ACT NO. XIII OF 2015

COUNTERVAILING DUTIES ACT, 2015

An Act to reform and repeal the Countervailing Duties Ordinance, 2001

[Gazette of Pakistan, Extraordinary, Part-I, 10th September, 2015]

No. F. 22(16)/2015-Legis., dated 8.9.2015.–The following Act of Majlis-e-Shoora (Parliament) received the assent of the President on the 5th September, 2015 and is hereby published for general information:–

WHEREAS it is expedient to give effect in Pakistan to the provisions of Articles VI and XVI of the General Agreement on Tariffs and Trade, 1994, and to the Agreement on Subsidies and Countervailing Measures and to further strengthen the law relating to imposition of countervailing duties to offset such subsidies, to provide a framework for investigation and determination of such subsidies and injury in respect of goods imported into Pakistan;

AND WHEREAS the imposition of countervailing duties to offset injurious subsidization is in the public interest;

AND WHEREAS it is expedient to provide for certain reforms in Countervailing Duties Ordinance, 2001 (I of 2001), by repealing it and re-enacting the law for the purposes hereinafter appearing;

It is hereby enacted as follows:–

PART I

PRELIMINARY

1.     Short title, extent and commencement.–(1) This Act may be called the Countervailing Duties Act, 2015.

(2)      It extends to the whole of Pakistan.

(3)      It shall come into force at once.

2.     Definitions.–In this Act, unless there is anything repugnant in the subject or context,–

(a)      “Agreement on Subsidies” means the Agreement on Subsidies and Countervailing Measures included in Annex (1 A) to the Final Ordinance of the Results of the Uruguay Round concerning the Implementation of Article XVI of the General Agreement on Tariffs and Trade, 1994;

(b)      “Appellate Tribunal” means the Appellate Tribunal established under the Anti-Dumping duties Law for the time being in force;

(c)      “Application” means an application submitted to the Commission pursuant to sub-section (1) of Section 11;

(d)      “Commission” means the National Tariff Commission established under the Law for the time being inforce;

(e)      “country” means any country or territory whether a member of the World Trade Organisation or not and includes a customs union or customs territory;

(f)       “countervailing measures” means any measures that may be taken by the Commission under this Act including imposition of countervailing duties, whether provisional or definitive, or the acceptance of an undertaking;

(g)      “definitive countervailing duty” means a duty imposed by the Commission under Section 16, sub-section (15) of Section 14 or sub-section (2) of Section 17;

(h)      “domestic industry” means the domestic producers as a whole of a like product or those whose collective output of that product constitutes a major proportion of the total domestic production of that product; except when any such domestic producers are related to the exporters or importers, or are themselves importers of the allegedly subsidised product. In such a case “domestic industry” shall mean the rest of the domestic producers:

          Explanation.–For the purposes of this clause, producers shall be deemed to be related to exporters or importers only if–

(i)       one of them directly or indirectly controls the other;

(ii)      both of them are directly or indirectly controlled by the same third person; or

(iii)     together they directly or indirectly control a third person:

          Provided that there are grounds for believing or suspecting that the effect of the relationship is such as to cause the producer concerned to behave differently from non-related producers and for that purpose one shall be deemed to control another when the former is legally or operationally in a position to exercise restraint or direction over the latter:

          Provided further that, in exceptional circumstances, as may be determined by the Commission, the domestic industry in relation to a product in question may be divided into two or more competitive markets and producers within each such market may be regarded as a separate industry if the–

(i)       producers within such a market sell all or almost all of their production of the product in question in such a market; and

(ii)      demand in such a market is not, to any substantial degree, supplied by producers of the product in question located elsewhere in Pakistan;

(i)       “Exporting country” means a country granting subsidy in respect of an investigated product, which country may be either–

(i)       the country of origin of the investigated product; or

(ii)      where the investigated product is not exported directly to Pakistan but is transported through an intermediate country, such intermediate country;

(j)       “government” means the government or any public body within the territory of an exporting country;

(k)      “injury” means, unless otherwise specified, material injury to a domestic industry, threat of material injury to a domestic industry or material retardation of the establishment of a domestic industry, when subsidised imports are causing such injury;

(l)       “interested party” includes–

(i)       an exporter, foreign producer, an importer of an investigated product or an association a majority of the members of which are producers, exporters or importers of such product;

(ii)      a producer of a like product in Pakistan or an association a majority of the members of which produce a like product in Pakistan; and

(iii)     such other person or group of persons as the Commission may, by notification in the official Gazette, specify;

(m)     “investigated product” means a product which is subject to an investigation under this Act;

