World Trade
Organization		
		
	G/ADP/N/1/CHL/2
G/SCM/N/1/CHL/2
14 March 2000	
	(00-1017)	
		
Committee on Anti-Dumping Practices
Committee on Subsidies and Countervailing Measures	Original:  	Spanish	

NOTIFICATION OF LAWS AND REGULATIONS
UNDER ARTICLES 18 .5 AND 32.6 OF THE AGREEMENTs

CHILE

	The following communication, dated 9 March 2000, has been received from the Permanent Mission of Chile.
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	Pursuant to Article 18.5 of the Anti-Dumping Agreement and Article 32.6 of the Agreement on Subsidies and Countervailing Measures, I have pleasure in transmitting herewith the amendments made to Chile's legislation on the investigation and imposition of anti-dumping duties and countervailing measures.

	The amendment to Law 18,525 concerning "Rules on the importation of goods", which authorized the conduct of investigations concerning anti-dumping and countervailing duties, was adopted under Law No. 19,612 published in the Official Journal (Diario Oficial) of 31 May 1999.  The amendment in question introduces no significant changes in anti-dumping or countervailing duty investigations.  It merely revokes the authority under Article 10 to establish so-called "tariff surcharges" and minimum customs values, while at the same time incorporating procedures for the investigation and application of safeguard measures, through the amendment to Article 9 of Law No. 18,525, procedures which were duly notified in document G/SG/N/1/CHL/2.

	For a better understanding of this notification, the following two annexes are attached:

	Annex I:	the text of Law No. 19,612.

	Annex II: 	the text of Law No. 18,525, in its current wording following the recent amendments under Law No. 19,612.

annex i

Law No. 19,612

Amending Law No. 18,525 on Import Price Distortions for the Purpose of 
Establishing a Safeguards Procedure Pursuant
to the Marrakesh Agreement

	Bearing in mind that the National Congress has approved the following draft Law

	"Single article - Make the following amendments to Law No. 18,525:

	(a)	Delete the comma after the word "surcharges" in the first paragraph of Article 4 and insert the words "of the kind" referred to in Article 9 or".

	(b)	Replace Article 9 by the following:

	Article 9.  In the circumstances envisaged in Article XIX of the General Agreement on Tariffs and Trade 1994 and in the Agreement on Safeguards of the World Trade Organization, the President of the Republic may apply ad valorem tariff surcharges, through a Supreme Decree of the Ministry of Finance, subject to a favourable report by the Commission referred to in Article 11.

	The surcharges referred to in the preceding paragraph may be applied provisionally if the Commission determines that the circumstances envisaged in Article 6 of the Agreement on Safeguards of the World Trade Organization exist.  The Commission shall have a period not exceeding 30 days from the date of initiation of the investigation in which to make such  determinations.

	The Commission may initiate an investigation pursuant to a written request submitted by the domestic industry affected by the serious injury or threat of serious injury.  Domestic industry shall be understood to meet the definition contained in Article 4.1(c) of the Agreement on Safeguards of the World Trade Organization.  The Commission may on its own initiative conduct an investigation when it possesses information that justifies so doing.

	The surcharges referred to in this Article shall not be applied for more than one year, including the period of provisional application of the measure.  However, they may be extended for one further period not exceeding one year when the reasons for their application still exist, subject to a favourable report by the Commission referred to in the first paragraph above.  Extension of the surcharge shall include a timetable for its gradual dismantling, unless there are exceptional circumstances duly substantiated by the Commission.

	Application of a surcharge which, when added to the tariff in effect, amounts to a figure higher than the tariff bound in the World Trade Organization shall require the approval of three-quarters of the members of the Commission.

	The application of emergency or safeguard measures provided for in trade agreements shall be governed, as a supplementary matter, by the rules of this Article and its regulations.  Where there is inconsistency between the regulations under this Law and those contained in the aforementioned agreements, the latter shall prevail to the extent of the inconsistency. 

	When compensation is agreed with another country under a safeguard measure, the President of the Republic may, through a Supreme Decree of the Ministry of Finance and for the period of application of the measure, lower tariffs or accelerate the tariff reduction process provided for in the corresponding trade agreement.

