Provisions on Safeguards Investigation And Award of Industry Injury

Order of the State Economic and Trade Commission of the People’s Republic of China No.47

　　The Provisions on Safeguards Investigation and Award of Industry Injury, which have been adopted at the director”s executive meeting of the State Economic and Trade Commission, are hereby promulgated and shall come into force on January 15, 2003.

Director of the State Economic and Trade Commission: Li Rongrong
December 13, 2002

Provisions on Safeguards Investigation and Award of Industry Injury

　　Chapter I General Provisions

　　Article 1 In order to regulate and guarantee the safeguards investigation and award of industry injury, these Provisions have been enacted in accordance with the Safeguards Regulations of the People”s Republic of China （hereinafter referred to as Safeguards Regulations）.

　　Article 2 The applications for safeguards investigation filed pursuant to the Safeguards Regulations, as well as the activities relating to safeguards investigation and award of industry injury, shall be governed by these Provisions.

　　Article 3 The State Economic and Trade Commission （hereinafter referred to as SETC） shall be in charge of the investigation and award of safeguards industry injury. Safeguards investigation of industry injury involving agriculture products shall be carried out by SETC in conjunction with the Ministry of Agriculture.

　　Article 4 The Bureau of Industry Injury Investigation under SETC is responsible for the concrete implementation of these Provisions.

　　Chapter II Determination of Injury and Causation

　　Article 5 Injury refers to the serious injury or threat caused by the increase of import products to the domestic industries that produce the same kind of products or the direct competitive products.

　　Serious injury refers to the all-around and major derogation suffered by the domestic industries.

　　Serious threat refers to the obvious impendent serious injury, which will occur if no measures are taken.

　　Article 6 The following factors shall be taken into consideration in the determination of serious injury or threat caused to the domestic industries by increase of import products:

　　1） Increase of import products, including the absolute and relative increase rate and the amount of import products;

　　2） Share of domestic market occupied by the increased import products;

　　3） Impact of the import products on the domestic industries, in terms of output, sale level, market share, productivity, equipment utilization rate, profit and loss, and employment etc;

　　4） Other facts that cause injury to the domestic industries.

　　Determination of serious threat shall be based on the examination of, according to the facts, the production capacity, reserve, export capacity and possibility of continual increase of export to China etc of the export country, and shall not be based on charges, supposition or minimal possibility.

　　Article 7 When determining the impact of import increase on domestic industries, SETC shall objectively and comprehensively evaluate the various quantitative indexes that affect the domestic industries according to the conclusive evidence, and shall not make the award only on the basis of very few indexes.

　　Article 8 When determining the causation between the increase of import products and the injury, SETC shall not only take into consideration the impact of the increase of import products on domestic industries, but also other factors causing the injury. Such other factors shall include:

　　1） Other factors affecting the price of the same kind of products in the domestic market;

　　2） Change of need for the products;

　　3） Change of consumption pattern;

　　4） Restriction on trade implemented by the domestic and foreign manufacturers and the change of the competitive conditions between the domestic and foreign manufacturers;

　　5） Progress of technology;

　　6） Export of the same kind of domestic products;

　　7） Other factors.

　　If any factors other than the import increase cause injury to the domestic industries, such injury shall not be attributed to the import increase.

　　Article 9 The same kind of products refer to the products identical with the import products under investigation; where there are no identical products, the products that have the most similar characteristics as those of the import products under investigation shall be the same kind of products.

　　Direct competitive products refer to the products that, though not of the same kind of products as the import product under investigation, have the similar usage as that of the import products under investigation and may easily replace the import products, and they also have direct competitive relationship.

　　Article 10 When determining the same kind of products and direct competitive products, the following factors may be taken into consideration: physical characteristics, chemical nature, production equipment and technics, usage, replaceable nature, comment of the consumers and manufacturer, sale channels and price of the products etc.

　　Article 11 SETC may exclude the products under investigation or part of those products that haven”t caused the industrial injury to the domestic industries in the award of industry injury. No safeguards will be applied to the excluded products.

　　Article 12 In the investigation and award of industry injury, SETC shall take the public interest into consideration, and may make the investigation on the possible impact of safeguards on the public interest.

