Page 493 - MANUAL OF SOP

Manual of OP for Trade Remedy Investigations

DETERMINATION OF SUBSIDY
20.60 Rule 12 and the Annexure IV of the CVD Rules provide the methodology
27
for calculation of the subsidy margin. This subsidy margin needs to be compared
with the injury margin for determination of duty under the lesser duty rule.

20.61 The CVD Rules clearly provide that the subsidy amount is to be determined
in terms of benefit to the recipient in the form of subsidization. Further, it may
28
also be noted that the general procedure relating to the investigation is left on to
29
the member countries . Each method applied by the investigating country should
be transparent, adequately explained and be in compliance with the guidelines
30
provided in the SCM Agreement.
20.62 The subsidy calculations must be done on a programme-by-programme/
subsidy-by-subsidy basis. This necessitates the determination of the amount of
subsidy provided to/received by the exporter/producer in question under a given
programme. Subsidy amount received by the exporter/producer during POI is
divided by relevant actual or potential sales over the useful life of that subsidy,
which gives the rate of subsidization with respect to that scheme. This working to
calculate per unit subsidy (Article 19.4 of the SCM Agreement and the Part A of
Annexure IV of the CVD Rules) during the period of investigation has to be done
with respect to each subsidy scheme. The calculations should reflect the amount
of subsidy found to exist during the period of investigation and not simply the face
value of the financial contribution. If the subsidy was only for part of the year,
appropriate allocation may need to be done. Finally, the subsidy under each of the
schemes needs to be added to arrive at the total per unit subsidy margin for all the
schemes.

20.63 Apart from the programmes alleged to be actionable subsidies, the
Designated Authority may investigate in to any other program of the subject
countries which may be revealed during the course of the investigation as actionable
27 Corresponding to Article 14 and Annex-IV of the SCM Agreement. It is left to the member countries to evolve their
own methods for calculation of subsidy margins.
28 See Appellate Body Report, United States - Final Countervailing Duty Determination with Respect to Certain
Softwood Lumber from Canada, WTO Doc. WT/DS257/AB/R (Jan.19, 2004).
29 See Panel Report, Mexico – Definitive Countervailing Measures on Olive oil from the European Communities -
Report of the Panel, footnote 63, WTO Doc. WT/DS341/R, (Sep.9, 2008).
30 See Appellate Body Report, Japan-Countervailing Duties on Dynamic Random Access Memories from Korea, WTO
Doc. WT/DS336/AB/R, (Nov.28, 2007). See also Appellate Body Report, United States - Countervailing Measures on
Certain Hot-Rolled Carbon Steel Flat Products from India, WTO Doc. WT/DS436/AB/R, (Dec.8, 2014) [hereinafter,
US – Carbon Steel].

470