	The President of the Republic may, through a Supreme Decree of the Ministry of Finance, raise the tariffs applicable to goods from another country when no agreement has been reached on adequate compensation as a result of that country's application of a safeguard measure to Chilean goods.

	(c)	In Article 10, delete the phrase beginning "Surcharges of" and ending with "24 per cent ad valorem".

	(d)	In Article 10, delete the words "these surcharges" between the words "which" and "anti-dumping duties".

	(e)	In the fifth paragraph of Article 11, delete the words "these surcharges" and replace the words "minimum customs values" by "surcharges".

	(f)	Replace the tenth paragraph of Article 11 by the following:  

		"The Commission shall be responsible for considering complaints concerning the application of the Agreement on Subsidies and Countervailing Measures, the Agreement on Safeguards and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, which form part of the Marrakesh Agreement Establishing the World Trade Organization".

	With my approval and endorsement;  to be enacted and implemented as a law of the Republic.  Santiago, 28 May 1999.  EDUARDO FREI RUIZ-TAGLE, President of the Republic.  Eduardo Aninat Ureta, Minister for Finance.  Jorge Leiva Lavalle, Minister for the Economy, Development and Reconstruction.

annex ii

law no. 18,525

Rules on the Importation of Goods

	Article 1.  All foreign goods to be imported into Chile shall be subject to payment of the duties established in the Customs Tariff or in other relevant legal provisions.

	The provisions of the preceding paragraph shall not apply to the total or partial exemptions provided in the Tariff, in special laws or international treaties.

	Article 2.  The customs duties established for various categories of goods in the official text of the Tariff approved by Finance Decree No. 679 of 1981, published in the Diario Oficial of 14 December 1981, and its subsequent amendments, and the duties to be applied under the 1980 Montevideo Treaty Establishing the Latin American Integration Association (LAIA), shall form part of this Law.

	The general rules on interpretation of the tariff nomenclature, the complementary general rules, the rules on units and packaging, the rules on valuation procedures and the Notes under each heading in the Tariff referred to in the preceding paragraph shall also form part of this Law.

	Article 3.  The rules on surtaxes and rates shall be established in a resolution by the Director of the National Customs Service.  The explanatory notes to the nomenclature issued or to be issued by the Brussels Customs Cooperation Council shall be used to interpret the Customs Tariff without prejudice to the authority given to the Director of the Service under Article 4, No. 7, of the Basic Law on the National Customs Service.

	Article 4.  Where the President of the Republic subdivides the headings in the Customs Tariff and modifies those subdivisions for statistical purposes or for any other administrative reasons, this shall not affect the customs duty payable under Article 2 upon import of the goods, except when the subdivision has been created to apply surcharges of the kind referred to in Article 9 or anti-dumping duties or countervailing duties of the kind referred to in Article 10.

	The National Customs Service may make the subdivisions and amendments referred to in the preceding paragraph, subject to authorization by the President of the Republic.  In such cases, the resolutions of the Service shall be published in the Diario Oficial.

	The Director of the National Customs Service shall be responsible for indicating the customs categories in which the goods shall be classified and shall be obliged to use the nomenclature in the Customs Tariff for that purpose.

	Article 5.  The taxable base for ad valorem duties shall be the customs value of the goods entering Chile.  This value shall be determined in accordance with the provisions of Articles 6, 7, 8 and 9 of this Law.

	Article 6.  Where sales take place under free market conditions, the customs value shall be determined on the basis of the transaction value, that is the price actually paid or payable for the goods when sold for import into Chile.

	A transaction shall be deemed to have taken place under free market conditions between a buyer and an independent seller when the payment of the price is the only obligation performed by the buyer and there is no contractual or other commercial relation between the buyer and the seller and their partners other than that created by the transaction on the goods in question.  Two persons shall be deemed to be related commercially if one of them has any interest whatsoever in the business of the other or if both have a common interest in any business or if a third party has a direct or indirect interest in the business of one of them.

	When these free conditions do not exist, the taxable base of the ad valorem duties shall be the price that it is deemed the goods could obtain at the time the customs duties are payable in a transaction under free market conditions between an independent buyer and seller.