　　SETC shall provide chances for the users and consumers of the import products to state their opinions and to submit evidence

　　Article 13 As a general principle, the period of industry injury investigation of a safeguards case is 3 years before the case is put on file.

　　Chapter III Industry Injury Investigation

　　Article 14 The applicant shall, within 3 days from the proclamation of the filing of the case of safeguards investigation, submit the application form for safeguards investigation and the relevant evidence to SETC.

　　Evidence and materials submitted by the applicant shall include the following matters:

　　1） Increase of import （including the absolute and relative increase） in the last 3 to 5 years and the relevant evidence;

　　2） Share of the import products increased in the last 3 to 5 years in the domestic market;

　　3） Causation between the increase of import products and the injury to the domestic industries, and the relevant evidence;

　　4） Other factors affecting the domestic industries and the relevant evidence.

　　5） Impact of the import products increased in the last 3 to 5 years on the domestic industries, and the relevant evidence, in terms of output, sale level, market share, productivity, equipment utilization rate, profit and loss, and employment etc;

　　Article 15 The applicant shall also submit to SETC an industry adjustment plan together with the application, the plan shall include the following matters:

　　1） Description of the present status of the domestic industries;

　　2） Description of the injury suffered by the domestic industries due to the import increase;

　　3） Specific suggestions on safeguards;

　　4） Target of the adjustment of domestic industries;

　　5） Forms and methods for adjustment of domestic industries;

　　6） Schedule for the adjustment of domestic industries;

　　7） Other matters that the applicant deems as necessary to be explained.

　　Article 16 Where any interested party applies for participating in the safeguards investigation activities, it shall file the application with SETC and make the relevant registration within 20 days from the day of proclamation of case-filing of the safeguards investigation. And the party may at the same time give opinions on the industry injury and causation in the safeguards investigation, and provide the corresponding evidence.

　　Article 17 Interested parties shall include:

　　1） Foreign （region） manufactures, exporters and domestic importers of the product under investigation, or the industrial or other organization of the manufacturers, exporters, and importers of that product;

　　2） Governments and the government representatives of the country （region） of origin and the export country （region） of the product under investigation;

　　3） Manufactures and sellers of the same kind of domestic product, or the industrial or other organizations of the manufactures and sellers of that product.

　　4） Others.

　　Article 18 Where any interested parties participate in the investigation activities, they shall present the relevant identification certificates. Where the interested party is an enterprise or other organization, it shall present the registration certificate, the business license, and the identification certificate of the legal representative.

　　Where any agent participates in the investigation activities upon entrustment, the agent”s identification certificate and trust deed shall be presented; where a party entrusts any lawyer to act as an agent, it shall entrust one who is a licensed lawyer from a Chinese law firm, and shall present the trust deed, the business license of the law firm and the practice certificate of the lawyer.

　　Article 19 Objects of the safeguards investigation of industry injury by SETC include domestic manufacturers, domestic importers, domestic purchasers, domestic final users, foreign exporters and foreign manufacturers etc.

　　Article 20 SETC may retain experts in the fields of industry, finance and accounting, trade and law etc to provide consultation if it deems necessary. The relevant experts are obliged to keep the secret concerned.

　　Article 21 SETC employs such investigation methods as questionnaire, sample, hearing, technical appraisal and on-spot inspection in the industry injury investigation.

　　Article 22 Questionnaires issued by SETC to the interested parties include: questionnaires for domestic manufacturers, questionnaires for domestic importers, questionnaires for domestic users, questionnaires for foreign manufacturers, foreign exporters or other kinds of questionnaires.

　　Article 23 The interested parties shall return the answer sheets pursuant to the method and time provided for by the questionnaires. Where any party needs an extension, it shall, within 7 days prior to the deadline for the answer, file a written application with SETC and explain the reasons. Whether to grant the extension shall be decided by SETC.

　　Article 24 SETC may make an on-spot inspection over the interested parties. Before the on-spot inspection, the main purpose and contents of the inspection shall be notified to the relevant interested parties in advance.

　　Article 25 At the request of an interested party or according to the need of investigation, SETC may, with the consent of the relevant country （region）, send personnel to that country （region） to investigate, with respect to the relevant product, the production capacity, investment and expansion, storage, origin or transit, as well as the association relationship among the enterprises.

