WT/DS156/R, adopted 17 November 2000, para.8.19.WT/DS211/R
Page 7
review the determinations made by those authorities,  in the light of the evidence of record that they
had before them.  As will become apparent, in the light of the facts of this case, we deem it necessary
to undertake a detailed review of the evidence subm itted to the IA to be able to determine whether an
objective and unbiased investigating authority could have reached the determinations that Turkey
challenges in this dispute.
3. Introduction of evidence that was no t before the Investigating Authority
7.15 The third issue is Egypt's claim that eviden ce that was submitted by Turkey during this
proceeding in an effort to demonstrate that the IA made errors in its analysis and determinations
during the rebar anti-dumping investigation, which evidence was not before the investigation
authority in that investigation, may not be examined by us.15  Egypt, relying on Article 17.5(ii) of the
AD Agreement, argues that we should reject this evidence as it was not made available to the
Investigating Authority in the course of the investigation itself.
7.16   Article 17.5(ii) provides:
"The DSB shall, at the request of the complaining party, establish a panel to examine the
matter based upon:
(ii) the facts made available in conformity with appropriate domestic procedures to
the authorities of the importing Member."
7.17 As Turkey has confirmed that the mentioned evidence was not made available to the
Investigating Authority in conformity with the appropriate domestic procedures, but was submitted
for the first time in the context of the proceedings be fore us, Egypt argues that we should disregard it.
Egypt finds support for its contention in the finding of the panel in US – Hot-Rolled Steel16 where it
was held that:
"It seems clear to us that, under [Article 17.5(ii) of the AD Agreement], a Panel may not,
when examining a claim of violation of the AD Agreement in a particular determination,
consider facts or evidence presented to it by a party in an attempt to demonstrate error in
the determination concerning questions that were investigated and decided by the
authorities, unless they had been made available in conformity with the appropriatedomestic procedures to the authorities of the investigating country during the
investigation."
7.18 Turkey argues, in response to a written question posed by us during the First Substantive
Meeting of the Panel with the Parties,
17 regarding the status of the evidence in question and the legal
                                                     
15 First Written Submission of Egypt, p.18 and 73.  On page 73 the following documents are identified
by Egypt: AMM Weekly Steel Scrap Price Composite for 1998  – submitted by Turkey as Exh. TUR-13, and
Metal Bulletin – 1998 European Iron Steel Scrap Prices for 1998 , submitted by Turkey as Exh. TUR-14.  In the
Oral Presentation of Egypt to the Panel on 27 November 2001, Egypt further identifies the following documentsas "new evidence" submitted by Turkey: An article from The Dow Jones Commodity Service – Report of 11
September 1997, titled "NKK Singapore to Build Steel Bar Mill for Egypt Steelmaker" and an article from The
Middle East Economic Digest – Report of 6 March 1998, titled "Egypt: Alexandria National Iron and Steel
Company (Both of these articles are referred to by Turkey in its First Written Submission under Claim C.2, butwere not submitted by Turkey as exhibits.); the Birmingham Steel Corporati on, Securities and Exchange
Commission (SEC) "Form 10-Q", submitted by Turkey as Exh. TUR-19, and the EFG-Hermes Study , submitted
by Turkey as Exh. TUR-32.
16 Panel Report, US – Hot-Rolled Steel , para.7.6.
17 In Question 4 to Turkey of the Written Questions by the Panel , dated 28 November 2001, we asked
Turkey: "Could Turkey please clarify the status of Exhibits TUR-13, TUR-14, TUR-19 and TUR-32, and also ofthe documents listed in footnote 16 and 17 of its First Written Submission, that is, were these documentsWT/DS211/R
Page 8
basis on which we should take these documents into consideration, that the reason that this evidence
was not submitted during the course of the investigation was that the Turkish exporters were under the
impression that the injury investigation conducted by  the Investigating Authority was with regard to
"threat" of material injury and not "actual" material injury.18
7.19 Turkey also argues that if we should decide, in terms of Article 17.5(ii), that the record that
we can take into account should ordinarily be limited to the facts made available to the Investigating
Authority during the course of the investigation, we nevertheless should adopt the legal principle of
taking "judicial notice" of certain other facts.19  We are not aware of a principle of "judicial notice" at
the WTO level.  Certainly, we as Panelists have an awareness of matters pertaining to life, nature and
society.  But the question is not what we as Paneli sts know or ought to accept as being known by the
IA.  The question is what the IA did and was expected to do under the AD Agreement at the time of
the investigation.
7.20 We note that, as the evidence proffered by Turkey and disputed by Egypt relates exclusively
to the injury determination by the IA and the causal link between the injury and dumped imports,
Article 3.5 of the AD Agreement also contains specific language addressing the issue of evidence.
This article provides, in relevant part:
"The demonstration of a causal relationship between the dumped imports and the
injury to the domestic industry shall be based on an examination of all relevant
evidence before the authorities ." (emphasis added)Furthermore, we agree with the
statement by the panel in US - Hot-Rolled Steel20, that:
"The conclusion that we will not consider new evidence with respect to claims under
the AD Agreement flows not only from Article 17.5(ii), but also from the fact that apanel is not to perform a de novo  review of the issues considered and decided by the
investigating authorities."
7.21 It is clear to us (and indeed, there is no disagreement on this point between the parties) that
the evidence in question, which was proffered by Turkey in the dispute to challenge determinations
made by the IA during the anti-dumping investigation, was not made available to the InvestigatingAuthority in conformity with the appropriate domestic procedures during the investigation, as
required by Article 17.5.(ii), and it is clear as well that consideration of new evidence of this sort can
be construed as a de novo  review, which is not permissible.  We thus will not take this evidence into
consideration when reviewing the measures of the determinations and actions of the Egyptian
Investigating Authority.
                                                                                                                                                                    
submitted to the Egyptian Investigating Authority, and if so, when?  If not, please provide legal argumentation
regarding the basis on which the Panel could take these documents into consideration" – Annex 4-1.
18 This aspect is addressed in Section VII.C.3, infra.
19 On page 3 of its response of 7 December 2001 to Question 4 to Turkey of the Written Questions by
the Panel , dated 28 November 2001, Turkey responded: "Both at the English and American common law, most
proof in a court of law is presented by means of testimonial evidence or by the offering of real evidence.  But
there is an exception to the requirement that a party who relies on a certain proposition must prove it, and that
exception is facts that can be 'judicially noticed'.  In the United States, there is a federal rule of evidencepermitting both trial courts and appellate courts to take 'j udicial notice' of facts that are not subject to reasonable
dispute because they are either (1) generally known; or (2) capable of accurate and ready determination by resort
to sources whose accuracy cannot be reasonably questioned. … The first type of fact of which judicial notice
may be taken is a fact that is 'so well known that it wo uld be a waste of judicial resources to require proof;
reasonably informed people simply could not differ as to the fact.'  The second type of fact is 'one that is capable
of ready verification through sources whose reliability cannot reasonably be questioned'." – Annex 4-1.
20 Panel Report, US – Hot-Rolled Steel, para.7.WT/DS211/R
Page 9
4. Request for dismissal of certain claims
7.22 In addition to the above preliminary objections, Egypt also requests us to reject certain claims
submitted by Turkey as Egypt asserts that these claims are not within the terms of reference of the
Panel and are therefore not properly before us.21
7.23 As there seemed to be some differences between Turkey's claims, as reflected in its Request
for Establishment of a Panel22, and its claims and legal argumentation in its First Written Submission,
we requested Turkey during the First Substantive Meeting of the Panel with the Parties on
28 November 2001 to "set out in summary format its legal argumentation in support of each of its
claims, i.e., listing the respective provisions of the Anti-Dumping Agreement and GATT 1994, and
explaining briefly in the light of the Vienna Convention on the Law of Treaties how the cited factual
circumstances constitute violations of those provisions".23  Egypt, in its Rebuttal Submission, asserted
that Turkey had "in its response of 7 December 2001 to the Panel's Questions, taken this opportunityto (1) introduce new claims; and (2) modify existing claims as regards injury and dumping that were
not mentioned in the request for establishment of a Panel".
24
7.24 In particular, Egypt objects to the following claims as set out in Turkey's response to our
question:
(a) That the IA did not consider factors affecting domestic prices under Article 3.4.
(b) That Egypt violated paragraph 6 of Annex II of the AD Agreement by sending the
letter of 19 August 1999 to the Turkish respondents.
(c) That the IA violated Article 17.6(i) of the AD Agreement.
(d) That the IA violated paragraph 3 of Annex II of the AD Agreement and Article X:3
of GATT 1994 in its selection of facts as facts available.25
7.25  In reviewing Turkey's Request for Establishment of a Panel26 and its response to our
Question 1, it is clear to us that, with the exception of Article 17.6(i), Turkey has explicitly cited in its
Request for Establishment of a Panel all of the above-cited provisions allegedly violated by Egypt.
However, it is also clear to us that the way in which some of the provisions are cited in Turkey's
"restatement" of its claims27 does not correspond to the same claims as set out in its Request for
Establishment of a Panel.  In light of this, we requested Egypt to provide us, in respect of each claim
that it requests us to dismiss, the two-part analysis referred to in Korea – Dairy28 and EC – Bed
Linen29, that is, the asserted lack of clarity in the Request for Establishment of a Panel, and evidence
of any resulting prejudice to Egypt's ability to defend  its interest in this dispute due to such lack of
clarity.30
                                                     
21 Written Rebuttal of Egypt, dated 19 December 2001, p.14.
22 WT/DS211/2 of 11 May 2001.
23 Question 1 to Turkey of the Written Questions by the Panel , dated 28 November 2001 Annex 4.1..
24 Written Rebuttal of Egypt, p.1.
25 Ibid.
26 WT/DS211/2, as amended.
27 Written Response of Turkey, dated 7 December 2001, to Question 1 of Questions by the Panel,  of
28 November 2001 – Annex 4.1.
28 Appellate Body Report, Korea - Dairy , para.6.
29 Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen
from India ("EC – Bed Linen") , WT/DS141/R, adopted 12 March 2001, as modified by the Appellate Body
Report, WT/DS141/AB/R, para.6.26.
30 Question 6 to Egypt of the Written Questions by the Panel , dated 27 February 2002 – Annex 4-2.WT/DS211/R
Page 10
7.26 In its response to our question, Egypt asserts that it was prejudiced with regard to the
following claims:31,32
(a) Claims under Article 3.4 as regards "factors affecting domestic prices"
Egypt contends that Turkey presents the same arguments in relation to Article 3.4 and
3.5 and alleges a violation under Article 3.4 or 3.5 and that Turkey's claims in relation
to these two provisions as stated in its Request for Establishment of a Panel at Claim
3 and 4 were not clarified in Turkey's First Submission, or subsequently.  Egypt is of
the view that Article 3.4 and 3.5 establish multiple obligations and if any violation
with respect thereunder is not presented with sufficient clarity, the burden on the
respondent becomes too onerous and both the Panel and the respondent are at risk of
being misled as to which claims are in fact being asserted against the respondent.
Egypt asserts that it was unclear as to which provision under Article 3 Turkey waspresenting its argumentation with respect to "factors affecting domestic prices" and
that Egypt was prejudiced as regards the preparation of its defence with respect to
those particular factors.
33
(b) Paragraph 6 of Annex II
Egypt contends that in its Request for Establishment of a Panel, Turkey claimed a
violation of Annex II, paragraph 6, with respect to the deadline granted to the
respondents to reply to the letter of 19 August 199934, but that Turkey, in its
restatement of claims35, additionally claimed that the sheer fact of sending the letter
of 19 August 1999 also constituted a violation of paragraph 6.  As paragraph 6
provides that an investigating authority should grant a party an opportunity to providefurther explanations within a reasonable period as to why its information should not
be rejected, Egypt fails to understand the basis for Turkey's claim as it provided no
further explanation or clarification.  As a result of the absence of any explanation of
the claim, Egypt contends that its ability to defend its interest was severely
prejudiced.
36
(c) Paragraph 3 of Annex II and Article X:3 of GATT 1994
Regarding the alleged violation of Annex II, paragraph 3, Egypt contends that Turkey
failed to identify the obligation contained in that provision that the IA would have
violated in its selection of "facts available", therefore preventing Egypt from
presenting a meaningful defence, as paragraph 3 relates to the circumstances in which
the data submitted by respondents must be accepted or can be rejected.  Egypt argues
that this provision does not address the selection  of facts available once it has been
decided to reject the data submitted by the respondents.  As the legal basis for this
                                                     
31 Response of Egypt, dated 13 March 2002, to Question 6 of the Written Questions by the Panel, of
27 February 2002 – Annex 8-2..
32 As these claims are the only ones addressed by Egypt in response to our question, we assume that
these are the only issues which Egypt would like to pursue  in this context and we therefore limit our analysis to
these issues as well.
33 Written Response of Egypt, dated 13 March 2002, to Question 6 to Egypt of the Written Questions
by the Panel , of 27 February 2002 - Annex 8-2.
34 Exh. TUR-11.
35 Written Response, dated 7 December 2001, of Turkey to Question 1 to Turkey of the Written
Questions by the Panel , of 28 November 2001 - Annex. 8-1.
36 Written Response of Egypt, dated 13 March 2002, to Question 6 to Egypt of the Written Questions
by the Panel , of 27 February 2002 – Annex 8-2.WT/DS211/R
Page 11
claim is not clear to Egypt, and as Turkey did not provide any clarification, Egypt
contends that its was severely prejudiced in respect to defending its rights.37
Regarding the alleged violation of Article X:3 of GATT 1994 is concerned, Egyptcontends that the allegations of a violation were vague and unsubstantiated and that it
is therefore not in a position to defend its interests.
38
(d) Failure to refer to the relevant treaty ar ticle in the Request for Establishment of a
Panel
(i) Whether the Final Report contains findings or conclusions sufficient to
satisfy the requirements of Article 12.2
Egypt contends that an Article 12.2 claim is not before us as it was not
referred to in the Request for Establishment of a Panel, and through a
reference to the finding of the panel in EC – Bed Linen , para. 6.15, asserts
that if a treaty article is not mentioned in the request for establishment of a
panel, such a claim is not before a panel.  Egypt states that as a result, it did
not prepare any defence on this claim.39
(ii) Whether the Panel can disregard evidence under Article 6.4
Egypt contends that although Turkey claims in its Rebuttal Submission that
we should not consider evidence that was not provided to interested parties
during the course of the investigation, such as the report on Other Causes of
Injury40, a violation of Article 6.4 was not claimed by Turkey and is therefore
not before us.41
(iii) Article 17.6(i) of the AD Agreement
Although Turkey alleges a violation of Article 17.6(i) of the AD Agreement,
Egypt contends that this provision governs the standard of review to be
applied by a panel when considering whether an investigating authority's
establishment of the facts was proper and the evaluation unbiased and
objective – it does not govern the rights and obligations of Members underthe AD Agreement.  Furthermore, Egypt asserts that Article 17.6(i) was not
cited in the Request for Establishment of a Panel and is therefore not before
us.
42
7.27 We address the issues raised by Egypt in relation to (a) and (d)(iii) above in Sections VII.C.1
and VII.D.2, infra.
7.28 Concerning the issues raised in (d)(i) and (d)(ii), we do not believe that Turkey has attempted
to raise claims under Article 12.2 or under Article 6.4, and therefore we neither address nor dismisssuch purported "claims".
7.29 With regard to the issues relating to paragraph 6 and paragraph 3 of Annex II under (b) and
(c), we are of the view that the relevant issues addressed by these two provisions are so interrelated
                                                     
37 Ibid.
38 Ibid.
39 Ibid.
40 Exh. EGT-6.
41 Ibid.
42 Ibid.WT/DS211/R
Page 12
that Egypt could not have been prejudiced in the preparation of its defence in the way in which
Turkey presented its claims in this regard.
7.30 With regard to Egypt's objection regarding Article X:3 of GATT 1994, we consider that
Turkey effectively abandoned its claim (set forth in paragraph 9 of its Request for Establishment of a
Panel) that the IA's decision to resort to facts available violated Article X:3.  In particular, Turkeymade no arguments in this respect in any of its submissions to us.  Furthermore, in response to a
specific question on this point, Turkey indicated that its Article X:3 claim in the context of facts
available concerns the selection of particular facts as "facts available", a point addressed in
paragraph 11 of its Request for Establishment of a Panel.  Paragraph 11 of the Request does not refer,
however, to Article X:3.  
7.31 Given Turkey's apparent abandonment of its claim that Egypt violated Article X:3 by reason
of the IA's decision to resort to facts available
43, we do not consider this claim further.  As for
Turkey's claim that the selection of particular facts as "facts available" violated Article X:3, it is clear
that the Request for Establishment of a Panel makes no reference to this provision in this context.  We
consider significant here that, unlike paragraphs 3 and 6 of Annex II (items (b) and (c) above),
Article X:3 is not related in any self-evident way to any of the other provisions cited by Turkey in
paragraph 11 of its Request for Establishment of a Panel.  Nor is this claim of violation of Article X:3related in any way to Turkey's other claims of violation of this provision.  We find that this claim is
simply not specified in Turkey's Request for Establishment of a Panel, and that the specifications and
justifications for its validity as a claim as presented by Turkey during the course of the dispute have
not been clear or convincing.  We therefore dismiss this claim and do not consider it further.
7.32 As for Turkey's claim of violation of Article X:3 due to the IA's alleged refusal to schedule a
meeting with certain respondents, we address this claim in Section VII.F, infra .
C. C
LAIMS RELATING TO INJURY AND CAUSATION
1. Claims under Article 3.4 of the AD Agreement
(a) Alleged failure to examine factors specifically listed in Article 3.4
7.33 Turkey claims that Egypt violated Article 3.4 by failing to examine all of the factors listed in
Article 3.4 of the AD Agreement.44  In particular, Turkey asserts that Egypt did not evaluate
productivity, actual and potential negative effects on cash flow, employment, wages, growth and
ability to raise capital or investments.  Turkey also argues that the public versions of the Essential
Facts and Conclusions Report and of the Final Report provide no evidence that there was a sufficient
examination or evaluation of capacity utilisation or return on investment.
7.34 Egypt argues that the record of the investigation makes clear that all of the factors listed in
Article 3.4 were considered by the IA.  In its response to a question from the Panel45 in the context of
the First Substantive Meeting with the Parties46, Egypt presents a table indicating specific references
in the Essential Facts and Conclusions Report and in the Final Report to the following factors listed in
Article 3.4:  sales, profits, output, market share, return on investments, capacity utilisation, prices,
                                                     
43 Written Response of Turkey, dated 7 December 2002, to Question 1 of the Written Questions by the
Panel , of 28 November 2001 – Annex 4-1.
44 Statement by Turkey during the First Substantive Meeting of the Panel with the Parties,
27 November 2001, p.12, and Written Response of Turkey, dated 7 December 2001, to Question 1 of  the
Written Questions by the Panel  of 28 November 2001 – Annex 4-1.
45 Question 5 of Egypt of the Written Questions by the Panel , of 28 November 2001 – Annex 4-2.
46 Written Response by Egypt, dated 7 December 2001, to Question 5 of the Written Questions by the
Panel , of 28 November 2001 – Annex 4-2.WT/DS211/R
Page 13
dumping margin and inventories.  In its Rebuttal Submission47, Egypt further states that "growth" (one
of the factors alleged by Turkey not to have been addressed at all by the IA) was addressed by the
information on "sales volume" and "market share", while "ability to raise capital" (another factor
identified in Turkey's claim) is addressed by pre-tax profit as a percentage of shareholders' funds.
Concerning the remaining factors alleged by Turkey not  to have been considered at all, Egypt refers to
the Confidential Injury Analysis , a submission containing Business Confidential Information which
was provided to the Panel and to Turkey in accordance with the Supplemental Procedures Concerning
Business Confidential Information that were adopted by the Panel.48  According to Egypt, this
Analysis forms part of the Final Determination in the rebar investigation, which must be distinguished
from the Final Report.  In particular, Egypt states that the Confidential Injury Analysis makes evident
that the IA's analysis indeed covered "all of the factors listed in Article 3.4".49
7.35 Article 3.4 of the AD Agreement reads as follows:
"The examination of the impact of the dumped imports on the domestic industry
concerned shall include an evaluation of all relevant economic factors and indices
having a bearing on the state of the industry, including actual and potential decline in
sales, profits, output, market share, productivity, return on investments, or utilization
of capacity; factors affecting domestic prices; the magnitude of the margin ofdumping; actual and potential negative effects on cash flow, inventories,
employment, wages, growth, ability to raise capital or investments.  This list is not
exhaustive, nor can one or several of these factors necessarily give decisive
guidance."
7.36 In evaluating this claim, we take note of and agree with the findings of previous panels
50 and
the Appellate Body51 that all of the factors listed in Article 3.4 must be addressed in every
investigation.  Egypt does not argue to the contrary.  Rather, the issue raised by this claim is the
nature of the consideration performed, as reflected in the Essential Facts and Conclusions Report, in
the Final Report, and in the Confidential Injury Analysis , taken collectively.  Two questions are raised
in this regard:  first, as a threshold matter, whether the IA addressed each of the listed factors at all;and second, if so, whether the evidence provided by Egypt to the Panel establishes that the
consideration of those factors substantively satisfies the requirements of Article 3.4.
7.37 Turning first to the threshold question, i.e., whether each factor is addressed in some way in at
least one of these documents, we find in the affirmative.  We take note of the references in the
Essential Facts and Conclusions Report
52 and Final Report53 to sales, profits, output, market share,
return on investments, capacity utilisation, prices, dumping margin, and inventories.  There is no
doubt that these factors were explicitly addressed by the IA.  Similarly, we are satisfied that byaddressing in the Essential Facts and Conclusions Report  and the Final Report  sales volume and
                                                     
47 Written Rebuttal of Egypt, dated 19 December 2001, Section III.A.1.
48 Attached hereto as Annex 13.
49 Statement by Egypt during the Second Substantive Meeting of the Panel with the Parties,
25 February 2002, p.13.
50 See e.g., Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type
Bed Linen from India ("EC – Bed Linen" ), WT/DS141/R, adopted 12 March 2001, as modified by the Appellate
Body Report, WT/DS141/AB/R, par.6.159, and the Panel Report, Mexico – Anti-Dumping Investigation of High
Fructose Corn Syrup (HFCS) from the United States ("Mexico – Corn Syrup" ), WT/DS132/R and Corr.1,
adopted 24 February 2000, par.7.128.
51 See, e.g., Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections
of Iron or Non-Alloy Steel and H-Beams from Poland ("Thailand – H-Beams") , WT/DS122/AB/R, adopted
5 April 2001, para.128.
52 Exh. TUR-15, Essential Facts and Conclusions Report , October 1999, p.29-32..
53 Exh. TUR-16, Final Report , October 1999, p.35-39.WT/DS211/R
Page 14
market share, the IA addressed "growth", as Egypt argues in its Rebuttal Submission.54  We therefore
do not consider further the factor "growth" in the context of this claim.  Thus, the focus of this claim
is whether the remaining factors identified by Turkey are reflected in the Confidential Injury Analysis ,
and if so, whether their treatment in that document is sufficient to satisfy the requirements of
Article 3.4.  Concerning the Confidential Injury Analysis , we are mindful of the findings of the
Appellate Body in Thailand – H-Beams  that confidential information relied upon by an IA, even if not
shared with respondents, should be taken into account by a panel when assessing compliance with
Article 3.4.55.
7.38 Turning to its content, we note that the Confidential Injury Analysis  contains data on, inter
alia, cash flow, employment, wages, and productivity.  Moreover, we accept, as argued by Egypt56,
that by addressing in the Confidential Injury Analysis  pre-tax profit as a percentage of shareholders'
funds for Alexandria National and Al Ezz, the IA addressed in that Analysis  "ability to raise capital".
Thus, taken together, the Essential Facts and Conclusions Report , the Final Report , and the
Confidential Injury Analysis  demonstrate that the IA addressed, at least in some way, all of the factors
listed in Article 3.4.
7.39 As noted above, however, this is only the thre shold issue for our determination of whether the
IA complied with the requirement of Article 3.4 in respect of the "examination" of all of the listed
factors.  Here, we recall the specific wording of the relevant part of that provision:
"The examination of the impact of the dumped imports on the domestic industry
concerned shall include an evaluation  of all relevant economic factors and indices…"
(emphasis added)
Thus, in taking up the second issue raised by this claim, this language compels us to consider whether
the IA's "examination" included an "evaluation" in the sense of Article 3.4 of each of the listed
Article 3.4 factors that appear only in the Confidential Injury Analysis .
7.40 We note Egypt's basic argument that the Confidential Injury Analysis  is proof that the IA
"examined" all of the factors listed in Article 3.4 that are not reflected in the Essential Facts and
Conclusions Report  and in the Final Report , and that the IA thus satisfied the requirements of that
Article.  To recall, Turkey alleges that Egypt failed to "examine" productivity, actual and potential
negative effects on cash flow, employment, wages, gr owth and ability to raise capital or investments,
because these factors are not referred to in the Essential Facts and Conclusions Report  or the Final
Report .  Turkey further argues that to the extent that data are included on some of these factors in the
Confidential Injury Analysis , this " Analysis " consists of data only, and thus is not sufficient to
constitute an "evaluation" in the sense of Article 3.4.
7.41 In this regard, we posed two very similar questions to Egypt concerning where in the record
of the investigation the IA's consideration could be found or discerned of the factors identified by
Turkey and which are not addressed in the Essential Facts and Conclusions Report  and/or in the Final
Report  (actual and potential negative effects on cash flow, employment, wages, productivity, and
ability to raise capital or investment)57, 58.  Both times, Egypt referred us exclusively to the
Confidential Injury Analysis .59.  We emphasize that while (as we have found above) the Confidential
                                                     
54 Written Rebuttal Submission of Egypt, Section III.A.1.
55 Appellate Body Report, Thailand – H-Beams , para.107 and 118.
56 Written Rebuttal Submission of Egypt, Section III.A.1.
57 Question 9 to Egypt and Question 3 to Both Parties of the Written Questions by the Panel,  dated
27 February 2002 – Annex 8-2.
58 As noted, we already have concluded above that "growth" effectively was addressed in the Essential
Facts and Conclusions Report  and the Final Report , and we thus do not consider that factor further here.
59 Written Response of Egypt to Question 9 to Eg ypt and Question 3 to Both Parties of the Written
Questions by the Panel , dated 27 February 2002 – Annex 8-2..WT/DS211/R
Page 15
Injury Analysis refers to and contains data on all of the factors listed in Article 3.4 (including those
that are the subject of this claim), it contains no narrative, but rather consists only of tables of data
concerning the various factors, for the domestic industry as a whole, and individually, for the two
domestic producers (Al Ezz and Alexandria National)60.  Egypt could not, or did not, provide any
document of record other than the Confidential Injury Analysis  in respect of the factors identified by
Turkey.  We therefore assume that these tables of data are the only documents of record reflecting or
representing the IA's consideration of these factors.
7.42 The question before us, in respect of productivity, actual and potential negative effects on
cash flow, employment, wages, and ability to raise cap ital or investments, therefore, is whether the
mere presentation of tables of data, without more, constitutes an "evaluation" in the sense of
Article 3.4.
7.43 We first consider the ordinary meaning of the word "evaluation".  The Oxford English
Dictionary defines "evaluation" as follows:
"(1) The action of appraising or valuing (goods, etc.); a calculation or statement of
value.  (2) The action of evaluating or determining the value of (a mathematical
expression, a physical quantity, etc.), or of estimating the force of (probabilities,
evidence )."61(emphasis added)
The Merriam-Webster's Collegiate Dictionary defines "evaluation" as follows:
"(1) To determine or fix the value of.  (2) To determine the significance, worth, or
condition of usually by careful appraisal or study. "62(emphasis added)
The Merriam-Webster's Thesaurus lists as synonyms for "evaluation" the following:
"(1) appraisal, appraisement, assessment, estimation, valuation (with related words:
interpreting; judging, rating); (2) appraisal, appraisement, assessment, estimate,
judgement, stock (with related words: appreciation; interpretation; decision)."63
7.44 We find significant that all of these definitions and synonyms connote, particularly in the
context of "evaluation" of evidence, the act of analysis, judgement, or assessment.  That is, the first
definition recited above refers to "estimating the force of" evidence, evoking a process of weighingevidence and reaching conclusions thereon.  The second definition recited above -- to determine the
significance, worth, or condition of, usually by car eful appraisal or study -- confirms this meaning.
                                                     
60 The factors for which data are presented in the Confidential Injury Analysis , for the industry as a
whole and for Alexandria National and Al Ezz individually,  are sales volume, sales revenue, cost of production,
gross profit, selling and administrative expenses, cost of sales, profit before interest expenses, finance cost, and
net profit, on a total basis and on a per ton basis, as well as cost of production, gross profit, selling andadministrative expenses, cost of sales, total cost and net profit as a per cent of revenue, as well as number ofemployees and per cent change thereof, wages, production capacity, production volume, and capacity utilisation,number of shareholders and per cent change thereof, value of total assets and percent change thereof, volume offinished goods inventory and per cent change thereof, cash flow, and worker productivity.  In addition, for the
industry as a whole, the Analysis  contains tables on return on investment, volume of total domestic sales, of
dumped imports, of other imports and total domestic market, as well as per cent market shares of the domesticindustry, the dumped imports and the other imports, "undercutting" (i.e., domestic industry price, Turkishimports' price, and percentage difference), price depression (domestic industry prices between 1996 and firstquarter 1999), price suppression (total cost, domestic industry price, and total cost as a percentage of price,between 1996 and first quarter 1999), and output volume and sales value, and per cent changes, between 1996
and first quarter 1999.
61 Oxford English Dictionary Online:  http://dictionary.oed.com.
62 Merriam-Webster's Collegiate Dictionary online:  http://www.m-w.com.
63 Merriam-Webster's Thesaurus online:  http://www.m-w.com.WT/DS211/R
Page 16
Thus, for an investigating authority to "evaluate" evidence concerning a given factor in the sense of
Article 3.4, it must not only gather data, but it must analyze and interpret those data.
7.45 We nevertheless do recognize that, in addition to the dictionary meanings of "evaluation" that
we have cited, the definitions set forth above also refer to a purely quantitative process (i.e.,
calculating, stating, determining or fixing the value of something).  If this were the definitionapplicable to the word "evaluation" as used in Article 3.4, arguably mere compilation of data on the
listed factors, without any narrative explanation or analysis, might suffice to satisfy the requirements
of Article 3.4.  We find, however, contextual support in Article 17.6(i) of the AD Agreement for our
reading that "evaluation" is something different from, and more than, simple compilation of tables of
data.  We recognize that Article 17.6(i) does not appl y directly to investigating authorities, and that
instead, it is part of the standard of review to be applied by panels in reviewing determinations of
investigating authorities.  However, Article 17.6(i) identifies as the object of a panel's review two
basic components of a determination:  first, the investigating authority's "establishment of the facts",
and second, the investigating authority's "evaluation of those facts".  Thus, Article 17.6(i)'s
characterization of the essential components of a determination juxtaposes "establishment of the facts"
with the "evaluation of those facts".  That panels are instructed to determine whether an investigating
authority's "establishment of the facts" was proper connotes an assessment by the panel of the meansby which the data before the investigating authority were gathered and compiled.  By contrast, the fact
that panels are instructed to determine whether an investigating authority's "evaluation of those facts"
was objective and unbiased, provides further support for our view that the "evaluation" to which
Article 3.4 refers is the process of analysis and interpretation of the facts established in relation to
each listed factor.
7.46 Our interpretation of the requirement of Article 3.4 to "evaluate" the factors and indices is
consistent with that of panels in a number of past disputes.  The panel in Thailand – H-Beams  found
in regard to the examination of the factors listed in Article 3.4 that:
"Article 3.4 requires the authorities properly to establish whether a factual basis exists
to support a well-reasoned and meaningful analysis of the state of the industry and afinding of injury.  This analysis does not derive from a mere characterization of the
degree of "relevance or irrelevance" of each and every individual factor, but rather
must be based on a thorough evaluation of the state of the industry and, in light of the
last sentence of Article 3.4 [footnote omitted], must contain a persuasive explanation
as to how the evaluation of relevant factors led to the determination of injury."
64
7.47 In U S – Hot-Rolled Steel , the issue was whether the US investigating authority had violated
Article 3.4 by failing to explicitly discuss, in its determination, certain factors for each year of theperiod of investigation.  In that case, according to the panel, the authority had discussed each of the
factors for the final two years of the three-year period of investigation, and only some of them for the
first year of that period.  The panel found that the determination explained the particular relevance of
the second and third years of the period, and that the authority's failure to explicitly address each
factor in its discussion of the first year of the period did not constitute a violation of Article 3.4
65.
That is, the panel found, inter alia , that each of the listed Article 3.4 factors was explicitly discussed
in the authority's determination, and given the expl anations provided in that determination for the
particular emphasis on a part of the period of investigation, the evaluation  of the facts was deemed
adequate by the panel.
7.48 This contrasts sharply with the situation in the present case, where the Egyptian Investigating
Authority appears to have gathered data on all of the listed Article 3.4 factors, as reflected in various
documents of record (including the Essential Facts and Conclusions Report , the Final Report  and the
                                                     
64 Panel Report, Thailand – H-Beams,  para.7.236.
65 Panel Report, US – Hot-Rolled Steel , paras.7.235-7.236.WT/DS211/R
Page 17
Confidential Injury Analysis ).  Egypt has been unable, however, to  adduce sufficient evidence to the
Panel, in response to our specific requests, of the IA's evaluation of all of those factors in its written
analyses. 66
7.49 Here we must emphasize that in the context of an anti-dumping investigation, which is by
definition subject to multilateral rules and multilateral review, a Member is placed in a difficultposition in rebutting a prima facie  case that an evaluation has not taken place if it is unable to direct
the attention of a panel to some contemporaneous written record of that process.  If there is no such
written record -- whether in the disclosure docum ents, in the published determination, or in other
internal documents -- of how certain factors have been interpreted or appreciated by an investigating
authority during the course of the investigation, there is no basis on which a Member can rebut a
prima facie  case that its "evaluation" under Article 3.4 was inadequate or did not take place at all.  In
particular, without a written record of the analytical process undertaken by the investigating authority,a panel would be forced to embark on a post hoc  speculation about the thought process by which an
investigating authority arrived at its ultimate conclusions as to the impact of the dumped imports on
the domestic industry.  A speculative exercise by a panel is something that the special standard of
review in Article 17.6 is intended to prevent.  Thus, while Egypt attempts to derive support from the
panel report in the US – Hot-Rolled Steel  dispute for its position that Article 3.4 does not require an
explicit written analysis of all of the factors listed therein
67, to us, the findings in that dispute confirms
our interpretation, in that what was at issue, was the substantive adequacy of the authority's written
analysis of each  of those factors.
7.50 Nor do we consider, as suggested by Egypt68, that the requirement of a written analysis of the
Article 3.4 factors is exclusively governed by Article 12 of the AD Agreement (public notice andexplanation of determinations).  While Article 12 contains a requirement to publish , and to make
available to the interested parties in the investig ation, some form of a report on the investigating
authority's determination, this is, as the Appellate Body has noted, a procedural requirement having to
do with due process
69, rather than with the relevant substantiv e analytical requirements (which in the
context of this claim are found in Article 3.4).
                                                     
66 See para.7.41, supra.
67 Written Response, dated 13 March 2002, of Egypt to Question 9 to Egypt and Question 3 to Both
Parties of the Written Questions of the Panel, of 27 February 2002 – Annex 8-2.  Egypt contends in its response
that "[t]he Confidential Injury Analysis  therefore constitutes an evaluation of the factors that it covers in the
sense of Article 3.4" and that this approach is consistent with the findings of the panel in US – Hot-Rolled Steel.
However, the facts in the US – Hot-Rolled Steel dispute differ significantly from those in this dispute. In this
dispute the allegation is that the IA did not properly evaluated all of the factors listed in Article 3.4 of the ADAgreement, whereas in the US – Hot-Rolled Steel  case, all Article 3.4 factors were evaluated, but Japan claimed
that the discussion did not sufficiently evaluate certain f actors by failing to discuss date for all three years which
comprised the period of investigation for the determinatio n of injury – paras. 7.231-7.236 of the Panel Report,
ibid.
68 Ibid, response to Question 6 and 9 to Egypt.
69 In the Appellate Body Report in Thailand – H-Beams , para.110, the Appellate Body stated that "…
Article 12 establishes a framework of procedural and du e process obligations concerning, notably, the contents
of a final determination ".  We note that what is at issue before us is not the adequacy of the final determination
or any other published document, as such, but rather, the adequacy of the substance  of the analysis performed by
the Egyptian investigating authority, in whatever document such analysis might be found.  Moreover, the basicissue before the Appellate Body in Thailand – H-Beams was very different from that before us.  In that appeal,
the issue raised was whether the panel was limited by the language of Articles 3.1 and 17.6 to reviewing theThai investigating authority's injury determination exclusively on the basis of facts and analysis discernible indocuments that had been published or otherwise made available to the respondents in the investigation or their
counsel, or whether in addition, the panel could and should take into account internal analysis memoranda and
similar documents prepared by and for the exclusive use of  the authority during the investigation, the contents of
which were not discernible in any documents available to the respondents.  Thus, the issue there was essentiallyabout how a panel should address confidential information, an issue not before us in this dispute.  Thus, whileWT/DS211/R
Page 18
7.51 On the basis of the above considerations, we find that while it gathered data on all of the
factors listed in Article 3.4, the Egyptian investigating authority failed to evaluate  productivity, actual
and potential negative effects on cash flow, employment, wages, and ability to raise capital or
investments.  We therefore find that Egypt acted inconsistently with Article 3.4.
7.52 We turn finally to Turkey's argument that Article 3.4 was further violated because the IA's
evaluation of "capacity utilisation" and of "return on investment" was inadequate.  In respect of
capacity utilisation, the IA's Final Report  indicates, in sections 4.3.1 (sales), and 4.3.2 (production),
respectively, that sales increased because domestic prices were reduced to compete with dumped
imports, and that domestic production also increased, as the companies "attempt[ed] to increase
production in order to reduce costs to be able to compete with the low-priced Turkish imports".  The
report also notes that the IA "concluded that the increase in production is attributed partly to starting
new production lines in steel mills".  The n, in Section 4.3.6 (production capacity), the Final Report
states that "[n]o effect on industry capacity utilisation has been found".  This statement that capacity
utilisation was unaffected, although short, is consistent with the above-quoted statements that sales
and production had increased, along with capacity.  Given this context, we do not find that the IA
failed to adequately evaluate capacity utilisation, and thus we do not find that Egypt violated
Article 3.4 in this respect.
7.53 Concerning return on investment, the IA's Final Report  notes in section 4.3.7 (return on
investment) that there was "a decline in return on investment during the period of investigation".  We
note that this finding, although brief, is consistent with the longer discussion concerning net profits
and losses in section 4.3.5 (profits).  Given this context, we do not find that the IA failed to adequately
evaluate return on investment, and thus we do not fi nd that Egypt violated Article 3.4 in this respect.
(b) Alleged failure to examine "all relevant economic factors and indices having a bearing on the
state of the industry"
7.54 Turkey claims a further violation of Article 3.4 by reason of the alleged failure by the
Investigating Authority to examine "all relevant economic factors and indices having a bearing on the
state of the industry", including, in particular, various factors allegedly affecting domestic prices andaffecting profits.
70
7.55 The factors identified by Turkey in this regard are:
(a) "The dramatic capacity expansion at the two major Egyptian rebar producers and its
likely temporary effects on their cost structures";
(b) "The effects of the capacity expansions, which started production at the end of 1998,
on competition between the Egyptian producers as they attempted to fill newly
expanded order books";
(c) "Sharpening competition between Al Ezz and Alexandria National as Al Ezz sought
to increase market share by capitalizing on its cost advantages over Alexandria
National";
(d) "Falling prices for steel scrap, the primary raw material input at Al Ezz";
                                                                                                                                                                    
