Subsidies and Countervailing Measure

SUBSIDIES AND
COUNTERVAILING RA 8751
MEASURE
DEFINITION OF SUBSIDY
A subsidy refers to any specific assistance provided directly or indirectly by
the government of the country of export or origin in respect of the product
imported into the PH, which confers a benefit to the foreign exporter or
producer of said producer.
DEFINITION OF SUBSIDY AND
COUNTERVAILING MEASURE
Subsidies and countervailing measure are a trade counter-measure adopted by
the government to offset any bounty or subsidy given to exporters which is
not generally available to other producers of the exporting country.

AMOUNT/RATE
EQUAL TO THE ASCERTAINED OR ESTIMATED AMOUNT OF
SUCH BOUNTY, SUBSIDY OR SUBVENTION
SPECIFIC SUBSIDY
A specific subsidy limited to an enterprise or industry, or to a group of
enterprises or industries. A subsidy can be limited to certain enterprises or
industries by being available only in particular regions of a country. All
export related subsidies and subsidies related to the use of domestic over
imported goods are specific. Subsidies can be specific if they are provided in
practice to only certain enterprise or industries even though the law may not
explicitly limit their application in such a manner.
ACTIONABLE SUBSIDIES
Actionable subsidies or “yellow” subsidies are those falling under the
definition of subsidy described above.
NON-ACTIONABLE
SUBSIDIES
Non-actionable subsidies or “green” subsidies refer to subsidies protected
from countervailing action either because they are considered to be of
particular value and not to be discouraged, or because they are considered to
have no, or at most minimal, trade-distorting effects or production effects.
PROHIBITED SUBSIDIES
Prohibited subsidies or “red” subsidies include export subsidies.
SUBSIDIZED
IMPORT/PRODUCT
A subsidized import/product refers to any product which is granted, directly
or indirectly by the government in the country of export or origin, any king or
form of specific subsidy upon the exportation or manufacture of such
product, and which is causing or is threatening to cause material injury to a
domestic industry, or is materially retarding the growth or preventing the
establishment of a domestic industry producing like product.
PHILIPPINE LEGISLATION
ON SUBSIDIES
RA 8751, otherwise known as the “ Act Strengthening the Mechanism 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 the Purpose Section
302, Part 2, Tittle II, Book I of Presidential Decree no. 1464” was signed
August 7,1999 and took effect on August 31,1999.
The IRR of RA 8751 (Joint Administrative Order No. 02, Series of 2000),
took effect on September 25, 2000.
RATIONALE FOR THE
PASSAGE OF RA8752
To transform the domestic countervailing duty law into a more workable
piece of legislation providing the safety nets against the inflow of subsidized
imports
To strengthen the rules governing the investigation of countervailing cases
To align the domestic law with the WTO Agreement on Subsidies and
Countervailing.
GOVERNMENT AGENCIES
ADMINISTERING THE ANTI-DUMPING
LEGISLATION
DTI-BIS or DA
Receives the properly documented application (DTI = industrial goods and DA =
agricultural products); determines whether or not a prima facie case exist to warrant
initiation or investigation; and conducts preliminary investigation to determine
whether or not provisional measures may be imposed.
TARIFF COMMISSION
Conducts the formal investigation and makes the final determination for purposes of
the imposition of a definitive countervailing duty; conducts countervailing review.
BOC
Collects the countervailing duties.
COVERAGE OF COUNTERVAILING
DUTY PROTEST
A countervailing duty protest shall apply to any product which is granted,
directly or indirectly, by the government in the country of export or origin,
any kind or form of specific subsidy upon the exportation or manufacture of
such product, and the importation of such subsidized product causing or
threatening to cause a material injury to domestic industry, or is materially
retarding the growth or preventing the establishment of a domestic industry.
TYPES OF PRODUCTS THAT
MAY BE SUDSISIZED
An agricultural product refers to a product classified under chapters 1-24 of
the CMTA, including those falling under Annex A of the IRR of RA 8751.
Non-agricultural or industrial goods refer to products classified under

Chapter 25-97 and excluded from the aforementioned Annex A.
IMPORTATIONS EXEMPTED FROM
SUBSIDY AND COUNTERVAILING
PROTEST
Products imported by or consigned to government agencies not organized

for profit and particularly designated by law or proper authorities to import,
directly or through awardees, such products as would stabilize or supplement
shortages;
Conditionally duty-free importations allowable under section 800 of CMTA.

INFORMATIONS REQUIRED WHEN
APPLYING FOR THE IMPOSITION OF
COUNTERVAILING DUTY
Identity of the applicant and a description of the volume and the value of his domestic
production of the like product
A list of all known domestic producers of the like product and, if possible; a 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.
Complete description of the allegedly subsidized product
Name of the country of export or origin of the allegedly subsidized product
Identity of each known foreign exporter or producer of the allegedly subsidized product, or
their duly authorized representative organizations.
 list of known persons importing the allegedly subsidized products with their last known
address
INFORMATIONS REQUIRED WHEN
APPLYING FOR THE IMPOSITION OF
COUNTERVAILING DUTY
Estimated aggregate or cumulative quantity, the port and the date of arrival, and the import entry
declaration of the allegedly subsidized product
The nature, extent and estimated amount of the subsidy in question
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 products on the price of the like product in the
domestic market
 Consequent impact of the importation of the allegedly subsidized products on the domestic
industry.