(n)      “investigation” means an investigation conducted under this Act;

(o)      “like product” means a product which is a like in all respects to an investigated product or, in the absence of such a product, another product which, although not a like in all respects, has characteristics closely resembling those of the investigated product;

(p)      “prescribed” means prescribed by rules made under this Act;

(q)      “provisional countervailing duty” means a duty imposed by the Commission under Section 13;

(r)      “public notice” means a notice published by the Commission in at least one issue each of a daily newspaper in the English language and a daily newspaper in the Urdu language having wide circulation in Pakistan;

(s)      “Schedule” mean the Schedule to this Act;

(t)      “subsidy” means a subsidy as defined in Section 4 and “subsidization” shall be construed accordingly; and

(u)      “WTO” means the World Trade Organisation established pursuant to the Marrakesh Agreement concluded in Marrakesh, Morocco, on the 15th April, 1994.

PART II

COUNTERVAILING MEASURES

3.  Levy of countervailing duty.–(1) Where the Commission determines in accordance with the provisions of this Act that any exporting country pays or bestows, directly or indirectly, any subsidy upon the manufacture or production therein or the exportation therefrom of any investigated product including any subsidy on transportation of such product and such subsidy causes injury then, upon the importation of any such product into Pakistan, the Commission shall, by notification in the official Gazette, impose a countervailing duty thereon as provided for in this Act.

(2)      For the purposes of this Act, a product shall be considered to be subsidised if it benefits from a countervailable subsidy as provided for in Sections 4 and 5.

(3)      A subsidy may be granted by a government of the country of origin of an investigated product or by the government of an intermediate country from which the investigated product is exported to Pakistan.

(4)      Notwithstanding anything contained in this Act, where an investigated product is not directly imported from the country of origin but exported to Pakistan from an intermediate country, the provisions of this Act shall be fully applicable and such transaction shall, where considered appropriate by the Commission, be regarded as having taken place between the country of origin of the investigated product and Pakistan.

PART III

DEFINITION OF SUBSIDY, COUNTERVAILABLE AND NON-COUNTERVAILABLE SUBSIDIES

4.  Circumstances in which subsidy shall be deemed to exist.–A subsidy shall be deemed to exist if–

(a)      there shall be financial contribution by a government, where–

(i)       the government practice involves direct transfer of funds including grants, loans and equity infusion, or potential direct transfer of funds or liabilities, or both;

(ii)      government revenue that is otherwise due is foregone or not collected including fiscal incentives such as tax credits:

          Provided that exemption of an exported product from duties or taxes borne by a like product when destined for domestic consumption, or remission of such duties or taxes in amounts not in excess of those which have accrued, shall not be deemed to be a subsidy provided that such exemption is granted in accordance with the provisions of the First, Second and Third Schedules;

(iii)     the government provides goods or services other than general infrastructure or purchases goods; or

(iv)     the 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 specified in sub-clauses (i), (ii) and (iii) which would normally be vested in the government and the practice in, no real sense, differs from practices normally followed by governments;

(b)      there is any form of income or price support within the meaning of Article XVI of the General Agreement on Tariffs and Trade, 1994; and

(c)      a benefit is thereby conferred.

5.  Countervailable subsidies.–(1) A subsidy shall be subject to countervailing measures under this Act only if the Commission determines that such subsidy is specific in accordance with the principles set out in sub-Sections (2), (3), (4) and (5).

(2)  In order to determine whether a subsidy is specific to an enterprise, industry or a group of enterprises or industries, hereinafter referred to as “certain enterprises”, within the jurisdiction of a granting authority, the Commission shall apply the following principles, namely:–

(a)      where the granting authority, or the legislation pursuant to which the granting authority operates, explicitly limits access to a subsidy to certain enterprises, such subsidy shall be specific;

(b)      where the granting authority, or the legislation pursuant to which the granting authority operates, establishes objectives criteria or conditions governing the eligibility for, and the amount of, a subsidy, specificity shall not exist, provided that the eligibility is automatic and that such criteria and conditions are strictly adhered to;

          Explanation.–For the purposes of Clause (b), objective criteria or conditions mean criteria or conditions which are neutral, which do not favour certain enterprises over other, and which are economic in nature and horizontal in application, such as, number of employees or size of enterprise. Such criteria or conditions must be clearly set out by law, regulation, or other official document, so as to be capable of verification; and

(c)      if, notwithstanding any appearance of non-specificity resulting from the application of the principles laid down in clauses (a) and (b), there are reasons to believe that the subsidy may in fact be specific, the following other factors may be considered by the Commission, namely:-

(i)       use of a subsidy programme by a limited number of certain enterprises;

(ii)      predominant use by certain enterprises;

(iii)     granting of disproportionately large amounts of subsidy to certain enterprises; and

(iv)     manner in which discretion has been exercised by the granting authority in the decision to grant a subsidy;

          Explanation.–For the purposes of Clause (c), information on the frequency with which applications for a subsidy are refused or approved and the reasons for such decisions shall, in particular, be considered.