Egypt cites Thailand – H-Beams  as support for its position in the present dispute, in our view that dispute
pertains to a different issue entirely.  To the extent that it may touch upon issues before us, it does not detract in
any way from our interpretation of the substantive requirements of Article 3.4 – paras.98 et al of the Appellate
Body Report.
70 Written Response of Turkey, dated 7 December 2001, to Question 1 to Turkey of the Written
Questions by the Panel,  of 28 November 2002 – Annex 4-1.WT/DS211/R
Page 19
(e) "A sharp contraction in demand in January 1999, the very month in which prices for
rebar fell";
(f) "The effect of comparably priced, fairly traded imports".71
7.56 According to Turkey, factor (a) has a bearing on cost of production and is therefore a
“relevant factor” to the state of the industry.  Factors (b)-(e) are, in Turkey’s view, factors “affectingdomestic prices” which either were not mentioned, or their effects on prices were not examined, or
were not given any weight, in the investigating authority's analysis of why prices fell.  Factor (f),
Turkey states, may or may not have had an effect  on prices, but Turkey argues that there was no
support for a finding that dumped imports had a materially different effect on domestic prices than did
other imports.  In other words, Turkey claims that these are factors other than dumped imports that
caused any injury experienced by the domestic industry72.  In response to a question, Turkey clarified
that factors (b) and (c) are subsumed in factor (a),  in that they were alleged adverse effects of the
capacity expansion, and that arguably, factor (d) was so subsumed as well.
7.57 Egypt argues that this claim by Turkey is misplaced and thus should be rejected, as in Egypt's
view, it raises arguments concerning causation, and in particular has to do with the requirement not to
attribute to dumped imports injury caused by ot her factors.  According to Egypt, causation is
exclusively regulated by Article 3.5, while Article 3.4 has to do exclusively with the existence  of
injury and not with its causes.  Furthermore, Egyp t argues, the investigating authority did examine a
range of "other factors" in its investigation, but concluded that there were "'no other causes of injury'
sufficient to break the causal relationship between the dumped imports and the injury to the domestic
industry"73.  In addition, Egypt argues that Turkey did not, either in the Request for Establishment of a
Panel, its first oral submission or its first written submission, refer to "factors affecting domesticprices", and asks us to dismiss this aspect of this claim.  Egypt further argues that, in any case, the IA
considered as "factors affecting domestic prices", demand and raw material costs.
7.58 We consider first Egypt's request that we dismiss Turkey's claim as to "factors affecting
domestic prices" on the grounds that this was not mentioned in the Request for Establishment of a
Panel or in Turkey's initial submissions.  We find no merit in this request for dismissal, and therefore
reject it.  First, we view this issue as an argument in support of a claim, not as a claim in itself.
Second, as a factual matter, the Request for Establishment of a Panel refers, in the context of Turkey's
Article 3.4 claim, to the "effect…of other, neutral factors that caused prices to fall".  We see no
difference in substance between this reference and the language "factors affecting domestic prices",
and no possible basis on which Egypt could have been confused by Turkey's references to and
arguments about, "factors affecting domestic prices".  This issue is pursued as well in Turkey's
submissions.
7.59 Turning to the substance of this claim,  we note the text of the relevant part of Article 3.4:
                                                     
71 Ibid, p.21-22.  We note that in respect of this claim, Turkey's Request for Establishment of a Panel
refers to some, but not all of the factors listed above.  In particular, the Request for Establishment of a Panelstates in this context that:  "Such factors include, but are not limited to, a large-scale capacity expansion by the
Egyptian rebar producers during the period of review, the effects of non-subject imports from third countries,
falling world-wide prices for steel scrap and a sudden contraction in domestic demand in January 1999, when
the [IA] found its first evidence of falling domestic prices ".  Egypt raised no objection to Turkey's reference in
its arguments in respect of this claim to factors that were not explicitly referred to in the request forestablishment.  We posed a question to both parties on this point (Question 1 to Both Parties of the Written
Questions by the Panel , of 27 February 2002.), and in response, Egypt indicated that where a request for
establishment uses an inclusive expression in respect of the specific grounds for a claim, the complaining party
can allege additional grounds in its arguments, so long as the party complained against has the opportunity to
offer rebuttal arguments.
72 Ibid, p.22 .
73 First Written Submission of Egypt, Section III.B.2.WT/DS211/R
Page 20
"The examination of the impact of the dumped imports on the domestic industry
concerned shall include an evaluation of all relevant economic factors and indices
having a bearing on the state of the industry, including … profits , …; factors
affecting domestic prices , … ." (emphasis added)
7.60 We recall that Turkey's claim is that Egypt violated Article 3.4 because the IA did not
examine all factors affecting profits , and did not examine all factors affecting domestic prices .  The
above text indicates to us, however, a different requirement on an investigating authority.  In
particular, the text is straightforward in that the requirement is to examine all relevant factors and
indices having a bearing on the state of the industry .  The text then lists a variety of such factors and
indices that are presumptively relevant to the investigation and must be examined, one of which is
"profits".  The text does not say, as argued by Tu rkey, "all factors affecting profits".  To us, this text
means that in its evaluation of the state of the industry, an investigating authority must include ananalysis of the domestic industry's profits.  Turkey has raised no claim that the IA failed to conduct
such an analysis in the rebar investigation.
7.61 Another listed element is "factors affecting domestic prices".  Here again, we note that
contrary to Turkey's argument, the text does not read "all factors affecting domestic prices".  Rather,
what is required is that there be an evaluation of factors affecting domestic prices.  This requirement
is clearly linked to the requirements of Articles 3.1 and 3.2 for an "objective examination" of "the
effect of dumped imports on prices in the domestic market for like products", which must involve a
consideration of:
"whether there has been a significant price undercutting by the dumped imports when
compared with the price of a like product of the importing Member, or whether theeffect of such imports is otherwise to depress prices to a significant degree or prevent
price increases, which otherwise would have occurred, to a significant degree."
74
In our view, this means that in its evaluation of the state of the industry, an investigating authority
must in every case include a price analysis of the type required by Articles 3.1 and 3.2.  Turkey has
raised no claim that the IA failed to conduct such an  analysis in the rebar investigation.  In addition, in
our view, an investigating authority must consid er generally the question of "factors affecting
domestic prices".  In this regard, we note that in the rebar investigation, the IA considered the
potential price effects of imports from third countries75, and noted as well that the market for rebar
was price-driven, rather than technology- or specification-driven76.
7.62 Turkey's argument that Article 3.4 requires a full "non-attribution" analysis appears to stem
from its reading of the term "having a bearing on" as  having to do exclusively with causation, (i.e., as
meaning factors having an effect on  the state of the industry).  There is another meaning of this term
which we find more pertinent in the overall context of Article 3.4, however.  In particular, the term
"having a bearing on" can mean relevant to  or having to do with  the state of the industry77, and this
meaning is consistent with the fact that many of the factors listed in Article 3.4 are descriptors or
indicators of the state of the industry, rather than being factors having an effect  thereon.  For example,
sales levels, profits, output, etc. are not in themselves causes  of an industry's condition.  They are,
rather, among the factual indicators by which that condition can be judged and assessed as injured or
not.  Put another way, taken as a whole, these factors are more in the nature of effects  than causes .
                                                     
74 Article 3.2 of the AD Agreement.
75 Document on Public File: Report on Other Causes of Injury for the document no 296 on 5/9/99, Case
of Rebar Originating or Exported from Turkey, non-official  translation.  Submitted by Egypt as Exh. EGT-6.
76 Exh. TUR-16, Final Report , para.4.3.5.3.
77 For example, Webster's New World Dictionary,  2nd College Edition, 1986, at p.123, includes as a
definition of "bearing": "relevant meaning, appreciation,  relation [the evidence had no bearing on the case]".WT/DS211/R
Page 21
7.63 This reading of "having a bearing on" finds contextual support in the wording of the last
group of factors in Article 3.4, namely "actual and potential negative effects on  cash flow, inventories,
…" (emphasis added).  Further contextual support is found in the cross-reference to Article 3.4
contained in the first sentence of Article 3.5:  "… the effects  of dumping as set forth in paragraph[] 4
[of Article 3]".(emphasis added)
7.64 We note in addition that if Turkey were correct that the full causation analysis, including non-
attribution, were required by Article 3.4, this woul d effectively render redundant Article 3.5, which
explicitly addresses causation, including non-attribu tion.  Such an outcome would not be in keeping
with the relevant principles of international treaty  law interpretation, or with consistent practice in
WTO dispute settlement.78
7.65 Moreover, even if we were to assume, arguendo,  that Article 3.4 does require a causation and
non-attribution analysis, the question would remain whether the IA was legally obligated to evaluatethe particular "factors affecting profits" and "facto rs affecting domestic prices" referred to by Turkey
before the Panel.  Here we note simply that th ere is no such specific requirement in the text of
Article 3.4.  Whilst "factors affecting domestic prices" must be evaluated, there is no requirement to
evaluate "all" such factors.  Whether or not an evaluation of such factors was sufficient from the
causal view point in any given case depends upon a consideration under Article 17.6 of theinvestigating authority's compliance with Article 3.5.  We address causation issues generally, and the
specific factors (a)-(f) asserted by Turkey, in Sections VII.C.4, VII.C.5 and VII.C.6, infra , which
address Turkey's claims under Article 3.5.
7.66 For the foregoing reasons, we find that the IA was not required under Article 3.4 to examine
and evaluate factors (a)-(f) listed above, and that Egypt thus did not act inconsistently with Article 3.4on that basis.
2. Claim under Articles 3.1 and 3.2 – Alleged failure to base the finding of price
undercutting on positive evidence
7.67 Turkey claims that the IA's finding of price undercutting was not based on positive evidence
as required by Article 3.1, because the IA failed to make a proper determination of price undercuttingin accordance with Article 3.2.  On price undercutting, Turkey's argument is that Egypt failed to
accurately determine whether there was price undercutting by imports of rebar from Turkey because
the Investigating Authority failed to make price comparisons on delivered-to-the-customer basis.
Turkey elaborates that the Essential Facts and Conclusions Report  does not reveal the channels of
distribution for the domestic and imported product or where in the chain of distribution any actual
price competition between those products takes place.  Without knowing these facts, according to
Turkey, it is impossible to ascertain whether the IA measured the price competition at the correct levelof trade, thus violating the Article 3.2 requirement that an investigating authority "consider whether
there has been a significant price undercutting by the dumped imports as compared with the price of a
like product in the importing country …".
7.68 Turkey further argues, on the basis of its examination of the Confidential Injury Analysis , that
the price undercutting analysis is further flawed by the fact that the prices used for the domestic sidewere the weighted-average revenue per unit of domestic rebar producers, and for the import side, were
the weighted-average unit customs entered value.  According to Turkey, in addition to being flawed
due to the level of trade at which it was made, this comparison was flawed, because the IA did not
                                                     
78 Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline
("US – Gasoline") , WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I,3.  On page 23 of the Appellate Body
Report it is stated: "… One of the corollaries of the 'general rule of interpretation' in the Vienna Convention  is
that interpretation must give meaning and effect to all the terms of the treaty.  An interpreter is not free to adopta reading that would result in reducing whole clauses or  paragraphs of a treaty to redundancy or inutility."WT/DS211/R
Page 22
look at "prices" or ensure that it was comparing prices for the same product.  According to Turkey,
rebar prices vary by size, with thinner rebar commanding a higher price per unit due to higher
production cost.  Given this, comparing one weighted  average "basket" to another, without knowing
whether the composition of each basket is the same, cannot, according to Turkey, yield an accurate
assessment of price undercutting.
7.69 Egypt responds79 that contrary to Turkey's claim, the Essential Facts and Conclusions Report
makes clear that the price comparison was made at the same level of trade (ex-factory for domestic
goods, and ex-importer's store for the dumped imports ).  Egypt states that Turkey would prefer that
the comparison be done at a different level of trade (delivered to the customer), but that there is no
such legal requirement.  Egypt further argues that such a comparison would ignore the fact that
importers and exporters do not sell on a delivered basis.  Thus, according to Egypt, the undercutting
analysis was performed properly and on the basis of positive evidence, such that Egypt complied withArticles 3.1 and 3.2.
7.70 We understand the legal basis of Turkey's claim to be that, to satisfy the requirements of
Article 3.2, a price undercutting analysis must be ma de on a delivered-to-the-customer basis, as it is
only at that level that any such undercutting can influence customers' purchasing decisions, and that in
addition, and in any case, for such an analysis to be based on positive evidence as required byArticle 3.1, an investigating authority must justify its choice of the basis for the price comparison it
makes.  In Turkey's view, the IA used the wrong basis for price comparison, and did not adequately
explain and justify its choice of that basis in the Essential Facts and Conclusions Report
80, in
violation of Articles 3.1 and 3.2.  Turkey finds further support for its claim that the price undercutting
finding violated Article 3.1 in the fact that the average unit customs value of imports was comparedwith the unit revenue of domestic rebar sales.
7.71 We recall that Article 3.1 provides in relevant part that:
"A determination of injury … shall be based on positive evidence and involve an
objective examination of … the effect of the dumped imports on prices in the
domestic market for like products, … ."
7.72 Article 3.2 provides in relevant part that:
"With regard to the effect of the dumped imports on prices, the investigating
authorities shall consider whether there has been a significant price undercutting by
the dumped imports as compared with the price of a like product of the importing
Member, or whether the effect of such imports is otherwise to depress prices to a
significant degree or prevent price increases, which otherwise would have occurred,
to a significant degree … ."
7.73 On the basis of the plain text of Article 3.2, we find no requirement that the price undercutting
analysis must be conducted in any particular way, that is, at any particular level of trade.  Therefore,
we find that Turkey has not established that there was a legal obligation on the IA to perform the price
undercutting analysis in the way asserted by Turkey.  Rather, we find that an objective and unbiased
investigating authority could have performed an undercutting analysis on the basis used by the IA.We  therefore find that the IA's price undercutting  finding is not inconsistent with Article 3.2.
                                                     
79 First Written Submission of Egypt, p.39.
80 We note that the price undercutting discussion in the Final Report  is identical to that in the Essential
Facts and Conclusions Report.WT/DS211/R
Page 23
7.74 In respect of the claim of violation of Article 3.1, we take note of the following passage in the
Essential Facts and Conclusions Report81 (repeated verbatim in the Final Report82):
"In considering price undercutting, the Investigating Authority will normally seek to
compare prices at the same level of trade (the ex-factory and ex-importers' store
levels), to ensure that differences in distribution costs and margins do not confuse theimpact of dumping.  Accordingly, the Investigating Authority's position is generally
to compare importers' prices, which involve similar cost elements to those in the
Egyptian manufacturer's ex-factory price, but do not include cost elements relating to
the distribution of goods.
With regard to price undercutting, the Investigating Authority compared prices at the
same level of trade. … ."
7.75 While we need not, and do not, opine on the exact nature of the "positive evidence"
requirement of Article 3.1, we note that even if we accept, arguendo,  Turkey's interpretation thereof,
the above-quoted passage from the Essential Facts and Conclusions Report  makes clear that the IA's
reports are not, as Turkey implies, devoid of any explanation for the choice of the level of trade at
which prices were compared.  Moreover, we note that there are any number of bases on which a price
undercutting analysis could be performed, and we do not find the IA's justification of the basis that itused to be illogical on its face or not objective, nor do we see in it any evidence of bias.  Concerning
the undercutting-related information in the Confidential Injury Analysis , Turkey has pointed to no
record evidence to substantiate its arguments concerning the existence or nature of any product
differentiation of rebar generally or as between imports and the domestic product, or any effect
thereof on prices.  Indeed we note in this regard the statement by three of the respondents in their 28September 1999 letter to the IA that "as the [IA] well knows, respondents do not break out costs by
diameter"
83, suggesting that diameter differences had an immaterial effect on costs.
7.76 On the basis of the foregoing considerations, we find that Turkey has not established that an
objective and unbiased investigating authority could not have found price undercutting on the basis of
the evidence of record.  We therefore find that Turkey has not established that the IA's priceundercutting finding was not based on "positive evidence" in violation of Article 3.1.
3. Claim under Articles 6.1 and 6.2 – Alleged violation due to "change" in the "scope" of
the injury investigation from threat to present material injury
7.77 Turkey alleges that Egypt changed the "scope" of the injury investigation from threat of
material to present material injury, without info rming Turkey and after the deadline for submitting
factual information in the investigation.  Turkey claims that by doing so, Egypt violated Article 6.1 by
failing to give Turkey notice of the information required by the IA, and Article 6.2 by failing to giveTurkey a full opportunity to defend its interests.
84
7.78 Turkey asserts, in particular, that the Initiation Report  referred exclusively to threat of injury,
and did not mention present material injury.  Turkey argues that on that basis, Turkish companies
provided evidence and arguments only in respect of the question of threat (i.e., the factors and
considerations referred to in AD Article 3.7).  Turkey argues that the IA then changed the scope of theinjury investigation, after the deadline for submitting factual information and arguments had passed,
                                                     
81 Exh. TUR-15, Essential Facts and Conclusions Report , para.4.2.1.
82 Exh. TUR-16, Final Report , para. 4.2.1.
83 Exh EGT-3, p.2b.
84 Written Response, dated 7 December 2002, of Turkey to Question 1 to Turkey of the Written
Questions by the Panel,  of 28 November 2001, p.25 – Annex 4.1.WT/DS211/R
Page 24
meaning that the Turkish companies did not have an  adequate opportunity to submit information and
comment on the question of present material injury, in violation of Articles 6.1 and 6.2.
7.79 Egypt responds85 that the IA presented in sufficient detail in the Essential Facts and
Conclusions Report  its findings and conclusions with respect to material injury, but that this is not the
issue raised by this claim.  Rather, according to Egypt, the issue is whether the IA was under anobligation to inform the Turkish respondents that it  had changed the scope of the injury investigation
from threat to present material injury during the c ourse of the investigation.  Egypt cites the panel
report in Guatemala – Cement II  in support of the proposition that no such obligation exists.
According to Egypt, the issue raised by Turkey's  claim is nearly identical to that addressed in
Guatemala – Cement II .  Egypt argues that in that case, Mexico claimed that Guatemala had violated
Articles 6.1, 6.2 and 6.9 of the AD Agreement by changing the basis of the injury determination from
a preliminary determination of threat of material injury to a final determination of present materialinjury without informing the respond ents.  Egypt notes that the panel found that "[n]o provision of the
AD Agreement requires an investigating authority to  inform interested parties, during the course of
the investigation, that it has changed the legal basis for its injury determination."
86
7.80 Egypt also argues that the Notice of Initiation ,87 which was published in Egypt's Official
Gazette, referred to evidence of material injury starting to occur as of that time, and that in addition,the fact that the investigation covered present material injury was reflected in a facsimile dated
17 July 1999 from the IA to counsel for three of the respondents.
88
7.81 Article 6.1 provides in relevant part:
"All interested parties in an anti-dumping investigation shall be given notice of the
information which the authorities require and ample opportunity to present in writingall evidence which they consider relevant in respect of the investigation in question."
7.82 Article 6.2 provides in relevant part:
"Throughout the anti-dumping investigation all interested parties shall have a full
opportunity for the defence of their interests."
7.83 As we understand Turkey's claim, the alleged violation of the Article 6.2 obligation to provide
interested parties with a full opportunity for the defence of their interests is at least partially dependent
on its claim that Article 6.1 was violated.  That is, the alleged failure to be given notice of the
information required by the authorities meant, ac cording to Turkey, that the respondents did not have
a full opportunity for the defence of their interests.
7.84 We start therefore by considering whether, as a factual matter, it is clear that the scope of the
investigation was limited to threat of injury initially, but was thereafter changed, as alleged by
Turkey, to an investigation relating to present mate rial injury.  We note in this regard first that the
published Notice of Initiation
89 states that as of the time of initiation, there was evidence that injury
was occurring.  Furthermore, the (foreign) manufacturers' and exporters' questionnaires90, which were
sent by the IA shortly after the investigation was initiated, state explicitly that "the investigation of
injury will cover the period from 1996 to 1998.  As for the threat of injury, it will cover the period
from 1999 to 2000".  While these questionnaires then went on to pose specific questions to the foreignmanufactures and to the exporters concerning some of the factors and issues addressed by Article 3.7,
                                                     
85 First Written Submission of Egypt, p.41.
86 First Written Submission of Egypt, Section III.B.8, quoting Guatemala – Cement II, para.8.237.
87 Exh. EGT-7.3.
88 Exh. EGT-8.
89 Ibid,  par.4, p.2.
90 Exhs. TUR-3 and TUR-2, Sections 1.8 and 1.5, respectively.WT/DS211/R
Page 25
this is not in itself determinative.  Indeed, it is logical, given that these factors have primarily to do
with the likelihood of further increases in dumped imports, which is information in the hands of the
foreign producers and exporters, that the requests for data on these factors would be directed to those
foreign producers and exporters.  By the same token, it is logical that requests for data on the
Article 3.4 factors, information which is in the hands of the domestic industry, would be directed atthe domestic producers, rather than the foreign producers and exporters.
91  T h e  I A ' s  Final Report
alludes to this point as well, quoting from the fax sent to counsel for three of the respondents on
17 July 199992 in connection with the scope of the injury investigation which stated:
"At initiation, it is normal practice to co ver both whether injury has commenced or
whether it is threatened through the imports.  Because of the requirements on threat of
injury, it is also normal practice to include questions on this matter in the
questionnaire sent to overseas exporters or producers."93
7.85 Thus it is clear to us that a possible determination based on present material injury was, from
the outset, within the scope of the investigation.  For all of the foregoing reasons, we do not find that
Turkey has established as a factual matter that the scope of the investigation was changed.
7.86 Nor do we find that Turkey has established as a factual matter that the IA failed to inform the
Turkish respondents of the information required of them, or denied them the opportunity for the fulldefence of their interests.  As noted, the questionnaires sent to the foreign producers and the exporters
indicated that the injury investigation covered both present material injury and threat thereof, and
identified the particular injury-related informati on requested of those interested parties by the IA.
Three of the respondents then subsequently, and in addition, submitted a written brief, after  the due
date for responses to questionnaires, which presented various legal and factual arguments concerninginjury issues.
94  There is no evidence to suggest, nor does Turkey claim, that the IA refused to
consider this submission or objected to it in any way.  To the contrary, the IA appears to have
accepted this submission without objection or difficulty.95
7.87 Furthermore, while counsel for these same respondents complained in comments on the
Essential Facts and Conclusions Report  about the alleged change in the scope of the investigation,
implying that the respondents had learned only in that report that present material injury was at issue,
("For ITPD to assert, now, long after the Notice of Initiation was issued , that this case concerns injury
rather than threat is to move the goalposts while the game is underway"96 (emphasis added)), in fact
these respondents were explicitly informed by the IA in the fax dated 17 July 199997, in response to an
inquiry that had been made at verification, that the injury investigation covered both present material
                                                     
91 Here it should be emphasized that requests for data and information  by an investigating authority in
an investigation are simply that.  It is perfectly understandable that an investigating authority would request thevarious pieces of information that it mu st consider in an anti-dumping investigation from the interested parties
having possession of that information.  In our view, such information requests are not the same as theopportunities for interested parties to present arguments in respect of the legal and factual issues in aninvestigation.
92 Exh. EGT-8.
93 Exh. TUR-16, Final Report , para.4.5.7.
94 Exh. TUR-18.  This submission was made by respondents Habas, Diler and Colakoglu on
21 May 1999.  The responses to the manufacturer's and exporter's questionnaires were due on or about7 April 1999 (the day that most of them were submitted), i.e., 37 days after having been sent to them.
95 Moreover, the document identified by Egypt as being from the Public File of the investigation (Exh.
EGT-6) addresses some of the arguments presented in that written brief, indicating that the IA took it into
account in its injury analysis.
96 Exh. TUR-20, p.17.
97 Exh. EGT-8.WT/DS211/R
Page 26
injury and threat.98  These respondents implicitly confirmed their awareness of this fact in their
15 September 1999 submission on cost99, in which they stated that "…[g]iven the clear fact that the
Egyptian industry is not materially injured  by Turkish exports, coupled with our earlier evidence
concerning threat…we urge the ITPD to terminate these proceedings with a negative determination of
material injury or threat thereof " (emphasis added).  We note that this assertion that the industry was
not materially injured was accompanied by no argumentation or evidence, however.  Nor had these
respondents made any attempt, upon receiving on 17 July 1999 explicit confirmation that the injury
investigation covered present material injury as well as threat, to submit any such pertinent
argumentation or evidence.  We find significant that these respondents did not themselves take the
initiative to try to protect their interests by requesting an opportunity to submit argumentation and
evidence, or by simply presenting a submission, as they had done, apparently successfully, in respect
of threat of material injury.100  In short, we find no evidence that the respondents were "denied" the
opportunity to present pertinent arguments on present material injury, nor that they ever attempted to
do so.
7.88 Here, we emphasize that the language of the provision at issue creates an obligation on the IA
to provide opportunities  for interested parties to defend their in terests.  In the situation that is the
subject of this claim, there is no evidence that such an opportunity was not provided .  Rather, the
evidence shows that the respondents did not in fact intervene (or even attempt to do so) on this issue.
Failure by respondents to take the initiative to defend their own interests in an investigation cannot be
equated, through WTO dispute settlement, with failure by an investigating authority to provide
opportunities for interested parties to defend their interests.
7.89 We must stress that the foregoing factual analysis of the record evidence concerning the scope
of the injury investigation accepts, arguendo , Turkey's implicit interpretation of AD Article 3.7.  In
particular, Turkey's legal premise appears to be that  where an injury investigation is limited to threat
of material injury, the factors and considerations referred to in AD Article 3.7 are the  only  ones that
must be examined by the IA.
7.90 Article 3.7 of the Anti-Dumping Agreement provides as follows:
"A determination of a threat of material injury shall be based on facts and not merely
on allegation, conjecture or remote possibility.  The change in circumstances which
would create a situation in which the dumpi ng would cause injury must be clearly
foreseen and imminent.  [footnote omitted.]  In making a determination regarding the
existence of a threat of material injury, the authorities should consider, inter alia ,
such factors as:
(i) a significant rate of increase of dumped imports into the domestic
market indicating the likelihood of substantially increased
importation;
                                                     
98 The 17 July 1999 fax states in this regard:  "At the recent meeting in Turkey with the investigation
team, you raised the question about the dumping investigation … whether this investigation concerned material
injury arising from the importation of allegedly dumped goods from Turkey or threat of material injury arising
from the same cause … ."
99 Exh. TUR-34A, -34B and -34C, cover letter, p.2, footnote 1.
100 The threat of injury submission was made on 21 May 1999, one day after the IA had informed these
respondents that the deadline for any further questionnaire responses on the subject of threat of injury had beenthe due date for the questionnaires (Exh. TUR-31, p.2), a date already in the past.  In presenting the threat
submission, these respondents stated that it was not a response to the questionnaire, but was an "independent
evidentiary submission" as foreseen in AD Article 6.1.  There is no evidence that this submission was rejected.To the contrary, the document from the Public File (Exh. EGT-6) addresses certain arguments made in thatsubmission.WT/DS211/R
Page 27
(ii) sufficient freely disposable, or an imminent, substantial increase in,
capacity of the exporter indicating the likelihood of substantially
increased dumped exports to the importing Member's market, taking
into account the availability of other export markets to absorb any
additional exports;
(iii) whether imports are entering at prices that will have a significant
depressing or suppressing effect on domestic prices, and would likely
increase demand for further imports; and
(iv) inventories of the product being investigated.
No one of these factors by itself can necessarily give decisive guidance but the totality
of the factors considered must lead to the conclusion that further dumped exports are
imminent and that, unless protective action is taken, material injury would occur."
7.91 Thus, the text of this provision makes explicit that in a threat of injury investigation, the
central question is whether there will be a "change in circumstances" that would cause the dumping to
begin to injure the domestic industry.  Solely as a matter of logic, it would seem necessary, in order to
assess the likelihood that a particular change in circumstances would cause an industry to begin
experiencing present material injury, to know about the condition of the domestic industry at the
outset.  For example, if an industry is increasing its production, sales, employment, etc., and is earninga record level of profits, even if dumped imports are increasing rapidly, presumably it would be more
difficult for an investigating authority to conclude that  it is threatened with imminent injury than if its
production, sales, employment, profits and other indicators are low and/or declining.
7.92 This logic-based conclusion finds explicit support in the plain text of the AD Agreement.  In
particular, the title of Article 3, "Determination of Injury", carries footnote 9 which provides that:
"Under this Agreement, the term 'injury' shall, unless otherwise specified, be taken to
mean material injury to a domestic industry, threat of material injury to a domestic
industry, or material retardation of the establishment of such an industry and shall be
interpreted in accordance with the provisions of this Article." (emphasis added)
In other words, where the unmodified term "injury" appears in the AD Agreement, it encompasses all
forms of injury – present and threatened material injury as well as material retardation of the
establishment of an industry.
7.93 Applying this definition to Article 3.1, it is clear that any injury investigation, whether the
question is present material injury, threat thereof, or material retardation, must "involve an objective
examination of both (a) the volume of the dumped imports and the effect of the dumped imports on
prices in the domestic market for like products, and (b) the consequent impact of these imports on
domestic producers of such products" (emphasis added).  It is in turn Article 3.4 which governs "theexamination of the impact of the dumped imports on the domestic industry".  Thus, in short, the
Article 3.4 factors must be examined in every investigation, no matter which particular manifestation
or form of injury is at issue in a given investigation.
7.94 This indeed is the reasoning applied and the conclusion reached by the panel in Mexico –
Corn Syrup.101  There, the allegation by the United States was that the Mexican investigating authority
                                                     
101 Panel Report, Mexico – Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the
United States ("Mexico – Corn Syrup") , WT/DS132/R and Corr.1, adopted 24 February 2000, paras.7.111-
7.143.WT/DS211/R
Page 28
considered the Article 3.7 factors to the exclusion or near exclusion of the Article 3.4 factors.  The
panel found that:
"The text of the AD Agreement requires consideration of the Article 3.4 factors in a
threat determination.  Article 3.7 sets out additional  factors that must be considered in
a threat case, but does not eliminate the obligation to consider the impact of dumpedimports on the domestic industry in accordance with the requirements of Article 3.4"
(emphasis added)."
102
7.95 Thus, no matter what the initial or final scope of the injury investigation is, the Article 3.4
factors would need to have been examined in either a case of present material injury or of threat of
material injury.  The only difference would have been that the information and argumentation relating
to the Article 3.7 factors would have become less relevant or non-relevant if the basis for the injury
investigation was changed from threat to present material injury.
7.96 It may indeed be the case that an investigatin g authority so clearly misleads interested parties
on the relevance to its investigation of the issues of present material injury and threat, or denies them
opportunities to address these issues, as to provides the basis for a claim of violation of Articles 6.1
and 6.2.  The circumstances of this case fall short of that possibility.  On the basis of the foregoing
considerations, we find that Turkey has not established that Egypt violated Articles 6.1 and 6.2, inrespect of the scope of the injury investigati on and the notice thereof provided to the Turkish
respondents.
4. Claim under Articles 3.5 and 3.1 – Alleged failure to develop specific evidence linking
imports to adverse volume and price effects upon the domestic industry, and consequent
failure to base the finding of a causal link on positive evidence
7.97 Turkey argues that the principal indicator of injury relied upon by Egypt in its affirmative
injury determination was falling prices and profitability in 1998 and 1999, and that the price decline
was attributed to price underselling by imports from Turkey.  According to Turkey, however, the IA
failed to develop "positive evidence" that dumped imports had an effect on domestic prices, or any
impact on the domestic industry.  According to Turk ey, this constituted a violation of the "positive
evidence" requirement of Article 3.1, which in turn meant that Egypt also violated the requirement of
Article 3.5 to demonstrate that the dumped imports were, through the effects of dumping, causing
injury within the meaning of the AD Agreement.
103
7.98 Turkey argues that the specific positive evidence that imports caused domestic prices to fall
would include evidence that purchasers considered Turkish imports to be the price leaders in the
market, evidence of specific sales lost by the domestic industry to Turkish imports, or evidence that
domestic producers dropped their prices, or had to retract planned price increases, because customerscited, in price negotiations with the domestic producers, availability of rebar from Turkey at lower
prices.  According to Turkey, the mere existence of increases in the volume of dumped imports is
insufficient evidence of an injurious impact on the domestic industry, as is the existence of some price
underselling, where the domestic industry is increasing its sales volume and market share.
7.99 Egypt argues that on the basis of the data and information available, the IA determined that
the volume of dumped imports increased over the period and that this had a significant effect on the
price of the domestic rebar, and that the IA also examined the consequent impact on the domestic
producers and found inter alia  that because the industry is sensitive to volume changes, it had to
lower prices to meet the competition from the dumped imports and to retain sales.  Egypt further
                                                     
102 Ibid, para.7.137.
103 Written Response, dated 7 December 2001, to Question 1 to Turkey, of the Written Questions by the
Panel, of 28 November 2001, p.20 – Annex 4-1.WT/DS211/R
Page 29
argues that there is no requirement in any provision of the AD Agreement that the particular kinds of
evidence referred to by Turkey be gathered and analyzed.
7.100  To recall, Article 3.1 provides as follows:
"A determination of injury for purposes of Article VI of GATT 1994 shall be based
on positive evidence and involve an objective examination of both (a) the volume ofthe dumped imports and the effect of the dumped imports on prices in the domestic
market for like products, and (b) the consequent impact of these imports on domestic
producers of such products."
7.101  Article 3.5 provides in relevant part as follows:
"It must be demonstrated that the dumped imports are, through the effects of
dumping, as set forth in paragraphs 2  and 4, causing injury within the meaning of
this Agreement.  The demonstration of a causal relationship between the dumpedimports and the injury to the domestic industry shall be based on an examination of
all relevant evidence before the authorities. … ." (emphasis added)
7.102  We note that neither of the provisions cited above refers to any of the particular kinds of
evidence that Turkey argues should have been gathered and examined, or indeed to any kind or type
of evidence at all.  It is clear that Article 3.1 provides overarching general guidance as to the nature ofthe injury investigation and analysis that must be conducted by an investigating authority.  Article 3.5
makes clear, through its cross-references, that Ar ticles 3.2 and 3.4 are the provisions containing the
specific guidance of the AD Agreement on the examination of the volume and price effects of the
dumped imports, and of the consequent impact of the imports on the domestic industry, respectively.
Thus, any reference in the AD Agreement to the particular kinds of evidence referred to by Turkey inrespect of the volume and price effects of the dumped imports presumably would be found, if
anywhere, in Article 3.2.  This provision contains no such reference, which may explain why Turkey
does not also allege a violation of Article 3.2 in respect of this claim.
7.103  In this connection, while Turkey objects to the nature of the price undercutting analysis
performed by the IA
104, Turkey does not claim that the IA failed entirely to consider whether there
had been price undercutting.  Similarly, while Turkey questions the accuracy of some of the data
concerning the volume of imports that was relied upon by the IA105, Turkey does not challenge the
IA's basic finding that the imports of rebar from Turkey increased in volume.
7.104  Nor is there any indication in the record (and again Turkey makes no such argument before
us) that, during the course of the investigation, the Turkish respondents made any argument that the
IA should consider the sorts of evidence that form the subject of this claim, or themselves offered any
such evidence.  Thus, it is undisputed both that th e IA gathered and analyzed the kinds of information
that are specifically required by the plain language of the AD Agreement, and that the respondents
made no attempt during the course of the investigation to complement or expand that information with
additional sorts of evidence that are not specifica lly referred to by the AD Agreement, but which
Turkey now asserts in this dispute settlement pr oceeding that the IA was obligated to consider.
7.105  In short, we do not believe that there is a basis for us to find a violation of the AD Agreement
in respect of a kind of evidence or analysis not explicitly required or even mentioned by the AD
Agreement, where there is no evidence in the reco rd of the investigation to suggest that such an
analysis was necessary, or that any interested part y pursued the issue during the investigation.  Here
again, this is a situation where the respondents made decisions during the investigation (which they
                                                     
