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SD & TR > COUNTERVAILING DUTY > Flashcards

COUNTERVAILING DUTY Flashcards

1
Q

is a trade counter-measure adopted by
government to offset any bounty or subsidy given to exporters which is not generally
available to other producers of the exporting country.

A

Subsidies and countervailing measure

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2
Q

refers to any specific assistance (e.g., financial contribution, income or price support schemes) directly or indirectly provided by the government of the country of export or origin in respect of the product imported into the Philippines.

A

Subsidy

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3
Q

An industry is deemed to have received subsidy where a benefit is conferred as a result of:

A

Direct and/or potential transfer of government funds (e.g., grants, loans, equity
infusion, loan guarantees);

The government foregoing the revenue that should otherwise have been
collected (e.g., tax credits); or

The government providing goods or services, or purchasing goods.

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4
Q

Are all subsidies are countervailable/actionable?

A

NO

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5
Q

A subsidy, in order to be
countervailable/actionable, must be ____________

A

specific

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6
Q

“yellow” subsidies are those falling under the definition of subsidy described above, which are neither non-actionable nor prohibited subsidies

A

Actionable subsidies

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7
Q

“green” subsidies are those which are permitted as they are of a general nature, i.e., applied across-the-board to all industries and not limited to a specific industry or enterprise, or group of enterprises or industries

A

Non-actionable subsidies

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8
Q

A subsidy under this category cannot be subjected to either countervailing measures or other disciplines under the World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures

A

Non-actionable subsidies

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9
Q

“red” subsidies include export subsidies, i.e., those that are contingent on export performance, and subsidies that are contingent on the use of domestic over imported goods

A

Prohibited subsidies

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10
Q

An importing country alleging this kind of subsidy can avail of remedy measures by bringing the matter before the WTO Dispute Settlement Body for redress

A

Prohibited subsidies

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11
Q

What type of Subsidy?
Direct subsidies based on export performance.

actionable subsidy
non-actionable subsidy
prohibited subsidy

A

prohibited subsidy

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12
Q

What type of Subsidy?
Currency retention schemes involving a bonus on exports.

actionable subsidy
non-actionable subsidy
prohibited subsidy

A

prohibited subsidy

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13
Q

What type of Subsidy?
Provision of subsidized inputs for use in the production of exported goods.

actionable subsidy
non-actionable subsidy
prohibited subsidy

A

prohibited subsidy

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14
Q

What type of Subsidy?
Exemption from direct taxes (e.g., tax on profits related to exports);

actionable subsidy
non-actionable subsidy
prohibited subsidy

A

prohibited subsidy

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15
Q

What type of Subsidy?
Exemption from, or remission of, indirect taxes (e.g., value added tax on exported
products in excess of those borne by these products when sold for domestic
consumption;

actionable subsidy
non-actionable subsidy
prohibited subsidy

A

prohibited subsidy

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16
Q

What type of Subsidy?
Remission or drawback of import charges (e.g., tariffs and other duties) in excess
of those levied on inputs consumed in the production of exported goods;

actionable subsidy
non-actionable subsidy
prohibited subsidy

A

prohibited subsidy

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17
Q

What type of Subsidy?
Export guarantee programs at premium rates inadequate to cover the long-term
costs of the program

actionable subsidy
non-actionable subsidy
prohibited subsidy

A

prohibited subsidy

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18
Q

What type of Subsidy?
Export credits at rates below the government‟s cost of borrowing, where they are
used to secure a material advantage in export credit terms

actionable subsidy
non-actionable subsidy
prohibited subsidy

A

prohibited subsidy

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19
Q

country from where the allegedly subsidized product was shipped to the Philippines, regardless of the location of the seller. The country of export and the country of origin may be the same, but not in all instances.

A

country of export

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20
Q

where the allegedly subsidized product was either wholly obtained or where its last substantial transformation took place.

A

country of origin

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21
Q

What articles may be covered by a countervailing action.

