. /.RESTRICTEDWORLD TRADE
ORGANIZATIONG/ADP/IG/W/16
19 November 1998
(98-4642)
Committee on Anti-Dumping Practices
Informal Group on Anti-CircumventionOriginal:  English
TOPIC 1 – WHAT CONSTITUTES CIRCUMVENTION?
Questions Posed by the UNITED STATES to
HONG KONG, CHINA and JAPAN
The following communication was received on 27 October 1998 from the Permanent Mission
of the United States.
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QUESTIONS FOR HONG KONG, CHINA
Nickel Example
1. What factors should be used to decide whether the new alloy is a "new product"?  What
would be the significance of determining that the new alloy is a "new product"?
2. If it were established that the new alloy was a perfect substitute for nickel, and that the new
alloy was being sold to the same customers as before the order under the same contracts for the same
price, and that the customers willingly accepted the substitution because they considered the change in
the metal to be insignificant, would this strengthen the case for finding that exports of the new alloywere circumventing the order?
3. Would Hong Kong, China's view of this hypot hetical example be any different if, instead of
adding 0.5 per cent silver to the nickel, the producer added 0.5 per cent steel, which reduced the value
of the new alloy?  Would the case for finding circ umvention become stronger if 100 per cent of the
original nickel exports went to a stainless steel producer for use in the production of stainless steel,
and 100 per cent of the nickel/steel alloy imports went to that same producer for the same use?
Hinge Example
4. Would stipulating that the assembly of the hinges constituted a "marginal alteration"
strengthen the case for finding circumvention?
5. If the foreign producer freely admitted that its sole purpose in shifting the assembly operation
had been to circumvent the order, and also ad mitted that the shift in the location of assembly
otherwise was commercially disadvantageous, would this strengthen the argument that the hinge
components were circumventing the order?G/ADP/IG/W/16
Page 2
Salt Example
6. If the production and transportation costs of saline syrup were only slightly higher (for
example 5 per cent higher) would this strengthen the case for finding circumvention?
QUESTIONS FOR JAPAN
Nickel Example
1. If a full examination of the facts demonstrated that the new alloy was a perfect substitute for
99 per cent pure nickel, would this strengthen the argument that the new alloy was being used to
circumvent the order?
2. Would it strengthen the case for finding circumvention if the new alloy was being sold to the
same customers as before the order under the same contracts for the same price, and the customers
had agreed to the substitution on the basis that the change in the composition of the metal was
insignificant?
3. Would it strengthen the argument for finding circumvention if, instead of adding 0.5 per cent
silver to the nickel, the producer added 0.5 per cent steel, which reduced the value of the new alloy
and rendered it useless for any purpose other than manufacturing stainless steel?
4. Japan's paper states that "it is always possible to define the product coverage precisely to
include products with minor alternations in the original investigation".  Does this mean that every
possible variation must be identified and specified, or would it be possible to state generally that
minor variations were covered?
Hinge Example
5. If the foreign producer freely admitted that its sole purpose in shifting the assembly operation
to a third country had been to circumvent the order, and that the shift in the location of assembly
otherwise was commercially disadvantageous, would th is strengthen the argument that the exports of
hinge components were circumventing the order?
Salt Example
6. If it were demonstrated that the channels of distribution, customers, and uses of saline syrup
were all identical to those for salt, would this strengthen the case for finding circumvention?
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