104 Section VII.C.2,  supra.
105 Written Rebuttal of Turkey, p.8-9.WT/DS211/R
Page 30
apparently now regret) not to raise specific arguments in defence of their interests in the context of the
mandatory price effects analysis, the particular details of which are left by the AD Agreement to the
discretion of the investigating authority.  It is not  within our mandate to reverse through the dispute
settlement process the consequences of those respondents' decisions made during the course of the
investigation as to which arguments they would present.
7.106  On the basis of the foregoing considerations, we find that Turkey has not established that
Egypt violated the "positive evidence" requirement of Article 3.1 by virtue of the IA's not developing
certain specific kinds of evidence, nor has Turkey established that, as a consequence, Egypt violated
the requirement of Article 3.5 to demonstrate a cau sal relationship between the dumped imports and
the injury to the domestic industry.
5. Claim under Article 3.5 – Alleged failure to take account of, and attribution to dumped
imports of, the effects of other "known factors" injuring the domestic industry
7.107  Turkey claims that Egypt violated Article 3.5 by failing to take account of, and by attributing
to dumped imports, the effects of other "known factors" that were at the same time injuring the
domestic industry.
7.108  The particular "known factors" identified by Turkey are the same as those identified in
connection with its claim under Article 3.4106), namely:
(a) "The dramatic capacity expansion at the two major Egyptian rebar producers and its
likely temporary effects on their cost structures";
(b) "The effects of the capacity expansions, which started production at the end of 1998,
on competition between the Egyptian producers as they attempted to fill newly
expanded order books";
(c) "Sharpening competition between Al Ezz and Alexandria National as Al Ezz sought
to increase market share by capitalizing on its cost advantages over Alexandria
National";
(d) "Falling prices for steel scrap, the primary raw material input at Al Ezz";
(e) "A sharp contraction in demand in January 1999, the very month in which prices for
rebar fell";
(f) "The effect of comparably priced, fairly traded imports".
We recall, as noted above, Turkey's clarification that factors (b), (c) and arguably (d) are subsumed in
(a) as adverse effects of capacity expansion.107
7.109  Egypt argues that throughout the course of th e investigation, the IA examined all evidence
that was provided by interested parties, including evidence concerning capacity expansion,
competition between domestic producers, falling prices for raw materials, domestic demand, and theeffect of non-dumped imports.  On the basis of th is examination, Egypt argues, the IA found that there
were "no other causes of injury" sufficient to break the causal relationship between the dumped
imports and the injury to the domestic industry.
108
                                                     
106 Section VII.C.1(b), supra.
107 Para.7.50, supra.
108 First Written Submission of Egypt, p.28.WT/DS211/R
Page 31
7.110  Before turning to the substance of this claim, we note that in response to a request from the
Panel for certain documents, Egypt submitted a docu ment which it identified as being part of the
public file of the investigation, and which, according to Egypt, contains some of the detailed analysis
performed by the IA in respect of a number of the "other factors" that it considered during the
investigation.  According to Egypt, this docum ent was available for inspection upon request during
the investigation (27 January 1999-21 October 1999).109  The document contains sections on
"shrinkage of demand", "non-dumped imports", "costs and administrative expenses", and
"competition", in addition to several others.110
7.111  This document was not given to Turkey during the course of the investigation111, (although
Egypt claims that it was in the Public File to which Turkey could have had access during that period),
and Turkey states that it did request information from the Public File during the consultations that
began this dispute, but was informed that as th e investigation was closed, no further access to the
Public File was possible.112
7.112  It is not within our terms of reference to consider issues that arose in the context of dispute
settlement consultations, and therefore we do not pursue that question further.  We do take note,
however, that the published Notice of Initiation113 specifically refers to the public file to which all
interested parties could have access, and we further note that Turkey does not assert that any Turkishrespondents ever sought access to that file during the investigation and was denied such access.
7.113  Turkey considers that the Panel should not rely on the public file document as evidence of the
IA's consideration of certain other factors possibly causing injury.  While Turkey acknowledges, in
the light of the Appellate Body ruling in Thailand – H-Beams  that Egypt can rely on evidence not
referred to in the IA's published reports, it nevertheless maintains that Egypt can rely only ondocuments that were shared with or otherwise made available to the respondents
114.  It is not clear to
us what distinction Turkey is making here, as our reading is that Thailand – H-Beams  addresses and
resolves both of these issues, to the effect that we can take into account the public file document.
7.114  Turning to the substance of the issue raised by th is claim, we first recall the relevant language
of Article 3.5:
"The authorities shall also examine any known factors other than the dumped imports
which at the same time are injuring the domestic industry, and the injuries caused by
these other factors must not be attributed to the dumped imports.  Factors which may
be relevant in this respect include, inter alia , the volume and prices of imports not
sold at dumping prices, contraction in demand or changes in the patterns of
consumption, trade-restrictive practices of and competition between the foreign and
domestic producers, developments in technology and the export performance andproductivity of the domestic industry."
7.115  As this provision makes clear, while it is mandatory to consider "known" factors other than
the dumped imports which at the same time are injuring the domestic industry and to ensure that any
such injury is not attributed to those imports, it also is clear that the particular list of factors contained
in Article 3.5 is illustrative only.  This is indicated by the language preceding this list:  "Factors which
                                                     
109 Exh. EGT-6 and cover note to List of Exhibits attached to the Written Response of Egypt to
Questions of the Panel, dated 12 December 2001.
110 Ibid, p.1-4 and 6.
111 Written Rebuttal Submission of Turkey, p.1.
112 Oral Statement by Turkey during the Second Substantive Meeting of the Panel with the Parties on
25 February 2002.
113 Exh. EGT-7.3, Section 12.
114 Statement by Turkey during the Second Substantive Meeting of the Panel with the Parties on
25 February 2002, Section I.B.WT/DS211/R
Page 32
may be relevant in this respect include , inter alia , …" (emphasis added).  Nor does Turkey argue to
the contrary.  Rather, Turkey argues that the particular factors that it refers to in this dispute were
wholly responsible for any injury suffered by th e Egyptian domestic industry, that these factors were
or should have been "known" to the IA, and that the IA in making its affirmative injury and causation
determination improperly attributed the injury caused by the other factors to the dumped imports.
7.116  We start by considering whether, as a factual matter, Turkey is correct that the IA failed to
examine the "other" factors identified by Turkey in th is dispute.  Turning to the first of these factors,
capacity expansion, we note that both the IA's Essential Facts and Conclusions Report115 and the
Final Report116 mention the fact of the industry's capacity expansion, although not its magnitude, and
states that the industry did not reduce production to meet import competition, but rather reduced its
prices to maintain capacity utilisation, and to try to cover its costs.  The reports then conclude that
there was "no effect" on capacity utilisation (i.e., that there was no change in capacity utilisation).Thus, it appears that the IA found the industry's capacity expansion to be a neutral factor in its injury
and causation analysis.  Moreover, we note that while the issue of the industry's capacity expansion
was raised by certain respondents during the investigation, the only detailed arguments that were
presented in this regard, which were in the submission  on threat of material injury of Habas, Diler and
Colakoglu, were to the effect that even after the industry's capacity expansion, the industry hadinsufficient  capacity to meet domestic demand.
117  The only other reference by any respondent to the
capacity expansion, which can be found in the Turkish Government's comments on the Essential
Facts and Conclusions Report , consists of a simple assertion to the effect that the new investments
made by the Egyptian producers were largely responsible for the decline in those producers' profits
and return on investment.118
7.117  Concerning Turkey's argument that the capacity expansion would have had a large effect on
the industry's costs of production, which should have been pursued by the IA during the investigation,
we note that the data on the industry's costs, as contained in the Confidential Injury Analysis , the
source for the data referred to in the IA's Essential Facts and Conclusions Report  and  its Final
Report , shows in fact that unit costs of production declined consistently over the period of
investigation.  Thus, the record evidence does not seem to bear out factually the hypothesis posed by
Turkey.119
7.118  In respect of the decline in scrap prices, in its Final Report , the IA acknowledges the
arguments made on this point during the investigati on, but implies that one comment is illogical and
notes that the other is not supported by the evidence.  In particular, the Government of Turkey stated
in its comments to the IA on the Essential Facts and Conclusions Report  that the IA had failed to
comply with the requirement to properly analyze known factors other than imports because it did not:
" … take into consideration decreasing international market prices of scrap in 1998,
while establishing a causal relationship between the domestic market prices in Egypt
and the export prices of goods originating in Turkey.  In fact, as the prices of scrap –
                                                     
115  Ibid,  Section 4.3.2.4 and 4.5.4.
116 Ibid,  Section 4.3.2.2, 4.3.2.3 and 4.6.
117 Exh. TUR-20, p. 9.  The submission refers to, and attaches, secondary source documents reporting
that demand for steel in Egypt was growing rapidly due to a boom in the construction industry, and that the
Egyptian market was "growing ahead of supply", such that imports were filling an "otherwise-unfilled demand".
118 Exh. TUR-30, Section 4.
119 Upon receiving the Confidential Injury Analysis , Turkey raised the further argument that the
industry's financing cost had increased at the time of the capacity expansion, and that this increase was what wasresponsible for the industry's loss of profits  - See Written Rebuttal of Turkey, p23-24.  As noted in the
discussion of scrap prices in paragraphs, infra , however, unit revenues declined significantly between 1997 and
first quarter 1999, particularly between 1998 and first quarter 1999, indeed by more than the increase infinancing costs.  Thus, we believe that an objective and unbiased investigating author ity could have reached the
conclusion reached by the Egyptian IA in respect of these trends.WT/DS211/R
Page 33
which establishes the majority of the rebar costs – decreased so did the prices of
rebars in the Egyptian market, as in most of other countries.
The decline in domestic producers' profits and return on investment cannot be related
to Turkish exports, either.  Other than the decrease of scrap prices , this decline can
only be associated with the new investments made by the Egyptian producer in therecent years, which ITPD mentioned in paragraph 4.3.2.4 of the Report."
120 (emphasis
added)
7.119  Similarly, Habas, Diler and Colakoglu argue in their comments on the Essential Facts and
Conclusions Report  that scrap prices were declining and the pricing in Egypt for rebar simply
reflected the drop in input prices.
7.120  In the Final Report , the IA notes the first comment that "loss of profits were due to the
decrease in scrap prices", and notes that:
"Normally, a decrease in the price of a raw material would increase profits.  However,
in this case, the domestic producers necessarily had to reduce prices so as to meet
import competition.  Thus, the loss of profits were found to be cause [sic] by meeting
the price competition rather than due to the reduction in scrap prices  Further, the
amount of decrease in prices was greater than the amount of decrease of scrapprices."
121
7.121  We note that the data on the industry's unit costs and unit revenues contained in the
Confidential Injury Analysis  – which was the source for the data reflected in the Essential Facts and
Conclusions Report and the Final Report  – show the pattern alluded to by the IA in the above
passage.  In particular, unit revenues and unit costs declined over the period of investigation,particularly at the end thereof, but the decline in un it revenues outpaced that in unit costs, resulting in
a reduction in gross profits.  Selling and administrative costs also declined, but not enough to offset
the reduction in gross profit, meaning that profit before interest expense also declined.  Thus, the IA's
description in its reports of the trends in costs versus rebar prices is consistent with the financial data
on the industry.
7.122  Concerning the effects of intra-industry competition, Turkey's argument appears to be
somewhat inconsistent, in that Turkey seems to be arguing both that the new capacity would have
brought about cost increases at both domestic producers that would have increased their price
competition with each other, and that Al Ezz was the lower-cost producer and thus was simply out-
competing Alexandria National.  While this factor doe s not seem to be explicitly referred to in the IA
published reports, it is mentioned in the document identified as being from the Public File of the
investigation, and in that context the IA notes that there was virtually no difference in the pricescharged by the two companies.  Moreover, it is not clear to us which data in the Confidential Injury
Analysis  would necessarily signify "the effects of intra-industry competition" as such.  Indeed, as
noted above, overall the industry's costs declined steadily over the period of investigation, and yet
industry profits declined as unit revenues declined.  Here we recall that, pursuant to the AD
Agreement, the IA must evaluate the condition of the domestic industry overall. 
122
7.123  Concerning the alleged sharp contraction in demand in January 1999, which according to
Turkey exactly coincided with falling rebar prices, we note that the IA considered the first calendar
quarter of 1999 as a whole, rather than month-by-month.  There is no requirement the AD Agreement
concerning how the time periods within a period of investigation should be broken out analytically.
                                                     
120 Exh. TUR-30, Section 4.
121 Exh. TUR-16, Final Report , para.4.3.5.3.
122 Article 3 of the AD Agreement.WT/DS211/R
Page 34
Given that economic data frequently are prone to short-term fluctuations, in our view it could be
imprudent for investigating authorities to base sign ificant aspects of their findings and conclusions on
data for extremely short periods.  Indeed, this seems to have been the point of view, during the
investigation, of the respondents that made a separate  threat of injury submission.  In particular, in
that submission's discussion of "other economic factors", in respect of domestic rebar sales data, theserespondents restated published government data on a "three-month rolling average basis (to smooth
out some of the seasonal fluctuation, such as the annual dip in December) …"
123.  In addition, as noted
above, these respondents' general argument, made in their submission of 20 May 1999 (i.e., four
months after the asserted decline in demand) was that rebar demand in Egypt was "booming".  The
data in the Confidential Injury Analysis  show that demand in the first quarter of 1999 was running at a
level comparable to that in 1998, and considerably higher than that in 1996 and 1997, and that at the
same time imports from Turkey and domestic sales were increasing.  Furthermore, the document fromthe Public File shows that the IA did examine whether there had been a contraction in demand during
the period of investigation and concluded on the basis of the record evidence that there had not been.
Thus, in our view, an unbiased and objective investigating authority could have reached the
conclusion that was reached by the IA in the rebar investigation on the basis of the facts of record on
this issue.
7.124  Finally, concerning the effects of "comparably-priced, fairly-traded imports", Turkey argues
that the imports from Saudi Arabia and Libya were similar in volume, and comparable in price, to the
imports from Turkey.  Turkey asserts that given this situation, there was no basis for the IA to
conclude that the imports from Turkey were causing injury while those from Saudi Arabia and Libya
were not.  The relevant passage from the Final Report  states:
"Market share of the domestic rebar industry declined in 1998 and increased in the
first quarter of 1999 due to reduction in the price to combat dumped prices.  All of
this had a negative impact on the profitability of the domestic producers.  The market
share of third country imports declined and Turkish rebar imports replaced the market
share of third country imports."
124
The import data contained in the IA's published reports appear to be consistent with the above
description.  In particular, the volume of imports from third countries, taken as a whole, declined from
roughly 700,000 tons per year in 1996-1998 to 43,400 tons in the first quarter of 1999 (extrapolated to
an annual level of roughly 174,000 tons), while the imports from Turkey, which had dropped from
145,000 tons in 1996 to zero in 1997, rebounded to 210,000 tons in 1998 and stood at 73,600 tons in
the first quarter of 1999, an annual extrapolated rate of 294,000 tons.  Thus, by the end of the period
of investigation, the volume of dumped imports wa s considerably greater than the total volume of
imports from all other sources.  Given these statistics, and in particular the fact that as of the end of
the period of investigation, the imports from Turkey had risen to a significantly higher level than the
imports from all other countries combined, which were sharply declining, the factual basis for
Turkey's argument is not clear to us.  Furthermore, the document from the Public File indicates that
the IA did consider, and rejected, the more detailed arguments concerning the alleged effects of theimports from Saudi Arabia and Libya that had been raised by the three respondents in their threat of
injury submission.
125
7.125  To summarize, we have taken careful note of the factors asserted by Turkey to have been
"other known factors" in the sense of Article 3.5.  We also have taken note of the discussions of those
factors by the IA in the investigation in its published reports and in the document from the public file,
and compared those discussions with the related underlying data of record.  As a factual matter, as
discussed above, we find that the IA did in fact explicitly discuss in its published reports most of the
                                                     
123 Exh. TUR-18,  p.8.
124 Ibid,  Section 4.3.4.5.
125 Exh. TUR-18.WT/DS211/R
Page 35
"other factors" identified by Turkey, a number of which are identified by Turkey as being essentially
the same, and covered the remainder of these factors (namely possible effects of intra-industry
competition and of any contraction in demand) in the document from the Public File.  On the basis of
the data of record, we find no evidence that the IA's consideration of those factors, including its
conclusions about them, were biased or not objective.
7.126  It is clear that Turkey has reached different conclusions than the IA concerning certain
evidence of record, and Turkey invites us to do the same.  We recall, however, that we are bound by
the requirements of Articles 17.5 and 17.6 of the AD Agreement to consider, on the basis of the
evidence that was before the investigating au thority during the investigation, whether the
establishment of the facts in respect of any factor was improper, and whether the evaluation of any
factor was biased or non-objective.  That is, we are precluded from basing our findings on our own de
novo  review of the record evidence, and our own c onclusions about each factor and the existence of
injury and causation overall.  We are, rather, to consider whether the conclusions reached in the
investigation could  have been reached by an objective and unbiased investigating authority on the
basis of its analysis of the evidence of record at the time of the determination.  For the reasons
discussed above, we find that this standard has been met, and thus that Turkey has not established that
the IA's evaluation of the possible causation of injury by factors other than the dumped imports wasinconsistent with Article 3.5.
6. Claim under Articles 3.5 and 3.1 – Alleged failure to demonstrate that the imports
caused injury "through the effects of dumping"
7.127  Turkey claims that because the period of investigation (POI) for dumping ended on
31 December 1998, and most of the injury found by the IA occurred in the first quarter of 1999, theIA failed to demonstrate that dumping and injury occurred at the same point in time such that there
was a link between the imports that were specifically found to be dumped and the injury found,
violating Articles 3.5 and 3.1.
126  In particular, according to Turkey the largest price and profitability
declines occurred in first quarter 1999, but the IA made no finding that imports were sold at less than
normal value during that period, nor is there any evidence linking the effect of the dumped imports onprices in the domestic market for like product, or linking these imports to the effects on domestic
producers.  Turkey further argues that by failing to link the imports in 1998 to the injury in 1999, the
IA failed to demonstrate "that the dumped imports are, through the effects of dumping, … causing
injury within the meaning of this Agreement"
127, in violation of Article 3.5.
7.128  We turn first to the factual basis for this claim by Turkey.  In particular, Turkey's argument
seems largely to rest on its view that there was a differentiation or demarcation as to the nature or
extent of the injury found by the IA to exist in 1998 (the period of investigation for the dumpinginvestigation) as compared to first quarter 1999 (the final portion of the period of investigation for the
injury investigation).  Our review of the Final Report , however, shows no hint of such a
differentiation.  Rather, the Report refers to declines in various indicators in both 1998 and 1999
without reference to any particular qualitative change or shift from the one period to the next.  We
note that the IA found present material injury during the period of investigation on the basis of thosedeclines.  Therefore, there is substantial simultan eity in the period of investigation for dumping and
the period during which injury was found.
128
7.129  Moreover, Turkey's approach rests on the quite artificial assumption that the market instantly
absorbs, and reacts to, imports the moment they enter the territory of the importing country.  Such an
                                                     
126 Written Response, dated 7 December 2001, of Turkey to Question 1 to Turkey of the Written
Questions by the Panel , of 28 November 2001, p.24 – Annex 4-1.
127 Ibid, p.24.
128 See Recommendation Concerning the Periods of Data Collection for Anti-Dumping Investigations ,
G/ADP/6, adopted 5 May 2000 by the Committee on Anti-Dumping Practices.WT/DS211/R
Page 36
assumption implicitly rests on the existence of so-calle d "perfect information" in the market (i.e., that
all actors in the market are instantly aware of all market signals).  Turkey did not establish a prima
facie  case that such a condition existed in the Egyptian market for rebar during the period covered by
the investigation.
7.130  In addition, neither of the articles cited in this claim, nor any other provision of the AD
Agreement, contains any specific rule as to the time periods to be covered by the injury or dumping
investigations, or any overlap of those time periods.
7.131  In fact, the only provisions that provide guidance as to how the price effects and effects on the
domestic industry of the dumped imports are to be ga uged are (as cross-referenced in Article 3.5),
Articles 3.2 (volume and price effects of dumped imports), and Article 3.4 (impact of the dumped
imports on the domestic industry).  Neither of these provisions specifies particular time periods for
these analyses.  (We note that Turkey's specific claims in respect of the price effects analysis and theanalysis of the effects of the dumped imports on the domestic industry are addressed in Sections
VII.C.4 andVII.C.5, supra .)
7.132  For the foregoing reasons, we find that Turkey has not established that the IA was obligated
by Articles 3.1 and 3.5 to perform an analysis and make a finding of the type asserted by Turkey in
respect of whether the imports caused injury "through the effects of dumping".  We thus find thatTurkey has not established that Egypt violated Articles 3.5 and 3.1 in this respect.
D. C
LAIMS RELATING TO THE DUMPING INVESTIGATION – "FACTS AVAILABLE "
1. Factual background
7.133  The dumping-related claims in this dispute all turn on one key event in the dumping
investigation, namely a request sent by the IA to all respondents on 19 August 1999129 ("the
19 August request") for certain cost-related information.  The chronology of events was that in its
questionnaires sent to foreign manufacturers and exporters in late January or early February 1999, the
IA requested certain information pertaining to the cost of producing rebar.130  In June 1999,
subsequent to receiving the questionnaire responses, the IA conducted on-the-spot verifications at the
respondents' premises in Turkey.  The verifications covered only the price data, and not the cost data,reported in those responses.  Then on 19 August 1999, the IA sent each of the respondents that had
submitted a questionnaire response
131 a letter indicating that the IA had certain concerns about the
accuracy of the cost data reported in the questionnaire responses, in particular about whether the cost
data fully reflected the effects of the hyperinflation then prevailing in Turkey.  The IA informed the
respondents that it therefore intended to adjust the reported costs to reflect the monthly rate of
inflation, and to perform the profitability test on the basis of the adjusted costs, unless the respondents
provided, by 1 September 1999 (i.e., 13 days later), certain specified additional cost-relatedinformation and explanations.  The respondents all requested extensions of time, of varying lengths, to
respond.  In response to these requests, the IA extended the deadline for all of the respondents by
14 days, i.e., to 15 September 1999.  No follow-up or other requests for further extensions were made
by any respondent.
                                                     
129 Exh. TUR-11.
130 Exh. TUR-3.
131 One Turkish respondent, Ekinciler, did not respon d to the questionnaire and thus did not receive a
cost-related letter from the IA on 19 August 1999.WT/DS211/R
Page 37
2. Claim under Article 17.6( I)
7.134  Turkey claims that the IA's determination of the facts in the rebar investigation was not
"proper", nor was its evaluation of the facts "objective" and "unbiased" within the meaning of
Article 17.6(i).
7.135  We recall that the full text of Article 17.6(i) of the AD Agreement provides:
"[I]n its assessment of the facts of the matter, the panel shall determine whether the
authorities' establishment of the facts was proper and whether their evaluation of
those facts was unbiased and objective.  If the establishment of the facts was proper
and the evaluation was unbiased and objective, even though the panel might have
reached a different conclusion, the evaluation shall not be overturned."
7.136  Turkey's specific claim in this context is that the IA's findings that the respondents' cost of
production did not include the effects of hyperinflation in Turkey, which was put by the IA at 5 percent per month, were speculative and contrary to all the facts on the record.
132  Turkey asserts that:
"The only support for the Investigation Authority's supposition in this regard is the
undisputed fact that Turkey's economy was experiencing high inflation during the
period of investigation.  However, hyperinflation in the economy as a whole certainly
does not mean that each sector and product group is experiencing inflation at thesame rate.  This is particularly true of industries, like the Turkish rebar industry, that
import most of their raw materials and where the raw material input is a commodity
product subject to significant swings in price.
…
The Investigating Authority's findings that respondents' costs did not include the
effects of inflation, which the Investigating Authority put at 5 % per month, were
contrary to all of the facts on the record.  For this reason, the Investigating Authority's
determination of the fact was not "proper," nor was its evaluation of the facts
"objective" and "unbiased" within the meaning of Article 17.6(i)."
133
7.137  Egypt contends that Article 17.6(i) of the AD Agreement governs the standard of review to be
applied by a panel when considering whether the Investigating Authority's establishment of the facts
was proper and the evaluation unbiased and objective.  Egypt further asserts that Article 17.6(i) does
not govern the rights and obligations of Members under the AD Agreement.  Egypt also contends that
this claim was not cited in the Request for Establishment of a Panel134 and as a consequence, this
claim is not within the terms of reference of the Panel and must be rejected.135
7.138  Turkey contests Egypt's view by referring to the Appellate Body finding in US – Hot-Rolled
Steel where it states that Article 17.6(i) imposes certain substantive obligations upon investigating
authorities:
"Article 17.6(i) of the Anti-Dumping Agreement also states that the panel is to
determine, first, whether the investigating authorities "establishment of the facts was
proper" and, second, whether the authorities' " evaluation of the facts was unbiased
and objective."  Although the text of Article 17.6(i) is couched in terms of an
                                                     
132  Written Response, dated 7 December 2001, of Turkey to Question 1 to Turkey of the Written
Questions by the Panel , of 28 November 2001, p.30 – Annex 4-1.
133  Ibid, p.31.
134 WT/DS211/2, as amended.
135 Second Written Submission of Egypt, p.14.WT/DS211/R
Page 38
obligation on panels – panels "shall" make these determinations – the provision, at the
same time, in effect defines when investigating authorities can be considered to have
acted consistently with the Anti-Dumping Agreement in the course of their
"establishment" and "evaluation" of the relevant facts.  In other words, Article 17.6(i)
sets forth the appropriate standard to be applied by panels in examining the WTOconsistency of the investigating authorities' establishment and evaluation of the facts
under other provisions of the Anti-Dumping Agreement."
136
7.139  Turkey also refers to Claim 1 in its Request for Establishment of a Panel where it stated that
"the Egyptian investigative authority … rendered determinations of injury and dumping in its
investigation without proper establishment of the facts  and based on an evaluation of the facts that
was neither unbiased nor objective " and to Claim 9 where it stated that "[t]he factual basis cited by the
[Investigating Authority] for seeking large amounts of supplemental cost information late in the anti-dumping proceeding were unfounded … .  The [Investigating Authority's] subsequent decision to rely
on 'facts available' was based on an improper determination of the facts  in the investigation and on an
evaluation of the facts that was neither unbiased nor objective .  Thus, Turkey asserts that contrary to
Egypt's views, Turkey put a violation of Article 17.6(i) squarely in issue in its request for this
Panel"
137 and that the claim is properly before us.
7.140  Turkey further argues that:
"It is not clear, under the Agreement, that Turkey must allege violation of a separate
substantive obligation under the Agreement in order to make this claim.  Turkey
believes there is a violation of the Agreement if, in reaching its final determination on
any issue, the investigating authorities' esta blishment of the facts is improper or its
evaluation of the facts fails to meet the test of objectivity and lack of bias.
However, to the extent that the panel considers that it may only review a violation of
Article 17.6(i) in the context of a separate substantive claim, we note that in
Section II.D of the restatement of our claims, where reference to Article 17.6(i) is
made, Turkey's claim is that Egypt's decision to apply "facts available" was aviolation of both Article 6.8 and Article 17.6(i) of the Agreement because that
decision was based on an improper determination of the facts and upon an evaluation
of the facts that was neither unbiased nor objective.  Thus to the extent that the Panel
considers that Article 17.6(i) merely sets forth a standard of review for Panel
consideration of other substantive violations, then we invite the Panel to consider this
claim in connection with our claimed violation of Article 6.8."
138
7.141  Turning first to whether a claim of violation of Article 17.6(i) is properly before us, we note
first that Article 17.6(i) is not listed in Turkey's Request for the Establishment of a Panel139, either in
the list of Articles allegedly violated, or in Claims 1 or 9, as referred to by Turkey140, as an article of
the AD Agreement which was alleged by Turkey to be violated by Egypt.  While certain language
similar to that in Article 17.6(i) is contained in certain paragraphs of the Request for Establishment of
a Panel, that provision is never mentioned.  It is well-established that in WTO dispute settlement, it isalways necessary, at a minimum, for the particular Articles of an agreement which are the subject of
                                                     
136 Statement by Turkey at the Second Substantive Meeting of the Panel with the Parties, p.12.
137  Ibid , p.13.
138 R e s p o n s e  o f  T u r k e y  t o  Q u e s t i o n  2  t o  T u r k e y  o f  t h e  Written Questions by the Panel , dated
14 March 2002 – Annex 8-1.
139 WT/DS211/2, as amended.
140 Written Response, dated 7 December 2001, to Question 1 to Turkey of the Written Questions by the
Panel , of 28 November 2002 – Annex 4-1.WT/DS211/R
Page 39
any claim to be cited explicitly in the request for establishment of a panel.141  Given the absence of
any such explicit citation, we dismiss this claim as being outside our terms of reference.
7.142  Furthermore, while, given our dismissal of this claim on procedural grounds, we need not rule
on whether a violation of Article 17.6(i) can be the su bject of a claim by a party in a dispute, we have
considerable doubts in this regard.  What is clear nevertheless, and in any case, is that Article 17.6(i)lays down the standard which a panel has to apply  in examining the matter referred to it in terms of
Article 17.5 of the AD Agreement.  As such, we are of course bound by it in our consideration of the
claims in this dispute.  
3. Claim under Article 6.8 and Annex II, paragraphs 5 and 6  - Resort to "facts available"
7.143  Turkey claims that "[b]ecause the basis for initially questioning and then rejecting Turkish
respondents' costs was unfounded", the IA’s resort to facts available was unjustified.  According to
Turkey, the Turkish respondents provided all 'necessary information' and certainly did not 'impede'the investigation".
142  Turkey argues that the rationale for requesting the additional cost data – namely
that the originally-reported data did not appear to reflect the high inflation the prevailing in Turkey –
was purely speculative, in that hyperinflation in an economy does not necessarily mean that each
sector or group experiences inflation at the same rate, in particular industries like the rebar industry
which import most of their raw materials and where those materials are commodity products subjectto significant swings in price.  According to Turkey, the respondents demonstrated in their responses
to the IA's 19 August request for cost information that there was nothing "missing" from the
respondents' reported costs.  Moreover, Turkey states, the Government of Turkey had provided
official inflation statistics that showed that inflation did not increase by 5 per cent per month in 1998,
but that in a number of months, inflation did not exceed 2.5 per cent.  Thus, according to Turkey,because the basis for requesting and then rejecting the cost data was factually unfounded, the IA's
resort to "facts available" was unjustified under Article 6.8.  Turkey further claims that resort to "facts
available" was inconsistent with Annex II, paragraphs 5 and 6, in that the respondents had acted to the
best of their ability, in that the IA had failed to inform certain respondents that their information was
being rejected, and had failed to give them an opportunity to provide further explanations.
143
7.144  Egypt argues, first, that Turkey is requesting the Panel to perform a de novo review of the
evidence that was before the IA, in that, according to Egypt, Turkey's arguments essentially reproduce
those made by the respondents during the investigation in respect of cost of production and
hyperinflation.  Egypt states that the standard of review set forth in Article 17.6(i) does not allow
panels to engage in such de novo review.  According to Egypt, the Panel must limit its review of the
decision to rely in part on "facts available" to whether the facts were properly established and whether
the conclusions reached were unbiased and objective.  Further, Egypt argues, the decision to partiallyuse "facts available" was in compliance with Arti cle 6.8 and Annex II of the AD Agreement.  In this
                                                     
141 See, Appellate Body Report, European Communities – Regime for the Importation, Sale and
Distribution of Bananas ("EC – Bananas III"), WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II,
591, para.143, Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy
products ("Korea – Dairy"), WT/DS98/AB/R, adopted 12 January 2000, para.124, and European Communities
– Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India ("EC – Bed Linen") , WT//DS141/R,
adopted 12 March 2001, as modified by the Appellate Body, p.9-10.
142 Turkey's Written response of Turkey, dated 7 December 2001, to Question 1 of the Written
Questions by the Panel , of 28 November 2001, p.31 – Annex 4-1.
143 Turkey also claims that the IA's resort to facts available was inconsistent with Articles 2.4, 2.2.1.1,
and 2.2.2 of the Anti-Dumping Agreement, and with Article X:3 of the GATT.  These claims are addressedseparately, in Sections VII.D.4 and VII.B.4.  In its Requ est for Establishment of a Panel, Turkey also refers to
alleged violations of paragraphs 3 and 7 of Annex II in the context of the IA's resort to facts available.  Turkey's
arguments in its submissions indicate, however, that the allegations of violation of these provisions are inconnection with the information used as facts available, and not with the resort to "facts available" as such.These claims are addressed in Sections VII.D.7-VII.D.9. infra .WT/DS211/R
Page 40
regard, Egypt argues that the cost data as originally reported were incomplete and unusable, and that
the respondents failed to submit the additional information, in particular supporting evidence and
reconciliation sheets, requested by the IA on 19 August, and that in addition, three of them
subsequently refused to submit any further informa tion when they were informed that their responses
to the 19 August request were deficient.  Finally, Egypt argues, the data and allegations presented bythe respondents concerning costs were contradicted by the evidence on the record.
(a) Article 6.8 and Annex II
7.145  Article 6.8 of the AD Agreement governs the use of "facts available" by an investigating
authority and provides:
"In cases in which any interested party refuses access to, or otherwise does not provide,
necessary information within a reasonable period or significantly impedes the
investigation, preliminary and final determinations, affirmative or negative, may be madeon the basis of the facts available.  The provisions of Annex II shall be observed in the
application of this paragraph."
7.146  Article 6.8 therefore addresses the dilemma in which investigating authorities might find
themselves - they must base their calculations of normal value and export price on some data, but the
necessary information may not have been submitted.  Article 6.8 identifies the circumstances in whichan IA may overcome this lack of necessary information by relying on facts which are otherwise
available to the investigating authority.
7.147  It is clear to us that according to the wordin g of Article 6.8, an investigating authority may
disregard the primary source of information and resort to the facts available only under the specific
conditions of Article 6.8.  An IA may therefore resort to "facts available" only where a party:
(i) refuses access to necessary information; (ii) otherwise does not provide necessary information
within a reasonable period; or (iii) significantly impedes the investigation.
7.148  Egypt does not assert, nor do we find an indication in the record, that the IA considered that
any of the Turkish respondents "significantly impede[d]" the investigation.  In fact, Egypt states that
its reasons for resort to facts available in respect of Habas, Diler and Colakoglu were that thesecompanies "refused access to necessary information" and "failed to provide necessary information",
and that in respect of Icdas and IDC, the reason was that these companies "otherwise failed to provide
necessary information".
144  We will thus have to consider whether, as indicated by Egypt, the Turkish
respondents refused access to necessary information, and/or failed to provide necessary information.
7.149  The IA explained its decision to resort to facts available in paragraph 1.6.5 of the Final
Report , as follows:
"Because parties did not provide all the data required, the Investigating Authority
decided to proceed with the investigation procedures and calculate margins of
dumping in accordance with Article 6.8 of the Anti-dumping Agreement which
provides that:
[quotation of Article 6.8 omitted]
Article 27 of the [Egyptian Anti-Dumping] Regulation provides that:
                                                     
144 Written Response, dated 7 December 2001, to Question 9 to Egypt of the Written Questions by the
Panel , of 28 November 2001 – Annex 4-2.WT/DS211/R
Page 41
'In case of absence of the data required, failure to submit data within the time-limit or
non-cooperation with the Investigating Authority, the Investigating Authority may
proceed in the investigation procedures and come to conclusions according to the best
information available …'
And Article 35 of the Regulation states that:'In cases where there is no sufficient data to determine the export price or the normal
value, the Investigating Authority may determine them on the basis of the best
information available'."
145
7.150  These statements appear to confirm that the IA based its decision to resort to "facts available"
in terms of Article 6.8 on respondents' "not provid[i ng] … necessary" information.  We therefore start
our analysis by examining the concept of "necessary information" in the sense of Article 6.8, and then
consider whether necessary information in that sense was requested by the IA, but not provided by therespondents.
7.151  Article 6.8 refers to "necessary" information, and not to "required" or "requested"
information.  As this provision itself does not define the concept of "necessary" information, we
consider whether there is guidance on this point anywhere else in the AD Agreement, in particular in
Annex II, given Article 6.8's explicit cross-reference to it.
7.152  In this regard, we find significant the specific wording of that cross-reference:  "[t]he
provisions of Annex II shall  be observed in the application of this paragraph " (emphasis added).  In
other words, the reference to "this paragraph" indicates that Annex II applies to Article 6.8 in its
entirety, and thus contains certain substantive parameters for the application of the individual
elements of that article.  The phrase "shall be observed" indicates that these parameters, which addressboth when facts available can be used, and what information can be used as facts available, must be
followed.
7.153  Our view of the relationship of Annex II to Article 6.8 is consistent with that of the Appellate
Body in United States – Hot-Rolled Steel .  In that case, the Appellate Body stated that Annex II is
"incorporated by reference" into Article 6.8,
146 i.e., that it forms part of Article 6.8.  In similar vein,
the Appellate Body also referred to the "collective requirements" of Article 6.8 and certain provisions
of Annex II.147  The panel in Argentina – Ceramic Tiles  came to a similar conclusion.148
7.154  It is clear that the provisions of Annex II that address what information can be used as facts
available (which, along with the other provisions of Annex II, "shall be observed") have to do with
ensuring the reliability of the information used by the investigating authority.  This view may further
be confirmed, as foreseen in Article 32 of the Vienna Convention on the Law of Treaties149, by the
negotiating history of Annex II.  In particular, this Annex was originally developed by the TokyoRound Committee on Anti-Dumping Practices, which adopted it on 8 May 1984 as a
                                                     
