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Sampling in anti-dumping investigations – Understanding EC’s practice

By T.D.  Satish


Anti-dumping investigations are company-specific and in a majority of such investigations, separate margin of dumping are determined for producers/exporters based on data provided by them. But often situation arises wherein large numbers of exporters participate and request for a separate duty margin. Since, anti-dumping investigations are time bound, this situation may as a necessary consequence result in significant administrative burden for the investigating authority. The concept of sampling is an effective way to overcome this problem, which has been in use even before it formed a part of the Anti-dumping Agreement (ADA) of the WTO. This article tries to compare the anti-dumping law in respect of sampling as existing in European Union and India and also examine the practice that has evolved in European Union with respect to sampling and whether such practice can be adopted under Indian system. Both EC’s Basic Regulation No 1225/2009 dated 30-11-2009 (EC Law) and Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and For Determination of Injury) Rules, 1995 (Indian AD Rules) are based on general framework set under Article 6.10 of the ADA.      

Major issues in sampling        

A.    Basis for sampling:        

Article 6.10 of the ADA provides that sampling can be resorted to where the number of exporters, producers, importers or type of products involved is so large so as to make determinations impracticable. Rule 17(3) of Indian AD Rules has adopted sampling provision provided under Article 6.10 of the ADA albeit with changes. Indian jurisprudence on sampling is next to nothing with India having resorted to sampling in only 2 anti-dumping investigations so far, wherein sampling was based on volume of exports into India (see end notes 1 & 2).          

In contrast, the provision of sampling is broader in EU, (see end note 3) which also covers complainants and transactions over and above exporters, producers and type of products. While often sampling is undertaken in view of large number of producers and exporters from exporting country taking part in the investigations, there have also been few instances in EC where sampling has been undertaken in view of large participation from importers (see end note 4), domestic industry producers (see end note 5) or different models of products imported into EC. In Hairbrushes from China PR, Korea, Taiwan, Thailand, Hong Kong (see end note 6), out of 8 companies participating from China PR, 5 companies were initially selected for sampling. However, since significant part of sampled companies did not cooperate, the sampling failed. To overcome this problem, EC adopted a sample which included export transactions of the four best-selling models sold by the two largest exporters from China PR. Apart from methods suggested, sampling may also be done based on largest representative volume of production, sales or exports, which can reasonably be investigated in time available. However, for doing such sampling, statistically valid information should be available at the time of selection of sample.          

B.     Issue of non-sampled respondents        

In a sampling exercise, sampled exporters/producers get separate rate of duty based on information provided by them and non-sampled/producers are accorded weighted average dumping margin of sampled companies. Thus, a fundamental question arises whether such non-sampled exporters are entitled to separate rate of duties. Answer to the question lies in Article 6.10.2 of the ADA which provides that authorities shall determine an individual margin of dumping not initially selected for sampling, provided such an exporter/producer submits necessary information within the prescribed time limit. The last line of Article 6.10.2 further provides that voluntary responses shall not be discouraged, making it amply clear that where non-sampled companies wish to get a separate rate of duty, authorities shall accede to such requests. Indian AD Rules, on the other hand, specifically exclude the last line of Article 6.10.2 of the ADA.        

The Indian provision on sampling is modeled on the EC anti-dumping law, which also contains similar provision [Article 17(3) of EC Law]. Article 17(3) of EC Law provides that requests for separate dumping margin for non-sampled exporters may be allowed where:-
a.       the company has submitted all necessary information within the timeframe provided, and
b.      individual examination would not be unduly burdensome.        

There have been cases on both sides, with EC, in some cases, allowing few requests out of many applications received (see end note 7), while rejecting the demand for separate dumping margin for entire non-sampled companies altogether, in certain other cases.        

It is to be noted that EC anti-dumping law is more comprehensive than its Indian counterpart. Article 17(4) of the EC law provides that the authority may select a new sample, where it reckons that there is a degree of non-cooperation from the parties selected in a sample. However, Indian Rules do not accommodate such a situation and as a result, leaving non-sampled exporters in Indian investigations in a more precarious situation. This is so because, by treating a sampled company as non-cooperating, the weighted average of remaining sampled companies may increase substantially, which may result in increase in dumping margin for non-sampled exporters.        

C.    The China factor        

The problem gets further complicated when it comes to imports from China considering the fact that it is deemed to be a non-market economy country.  In case of China, Chinese companies are entitled to claim market economy treatment (MET), acceptance of which would result in an individual normal value for the participating company. Even where such companies are not accorded market economy treatment, they can still claim individual treatment and claim a separate export price.        