A

any product which is granted, directly or indirectly, by the government in the country of export/origin any kind or form of specific subsidy upon the exportation or manufacture of such product were the importation of which is causing or threatening to cause material injury to a domestic industry.

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22
Q

Importations exempted from countervailing action

A
  1. Articles imported by, or consigned to, government agencies not organized for
    profit
  2. Conditionally duty-free importations allowable under Section 105 of the Tariff and
    Customs Code of the Philippines (TCCP),
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23
Q

otherwise known as “An Act Strengthening the Mechanisms for the Imposition of Countervailing Duties on Imported Subsidized Products, Commodities or Articles of Commerce in Order to Protect Domestic Industries from Unfair Trade Competition, Amending for the Purpose Section 302, Part 2, Title II, Book I of Presidential Decree No. 1464, otherwise known as the „Tariff and Customs of the Philippines, as Amended‟”, was signed on August 7, 1999 and took effect on August 31, 1999

A

Republic Act (RA) 8751

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24
Q

It provides protection to a domestic industry which is being injured, or is likely to be injured, by subsidized products imported into or sold in the Philippines.

A

Republic Act (RA) 8751

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25
Q

The provisions of RA 8751 were adopted in Section _______ of the Customs Modernization and Tariff Act (CMTA).

A

713

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26
Q

To transform the domestic countervailing duty law into a more workable and simple piece of legislation providing safety nets against the inflow of cheap
subsidized imports;

To strengthen the rules governing the investigation of countervailing cases; and

To align the domestic law with the WTO Agreement on Subsidies and
Countervailing Measures.

A

rationale for the passage of RA 8751

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27
Q

which government agency administer the countervailing legislation?

A

Department of Trade and Industry - Bureau of Importations Services or Department of Agriculture

Tariff Commission

Bureau of Customs

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28
Q

Who may file a petition for countervailing action?

A

filed by, or on behalf of, the domestic industry, in writing and in a
notarized form.

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29
Q

refers to the domestic producers, as a whole, of the like product or
to those producers of such like product whose collective output of the product constitutes a
major proportion of the total domestic production of those products in the industry
concerned.

A

Domestic Industry

30
Q

What is the threshold of support by producers for the petition to be accepted

A

Support by domestic producers whose collective output constitutes more than
50% of the total production of the like product

Support by producers accounting for at least 25% of the total domestic production

31
Q

Under what conditions can a countervailing investigation be initiated without a written application from the domestic industry?

A

DTI or DA may, on its own motion, initiate a countervailing action even without the written application from the domestic industry

32
Q

 Identity of the applicant and a description of the volume and the value of his domestic production of the like product;
 List of all known domestic producers of the like product and, if possible;
 Description of the volume and value of the domestic production of the like product
accounted for by such producers (if the application is made on behalf of the domestic industry);
 Description of the allegedly subsidized product;
 Names of the exporting countries, each known exporter or foreign producer, and a list of the importers of the product;
 Estimated aggregated or cumulative quantity, the port and the date of arrival, the import entry declaration of the allegedly subsidized product;
 Nature, extent and estimated amount of the alleged subsidy;
 Number of persons employed by the affected domestic industry;
 Total capital invested, production and sales volume, and aggregate production capacity of the domestic industry;
 Effect of the price of the allegedly subsidized product on the price of the like product in the domestic market; and
 Consequent impact of the importation of the allegedly subsidized product on the domestic industry, i.e., prices at which the product is sold in the domestic market of the exporting country and export prices; injury and causality; volume of subsidized imports; and adverse effects of such imports on domestic prices and
on domestic industries.

A

information is required when applying for the levy of countervailing duty

33
Q

stages in countervailing investigation

A

prima facie determination
preliminary determination
final determination
issuance of department order

34
Q

In Prima Facie Determination, the DTI-BIS or DA has ten ______ from receipt of the properly
documented petition to examine the accuracy and adequacy of the petition and determine whether there is sufficient evidence to justify the initiation of an investigation.