(3)      In applying the provisions of Clause (c) of sub-section (2), the Commission shall take into account the extent of diversification of economic activities within the jurisdiction of a granting authority and the length of time during which subsidy programme has been in operation.

(4)      A subsidy which is limited to certain enterprises located within a designated geographical region within the jurisdiction of a granting authority shall be specific.

(5)      The setting or changing of generally applicable tax rates by all levels of the government entitled to do so shall not be deemed to be a specific subsidy.

(6)      Notwithstanding anything contained in sub-Sections (2), (3), (4) and (5), the following subsidies shall be deemed to be specific, namely:–

(a)      subsidies contingent, in law or in fact, whether solely or as one of several other conditions, upon export performance, including those illustrated in the First Schedule:

          Provided that subsidies shall be considered by the Commission to be contingent in fact upon export performance when the facts demonstrate that granting of a subsidy, without having been made legally contingent upon export performance, is in fact tied to actual or anticipated exportation or export earnings:

          Provided further that the mere fact that a subsidy is accorded to enterprises which export shall not for that reason alone be considered by the Commission to be an export subsidy for the purposes of this clause; and

(b)      subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.

(7)  Any determination of specificity by the Commission under this section shall be substantiated on the basis of positive evidence.

6.     Non-countervailable subsidies.–Subsidies which are not specific as determined in accordance with the provisions of Section 5, shall not be subjected to countervailing measures under this Act.

PART IV

CALCULATION OF THE AMOUNT OF COUNTERVAILABLE SUBSIDY

7.     Calculation of amount of countervailable subsidy.–(1) The amount of countervailable subsidy, for the purposes of this Act, shall be calculated by the Commission in terms of any benefit conferred on a recipient which is found to exist during an investigation period for subsidization, which period shall normally be the most recent accounting year of the beneficiary but may be any other period of at least six months prior to initiation of an investigation for which reliable financial and other relevant data are available.

(2)  In determining the amount of countervailable subsidy the Commission shall apply the following principles to calculate any benefit conferred on the recipient as referred to in sub-section (1), namely:–

(a)      government provisions of equity capital shall not be considered to confer any benefit, unless an investment can be regarded as inconsistent with the usual investment practice including, for the provision of risk capital of private investors in the territory of an exporting country;

(b)      a loan by a government shall not be considered to confer any benefit, unless there is a difference between the amount that a firm receiving the government loan pays on it and the amount that the firm would pay for a comparable commercial loan which the firm could actually obtain on the market, in which event the benefit shall be the difference between these two amounts;

(c)      a loan guarantee by a government shall not be considered to confer any benefit, unless there is a difference between the amount that a firm receiving the guarantee pays on the loan guaranteed by the government and the amount that the firm would pay for a comparable commercial loan in the absence of the guarantee, in which case the benefit shall be the difference between these two amounts, adjusted for any difference in fees; and

(d)      a provision of goods or services or purchase of goods by a government shall not be considered to confer any benefit, unless the provision is made for less than adequate remuneration or the purchase is made for more than adequate remuneration, and the adequacy of remuneration shall be determined in relation to prevailing market conditions for the product or service in question in the country of provision or purchase including price, quality, availability, marketability, transportation and other conditions of purchase or sale.

8.  General provisions on calculation of counter-vailable subsidies.–(1) Subject to sub-section (2), the amount of counter-vailable subsidies shall be determined by the Commission in terms of subsidization per unit of an investigated product exported to Pakistan and in establishing such amount the following elements may be deducted from the total subsidy, namely:–

(a)      any fee or other costs necessarily incurred in order to qualify for or, to obtain a subsidy; and

(b)      export taxes, duties or other charges levied on export of an investigated product to Pakistan specifically intended to offset a subsidy.

(2)      Where an interested party claims a deduction under sub-section (1) such party shall prove to the Commission that the claim is justified.

(3)      Where a subsidy is not granted by reference to the quantities manufactured, produced, exported or transported, the amount of counter-vailable subsidy shall be determined by allocating the value of the total subsidy, as appropriate, over the level of production, sales or exports of the products concerned during an investigation period for subsidization.