	Article 7.  The customs value of the imported goods shall include all the costs incurred for transport to the place of importation.  These costs shall include loading and unloading, transport, commission, insurance, brokerage, interest and the cost of packing unless they are governed by their own customs regime.  The place of importation of the goods shall be the place of entry for customs formalities.  For the purposes of valuation, the customs duties shall be payable on the date appearing on the corresponding customs declaration.

	Article 8.  In the cases referred to in the final paragraph of Article 6 or where there are grounds for considering that the declared value is not the actual value, the National Customs Service shall establish the value taking into account the various elements which, in the transaction in question, are contrary to the concept of a transaction under free market conditions.

	For the purposes mentioned above, the Service shall consider the customs value of identical goods or, if there are none, similar goods sold at the same level of trade as those being valued.  In determining the value, the Service shall also take into account reliable information from manufacturers or may require information from national or foreign public authorities.  The same procedure shall be followed when the importation of the goods into Chile does not come under a sales contract.  In the case of used goods, when taking into account the price of new identical or similar goods, reductions for use and age shall be taken into account as appropriate.

	The valuation established on the basis of the rules in this Law shall constitute the taxable base for the application of ad valorem duties or for fixing the amount corresponding to the difference in duty if the import declaration has already been processed.  The acts of the National Customs Service modifying the declared value shall be appealable in conformity with the procedure laid down in Articles 132 et seq. of the Customs Order.

	Article 9.  In the circumstances envisaged in Article XIX of the General Agreement on Tariffs and Trade 1994 and in the Agreement on Safeguards of the World Trade Organization, the President of the Republic may apply ad valorem tariff surcharges, through a Supreme Decree of the Ministry of Finance, subject to a favourable report by the Commission referred to in Article 11.

	The surcharges referred to in the preceding paragraph may be applied provisionally if the Commission determines that the circumstances envisaged in Article 6 of the Agreement on Safeguards of the World Trade Organization exist.  The Commission shall have a period not exceeding 30 days from the date of initiation of the investigation in which to make such determinations.

	The Commission may initiate an investigation pursuant to a written request by the domestic industry affected by the serious injury or threat of serious injury.  Domestic industry shall be understood to meet the definition contained in Article 4.1(c) of the Agreement on Safeguards of the World Trade Organization.  The Commission may on its own initiative conduct an investigation when it possesses information that justifies so doing.

	The surcharges referred to in this Article shall not be applied for more than one year, including the period of provisional application of the measure.  However, they may be extended for one further period not exceeding one year when the reasons for their application still exist, subject to a favourable report by the Commission referred to in the first paragraph above.  Extension of the surcharge shall include a timetable for its gradual dismantling, unless there are exceptional circumstances duly substantiated by the Commission.

	Application of a surcharge which, when added to the tariff in effect, amounts to a figure higher than the tariff bound in the World Trade Organization shall require the approval of three quarters of the members of the Commission.

	The application of emergency or safeguard measures provided for in trade agreements shall be governed, as a supplementary matter, by the rules of this Article and its regulations.  Where there is inconsistency between the regulations under this Law and those contained in the aforementioned agreements, the latter shall prevail to the extent of the inconsistency.

	When compensation is agreed with another country under a safeguard measure, the President of the Republic may, through a Supreme Decree of the Ministry of Finance and for the period of application of the measure, lower tariffs or accelerate the tariff reduction process provided for in the corresponding trade agreement.

	The President of the Republic may, through a Supreme Decree of the Ministry of Finance, raise the tariffs applicable to goods from another country when no agreement has been reached on adequate compensation as a result of that country's application of a safeguard measure to Chilean goods.

	Article 10.  Anti-dumping and countervailing duties are hereby established for imports of goods of which the entry into the country causes or threatens serious injury to the domestic industry by entering at diminished prices as a result of artificial effects in their respective markets.  The President of the Republic shall determine the goods to which these surcharges, anti-dumping duties and countervailing duties shall apply, as well as their amount and duration, which shall not exceed one year, after receipt of the report by the Commission referred to in the following Article.