145 Exh. TUR-16, Final Report , para.1.6.5.
146 Appellate Body Report, US – Hot-Rolled Steel, para.75.
147 Ibid, para.82.
148 Panel Report, Argentina – Definitive Anti-Dumping Measures on Imports of Ceramic Floor Tiles
from Italy ("Argentina – Ceramic Tiles"), WT/DS189/R, adopted 5 November 2001.
149Art. 32 of the Vienna Convention of the Law of Treaties provides:
"Recourse may be had to supplementary means of interpretation, including the preparatorywork of the treaty and the circumstances of its conclusion, in order to confirm the meaning
resulting from the application of article 31, or to determine the meaning when the
interpretation according to article 31:
(a) leaves the meaning ambiguous or obscure; or(b) leads to a result which is manifestly absurd or unreasonable".WT/DS211/R
Page 42
"Recommendation Concerning Best Information Available in Terms of Article 6:8".150  D u r i n g  t h e
Uruguay Round negotiations, the substantive provisions of the original recommendation were
incorporated with almost no changes as Annex II to the AD Agreement.  A preambular paragraph to
the original recommendation, which was not retained when Annex II was created, in our view,
provides some insight into the intentions of the drafters concerning its application.  This paragraphreads as follows:
"The authorities of the importing country have a right and an obligation to make
decisions on the basis of the best information available during the investigation from
whatever source, even where evidence has been supplied by the interested party.  The
Anti-Dumping Code recognizes the right of the importing country to base findings on
the facts available when any interested party refuses access to or does not provide the
necessary information within a reasonable period, or significantly impedes theinvestigation (Article 6:8).  However, all reasonable steps should be taken by the
authorities of the importing countries to avoid the use of information from unreliable
sources."
To us, this preambular language conveys that the full package of provisions in the recommendation,
applicable in implementing Article 6:8 of the Tokyo Round Anti-Dumping Code, was intended,inter alia,  to ensure that in using facts available (i.e, in applying Article 6:8), information from
unreliable sources would be avoided.
7.155  On the question of the "necessary" information, reading Article 6.8 in conjunction with
Annex II, paragraph 1, it is apparent that it is left to the discretion of an investigating authority, in the
first instance, to determine what information it d eems necessary for the conduct of its investigation
(for calculations, analysis, etc.), as the authority is charged by paragraph 1 to "specify … the
information required from any interested party".  This paragraph also sets forth rules to be followed
by the authority, in particular that it must specify the required information "in detail", "as soon as
possible after the initiation of the investigation", and that it also must specify "the manner in whichthat information should be structured by the interested party in its response".  Thus, there is a clear
burden on the authority to be both prompt and precise in identifying the information that it needs from
a given interested party.  In addition, paragraph 1 refers to a "reasonable" time-period for providing
requested information.  We note that in this dispute, we have resolved in connection with other claims
Turkey's allegations that the IA's requests for cost information were not sufficiently prompt or precise,
and that insufficient time was allowed for responding.
151  Thus, we do not consider these issues
further here.
7.156  Having concluded that, subject to the requirements of Annex II, paragraph 1, it is left to the
discretion of the investigating authority to specify  what information is "necessary" in the sense of
Article 6.8, we now consider what provisions of Annex II are relevant in respect of determinations
that an interested party has "refused access to" or "otherwise has failed to provide" such information.
In terms of the issues raised in the present claim, we find that two of the key such provisions areparagraphs 3 and 5 of Annex II.
7.157  Annex II, paragraph 3 provides:
"All information which is verifiable, which is appropriately submitted so that it can
be used in the investigation without undue difficulties, which is supplied in a timely
fashion, and, where applicable, which is supplied in a medium or computer languagerequested by the authorities, should be taken into account when determinations are
made.  If a party does not respond in the preferred medium or computer language but
                                                     
150 ADP/21.
151 See, Sections VII.D.5, VII.D.6 and VII.E.1, infra.WT/DS211/R
Page 43
the authorities find that the circumstances set out in paragraph 2 have been satisfied,
the failure to respond in the preferred medium or computer language should not be
considered to significantly impede the investigation."
7.158  Annex II, paragraph 5 provides:
"Even though the information provided may not be ideal in all respects, this should
not justify the authorities from disregarding it, provided the interested party has acted
to the best of its ability."
7.159  These two paragraphs together thus provide key elements of the substantive basis for an IA to
determine whether it can justify rejecting responden ts’ information and resorting to facts available in
respect of some item, or items, of information, or whether instead, it must rely on the information
submitted by respondents "when determinations are made".  Some of the elements referred to in these
paragraphs have to do with the inherent quality of the information itself, and some have to do with thenature and quality of the interested party's participation in the IA's information-gathering process.
Where all of the mentioned elements are satisfied, resort to facts available is not justified under
Article 6.8.
7.160  We consider that in the present dispute, the determining factor in the IA's decision to resort to
facts available, and thus the central aspect of Turkey's claim in respect of this decision, is the"verifiability", in the sense of paragraph 3, of th e cost information submitted by the respondents, and
note in this regard Turkey’s objection to what it sees as the IA’s conducting a “mail-order
verification”.
152  That is, there seems to be no issue in respect of appropriateness of the manner in
which the information was submitted or whether thereby using it would involve undue difficulties, nor
is there an issue in respect of the medium or computer language.  We note that, in regard to the qualityof the information, paragraph 5 provides that information that may not be “ideal in all respects”
nevertheless should be used provided the submitter has acted to the best of its ability.  We address
Turkey’s claim in respect of the language “to the best of its ability” in paras. 7.239, et seq. ,  infra , and
focus here rather on the relationship of the phrase “not ... ideal in all respects” to the concept of
“verifiability” in paragraph 3.
7.161  As we have noted, paragraphs 3 and 5, in addition to some of the other provisions of
Annex II, have to do with assessing whether the information submitted by interested parties must be
used.  Thus, paragraph 5 is a complement to paragraph 3 and the two must be read together in
considering the IA’s obligations in respect of submitted information.  In particular, we believe that
under the pertinent phrases in these two paragraphs taken together, information that is of a very high
quality, although not perfect, must not be considered unverifiable solely because of its minor flaws, so
long as the submitter has acted to the best of its ability.  That is, so long as the level of good faithcooperation by the interested party is high, slightly imperfect information should not be dismissed as
unverifiable.
153
7.162  In the context of this dispute, we find the provisions of paragraph 1 also to be relevant as to
the "verifiability" of the information ultimately submitted by each respondent.  In particular, the
factual issue that culminated in the IA's resort to  facts available began with the IA's doubts as to the
accuracy of the cost data as originally submitted, and its 19 August request for "source data and []
audited financial data establishing the accuracy  of the summary data that you supplied".154  In other
                                                     
152 See, e.g., Section VII.E.1.
153 We note that there is an interplay between the concepts of acting to the best of one’s ability in
Annex II, paragraph 5, and “refusing access to” necessary information or “significantly impeding” an
investigation in Article 6.8.  That is, the behaviour of the interested party is relevant to the right to use factsavailable in a given situation.
154 Exh. TUR-11.WT/DS211/R
Page 44
words, the IA specified in detail in the 19 August  letter what information it considered necessary in
order to be able to verify the cost data as reported in the respondents' questionnaire responses.
7.163  In assessing whether Article 6.8 was violated in this case, we also must consider whether the
IA complied with paragraph 6 of Annex II.  In partic ular, Turkey claims that the IA failed to notify
two of the respondents, IDC and Icdas, that their information was being rejected, and failed to giventhem an opportunity to provide further explanations, as required by this provision.  According to
Turkey, for this reason as well, the IA's resort to facts available in respect to these respondents
violated Article 6.8.
7.164   In sum, to understand in this dispute whether the IA was justified in relying on facts available
for cost of production and constructed normal value, pursuant to Article 6.8, we will need to consider
whether the information provided by each of the five respondents concerning their costs of production
was “verifiable” in the sense of Annex II, paragraphs 3 and 5, and whether the IA provided the noticeand opportunity for explanation required by Annex II, paragraph 6.  To determine this, we will
consider the following questions.  In the first instance, did the IA clearly specify the information that
it needed in order to satisfy itself as to the accuracy of the respondents’ cost of production data (i.e.,
did the IA specify what it needed to verify the reported cost data)?  Did each respondent provide the
information that had been specified?  In doing so, what were the nature and extent of any flaws in theinformation that was provided? Did each respondent,  in providing information in response to the
requests, act to the best of its ability?  Finally, was each respondent informed that its information was
being rejected, and given an opportunity to provide further explanations?
7.165  We now turn to a detailed review of the facts of the rebar investigation, including the nature
of the information submitted by each of the Turkish respondents and the actions of those respondentsand the IA.  Only by applying the analytical framework that we have set out above to the specific
facts of this case can we make a judgement as to whether for each respondent the IA respected the
requirements of Article 6.8 in conjunction with  the cited paragraphs of Annex II.
(i) Colakoglu, Diler and Habas
7.166  Colakoglu, Diler and Habas responded to the Manufacturers Questionnaire and on
7 April 1999 submitted to the IA their responses, through the same legal counsel.
155  Their responses
to Appendix 2 of the Manufacturer's Questionnaire relating to sales in the domestic market to
independent customers during the period 1 January 1998 to 31 December 1998 contained information
relating only to those sales that were identical in physical characteristics, closest in time and closest in
quantity to the Egyptian sales.  Furthermore, these producers also reported in their responses monthly
average costs of production of rebar only for the months in which they had sales to Egypt, in response
to the information requested in Annex 9 to the Manufacturers Questionnaire.156
7.167  On 10 May 1999 counsel for these three producers sent a fax  to the IA regarding procedural
issues, enquiring,  inter alia , "[i]f there will be supplemental questions, when such questions would be
issued".157  The IA responded on 20 May 1999 that:
"Before the visit (verification), each comp any will be advised of the items which the
Egyptian Authority wishes to verify and further information that will be sought.  Ingeneral, the information which is missing is the supporting documentation on which
claims for adjustments are based.  It is usual for this type of information and
explanations to be provided during the verification visit, where the information in the
industry response has been sufficient, as it has in this case.  Without the supporting
                                                     
155 First Written Submission of Turkey, p.26.
156 Ibid.
157 Exh. TUR-36.WT/DS211/R
Page 45
data which is requested in the questionnaire however adjustments are not normally
allowed."
7.168  The on-site verification of the information submitted by the three producers in response to the
Manufacturer's Questionnaire was conducted in Turkey from 11 to 18 June 1999.158  I n  t h e
verification reports relating to these three producers, no discrepancies between the informationsubmitted and the verified information were noted by the IA.
159  It is common cause that the
verification was limited to export sales and domestic sales and that the reported data on cost of
production were not verified.160
7.169  On 12 August 1999 the IA sent faxes to all five respondents, including Habas, Diler and
Colakoglu, regarding certain adjustments to their export prices and home market prices.  These three
producers responded to this fax and provided certain requested information and explanations, as well
as comments, on 13 August 1999.161
7.170  On 19 August 1999 the IA sent letters by fax, the operational parts of which were identical, to
all five Turkish producers.162  In these letters the IA informed the producers that:
"The Investigating Authority has reviewed the cost and sales data that [name of
company] has submitted thus far in this proceeding.  In reviewing this data, the
Investigating Authority has identified a number of concerns that are identified below.
As a threshold matter, the Investigating Authority is aware that during the period of
investigation, Turkey was experiencing hyperinflation on the order of roughly
5 percent per month.  The Investigating Authority would , therefore, expect to see in
the data submitted by [company name] a substantial increase during the period of
investigation both in the home market sales prices and in the cost of production.  TheInvestigating Authority has reviewed the data submitted by [company name], and it
appears that the data is not consistent with the inflationary conditions experienced in
Turkey during the subject period.  [The IA then gives details of cost data of materials,
labour, manufacturing overhead and selling, general and administrative costs
("SG&A") as submitted by the three producers and noted that these cost elements allshowed a decrease during the subject period, despite the inflationary conditions.] The
costs reported included no finance cost, yet the income statement that [company
name] supplied indicated significant financing expenses.  The costs reported include a
deduction for "interest expense", the Investigating Authority would need an
explanation for this cost and why it is deducted from cost of production.
 …
The above data reported by [company name] indicate that your reported costs do not
reflect the inflation in effect.  The Investig ating Authority, therefore, intends to adjust
the cost data reported by [company name] and eliminate those home market sales that
are determined to be not in the ordinary course of trade.
In the event you disagree with the proposed course of action, we require that you
supply the Investigating Authority with source data and with audited financial dataestablishing the accuracy of the summary data that you supplied.  We also require that
                                                     
158 First Written Submission of Turkey, p.29.
159 Exh. TUR-6(Diler), TUR-7(Colakoglu) and TUR-8(Habas), respectively.
160 Verification Reports by the IA, submitted by Turkey as Exh. TUR-4(Icdas), TUR-5(IDC), TUR-
6(Diler), TUR-7(Colakoglu) and TUR-9(Habas), respectively.
161 Exh. TUR-25.
162 Exh. TUR-11.WT/DS211/R
Page 46
you provide a full and complete explanation regarding the issues set forth above. In
addition, you must reconcile the costs that you submitted to the audited financial
statement.  Attached hereto is a list of the data required by [company name] in the
event you propose a modification of the Investigating Authority's approach.
The Investigating Authority intends to conclude this investigation in the near future.
Therefore, any response to this letter must be accompanied by the data identified in
the attached list and must be received by the Investigating Authority no later than
September 1st, 1999.  Any response received after that date may be rejected by the
Investigating Authority.
List of supplemental materials required accompanying any response to this letter.
1. Basic Source Documents.
[Company's name] audited financial statements, including all footnotes,
covering full  calendar years 1997 and 1998, and any draft or interim
financial statements and footnotes covering [different periods for different
companies].
The annual or semi-annual submissions made to the Turkish tax authorities
for full calendar years 1997 and 1998.
A chart of accounts for full year 1998 and the first half of 1999.
Cost of production data prepared in accordance with app. 9A for the months
[different months for the different companies].
2. Accounting Practices
Provide a written summary of the basic books used in your accounting system.  Use a
diagram if possible.
Provide a review of the accounting system using the basic books summary, chart of
accounts, and the financial statements.  S how how sales and expenses are posted to
the various ledgers and statements ( i.e., demonstrate the manner in which source
documents for sales and expenses flow into the financial statements via accounting
vouchers, journals, subsidiary ledgers, and general ledger accounts).
Provide a complete list of the types of computer reports generated and/or available in
the ordinary course of business.  Provide samples of each of these reports.
3. Merchandise
Provide a complete list of all products sold during the period of investigation, and a
list of the internal accounting codes for thes e products that were used to record costs,
sales, or expenses.
4. Materials
A. Provide the material inventory ledgers for the subject merchandise showing the
raw materials, work in process, and finished goods inventory showing the balanceand activity in the accounts for each month during 1998 and an explanation ofWT/DS211/R
Page 47
whether and how inventory values are adjusted for inflation in [company name]
accounting records.
B. Reconcile the total value from the inventory ledgers for the months of [different
months for each company] to [company name] general ledger and financial statement.
C. Provide a copy of all material purchase orders placed during the months of
[different months for each company].  A copy of the appropriate pages from the
payments ledger showing payment for those purchases.
D. A worksheet reconciling the materials costs that you submitted in your summary
to the Investigating Authority to the company’s audited financial statement.
5. Labour
A. Explain whether any adjustments have been made in [company name] accounting
records to recognize the inflation that occurred during this time.
B. Explain the basis on which labour was allocated to the subject merchandise.C. Reconcile the labour costs reported for [d ifferent months for each company] to the
general ledger and to the financial statement, and provide supporting documents,including bank statements for those months.
6. Overhead
A. Explain whether any adjustments have been made to account for the inflation that
occurred during this time.
B. Provide a complete list of all expenses included in the category “overhead” which
you provided in your summary to the Investigating Authority.
C. Provide a complete list of all depreciation expenses and reconcile those expenses
to the summary which you provided to the Investigating Authority for the months of[different months for each company].
D. Specifically explain whether your recorded depreciation expenses take into
account the inflation that occurred during this time.
7. Complete sales listing
A. Provide the complete sales journal for the subject merchandise for the months of
[different months for each company].  Provide a worksheet for [different months for
each company] which reconciles the monthly sales total to the financial statementsales total.
B. Using the worksheets developed for the previous step, reconcile the total reported
export and home-market sales to sales journal(s), summary entries in the general
ledger based on sales journals, and the financial statements for [different months foreach company].  Show how the sales listing flows to subsidiary ledgers, the general
ledger, and the financial statements for 1998."
163
                                                     
163 Exh. TUR-11.WT/DS211/R
Page 48
7.171  Counsel representing these three producers requested on 23 August 1999 an extension of
51 days, to 22 October 1999, of the time-period of 13 days originally provided for the submission of
responses to the IA's letter.  The stated reasons for requesting the extensions were that Turkey had
suffered a major earthquake on 17 August 1999, with consequent absence of key employees attending
to their families or helping with relief efforts, as well as the fact that these companies were scheduled
to undergo verifications in EU and Canadian an tidumping investigations within the following
35 days.164 Icdas requested on 26 August 1999 an extension of 40 days, until 11 October 1999, and
IDC requested an extension until 15 October 1999.  The IA informed all five producers, on
26 August 1999, that an extension had been granted to 15 September 1999, that is, an extension of
14 days.
7.172  On 15 September 1999 the counsel for the three producers, Habas, Diler and Colakoglu,
submitted their responses to the 19 August 1999 letter.
7.173  The IA informed these producers by letter dated 23 September 1999 that certain requested
information and underlying documents had still not been submitted.  In all three cases, for example,
concerning material costs, for which the IA in the 19 August letter had requested data and supporting
documents (purchase orders, payment ledgers, etc.) regarding raw material purchases, the respondents
had submitted only information relating to billets, i. e., providing their internal transfer prices of the
billets they themselves had produced, rather than the requested information on the raw materials used
to make the billets.165
7.174  In the 23 September 1999 letters, the IA requested the three producers to address the
deficiencies in the responses they had submitted on 15 September 1999.
7.175  Specifically, with respect to Habas  the IA requested the following:
"1. Basic data: " The IA requested Habas to provide the total monthly quantity
of billets/rebars produced during the period of investigation.
"2. Materials: " According to the IA no information was submitted for
auxiliary materials used in the production process in attachment no 4 (to the
15 September response) and the IA requested a complete monthly list of all rawmaterials used to produce rebars and the percentage each represent of the finished
product.  The information requested was set out in an annex.  According to the annex,
the information to be submitted under the heading "materials used" was to be broken
down into scrap, graphite, ferro alloys, electrodes etc, and "labour" into sub-headings
"From scrap to billet" and "From billet to rebar" and the same with regard to
"overhead".  The other cost items requested were the same as in the format attached
to the original Manufacturer's Questionnaire."
7.176  The IA also requested that supporting documents such as purchase orders, purchase invoices,
and production line documents that show the total cost of producing billets as well as rebars, be
submitted and that all these documents should also be fully translated.
7.177  The IA requested that the allocation base of material used for each size, should also be
submitted.
                                                     
164 First Written Submission of Turkey, p.37.
165 According to Turkey "the original responses of each producer put the IA on notice that each
company was reporting its internal cost of billet as the reported raw material cost.  Footnote 91 in Turkey's FirstWritten Submission.WT/DS211/R
Page 49
"3. Labour: "  The IA requested that the costs of goods sold (COGS – attachment no.
10 to the response of 15 September) be translated and that supporting documents like
sample payroll records or time cards be furnished.  These documents should also be
translated.
"4. Overhead: "  The IA requested that the total amounts of factory overhead (item by
item) and how they were allocated to each size, be provided.
"5. SG & A:I "  The IA requested that the total amount of SG & A (item by item) and
the allocation basis of these amounts to each size, be submitted.
"6. Complete sales listing: "  The IA requested the total sales quantity for each size.
"7. Interest expense: "  The IA requested a list identifying separately interest expense
from interest income."
7.178  The IA also informed Habas that:
"Generally speaking, most documents provid ed were in Turkish.  A full translation
should be attached to each document, for example, a detailed manufacturing cost and
packing cost reconciliation.
Please provide us with a full explanation demonstrating how and where the high
inflation rate is already included in all cost elements during the POI.
The above-mentioned items no. 4,7 should be submitted within 2 days."
7.179  The information other than items 4 and 7 was to be submitted within five working days from
23 September 1999.  The IA did not indicate what the consequences would be if these deadlines were
not met.
7.180  With respect to Colakoglu , the IA requested almost exactly the same information.  The only
difference was that under the heading "Overhead", Colakoglu was also requested to furnish a
translation of documents that it had submitted in Turkish.
7.181  In the case of Diler , almost exactly the same information as that requested from Colakoglu,
was requested, except that under the heading "Basic  data", Diler was requested to provide the total
monthly quantity of scrap purchased (domestic listed separately from imported scrap), billetsproduced, billets sold (domestic listed separately from exported billet) and  rebars produced during the
period of investigation (by size).
7.182  In response to the IA's requests, counsel to these three producers informed the IA on
28 September 1999 that:
"The previously submitted responses of Colakoglu, Diler and Habas to the ITPD
questionnaire are complete and accurate. … .
Responses which were entirely complete in April 1999 remain so today.….
The documents provided on 13 September in response to the questionnaire of
19 August 1999 are translated in sufficient detail to enable ITPD to ascertain their
contents.  Many of these documents had been previously given and translated in full;WT/DS211/R
Page 50
for example, financial statements had been previously given in full translation, so we
did not provide duplicative translation.  Similarly, the packaging cost reconciliations
sought in the 23 September letter were in fact provided during the verification, when
ITPD fully verified packing costs and inspected, translated, and copied original
documents.
If ITPD remains unable to locate the original translations or to identify the pages of
the 15 September response where translations are provide, or if ITPD requires any
additional explanations, we will be pleased to come to Cairo to review these
documents with ITPD.  Such a meeting could be arranged after the third week of
November, if desired.  Before that time, counsel's time is fully booked, but we would
expect ITPD to afford us this scheduling courtesy in view of the events herein since
verification was concluded.
With reference to ITPD's request for additional information in the ITPD letter of
23 September, we note that ITPD is requiring responses to the letter 'within 2 days'
for certain items and 'no later than 5 working days' for other items.
International courier service from Turkey to Egypt requires 2 days.  Therefore it is
physically impossible to provide documentation within 2 days.  Furthermore, even a5-day time-limit is unreasonable; no respondent could possibly provide factual
responses in such a period of time.  Thus the time limits set for this questionnaire
response are unreasonable and impossible to meet, and hence in violation of GATT
AD Code [sic], Art 2.4 ('unreasonable burden of proof') and Art 6.1 (respondents
shall be given 'ample opportunity to present evidence …').
In particular, with reference to 'Attachment 1' of ITPD's 23 September letter,: ITPD
has not previously requested this type of information.  It thus amounts to a new cost
questionnaire.  The question is extremely burdensome; respondents estimate that, if
the questions were properly posed(sic), it would take at least a month to provide the
answers. ….
….. Colakoglu, Diler and Habas object to what is blatantly a mail order verification.
…
If ITPD does not understand any of our s ubmissions or wants more explanation, we
are willing to meet with ITPD in Cairo to explain anything about which ITPD has
questions.
Colakoglu, Diler and Habas have answered every question of the questionnaire, …
As of the end of the verification, the factual record is complete.In short, Colakoglu, Diler and Habas stand by their responses and demand a
calculation based on their responses as submitted."
7.183  On 28 September 1999, the IA responded to this letter, informing the counsel for the three
respondents that "we note that you did not fully respond to the following items: materials, labour,
overhead, SG&A, interest expense and detailed cost sheet.  Therefore, the ITPD will use other dataprovided by your clients which were satisfactory, but will use facts available for the above-mentioned
items."
166
                                                     
166 Exh. EGT-13-6.WT/DS211/R
Page 51
7.184  On 28 September 1999, counsel for these three companies responded to the IA's letter of
28 September, informing the IA that they:
"reiterate that they are absolutely entitled to a decision based on their own data.  They
answered the questionnaire, received no supplemental questions, and successfully
underwent verification.  Questionnaires subsequent to verification are ultra vires  and
cannot be the basis for facts available. … .  Furthermore, respondents' submissions of
15 September fully support and verify the accuracy of respondents' reported costs. …
Colakoglu, Diler and Habas are therefore entitled to a margin calculation based on
their own numbers, as submitted.  Any other outcome – in particular, any 'facts
available' outcome – would be unlawful."167
7.185  In a letter dated 5 October 1999 to counsel for these three producers, the IA referred to that
counsel's previous suggestion of a "possible" m eeting in Cairo to explain the data submitted by
Colakoglu, Diler and Habas and stated that "any further comments or explanations regarding the
request of ITPD for supplemental information should have been included in your responses, the
deadline for which has passed.  We will consider any further information to be untimely.  … ."
7.186  Concerning the three respondents as a group, in the IA's Essential Facts and Conclusions
Report of October 1999168 under the heading:  "The IA's Request for Supplemental Information", the
IA stated that:
"On September 15, 1999, respondents Habas, Diler and Colakoglu responded to the
Investigating Authority with some incomplete  data and argued that the Investigating
Authority's request for additional data was procedurally improper.  These respondents
argued that the Investigating Authority is prohibited from requesting further data andthat, following a verification, the Investigatin g Authority is required to accept all data
submitted by respondents that the Investigating Authority did not find to be
inaccurate as a result of the verification.  The data provided on September 15 were
incomplete and some of them were untranslated, so on September 23, 1999, these
respondents were requested to complete the data and translations required. OnSeptember 28, 1999, respondents replied that they had previously submitted all data
required on September 15, 1999."
169
7.187  Under the heading "Normal Values" the IA commented as follows:
"The Investigating Authority applied partial facts available to calculate the normal
value for Habas, Diler and Colakoglu.  These respondents failed to respond
completely to the Investigating Authority's requests for information.  On this point,
each of these respondents submitted responses to the Investigating Authority's initialquestionnaire and participated in a verification of those responses.  Following these
verifications, the Investigating Authority issued follow-up requests for information
seeking supplemental cost and sales data.  These respondents did not provide
complete responses to the Investigating Authority's requests.  The Investigating
Authority forwarded two additional request s for the respondents to complete the
responses; however, the requested information was not provided. … As part of this
investigation, the Investigating Authority requested that respondents supply source
documents supporting certain of its claims of material, labor and overhead costs.
Respondents were also requested to reconcile certain costs to their financial
                                                     
167 Exh. EGT-9.
168 Exh. TUR-15.
169 Exh. TUR-15, Essential Facts and Conclusions Report , para. 1.6.2.WT/DS211/R
Page 52
statements covering the investigations period.  Respondents declined to provide the
necessary data."170
7.188  Concerning the three respondents individually , the IA commented as follows in the Essential
Facts and Conclusions Report  with regard to the failure of each  to submit the requested information
and/or supporting documentation.
7.189  Regarding Habas , the IA commented as follows:
"Although the Investigating Authority twice requested full costs of production for the
entire POI, the company only provided costs for two selected months, and there is no
evidence on the record that these were representative of the period."171
7.190  Regarding Diler , the IA commented as follows:
"… Diler did not provide sufficient information for the Investigating Authority to
confirm the monthly specific costs of materials, labor, or overhead during the periodof investigation despite being requested to do so."
172
7.191  Regarding Colakoglu , the IA commented as follows:
"… Colakoglu did not provide sufficient information for the Investigating Authority
to confirm the monthly specific costs of materials, labor, or overhead during the
period of investigation despite being requested to do so."173
7.192  In comments on the Essential Facts and Conclusions Report , counsel for these three
producers asserted that "… respondents have submitted complete sales and cost databases which were
verified or reconciled to financial statements", "… the respondents' post-verification submissions
were fully responsive to ITPD's inquiries – even though those inquiries were, themselves, ill-founded
in law and in fact – and as such they provide compelling reason for ITPD to correct the manifest errorin the use of facts available and, instead, to issue a final determination in accordance with
respondents' databases as submitted and without change", and with reference to the information
submitted on 15 September 1999, that "[i]ndeed, the submission was in many respects more than what
ITPD had requested, and there were adequate translations for each and every single document".
174
Counsel did not address the specific issues rais ed by the IA regarding incomplete information.
7.193  In the Final Report , issued in October 1999, the IA stated, under the heading "Complete or
Incomplete Sales/Cost Responses":
"We note that these three respondents' [referring to Colakoglu, Diler and Habas]
repeated assertion that they 'have submitted complete sales and cost databases which
were verified or reconciled to financial statements' is simply incorrect.  The sales
databases were verified.  As for the cost databases being reconciled to financial
statements, we requested their trail balances and, when the respondents providedthem on September 15, 1999, along with a claim that '[t]rial balances do not contain
quantity (tonnage) data, so they will not reveal any information concerning unit costs.
Moreover, trial balances are company-wide, and will generally not reveal anything of
particular relevance concerning rebar production'.  We subsequently requested
English translations but never received them.  However, in their  October 15, 1999
                                                     
170 Ibid, para.3.2.1.1.
171 Ibid, para.3.2.2.1.
172 Ibid, para.3.2.3.1.
173 Ibid, para.3.2.4.1.
174 Exh. TUR-20.WT/DS211/R
Page 53
comments respondents assert that they 'clearly and unequivocally reconciled their
monthly conversion – labor and overhead – to their trial balances, and thence to the
general ledger'.  This latter statement is somewhat disingenuous in light of the
September 15 statement, regardless, since we never received the requested
translations, this information was not usable.  Thus, it is simply incorrect that the costdatabases were reconciled to financial statements.
….
The Department points out that all cost information was requested for the entire 12-
month period in the original questionnaire, but only selected costs were provided; one
firm provided detailed cost data for only 4 months, corresponding to the 4 months of
Egyptian sales, and a second firm provided detailed cost data for only 2 months of the
period.  Although the three firms provided  12 months of material, labor and overheadcosts, for all three firms these responses were unusable for various reasons: they were
limited to materials, labor, and overhead, there was no supporting evidence, no
clarifications, and no narrative or further explanations, there were no detailed
breakouts of these cost elements such as overhead, and various documents were not
translated into English, all of which the Department had requested.  Although inresponse to supplemental requests for info rmation to cure these deficiencies the
respondents provided various additional supporting evidence and further arguments
about previously furnished data, they failed to provide much of the above necessary
information, clarifications, supporting evidence and translations.  In sum, the
responses remained deficient in many respects; the Department used respondents'data whenever it was sufficient, and only used partial facts available for data that
were missing, deficient, or inadequate. "
7.194  Under the heading "Normal Values", with reference to Colakoglu, Habas and Diler, the IA
commented as follows:
"These respondents did not provide complete responses to the Investigating
Authority's requests. …. As part of this investigation, the Investigating Authority
requested that respondents supply source documents supporting certain of their
claims of material, labor and overhead costs.  Respondents were also requested to
reconcile certain costs to their financial statements covering the investigation period.
Respondents declined to provide the necessary data.
…
These respondents have argued that the data that they submitted was sufficient and
those facts (sic) available should not be applied.  However, the submissions of these
respondents are deficient in several respects.  For example, the Investigating
Authority requested copies of invoices and purchase orders for purchases of scrap
made by respondents during the investigation period.  The Investigating Authority
considers these source documents important to determine the reliability of thesubmitted data.  These three respondents refused to provide any such evidence of the
cost of scrap, or, in fact, of any other materials. …
As another example the Investigating Authority requested that the respondents
reconcile reported labor costs with the companies' financial statements. None of these
respondents supplied the requested reconciliation or explained why suchreconciliation could not be provided. Similarly, the Investigating Authority requested
that the respondents reconcile monthly sales amounts to the companies' financial
statements.  Once again, neither the data nor an adequate explanation was providedWT/DS211/R
Page 54
by these companies.  Further, the Investigating Authority requested that translations
be provided for the materials submitted by respondents, however, several of the
documents were provided with no such translations."175
7.195  In its Final Report  the IA did not add to its comments in the Essential Facts and Conclusions
Report relating to the individual producers.
(ii) Icdas and IDC
7.196  As indicated in  paragraph 7.170, supra , these two companies received basically the same
letter, dated 19 August 1999, as Colakoglu, Diler and Habas, from the IA.  The contents of the letter
are set forth in that paragraph.
7.197  Both of these companies also received, on request, an extension from the IA for the
submission of their responses to the 19 August 1999 request, from 1 September 1999 to
15 September 1999.176
Icdas
7.198  On 15 September 1999 Icdas submitted to the IA its response to the 15 August 1999 request.
7.199  The IA responded to Icdas's 15 September submission on 23 September 1999, by stating that:
"1. Attachment 8 has not been received
2. Attachment 9 is unclear, please provide us depreciation expenses for Sep., Oct. and
Nov. 1998 translated into English.
The above-mentioned items should be submitted within five working days."
7.200  Attachment 8 (which concerned labour cost s) and the depreciation expenses breakdown,
translated into English, were faxed by Icdas to the IA on 27 September 1999 and sent by courier on
28 September 1999.177  According to Turkey, Icdas "responded fully to this information request in a
timely manner and received no other indication from the IA that its response on September 15, 1999
was otherwise incomplete or unusable".178
7.201  In its Essential Facts and Conclusions Report  of October 1999, the IA stated:
"Icdas … provided incomplete data and most of the data submitted were not
supported by evidence."179
7.202  The IA further stated, under the heading "Comparison of the Net Home Market Price to the
Cost of Production":
'… Icdas did not provide sufficient information for the Investigating Authority to
confirm the monthly specific costs of materials, labor, or overhead during the period
of investigation despite being requested to do so.'
                                                     
175. Exh. TUR-16, Final Report , para.3.2.1.1. to 3.2.1.5.
176 See para.7.171, supra.
177 Exh.TUR-40.
178 First Written Submission of Turkey, p.68.
179 Exh.TUR-15, para.1.6.2.WT/DS211/R
Page 55
7.203  In response to these statements in the Essential Facts and Conclusions Report , Icdas stated in
its  14 October 1999 comments thereon that:
"Icdas timely responded to the Department's additional request for information dated
August 19, 1999 and provided all the necessary information to the Department.  In its
letter No. 629 dated September 23, 1999, the Department listed outstanding issues inIcdas' responses dated September 15, 1999 and this remaining items are timely
submitted to the department.  If there would have been any other missing information,
the Department should have notified  Icdas to provide this missing or incomplete
information in its letter No. 629. In the Report the department does not clearly state
what information is found missing or incomplete."
180
7.204  In its Final Report  the IA stated that "Icdas and IDC provided incomplete data and most of
the data submitted were not supported by evidence".181  Although, as recounted above, the IA
addressed in detail in the Final Report  the failure of Colakoglu, Diler and Habas to submit certain
requested information, no such detail was included in respect of Icdas or IDC.182
7.205  Instead, concerning Icdas' compliance with the 19 August request, the Final Report  states:
"On September 23, 1999, the Department requested a missing document and several
documents to be translated into English. …183 (emphasis added)
…
As for Icdas' claim that it 'provided all the necessary information' in response to the
Department's August 19, 1999 request and th at the 'remaining items are[sic] timely
submitted' in response to the Department's September 23, 1999 request, that is
incorrect.  In fact, the firm did not furnish (1) the requested breakdown of labour andoverhead costs, (2) the requested supporting documents for labour and overhead
costs, (3) the requested allocations and allocation methodologies for materials,
overhead, and SG&A, and (4) the requested reconciliations of submitted data to its
financial statement. In addition, its explanation of how inflation was
reflected/included in its costs was inadequate and unsupported."
184
IDC
7.206  In response to IDC's submission of the information requested in the 19 August 1999 letter, on
23 September, the IA requested IDC to:
"… provide the following within five working days:
1.Interest expense:  Furnish a list identifying separately interest expenses from
interest income.
2.In worksheet 2 (factory cost and profit for domestic sales per ton) it is unclear
whether the materials listed are scrap or billets, please specify.
3. Fill in the enclosed cost of production sheet for Aug., Sep., and Oct. 1998.
                                                     
180 Exh. TUR-26, p.3.
181 Exh.TUR-16, para.1.6.2.
182Ibid,  p.12-15.
183 Ibid,  para.3.1.7.10.
184 Ibid, para.3.1.7.15.WT/DS211/R
Page 56
Item 1 should be submitted within 2 days."185 186
7.207  IDC faxed information on interest expense to the IA on 25 September, the due date. When
informed by the IA that the fax had not been received, IDC resent it on 29 September 1999.187
7.208  On 28 September 1999, IDC faxed the information on the cost of production for the months
of August, September and October 1998 to the IA. In the fax IDC also noted that the "productioncosts given in Worksheet 2 are calculated from scrap to rebar basis" and that "[m]aterials listed are the
same as the cost of production sheets attached for item 3 (Cost of production sheets)".
188
7.209  On 28 September 1999 the IA requested IDC to submit a list identifying separately interest
expenses from interest income showing the differ ence between both interest expense and interest
income per ton during 1998 on a monthly basis, with a note "[y]our effort will be appreciated if we
receive the above-mentioned immediately".  According to Turkey, IDC faxed the requested
information to the IA on 29 September 1999.189
7.210  As noted above, the IA issued its Essential Facts and Conclusions Report  on 5 October 1999,
applying "facts available" to IDC.  In that report, as indicated above, the IA stated that "Icdas and IDC
provided incomplete data and most of the data submitted were not supported by evidence".  The IA
also stated that:
"For materials, labor and overhead, since the company did not adequately
demonstrate or support its claim that inflation was included, as facts available, since
these costs varied significantly during the period, we used the highest cost for each
element during the period to reflect the inclusion of inflation costs."190
7.211  The IA did not identify in the Essential facts and Conclusions Report  any particular document
or other information that had been requested by the IA, but not submitted by IDC.
7.212  On 15 October 1999 IDC commented regarding the Essential Facts and Conclusions Report
that:
"Up to today, IDC has always become(sic) cooperative with your Authority and have
always given all information and supporting documents you requested. Therefore,
facts available clause should not have been used.  As you know, IDC has neverrefused your any request of any information.  We have given all correct information
and documents to you on time and informed you to contact us anytime you need more
clarification and explanations."
191
7.213  IDC attached to this letter "Worksheet 1: Cost of Production (From Billet to Rebar) for 1998",
"Worksheet 2: Calculation of Financial Expenses for Constructed Normal Value Table and
Constructed Normal Value table for IDC".  Worksheet 1 contains the cost of production from billet to
rebar for the months of August, September and October 1998 and is the same information that wasfaxed to the IA on 28 September 1999, except that in this document ex-factory sales prices and profits
were added.  Worksheet 2 contains information relating to interest expense (but not interest income), a
                                                     
