Article 1 Definition of a Subsidy Article 1.

1 For the purpose of this Agreement, a subsidy shall be deemed to exist if: (iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments; Article 1.1(b) a benefit is thereby conferred. Article 14 Calculation of the Amount of a Subsidy in Terms of the Benefit to the Recipient For the purpose of Part V, any method used by the investigating authority to calculate the benefit to the recipient conferred pursuant to paragraph 1 of Article 1 shall be provided for in the national legislation or implementing regulations of the Member concerned and its application to each particular case shall be transparent and adequately explained. Furthermore, any such method shall be consistent with the following guidelines: (a) government provision of equity capital shall not be considered as conferring a benefit, unless the investment decision can be regarded as inconsistent with the usual investment practice (including for the provision of risk capital) of private investors in the territory of that Member; (b) a loan by a government shall not be considered as conferring a benefit, unless there is a difference between the amount that the firm receiving the loan pays on the government loan and the amount the firm would pay on a comparable commercial loan which the firm could actually obtain on the market. In this case the benefit shall be the difference between these two amounts; (c) a loan guarantee by a government shall not be considered as conferring a benefit, unless there is a difference between the amount that the firm receiving the guarantee pays on a loan guaranteed by the government and the amount that the firm would pay on a comparable commercial loan absent the government guarantee. In this case the benefit shall be the difference between these two amounts adjusted for any differences in fees; (d) the provision of goods or services or purchase of goods by a government shall not be considered as conferring a benefit unless the provision is made for less than adequate remuneration, or the purchase is made for more than adequate remuneration. The adequacy of remuneration shall be determined in relation to prevailing market conditions for the good or service in question in the country of provision or purchase (including price, quality, availability, marketability, transportation and other conditions of purchase or sale). Article 12 Evidence Article 12.7 In cases in which any interested Member or 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 made on the basis of the facts available. Article 12.9 For the purposes of this Agreement, "interested parties" shall include: (i) an exporter or foreign producer or the importer of a product subject to investigation, or a trade or business association a majority of the members of which are producers, exporters or importers of such product; and

. availability. (d) the provision of goods or services or purchase of goods by a government shall not be considered as conferring a benefit unless the provision is made for less than adequate remuneration. (b) a loan by a government shall not be considered as conferring a benefit. Article 1. quality. grants. i.g. 1. and equity infusion). or the purchase is made for more than adequate remuneration. loan guarantees). unless the investment decision can be regarded as inconsistent with the usual investment practice (including for the provision of risk capital) of private investors in the territory of that Member.(ii) a producer of the like product in the importing Member or a trade and business association a majority of the members of which produce the like product in the territory of the importing Member. any such method shall be consistent with the following guidelines: (a) government provision of equity capital shall not be considered as conferring a benefit. unless there is a difference between the amount that the firm receiving the guarantee pays on a loan guaranteed by the government and the amount that the firm would pay on a comparable commercial loan absent the government guarantee. In this case the benefit shall be the difference between these two amounts adjusted for any differences in fees. The adequacy of remuneration shall be determined in relation to prevailing market conditions for the good or service in question in the country of provision or purchase (including price. loans. (c) a loan guarantee by a government shall not be considered as conferring a benefit.g.e. potential direct transfers of funds or liabilities (e. Furthermore. any method used by the investigating authority to calculate the benefit to the recipient conferred pursuant to paragraph 1 of Article 1 shall be provided for in the national legislation or implementing regulations of the Member concerned and its application to each particular case shall be transparent and adequately explained. where: (i) a government practice involves a direct transfer of funds (e. a subsidy shall be deemed to exist if: (a)(1) there is a financial contribution by a government or any public body within the territory of a Member (referred to in this Agreement as "government"). This list shall not preclude Members from allowing domestic or foreign parties other than those mentioned above to be included as interested parties. transportation and other conditions of purchase or sale).1 For the purpose of this Agreement. In this case the benefit shall be the difference between these two amounts. marketability. Article 14 Calculation of the Amount of a Subsidy in Terms of the Benefit to the Recipient For the purpose of Part V.1(b) a benefit is thereby conferred. unless there is a difference between the amount that the firm receiving the loan pays on the government loan and the amount the firm would pay on a comparable commercial loan which the firm could actually obtain on the market.

