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Questions and Answers
Which of the following best describes a subsidy?
What makes a subsidy countervailable?
Which of the following is true about non-actionable subsidies?
What characterizes actionable subsidies?
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An example of a non-actionable subsidy would be:
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Which of the following is NOT considered a subsidy?
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Which of the following statements is true about prohibited subsidies?
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What type of subsidy is typically granted for research to adapt production facilities for environmental compliance?
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What can trigger a countervailing protest?
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Which types of importations are exempt from countervailing action?
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What is the purpose of Republic Act (RA) 8751?
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When did Republic Act 8751 take effect?
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What is the main aim of countervailing duties?
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Which section of the Tariff and Customs Code was amended by RA 8751?
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What are conditionally duty-free importations?
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What is the significance of Section 713 of the Customs Modernization and Tariff Act (CMTA)?
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What is the primary purpose of reforming the domestic countervailing duty law?
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Which agency is responsible for conducting formal investigations in countervailing cases?
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Who can file a petition for countervailing action?
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What does the term 'domestic industry' refer to?
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What is the required threshold of support from producers for a petition to be accepted?
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Which agency is tasked with the imposition of countervailing duty?
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Under what condition can a countervailing investigation begin without a written application?
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What is the role of the Bureau of Import Services (BIS) in the countervailing process?
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What is the de minimis amount of subsidy for a product originating from a developed country?
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When is the volume of subsidized imports considered negligible for developing countries?
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What is the minimum collective share of countries with less than 4% import share that triggers reporting requirements?
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How long do interested parties have to defend their interests after being disclosed the essential facts?
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Which of the following best describes the term 'subsidy' in the context of countervailing?
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What is the first stage in a countervailing investigation?
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What does the term 'negligible injury' refer to in the context of countervailing duties?
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Which of the following is NOT required when applying for the levy of countervailing duty?
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What can investigating authorities do if exporting enterprises impede an investigation?
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Which of the following elements is NOT part of the definition of a 'like product' in countervailing?
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Which authority is responsible for examining the petition and determining if there is sufficient evidence for the investigation?
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What must the applicants provide concerning the allegedly subsidized product?
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What type of evidence is necessary to initiate a countervailing action?
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How long does DTI-BIS or DA have to make a Prima Facie Determination after receiving a petition?
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Which piece of information is crucial to understand the impact of the allegedly subsidized product on domestic markets?
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What should be included about the domestic production of the like product in the application for a countervailing duty?
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What does a price undertaking aim to achieve in relation to exporting countries?
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How long is a price undertaking effective unless proved otherwise?
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What is the lesser duty rule primarily designed for?
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What initiates an administrative sunset review regarding countervailing duties?
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What is the time frame required before initiating an interim review of countervailing duties?
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Who can file a petition for judicial review concerning countervailing duties?
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What is the primary focus of an interim review regarding countervailing duties?
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Which of the following is NOT true about the price undertaking process?
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Study Notes
Subsidies and Countervailing Duty (R.A. 8751, 1999)
- A subsidy is any specific assistance (financial, income, or price support) given by a government to exporters, not generally available to other producers.
- Actionable subsidies (yellow) are specific, targeting particular enterprises, industries, or regions.
- Non-actionable subsidies (green) are general (applied equally to all industries) and permitted.
- Prohibited subsidies (red) are contingent on export performance or using domestic goods over imports. These are subject to remedies through the WTO.
- Country of export is where the product was shipped to the Philippines. Can be different than the origin.
- Country of origin is where the product was substantially transformed or made. May be different from the export country.
- Countervailing action can be taken against products with subsidies that cause harm to a domestic industry.
- Domestic industry is the whole of domestic producers of a like product, making up a major proportion of the total domestic production in the industry.
- Support threshold for petition acceptance: Over 50% collective output, or 25% of total production.
- Initiating a countervailing investigation without formal application is possible in special circumstances.
- To initiate a petition:
- Identity of applicant and product description
- List of domestic producers, volume, and value
- Description of the subsidized product
- Types of subsidies that are actionable:
- Direct subsidies based on export performance
- Currency retention schemes with export bonuses
- Provision of subsidized inputs for exports
- Tax exemptions specifically for exports
- Remission of import charges exceeding domestic consumption charges
- Governing law: Republic Act (RA) 8751, taking effect on 31 August 1999, designed to protect domestic industries.
- Government agencies involved: Department of Trade and Industry (DTI), Bureau of Import Services (BIS) or Department of Agriculture (DA).
- Parties who can file a petition: domestic industry. Petitions must be presented in a notarized form.
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Conditions for investigation termination:
- De minimis subsidy amounts, negligible import volumes
- Negligible injury to domestic businesses.
- Essential facts disclosure: Before duty imposition, interested parties receive essential facts for response in writing
- Like products: Identical or similar products.
- Subsidies: Specific assistance from government.
- Injury: Material injury or threat to the domestic industry (e.g. reduced prices, lost market share).
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Determining material injury factors:
- Output, sales, market share, profitability, productivity, return on investments, or capacity utilization
- Effects on domestic prices
- Cashflow, inventories, employment, wages, growth and capital investments
- Remedies: Provisional and definitive duties.
- Price undertaking: A voluntary commitment by the exporting government or exporter to adjust prices or cease exports at reduced prices. This can last for 5 years.
- Lesser duty rule: Apply a duty that removes injury but is smaller than the subsidy.
- Administrative reviews: Conducted by the Tariff Commission (including sunset and interim reviews).
- Judicial review: Available through the Court of Tax Appeals within 30 days.
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Description
This quiz covers the key concepts of subsidies as defined under R.A. 8751, 1999, including actionable, non-actionable, and prohibited subsidies. It also discusses countervailing duties and the distinction between the country of export and the country of origin. Test your understanding of these important trade regulations and their implications for domestic industries.