185 Exh. EGT–13-1-2.
186 The cost of production sheet referred to, is identical to Attachment No 1 to the 23 September letters
to Colakoglu, Diler and Habas.
187 First Written Submission of Turkey, p.44.
188 Exh. TUR-41.
189 Ibid.
190 Exh. TUR-15, para.3.2.6.1.
191 Exh.TUR-27.WT/DS211/R
Page 57
list of productions items subject to interest expense, and a constructed normal value for IDC for the
three months of August, September and October 1998.
7.214  In its Final Report  the IA repeated that:
"Icdas and IDC provided incomplete data and most of the data submitted were not
supported by evidence."192
7.215  Turkey takes strong issue with this characterization, alleging that all of the information
requested by the IA, most importantly that provided on 15 September in response to the IA's
19 August request, as well as the further information provided in response to the IA's 23 September
request, was submitted within the time-periods set by the IA.
7.216  The IA did not refer in the Final Report  to any specific requested document or information
not submitted by IDC.  However, the IA stated that:
"With its comments on the Essential Facts Report Izmir (IDC) attached information
which the Department, because it determines that this is new information untimely
submitted, will not consider in this investigation."193
(b) Was the cost information requested by the IA on 19 August and 23 September 1999
"necessary information"?
7.217  We recall that the parties have submitted extensive arguments regarding the validity of the
IA's rationale for seeking the detailed cost informa tion.  Turkey claims that "because the basis for
initially questioning and then rejecting Turkish respondents' costs was unfounded, resort to facts
available was unjustified under Article 6.8 of the Agreement".  On the other hand, we note that the IA
justified its request for the cost data as necessary to enable it to determine whether the respondents
had made sales of comparison merchandise in the home market at prices that were below the cost ofproduction, in accordance with Article 34 of the Egyptian Regulations.  This provision, which
essentially mirrors the provisions of Article 2.2 and 2.2.1 of the Anti-Dumping Agreement, allows
investigating authorities to construct a normal value if sales of the like product in the domestic market
of the exporting country are below costs of production plus SG&A.  Egypt argues that the IA was not
in a position to make this determination because the required information to enable it to make the
determination was not submitted by the respondents in their responses to the initial questionnaire.  On
its face, this justification for seeking the detailed  cost information appears plausible to us, given, as
noted, that a below-cost test is explicitly provided for in Articles 2.2 and 2.2.1 of the AD Agreement.
Thus, the requested information would seem to be "necessary" in the sense of Article 6.8.
7.218  As to the specific basis for the IA's 19 August request, the IA stated in that request that it was
seeking the additional, detailed cost data because it was aware that Turkey was a country with a
hyperinflationary economy, with inflation averaging "roughly 5 per cent per month".  The IAindicated that it would have expected to see the effect of this hyperinflation reflected in the different
cost elements reported by the respondents in the original questionnaire responses.  The IA maintained
this position throughout the process.
7.219  The parties are in agreement that the cost figures reported by the respondents did not reflect
the increases one would normally have expected in a hyperinflationary economy.  However, in theirresponses to the 19 August and 23 September information requests, the respondents provided a
number of explanations for this in respect of scrap, labour and depreciation, the main cost elements
questioned by the IA as not reflecting hyperinflation.  According to the respondents, the international
                                                     
192 Exh.TUR-16, para.1.6.2.
193 Exh.TUR-16, p.30.WT/DS211/R
Page 58
price of steel scrap (accounting for 60 per cent of the cost of producing rebar), fixed in US dollar
terms, declined substantially during the POI; labour rates were fixed once a year after negotiations
with trade unions; and the revaluation of assets for purposes of depreciation was also done once a year
through the application of "uplift factors" published by the Turkish Government.  The respondents
insisted that the cost data that they submitted were  their actual figures, reflecting their actual costs of
production during the POI.  These arguments by the respondents were repeated in their respective
comments on the Essential Facts and Conclusions Report194, as well as by the Government of Turkey
in its comments.195
7.220  Turning first to scrap cost, the IA rejected the data and explanation on world steel scrap prices
submitted by the three respondents, stating:
"… [r]espondents' information on world scrap prices was expressed in annual terms
(prices at the end of a year were lower than prices at the beginning of the year), it wasnot useful in determining price movements during the investigation period (calendar
1998).  When the Department examined monthly domestic rebar and purchased scrap
prices throughout the period (another respondent in this investigation submitted
monthly scrap prices), a very different picture emerged.  … The sharp decline, which
respondents implied was sustained throughout the period, was in fact, limited to 3 outof 12 months of the investigation period, …. .
Thus, the Department had a reasonable basis for its concern whether domestic costs
fully reflected the high inflation."
196
7.221  As it was not clear to us to which company "another respondent in this investigation" referred,
we requested Egypt during the Second Substantive Meeting of the Panel with the Parties to clarify thematter.
197  Egypt indicated that this "other respondent" was Alexandria National Steel, which had
submitted the information in response to a telephonic request made by the IA "in order to verify the
veracity" of the claim by the Turkish respondents that scrap prices had collapsed throughout the
period of investigation.198.  At our request Egypt provided the scrap cost information as submitted by
Alexandria National Steel.199  The document consists of two parts:  one part sourced, from the Metal
Bulletin  of March 1999, which reflects iron and steel scrap prices, fob Rotterdam, for three categories
of scrap -- "HMS 1"200, "HMS 1&2" and "shredded" on specific dates covering the period January to
December 1998, excluding March and June 1998.  The price information gives a minimum and a
maximum price per date and per category.  The second part of the document consists of prices
computed by Alexandria National Steel from the underlying Metal Bulletin  data.  According to Egypt,
the IA's "assessment of the evolution of scrap prices was based on the 'source reference' in the second
page of EX-EGT-12, and not on the prices mentioned on the cover page of the Alexandria National".
7.222  Egypt asserts before us that the evidence submitted by Alexandria National Steel reveals that
the Turkish respondents' claim that scrap prices declined throughout the investigation period was
factually wrong.201  Egypt states:
                                                     
194 Exh. TUR-20 and TUR-27.
195 Exh. TUR-30.
196 Exh. TUR-16, p.12-13.
197 Question 2 to Egypt of the Written Questions by the Panel,  dated 27 February 2002 – Annex 8-2.
198 Written Response of Egypt to the Two Follow-Up Written Questions by the Panel  of 3 April 2002 –
Annex 8-3.
199 Exh. EGT-12.
200 Our understanding is that "HMS" refers to "heavy melting scrap".
201 Written Response of Egypt to the Two Follow-Up Written Questions by the Panel  of 3 April 2002 –
Annex 8-3..WT/DS211/R
Page 59
"Indeed, as explained in the Final Report , scrap prices were found to be fairly
constant for the first seven months of the investigation period.  During the next three
months, prices collapsed.  Then, prices started to recover in the last two months on
the investigation period.  In other words, the 'sharp decline' was in fact limited to
three out of twelve months."
7.223  Turkey commented on Egypt's response on our questions and states that:
"As the panel can clearly see by a review of … the second page of EX-EGT-12,
HMS1&2 scrap prices declined steeply between January 1998 ($114 – 116 per ton)
and April 1998 ($96 - $97 per ton) and continued their decline into July 1998 (to $92
-$94 per ton).  This is an overall decline of 19%, hardly evidence of scrap price
stability during the first seven months of the year.  Scrap prices for HMS 1 show
similar declines – from $123 - $124 per ton in January 1998 to $105 - $107 per ton inApril 1998 and $98 –$ 99 in July (an overall decline of 20%).  Prices then dropped
from August to October ($70 - $72 per ton) or a further decline of 23% from January
levels. …"
202
7.224  We have a slightly different reading from that of Turkey of the scrap price data submitted by
Alexandria National.  In particular, we note that for each of the categories "HMS1" and HMS1&2",prices declined from January through end-February, then were essentially stable from March through
mid-July, then declined again from mid-July through end-September, then rose from October through
December.  Prices in December 1998 were nevertheless considerably lower than in January 1998 in
all categories.  The IA's characterization that the trend in scrap prices as reported by Alexandria
National Steel showed "sharp declines" in onl y three out of the twelve months of 1998, was
essentially borne out by the data.  Nevertheless, it is somewhat incomplete given the large end-point-
to-end-point decline that took place over the period.
7.225  Turning to the evidence on scrap prices that was submitted by the Turkish respondents in
questionnaire responses and other submissions, we note that in general these data also show
considerable declines from the beginning to the end of the period of investigation, although again witha certain amount of fluctuation during that period.  For example, the data reported by Icdas show that
there was a sustained decrease in the scrap prices during the POI, with the month of August the only
exception.  The scrap price paid by Icdas for locally sourced and imported scrap decreased from
US$129.44 in January 1998, to US$85.81 in November 1998.
203  In particular, the price dropped
between January and March, was relatively steady in April through July, then rose slightly in August,
and dropped again in September through November.  The prices of scrap reported by IDC (sourced in
Turkey) also reflect a decrease from US$134 in January 1998, to US$85 in December 1998204.
However, these data show a substantial decrease in April, some recovery in May, June and July, and
then a monthly decrease to December 1998.205  The scrap cost data "sourced from Colakoglu"206 also
reflect a decrease in scrap prices in Turkish Lire over the POI, although with increases in different
months compared with the data reported by Icdas and IDC.  The overall trend is the same, however,
namely that the price of scrap decreased from the beginning to the end of the POI.
7.226  Turning to the questions of labour costs and depreciation, the IA stated here again that the
expected effects of hyperinflation were not evident, causing it to doubt the accuracy of these costs as
                                                     
202 Written Comments by Turkey on Egypt's Response to Certain Questions Posed by the Panel , dated
9 April 2002, Annex 8-3 – Annex 8-3.
203  Exh. EGT-7.1.
204  Ibid.
205  Ibid.
206  Ibid.WT/DS211/R
Page 60
reported in the responses to the original questionnaire, and leading it to seek additional information
and supporting documentation in respect of these costs.
7.227  Turkey argues that the three respondents, Colakoglu, Diler and Habas "explained" in their
15 September submissions and elsewhere that labour contracts are renegotiated once per year, and that
depreciation expenses are adjusted at year-end for inflation, meaning that inflation would not beexpected to cause these costs to vary from one month to another.  According to Turkey, this "factual"
information further undermines the IA's rationale for requesting the detailed cost information, as it
"proves" that the effects of inflation on the three respondents' costs were not as presumed by the IA.
7.228  The parties also have divergent views concerning the general Turkish inflation rate during the
POI.  Throughout the process, the IA referred to an estimated inflation rate of 5 per cent per month in
Turkey during that period,
207 which it said was derived from statistics sourced from the Turkish State
Institute of Statistics.208  In its comments on the Essential Facts and Conclusions Report , the Turkish
Government objected to the use of an inflation rate of 5 per cent per month and submitted evidence
(also from the Turkish State Institute of Statistics) showing that the inflation rate was less than 5 per
cent per month during the POI.209  The IA rejected the evidence and argument put forward by the
Turkish Government, stating that: "[s]ince the referenced exhibit constitutes new, untimely
information, the Department will not consider it in this investigation."  Nevertheless, it should benoted that Turkey did not at the time and does not now contest the fact that the Turkish economy was
"hyperinflationary" during the POI.  Thus, there seems to be no disagreement between the parties that
the actual monthly rate of inflation during the POI,  whatever its exact level, was high.  We thus see no
basis on which to conclude, as contended by Turkey, that the factual evidence submitted by the
Government of Turkey, even if it had been accepted, would have "disproved" the IA's hyperinflationpremise for seeking the detailed cost data.
7.229  Further, in reference to inflation, the parties have submitted arguments concerning the
significance of the fact that the Turkish respondents do not prepare their financial statements in
accordance with International Accounting Standards 29 ("IAS 29"), applicable to economies with
hyperinflation.  This issue was not raised by Egypt during the investigation, although the auditedfinancial statements of Habas, Diler and Colako glu, which indicate that they do not apply IAS 29,
were submitted by those companies in their 15 September submissions.
210  No direct reference to
IAS 29 relating to Icdas and IDC could be found in the documents of record submitted to us.211  Egypt
argues that the auditors' reports support the view of  the IA that the data submitted by the respondents
did not reflect the effects of inflation212.  However, the auditors' reports make clear in all instances
that there was not consensus in Turkey on the use of IAS 29.  The auditors' notes to the financial
                                                     
207 Letter of 19 August 1999 to the respondents, p.21 and 23 of the Essential Facts and Conclusions
Report , and p.16 of the Final Report .
208 Exh. EGT 7-7.
209 Exh. TUR 30.
210 Exh. TUR-34A, TUR-43B and TUR-34C, respectively.
211.On page 56 of its First Written Submission, Egypt states that Icdas did not submit its audited
accounts, although the IA did not request Icdas to submit its audited financial statements in its request of19 August 1999, or in any subsequent requests.  We could therefore not find any reference to IAS 29 with
regard to Icdas in the record.  In the case of IDC, we  could not find any reference to IAS 29 in the translated
sections of its audited financial statements, which were submitted by Egypt as Exh. EGT-15.
212 In its Rebuttal Submission (at p. 29), Turkey objects to Egypt's arguments regarding IAS 29 as
being a post hoc  rationalisation by Egypt of the anti-dumping determination, and requests the Panel to disregard
it, as "errors made during the investigation cannot be rectified in subsequent submission before a WTO panel".As the relevance of IAS 29 to this dispute is at best dubious, there would seem to be no need for the Panel to
further address this point.  (In any case, the information regarding IAS 29 was submitted by the respondents
themselves and is used by Egypt only as confirmation of the IA's view that the cost data of the respondents didnot reflect hyperinflation and is only an argument in support of its position.  That said, Turkey does appear to becorrect factually that IAS 29 did not figure in the IA's reasoning as set forth in its reports.)WT/DS211/R
Page 61
statements of two of the companies indicate that the accounts were prepared in US dollars which,
being a stable currency, obviated the need to prepare the financial statements according to IAS 29.  In
any case, it seems to us that the main rationale behind IAS 29 (which requires presentation of three
years of figures, together with certain indexes), is to give the reader a clear picture of the financial
status of the company, compared to previous  periods, undistorted by hyperinflation.  It therefore
seems that IAS 29 is primarily useful for comparison purposes.213
7.230  We are therefore of the view that the application, or non-application, of IAS 29 by the
Turkish respondents in preparing their financial statements is not relevant for our review of the
measures taken by the IA.  That said, it seems to us that the reference to IAS 29 is a post hoc
justification by Egypt in respect of the IA's request for cost data, a justification which is in any case
not required by Article 2.2 and Article 2.2.1.
7.231  While, as is evident from the above, the parties have argued extensively before us concerning
the IA's rationale for seeking the detailed cost data, in our view this question is essentially irrelevant
under Article 6.8, because that provision simply does not cover this question.  Rather, as noted above,
the relevant provisions are Articles 2.2 and 2.2.1  These provisions establish no preconditions for
requesting cost data.  Indeed, in this case, cost data were requested as a normal, integral part of the
initial questionnaire, and Turkey raises no challenge in this regard before us.  Rather, Turkey objectsto the rationale for requesting additional details and supporting documentation that would allow the
originally-reported data to be checked and verified.  Given that the  IA's overall concern about how
the effects of hyperinflation were treated in the five respondents' accounting records was not
unsubstantiated (in that there was no disagreement that Turkey was experiencing hyperinflation), and
in view of the fact that cost data is a normal part of an anti-dumping investigation, there is in our viewno basis in Article 6.8 or for that matter in any ot her provision of the AD Agreement, for a finding of
any violation in respect of the IA's request for the detailed information.  In this sense, we confirm our
finding above that the requested information was "necessary" in the sense of Article 6.8.
(c) Did the respondents “refuse access to” or “otherwise fail to provide” “necessary
information”?
7.232  We now consider whether the facts of record indicate, as asserted by Egypt that the Turkish
respondents Habas, Colakoglu and Diler "'refused access to'" the necessary information and "'failed to
provide'" such information, and that the other two respondents (Icdas and IDC) "'otherwise failed to
provide'" the necessary information.
214  Turkey asserts that it does not claim that the five respondents
"submitted all of the information and documents requested by the Investigating Authority after the
original questionnaire responses were filed".  In fact, Turkey admits that these companies did not
submit all the requested information and/or reconciliations.215  However, Turkey asserts they acted "to
the best of their ability" in providing the information.216  With regard to Icdas and IDC, Turkey claims
that "the Investigating Authority itself found little fault with the responses filed by the respondents,
requesting only a few follow-up documents and clarifications, which were promptly provided".
7.233  In light of the facts as set out above, it is clear that a distinction can be made between the
information, in terms of both amount and quality, submitted by Colakoglu, Diler and Habas, on theone hand, and Icdas and IDC on the other.  We t hus conduct our factual analysis on this basis.
                                                     
213 We posed a question to Egypt on this point (Question 3 for Egypt of the Written Questions by the
Panel, dated 27 February 2002).  Egypt, while confirming that IAS 29 is useful for comparison purposes, also
indicated that it requires restatement of the current year figures adjusted for inflation, and thus is useful for
reflecting inflation in a single year as well – Annex 8-2.
214 Written Response, dated 7 December 2001, to Question 9 to Egypt of the Written Questions by the
Panel , of 28 November 2001 – Annex 4-2.
215 Ibid.
216 Written Response of Turkey, dated 14 March 2002, to Question 1 of the Written Questions by the
Pane, of 27 February 2002 – Annex 8-1.WT/DS211/R
Page 62
(i) Colakoglu, Diler and Habas
7.234  In reviewing the documentation submitted by Turkey as Exhibits TUR-34A, TUR-34B and
TUR-34C, containing the full response of Diler, Colakoglu and Habas, respectively, to the IA's
19 August 1999 request for information, it is clear to us that a great deal of the requested information
was not submitted.  From the documents submitted by these three respondents, it appears that ratherthan submitting, or even attempting to submit, al l of the information and documents requested by the
IA, only selected information was submitted.  In the case of Colakoglu and Habas, for example,
Appendix 9A – Factory Cost and Profit for Domestic  Sales, the sales price ex-factory and profit/loss
before tax were not provided.  In the case of Diler, only information on direct material, direct labor
and factory overhead, but not the breakdown, as re quested, was submitted.  Of particular note, and
emphasized by the IA in its reports, these companies did not submit underlying source documents
(purchase orders, invoices, etc.).
7.235  Furthermore, very few of the headings of the submitted documents were translated and no
reconciliation of the different cost elements to the audited financial statements were submitted.  To
clarify the exact situation concerning the requested reconciliations, we posed the following written
question to Turkey:
"Turkey asserts that the respondents submitted all the requested information and
documents, including the requested reconciliations of data to the financial statements.
Could Turkey indicate for each of the respondent companies (Habas, Diler,
Colakoglu, IDC and Icdas) where in the record these reconciliation could be found
and for each one explain exactly, in  a step-by-step fashion, how the reconciliations
were done?"
217
7.236  In response to this question, Turkey submitted a detailed step-by-step explanation of how the
reconciliations could be done for each of the producers218.  However, Turkey failed to indicate where
in the record any such reconciliations could be found in the case of Colakoglu, Diler and Habas.  It is
thus clear that the reconciliations were not submitted to the IA.
7.237  Instead, the three Turkish producers submitted the raw data as is, without any explanatory
narrative or translations, in spite of the IA's clear request.  We are of the view that the request to
translate the documents did not put an unreasonable burden on the exporters, as the narrative parts of
the documents were quite limited.  Furthermore, th e translations could have been provided in hand-
written form on the documents themselves without extraordinary effort.
7.238  The extent of the deficiencies of the responses of these three producers is evident from the
follow-up requests sent by the IA to Colakoglu, Diler and Habas on 23 September 1999.219  Then, in
response to the IA's request of 23 September 1999, the three respondents made no attempt to providethe information identified as missing.  Instead they  claimed that that information constituted a "new"
request (not previously made) to provide a break-down of the companies' billet costs into a number of
separate components.
220  However, a close reading of the requests of 19 August and
23 September 1999 shows that the request of 23 September 1999, which attached a list of the cost
components for which information was required, was a follow-up request to the 15 Septembersubmissions of these respondents, requesting for a second time the details underlying the originally
reported costs, including documentation of raw material purchases.  The fact that this list was attached
                                                     
217 Question 1 to Turkey of the Written Questions by the Panel , dated 27 February 2002 – Annex 8-1.
218 Written Response to Question 1 to Turkey, dated 14 March 2002, of the Written Questions by the
Pane l, of 27 February 2002 – Annex 8-1.
219 Exh. TUR-13.
220 First Written Submission of Turkey, p.68.WT/DS211/R
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only to the 23 September 1999 request does not detract from the fact that the very same information,
albeit in a less explicit manner, had already been requested in the 19 August letter.
7.239  We next consider Turkey’s claim that although these three respondents did not submit all of
the information requested by the IA, they “acted to the best of their ability” in the sense of Annex II,
paragraph 5, and that therefore the IA’s resort to facts available was not justified.  Turkey thusappears to argue that the fact of acting to the best of one’s ability should override any substantive
flaws in the information submitted, in determining wh ether resort to facts available is justified under
Article 6.8.
7.240  Egypt argues that these respondents did not supply the requested information and did not act
to the "best of their ability".  Therefore, Egypt argu es, the IA's resort to facts available in respect of
these respondents was fully justified.  In particular, Egypt states, these exporters explicitly informed
the Investigating Authority that they refused to s ubmit the information requested in the Investigating
Authority’s letter of 23 September 1999 which requested them to fill the gaps of their previous
submission, thus effectively terminating their co-ope ration with the IA on that date.  It is clear to
Egypt that those respondents cannot therefore be consid ered to have acted to the best of their ability
since they declined to submit information which was readily available to them.  Egypt states in this
regard that the evidence which Diler, Habas and Colakoglu refused to submit was provided by the twoother respondents within the time-limit set by the Investigating Authority, confirming that the
requested documentation could have been submitted by Diler, Habas and Colakoglu had they agreed
to do so.  In consequence, Egypt considers, the IA was fully entitled to make use of the provisions of
Article 6.8 of the AD Agreement with respect to these respondents as they refused to provide
necessary information and, as a consequence, significantly impeded the investigation.
7.241  Paragraph 5 of Annex II provides, in relevant part:
"[E]ven though information provided may not be ideal in all respects, this should not
justify the authorities from disregarding it, provided the interested party has acted to
the best of its ability. " (emphasis added)
7.242  We recall that our finding above that the provisions of Annex II, paragraph 5 form part of the
substantive basis for interpreting Article 6.8.  That is, we found that this paragraph in conjunction with
other paragraphs of Annex II provides certain substantive parameters that must be followed by an
investigating authority in making its assessment of whether, in a particular case, resort to "facts
available" pursuant to Article 6.8, in respect of certain elements of information, is justified.  In other
words, paragraph 5 does not exist in isolation, either from other paragraphs of Annex II, or from
Article 6.8 itself.  Nor, a fortiori , does the phrase "acted to the best of its ability".  In particular, even
if, with the best possible intentions, an interested party has acted to the very best of its ability inseeking to comply with an  investigating authority's requests for information, that fact, by itself, would
not preclude the investigating authority from resort ing to facts available in respect of the requested
information.  This is because an interested party's level of effort to submit certain information does
not necessarily have anything to do with the substantive quality  of the information submitted, and in
any case is not the only determinant thereof.  We recall that the Appellate Body, in US – Hot-Rolled
Steel , recognized this principle (although in a slightly different context), stating that "parties may very
well 'cooperate' to a high degree, even though the requested information is, ultimately, not obtained.
This is because the fact of 'cooperating' is in itself not determinative of the end result of the
cooperation".
221
7.243  Furthermore, even if , arguendo, acting to the best of one's ability by itself were sufficient to
preclude an investigating authority from resorting to facts available in respect of certain information,
we do not find that Turkey has established as a factual  matter that the three respondents – Habas,
                                                     
221 Appellate Body Report , US – Hot-Rolled Steel, para.99.WT/DS211/R
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Diler, and Colakoglu – did act to the best of their abilities in responding to the IA's requests for cost-
related information in the rebar investigation.  We recall that the Appellate Body stated that the phrase
"to the best of its ability" suggests a high degree of cooperation by interested parties222, and we agree.
7.244  Considering in more detail the concrete meaning of the phrase to the "best" of an interested
party's ability, we note that the Concise Oxford Dictionary  defines the expression "to the best of one's
ability" as "to the  highest level of one's  capacity to do something"223 (emphasis added).  In similar
vein, the Shorter Oxford Dictionary  defines this phrase as "to the furthest extent  of one's ability ; so far
as one can do".  We note that in a legal context, the concept of "best endeavours", is often juxtaposed
with the concept of "reasonable endeavours" in defining the degree of effort a party is expected to
exert.  In that context, "best endeavours" connotes efforts going beyond those that would be
considered “reasonable” in the circumstances.  We  are of the opinion that the phrase the “best” of a
party’s ability in paragraph 5 connotes a similarly high level of effort. 224
7.245  In applying this test to the actions of Diler, Habas and Colakoglu in responding to the IA's
requests for cost information in the rebar investigation, in our view an unbiased and objective
investigating authority could find that it was within the capacity of these respondents to submit the
requested information (particularly the supporting documentation substantiating the reported costs,
and the reconciliations of those costs to financial statements).  The information undeniably was attheir disposal, and they never argued, or submitted, that it was not, or that for some other reason it
would be impossible to provide it, or even that it would cause them some hardship to do so.  The fact
that other respondents provided most, if not all, of the requested information (particularly concerning
scrap costs) also indicates that provision of such information was within the three respondents' ability.
7.246  Indeed, these points were made by the IA in the Final Report .  For example, concerning
scrap, the IA stated:
"[t]hese three respondents refused to provide any such evidence of the cost of scrap,
or, in fact, of any other materials.  The fact that other respondents supplied such
information indicates that the materials are readily available; indeed, these
respondents do not contend otherwise ."
225
Similarly, concerning labour cost, the IA stated:
"As another example, the Investigating Authority requested that the respondents
reconcile reported labor costs with the companies' financial statements.  None of
these respondents supplied the requested reconciliation or explained why such
reconciliation could not be provided .  Similarly, the Investigating Authority
requested that the respondents reconcile monthly sales amounts to the companies'financial statements.  Once again, neither the data nor an adequate explanation was
provided by these companies ."
226
7.247  To summarize, we are of the view that the nature and extent of the deficiencies identified in
the IA's 23 September letter, none of which any of the three respondents attempted to rectify, were
                                                     
222 Ibid, para.100.  The Appellate Body further noted in this paragraph that "investigating authorities
are entitled to expect a very significant degree of effort – to the 'best of their abilities' – from investigatedexporters.
223 Pages 3 and 128 of The Concise Oxford Dictionary  (10th ed).
224 Black's Law Dictionary, Revised 4th Edition, defines "best" as, inter alia: "of the highest quality",
and states further that "[w]here one covenants to use his 'best endeavours,' there is no breach if he is prevented
by causes wholly beyond his control and without any default on his part [reference omitted]".  "Reasonable" is
defined, inter alia , as "ordinary or usual".
225 Exh. TUR-16, para.3.2.1.4 (emphasis added).
226 Exh. TUR-16, para.3.2.1.5 (emphasis added).WT/DS211/R
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such that the IA was justified in considering that  information “necessary” to make an analysis of
whether domestic sales were made below cost, as provided for in Article 2.2 and 2.2.1 of the AD
Agreement, had not been provided.  That is, the information submitted was substantially incomplete,
lacking in particular underlying documentation and reconciliations to audited financial statements
which the IA had identified as the information required to render "verifiable" the respondents'reported cost data.  Moreover, in addition to the substantive flaws in the information, we do not find
that these companies acted to the best of their ability in responding to the IA’s requests of 19 August
and 23 September, 1999.
7.248   For the foregoing reasons, we find that an unbiased and objective investigating authority
could have found that Habas, Diler and Colakoglu failed to provide necessary information in the sense
of Article 6.8.  As a consequence, we find that Egypt did not violate Article 6.8 or paragraph 5 of
Annex II in resorting to facts available in re spect of these respondents’ cost of production
calculations.
(ii) Icdas and IDC
7.249  In the case of Icdas and IDC it is clear from the record that these companies submitted almost
all, if not all, of the requested information.  Nor did the IA clearly indicate in the Essential Facts and
Conclusions Report which specific information thes e companies had failed to provide, which in turn
formed the basis of the IA's decision to resort to facts available in respect of those companies.  Indeed,
in respect of IDC, neither the Essential Facts and Conclusions Report  nor the Final Report  identifies
any single piece of requested information that was not submitted.
7.250  To clarify this issue in respect of Icdas, we posed the following written question to Egypt:
"… . Could Egypt please precisely identify the documents containing the IA's
requests for the information referred to in the Final Report as not having been
submitted.  Please describe the documents that were provided by Icdas  on these
points and indicate how, in the light of those documents, the IA was satisfied that AD
Article 6.8 could be applied".
227
7.251  Although Egypt pointed out certain deficiencies in the information submitted by Icdas in
response to our question, Egypt failed to identify the documents containing the IA's requests for the
information referred to in the Final Report as not having been submitted.228  In other words, the IA
apparently never requested of Icdas the documents referred to in the Final Report as missing.
7.252  Moreover, looking at the evidence overall as submitted by Icdas and IDC, it is clear to us that
these two producers responded quite comprehensively to the IA's 19 August 1999 request.  It is also
clear from the record that after receipt of these companies' responses, the IA on 23 September
requested from each of them only two or three items of a minor nature, and identified no fundamentalproblems with, or deficiencies in, the information that they had submitted.  These respondents
complied with these follow-up requests within the time specified by the IA.  In respect of IDC, neither
of the IA’s published reports identifies any single requested document or piece of information that
IDC failed to submit.  In respect of Icdas, while the published reports refer to a few documents
purportedly not submitted by Icdas, that company was never so informed by the IA.
7.253  This brings us to a further related element of Turkey's claims in respect of the use of facts
available for Icdas and IDC, namely, that in resorting to facts available, Egypt violated Annex II,
paragraph 6, in that the IA failed to inform thes e companies that their cost information submitted in
                                                     
227 Written Questions by the Panel  to the Parties, 27 February 2002, Question 8 to Egypt – Annex 8-2.
228 Written Response of Egypt, dated 13 March 2002, to Question 8 of the Written Questions by the
Panel,  of 27 February 2002 – Annex 8-2.WT/DS211/R
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response to the 19 August and 23 September requests was not accepted, and that the IA in addition
failed to give them the opportunity to provide further explanations.
7.254  To recall the facts, on 23 September 1999, the IA sent letters to respondents IDC and Icdas
identifying for each company a few items which acco rding to the IA had not been submitted in these
companies' responses to the 19 August questionnaire.  According to Turkey, these companiessubmitted the requested information within the time  allowed.  Neither company received any further
communication from the IA.  These respondents' cost data as submitted were rejected by the IA, and
certain "facts available" were used instead.
7.255  Egypt argues that in their responses to the 19 August request, these respondents had indicated
that their costs of materials were not adjusted for inflation, and that  IDC's response did not indicate
that the financial statements had been prepared in accordance with International Accounting
Standard 29 dealing with the effects of hyperinflation.  According to Egypt, it was therefore clear tothe IA that the reported costs did not reflect th e hyperinflation and could therefore not be used to
determine the costs of production and sale of rebar, and given this, it was not necessary to further
investigate this matter.  Accordin g to Egypt, the IA gave IDC and Icdas ample opportunity to present
their views in writing, and the IA therefore ac ted in full compliance with Annex II, paragraph 6.
7.256  Annex II, paragraph 6 provides as follows:
"If evidence or information is not accepted, the supplying party should be informed
forthwith of the reasons therefor, and should have an opportunity to provide further
explanations within a reasonable period, due account being taken of the time-limits of
the investigation.  If the explanations are considered by the authorities as not being
satisfactory, the reasons for the rejection of  such evidence or information should be
given in any published determinations."
7.257  At issue is first, whether the IA was under an obligation to inform IDC and Icdas that their
evidence and information submitted in response to the 19 August request was being rejected and to
give them an opportunity to provide further explanations, and second, if so, whether the IA did so.
7.258  Turning to the first aspect, we note that the applicability of this obligation to the responses to
the 19 August request is somewhat ambiguous.  In particular, it is clear on its face that the 19 August
request itself is a communication of the type referred  to in Annex II, paragraph 6, at least in so far as
the original questionnaire responses on cost were concerned.  That is, in that letter as sent to each
respondent, the IA identified various problems that it perceived in the cost data originally reported by
that respondent in its questionnaire response, indicated that the IA intended to adjust those data for
hyperinflation, and then gave the respondent the chance to provide further information on cost of
production if it wished to avoid the IA's performing the mentioned inflation adjustment.  Thus, the19 August request informed the respondents that their information was being rejected and provided
them an opportunity to submit further explanations, as well as certain additional information.
7.259  The question is then whether the IA, having in the 19 August request informed respondents of
its intention to reject their previously-submitted cost information and provided an opportunity for,
inter alia, further explanations in respect of that information, was under a new obligation to take these
steps again in respect of the responses to the 19 August letter.  Put another way, was it sufficient at
that point for the IA to simply explain in the Final Report , in accordance with the last sentence of
Annex II, paragraph 6, why Icdas' and IDC’s respon ses to the 19 August request were rejected?
7.260  Here again we believe that this issue can only be decided in the light of the particular situation
at the time.  While we have concluded in Section VII.D.5, infra , that the 19 August request was not a
questionnaire in the sense of Article 6.1.1, there is nevertheless no doubt that it was a request by the
IA for the provision of a great deal of detailed information.  The responses to it by IDC and Icdas wereWT/DS211/R
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quite lengthy, and contained many pages of accounting and other documentation.  The IA's
23 September letters following up on these responses identified no fundamental problems in them, but
rather identified a few apparently minor missing items that were to be (and were) submitted within
two to five days.
7.261  Given the nature of the 19 August communication and of these companies' responses thereto,
in our view the IA continued to be bound by the obligation to inform the respondents that their
information submitted in response to the 19 August request was being rejected and to give them a
final opportunity to explain.  For us, the determinative factor in this regard is that the 19 August letter
not only gave respondents the opportunity to provide explanations  concerning their originally-
submitted cost data, it also requested them to submit extensive  further information , which they in fact
did.  Because the 19 August request was a request for "information" as referred to in Annex II,
paragraph 6 (and not just an opportunity for explanation), and because IDC and Icdas providedextensive "information" in response to it, the IA was bound by the first sentence of Annex II,
paragraph 6 in respect of that “information”.  Thus, these companies should have been informed that
their responses to the 19 August request were being rejected, and given an opportunity to "provide
further explanations".  This did not happen.  On 23 September, these companies were simply
requested to provide a few missing pieces of information, and thus certainly were left with theimpression that their responses to the 19 August requests had been accepted by the IA.
7.262  We must emphasize in this connection that it was the IA itself that requested the information
at issue (i.e., the information submitted in response to the 19 August letters).  As we have found
above, it is within the discretion of an investigatin g authority to determine, subject to the requirements
of Annex II, paragraph 1, what information it needs from interested parties.  Furthermore, there isnothing in the AD Agreement that precludes an in vestigating authority from requesting information
during the course of an investigation, including after the questionnaire responses have been
received.
229  The fact that an investigating authorit y may request information in several tranches
during an investigation cannot, however, relieve of it of its Annex II, paragraph 6 obligations in
respect of the second and later tranches, as that requirement applies to “information and evidence”without temporal qualification.
230
7.263  We note that, at least in respect of Habas, Diler and Colakoglu, the IA itself apparently
considered that it had the obligation to explicitly indicate that the information submitted in response to
the 19 August request was being rejected.  In particular, the 23 September letters identify, as
discussed above, a number of very serious inadequacies in the responses of these companies and
contain long lists of missing items that would need to be submitted within two to five days.  Given
these companies' reactions to the 23 September letter, in their own letter of 28 September to the IA, itis evident that they were in no doubt that the IA intended to reject the cost information they had
submitted.  Nevertheless, the IA sent these three companies one final letter, dated
28 September 1999
231, informing them that they had not fully responded in respect of six items232, and
that therefore the IA "will use other data provided by your clients which were satisfactory, but will
use facts available for the above-mentioned items".  No similar communication was ever sent to IDCor Icdas.
                                                     
