INTERNATIONAL & COMPARATIVE LAW
RUSSIA REQUESTED FOR THE ESTABLISHMENT OF A PANEL
On 23 December 2013 the Russian Federation requested consultations with the European Union ("EU") pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994"), Article 17 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the "AD Agreement"), and Article 30 of the Agreement on Subsidies and Countervailing Measures (the "SCM Agreement") with regard to the EU’s cost adjustment methodologies and certain anti-dumping measures on imports from the Russian Federation.
As the matter has not been resolved during the consultations the Russian Federation requested the establishment of a Panel for examination of the matter.
The Russian Federation claims that measures contradict obligations of the EU under the AD Agreement, the GATT 1994 and the Marrakesh Agreement Establishing the World Trade Organization, as the EU:
- rejected the cost of manufacturing the product under consideration, including the costs of energy inputs such as gas and electricity, that accurately and reasonably reflect the costs associated with the production and sale of the product under consideration and that are recorded in exporters’ or producers’ records on the basis of generally accepted accounting principles of the country of origin and exportation;
- replaced and "adjusted" the cost of manufacturing of the product under consideration actually borne by the foreign producers and exporters, including the costs of energy inputs such as gas and electricity, by using prices including those outside the country of origin and exportation that do not reflect the cost of production in the country of origin and exportation and by using such prices as the basis for a construction of the costs for determining whether sales were made in the ordinary course of trade and subsequently for constructing normal value;
- "adjusted" the normal value for differences not affecting price comparability when it rejects and "adjusts" the cost of manufacturing of the product under consideration actually borne by the foreign producers and exporters, including the costs of energy inputs such as gas and electricity, thereby adjusting normal value for a factor that is used in the production of products for export as well as domestic sale and failing to ensure a fair comparison between normal value and export sales;
- rejected prices of sales of the like product in the ordinary course of trade in the country of origin and exportation as the basis for determining the normal value and unduly considers that a "particular market situation" exists as soon as an export duty, price regulation or other alleged "market impediment" exists in the country of origin and exportation with respect to an input or the product under consideration or when their prices are "out of line with world-market prices" or prices in other representative markets;
- rejected cost and price information of foreign producers and exporters in the country of origin and exportation in combination with the continued use of unadjusted profitability data of such foreign producers or exporters for purposes of determining whether sales were made in the ordinary course of trade and for constructing normal value, and the failure to apply another reasonable method for determining the profit;
- rejected and replaces costs that are reasonably related to the production of the product under consideration for natural-resource inputs only or disproportionately thus disadvantaging resource-rich Members like the Russian Federation compared with the treatment accorded to producers or exporters of other Members; etc.
The request for establishment of a panel was proposed for consideration at the next meeting of Dispute Settlement Body in 18.06.2014.