　　Article 26 SETC may organize relevant agencies and personnel to demonstrate the adjustment plan of domestic industries, including the aim, measures and feasibility etc provided for by the adjustment plan.

　　Article 27 SETC may ask the interested parties to submit or supplement written materials pursuant to the provisions, or the interested parties may voluntarily submit the written materials to SETC.

　　Article 28 Industry injury hearings may be held at the request of the interested parties or where SETC deems necessary. Industry injury investigation hearings shall be held in accordance with the Rules for Industry Investigation Hearings.

　　Article 29 Where any interested party deems necessary to keep confidential the materials and the relevant evidence provided, it shall, when submitting those materials to SETC, submit a non-confidential outline thereof together, or submit the confidential version and open version of those materials separately.

　　The non-confidential outline and open version shall reasonably present the substantial contents of the confidential information. If this requirement is not met, SETC may request the party to supplement the relevant contents and evidence materials.

　　Article 30 Where an interested party fails to provide the non-confidential outline or open version of the materials and relevant evidence, or the reasons for failure to do so are insufficient, SETC may give no consideration to those materials. If SETC deems unnecessary to keep confidential the materials provided, it may request the interested party to cancel the application for keeping confidential.

　　Article 31 In the course of industry injury investigation and award, an interested party shall tell the truth and provide the relevant materials. If the interested party fails to do so or fails to provide the necessary information within a reasonable time, or seriously interferes with the investigation by other means, SETC may make the award on the basis of the facts already obtained and the superior information available.

　　Article 32 After a safeguards investigation is put on file and before the final award is proclaimed, any interested party may consult the open information relating to the investigation of this case with SETC. Within a reasonable time after the final award is proclaimed, the relevant interested party may also consult the relevant open information.

　　Article 33 To consult the open information, an interested party shall present the relevant certifications and go through the formalities for consulting pursuant to the provisions.

　　Article 34 An interested party may extract and duplicate the open information, but may not take the original of the open information outside of SETC.

　　Chapter IV Industry Injury Award

　　Article 35 SETC may give policy suggestions for the adjustment of domestic industries according to the industry adjustment plans filed by the domestic industries and the relevant information obtained through the investigation.

　　SETC shall evaluate the effect of the safeguards to be taken on promoting the adjustment of domestic industries and the time it will take.

　　Article 36 SETC shall, according to the initial investigation results, make a preliminary award on the injury and whether there is causation between the injury and the increased import products.

　　Article 37 Where the preliminary award determines that the increased import products has caused injury to the domestic industries and there is causation between the increased amount and the injury, SETC shall continue to make an investigation on the injury and the degree thereof. SETC shall, according to the investigation results, make the final award on injury and whether there is causation between the injury and the increased import products.

　　Article 38 Where a safeguard measure has been implemented for more than 1 year, SETC may suggest to gradually ease that measure according to the need and development of domestic industries.

　　Article 39 Where a safeguard measure has been implemented for more than 3 years, SETC shall make a midterm review of the impact of that safeguard on domestic industries and the adjustment of domestic industries. For a midterm review case, SETC shall make a review award.

　　Article 40 As to the procedures for midterm review, the relevant provisions on safeguards investigation shall be referred to.

　　Article 41 Within 60 days prior to the expiration of a safeguard measure as stipulated in the final award, SETC may give opinions on whether to cancel or extend that measure according to the situation of domestic industries.

　　Chapter V Supplementary Provisions

　　Article 42 When submitting any documents and evidence materials to SETC, an interested party shall submit the Chinese version in quintuplicate, and shall submit the corresponding electronic version in triplicate （computer disks or CD-ROM）.

　　Article 43 In the industry injury investigation and award of SETC, the normative Chinese provided for by the language authority of the state shall be used as the formal language and characters. Any documents, materials and information provided by the interested parties shall be normative Chinese. Non-Chinese materials shall be accompanied by Chinese translations and the original text, and the Chinese translation shall be superior to the others. Non-Chinese materials without Chinese translation accompanies shall not be regarded as valid and legal evidence materials.

　　Article 44 The power to interpret these Provisions shall remain with SETC.

　　Article 45 These Provisions shall enter into force on January 15, 2003.