229 See para.7.320,  infra.
230 We do not mean to imply here that an interested party can impose on an investigating authority an
Annex II, paragraph 6 requirement simply by submitting new information sua sponte  during an investigation.
Rather, the role of paragraph 6 of Annex II, namely th at it forms part of the basis for an eventual decision
pursuant to Article 6.8 whether or not to use facts available, makes it clear that its requirements to informinterested parties that information is being rejected and to give them an opportunity to provide explanations,pertain to “necessary” information in the sense of Article  6.8.  As discussed above, “necessary” information is
left to the discretion of the investigating authority to specify, subject to certain requirements, notably those in
Annex II, paragraph 1.
231 Exh. EGT-13.6.
232 Materials, labour, overhead, SG&A, inte rest expense, and detailed cost sheet.WT/DS211/R
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7.264  Finally, the IA gave no indication in the Essential Facts and Conclusions Report  or in the
Final Report  that either Icdas and IDC had at any point failed to act to the best of its ability.  To the
contrary, the record shows that these companies responded on time and comprehensively to the
19 August request, and did so once again in response to the IA’s 23 September follow-up requests.
7.265  To summarize in respect of Icdas and IDC, we have found that the IA in the 19 August
request not only informed these respondents of problems with their originally-submitted cost data, but
informed them of what information would be needed  for their costs to be verifiable.  Thus, in the
19 August letter, the IA established the standard for verifiability of the respondents' cost data.  Icdas
and IDC responded in a timely manner, and as evidenced by the narrow scope of the 23 September
follow-up requests that they received, their responses also were largely complete.  Furthermore, they
supplied the further information requested on 23 September within the deadlines set by the IA.  Thus,
the record evidence indicates that as of their responses to the 23 September requests, these tworespondents had submitted all of the information that the IA itself had defined as what was necessary
to render their cost information “verifiable”.  There is no indication whatsoever that the IA considered
either of these companies to have failed to act to the best of its ability.  Nevertheless, the IA rejected
the submitted cost information on the grounds that the IA still was not convinced that the cost data
reflected hyperinflation – that is, in effect, it simply did not believe the costs reported by thesecompanies, although the information they submitte d complied fully with what the IA itself had
defined as necessary to verify those costs.  Th e IA failed to inform these companies that it was
rejecting the information submitted in response to the 19 August and 23 September requests, and
failed to give them an opportunity to provide further explanations.
7.266  For the foregoing reasons, we find that Egypt violated Article 6.8 and Annex II, paragraph 6,
in respect of IDC and Icdas, because the IA, having identified to these respondents the information
“necessary” to verify their cost data, and having received that information, nevertheless found that
they had failed to provide “necessary informatio n”; and further, did not inform these companies of
this finding and did not give them an opportunity to provide further explanations.
4. Claim under Article 2.2.1.1, 2.2.2 and 2.4 due to alleged unjustified resort to facts
available
7.267  Under this claim, Turkey cites Articles 2.2.1.1, 2.2.2 and 2.4 as being violated "because the
IA was not justified in resorting to facts available".  Article 2.2.1.1 requires that costs shall normally
be calculated on the basis of records kept by the exporter or producer under investigation, provided
such records are kept in accordance with generally accepted accounting principles of that country, and
reasonably reflect the relevant costs.  Article 2.2.2 deals with calculations of general, selling and
administrative costs, and profits, and how these calculations should be done in the case of aconstructed normal value.  Turkey alleges that the methodologies set forth in those provisions were
not followed by the IA.  In response to a question from the Panel, Turkey clarified that this was an
"alternative" claim to that under Article 6.8 and Annex II.  In particular, Turkey stated that this claim
was intended to avoid a situation where the Panel might find that even if resort to facts available had
not been technically justified, the particular facts that were used could have been used, i.e., that only aharmless error had been committed.
7.268  Given Turkey's characterization and explanation of the rationale for this claim, we understand
the claimed violations of Article 2.2.1.1 and Article 2.2.2 to be entirely subsidiary to the claimed
Article 6.8 violation.  In this regard, we recall that we have found that the IA was justified in resorting
to facts available in respect of Habas, Diler and Colakoglu.  This can only mean that the IA was
justified to use facts other than  those as submitted by the respondents, i.e, that Articles 2.2.1.1 and
2.2.2 do not apply.  We also recall that we have found that the IA was not justified in resorting to facts
available, in violation of Article 6.8 and Annex II, paragraph 6, as regards IDC and Icdas.  For these
two companies, we need not and do not reach the issue of which particular information of theWT/DS211/R
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respondents was not used.  We therefore exercise judicial economy in respect of the claimed
violations of Articles 2.2.1.1 and 2.2.2 in respect of all of the respondents.
7.269  Concerning its Article 2.4 claim in this context, Turkey argues that "[e]ven if there were some
basis to conclude that respondents did not res pond fully to the IA's 19 August or 23 September
information requests, the respondents provided a full explanation of how their submitted costs andprices reflected inflation in Turkey and [ ] the IA's rejection of those well-founded reasons imposed an
unreasonable burden of proof in violation of Ar ticle 2.4".  As discussed in Section VII.E.2, infra ,
Article 2.4 has to do with the comparison  of export price to normal value, and does not create a
generally applicable rule as to burden of proof, and we thus find that Article 2.4 is not applicable to
the IA's decision to resort to facts available.  Furthermore, even if this provision were applicable, we
have found elsewhere
233 that there is no basis in the evidence of record on which to conclude that the
information requirements imposed by the IA in respect of costs were unreasonable.  We therefore findthat Turkey has not established that there is a violation of Article 2.4 under this claim.
5. Claim under Article 6.1.1, Annex II, paragraph 6, and Article 6.2 – Deadline for
response to 19 August 1999 request
7.270  Turkey argues that Article 6.1.1 requires that a party must be given 37 days to reply "after
receiving a questionnaire used in an anti-dumping investigation[]" and that "due consideration" mustthen be given to any request for an extension of  the original period for a response.  According to
Turkey, Egypt violated these provisions by first setting a 13-day rather than a 37-day deadline, and
then by granting an inadequately short extension.
7.271  Turkey claims in the alternative that Egypt violated Annex II, paragraph 6, which provides
that parties receiving supplemental request for information should be given "an opportunity to providefurther explanations within a reasonable period …", and Article 6.2 which provides that "[t]hroughout
an anti-dumping investigation all interested parties shall have a full opportunity for the defence of
their interests".  In particular, Turkey argues that the original 13-day deadline was plainly inadequate
given the nature and magnitude of the 19 August request, and was more so in light of the earthquake
that had occurred in Turkey on 18 August.  Turkey argues that the "denial" of the respondents'requests for extensions to 11 and 22 October thus violated Annex II, paragraph 6 and Article 6.2.
7.272  Egypt responds that the 19 August requests did not constitute "new questionnaires", in that
they were, in the first place, not "new".  Rather, according to Egypt, they re-requested information
that already had been requested in the foreign manufacturers' and exporters' questionnaires, which
normally should have been readily available to the respondents.  Nor, Egypt argues, were they
"questionnaires" in the sense of Article 6.1.1, meaning that they were not subject to the minimum
response time requirements of that provision.  Rather, they were intended to provide an additionalopportunity for respondents to report cost data fo r the full period of investigation, and to clarify
whether and to what extent the reported costs reflected the effects of hyperinflation.  Egypt further
argues that the respondents were given a reasonable period of time in which to respond, noting in
particular the 14-day extension that was granted by the IA, a more than doubling of the initial 13-day
period.
(a) Claim under Article 6.1.1
7.273  We consider first Turkey's allegation of violation of Article 6.1.1.  Article 6.1.1 provides as
follows:
"Exporters or foreign producers receiving questionnaires used in an anti-dumping
investigation shall be given at least 30 days for reply.
 15  Due consideration should be
                                                     
233 Section VII.E.2, infra .WT/DS211/R
Page 70
given to any request for an extension of the 30-day period and, upon cause shown,
such an extension should be granted whenever practicable.
_____________
15 As a general rule, the time-limit for exporters shall be counted from the date of
receipt of the questionnaire, which for this purpose shall be deemed to have been received oneweek from the date on which it was sent to the respondent or transmitted to the appropriatediplomatic representative of the exporting Member or, in the case of a separate customs
territory Member of the WTO, an official representative of the exporting territory."
7.274  We note first, as a point of clarification, that the time-limit requirement specified in
Article 6.1.1 is 30 days, not 37 days.  Moreover, footnote 15 provides that (only) in the case of
questionnaires sent to exporters is it necessary to count the time-limit from date of receipt, which in
turn is deemed (only) for exporters to be seven da ys from transmittal.  In effect, therefore, Turkey's
statement that Article 6.1.1 requires a minimum time-limit of 37 days from date of receipt, is not
entirely accurate.
7.275  This, however, is not the central issue in this claim.  Rather, this claim turns on whether the
19 August requests were "questionnaires" in the sense of Article 6.1.1, because only if so would any
specific minimum time-limit (whether 30 or 37 days) apply.  Put another way, the question is whether"questionnaires" as referred to in Article 6.1.1 are only the original questionnaires in an investigation,
or whether this term also includes all other requests for information, or certain types of requests,
including requests in addition and subsequent to original questionnaires.
7.276  The term "questionnaire" as used in Article 6.1.1 is not defined in the AD Agreement, and in
fact, this term only appears in Article 6.1.1, and in paragraphs 6 and 7 of Annex I.  In our view, the
references in Annex I, paragraphs 6 and 7 provide strong contextual support for interpreting the term
"questionnaires" in Article 6.1.1 as referring only to the original questionnaires sent to interestedparties at the outset of an investigation.  In particular, both of these provisions refer to "the
questionnaire" in the singular, implying that there is only one document that constitutes a
"questionnaire" in a dumping investigation, namely the initial questionnaire, at least as far as the
foreign companies (producers and exporters) that might be visited are concerned.  Paragraph 6 refers
to visits by an investigating authority to th e territory of an exporting Member "to explain the
questionnaire ".  Paragraph 7 provides that "on-the-spot investigation … should be carried out after the
response to the questionnaire  has been received…"
7.277  If any requests for information other than the initial questionnaire were to be considered
"questionnaires" in the sense of Article 6.1.1, a number of operational and logistical problems would
arise in respect of other obligations under the AD Agreement.  First, there is no basis in the ADAgreement on which to determine that some, but not all, information requests other than the initial
questionnaire also would constitute "questionnaires".  Thus, even if an investigating authority was not
obligated to provide the minimum time-period in Article 6.1.1 in respect of every request for
information, it would not be able to determine from the Agreement which of its requests were and
were not subject to that time-period.  On the other hand, if all requests for information in aninvestigation were "questionnaires" in the sense of Article 6.1.1, this could make it impossible for an
investigation to be completed within the maximum one year (or exceptionally, 18 months) allowed by
the AD Agreement in Article 5.10.  Moreover, a 30- or 37-day deadline for requests for information
made in the context of an on-the-spot verification -- i.e., the "obtain[ing of] further details" explicitly
referred to in Article 6.7 to as one of the purposes of such verifications -- obviously would becompletely illogical as well as unworkable.  Finally, such an interpretation would render superfluous
the requirement in Annex II, paragraph 6 to allow a "reasonable period …" for the provision of any
explanations concerning identified deficiencies in submitted information.WT/DS211/R
Page 71
7.278  Considering the substance of the 19 August requests, particularly in comparison to the
original questionnaires, further persuades us that the 19 August requests did not constitute new
"questionnaires" in the sense of Article 6.1.1.  In particular, as we have noted234, supra , while the
questions posed are rather detailed, they are in the nature of follow-up questions to the original
questionnaire responses, in that they request cost data for the months for which such data were notoriginally provided by certain respondents, and they request underlying documentation,
reconciliations and explanations of the originally submitted cost data and of the additional cost data
being requested.
7.279  For the foregoing reasons, we conclude that the 19 August requests did not constitute
questionnaires in the sense of Article 6.1.1, and that therefore the deadline imposed for responses to
those requests was not inconsistent with that Article.
(b) Alternative claim under Annex II, paragraph 6 and Article 6.2
7.280  We now turn to Turkey's alternative claim in respect of the deadline for responses to the
19 August requests, that the time allowed did not constitute a "reasonable period", in violation of
Annex II, paragraph 6, and that therefore the IA failed to provide the Turkish respondents a "full
opportunity for the defence of [their] interests", in violation of Article 6.2.
7.281  Because the claimed violation of Article 6.2 is entirely dependent on the claimed violation of
Annex II, paragraph 6, we turn first to Annex II, paragraph 6.  We note that the relevant part of this
provision reads as follows:
"If evidence or information is not accepted, the supplying party should be informed
forthwith of the reasons therefor, and should have an opportunity to provide further
explanations within a reasonable period, due account being taken of the time-limits of
the investigation … ." (emphasis added)
7.282  This text makes clear that the obligation for an  investigating authority to provide a reasonable
period for the provision of further explanations is not open-ended or absolute.  Rather, this obligation
exists within the overall time constraints of the investigation.  Thus, in determining a "reasonable
period" an investigating authority must balance the need to provide an adequate period for the
provision of the explanations referred to against the time constraints applicable to the various phases
of the investigation and to the investigation as a whole.
7.283  We recall that in the rebar investigation, the IA initially set a 13-day deadline for any
responses to the 19 August requests.  After receiving the requests for extensions from the respondents,
the IA extended by 14 days the time-period that was allowed for the responses.
235  After the IA
informed the respondents of the extended deadline, no respondent came back with any additional
request for more time, nor did any respondent argue that the new deadline was unreasonable orotherwise object to it.  All of the respondents in fact made lengthy submissions in response to the
19 August request on or before the deadline.
7.284  On the basis of the foregoing considerations, we do not find that, as a factual matter, the
deadline for responses to the 19 August request was unreasonable.  We note that this claim concerns
in part Annex II, paragraph 6 outside the context of Article 6.8.  Given our finding that the deadlineestablished was not unreasonable, i.e., that the factual basis for this claim does not exist, we need not
and do not rule on whether Annex II, paragraph 6 can be invoked outside the context of Article 6.8.
As a consequence, we also do not find that in establishing a 27-day deadline for the provision of these
                                                     
234 See para.7.238,  supra.
235 Exh. EGT-14.1(Icdas), EGT-14.2(IDC) and EGT-14.3(Diler, Colakoglu and Habas), respectively.WT/DS211/R
Page 72
responses, the IA failed to provide the respondents with a full opportunity for the defence of their
interests, and we thus find no violation of Article 6.2 in this respect.
6. Claim under Article 6.1.1, Annex II, paragraph 6, and Article 6.2 - Deadline for the
responses of Habas, Diler and Colakoglu to the 23 September letter of the IA
7.285  On 23 September, i.e., approximately one week after receiving the responses to the 19 August
request, the IA sent letters to each respondent identifying information and documentation which,
according to the IA, that particular respondent had "not yet furnished" in response to the 19 August
request.  The IA gave all of the respondents the same time-frame in which to furnish the identified
information, namely 2 days for some of the listed items and 5 days for the rest.
7.286  Turkey claims that in the 23 September letter to Habas, Diler and Colakoglu, the IA for the
first time required these companies to provide a m onthly breakdown of all costs to produce billet, and
also demanded that the companies translate each page of the hundreds of pages of documentation thatthey had been required to provide in their respons es to the 19 August request.  According to Turkey
the two-to-five days allowed these three companies to respond to the 23 September letter was
manifestly inadequate, and was contrary to Articles 6.1.1, 6.2 and Annex II, paragraph 6.
7.287  For the same reasons set forth in respect of the preceding claim, we do not find that the
23 September letters constituted "questionnaires" in the sense of Article 6.1.1, and thus we find noviolation of that provision.
7.288  As for the claim of violation of the requirement in Annex II, paragraph 6 to provide a
"reasonable period", we recall that this provision forms part of the required procedural and substantive
basis for a decision as to whether resort to facts available pursuant to Article 6.8.  We further recall
that we have found, supra
236, that the IA’s decision to resort to facts available in respect of Habas’,
Diler’s and Colakoglu’s costs of production and constructed normal values did not violate Article 6.8,
based on considerations under Annex II, paragraphs 3 and 5.  Thus, we would not necessarily need to
address this aspect of this claim for its own sa ke.  Nonetheless, a full analysis of Annex II,
paragraph 6 as it pertains to the factual basis of this claim, appears necessary to evaluate the merits of
the claimed violation of Article 6.2 resulting from the deadline for responses to the 23 Septemberrequests.  In performing this analysis, however, we  note that we again do not here take a position on
whether Annex II, paragraph 6 can be invoked separately from Article 6.8.  We would need to do so
only if we find that as a factual matter, the deadline in question was unreasonable.
7.289  We thus turn first to this factual question, i.e., whether the two-to-five day deadline as it
applied to Habas, Diler and Colakoglu was unreasonable.  We believe that this issue must be judged
on the basis of the overall factual situation that existed at the time.  Here, it appears that the key
element raised by Turkey is whether the information requested was "new" information that was beingrequested for the first time.  In this regard, Turkey complains in particular about the IA's request for a
monthly breakdown of costs to produce steel bille t (the feedstock used in rebar production).
7.290  In considering whether this was an entirely new information request, we note that item 4 of
the "list of supplemental materials" in the 19 August letters requested detailed listings of raw material
"purchases" as well as copies of payment ledgers showing payments for those purchases, and copiesof the underlying purchase orders.  The main inform ation provided by these companies in response to
the request for data on raw material costs was their internal transfer price data for billet, a product
they make themselves, rather than purchasing it as a raw material.  Thus, the 23 September request for
a monthly breakdown of the costs to produce steel billet, rather than constituting a new request for
previously-unrequested information, in fact, was in essence a restatement of the request in the19 August letters for data and documentation on raw material purchases .  The other items listed in the
                                                     
236 Para.7.248.WT/DS211/R
Page 73
23 September letter similarly were items previously requested.  Thus we conclude that the
23 September request was a follow-up to the responses to the 19 August request rather than a new
request.
7.291  A further consideration concerning the "reasonableness" of the 23 September request is
whether any of the other respondents received a longer period in which to respond to the letters theyreceived from the IA on 23 September.  Here the answer is "no"; all respondents were given the same
amount of time to respond to those letters.  The fact that more information was requested in the letter
to Habas, Diler and Colakoglu than in the letters to the other two respondents, IDC and Icdas, is a
reflection of the fact that, according to the record, the latter two companies' responses to the
19 August request were much more complete than th ose of the first three companies.  For the IA to
have given Habas, Diler and Colakoglu more time than IDC and Icdas to respond to the 23 September
follow-up request arguably would have been less th an fair, and indeed would have rewarded precisely
the companies whose responses to the 19 August request were the least adequate.
7.292  In this context it must be remembered that a ll five respondents received essentially equivalent
information requests on 19 August, and were given an identical period in which to respond.  All five
respondents then again were given an identical period in which to respond to the 23 September
follow-up (deficiency) requests.  Thus, for equivalent requests for information, the five respondentsreceived, in total, equivalent (and considerable) time-periods to respond.  Thus, the two-to-five-day
deadline for responses to the 23 September simply forms part of the overall time granted for responses
to the basic request for cost information that was sent on 19 August.  The three respondents
mentioned in this claim chose to use their initial 27-day response period in a different way from the
other two respondents.  It was these decisions by the two groups of respondents (not by the IA) thatfundamentally gave rise to the different scopes of the 23 September follow-ups that they respectively
received.
7.293  We note further that in any case, Habas, Diler and Colakoglu never even attempted to submit
any of the information identified in the 23 Septembe r letters or sought any extension of the deadline
for responding.  To the contrary, they made it clear in their response to the IA
237 that they had no
intention of submitting further information.
7.294  The factual situation thus was:  (1) that the 23 September letter was essentially a restatement
of previous requests that had not been responded to in full, rather than a new request, (2) that all five
respondents, including Habas, Diler and Colakoglu, received overall the same amount of time to
provide the cost data specified in the 19 August request, and (3) that unlike Icdas and IDC, which had
used the initial 27 day period to full advantage, these three respondents stated explicitly that they
would not provide the information referred to in the 23 September request, (i.e., they made no attemptto comply with the request nor did they reques t an extension of the two-to-five day period).
7.295  As a consequence, we do not find that Turkey has established that the two-to-five day period
provided to Habas, Diler and Colakoglu for responding to the 23 September request was
unreasonable, and thus we do not find that Turkey has established the factual basis for a possible
violation of Annex II, paragraph 6 in that regard.  As a result, we also do not find that the IA failed toprovide Habas, Diler and Colakoglu with a full opportunity for the defence of their interests, and thus
find no violation of Article 6.2 in this respect.
7. Claim under Annex II, paragraph 7 due to the addition of 5 per cent for inflation to
Habas' highest reported monthly costs
7.296  Turkey claims that the Investigating Authority violated Annex II, paragraph 7 by adding an
arbitrary 5 per cent to Habas' reported costs when constructing Habas' normal value.  Habas submitted
                                                     
237 Exh. EGT-2.WT/DS211/R
Page 74
cost data for only two of the 12 months of the period of investigation.  As a proxy for the effects of
hyperinflation, the IA constructed Habas' normal value by using the highest (of the two reported)
monthly costs for each cost element as submitted by Habas, and then added to these 5 per cent, the
monthly rate of inflation considered by the Inve stigating Authority as reflecting the ruling rate of
inflation during the period of investigation.  Turkey cl aims that in doing this, Egypt violated Annex II,
paragraph 7, as this amount which was based on a "secondary source", was wholly arbitrary, was
contradicted by data supplied to Egypt by the Government of Turkey, was not corroborated by any
other data on the record, and thus was an inappropriate basis for facts available under the AD
Agreement.
7.297  Egypt argues that it determined the "facts available" in such a manner that the respondents
would still benefit from their own data, by taking the highest monthly cost of production reported by
the respondents during the investigation period.  In the case of Habas, because Habas had providedcosts for two selected months only, and had failed  to submit satisfactory evidence that these two
months were representative of the period of investigation or had been adjusted for inflation, the IA
added 5 per cent to each cost element except interest to account for inflation.  For interest, no
adjustment was made to the data reported by Habas, as it was found that Habas’s interest cost was
determined in the marketplace and therefore woul d reflect inflation.  According to Egypt, the IA
would have been entitled to reject entirely the reported cost data, and base its determinations on
information from secondary sources, as explicitly contemplated by Annex II, paragraph 7, but instead
it decided to use the respondents' submitted data to the extent possible.
7.298  Paragraph 7 of Annex II states, in relevant part:
"If the authorities have to base their findings, including those with respect to normal
value, on information from a secondary source, including the information supplied in
the application for the initiation of the inve stigation, they should do so with special
circumspection.  In such cases, the authorities should, where practicable, check the
information from other independent sources at their disposal, such as published price
lists, official import statistics and customs returns and from the information obtainedfrom other interested parties during the investigation. … ."
7.299  Concerning the "facts available" used in the case of Habas, the IA stated in its Final
Report:
238
"The Investigating Authority first attempted to compare the net home market to thecost of production.  Although the Investig ating Authority twice requested full costs of
production for the entire POI, the compan y only provided costs for two selected
months, and there is no evidence on the record that these were representative of theperiod.  Therefore, as facts available for the COP, the Investigating Authority used
for each cost element (except interest) the highest of the company's submitted costs
and added 5 per cent to account for inflation during the period of each month."
7.300  We understand that the main issue raised by this claim is the factual validity and accuracy of
the estimated 5 per cent for inflation that was used in the cost of production and constructed valuecalculations for Habas.  In particular, Turkey argues that the official statistics published by the
Government of Turkey show a lower monthly average rate of inflation, in that in only two months of
1998 did inflation exceed 5 per cent, fluctuating in the other months between 1.6 and 4.6 per cent.
239
This issue was raised during the investigation, namely in the comments of the Government of Turkeyon the Essential Facts and Conclusions Report .  Along with these comments, the Turkish
                                                     
238 Exh.TUR-16, para.3.2.2.1.
239 Written Response, dated 15 October 1999, of the Government of Turkey on the Essential Facts and
Conclusions Report,  submitted by Turkey as Exh. TUR-30, p.2.WT/DS211/R
Page 75
Government, provided wholesale price index data published by the Turkish State Institute of
Statistics.  In its Final Report , the IA indicated that it had rejected the inflation information submitted
by the Turkish Government as "new" and "untimely"240, and stated that it was continuing to apply the
estimated 5 per cent inflation rate on the basis that it had other information at its disposal that showed
an even higher monthly rate.
7.301  We requested Egypt to submit to us the information on inflation the IA had referred to in the
Final Report ,241 and to explain how the IA had arrived at the 5 per cent figure based on the data at its
disposal.242  Egypt replied that it had used the same data source as that submitted by the Turkish
Government (i.e., the price indices published by the Turkish State Institute of Statistics), but that the
5 per cent rate was the average of the official wholesale and consumer price indices during the period
of investigation, whereas the Turkish Government had referred in its comments only to the wholesale
price index.
7.302  We recall that the claim before the Panel is that the addition of 5 per cent to Habas' costs was
arbitrary, finds no support anywhere in the record and, as information from a "secondary source",
should have been used with "special circumspection", and in particular, should have been "check[ed]
… from other independent sources at [the IA's] di sposal".  Turkey also argues that under the AD
Agreement, if data from a company cannot be used, they must be replaced with data from a secondarysource.  According to Turkey, there is no authority in the AD Agreement to make purely arbitrary
adjustments to a respondent's costs.  Turkey cites no provision of the AD Agreement in this context,
however.
7.303  In considering this claim, we note that the 5 per cent figure was derived from a secondary
source, in fact the same secondary source as was proffered by the Government of Turkey during theinvestigation.  Thus, the source of the information as such is not at issue.  Given this, there was no
need for the IA to check the validity of that sour ce.  Rather, the only issue is whether the 5 per cent
figure that was derived from that source was calculated and used with "special circumspection". In
this regard, the relevant fact is that the 5 per cent figure represents an average of the 1998 wholesale
and consumer price indices for Turkey.
7.304  Turkey asserted during this dispute that a consumer price index is “irrelevant” to rebar.
243
Turkey offered no specific argumentation or information in support of this point, however.  We note
that in its communications with respondents during the investigation concerning the effects on the
respondents of hyperinflation in Turkey, the IA appears to have been referring to the general,
economy-wide rate of inflation.  It is not illogical that such a broad measure of inflation should reflect
both wholesale and consumer prices.  Nor is it illogical that a company’s cost to produce a product
would be influenced by both consumer and wholesale prices.  In short, to us it is not evident on its
face that consumer prices would be wholly irrelevant to a company’s production costs.  Nor has
Turkey advanced any argumentation or evidence to demonstrate that this is so, either as a matter of
general principle or in respect of the companies that were respondents in the rebar investigation.
7.305  For these reasons, we do not find that the IA failed to use "special circumspection" in
estimating inflation in Turkey at 5 per cent per month, and in applying this figure to Habas.  We thusdo not find that Egypt violated Annex II, paragraph 7 in this regard.  We find, rather, that on the basis
of the evidence of record, an objective and unbiased investigating authority could have reached the
conclusion that 5 per cent was the approximate average monthly inflation rate in Turkey during the
period of investigation.  In this regard, it should be emphasized that applying “special
                                                     
240 Exh. TUR-16, Final Report , p.21.
241 Question 10 to Egypt of the Written Questions by the Panel , dated 28 November 2001 – Annex 4-2.
242 Question 4 to Egypt of the Written Questions by the Panel , dated 27 February 2002 - Annex.8-2.
243 Written Comments, dated 14 March 2002, by Turkey on Question 4 to Egypt of the Written
Questions by the Panel , of 27 February 2002 – Annex 8-1.WT/DS211/R
Page 76
circumspection” does not mean that only one outcome is possible on a given point in an investigation.
Rather, even while using special circumspection, an investigating authority may have a number of
equally credible options in respect of a given que stion.  In our view, when no bias or lack of
objectivity is identified in respect of the option selected by an investigating authority, the option
preferred by the complaining Member cannot be preferred by a panel.
8. Claim under Annex II, paragraphs 3 and 7 due to failure to use Icdas' September-
October 1998 scrap costs
7.306  Turkey claims that in constructing Icdas normal value on the basis of facts available, the IA
declined to use the scrap costs as reported by Icdas for September-October 1998 (the months in which
it exported to Egypt), and instead used Icdas' January 1998 scrap cost (the highest in the period of
investigation).  Because, according to Turkey, Icdas had provided all of the requested data and
documentation concerning its scrap costs in a timely manner and these data were "verified" (clarifiedby Turkey to mean "verifiable"
244), the IA should have used those scrap costs as submitted.  Its failure
to do so, Turkey argues, was a violation of Annex II, paragraph 3.  In addition, Turkey argues that the
IA violated the spirit, if not the letter, of paragraph 7 of Annex II, in that a comparison with the
"verified" data submitted by Icdas shows that the scrap cost data used by the IA in its calculations
were "grossly distorted".
7.307  Egypt argues that Turkey's invocation of Annex II, paragraph 3 is misplaced.  In Egypt's
view, this provision is only concerned with the circumstances in which the data submitted by the
respondents have to be accepted or can be rejected, and says nothing about the selection of
appropriate facts available once the data submitted by respondents has been rejected.
7.308  Paragraph 3 of Annex II states, in relevant part:
"All information which is verifiable, which is appropriately submitted so that it can
be used in the investigation without undue difficulties, …, should be taken into
account when determinations are made. … ."
7.309  We recall that in our assessment of Turkey's claim that Egypt violated Article 6.8 in resorting
to the use of "facts available", we found that the provisions of Annex II, paragraph 3 form part of thesubstantive parameters for the interpretation of Article 6.8.  That is, we found that this paragraph in
conjunction with  other paragraphs of Annex II must be followed by an investigating authority in
making its assessment of whether, in a particular case and in respect of certain elements of
information, it is justified in resorting to "facts available" pursuant to Article 6.8.  In other words,
paragraph 3 applies to an IA's decision to use "facts available" in respect of certain elements of
information.  It does not have to do with determining which particular facts available will be used for
those elements of information once that decision has been made.  Thus, we find that this provisiondoes not apply to the situation that is the subject of  this claim.  This said, we recall that we have
found, supra , in part based on an analysis of Annex II, paragraph 3, that the IA was not justified in
resorting to facts available in respect of Icdas.  We thus do not need to address this claim further.
7.310  Turning to Turkey's claim of violation of Annex II, paragraph 7, given that we have found, in
the context of Turkey's Article 6.8 claim, that the IA's  resort to "facts available" in respect of Icdas
was not justified, we do not need to address this claim, which concerns the selection of particular facts
available.
                                                     
244 Written Response, dated 14 March 2002, to Question 4 to Turkey of the Written Questions by the
Panel , of 27 February 2002 – Annex 8-1.WT/DS211/R
Page 77
9. Claim under Annex II, paragraphs 3 and 7 due to calculation of the highest monthly
interest cost for IDC
7.311  Turkey claims that the IA violated Annex II, paragraph 3 in calculating the amount of interest
expense to use as facts available in constructing IDC's normal value.  In particular, according to
Turkey, the IA calculated the interest expense by dividing IDC's total interest expense by rebarproduction in April 1998.  Turkey states that because IDC produces and sells on the market other
products (namely billets), and because the April rebar production figures were abnormally low, the
result was a distorted, very high, interest component, which overstated the constructed normal value.
Turkey argues that the IA should have divided total interest cost by total sales during the period of
investigation, based on the audited financial statement, instead of choosing the month with the highest
interest cost and dividing that cost by that  month's rebar production, which was abnormally low.
According to Turkey, IDC's audited financial statemen t shows that its interest expense expressed as a
percentage of the total cost of manufacturing would be much lower.  Because the IA failed to use
verifiable information (the interest expense as reflected in the audited financial statement), in Turkey's
view, the IA violated Annex II, paragraph 3.
245
7.312  Egypt responds that there are no requirements in the AD Agreement for any particular
methodology for calculating interest expense for a cons tructed value, and that therefore, provided that
the methodology used is not partial or biased, the IA's calculation should be upheld.  Moreover, Egypt
disagrees with the calculation methodology proposed  by Turkey, which in Egypt's view would have
been totally inappropriate in the context of the rebar investigation, as IDC's reported costs had been
found to be unreliable.246  Egypt argues, having selected April as the appropriate month for calculation
of interest expense, it had to use the production for that month as the denominator, as any other choicefor allocation would have been arbitrary.
7.313  Concerning Turkey's claim of violation of  Annex II, paragraph 3, we find, for the same
reasons as stated in Section VII.D.8, supra , that this provision does not apply to the situation that is
the subject of this claim, and we similarly recall our findings,  supra , in part based on an analysis of
Annex II, paragraph 3, that the IA was not justified in resorting to facts available in respect of IDC.We thus do not consider this claim further.
7.314  Concerning Turkey's claim of violation of Anne x II, paragraph 7, as was the case in respect of
the claim concerning Icdas discussed in Section VII.D.8, supra , Turkey's exact claim is that Egypt
violated the "considerations underlying Annex II, paragraph 7", i.e., once again, that this provision
was violated "in spirit".  In our view, the factual situation about which Turkey complains in respect of
IDC is precisely analogous to that raised in respect of Icdas under the same provision.  Our basic
reasoning and conclusions therefore are the same.
7.315  In particular, given that we have found, in the context of Turkey's Article 6.8 claim, that the
IA's resort to "facts available" in respect of IDC was not justified, we do not need to address this
claim, which concerns the selection of particular facts available.
E. O
THER CLAIMS R ELATING TO THE DUMPING INVESTIGATION
1. Claim under Annex II, paragraph 1; Annex II, paragraph 6; and Article 6.7, Annex I,
paragraph 7 – Alleged failure to verify the cost data during the "on-the-spot"
verification, and conduct of "mail order" verification instead
7.316  Turkey claims that by failing to request the basic cost data identified in its 19 August letter in
its original questionnaire, the IA violated Annex II, paragraph 1.  Turkey further claims that by
                                                     
245 First Written Submission of Turkey, p.74-76 and Second Written Submission of Turkey, p.77-82.
246 First Written Submission of Egypt, p.87-88.WT/DS211/R
Page 78
waiting until after the verification to raise these issues and then insisting that respondents provide full
"mail order" verification of previously-submitted cost responses and the information requested on
19 August, Egypt violated Annex I, paragraph 7 and Article 6.7.  According to Turkey, by taking
these steps, Egypt also seriously prejudiced the rights of respondents and impaired their "opportunity
to provide further explanations" in violation of Annex II, paragraph 6.
7.317  Egypt argues that the AD Agreement permits, but does not require, on-the-spot verification.
Egypt further argues that the IA did request cost data from the outset, in the questionnaires, that the
additional data was requested by the IA on 19 August due to possible problems in the cost data as
originally reported by the Turkish respondents, and that nothing in the AD Agreement prevents an
investigating authority from seeking information during the course of an investigation.
7.318  Turning first to the claim of violation of Annex II, paragraph 1, we note that the relevant text
of this provision reads as follows:
"As soon as possible after the initiation of the investigation the investigating
authorities should specify in detail the info rmation required from any interested party,
and the manner in which that information should be structured by the interested party
in its response."
7.319  We recall that in the context of Article 6.8, we found that the various provisions of Annex II
contain substantive parameters for the application of Article 6.8.
7.320  In the rebar investigation, the IA sent questionnaires to the Turkish respondents shortly after
initiating the investigation, and these questionnaires did request cost information.  Furthermore, the
import of the 19 August letter was to request certain supplemental cost information as well as
explanations concerning certain of the cost information originally submitted in response to thequestionnaires.  We find no basis on which to conclude that an investigating authority is precluded by
paragraph 1 of Annex II or by any other provision from seeking additional information during the
course of an investigation.
7.321  We note that this claim concerns in part Annex II, paragraph 1 outside the context of
Article 6.8.  Given our finding that Annex II, paragraph 1 does not contain the obligation asserted byTurkey, we need not and do not rule on whether Annex II, paragraph 1, can be invoked separately
from Article 6.8.
7.322  We turn next to Turkey's claim that Egypt violated Article 6.7 and Annex I, paragraph 7 by
waiting until after the on-the-spot verification to raise the cost issues in the 19 August letters, and then
by attempting to conduct what Turkey refers to as a "mail order" verification.  In evaluating this claim
we note that it depends on an interpretation of Article 6.7 and Annex I, paragraph 7 as requiring an
on-the-spot verification.  We thus consider these provisions in detail to determine whether theycontain any such requirements.
7.323  Article 6.7 reads in relevant part as follows:
"In order to verify information provided or to obtain further details, the authorities
may carry out investigations in the territory of other Members. … ." (emphasis added)
7.324  Annex I, paragraph 7 provides in relevant part:
"As the main purpose of the on-the-spot investigation is to verify information
provided or to obtain further details, it should be carried out after the response to the
questionnaire has been received unless the firm agrees to the contrary and theWT/DS211/R
Page 79
government of the exporting Member is informed by the investigating authorities of
the anticipated visit and does not object to it; ... ."
7.325  Concerning the relationship of Annex I to Article 6.7, we come to the same conclusion as in
respect of Annex II and Article 6.8.247  In particular, we note Article 6.7’s explicit cross-reference to
Annex I:  “[T]he procedures described in Annex I shall apply to investigations carried out in theterritory of other Members”.  This language thus establishes that the specific parameters that must be
respected in carrying out foreign verifications in compliance with Article 6.7 are found in Annex I.
Thus, we must analyze the relevant provisions of Article 6.7 and Annex I together to determine if the
requirement claimed by Turkey exists.
7.326  Considering Article 6.7, we find determinative the use of the word "may" (that is, that
authorities “may” carry out investigations in the territory of other Members).  This language makes
clear that on-the-spot verifications in the territory of other Members are permitted, but not required,by Article 6.7.
7.327  The relevant portion of Annex I, paragraph 7 deals with the timing of a foreign verification
visit, if one is made (i.e., “after the response to the questionnaire has been received”).  This provision
thus cannot be construed as containing a requirement to conduct such a visit per se .  We note that our
reading of these provisions is consistent with the findings of the panel in Argentina – Ceramic  Tiles ,
which stated that the AD Agreement contains no requirement to conduct foreign verifications, but
rather that Article 6.7 merely provides for this possibility, and that such on-site visits are neither the
only way nor even the preferred way for investigating authorities to meet their obligation under
Article 6.6 to "satisfy themselves as to the accuracy of the information supplied by interested parties
upon which their findings are based".
248
7.328  For the foregoing reasons, we find that Turkey has not established that Egypt violated
Annex II, paragraph 1, Article 6.7, or Annex I, para graph 7, as these provisions do not contain the
obligations asserted by Turkey.
7.329  This brings us to Turkey's final allegation of a violation in connection with this claim, of
Annex II, paragraph 6, regarding the alleged impairment of the respondents' "opportunity to providefurther explanations".  We note that this alleged violation is entirely dependent on and derivative from
the other alleged violations raised by Turkey in connection with this claim.  Given that we have found
no violation of these provisions, we conclude in this instance as well that Turkey has not established
the factual basis for the alleged violation by Egypt of violated Annex II, paragraph 6 in respect of the
factual situation that is the subject of this claim.
249
2. Claim under Article 2.4 – Request for detailed co st information late in the investigation
allegedly imposed an unreasonable burden of proof on the respondents
7.330  Turkey claims that by waiting until late in th e investigation to raise issues requiring the
submission of new factual information and then imposing an unduly burdensome "mail order"
verification requirement on the respondents, the IA imposed an "unreasonable burden of proof" upon
respondents in violation of Article 2.4 of the AD Agreement.
7.331  Egypt argues that Article 2.4 pertains exclusively to the requirement to make a fair
comparison between export price and normal value, and that its requirement not to impose an
unreasonable burden of proof applies to the collection of information concerning allowances required
                                                     
