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.