STAGES OF SUBSIDY AND
COUNTERVAILING INVESTIGATION
PRIMA FACIE DETERMINATION
The DA or DTI-BIS has 10 days 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 investigation

PRELIMINARY DETERMINATION
Once a prima facie case has been established, the DA or DTI-BIS initiates the
investigation and makes a preliminary determination on whether or not a provisional
measure may be imposed within 20 days from receipt of the answers to the
questionnaires from respondents and other interested parties
STAGES OF SUBSIDY AND
COUNTERVAILING INVESTIGATION
FINAL DETERMINATION
The Tariff Commission conducts the formal investigation during it which notifies all interested parties; receives
representations and/or other submissions; holds preliminary conference and public consultations; and conducts
on-site investigation/data verification. The Commission has 120 days from the receipt of the advice from either
department to complete investigation and submit its report findings to the secretary.

ISSUANCE OF DEPARTMENT ORDER
Within 10 days from receipt of affirmative final determination by the Commission, the DA or DTI Secretary
shall issue a Department Order for the imposition of a definitive countervailing measure, unless the Secretary
has earlier accepted an undertaking from the foreign exporter to increase prices or cease exportation at dumped
prices.
In case of negative determination, either Secretary shall issue, through the SOF, after the lapse of the period for
the petitioner to appeal to the CTA, an Order for the Commissioner of Customs to immediately release the anti-
dumping bond to the importer.
ELEMENTS

1. Like Product;
2.Subsidy;
3. Material Injury; and
4. Causality
ELEMENTS
LIKE PRODUCT
Product which is identical or alike in all respect to the product under
consideration, OR
In the absence of such a product, another product which, although not alike in
all respect, has characteristics closely resembling those of the product under
consideration.
ELEMENTS
SUBSIDY
any specific assistance provided directly or indirectly by the government of
the country of export or origin in respect of the product imported into the PH,
which confers a benefit to the foreign exporter or producer of said producer.
ELEMENTS
MATERIAL INJURY
Refers to material injury to a domestic industry ("current or present injury"),
threat of material injury ("future injury"), or material retardation of the
establishment of a domestic industry

Injury test must be based on positive evidence and objective examination of both:
 volume of the subsidized imports
 effect of subsidized imports on prices in the domestic market for like product;
and
 consequent impact of these imports on the domestic producers of such products
3 MODALITIES IN DETERMINING THE
PRICE EFFECTS OF SUBSIDIZED
Price Undercutting
IMPORTS:
refers to the extent at which the allegedly subsidized product is consistently sold at a price below
the domestic selling price of the like product
Price Depression
refers to the extent at which the domestic producer reduces its selling price in order to compete
with the allegedly subsidize product

Price Suppression
refers to the extent by which the allegedly subsidize product prevents the domestic producer from
increasing its selling price to a level that will allow full recovery of its cost of production.
ELEMENTS
CAUSALITY
Causal relationship between the dumped imports and the injury to the
domestic industry.
Refers to "overall assessment that the material injury suffered by the
domestic industry is the direct result of the importation of the subsidized
imports.
REMEDIES IMPOSED AGAINST
SUBSIDY AND COUNTERVAILING
PROVISIONAL MEASURE
Takes the form of a security (cash deposit or bond) equal to amount of the provisionally
calculated amount of subsidy. It is applied only after the DA/DTI-BIS has made a
preliminary affirmative determination so sooner than 60 days from initiation of the case.
DEFINITIVE COUNTERVAILING DUTY

Final countervailing duty imposed, in addition to regular duty and other charges, on a
protested product imported from a specific country following an affirmative final
determination.

DURATION OF IMPOSITION OF
COUNTERVAILING MEASURE

PROVISIONAL MEASURE
Four months.

DEFINITIVE COUNTERVAILING DUTY
Five years from the date of imposition.
VOLUNTARY UNDERTAKING
Voluntary undertaking is an offer 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 PH at the subsidized price. An offer of price undertaking
shall be made only after a preliminary affirmative determination of
subsidization and injury to the domestic industry has been reached.
Price undertaking is effective for the period of five years unless the foreign
exporter proves to the satisfaction of the authorities that the undertaking is
no longer necessary.

REVIEWS
EXPIRY OR SUNSET REVIEW
May be initiated by any interested party or upon own motion of the
commission before the sunset date to determine whether the expiry of the
anti-dumping duty would likely lead to a continuation or recurrence of
subsidization and injury.

REVIEWS
INTERIM REVIEW
Conducted by the Commission motu proprio, or upon the direction of the
secretary, or upon petition of any interested party, to determine whether
 The need for the continued imposition of the countervailing duty is no
longer necessary to offset subsidization, taking into consideration the need
to protect the existing domestic industry
 The existing duty is not sufficient to counteract the subsidization which is
causing injury.
At least one year should have elapsed since the imposition of the
countervailing before an interim review can be initiated.

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SUBSIDIES AND

To strengthen the rules governing the investigation of countervailing cases

Non-agricultural or industrial goods refer to products classified under

Products imported by or consigned to government agencies not organized

Conditionally duty-free importations allowable under section 800 of CMTA.

DEFINITIVE COUNTERVAILING DUTY

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