A

(10) days

35
Q

In Preliminary Determination, once a prima facie case has been established, DTI or DA initiates the investigation and makes a preliminary determination on whether or not a provisional measure may be imposed within _____________from receipt of the answers of the questionnaire from respondents and other interested parties.

A

20 days

36
Q

In Final Determination, in the conduct of its formal investigation, the Tariff Commission notifies all interested parties; receives representations and/or other submissions; holds preliminary conference and public consultations; and conducts on-site investigation/data verification both foreign and domestic. The Commission has _____________ from receipt of the advice from either Secretary of DTI or DA to complete its investigation and submit its report of findings to the Secretary.

A

120 days

37
Q

In Issuance of Department Order, within ________________ from receipt of the affirmative
final determination by the Tariff Commission, the Secretary of DTI or DA issues a
Department Order for the imposition of a definitive countervailing duty, unless the
Secretary has earlier accepted a price undertaking from the foreign exporter,
producer or government of the country of export or origin.

A

ten (10) days

38
Q

What is the purpose of government to government consultation and when is it
conducted?

A

clarifying the situation as to matters referred to
in the application and arriving at a mutually agreed upon solution.

39
Q

What circumstances can a petition be rejected and the investigation terminated in case of a product originating from a develop country?

A

amount of subsidy is de minimis, i.e., less than 1%;

volume of subsidized imports is negligible, i.e., less than 3% of the total imports of the importing country. However, this rule does not apply when countries with individual shares of less than 3% collectively account for more than 7% of imports of the product under investigation; or

injury is negligible.

40
Q

What circumstances can a petition be rejected and the investigation terminated in case of a product originating from a developing country?

A

amount of subsidy is de minimis, i.e. equal to or less than 2% (3% for least developed countries);

volume of subsidized imports is negligible, i.e., less than 4% of the total imports of the importing country. However, this rule does not apply when countries with individual shares of less than 4% collectively account for more
than 9% of total imports; or

injury is negligible

41
Q

Before making the final determination, the Tariff Commission is required to disclose
to interested parties (e.g., exporters or producers, their governments, and importers) the ___________ on which the decision to apply the duty is to be made. The parties are given ____________ from the date of receipt of the essential facts to defend their interests in writing.

A

essential facts
five (5) days

42
Q

What are the four elements of countervailing?

A

like product
subsidy
injury
causal link

43
Q

a product is identical or alike in all respects to the article under consideration or, in the absence of such product, another product which, although not alike in all respects, has characteristics closely resembling those of the
product under consideration

A

like product

44
Q

refers to any specific assistance directly or indirectly provided by the
government of the country of export or origin in respect of a product imported into
the Philippines

A

subsidy

45
Q

means material injury to a domestic industry, threat of material injury or material retardation of the growth or the prevention of the establishment of a domestic industry

A

injury

46
Q

the material injury suffered by the domestic industry is the direct result of the importation of the subsidized product.

A

causal link

47
Q

factors considered in determining material injury to the domestic industry

A

Actual or potential decline in output, sales, market share, profits, productivity,
return on investments, or utilization of capacity;

Effects on domestic prices;

Actual or potential effects on cash flow, inventories, employment, wages, growth,
and ability to raise capital or investments; and

Whether there has been an increased burden on government support programs.

48
Q

what are the 3 modalities in determining price effects?

A

price depression
price suppression
price undercutting

49
Q

refers to the extent by which the domestic producer reduces its selling price in order to compete with the allegedly subsidized product.

A

price depression

50
Q

refers to the extent by which the domestic producer reduces its selling price in order to compete with the allegedly subsidized product.

A

price suppression

51
Q

refers to the extent by which the allegedly subsidized product is consistently sold at a price below the domestic selling price of the like product.