247 See paras.7.152-7.154.
248 Panel Report, Argentina – Ceramic Tiles,  footnote 65.
249 Because of this, we again do not opine on whether it is possible to invoke Annex II, paragraph 6
outside the context of Article 6.8.WT/DS211/R
Page 80
to ensure a fair comparison.  Egypt argues in the alternative that should the Panel consider that
Article 2.4 must be interpreted as being of general application to data collection in the course of an
investigation, the claim of violation is factually incorrect and that the burden of proof imposed upon
the respondents did not exceed the limits of reasonableness.
7.332  We start with the text of Article 2.4, which reads as follows:
"A fair comparison shall be made between the export price and the normal value.  This
comparison shall be made at the same level of trade, normally at the ex-factory level, and in
respect of sales made at as nearly as possible the same time.  Due allowance shall be made in
each case, on its merits, for differences which affect price comparability, including
differences in conditions and terms of sale, taxation, levels of trade, quantities, physical
characteristics, and any other differences which are also demonstrated to affect price
comparability.7  In the cases referred to in paragraph 3, allowances for costs, including duties
and taxes, incurred between importation and resale, and for profits accruing, should also be
made.  If in these cases price comparability has been affected, the authorities shall establish
the normal value at a level of trade equivalent to the level of trade of the constructed export
price, or shall make due allowance as warranted under this paragraph.  The authorities shall
indicate to the parties in question what information is necessary to ensure a fair comparisonand shall not impose an unreasonable burden of proof on those parties."
_________________
7 It is understood that some of the above factors may overlap, and authorities shall ensure that they do
not duplicate adjustments that have b een already made under this provision.
7.333  Article 2.4, on its face, refers to the comparison  of export price and normal value, i.e., the
calculation of the dumping margin, and in particular, requires that such a comparison shall be "fair".
A straightforward consideration of the ordinary meaning of this provision confirms that it has to do
not with the basis for and basic establishment of the export price and normal value (which are
addressed in detail in other provisions)250, but with the nature of the comparison of export price and
normal value.  First, the emphasis in the first sentence is on the fairness  of the comparison .  The next
sentence, which starts with the words "[t]his comparison", clearly refers back to the "fair comparison"
that is the subject of the first sentence.  The second sentence elaborates on considerations pertaining to
the "comparison", namely level of trade and timing of sales on both the normal value and export price
sides of the dumping margin equation.  The third sentence has to do with allowances for "differences
which affect price comparability ", and provides an illustrative list of possible such differences.  The
next two sentences have to do with ensuring "price comparability" in the particular case where aconstructed export price has been used.  The final sentence, where the reference to burden of proof at
issue appears, also has to do with "ensur[ing] a fair comparison".  In particular, the sentence provides
that when collecting from the parties the particular information necessary to ensure a fair comparison,
the authorities shall not impose an unreasonable burden of proof on the parties.
7.334  The immediate context of this provision, namely Articles 2.4.1 and 2.4.2 confirms that
Article 2.4 and in particular its burden of proof requirement, applies to the comparison of export price
and normal value, that is, the calculation of th e dumping margin.  Article 2.4.1 contains the relevant
provisions for the situation where "the comparison  under paragraph 4 requires a conversion of
currencies" (emphasis added).  Article 2.4.2 specifically refers to Article 2.4 as "the provisions
governing fair comparison", and then goes on to establish certain rules for the method by which that
                                                     
250 In this regard, we note that earlier provisions in Article 2, namely Article 2.2 including all of its sub-
paragraphs, and Article 2.3, have to do exclusively and in some detail with the establishment of normal valueand export price, and in addition that Article 2.1 has to do in part with the establishment of the export price.WT/DS211/R
Page 81
comparison is made (i.e., the calculation of dumping margins on a weighted-average to weighted-
average or other basis).
7.335  In short, Article 2.4 in its entirety, including its burden of proof requirement, has to do with
ensuring a fair comparison, through various adjustme nts as appropriate, of export price and normal
value.  Thus, we find that it does not apply to the investigating authority’s establishment of normalvalue as such, which was the main (if not only) purpose of the Egyptian IA's 19 August request for
certain cost-related information.
7.336  Moreover, even if the burden of proof requirement in Article 2.4 were considered to apply to
requests for information for the establishment of norm al value, and even if some of the information
contained in the IA's 19 August request potentially could have been relevant to the fair comparison
exercise that is the subject of Article 2.4, we do not find that Turkey has established that that request
imposed an unreasonable burden of proof on the respondents.  That is, we agree with Egypt that thefactual basis for a claim of violation does not exist.  In particular, we note that the request concerned
the amplification or clarification of cost information provided or meant to have been provided in the
questionnaire responses, and no respondent argued at the time that it received the 19 August request
that it was unreasonably burdensome.  Moreover, while all of the respondents requested (and
received)
251 extensions of the original deadline for responses, and then on or before the deadline
submitted responses including relatively voluminous documentation, in no case did any respondent
indicate that more time was needed, or otherwise argue or attempt to justify that it simply did not find
it possible to comply with the request.  While respondents Habas, Diler and Colakoglu did present
certain argumentation in their responses to the 19 August request, that argumentation had to do with
the alleged illegality of the request under WTO rules, rather than with its burdensomeness.
7.337  For the foregoing reasons, we find that Turkey has not established that the IA's 19 August
request for certain cost information imposed an unreasonable burden of proof in violation of
Article 2.4.
3. Claim under Article 6.2 and Annex II, paragraph 6 – Alleged denial of requests for
meetings
7.338  Turkey submits that the three respondents Habas, Diler and Colakoglu requested a meeting
with the IA after receiving the IA's letter of 23 September 1999, during which "they could explain
how the information submitted in their 15 September responses [to the 19 August request] replied to
the Investigating Authority's information requests"252.  Turkey further argues that IDC stated that it
was available for a further verification of its cost data if the IA so desired.253  According to Turkey,
the denial of these requests violated Article 6.2, which Turkey quotes as "provid[ing], inter alia , that
'[i]nterested parties shall … have the right … to present … information orally'"254.  In addition,
Turkey claims, the denial of these requests violat ed Annex II, paragraph 6 by denying the Turkish
respondents the basic right, where "evidence or information is not accepted", to be "informed
forthwith of the reasons therefor, and … given an opportunity to provide further explanations within a
reasonable period … ."
                                                     
251 The extensions granted were, however, shorter than those requested.
252 Written Response, dated 7 December 2001, to Question 1 to Turkey of the Written Questions by the
Panel,  of 28 November 2001 – Annex 4-1.
253 Turkey also initially argued that Icdas had requested a hearing as soon as it had reviewed the
Essential Facts and Conclusions Report .  In response to a question from the Panel as to where in the record that
request was found, Turkey informed the Panel that Icdas had not in fact made such a request.  ( See Written
Response, dated 14 March 2002, to Question 4 to Turkey of the  Written Questions by the Panel, of
27 February 2002.)
254 Written Response, dated 7 December 2001, to Question 1 to Turkey of the Written Questions by the
Panel , of 28 November 2001 – Annex 4-1.WT/DS211/R
Page 82
7.339  Egypt counters that the IA was under no obligation to organize a meeting with Habas, Diler
and Colakoglu at that stage of the investigation in the absence of any valid justification, in accordance
with the last sentence of Article 6.2.  Egypt further states that the meeting was requested after those
respondents had informed the IA that they w ould not submit the information requested in the
23 September letter.  Egypt argues that according to those respondents, the purpose of such a meetingwould have been to explain the information in their responses to the 19 August request, but in Egypt's
view that information was largely deficient, mean ing that such a meeting was not justified.  Egypt
states that the IA indicated to those respondents that the explanation of the data submitted in response
to the 19 August request should have been provided by submitting a written response to the
23 September letter, which the respondents had explicitly refused to do.  Egypt notes that in any
event, even if a meeting had been held, these respondents would not thereby have been excused from
submitting in writing the explanations proffered orally. during such a meeting, due to Article 6.3'srequirement that "[o]ral information provided under [Article 6.2] shall be taken into account by the
authorities only in so far as it is subsequently reproduced in writing … ."  Concerning IDC, Egypt
argues that the IA's denial to conduct a verification visit at that company's premises cannot be
examined under Article 6.2 of the AD Agreement, as that provision is not concerned with verification
visits.  Finally, Egypt argues that Annex II, paragraph 6 is inapplicable to the organizing of hearings,and that Egypt had demonstrated in connection with other claims that the IA had acted in full
compliance with the obligations in that provision.
7.340  Turning first to the claim of violation of Article 6.2, we note that the full text of the relevant
part of that provision, namely the last sentence, reads as follows:
"Interested parties shall also have the right, on justification , to present other
information orally." (emphasis added)
7.341  We note that the words "also" and "other" in this sentence refer to other provisions of
Article 6.2 concerning the right of interested parties to meet with opposing parties to present views
and rebuttal arguments.  Thus, with respect to the claim before us, the operative part of this sentence
is the nature of the "right" of interested parties to "present information orally" outside the setting of anadversarial hearing.  In this regard, while the pa rtial quotation set forth by Turkey would imply that
the right in question is open-ended and absolute, the full text of the provision makes clear that the
right exists only upon "justification".  It is perhaps axiomatic that an interested party seeking to
invoke its Article 6.2 right must attempt to exercise that right before it can claim that it has been
denied.
7.342  Thus, the first question that must be addressed is whether the respondents in question in fact
requested meetings, and if so, whether any such requests were substantiated (i.e., whether justificationwas presented).  Turning first to Habas, Diler and Colakoglu, their reference to a meeting was
contained in their 28 September 1999 letter in which they indicated that they would not provide the
additional information requested in the 23 September letter.  The relevant passage concerning the
possibility of a meeting is as follows:
"If ITPD remains unable to locate the original translations or to identify the pages of
the 15 September response where translations are provided, or it ITPD requires any
additional explanations, we will be pleased to come to Cairo to review these
documents with ITPD.  Such a meeting could be arranged after the third week of
November, if desired.  Before that time, counsel's time is fully booked, but we would
expect the ITPD to afford us this scheduling courtesy in view of the events hereinsince verification was concluded."
255
                                                     
255 Exh EGT-2, p.3.WT/DS211/R
Page 83
7.343  We do not consider that the above passage can be viewed as an attempt by these interested
parties concerned to exercise their Article 6.2 rights to a meeting.  Nor does it deal adequately, or at
all, with the justification for such a meeting, upon which the right to have such a meeting is
conditioned.  Rather, it seems plainly to be an offer  to travel to Cairo to participate in a meeting
should the IA decide that such a meeting would be useful.  Indeed, that this was an offer, rather than arequest, was explicitly confirmed by these three respondents in their 15 October 1999 comments on
the Essential Facts and Conclusions Report , in which they state that it was to provide the IA with an
understanding of the "meanings and linkages" of the documents that they had submitted that their
"counsel offered  to come to Cairo to assist in the explanation of documents.  That offer  still
stands"(emphasis added).
256  Moreover, we question the seriousness of the offer that was made, given
that the proposed earliest possible date for such a meeting, due to the stated unavailability of the
companies' counsel, was fully two months later.  Nor, even if a meeting was requested, do we findthat these companies provided any justification for such a meeting.  Indeed, while the express purpose
of the last sentence of Article 6.2 is the oral provision of information , we note that these respondents
raised the possibility of a meeting in the contex t of their informing the IA that they intended to
provide no further information.  Rather they were prepared only to assist the IA in locating any
original translations that had been previously submitted or identify where additional translations hadbeen provided, and to furnish any explanations that the IA might need.  The IA in fact made these
points in its response to these respondents' 28 September letter, as follows:
"In your letter dated 28 September, 1999, you referred to a possible meeting in Cairo
to explain the data submitted by Habas, Diler and Colakoglu.  Please note that any
further comments or explanations regardin g the request of ITPD for supplemental
information should have been included in your responses, the deadline for which has
passed.  We will consider any further information to be untimely.  Regarding your
concern that ITPD may not understand the submission, the ITPD understands the data
that has been submitted.  The fact is your clients did not completely respond to the
requests for supplemental information, which required the ITPD's use of factsavailable for portions of the submission."
257
7.344  Concerning IDC, we note that here again, IDC di d not in fact request a meeting with the IA.
Rather, it informed the IA that it was available for a further verification at its premises if the IA so
wished.  In particular, the relevant passage from  IDC's 15 October 1999 letter commenting on the
Essential Facts and Conclusions Report  reads as follows:
"Finally, we kindly request, the Authority to contact us anytime they wish and kindly
note that all our files, reports, general ledgers are ready for verification by yourauthorised investigators."
258
Here again, this passage cannot in any way be construed as containing a request for a meeting, nor ajustification for any such request.
7.345  For the foregoing reasons, we do not find that the IA denied requests of respondents Habas,
Diler, Colakoglu, and IDC for meetings, and thus did not act inconsistently with the last sentence of
Article 6.2.
7.346  In view of our findings in the preceding paragraph, in respect of the claim under the last
sentence of Article 6.2, that the IA did not reject requests for meetings, we also do not that Turkey has
                                                     
256 Exh. TUR-20, p.10.
257 Exh. EGT-10.
258 Exh. TUR-27, p.3.WT/DS211/R
Page 84
established the factual basis for a possible violation of Annex II, paragraph 6 resulting from the
alleged rejection of such requests.259
4. Claim under Article 2.4 – Alleged failure to make an adjustment to normal value for
differences in terms of sale
7.347  Turkey claims that Egypt violated Article 2.4 in that the IA failed to make a credit cost
adjustment to normal value for differences in payment terms between home market sales and exports
sales to Egypt.  According to Turkey, an imput ed credit cost adjustment was claimed by the
respondents to adjust export prices and home market prices with deferred payment terms to a common
sight price basis in order to ensure an "apples-to-apples" comparison.  Turkey argues that such a credit
cost adjustment is normally granted by the United States, the European Communities, Canada, Chile
and Australia.  According to Turkey, the Third Pa rty Submission of the European Communities states
that it is EC policy to make such an adjustment where constructed normal value is used because thatconstructed normal value "will typically include an element for costs relating to the granting of credit
terms".  Turkey argues in this respect that the interest expense that is included in the Turkish
companies’ administrative, selling and general costs includes interest expenses related to the financing
of outstanding receivables, and therefore that a credit cost adjustment should have been made to
normal value, as was done to the respondents' export prices to Egypt.  Turkey considers that bymaking a credit cost adjustment to the export price, but not to normal value, Egypt produced a
distorted comparison in violation of Article 2.4.
7.348  Egypt argues that the absence of an adjustment for credit expenses to the normal value is
based on a permissible interpretation of the AD Agreement.  In particular, Egypt notes, due
allowances should be made for differences that affect price comparability, and with respect to termsand conditions of sale, in Egypt’s view an allowance is normally warranted when normal value is
based on actual domestic sales prices, as only then would the prices be affected by contractual
conditions and terms of sales.  By contrast, constructed normal value is based on cost of production,
i.e., items which cannot be influenced by conditions and terms of sale.  According to Egypt, this is
particularly true with respect to credit terms, as when negotiating a price, the buyer and seller will inprinciple take into account the credit period gran ted for deferred payment compared with payment in
cash.  Thus, according to Egypt, by comparing export price net of credit costs and a constructed
normal value without an adjustment for credit costs, the IA compared prices on a comparable basis.
Furthermore, Egypt argues, should the Panel consider that Article 2.4 requires that constructed normal
value be adjusted for credit costs, all Turkish domestic rebar sales were made at a loss and therefore
there were no domestic sales with relevant credit terms in the ordinary course of trade that the IA
could have used to determine the credit cost adjustme nt.  Lastly, for Egypt, the fact that some other
jurisdictions may deduct credit costs from constructed normal values does not render Egypt’s practice
inconsistent with Article 2.4.
7.349  We view both parties as arguing that this issue can be resolved purely as a matter of legal
interpretation.  That is, Turkey argues, in essence, that in all cases, constructed normal value should
be adjusted for credit costs.  By contrast, Egypt argues in essence that it is permissible as a matter ofpolicy never  to adjust constructed normal value for credit costs.
7.350  We recall that Article 2.4 provides as follows:
“A fair comparison shall be made between the export price and the normal value.
This comparison shall be made at the same level of trade, normally at the ex-factory
level, and in respect of sales made at as nearly as possible the same time.  Dueallowance shall be made in each case, on its merits, for differences which affect price
                                                     
259 Once again, we need not and do not opine on whether it is possible to invoke Annex II, paragraph 6
outside the context of Article 6.8.WT/DS211/R
Page 85
comparability, including differences in conditions and terms of sale, taxation, levels
of trade, quantities, physical characteristics, and any other differences which are also
demonstrated to affect price comparability [footnote omitted].  In the cases referred to
in paragraph 3, allowances for costs, including duties and taxes, incurred between
importation and resale, and for profits accruing, should also be made.  If in thesecases price comparability has been affected, the authorities shall establish the normal
value at a level of trade equivalent to the level of trade of the constructed export
price, or shall make due allowance as warranted under this paragraph.  The authorities
shall indicate to the parties in question what information is necessary to ensure a fair
comparison and shall not impose an unreasonable burden of proof on those parties."
7.351  In considering this claim, we note the parties’ arguments that Article 2.4 always  requires on
the one hand, or permits a policy of never  making, on the other hand, a credit cost adjustment to
constructed normal value.  To us, reading Article 2.4 in this way is not possible, i.e., this claim cannot
be resolved on the basis of a judgement as to whether a given legal interpretation of that provision is
permissible, in the abstract, and without considering the specific facts of an individual case.
7.352  To the contrary, we read Article 2.4 as explicitly requiring a fact-based, case-by-case analysis
of differences that affect price comparability.  In this regard, we take note in particular of therequirement in Article 2.4 that “[d]ue allowance shall be made in each case, on its merits , for
differences which affect price comparability” (emphasis added).  We note as well that in addition to
an illustrative list of possible such differences, Article 2.4 also requires allowances for “any other
differences which are also demonstrated to affect price comparability” (emphasis added).  Finally, we
note the affirmative information-gathering burden on th e investigating authority in this context, that it
“shall indicate to the parties in question what information is necessary to ensure a fair comparison and
shall not impose an unreasonable burden of proof on those parties” (emphasis added).  In short, where
it is demonstrated by one or another party in a particular case, or by the data itself that a given
difference affects price comparability, an adjustment  must be made.  In identifying to the parties the
data that it considers would be necessary to make such a demonstration, the investigating authority isnot to impose an unreasonable burden of proof on the parties.  Thus, the process of determining what
kind or types of adjustments need to be made to one or both sides of the dumping margin equation to
ensure a fair comparison, is something of a dialogue between interested parties and the investigating
authority, and must be done on a case-by-case basis, grounded in factual evidence.
7.353  Our analysis of this claim thus focuses on whether the IA met its burden under Article 2.4 in
the process that ultimately resulted in its decision not to adjust constructed normal values for credit
costs, i.e., whether that decision was justified on the basis of the evidence of record, and whether,including in the light of the respondents’ actions and submissions concerning the issue of credit costs,
the IA fulfilled its obligations in developing that evidence.  We start by considering the chronology of
relevant events during the investigation, beginning  with the questionnaires that were sent to the
foreign manufacturers and the exporters.  Here we note that both of these questionnaires contain
questions concerning possible allowances for certain differences that might affect price comparability,including credit costs.  In the manufacturer's questionnaire, the question of terms of trade, including
credit, is raised in sections 4.3 and 4.4 (domestic sales) and 5.2 and 5.3 (exports to Egypt).  In the
exporter's questionnaire, the same questions are contained in sections 3.6 and 3.7 (domestic sales) and
4.4 and 4.5 (exports to Egypt).  Thus, the IA invited the Turkish respondents’ input on the issue of
credit at the outset of the investigation, and each respondent included in its questionnaire responsecertain information and argumentation concerning how a credit cost adjustment should be calculated
and applied.
260  The issue of credit costs also was addressed in the verification reports, and was further
referred to in letters dated 12 August 1999 from the IA concerning certain problems identified by the
                                                     
260 In response to a request from the Panel, Turkey provided certain excerpts from the respondents'
questionnaire responses (Exh. TUR-42) which according to Turkey reflect the requests made by the respondentsfor a credit cost adjustment to normal value.WT/DS211/R
Page 86
IA after verification, and in the 13 August 1999 response on behalf of three respondents to those
letters.
(a) Factual background
7.354  A chronology of the references to imputed credit costs from all of these documents is set forth
below for each respondent separately.
(i) Icdas
Questionnaire response
7.355  The relevant portion of Icdas' questionnaire response reads as follows:
"Payments of domestic sales of reinforcing bars are usually received at a later date
then [sic] the date on the invoice.  The duration between the date of invoice and the
date of the receipt of the payment usually varies between 7 and 90 days.
While deciding on the price, the date the customer will make the payment are taken
into account and an additional charge is included in the price to offset the
depreciation of Turkish Lira. (All sales in domestic market are made in Turkish Lira).
Exact date receipt of payment can not be determined in the recording procedure of
Icdas since the accounts receivable are followed by customer basis rather than invoice
basis.  Therefore we based our calculations on average number of days outstanding.
For calculation of average number of days outstanding for the six months reported,
we obtained the accounts receivable balance of and total sales to each customer on a
monthly basis.  Then we indexed these figu res to the end of period of investigation
i.e. to December 1998.  (Republic of Turkey State Institute of Statistics Wholesale
Price Indexes and calculated indexation figures to end of period of investigation areprovided as Attachment 2.
After indexation of these figures to the end of period of investigation we added up
monthly indexed figures and finally by dividing the total indexed monthly accounts
receivable to total indexed sales, we determined an average number of days
outstanding for the reported period.  For calculation of these figures please seeTable 4.
To get a unit interest expense by transaction basis, we used actual short term TL
borrowing rate of Icdas.  During the reported period Icdas used only one short term
loan.  Copies of the documents showing the usage of this loan are provided in
Attachment 3.
With this interest rate by using the following equation we calculated the unit cost of
credit computed at the actual cost of short-term debt borrowed:
(Average number of days outstanding x Average interest rate x Gross unit
price)/360)."
261
                                                     
261 Exh. TUR-42, p.4-5.WT/DS211/R
Page 87
Verification report
7.356  The verification report for Icdas contains the following text concerning credit cost in respect
of home market sales:
"Cost of Credit
The accounts for sales in Turkey can be received later than the date of the invoice. …
The period between due date of settlement of the account and the actual date of
payment was established from the accounts outstanding ledger.  The average days
outstanding per ton was calculated and an adjustment made.  The interest used was
established from the company records of short term loans."262
12 August 1999 letter from the IA
7.357  In its 12 August letter to Icdas, the IA stated in respect of credit cost:
"With regard to the cost of credit for normal values, the investigating authority
decided not to adjust this cost for lack of reliable evidence concerning this
adjustment."263
Response to the 12 August 1999 letter
7.358  Turkey states that on 17 August 1999, Icdas submitted a response to the IA's 12 August,
challenging, among other things, the IA's stated intention not to make a credit cost adjustment.
Although in its first written submission Turkey quoted what it indicated were excerpts from that letter,
it did not submit that letter to the Panel, either as an exhibit to that submission or otherwise.  Thus, we
have not seen the 17 August letter in original.  According to Turkey, Icdas argued that the proposed
denial of a credit cost adjustment was contrary to Article 2.4 of the AD Agreement, and noted that allof its home market sales were on "'deferred payment terms'", such that not making a credit cost
adjustment to home market prices would "'seriously deteriorate the fair comparison between the
export and domestic prices'".
264
19 August request; 15 September response to the 19 August request; 23 September
follow-up request from the IA; 28 September letter from the IA; Essential Facts and
Conclusions Report ; 15 October comments on Essential Facts and Conclusions Report ;
and Final Report
7.359  There is no reference to the issue of a credit cost adjustment in any of the above-captioned
documents.  That is, once the cost and constructed value issue arose (as reflected in the 19 August
request), this issue was not mentioned further, either by Icdas or by the IA.
(ii) IDC
Questionnaire response
7.360  The relevant portion of IDC's questionnaire response reads as follows:
                                                     
262 Exh. TUR-4, p.6.
263 Exh. TUR-10.
264 First Written Submission of Turkey, Section IV.A, para.20-23.WT/DS211/R
Page 88
"Other (credit) expenses:  As explained in response to 4.3 which is credit expenses
due to deferred payments in home market sales.  IDC used the following equation to
calculate home market credit expenses:
No. of days x Interest Rate x( Gross Invoice Value-1.5% Discount)
               360
IDC calculated the weighted average number of days between invoice date and
payment date for sales of rebar for each month.  Based on the monthly calculations,
IDC calculated the average number of days between invoice date and payment date
during the investigation period.  A worksheet summarizing the results of these
calculations is attached in Exhibit B-1.  Weighted-average short-term in the home
market interest rate is shown in the worksheets attached to Exhibit B-1".265
7.361  We note that in IDC's Appendix 9A concerning cost of production of rebar, IDC reported no
data for the line item entitled "Financing Costs".266  Other documents of record clarify that this was
because IDC reported no interest cost component of cost of production.  We note Turkey's
explanation that IDC was indicating thereby that it had no net financial expense after the applicationof interest income.
267
Verification report
7.362  The verification report contains the following passage concerning IDC's credit cost on home
market sales:
"Cost of Credit
Izmir has stated that its terms of sale are ex-works.  The invoice is issued the same
day as the goods are picked up from the mill.  The company provided details of the
credit period for the sales under review in Turkey.  The verification team verified the
days credit outstanding from the company records.  The interest rate applying was
verified from a bank document.  The [illegible] used in the calculation was clarifiedand an adjustment for the cost of credit on local sales was made."
268
12 August letter
7.363  In its 12 August letter to IDC, the IA stated in respect of credit cost:
"With regard to the cost of credit for normal values, the investigating authority
decided not to adjust this cost for lack of reliable evidence concerning this
adjustment."269
Response to the 12 August letter
7.364  Turkey states that on 13 August 1999, IDC submitted a faxed response to the IA's 12 August
letter, expressing "surprise" at the IA's stated decision not to grant a credit cost adjustment to normal
value, and indicating that " 'on your verification report (sent to us on 17.07.1999) you have already
verified the cost of credit and your verification team confirmed [the adjustment at the verification]'
".270  Although Turkey's first written submission presents these passages as verbatim excerpts from
                                                     
265 Exh. TUR-42. p.7-10.
266 Exh. TUR-42, p.29.
267 See para.7.399, infra .
268 Exh. TUR-5, Section 4.3.
269 Exh. TUR-10.
270 First Written Submission of Turkey, Section IV.A, para.24.WT/DS211/R
Page 89
IDC's 13 August fax to the IA, Turkey did not submit th at fax to the Panel, either as an exhibit to that
submission or otherwise.  Thus, we have not seen the 13 August fax in original.
19 August request; 15 September response to the 19 August request; 23 September
follow-up request from the IA; 28 September letter from the IA; Essential Facts and
Conclusions Report ; 15 October comments on  Essential Facts and Conclusions
Report ; and Final Report
7.365  There is no reference to the issue of a credit cost adjustment in any of the above-captioned
documents.  That is, once the cost and constructed value issue arose (as reflected in the 19 August
request), this issue was not mentioned further, either by IDC or by the IA.
(iii) Diler
Questionnaire response
7.366  The relevant portion of Diler's questionnaire response concerning imputed credit reads as
follows:
"We add a field (column M) in which we calculate the imputed interest expense
according to the formula:
(T1-T2)/360 x INT x UNIT PRICE
where T1 is the date of invoice, T2 is the date of receipt of payment, INT is the short-
term commercial interest rate in Turkey (80% per annum), and UNIT PRICE is the
unit price on the invoice.  This field, then, is the unit imputed interest expense for the
given line item in the database, and it should be subtracted from the domestic market
selling price.
We add a field showing the net price for the cost test (column N).  This field reports
the gross unit price minus movement charges (i.e., minus inland freight).  Under usual
antidumping methodologies, the administering authority tests whether the home
market sale is above cost of production.  To do this, one uses the ex-factory price
exclusive of the imputed interest expense.  Imputed interest is excluded from price for
purposes of the cost test because a company's financial statement and cost accountsdo not contain any entry for imputed expenses, and so the sales price for cost test
purposes should also be without imputed interest."
271
7.367  In another section of its questionnaire response, Diler further elaborates on selling expenses,
general and administrative expenses, and interest expense, as follows:
"Selling expenses is the total indirect selling expenses incurred in the sale of rebar in
the stated months of 1998, divided by the total cost of goods sold for rebar for the
stated months of 1998.  We have subtracted direct selling expenses from total sellingexpenses, since the direct expenses (freight, handling charges and the like) are
reported in Apps. 3B and 5 as adjustments to price.  Keeping the direct expenses in
the cost would result in comparison of a selling-expense-included cost with a selling-
expense-excluded price, which would be inappropriate.
General and administrative expenses are the Diler G&A for the full year 1998,
divided by total COGS for 1998.  We report this on an annual basis because G&A
                                                     
271 Exh. TUR-42, p.12-13.WT/DS211/R
Page 90
expenses are 'period' costs, i.e., costs which vary greatly in particular months and
therefore must be analyzed on an annual basis.
Interest expense is reported in a manner similar to G&A expense, i.e., on an annual
basis, since it is also a period cost.  Interest expenses is on a consolidated basis
(Group interest expense, offset by Group interest income), as this is the practice inantidumping investigations, because of the fungibility of money."
272
Verification report
7.368  The passage from the verification report on Diler contains the following passage concerning
credit cost on home market sales:
"Cost of Credit
The company provided details of the credit period for the sales under review in
Turkey.  The team verified the difference between the date of sale and the date ofpayment from accounting records.  Because the company has no short-term loan
finance on its books the short-term loan interest rate from the Economist was taken as
an independent source, and used for the appl icable interest rate.  The result of the
calculation using this data gave the cost of credit for local sales.  An adjustment for
the cost of credit on local sales was made."
273
12 August letter from the IA
7.369  In its 12 August 1999 letter to Diler, Habas and Colakoglu, the IA stated concerning credit
cost:
"With regard to the cost of credit for no rmal values for the three companies (Habas,
Diler and Colakoglu) the investigating authority decided not to adjust this cost forHabas and Colakoglu for lack of evidence concerning this adjustment.  The purchase
order provided by Diler as an evidence for credit period is unreliable."
274
Response to 12 August letter
7.370  On 13 August 1999, counsel for the three respondents (Diler, Habas and Colakoglu)
responded to the IA's 12 August letter.275  Concerning the IA's indication that it was rejecting the
claimed credit cost adjustment for each of the co mpanies, these companies complained that such a
rejection was unjustifiable given that the credit cost figures had been verified.  In particular, they
argued that the verification reports' indications that adjustments for credit costs had been made
constituted legally binding findings of fact by the IA.  They noted further that the stated reason for
rejecting the adjustment was lack of evidence, and they argued that the evidence had been fully
verified as to the number of days credit granted by each company on its home market sales and as to
the prevailing interest rate.276
19 August request; 15 September response to the 19 August request; 23 September
follow-up request from the IA; 28 September letter from the IA; Essential Facts and
Conclusions Report ; 15 October comments on Essential Facts and Conclusions Report ;
and Final Report
                                                     
272 Exh. TUR-42, p.21.
273 Exh. TUR-6, p.7.
274 Exh. TUR-10.
275 Exh. TUR-25.
276 Ibid, p.14-16.WT/DS211/R
Page 91
7.371  There is no reference to the issue of a credit cost adjustment in any of the above-captioned
documents.  That is, once the cost and constructed value issue arose (as reflected in the 19 August
request), there was no further mention of this issue, either by Diler or by the IA.
(iv) Colakoglu
Questionnaire response
7.372  The relevant portion of Colakoglu's questionnaire response reads as follows:
"We add a field in which we calculate the net interest expense according to the
formula:
(T1-T2)/360 x INT x UNIT PRICE
where T1 is the date of invoice, T2 is the date of receipt of payment, INT is the short
term commercial interest rate in Turkey (equal to 80% per annum – see Exhibit 4
hereto), and UNIT PRICE is the unit price on the invoice.  This field, then, is the unitimputed interest expense for the given line item in the database.  Under typical
antidumping practice, the imputed credit should be subtracted from unit price for
purposes of making price-to-price comparisons between domestic price and export
price (since both such prices have, or can have, imputed credit).  However, imputed
credit should not be subtracted from unit price in determining whether a sale is above
cost, since there is not imputed credit component of cost of production, and both sides
of the comparison should be viewed in pari materia. "
277
Verification report
7.373  The verification report concerning Colakoglu contains the following passage concerning
credit cost:
"Cost of Credit
The credit cost for the sales in Turkey during the period of export (April-
August 1998) has been calculated for the domestic sales sold on deferred payment.
The deferred payment refers to the wait ing time for payment the company has before
the post-dated cheque can be presented for payment.  The investigating team obtained
the details of the maturity date for individual sales over the period thus establishing
the period of credit from the firm's records.  The interest rate was established from the
published rate found in the Economist for the period.  The company had no short-
term borrowing during the period".278
12 August letter from the IA, and Response to the 12 August letter
7.374  The passages from the 12 August letter from the IA, and the response thereto, pertaining to
Colakoglu are as reflected, supra,  in respect of Diler.
19 August request; 15 September response to the 19 August request; 23 September
follow-up request from the IA; 28 September letter from the IA; Essential Facts and
Conclusions Report ; 15 October comments on Essential Facts and Conclusions Report ;
and Final Report
                                                     
277 Exh. TUR-42, p.15-16.
278 Exh. TUR-7, p.6.WT/DS211/R
Page 92
7.375  There is no reference to the issue of a credit cost adjustment in any of the above-captioned
documents.  That is, once the cost and constructed value issue arose (as reflected in the 19 August
request), there was no further mention of this issue, either by Colakoglu or by the IA.
(v) Habas
Questionnaire response
7.376  The relevant portion of Habas' questionnaire response reads as follows:
"We add a field for the interest component of the invoice price, since, as explained
above, the interest component depends on the terms of payment and is a material part
of the price.
We add a field showing the number of days from invoice to payment (the time-period
for imputed interest expense).
We add a field in which we calculate the net interest expense (credit expense, column
M) according to the formula:
N/360 x INT x UNIT PRICE
where N is the imputed credit period, INT is the short-term commercial interest rate
in Turkey (80%), and UNIT PRICE is the unit price on the invoice.  This field, then,
is the unit imputed interest expense for the given line item in the database, and itshould be subtracted from the domestic market selling price.
We add a field for comparing price with cost of production, namely, column J.  This
is the invoice value without imputed credit.  This is the appropriate figure to use for
the cost test, since cost data are also exclusive of imputed credit."
279
7.377  Habas' questionnaire also contains the following passage concerning selling, general and
administrative expenses:
"Selling expenses is the total indirect selling expenses incurred in the sale of rebar in
November and December 1998, divided by the cost of goods sold for rebar for
November and December 1998.  We have subtracted directed selling expenses from
total selling expenses, since the direct expenses (freight, handling charges and thelike) are reported in Apps. 3B and 5 as adjustments to price.  Keeping the direct
expenses in the cost would result in a comparison of a selling-expense-included cost
with a selling-expense-excluded price, which would be inappropriate.
General and administrative expenses are the G&A of the Iron and Steel plant for the
full year 1998, divided by total COGS for 1998.  We report on this on an annual basis
because G&A expenses are 'period' costs, i.e., costs which vary greatly in particular
months and therefore must be analyzed on an annual basis.
Interest expense is reported in a manner similar to G&A expense, i.e., on an annual
basis, since it is also a period cost.  Interest expense is on a consolidated basis (Group
interest expense, offset by Group interest income)."
280
                                                     
279 Exh. TUR-42, p.18-19.
280 Exh. TUR-42, p.26.WT/DS211/R
Page 93
Verification report
7.378  The verification report for Habas contains the following passage concerning credit cost:
"Cost of Credit
The credit cost for the sales in Turkey during the period of export (Nov-Dec 1998)
was verified from the company's records.  The method of calculation using theformula, N/360 x interest rate x unit price, was accepted.  As the company had no
short-term borrowings, the short-term borrowing rate published in the Economist  was
accepted as the interest rate used.  An adjustment for the cost of credit on local sales
was made".
281
12 August letter from the IA, and Response to the 12 August letter
7.379  The passages from the 12 August letter from the IA, and the response thereto, pertaining to
Habas are as reflected, supra,  in respect of Diler.
19 August request; 15 September response to the 19 August request; 23 September
follow-up request from the IA; 28 September letter from the IA; Essential Facts and
Conclusions Report ; 15 October comments on Essential Facts and Conclusions Report ;
and Final Report
7.380  There is no reference to the issue of a credit cost adjustment in respect of Habas in any of the
above-captioned documents.  That is, once the cost and constructed value issue arose (as reflected in
the 19 August request), there was no further mention of this issue, either by Habas or by the IA.
(b) Assessment by the Panel
7.381  We recall that this claim can only be resolved on the basis of the facts of record as to whether,
during the course of the investigation, the respondents demonstrated on the merits (subject to therequirement that the IA not impose an unreasonable burden of proof in respect of such an adjustment)
that constructed normal value needed to be adjusted for credit costs to ensure a fair comparison of
normal value and export price.  Here, we take note that at the outset of the investigation, the IA
invited respondents to identify in their questionnaire responses any adjustments which they felt the IA
should make to the reported domestic and export prices and to provide information concerning suchadjustments including explicitly for credit costs.  We also note that all of the respondents asserted in
their questionnaire responses that a credit cost adjustment should be made to domestic selling prices
to account for the number of days of delay in receiving payment after invoices were issued.  All of
them provided formulas by which such credit cost could be calculated, and information on the values
of certain of the variables in those formulas.  That information was discussed in the verification
reports, and then, when informed that ultimately it had been rejected, at least three of the respondents
submitted comments complaining about that course of  action.  All of these exchanges of information
and correspondence between the respondents and the IA took place in the context of the examination
of normal value based on domestic selling prices in Turkey.
7.382  Once the focus of the dumping investigation shifted to constructed value, however, no further
reference was made to the question of a credit co st adjustment to normal value, either by any
respondent or by the IA.  Thus, in the context of the constructed value phase of the investigation, it isclear that no explicit request for or claim of such an adjustment was made by any respondent.  The
question for us thus becomes whether, in the light of  the information of record concerning this issue
from the earlier phase of the investigation, the respondents had demonstrated that such an adjustment
                                                     
