Page 602 - MANUAL OF SOP

Relevant Wto Jurisprudence

24.60. In a WTO Dispute EC – Salmon (Norway) (DS-337), the investigating
authority in the European Communities applied a less-than-10 percent profitable
sales test. The Panel determined this was an impermissible means of determining
whether domestic sales were in the ordinary course of trade.

“The less-than-10 per cent profitable sales test was not a permissible
means of determining whether domestic sales were made outside of
the ordinary course of trade, and, as such, the investigating authority's
decision to disregard the profit margin data of three of the ten investigated
parties could not be justified under the terms of Article 2.2.2.”
The justifications the EC advances for the less-than-10 per cent profitable
sales test is that it provides a 'complement to the less-then-20 per cent un
profitable rule' that is set out in footnote 5 to Article 2.2.1, and thereby
'helps to achieve the goal of even-handedness that was identified by the
Appellate Body'. In making this statement, the EC wanted to suggest
that the application of Article 2.2.1 may result in findings that are
not 'even-handed' and 'fair to all parties affected by an anti-dumping
investigation'. By agreeing to the rules in footnote 5, it is evident that
the drafters of the AD Agreement recognised that a minimum volume
of below-cost sales is not incompatible with sales being made in the
ordinary course of trade. As such, the result achieved through the
operation of footnote 5 is, in and of itself, fair and even-handed, and
therefore does not require the application of any complementary rule to
ensure that normal value is appropriately calculated."
24.61. In a WTO Dispute Korea – Certain Paper (DS-312), the Panel accepted that
the KTC's decision to disregard the domestic sales data submitted by Indah Kiat and
Pindo Deli was not WTO-inconsistent because those data were not verifiable.

“It follows that the KTC could not possibly carry out the determinations set
out under Article 2.2 of the Agreement before resorting to constructed
normal value for Indah Kiat and Pindo Deli. We therefore conclude that
the KTC did not act inconsistently with Article 2.2 in basing its normal
value determination on constructed value under Article 2.2 for these
two companies and reject Indonesia's claim”

24.62. In a WTO Dispute EC – Tube or Pipe Fittings (DS-219), the Appellate Body
explained upon the data to be used for the construction of normal value.

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