ARTICLE 5 OF THE AGREEMENT ON IMPLEMENTATION OF ARTICLE VI OF THE GENERAL

AGREEMENT ON TARIFFS AND TRADE 1994

INTRODUCTION & BACKGROUND-

The title is ‘Initiation and Subsequent Investigation’. Article 5 of the Anti-Dumping Agreement
outlines the conditions under which an investigating authority can initiate an anti-dumping
investigation. The primary purpose of an anti-dumping investigation is to determine whether foreign
companies are engaging in unfair trade practices by selling products in the domestic market at a price
below the cost of production or below the price they charge in their home market. Dumping can
cause harm to domestic producers, leading to lost sales, reduced profits, and job losses.

Article 5 of the Anti-Dumping Agreement requires that an investigating authority must have
sufficient evidence that dumping has occurred before initiating an investigation. This includes
evidence of the selling price of the goods in question and the price in the exporter's domestic
market. Additionally, the investigating authority must evaluate the effect of the dumped imports on
the domestic industry, including whether there has been material injury to the industry or a threat of
material injury.

CONDITIONS TO INITIATE INVESTIGATION

It states that an investigation can only be initiated if the following conditions are met:

1. There is sufficient evidence of dumping.

2. The domestic industry has suffered or is threatened with material injury.
3. The dumping and the injury are causally linked.

In Guatemala – Cement II, the Panel examined Mexico's claim that Guatemala's authority, in
violation of Article 5.2, had initiated the anti-dumping investigation without sufficient evidence of
dumping having been included in the application. In the context of Guatemala's Cement II case,
Article 5 would have been relevant in determining whether the dumping of cement from other
countries was causing material injury to the domestic cement industry in Guatemala. If the
investigating authority found that the three conditions under Article 5 were met, it could then
proceed with an anti-dumping investigation and potentially impose anti-dumping measures, such as
tariffs or quotas, to counteract the unfair practice of dumping.
HOW IS THE INVESTIGATION INITIATED?
If application is moved to designated authority, what will DGTR do w that? Application is triggering
point of the investigation process. Nothing under Art. 5 says that after submission of information,
the designated authority will start the investigation.

The designated authority has the authority to start investigation or not? If they have exercised could
that be challenged? And who will challenge? The domestic industry will make an application. If they
are not making any decision, it can be challenged before the CSAC. They will not go to the WTO as
that is available only to foreign countries. Discretion is on designated authority. When to initiate the
investigation, it is silent on it. There is no time-span for initiation of investigation under 5.1 there is
discretion as to when to start.

WHAT MAKES SURE INVESTIGATION IS INITIATE?

The application should be sufficiently documented and be done by appropriate authority [like the
DGTR in India]; if there is no deficiency then the application would be considered for initiation.

Things that make sure that definitely the investigation would start-

1. Applicant filing the application have standing- meaning 50% as outlined in Art. 5.4.
Applicant must be supported by the required number of statutory percentage.
2. Application must be containing certain information as per Art. 5.2, the chapeau [meaning
opening sentence] requirement and the 4 paragraphs that Art. 5.2 is having [it has two parts-
first, for dumping, injury and causal link; and second part is specific information]. Chapeau
has 3 requirements. These information must be-
a. Reasonably available information
b. Provided without analysis
c. Sufficient enough to prove acts of dumping
3. If it is adequate or accurate
4. The investigating authority must conclude there is sufficient evidence. Sufficiency of
evidence is also there. It should be accurate and evident.
a. Relation b/w 5.2 and 5.3- art. 5.3 is one additional step needed on behalf of the
designated authority to see whatever information supplied is sufficient enough to
apply/prove that the degree, taxation and causal link of dumping exist; otherwise,
resort to 5.8 for termination.
 i. Main test is sufficiency test- Mexico – Corn Syrup case, Argentina –
Poultry Anti-Dumping Duties case, US – Softwood Lumber II case.

WHAT IS THE THRESHOLD OF SUFFICIENCY TO INITIATE?

Under Article 5 of the WTO Anti-Dumping Agreement, the investigating authority must determine
whether the complaint submitted by the domestic industry contains sufficient evidence to justify the
initiation of an investigation into the alleged dumping.

In the Mexico-Corn Syrup case, there is a 3 pronged approach mentioned in it for evidence of the
causal link between dumping and injury. The Panel concluded that Article 5.3 does not establish a
requirement for the investigating authority to state specifically the resolution of questions
concerning the exclusion of certain producers involved in defining the relevant domestic industry in
the course of examining the accuracy and adequacy of the evidence to determine whether there was
sufficient evidence to justify initiation.

The case of US- Softwood Lumber clearly says what is reasonably available and for what. It says all
data should be reasonably available [for dumping, injury and causal link]. There is no undue burden
on the applicant to submit it all. If DGTR feels information is not enough, it can ask for more
under Art. 6.1 & 6.2, for power to search data, ask the other party to submit data, etc. all these
powers are under “evidence clause” under Article 6.

To assess the sufficiency of evidence, the investigating authority must consider a range of factors,
such as the volume and price of the allegedly dumped imports, their impact on the domestic
industry, and the causal link between the dumping and the injury suffered by the domestic industry.

The investigating authority must ensure that the evidence is relevant, reliable, and verifiable, and it
must also take into account any other relevant factors that could affect the assessment of the
evidence. If the investigating authority determines that the evidence is sufficient, it may initiate an
investigation into the alleged dumping. However, if the evidence is found to be insufficient, the
investigating authority may reject the complaint and not initiate an investigation.

In the case of Mexico - Steel Pipes and Tubes, Mexico argued that if an investigating authority
initiates an investigation based on sufficient evidence in the application, it indicates that the authority
has examined the evidence and found it sufficient for the purpose of Article 5.3. Mexico used EC -
Bed Linen as a precedent to support their argument, but the panel did not agree with Mexico. The
panel did not interpret EC - Bed Linen as supporting Mexico's argument, and it did not agree that
Article 5.3 does not impose a substantive obligation on investigating authorities to assess the
sufficiency of the evidence. The panel noted that while the EC - Bed Linen case found that Article
5.3 does not specify the nature of the examination to be conducted, it does not mean that
investigating authorities have no substantive obligation to assess the sufficiency of evidence.
Therefore, the panel found that the EC - Bed Linen case is not relevant to the substantive issue in
the case, which pertains to the authority's assessment of the evidence's sufficiency.

DISTINCTION BETWEEN ART. 5.2 & ART. 5.3

The Panel in Morocco – Definitive AD Measures on Exercise Books (Tunisia) noted the
distinction between Articles 5.2 and 5.3, namely that Article 5.2 deals with the content of the
complaint, whereas Article 5.3 establishes the standard of review for the complaint.

Article 5.2 imposes an obligation for authorities to comply with an application assessment. However,
Morocco believes that this article does not impose a legal obligation on the investigating authority. If
Article 5.2 is used as a basis for their claims in the dispute, then it’s important for the panel to
acknowledge that this article doesn't create an independent obligation for the authority. Instead,
Article 5.2 specifies what should be included in the complaint submitted by the domestic industry,
and it's Article 5.3 that establishes the criteria for the review that the authority must conduct to
determine whether the evidence in the complaint justifies an investigation.

SUMMARY-
In summary, Article 5 of the Anti-Dumping Agreement establishes the conditions that must be met
before an investigating authority can initiate an anti-dumping investigation. The investigating
authority must have sufficient evidence of dumping, evaluate the impact on the domestic industry,
and establish a causal link between the dumped imports and the injury suffered by the domestic
industry.