(4)      Where a subsidy can be linked to acquisition or future acquisition of fixed assets, the amount of counter-vailable subsidy shall be calculated by spreading the subsidy across a period which reflects normal depreciation of such assets in the industry concerned, and the amount so calculated which is attributable to an investigation period, including that which derives from fixed asset acquired before such period, shall be allocated as provided for in sub-section (2):

Provided that where assets are non-depreciating, a subsidy shall be valued as an interest-free loan, and be treated in accordance with the provisions of Clause (b) of sub-section (2) of Section 7.

(5)  Where a subsidy cannot be linked to acquisition of fixed assets, the amount of any benefit received during an investigation period shall, in principle, be attributed to this period, and allocated as provided for in sub-section (2), unless special circumstances arise justifying attribution over a different period.

PART V

DETERMINATION OF INJURY

9.  Determination of injury.–(1) A determination of injury by the Commission shall be based on positive evidence and shall involve an objective examination of–

(a)      volume of any subsidised imports and their effect on prices in domestic market for like products; and

(b)      consequent impact of subsidised imports on domestic industry:

Explanation.–With regard to volume of any subsidised imports, consideration shall be given by the Commission to whether there has been a significant increase in subsidised imports, either in absolute terms or relative to production or consumption in Pakistan. With regard to effect of any subsidised imports on prices, consideration shall be given by the Commission to whether there has been significant price under-cutting by the subsidised imports as compared with the price of a like product of domestic industry, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases which would otherwise have occurred, to a significant degree, provided that no one or more of these factors shall be deemed to necessarily give decisive guidance.

(2)  Where imports of a product from more than one country are simultaneously subject to an investigation, the effects of such imports may be cumulatively assessed by the Commission only if it determines that–

(a)      The amount of subsidisation established in relation to the imports from each country is more than de minimus as defined in sub-section (3) of Section 15 and the volume of imports from each country is not negligible; and

(b)      a cumulative assessment of the effects of the imports is appropriate in the light of conditions of competition between imported products and the conditions of competition between the imported products and a like domestic product.

(3)      An examination by the Commission of an impact of subsidized imports on a domestic industry concerned may include an evaluation of all relevant economic factors and indices having a bearing on the state of the domestic industry including the fact that the domestic industry is still in the process of recovering from the effects of past subsidisation or dumping, the magnitude of the amount of counter-vailable subsidies, actual and potential decline in sales, profits, output, market share, productivity, return on investments, utilization of capacity, factors affecting domestic prices, actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital or investments and, in the case of agriculture, whether there has been an increased burden on Government support programmes.

(4)      The Commission shall satisfy itself that subsidised imports are, through the effects of subsidies, as set forth in sub-Sections (1) and (3), causing injury within the meaning of this Act. The consideration of a causal relationship between subsidised imports and injury to domestic industry shall be based on an examination by the Commission of all relevant evidence before it.

(5)      The Commission shall examine known factors other than subsidized imports which are injuring domestic industry to ensure that injury caused by such other factors is not attributed to subsidised imports. Such other factors may include factors such as the volume and prices of non-subsidised imports, contraction in demand or changes in patterns of consumption, restrictive trade practices of and competition between a foreign country and domestic producers, developments in technology and export performance and productivity of domestic industry.

(6)      The effect of subsidised imports shall be assessed by the Commission in relation to the production by domestic industry of a like product when available data permits separate identification of that production on the basis of such criteria as the production process, producers’ sales and profits:

Provided that where such separate identification of that production is not possible, the effects of subsidised imports shall be assessed by the Commission by examination of the production of the narrowest group or range of products including a like product, for which the necessary information can be provided.

(7)      A determination of a threat of material injury by the Commission shall be based on facts and not merely on allegation, conjecture or remote possibility and any change in circumstances which would create a situation in which subsidy would cause injury must be foreseen and imminent.

(8)  In making a determination regarding the existence of a threat of material injury, the Commission shall take into consideration factors such as–

(a)      the nature of subsidy or subsidies in question and any trade effects likely to arise therefrom;

(b)      any significant rate of increase of subsidised imports into a domestic market indicating the likelihood of substantially increased imports;

(c)      sufficient freely disposable capacity of an exporter or an imminent substantial increase in such capacity indicating the likelihood of substantially increased subsidised exports into Pakistan, account being taken of the availability of other export markets to absorb any additional exports;

(d)      whether imports are entering at prices that would, to a significant degree, depress prices or prevent price increases which otherwise would have occurred and would probably increase demand for further imports; and

(e)      inventories of an investigated product.