Factors which may be relevant in this respect include. other factors may be considered. The authorities shall also examine any known factors other than the subsidized imports which at the same time are injuring the domestic industry. It is understood that the setting or change of generally applicable tax rates by all levels of government entitled to do so shall not be deemed to be a specific subsidy for the purposes of this Agreement. provided that the eligibility is automatic and that such criteria and conditions are strictly adhered to. contraction in demand or changes in the patterns of consumption. such subsidy shall be specific. (c) If. 2. . is specific to an enterprise or industry or group of enterprises or industries (referred to in this Agreement as "certain enterprises") within the jurisdiction of the granting authority. inter alia.3 Any subsidy falling under the provisions of Article 3 shall be deemed to be specific. or the legislation pursuant to which the granting authority operates. Such factors are: use of a subsidy programme by a limited number of certain enterprises. and the manner in which discretion has been exercised by the granting authority in the decision to grant a subsidy. trade restrictive practices of and competition between the foreign and domestic producers. developments in technology and the export performance and productivity of the domestic industry. and the injuries caused by these other factors must not be attributed to the subsidized imports.4 Any determination of specificity under the provisions of this Article shall be clearly substantiated on the basis of positive evidence. a subsidy. the following principles shall apply: (a) Where the granting authority. the granting of disproportionately large amounts of subsidy to certain enterprises. there are reasons to believe that the subsidy may in fact be specific. predominant use by certain enterprises. as defined in paragraph 1 of Article 1. regulation. account shall be taken of the extent of diversification of economic activities within the jurisdiction of the granting authority. establishes objective criteria or conditions2 governing the eligibility for. as well as of the length of time during which the subsidy programme has been in operation. so as to be capable of verification. 2. The demonstration of a causal relationship between the subsidized imports and the injury to the domestic industry shall be based on an examination of all relevant evidence before the authorities. The criteria or conditions must be clearly spelled out in law. 2. causing injury within the meaning of this Agreement. the volumes and prices of non-subsidized imports of the product in question. or the legislation pursuant to which the granting authority operates.1 In order to determine whether a subsidy. through the effects47 of subsidies.Article 2 Specificity 2. notwithstanding any appearance of non-specificity resulting from the application of the principles laid down in subparagraphs (a) and (b). (b) Where the granting authority. and the amount of. specificity shall not exist.5 It must be demonstrated that the subsidized imports are. In applying this subparagraph. or other official document. explicitly limits access to a subsidy to certain enterprises. Article 15 Determination of Injury 15.2 A subsidy which is limited to certain enterprises located within a designated geographical region within the jurisdiction of the granting authority shall be specific.

marketability. (c) a loan guarantee by a government shall not be considered as conferring a benefit. In this case the benefit shall be the difference between these two amounts.1(b) a benefit is thereby conferred. Furthermore. in no real sense. availability.1 For the purpose of this Agreement. unless there is a difference between the amount that the firm receiving the guarantee pays on a loan guaranteed by the government and the amount that the firm would pay on a comparable commercial loan absent the government guarantee. unless the investment decision can be regarded as inconsistent with the usual investment practice (including for the provision of risk capital) of private investors in the territory of that Member. unless there is a difference between the amount that the firm receiving the loan pays on the government loan and the amount the firm would pay on a comparable commercial loan which the firm could actually obtain on the market. (b) a loan by a government shall not be considered as conferring a benefit. differs from practices normally followed by governments. Article 1.Article 1.4 No countervailing duty shall be levied51 on any imported product in excess of the amount of the subsidy found to exist. . or the purchase is made for more than adequate remuneration. The adequacy of remuneration shall be determined in relation to prevailing market conditions for the good or service in question in the country of provision or purchase (including price. (d) the provision of goods or services or purchase of goods by a government shall not be considered as conferring a benefit unless the provision is made for less than adequate remuneration. quality. Article 19 Imposition and Collection of Countervailing Duties 19. Article 14 Calculation of the Amount of a Subsidy in Terms of the Benefit to the Recipient For the purpose of Part V. a subsidy shall be deemed to exist if: (iv) a government makes payments to a funding mechanism. calculated in terms of subsidization per unit of the subsidized and exported product. any method used by the investigating authority to calculate the benefit to the recipient conferred pursuant to paragraph 1 of Article 1 shall be provided for in the national legislation or implementing regulations of the Member concerned and its application to each particular case shall be transparent and adequately explained. any such method shall be consistent with the following guidelines: (a) government provision of equity capital shall not be considered as conferring a benefit. In this case the benefit shall be the difference between these two amounts adjusted for any differences in fees. or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice. transportation and other conditions of purchase or sale).

Sign up to vote on this title
UsefulNot useful