	Article 11.  A National Commission shall be established to investigate the existence of distortions in the prices of imported goods.  This Commission shall comprise the Inspector-General of the Economy, who shall be its Chairman;  two representatives of the Central Bank of Chile, who shall be designated by its Board;  representatives of the Ministry of Finance, the Ministry of Agriculture and the Ministry of the Economy, Development and Reconstruction, who shall be designated by a resolution published in the Diario Oficial;  the National Director of Customs;  and a representative of the Ministry of Foreign Affairs, designated as above.  The above-mentioned members shall have the alternates provided for by law or as designated by their respective institutions by resolution published in the Diario Oficial.

	The Commission shall be responsible for hearing complaints concerning distortions in the prices of internationally traded goods.  To that end, it shall conduct an investigation in each case.  It shall report the opening and subject of an investigation within five working days after the complaint has been duly lodged, by means of a notice published in the Diario Oficial.  Within 30 days from the date of such notice, the Commission shall receive whatever information interested parties wish to submit and request any reports it considers necessary.  Before reaching a decision, it shall also conduct hearings of the interested parties, if they so request, to hear their arguments.

	The complaint submitted to the Commission shall indicate the distortion and the manner in which it causes or threatens material injury to the domestic industry affected.

	Without prejudice to the provisions of the preceding paragraphs, the Commission may on its own initiative conduct the investigations referred to in this Article when it possesses information that justifies so doing.  Investigations conducted by the Commission on its own initiative shall as far as possible be subject to the same procedure as for investigations of complaints.

	Within a maximum period of 90 days from the date of publication of the notice in the  Diario Oficial, the Commission shall make a decision on the facts under investigation on the basis of the information in its possession.  If the Commission considers that, on the basis of such information, it is possible to establish the existence of distortions in the price of the product and that such distortions cause or threaten material injury to the affected domestic industry, it shall so state in the decision it delivers for that purpose, in which it shall recommend, either jointly or separately, the establishment of the surcharges referred to in Article 9 or the anti-dumping or countervailing duties referred to in Article 10.

	Before delivering the decision referred to in the preceding paragraph and at any stage in the investigation, the Commission may request the President of the Republic, through the Minister for Finance, to establish within a period of 60 days provisional surcharges, anti-dumping or countervailing duties or minimum customs values.  The duration of the surcharges, anti-dumping or countervailing duties or minimum customs values applied under this paragraph shall not extend beyond the date on which the final decision is adopted, and shall be payable if they were in force at the time when the Customs Service accepted the corresponding import declaration for processing.

	The Commission may at any time request the competent authority to modify or repeal measures adopted provisionally.

	In the event that, upon completion of the investigation, the Commission decides that there is no distortion in the price of the goods concerning which it requested provisional measures, or that distortions do exist but do not cause or threaten serious injury to the national economy, the persons affected by the provisional surcharges, anti-dumping or countervailing duties or minimum customs values may apply for the refund of such payments.  Likewise, the persons concerned may request the total or partial refund of amounts paid under such provisional measures when, following a recommendation by the Commission in the relevant resolution that definitive surcharges, anti-dumping or countervailing duties or minimum customs values be imposed, the competent authority does not impose any such measure or adopts a measure for a lower amount than that which had to be paid under the provisional measure.  Current interest shall accrue on refundable amounts.  Application for refund must be made within 90 days of the date of entitlement to refund, after which the right thereto shall lapse.

	The resolutions of the Commission shall be adopted by a majority of votes;  in the case of a tied vote, the Chairman shall have the deciding vote.

	The Commission shall be responsible for considering complaints concerning the application of the Agreement on Subsidies and Countervailing Measures, the Agreement on Safeguards and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, which form part of the Marrakesh Agreement Establishing the World Trade Organization.

	Regulations enacted by Supreme Decree of the Ministry of Finance shall establish the necessary procedure for the collection of the duties, taxes and other charges arising out of the provisional imposition of minimum customs values, surcharges, anti-dumping and countervailing duties and their refund, where appropriate.  The regulations shall also determine the procedures necessary for the implementation of the provisions of this Article.

	The Central Bank of Chile shall act as the Technical Secretariat of the Commission referred to in the first paragraph of this Article.

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