Explanation.–None of the factors specified in sub-section (8) by itself shall be deemed to necessarily give decisive guidance but the totality of the factors considered by the Commission must lead to the conclusion that further subsidised exports are imminent and that, unless protective action is taken, material injury will occur.

10.  Further circumstances in which injury may be found to exist.–(1) Where domestic industry in relation to a product in question has been divided into two or more competitive markets and the producers within each such market regarded as a separate industry in accordance with the second proviso to Clause (i) of Section 2, injury may be found to exist even where a major portion of the total domestic industry does not suffer injury provided that, there is a concentration of subsidised imports into such a separated market, and provided further that the subsidised imports are causing injury to the producers of all or almost all of the production within such market.

(2)  Where injury is found to exist in the circumstances referred to in sub-section (1), the exporters or the government granting countervailable subsidies shall be given an opportunity to offer an undertaking in accordance with Section 14 in respect of the region concerned or to cease exporting at subsidised prices to the region concerned prior to any countervailing measures being applied by the Commission under this Act.

(3)      In the circumstances referred to in sub-section (2), special account shall be taken by the Commission of any interest of the region and if an adequate undertaking is not offered promptly or if the situations set out in sub-Sections (13) and (14) of Section 14 apply, a provisional or definitive countervailing duty may be imposed by the Commission in respect of domestic industry as a whole.

(4)      The provisions of sub-section (6) of Section 9 shall apply to this section.

PART VI

INVESTIGATION

11.  Initiation of investigation.–(1) Save as provided for in sub-section (11), the Commission shall initiate an investigation to determine the existence, degree and effect of any alleged subsidy only upon receipt of a written application by or on behalf of domestic industry.

(2)  An application shall be submitted to the Commission in such manner, number and form and with such fee as may be prescribed. It shall include sufficient evidence of the existence of a subsidy and, if possible, its amount, injury within the meaning of this Act and a causal link between the subsidized imports and the alleged injury. The application shall also contain such information as is reasonably available to an applicant on the following, namely:–

(a)      identity of the applicant and a description of the volume and value of domestic production of a like product by the applicant:

          Provided that where an application is made on behalf of domestic industry, the application shall identify the industry on behalf of which the application is made by a list of all known domestic producers of the like product or, association of domestic producers of the like product and, to the extent possible, a description of the volume and value of domestic production of the like product accounted for by such producers;

(b)      a complete description of an allegedly subsidised product including its current customs tariff classification number as contained in the First Schedule to the Customs Act, 1969 (IV of 1969), the name of exporting country, identity of each known exporter or foreign producer, and a list of known persons importing the product in question;

(c)      evidence with regard to the existence, amount, nature and countervailability of subsidy in question; and

(d)      information on changes in volume of allegedly subsidised imports, the effect of those imports on prices of a like product in domestic market and the consequent impact of the imports on domestic industry as demonstrated by relevant factors and indices having a bearing on the state of domestic industry, such as those listed in the explanation to sub- section (1) of Section 9, and in sub-section (3) of Section 9.

(3)      The Commission shall examine the accuracy and adequacy of the evidence provided in an application to determine whether it is compliant with the requirements of sub-section (2) and in order to determine whether there is sufficient evidence to justify initiation of an investigation.

(4)      An investigation may be initiated by the Commission in order to determine whether or not the alleged subsidies are specific in accordance with the principles set out in Section 5.

(5)      An investigation may also be initiated by the Commission in respect of subsidies which are non-countervailable in accordance with the provisions of Section 6 in order to determine whether or not the conditions set out therein have been met.

(6)      An investigation may be initiated by the Commission in respect of measures of any type to the extent that they contain an element of subsidy as defined in Section 4.

(7)      An investigation shall not be initiated by the Commission pursuant to sub- section (1) unless the Commission is satisfied, on the basis of an examination as to the degree of support for, or opposition to, an application expressed by domestic producers of a like product, that the application has been made by or on behalf of domestic industry.

(8)      An application shall be considered to have been made by or on behalf of domestic industry if it is supported by those domestic producers whose collective output constitutes more than fifty percent of the total production of a like product produced by that portion of domestic industry expressing either support for or opposition to the application:

Provided that no investigation shall be initiated by the Commission when domestic producers expressly supporting an application account for less than twenty-five percent of the total production of a like product produced by domestic industry.

(9)      The Commission shall, as soon as possible after receipt of a properly documented application in accordance with the requirements of Section 11, and in any event before initiation of an investigation, give notice to an exporting country, which shall be invited for consultations with the aim of clarifying the situation as to matters referred to in sub-section (2) and arriving at a mutually agreed solution.