However, lack of cases dealing with MET status in case of sampling in India compels us to refer EC law and look for a solution. There have been cases involving China, wherein EC has considered responses of all the companies, whether part of sample or not, and has determined MET status for each of the companies individually. In Certain Finished Polyester Filament Apparel Fabrics from China PR (see end note 8), the EC analyzed each of the 49 MET applications for MET treatment, of which 25 exporting producers from China were granted MET. Similarly in Certain Castings from China PR (see end note 9), out of 21 exporting producers, on-the-spot examination was carried for 7 companies, of which only one satisfied the MET criteria. Of the remaining 14 un-verified exporters, desk analysis was conducted and 4 exporting producers from China were accorded MET status. However, in Footwear from China PR, the EC ruffled quite a few feathers, when it diverged from its previous position of considering individual MET claims. In this case, the Commission as well as the lower court rejected the appellant’s contention that basic regulation obligated the Commission to examine individual MET/IT claims from an entity from NME country. The lower court held that Commission was not required to examine the MET/IT claims of non-sampled entities, where it has been concluded that the calculation of individual dumping margins would be unduly burdensome and would prevent it from completing the investigation in good time.

However, the Court of Justice of the European Union (ECJ) (see end note 10) overruled the lower court on the point that Commission was not required to examine MET claims under Article 2(7)(b) and (c) of the basic regulation. The ECJ held that Article 2(7) and Article 17 differed in content and purpose and according to Article 2(7)(b), the Commission has to determine normal value in accordance with Article 2(1) to (6), if it was shown that market economy conditions prevail for that company and the same was not affected by the manner in which the dumping margin was to be calculated.        

However, WTO Panel in European Union – Anti-Dumping Measures on Certain Footwear from China PR (see end note 11), has rejected the contention of China that the criteria used for the selection of the sample used in the determination of dumping do not guarantee that the sample selected will be representative for purposes of determining whether market economy conditions prevail in the industry producing the like product. The Panel held that anti-dumping duties may be imposed on non-sampled exporters, consistently with Articles 6.10 and 9.4 of the AD Agreement, as a consequence of a finding of dumping based on information provided by a limited number of examined producers.  The Panel found no reason for non-imposition of anti-dumping duties, in a case involving an NME, on non-sampled exporters based on a finding of dumping involving an MET analysis based on information provided by a limited number of examined producers. The Panel further opined that China did not indicate as to why the inclusion of such companies would make the sample more representative with respect to whether market economy conditions prevail for the industry in question and that there was no question that the sample used by the Commission for the MET determination concerned the "industry producing the like product" in this case.            


The EC has been consistently using sampling provisions where large numbers of community producers, exporters, producers or products were involved. On the other hand, in spite of being the largest user of anti-dumping remedies, India has so far conducted 2 investigations using sampling methodology despite the fact that there are investigations wherein large numbers of interested parties take part. It is evident that India has failed to apply sampling provisions as effectively as is done by the EC. The EC law makes it clear that responses of non-sampled companies are examined and not rejected outright, which is not the case in India. Furthermore, the EC law provides an option to the authority to select another sample, if previous sample is not considered representative enough for want of cooperation or some other reason. Indian law, however, does not give such an option to authority, which places exporters/producers at a more precarious situation. Amendment in the existing Indian AD rules is one of the solutions that may be contemplated upon. However, despite the differences, there exist many similarities in EC law and practice, which can be adopted by India, while conducting sampling exercise.            

End notes:
1.      Poly Vinyl Chloride (PVC) Suspension Grade from Taiwan, China PR, Indonesia, Japan, Korea RP, Malaysia, Thailand and USA
2.      Silk Fabrics 20-100 gms per meter from People’s Republic of China
3.      Article 17 of Council Regulation(EC) No 1225/2009
4.      Integrated Electronic Compact Fluoroscent Lamps (CFL-i) from China [2002 OJ (C244)2]; Certain Handbags from China [1997 OJ (L33)11]
5.      Unbleached (grey) cotton fabrics from China, Egypt, India, Pakistan and Turkey [1996 OJ (L295) 3]; Farmed Atlantic Salmon from Norway, Chile, Faroe Is. [2003 OJ (L133) 1]; Certain luggage and travel goods from China PR [1997 OJ (L174) 53]
6.      2000 OJ (L111) 4
7.      Hollow Sections from Turkey [2003 OJ (L175) 3]
8.      2005 OJ (L) 69/6 dated 16.03.2005
9.      2005 OJ (L) 199/1 dated 29.07.2005
10.  Brosmann Footwear (HK) Ltd vs. Council of the European Union (ECJ)(Order in case C-249/10 P dated 2-Feb-12
11.  WT/DS405/R

[The author is an Associate, International Trade Practice, Lakshmikumaran & Sridharan, New Delhi]
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