281 Exh. TUR-8, p.7.WT/DS211/R
Page 94
should apply regardless of whether normal value was determined based on price or based on
constructed value.
7.383  Here we recall that the IA on 12 August informed the respondents that their claims of credit
cost adjustment (to domestic selling prices) would be rejected essentially for lack of evidence, and we
also recall that the three respondents who shared the same counsel (Diler, Colakoglu and Habas)protested this decision of the IA, insisting that their credit cost information had been verified, and that
the IA was legally bound by the verification findings.  We note as well Turkey's representation that
Icdas and IDC also submitted written responses to the 12 August letters that they received from the IA
in which they argued that a credit cost adjustment should be made to their domestic selling prices, as
such an adjustment had been verified.
7.384  Considering further the credit cost information submitted by Diler, Colakoglu and Habas, we
note the references to this issue in their original questionnaire responses concerning the cost ofproduction information to be used for the below-cost sales test (which they refer to as the "cost test").
They indicated that  there was no credit cost include d, and that therefore cost of production should be
compared with a domestic selling price unadjusted for credit expense, to ensure a correct comparison.
In particular, Diler stated:
"Imputed interest is excluded from price for purposes of the cost test because a
company's financial statement and cost accounts do not contain  any entry for imputed
expenses, and so the sales price for cost test purposes should also be without imputed
interest." (emphasis added)
282
Colakoglu stated:
"However, imputed credit should not be subtracted from unit price in determining
whether a sale is above cost, since there is not imputed credit component of cost of
production, and both sides of the comparison should be viewed in pari materia. "
(underline emphasis added; italic emphasis in original)283
Habas stated:
"We add a field for comparing price with cost of production, namely, column J.  This
is the invoice value without imputed credit.  This is the appropriate figure to use for
the cost test, since cost data are also exclusive of  imputed credit." (emphasis added)284
7.385  The way in which the question of determining normal value in this case evolved had the
potential to cause the IA to consider a number of important technical issues about the differences
between the normal value assessed on the basis of domestic selling prices and the constructed normalvalues arrived at, and the need for any adjustment as between the constructed normal value and the
export price.  As it turned out, the consideration u ndertaken by the IA appears to have been limited to
the context of credit cost adjustment to domestic selling prices, in which context the credit term
information submitted by the respondents was rejected, because it was (in the view of the IA)
insufficient and/or unreliable.  The Turkish responden ts objected to this in communications to the IA.
No further consideration of the question of a credit cost adjustment after this point in time in the
investigation appears in any document of record provided to the Panel, whether submitted by the
respondents or created by the IA.  The IA appears not to have considered whether an adjustment for
credit cost should be made to the constructed normal values at all.  In this dispute, the parties did not
provide us with evidence of the consideration of that issue as it might relate to constructed normal
                                                     
282 Exh. TUR-42, p.12.
283 Ibid , p.15.
284 Ibid, p.18.WT/DS211/R
Page 95
values, and we thus must proceed on the basis that the final interchange on the issue was notification
to the respondents of rejection of the claim for an adjustment to the domestic selling price-based
normal values, and their complaints which then followed.
7.386  Beyond this factual analysis of what actually happened in the investigation, the parties have
engaged in a debate about adjustments to constructed normal values, and whether Article 2.4 appliesto require such adjustments to be made.  Comparative precedent from various jurisdictions has been
presented to the Panel, and arguments about economic rationale and the correct appreciation of what a
constructed normal value should be taken to represent have been made.  It seems to us that these
issues are being raised for the first time by the par ties before us:  they were not dealt with before the
IA.  The Panel is not the IA, nor does it stand in the shoes of the IA. In this regard we recall our
discussion about the relationship between what an investigating authority is obligated by the AD
Agreement to do with regard to procedural issues in an anti-dumping investigation, and whatinterested parties must themselves contribute, in the way of evidence and argumentation, for issues of
concern to them to be considered and taken in to account in the authority's determinations.
285  In this
case, when confronted with the Essential Facts and Conclusions Report , which clearly identified that
a constructed normal value had been applied without any adjustment for credit terms, the respondents
did not take any action to protect their interests.
7.387  This claim by Turkey is an example of the difficulty which is presented for a complaining
Member where it comes before a Panel and claims that an investigating authority committed a breach
of a merits-based matter, but the merits were not ad dressed with the investigating authority.  The facts
and circumstances of each case will vary.  Here we find that certain information concerning the
respondents' imputed credit costs, and how those costs should be treated, was before the IA.  Thisinformation was requested in the Exporter's Questionnaire, no doubt for consideration as a possible
adjustment to be taken into account at some point in the investigation.  However, the issue of an
adjustment was then dealt with between the parties in relation to a normal value based on domestic
selling prices.  When the IA's normal value assessments shifted to a constructed approach, and this
was communicated to the respondents, nothing more was said by either the respondents or the IAabout the question of whether a credit cost adjustment to the constructed value was necessary, and if
so, how it should be calculated.  On balance, we consider that the respondents should have raised their
concerns at that point in time.  In the absence of such a claim and, we reiterate, within the confines of
the facts of this case, we do not think that a prima facie  violation of its obligations by the IA has been
made out by Turkey.
7.388  Having said that, and in deference to the efforts of the parties in researching and presenting
their respective arguments to the Panel on this point, we would add that we do not think that theconstruction of a normal value under Article 2.2 pr ecludes consideration of the making of various
adjustments as between that normal value and the export price with which it is to be compared.  A
constructed normal value is, in effect, a notional price, "built up" by adding costs of production,
administrative, selling and other costs, and a profit.  In any given case, such a built-up price might or
might not reflect credit costs.  Thus, what might be necessary to take into account by way of dueallowance in a particular investigation in order to comply with the obligation to ensure a fair
comparison under Article 2.4 cannot be limited by the simplistic characterisation of a normal value as
being one arrived at by way of a construction under Article 2.2.
5. Claim under of Articles 2.2.1.1 and 2.2.2 – Interest income offset
7.389  Turkey claims that by failing to deduct short- term interest earnings from interest expense in
computing the net interest expense which it included in the cost of production and constructed normal
value, the IA violated Article 2.1.1.1, which provides that "'costs shall normally be calculated on the
basis of records kept by the exporter or producer under investigation, provided that such records are in
                                                     
285 Section VII.A,  supra .WT/DS211/R
Page 96
accordance with the generally accepted accounting principles of the exporting country and reasonably
reflect the costs associated with production and sale of the product under consideration' ".  Turkey
claims in addition that the IA's failure to deduct short-term interest expense also violated Article 2.2.2,
which provides that " 'amounts for administrative, selling and general costs … shall be based on
actual data pertaining to the production and sales in the ordinary course of trade by the exporter orproducer under investigation' ".  According to Tu rkey, the respondents' financial statements were
prepared in accordance with generally accepted accounting practices in Turkey, and these statements
separate operating and non-operating income, classifying short-term interest income as operating
income.  Turkey argues that this classification means that this income is related to the companies' core
operations involving production and sale of rebar.  Furthermore, Turkey argues, short-term interest
income is offset against interest expense and other expenses in arriving at the companies' net income,
meaning that to arrive at an accurate picture of the fully distributed cost of production, this incomemust be deducted.  Finally Turkey argues that such an interest income offset is given in other
jurisdictions because companies commonly maintain  a working capital reserve in interest-bearing
accounts in order to meet daily case and working capital requirements.  Turkey states in this regard
that a NAFTA panel reviewing a decision by Revenue Canada instructed Revenue Canada to offset
interest expense with short-term interest income, explaining that under generally accepted accountingrules, short-term interest income is considered part  of the current operating cycle.  Turkey also argues
that a US court decision also supports Turkey's point of view.
7.390  Egypt contends that the IA's decision to disallow interest income in the calculation of cost of
production, because these revenues were found not to be sufficiently related to the respondents' costs
of production was consistent with Articles 2.2.1.1 and 2.2.2 of the AD Agreement, and that Turkey'sclaims are both legally incorrect and based on a misunderstanding of the practice of other
jurisdictions.  Egypt notes that the text of Article 2.2.1.1 refers to "costs associated with the
production and sale of the product concerned", and that the text of Article 2.2.2 instructs investigating
authorities to use, when determining the amounts of  administrative, selling and general costs, and
profits, "data pertaining to production and sales".  Egypt notes that Article 2.2.1.1 also authorisesinvestigating authorities to adjust cost of pr oduction for non-recurring items during the period of
investigation.  For Egypt, the cited provisions co nfirm that an authority must determine the cost of
production normally incurred, and must disregard exceptional items.  For Egypt, the exclusion from
the cost calculation of expenses that are not related to the production or sale of the product, but which
pertain to the financial activities of a company as a whole is based on a permissible interpretation of
the provisions at issue and therefore is consiste nt with the AD Agreement.  Furthermore, Egypt
argues, other jurisdictions (namely the United States, the EC and Canada) allow an offset for short-term interest income only when it is demonstrated that it is related to production or sale of the product
concerned.
7.391  The full text of Article 2.2.1.1 reads as follows:
"For the purpose of paragraph 2, costs shall normally be calculated on the basis of
records kept by the exporter or producer under investigation, provided that suchrecords are in accordance with the generally accepted accounting principles of the
exporting country and reasonably reflect the costs associated with the production and
sale of the product under consideration.  Authorities shall consider all available
evidence on the proper allocation of costs, including that which is made available by
the exporter or producer in the course of the investigation provided that suchallocations have been historically utilized by the exporter or  producer, in particular in
relation to establishing appropriate amortization and depreciation periods and
allowances for capital expenditures and other development costs.  Unless already
reflected in the cost allocations under this sub-paragraph, costs shall be adjusted
appropriately for those non-recurring items of cost which benefit future and/or currentproduction, or for circumstances in which costs during the period of investigation are
affected by start-up operations." (footnote omitted)WT/DS211/R
Page 97
7.392  The relevant part of Article 2.2.2 reads as follows:
"For the purpose of paragraph 2, the amounts for administrative, selling and general
costs and for profits shall be based on actual data pertaining to production and sales in
the ordinary course of trade of the like product by the exporter or producer under
investigation … ."
7.393  We note that both of these provisions emphasize two elements, first, that cost of production is
to be calculated based on the actual books and records maintained by the company in question so long
as these are in keeping with generally accepted acc ounting principles but that second, the costs to be
included are those that reasonably reflect the costs associated with  the production and sale of the
product under consideration.  While Egypt argues in  the first instance that the IA's decision not to
offset interest expense with interest income was based on a permissible interpretation of the relevant
provisions, we do not believe that the issue raised by this claim can be resolved on this basis.  Rather,here again, we believe that the provision itself makes clear that the calculation of costs in any given
investigation must be determined based on the merits, in the light of the particular facts of that
investigation.  This determination in turn hinges on whether a particular cost element does or does not
pertain, in that investigation, to the production and sale of the product in question in that case .  Thus,
in particular, we must consider the details of the evidence of record in order to reach a conclusion asto whether, in the rebar investigation, there was ev idence in the record that  the short-term interest
income was "reasonably" related to the cost of producing and selling rebar, and that the IA thus
should have included it in the cost of production calculation.
(a) Factual background
(i) Icdas
Questionnaire response
7.394  The relevant part of Icdas' questionnaire response reads as follows:
"Interest revenue
For late payments Icdas usually charges a new invoice.  This invoices are collected
under account numbers 602 7000003 and 602 7000004 in the recording procedure ofIcdas.  This late payment invoices cannot be tied to invoices therefore we distributed
this total figures on a monthly basis.  Total monthly figure is distributed to all
transactions in a given month respecting the quantity.  For calculation and allocation
of these expenses please see Table 5".
7.395  This particular passage is not referred to in any of the other documents of record that have
been submitted to us, and thus it is not clear to what it refers specifically, and how if at all it relates to
this claim.
19 August request; response to 19 August request; 23 September follow-up request,
reply to 23 September follow-up request
7.396  There is no reference, in any of the above-captioned documents that were sent to or submitted
by Icdas, to the issue of interest income.
Essential Facts and Conclusions Report
7.397  The Essential Facts and Conclusions Report  contains the following text in respect of Icdas'
interest expense:WT/DS211/R
Page 98
"To the above costs the Investigating Authority added an amount for interest expense.
The Investigating Authority did not offset this amount by interest revenue, as the
Investigating Authority does not consider interest revenue as sufficiently related to
production to be includable in the calculation of constructed value."286
Final Report
7.398  The text in the Final Report  concerning  Icdas' interest expense287 is identical to that in the
Essential Facts and Conclusions Report .
(ii) IDC
Questionnaire response
7.399  Turkey has provided no narrative excerpt from IDC's questionnaire response referring to
interest income, so we must presume that no such narrative was included in that response.  Turkey has
simply provided IDC's Appendix 9A to its que stionnaire response, which contains no entries
whatsoever for the line item entitled "Financing Costs".  According to Turkey, this indicates that IDC
thereby was indicating that it had no net financial expense after the application of interest income.
Turkey notes in this regard that the income statement attached to IDC's 9 September 1999 response to
the 19 August request shows that interest revenues offset virtually all of the company's interest
expense.288
23 September follow-up request
7.400  In its 23 September 1999 request based on IDC's response to the 19 August request, the IA
made the following request in respect of interest expense:
"1 – Interest Expense:
Furnish a list identifying separately interest expenses from interest income."289
28 September follow-up request
7.401  In its 28 September 1999 letter to IDC following up on IDC's response to the IA's
23 September request, the IA requested the following in respect to interest:
"Please furnish a list identifying separately  interest expenses from interest income
showing the difference between both interest  and interest income per ton during 1998
on monthly basis."290
Essential Facts and Conclusions Report
7.402  Concerning IDC, the Essential Facts and Conclusions Report  states as follows in respect to
interest expense, in paragraph 3.2.5.2:
"To the above costs the Investigating Authority added an amount for interest expense.
The Investigating Authority did not offset this amount by interest revenue, as the
                                                     
286 Exh. TUR-15, p.23(para.3.2.5.2).
287 Exh. TUR-16, p.29.
288 Written Response, dated 14 March 2002, to Question 10 to Turkey of the Written Questions by the
Panel , of 27 February 2002 – Annex 8-1.
289 Exh. EGT-13.1.2.
290 Exh. EGT-13.1.3.WT/DS211/R
Page 99
Investigating Authority does not consider interest revenue as sufficiently related to
production to be includable in the calculation of constructed value … ."291
IDC's comments on the Essential Facts and Conclusions Report
7.403  In its 15 October comments on the Essential Facts and Conclusions Report , IDC makes the
following statement concerning the IA's treatment of IDC's interest expense and income292:
"3 – We disagree with you that the Authority does not consider interest revenue as
sufficiently related to production.
Even if, we suppose that this argument is correct, the Authority should not have taken
the figure out of the period of investigation and long term interest expenses.
As you requested, we separated all our interest expenses at the worksheet given to
you on 29th September 1999.  As seen from the worksheet, our long term interest
expenses are related to ship procurement of which bank documents for both ships
"IDC-1" and "IDC-2" are attached.  (Attachment 1)
Most importantly, as you know interest expenses must be related to all products
which can be sold, such as plain bars, deformed bars, billets, non-quality products,products in short length, scrap products and miss rolled products.  Additionally,
interest expenses can not be related to deformed bars only, this can not be understood.
The Authority should have considered the months of the period of investigation.
Also, the Authority has taken the profit figure  from our income statement.  This
figure includes our financial profits  which was not taken into consideration by the
Authority in the cost of production.  This is also contradictory and not
understandable."
Final Report
7.404  In the Final Report , the text concerning IDC's interest expense is identical to that in the
Essential Facts and Conclusions Report .
293
(iii) Diler
Questionnaire response
7.405  Diler's questionnaire contains the following text  concerning interest expense in the section
pertaining to cost of production:
"Interest expense is reported in a manner similar to G&A expense, i.e., on an
annual basis, since it is also a period cost.  Interest expense is on a
consolidated basis (Group interest expense, offset by Group interest income),
as is the practice in antidumping investigations, because of the fungibility of
money."294
                                                     
291 Exh. TUR-15, p.23.
292 Exh. TUR-27, p.2-3.
293 Exh. TUR-16, p.29.
294 Exh. TUR-42, p.21.WT/DS211/R
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Diler's Appendix  9A to its questionnaire response295 contains a column for "Interest Expense
(revenue)" which contains negative numbers (i.e., indicating net revenue) for all of the months for
which data are provided.
19 August request
7.406  The 19 August request sent to Diler contains the following passage pertaining to interest
income and expense:
"The costs reported included no finance cost, yet the income statement that Diler
supplied indicated significant financing expenses.  The costs reported include a
deduction for 'interest expense', the Investigating Authority would need an
explanation for this cost and why it is deducted from cost of production."296
15 September response to 19 August request
7.407  Diler replied on 15 September to the 19 August request.  This response included a joint cover
letter on behalf of Diler, Habas and Colakoglu.  That letter contained the following statement in
respect of the negative interest expense that these companies had reported in their questionnaire
responses:
"Regarding the issue of negative interest expense, the fact is that interest income
exceeded interest expense.  Companies regu larly invest their working capital in very
short-term interest income instruments, such as overnight ("repo") loans, on which
the interest income can be as high as 120% per year.297
….
Regarding respondents' interest expense factors, each respondent has provided its
financial statements in the file "mfr income stmt" included in Exhibit 2 of the
questionnaire response (the data base submissions). [footnote omitted.]  From these
income statements, as well as worksheets embedded in the cost submissions
(dlsapp9A), it is apparent that sort-ter m interest income exceeded total interest
expense.  This is the reason respondents' interest expense for purposes of cost ofproduction is a net negative figure.
As for ITPD's question of why respondents deduct short-term interest income from
the interest expense component of cost of production, the answer is simply that, in
any reasonable measure of cost, interest income is netted against interest expense.
This is true in dumping cases as well as in any other accounting exercise.  If a
company pays out $100 in interest expense and earns $120 in interest income, then
the company obviously has a net interest expense of -$20, that is, net interest incomeof +$20.  Just as a positive interest expense is an element of cost, so a negative
interest expense is an element of cost.  The former increases cost, and the later [sic]
reduces cost, but there is no reason in accounting or in law why an adjustment to cost
may be only made on the upward side.  Indeed, scrap revenue is always deducted
from material cost, in the same way interest revenue is deducted from interest cost.
…
                                                     
295 Ibid, p.22.
296 Exh. TUR-11.
297 Exh. TUR-34 A, B and C, cover letter at p.2.WT/DS211/R
Page 101
Indeed, we point out that Colakoglu, Diler and Habas have each submitted not only
complete cost databases on a monthly basis – exceeding the requirements of the
questionnaire – but they have also provided their financial statements and detailed
analyses of their selling, general and administrative, and interest expenses to enable
ITPD to evaluate each of these elements.  See each company's Exhibit 2 of thequestionnaire response, containing tables of financial statements and detailed SGA
expense tables."
298
23 September follow-up request from the IA
7.408  In its 23 September 1999 follow-up request to Diler's response to the 19 August request, the
IA made the following request in respect of interest expense:
"7.  Interest Expense:
Please, furnish a list identifying separately interest expenses from interest income."299
28 September letter from the IA
7.409  In its letter to Diler, Habas and Colakoglu dated 28 September, the IA indicated the
following:
"With reference to your fax messages of 15th and 28th September 1999, we note that
you did not fully respond to the following items:…
- Interest expense, and
…"
300
Essential Facts and Conclusions Report
7.410  At section 3.2.1.6, the Essential Facts and Conclusions Report  states:
"In addition, these respondents [Diler, Habas and Colakoglu] have asserted that the
COP should be reduced in an amount by which investment income exceed finance
expenses.  The Investigating Authority believes that such an adjustment would not be
appropriate.  Decisions by respondents to invest funds in interest-bearing accounts do
not, in the Investigating Authority's view, bear a sufficiently close relationship to thecompany's cost of producing the subject products.  As such, the Investigating
Authority disregarded such income in the calculation of COP."
301
7.411  For each of the three respondents the Essential Facts and Conclusions Report  indicates that
an amount for interest expense was included in cost of production, and that no offset was made for
interest income, for the same reason as outlined in section 3.2.1.6, quoted above.  These statements
appear at sections 3.2.2.1 and 3.2.2.2 (Habas)302, 3.2.3.2 (Diler)303, and 3.2.4.2 (Colakoglu) of the
Final Report .304
15 October comments on the Essential Facts and Conclusions Report
                                                     
298 Ibid, p.7 and 8.
299 Exh. TUR-12.
300 Exh. EGT-13.6.
301 Exh. TUR-15, p.20.
302 Ibid, p.21.
303 Ibid.
304 Ibid, p.22.WT/DS211/R
Page 102
7.412  In their joint comments on the Essential Facts and Conclusions Report305, Diler, Habas and
Colakoglu state:
"Regarding §3.2.1.6 and cognate paragraphs, Colakoglu, Diler and Habas reject as a
matter of law the Report's statement that interest income should not offset interest
expense for cost purposes.  This is a universal practice; see, for example, the USRebar  case cited above.  The Report states that a company's purchase of short-term
instruments does not 'bear a sufficiently close relationship to the cost of the
company's producing the subject products' to warrant the offset.  This test, namely, a
'sufficiently close relationship to the cost of the company's producing the subject
merchandise', is not the appropriate test.  If the respondent's interest expense  were
unrelated to production, ITPD would surely consider the expense to be an expense for
purposes of antidumping cost accounting.  In other words, ITPD would not use alinkage-to-production test mathematically, and there is no reason to apply to interest
income a test different from the test applied to interest expense.  In sum, ITPD's
exclusion of interest income from the calculation of net interest expense violates
precedents in other GATT countries, is contrary to accounting practices, and is
without justification on any normative ground ."
306
Final Report
7.413  The statements in the Final Report  on this issue are identical to those in the Essential Facts
and Conclusions Report.
(iv) Colakoglu
Questionnaire response
7.414  Turkey has provided no narrative excerpt from Colakoglu's questionnaire response referring
to interest income, so we must presume that no such  narrative was included in that response.  Turkey
has simply provided Colakoglu's Appendix 9A to its questionnaire response, which contains one
column entitled "Interest Expense", in which positive numbers are reported, and another column
entitled "Short-term interest income", in which (larger) negative numbers are reported.307
19 August request
7.415  The 19 August request sent to Colakoglu contains the following passage pertaining to interest
income and expense:
"The costs reported included interest expenses that does not reflect the inflation rate.
The costs reported include a deduction for 'short term interest income', the
Investigating Authority would need an explanation for this cost and why it is
deducted from cost of production."308
15 September response to the 19 August request; 23 September follow-up request from
the IA; 28 September letter from the IA; Essential Facts and Conclusions Report ;
15 October comments on the Essential Facts and Conclusions Report ; and Final Report
                                                     
305 Exh. TUR-20.
306 Ibid, p.15 and 16.
307 Ibid, p.24.
308 Exh. TUR-11.WT/DS211/R
Page 103
7.416  The relevant passages concerning Colakoglu in the 15 September response to the 19 August
request, the 23 September follow-up request from the IA, the 28 September letter from the IA, the
Essential Facts and Conclusions Report , the 15 October comments on the Essential Facts and
Conclusions Report , and the Final Report , are identical to those set forth above in respect of Diler.309
(v) Habas
Questionnaire response
7.417  Habas' questionnaire response contains the following text pertaining to interest expense in the
section pertaining to cost of production:
"Interest expense is reported in a manner similar to G&A expense, i.e., on an annual
basis, since it is also a period cost.  Interest expense is on a consolidated basis (Group
interest expense, offset by Group interest income)."310
7.418  Habas's Appendix 9A contains a column entitled "Interest Expense", in which negative
numbers are reported.
19 August request
7.419  The 19 August request sent to Habas contains the following passage pertaining to interest
income and expense:
"The costs reported included no finance cost, yet the income statement that Habas
supplied indicated significant financing expenses.  The costs reported include a
deduction for 'interest expense', the Investigating Authority would need an
explanation for this cost and why it is deducted from cost of production."311
23 September follow-up request
7.420  In its 23 September 1999 follow-up request to the Habas's response to the 19 August request,
the IA made the following request concerning interest expense:
"Interest Expense:
Please furnish a list identifying separately interest expense from interest income."312
15 September response to the 19 August request; 23 September follow-up
request from the IA; 28 September letter from the IA; Essential Facts and
Conclusions Report ; 15 October comments on the Essential Facts and
Conclusions Report ; and Final Report
7.421  The relevant passages concerning Habas in the 15 September response to the 19 August
request, the 23 September follow-up request from the IA, the 28 September letter from the IA; the
Essential Facts and Conclusions Report , the 15 October comments on the Essential Facts and
Conclusions Report , and the Final Report , are identical to those set forth above in respect of Diler.313
                                                     
309 See paras.7.407,  et seq., supra.
310 Exh. TUR-42, p.26.
311 Exh. TUR-11.
312 Exh. TUR-12.
313 See paras.7.407, et seq. , supra .WT/DS211/R
Page 104
(b) Assessment by the Panel
7.422  We recall that to resolve this claim, we must consider whether the evidence of record
indicates that the short-term interest income is related to the production and sale of rebar in the
Turkish home market.  In this regard, we note that it was the respondents who initially advocated (at
least implicitly) for an interest income offset, by reporting in their questionnaire responses on cost
their net interest expense figures, which ranged from zero to negative numbers (the latter indicating
net interest income).  With two exceptions -- D iler and Habas -- the respondents simply reported the
net figures without indicating how they were arrived at or what their components were.  Diler and
Habas, for their part, indicated that their reported interest figures were "consolidated" item reflecting
"Group" interest expense offset by "Group" interest  income (suggesting that  it was broader than the
companies or operations producing rebar), but did not offer further explanations or breakdowns.
7.423  Concerning Diler, Habas and Colakoglu, the IA requested in its 19 August requests
explanations of why interest expense was reported as a negative number.  These companies provided
the narrative explanations noted above314, (which does not address the relationship of the interest
income to production and sale of rebar)315.  Rather, this narrative simply explains, in some detail, the
mathematical reason for interest having been reported by each company as a negative figure, i.e., that
interest income exceeded interest expense.  The na rrative then asserts that just as a positive interest
expenses is an element of cost, so too is a negative interest expense, and that there is no accounting or
legal reason why an adjustment to cost can be made only on the upward side.  The IA then requested
in its 23 September follow-up requests that these companies provide lists separately identifying the
interest income and expense items.  As discussed above, these companies provided no information on
any item in response to the 23 September requests.  Then, in their comments on the relevant portion ofthe Essential Facts and Conclusions Report  that indicates that no interest income offset was allowed
because that income was not sufficiently closely related to the companies' costs to produce rebar,
these companies made no attempt to demonstrate, or even to argue, that the IA was factually incorrect
and that indeed the interest income was related to the cost of producing rebar.  To the contrary, they
argued that the "'sufficiently close relationship to  the cost of the company's producing the subject
merchandise' is not the appropriate test" (emphasis added).
316 We note however, that the
"relationship" test is precisely the test articulated by the relevant provisions of the AD Agreement.
7.424  Concerning IDC, the IA requested in the 19 August request that IDC requested a list
separately identifying interest income and interest expense, and in its 28 September letter to IDC, the
IA requested a list separately identifying interest  income and interest expense showing the difference
on a per ton basis monthly for 1998.  IDC, in commenting on the indication in the Essential Facts and
Conclusions Report  that no interest income offset would be made due to the insufficient relationship
to cost of producing rebar, noted that long-term interest expense should not have been used, that IDC
had provided the breakout that the IA had requested on 28 September, which showed that long-term
interest expenses were related to ship procurement,  and that interest expenses were related to all
products of the company, not just rebar.  In addition, IDC argued that the profit figure that was used
by the IA in constructed value included the company's financial profits, but had not been included inthe cost of production, which according to IDC was "contradictory".  These comments thus clearly are
aimed at demonstrating the weakness or absence of any relationship to production of the interest
expense  that was used in the constructed value calculation, rather than at demonstrating any
relationship of interest income  to production.
7.425  Concerning Icdas, other than a passage in its original questionnaire response entitled "Interest
Revenue" (having to do with invoices for late paymen ts), to which there is no further reference in the
record before us, there is no indication that Icdas asserted any particular approach to or data regarding
                                                     
314 Ibid.
315 We note that this issue was raised by the IA later in the investigation ( See para. 7.426).
316 Ibid.WT/DS211/R
Page 105
an interest income offset.  Nor did the IA pose any specific questions to Icdas in this regard.  While
the IA noted briefly in the Essential Facts and Conclusions Report  that no such offset was made in
the constructed value calculation, Icdas made no comment on this point. We see, moreover, no
evidence in the record otherwise that appears rele vant to the existence of a relationship, if any,
between interest income and the cost of producing and selling rebar.  We note in this regard that whenwe asked Turkey to identify any such evidence, Turkey replied:
"Specific information was not requested by the Investigating Authority on the nature
of the interest income at issue.  If the Investigating Authority had any doubt as to the
validity of the offset in question, it was incumbent upon the Investigating Authority
to request additional information.  The Investigating Authority cannot justify the
denial of an adjustment based on the failure to provide clarifications or supporting
evidence that it itself did not seek.  We note that the Investigating Authority nevercited any evidence that the interest income was not related to production, nor has
Egypt produced such evidence to the Panel".
317
7.426  We note in this regard that three of the respondents simply refused to provide even a breakout
of interest income from interest expense, when such a breakout was specifically requested by the IA.
Then, in their comments on the Essential Facts and Conclusions Report  they advanced an incorrect
legal argument concerning the relationship-to-production test applied by the IA in deciding not to
make an interest income offset, rather than trying to establish factually that their accounting records of
the interest income reasonably reflected costs associated with the production and sale of rebar, and not
some other aspect of the respondent's operations.  The IA thus explicitly identified this issue during
the course of the investigation, and provided the respondents with an opportunity to address it, whichthese companies chose to do in a certain way.  The other respondent that commented on this aspect of
the Essential Facts and Conclusions Report  tried to disprove  the relationship between interest expense
and the cost of producing rebar, rather than trying to prove  the existence of a relationship between
interest income  and cost of production.  The fifth responde nt made no comments or arguments at all
on this issue at any point during the investigation (other than the somewhat ambiguous paragraph inits questionnaire response concerning "Interest Revenue").  In short, Turkey has not identified, and we
have not found, evidence of record that would demonstrate any relationship of short-term interest
income to the cost of producing rebar, nor any i ndication that any respondent attempted to submit
such evidence or advance such an argument during the course of the investigation, in spite of the IA's
providing them the opportunity to do so.  We therefore find that Turkey has not established a prima
facie  case that the IA violated Article 2.2.1.1 or 2.2.2 in deciding not to make an interest income
offset in calculating cost of production and constructed normal value.
F. 
CLAIM UNDER ARTICLE X:3 OF GATT 1994
7.427  Turkey claims a violation of Article X:3 of GATT 1994 in "connection with Egypt's refusal to
schedule a meeting with the Turkish respondents to discuss the adequacy of their responses on
September 15, 1999.318  Turkey contends that this decision  was "administrative" in nature and  based
directly on a substantive law or rule.319
7.428  Article X:3 of GATT 1994 provides:
                                                     
317 Written Response, dated 14 March 2002, to Question 10 to Turkey of the Written Questions by the
Panel , of 27 February 2002.
318 First Written Submission of Turkey, Section IV.D.2.
319 Written Response, dated 7 December 2001, to Question 2 to Turkey of the Written Questions by the
Panel , of 28 November 2001.WT/DS211/R
Page 106
"(a) Each contracting party shall administer in a uniform, impartial and reasonable
manner all its laws, regulations, decisions and rulings of the kind described in
paragraph 1 of this Article."
7.429  We recall that in the present dispute, we have found that Turkey has not established that the
respondents "requested" a meeting with the IA, but rath er that they offered to travel to Cairo if the IA
would find it useful.  We see nothing non-uniform, non- impartial or unreasonable in the IA's decision
not to accept this offer of the respondents.  Accordingly, we find that Turkey has not established that
Egypt violated Article X:3.
VIII.  CONCLUSIONS
8.1 In light of the foregoing findings, we conclude that Egypt did not act inconsistently with its
obligations under:
(a) Article 3.4 of the AD Agreement, as Turkey has not established that the Egyptian
Investigating Authority was required to examine and evaluate the particular factors
identified by Turkey as "relevant factors and indices having a bearing on the state of
the domestic industry";
(b) Article 3.2 of the AD Agreement, as Turkey has not established that there was a legal
obligation on the Egyptian Investigating Authority to perform the price undercuttinganalysis in the way asserted by Turkey;
(c) Article 3.1 of the AD Agreement, as Turkey has not established that the Egyptian
Investigating Authority's price undercutting finding was not based on positive
evidence;
(d) Articles 6.1 and 6.2 of the AD Agreement in respect of the alleged change in scope of
the injury investigation from threat of mate rial injury to present material injury and
notice thereof to the Turkish exporters;
(e) Articles 3.1 and 3.5 of the AD Agreement, as Turkey has not established that the
Egyptian Investigating Authority violated the positive evidence requirement of
Article 3.1 by virtue of the Investigating Authority not developing certain specifickinds of evidence, nor has Turkey established that, as a consequence, Egypt violated
the requirement of Article 3.5 to demonstrate a causal relationship between the
dumped imports and the injury to the domestic industry;
(f) Article 3.5 of the AD Agreement, as Turkey has not established that the Egyptian
Investigating Authority's evaluation of the possible causation of injury by factors
other than the dumped imports was inconsistent with Article 3.5;
(g) Article 3.1 and 3.5 of the AD Agreement, as Turkey has not established that the
Egyptian Investigating Authority was obligated by Articles 3.1 and 3.5 to perform an
analysis and make a finding of the type asserted by Turkey in respect of whether the
imports caused injury "through the effects of dumping";
(h) Article 6.8 of the AD Agreement and paragraph 5 of Annex II thereto, with regard to
three of the Turkish exporters, as an unbiased and objective investigating authoritycould have found that these three exporters failed to provide necessary information
and that resort to facts available was therefore justified in calculating the cost of
production in respect of these three exporters;WT/DS211/R
Page 107
(i) Article 6.1.1 of the AD Agreement, as the request for information at issue was not a
"questionnaire" in the sense of this provision, and the minimum time-period provided
for in Article 6.1.1 was therefore not applicable to this request for information;
(j) Article 6.2 of the AD Agreement, or paragraph 6 of Annex II thereto, with regard to
the 19 August 1999 request for information, as Turkey has not established that thetime-period allowed by the Egyptian Investigating Authority for submission of the
requested information was unreasonable or, as a consequence, that the Egyptian
Investigating Authority failed to provide the Turkish exporters with a full opportunity
for the defence of their interests;
(k) Article 6.2 of the AD Agreement, or paragraph 6 of Annex II thereto, with regard to
the 23 September 1999 request for information, as Turkey has not established that the
time-period allowed by the Egyptian Investigating Authority for the submission of therequested information was unreasonable or, as a consequence, that the Egyptian
Investigating Authority failed to provide the Turkish exporters with a full opportunity
for the defence of their interests;
(l) Paragraph 3 of Annex II to the AD Agreement, as this provision does not apply to the
selection of particular information as "facts available";
(m) Paragraph 7 of Annex II to the AD Agreement, as Turkey has not established that the
Egyptian Investigating Authority failed to use "special circumspection"  in estimating
the prevailing inflation rate in Turkey, which was applied to the data reported by one
respondent, at 5 per cent per month;
(n) Article 6.7 of the AD Agreement, paragraph 7 of Annex I thereto, and paragraphs 1
and 6 of Annex II thereto, as Turkey has not established that these provisions contain
the obligations asserted by Turkey, i.e., Turkey has not established that it is
mandatory for investigating authorities to conduct "on-the-spot" verification of
information submitted, that investigating authorities are precluded from requesting
additional information during the course of the investigation, that the rights of theTurkish exporters were seriously prejudiced, or that the actions of the Egyptian
Investigating Authority impaired their "opportunity to provide further explanations";
(o) Article 2.4 of the AD Agreement, as Turkey has not established that the burden of
proof requirement of that provision is applicable to the request for certain cost
information by the Egyptian Investigating Authority in its letter of 19 August 1999,
nor, even if that requirement were applicable, that the request imposed an
unreasonable burden of proof on the Turkish respondents;
(p) Article 6.2 of the AD Agreement and paragraph 6 of Annex II thereto, as Turkey has
not established that the Egyptian Investigating Authority denied requests of Turkish
exporters for meetings;
(q) Article 2.4 of the AD Agreement, as Turkey has not made a prima facie  case that the
Egyptian Investigating Authority violated this provision in failing to make anadjustment to normal value for differences in terms of sale;
(r) Articles 2.2.1.1 and 2.2.2 of the AD Agreement, as Turkey has not made a prima
facie  case that the Egyptian Investigating Authority violated these provisions in
deciding not to make an interest income offset in calculating cost of production and
constructed normal value; andWT/DS211/R
Page 108
(s) Article X:3 of GATT 1994 as Turkey has not established that Egypt administered its
relevant laws, regulations, decisions or rulings in a non-uniform, non-impartial or
unreasonable manner in deciding not to accept an offer of certain respondents to
travel to Cairo for a meeting with the Investigating Authority.
8.2 In the light of the foregoing findings, we conclude that Egypt acted inconsistently with its
obligations under:
(a) Article 3.4 of the AD Agreement, in that while it gathered data on all of the factors
listed in Article 3.4, the Egyptian Investigating Authority failed to evaluate all of the
factors listed in Article 3.4 as it did not evaluate productivity, actual and potential
negative effects on cash flow, employment, wages, and ability to raise capital or
investments; and
(b) Article 6.8 of the AD Agreement, and paragraph 6 of Annex II thereto, with regard to
two of the Turkish exporters, as the Egyptian Investigating Authority, having
received the information that it had iden tified to these two respondents as being
necessary, nevertheless found that they had failed to provide the necessary
information, and further, did not inform these two exporters of this finding and did
not give them the required opportunity to provide further explanations beforeresorting to facts available.
8.3 With respect to those of Turkey's claims not addressed above, we have:
(a) concluded that the claim was not within our terms of reference (claim under AD
Article 17.6(i), claim under Article X:3 of GATT 1994 in respect of selection of
particular facts available), or was abandoned by Turkey (claim under Article X:3 inrespect of resort to facts available); or
(b) concluded that, in the light of considerations of judicial economy, it is neither
necessary nor appropriate to make findings.
8.4 Under Article 3.8 of the DSU, in cases where ther e is infringement of the obligations assumed
under a covered agreement, the action is considered prima facie  to constitute a case of nullification or
impairment of benefits under that Agreement.  Accordingly, we conclude that to the extent Egypt has
acted inconsistently with the provisions of the AD Agreement, it has nullified or impaired benefits
accruing to Turkey under that Agreement.
IX. RECOMMENDATION
9.1 In accordance with Article 19.1 of the DSU, we recommend that Egypt brings its definitive
anti-dumping measures on imports of steel reba r from Turkey into conformity with the relevant
provisions of the AD Agreement.
__________