(10)    The Commission may, suo moto, initiate an investigation without having received a written application by or on behalf of domestic industry if it has sufficient evidence of the existence of countervailable subsidies and injury within the meaning of this Act.

(11)    The evidence both of subsidy and of injury shall be   considered simultaneously by the Commission in the decision on whether or not to initiate an investigation and an application shall be rejected where there is insufficient evidence of either countervailable subsidies or of injury to justify initiation of an investigation:

Provided that an investigation shall not be initiated against countries whose imports represent a market share of below one per cent unless such countries collectively account for three per cent or more of domestic consumption.

(12)    An application may be withdrawn by an applicant prior to initiation of an investigation by the Commission, in which case it shall, subject to the provisions of sub-section (1) of Section 15, be deemed not to have been made:

Provided that upon withdrawal of an application any fee paid by an applicant pursuant to sub-section (2) shall stand forfeited in favour of the Commission.

(13)    Where, after consultation with an exporting country as provided for in sub-section (10), the Commission is satisfied that there is sufficient evidence to justify initiating an investigation, the Commission shall give notice of such decision by means of a public notice of initiation of an investigation, and the initiation of an investigation shall be effective on the date on which such notice is published.

(14)    Where the Commission does not consider it appropriate to initiate an investigation it shall inform an applicant of its decision.

(15)    The public notice of initiation of an investigation referred to in sub-section (14) shall announce initiation of an investigation, indicate the product and countries concerned, give a summary of the information received, provide that all relevant information is to be communicated to the Commission, state the periods within which any interested party may make itself known, present its views in writing and submit information if such views and information are to be taken into account during the investigation and shall also state the period within which interested parties may apply to be heard by the Commission in accordance with sub-section (4) of Section 12.

(16)    The Commission shall advise any exporters, importers and any association of importers or exporters known to it to be concerned, as well as an exporting country and an applicant, of initiation of an investigation and, subject to the requirements of Section 29, provide the full text of an application to the known exporters and to the authorities of an exporting country, and make it available upon request to other interested parties involved:

Provided that, where the Commission determines that the number of exporters involved is particularly high, the full text of a written complaint may instead be provided by the Commission only to the authorities of an exporting country or to a relevant association.

(17) An investigation shall not hinder the procedures of customs clearance.

12.  Principles governing investigation.–(1) Following initiation of an investigation, the Commission shall commence an investigation and such investigation shall cover both subsidisation and injury which, shall be investigated simultaneously.

(2)      For the purpose of,–

(a)      a representative finding, an investigation period shall be selected by the Commission which, in the case of subsidisation shall, normally, cover an investigation period provided for in Section 7 and information relating to a period subsequent to the investigation period shall not, normally, be taken into account by the Commission; and

(b)      an investigation of injury, the investigation period shall normally cover thirty-six months:

          Provided that the Commission may at its sole discretion, select a shorter or longer period if it deems it appropriate in view of available information regarding domestic industry and an investigated product.

(3)      Parties receiving questionnaires from the Commission used in a countervailing duty investigation shall be given at least thirty days to reply and such 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 one week from the day on which it was sent to a respondent or transmitted to an appropriate diplomatic representative of an exporting country:

Provided that where a party shows due cause for an extension to the satisfaction of the Commission, an extension of not more than thirty days may be granted by the Commission at its discretion.

(4)      Any interested party which has made itself known in accordance with sub-section (16) of Section 11 shall be heard by the Commission if it has, within the period prescribed in a public notice of initiation of an investigation made a written request for hearing showing that it is an interested party likely to be affected by the result of an investigation and that there are particular reasons why it should be heard.

(5)      Opportunities shall, on request, be provided for any importers, exporters and an applicant, which have made themselves known in accordance with sub-section (16) of Section 11 and the government of an exporting country to meet those parties having adverse interests, so that opposing views may be presented and rebuttal arguments offered. Provision of such opportunities shall take account of the need to preserve confidentiality and of convenience of the parties. There shall be no obligation on any party to attend such meeting and failure to do so shall not be prejudicial to that party’s case. Oral information provided under this sub-section shall only be taken into account by the Commission to the extent that the same is subsequently confirmed in writing and provided to the Commission.

(6)      Without prejudice to the provisions of Section 42, an applicant, the government of an exporting country, importers and exporters and their representative associations, which have made themselves known in accordance with sub-section (16) of Section 11, may, upon written request, inspect all information made available to the Commission by any party to an investigation, as distinct from internal documents prepared by the Commission, which is relevant to presentation of their cases and is not confidential within the meaning of Section 29, and that it is used in an investigation. Such parties may respond to such information and their comments shall be taken into consideration wherever they are sufficiently substantiated in a response.