A

price undercutting

52
Q

factors in determining the existence of a threat of material injury

A

 Nature of the subsidy in question and the trade effects likely to arise therefrom;

 Significant rate of increase in the importation of the subsidized product into the domestic market indicating the likelihood of substantially increased importations;

 Sufficient freely disposable, or an imminent, substantial increase in, production capacity of the foreign exporter indicating the likelihood of substantially increased subsidized exports in the domestic market, taking into account the availability of other export markets to absorb any additional exports;

 Whether such subsidized products are entering at prices that will have a significantly depressing or suppressing effect on domestic prices, and will likely increase demand for further importation of the subsidized products; and

 Inventories of the product being investigated

53
Q

Contraction in demand or changes in the patterns of consumption;

is it injury related or not to subsidization?

A

not

54
Q

Trade restrictive practices of, and competition between, foreign and domestic
producers;

is it injury related or not to subsidization?

A

not

55
Q

Developments in technology

is it injury related or not to subsidization?

A

not

56
Q

Export performance and productivity of the domestic industry

is it injury related or not to subsidization?

A

not

57
Q

What are the remedies/measures imposed against subsidization?

A

provisional measure

definitive duty

58
Q

a remedy that takes the form of a security (cash deposit or bond) equal to the amount of the provisionally calculated amount of subsidy. It is applied only after the DTI-BIS or DA has made a preliminary affirmative determination and no sooner than 60 days from the initiation of the case.

A

provisional measure

59
Q

a remedy that final countervailing duty is imposed, in addition to the regular duty and other charges, on a protested product imported from a specific exporter, following an affirmative final determination.

A

definitive duty

60
Q

what is the duration of the imposition of provisional measure?

A

4 months

61
Q

what is the duration of the imposition of definitive countervailing duty?

A

5 years from the date of imposition

62
Q

a voluntary undertaking by the government of the exporting country to eliminate or limit the subsidy; or voluntary commitment by the foreign exporter and/or the producer that they will increase their prices or will cease exporting to the Philippines at the subsidized price

A

price undertaking

63
Q

An offer of price undertaking shall be made only after a preliminary affirmative determination of subsidization and injury to the domestic industry.

true or false

A

true

64
Q

Price undertaking is effective for a period of ____________ unless the foreign exporter
proves to the satisfaction of the authorities that the undertaking is no longer necessary.

A

five (5) years

65
Q

the imposition of countervailing duty in amounts lower than the calculated subsidy, if such a lesser duty is adequate to remove the injury to the domestic industry.

A

lesser duty rule

66
Q

What are the reviews available to the affected parties of countervailing measures?

A

a. Administrative Reviews
sunset review
interim review
b. judicial review

67
Q
  • may be initiated by any interested party or upon own motion of the Tariff Commission before the sunset date, i.e., the 5th year, to
    determine whether the expiry of the duration of the countervailing duty imposition would lead to a continuation or recurrence of subsidization and injury.
A

sunset review

68
Q

conducted by the Commission, motu proprio, or upon the direction of the Secretary or upon petition of any interested party to determine
whether (i) the imposition of the countervailing duty is no longer necessary to offset subsidization, taking into consideration the need to protect the existing domestic industry against dumping, or (ii) the existing duty is not sufficient to counteract the subsidization which is causing injury. At least one (1) year
should have elapsed since the imposition of the countervailing duty before an interim review can be initiated.

A

interim review

69
Q

Aggrieved and/or any interested party may file a petition for review with the Court of Tax Appeals within thirty (30) days from receipt of notice of the final ruling on the imposition of a countervailing duty. Filing of such petition
for review shall not in any way stop or suspend the imposition and collection of the countervailing duty

A

judicial review

70
Q

in judicial review the aggrieved and/or any interested party may file a petition for review with the Court of Tax Appeals within __________________________ of the final ruling on the imposition of a countervailing duty. Filing of such petition for review shall not in any way stop or suspend the imposition and collection of the countervailing duty

A

thirty (30) days from receipt of notice

SD & TR (3 decks)

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