(7)      Save as provided for in Section 28, any information which is supplied by interested parties and upon which findings are based shall, to the extent possible, be examined for accuracy by the Commission.

(8)      An investigation shall, whenever possible, be concluded within one year and in no event later than eighteen months from its initiation, in accordance with the findings made pursuant to Section 14 for undertakings or the findings made pursuant to Section 16 for definitive action.

(9)      Throughout an investigation, the Commission shall afford an exporting country a reasonable opportunity to continue consultations with a view to clarifying the factual situation and arriving at a mutually agreed solution:

Provided that the Commission may continue an investigation during such consultations.

(10)    The Commission shall allow industrial users of an investigated product in Pakistan, and representative consumer organisations in cases where the investigated product is commonly sold at retail level in Pakistan to provide to the Commission, in writing, no later than two months after initiation of an investigation, information concerning matters relevant to the investigation regarding subsidization dumping and injury.

PART VII

PROVISIONAL COUNTERVAILING MEASURES

13.   Provisional countervailing duties.–(1) Provisional countervailing duty shall be imposed by the Commission if–

(a)      an investigation has been initiated by the Commission in accordance with Section 11;

(b)      a public notice of initiation of an investigation has been given and interested parties have been given adequate opportunities to submit information and make comments in accordance with sub-section (16) of Section 11; and

(c)      a provisional affirmative determination has been made by the Commission that a subsidy exists and that there is consequent injury to domestic industry.

(2)  A provisional countervailing duty shall not be imposed earlier than sixty days from initiation of an investigation but no later than nine months from initiation of the investigation and shall be in an amount equal to the total amount of countervailable subsidies as provisionally established by the Commission:

Provided that the amount of the provisional countervailing duty shall not exceed the total amount of subsidisation as provisionally established, but it may be less than the margin if such lesser duty would be adequate to remove the injury to the Domestic Industry.

(3)      A provisional countervailing duty shall be in the form of cash deposit equal to or less than, the amount of the provisionally calculated amount of subsidisation, if such lesser duty would be adequate to remove the injury:

Provided that the release of a product concerned for free circulation in Pakistan shall be subject to provisions of such cash deposit.

(4)      A provisional countervailing duty shall be imposed for a period not exceeding four months.

PART VIII

UNDERTAKINGS AND TERMINATION WITHOUT MEASURES

14.   Undertakings.–(1) An investigation may be terminated by the Commission without imposition of provisional or definitive countervailing duties upon receipt of a satisfactory voluntary undertaking under which–

(a)      an exporting country agrees to eliminate or limit subsidy or take other measures concerning its effects; or

(b)      any exporter undertakes to revise its prices or to cease exports in question as long as such exports benefit from countervailable subsidies, so that the Commission is satisfied that the injurious effect of the subsidies is eliminated.

(2)      Price increases under such undertakings shall not be higher than those which are necessary to offset the amount of countervailable subsidies and shall be less than the amount of countervailable subsidies if such increases would be adequate to remove injury to domestic industry.

(3)      Undertakings may be suggested by the Commission but no country or exporter shall be obliged to enter into such an undertaking and the fact that countries or exporters do not offer such undertakings, or do not accept an invitation to do so, shall in no way prejudice the outcome of an investigation by the Commission:

Provided that the Commission may in such circumstances determine that a threat of injury is more likely to be realised if the subsidised imports continue.

(4)      Undertakings shall not be sought or accepted by the Commission from countries or exporters unless a provisional affirmative determination of subsidization and injury caused by such subsidisation has been made by the Commission.

(5)      Save in exceptional circumstances, undertakings may not be offered later than the end of the period during which representations may be made pursuant to sub-section (7) of Section 30.

(6)      The decision to accept an undertaking shall rest with the Commission.

Explanation.–The Commission may not accept a price undertaking if it considers the acceptance thereof to be impractical because the number of actual or potential exporters is too great or for reasons of general policy or for any other reason.

(7)      An exporting country or exporter concerned may be provided with the reasons for which it is proposed to reject an offer of an undertaking and may be given an opportunity to make comments thereon and the reasons for rejection shall be set out in a definitive decision by the Commission.

(8)      Parties which offer an undertaking shall be required to provide a non-confidential version of such undertaking so that it may be made available to interested parties to an investigation.

(9)      If an undertaking is accepted by the Commission, it shall nevertheless complete an investigation if it receives a request from an exporting country or exporter in writing to continue such investigation or where the Commission so decides on its own accord.

(10)    In the event the Commission makes a negative determination of subsidisation and injury pursuant to an investigation continued under sub-section (9), an undertaking in question shall automatically lapse except in cases where the Commission determines that such a determination is due in large part to the existence of such undertaking in which case the Commission may require that such undertaking be maintained for a reasonable period of time to be determined by the Commission.

(11)    In the event the Commission makes an affirmative determination of subsidisation and injury pursuant to an investigation continued pursuant to sub-section (9), an undertaking in question shall continue consistent with the provisions of this Act.

(12)    The Commission may require any country or exporter from whom an undertaking has been accepted to provide, periodically, information relevant to the fulfilment of such undertaking and to permit verification of such information.

(13)    Failure to provide any information requested by the Commission pursuant to sub-section (12) shall be deemed to be a violation of an undertaking in question.

(14)    Where undertakings are accepted from certain exporters during the course of an investigation, they shall, for the purpose of Sections 19, 20, 21 and 23 be deemed to take effect from the date on which the investigation is concluded for an exporting country.

(15)    If an undertaking is violated or deemed to be violated, the Commission may, subject to the provisions of this Act, take expeditious actions, which may include immediate application of provisional measures using the best information available. In such cases, a definitive countervailing duty may be levied in accordance with the provisions of this Act on products entered for domestic consumption not more than ninety days before the application of such provisional measures, except that any such retroactive assessment shall not apply to imports entered before such violation of the undertaking.

15.  Termination of investigation without measures.–(1) An application submitted pursuant to Section 11 may be withdrawn at any time after an investigation has been initiated, in which case the Commission shall terminate the investigation without imposition of any measures provided for in this Act:

Provided that the Commission may, if it considers it fit to do so, continue an investigation notwithstanding the withdrawal of an application in which event, the Commission may, subject to the provisions of this Act impose such measures as are provided for in this Act.

(2)  Where, the Commission determines in accordance with the provisions of sub-Sections (3), (4), (5), and (6) that the amount of countervailable subsidies is negligible or, where the volume of subsidised imports, whether actual or potential, or injury is negligible then it shall immediately terminate an investigation.

(3)      The amount of countervailable subsidies shall be considered to be negligible if such amount is less than one per cent ad valorem, except that in the case of investigations concerning imports from developing countries the negligible subsidy threshold shall be two per cent ad valorem.

(4)      Injury shall normally be regarded as negligible where the market share of any imports is less than the amounts set out in the proviso to sub-section (12) of Section 11.

(5)      In the case of an investigation concerning imports from developing countries, the volume of subsidised imports shall be considered negligible if it represents less than four per cent of the total imports of a like product in Pakistan, unless imports from developing countries whose individual shares of total imports represent less than four per cent collectively account for more than nine per cent of the total imports of a like product in Pakistan.

(6)      In the case of an investigation concerning imports from countries other than developing countries, the volume of subsidised imports shall be considered negligible if it represents less than three per cent of the total imports of a like product in Pakistan, unless imports from such countries under investigation which individually account for less than three per cent of the total imports of a like product in Pakistan collectively account for more than seven per cent of imports of the like product in Pakistan.

(7)      Termination of an investigation under this Act or conclusion of an investigation without imposition of measures shall not be a bar to filing of a de novo application for a new investigation immediately after termination or conclusion of the investigation. The Commission shall treat the application in accordance with provisions of this Act.

PART IX

DEFINITIVE COUNTERVAILING DUTIES

16.  Imposition of definitive countervailing duties.–(1) Where the Commission has established the existence of countervailable subsidies and injury caused thereby, a definitive countervailing duty shall be imposed by the Commission, unless the subsidy in question is withdrawn or it has been demonstrated to the satisfaction of the Commission that the subsidies no longer confer any benefit on any exporters involved.

(2)      A definitive countervailing duty shall be an amount equal to or less than the amount of countervailable subsidies from which any exporters have been found to benefit, as established by the Commission in accordance with the provisions of this Act:

Provided that the amount of the countervailing duty shall not exceed the total amount of subsidisation established but it may be less than the total amount if such lesser duty would be adequate to remove injury to the domestic industry.

(3)      A definitive countervailing duty shall be imposed in an appropriate amount in each case, on a non-discriminatory basis, on imports of a product from all sources found to benefit from countervailable subsidies and causing injury except as to imports from those sources from which undertakings under Section 14 have been accepted by the Commission.

(4)      When the Commission has limited its examination in accordance with Section 27, any definitive countervailing duty applied to imports from exporters or producers which have made themselves known in accordance with Section 27 but were not included in an examination shall not exceed the weighted average amount of countervailable subsidies established for parties in a sample.

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