Article 116: Imposition of Provisional Measures and Countervailing Duties


  1.         Notwithstanding anything to the contrary in this Chapter, a Member State aggrieved by the application or maintenance of prohibited subsidies or by subsidies which cause injury, or result in nullification, impairment, or serious prejudice, or cause serious adverse effects, as the case may be, shall introduce provisional measures only on the basis of the following rules:

(a)        Provisional measures may be applied only if –

(i) a preliminary investigation has been initiated in accordance with the provisions of this Chapter, a public notice has been given to that effect  and  interested  persons  have   been  given  adequate opportunities to submit information and make comments;

(ii) an affirmative preliminary determination has been made of the existence of a prohibited subsidy, or a subsidy causing injury, nullification, impairment, serious prejudice, or a subsidy causing serious adverse effects, as the case may be;

(iii) consultations were  requested  and    undertaken, COTED  was notified and requested to investigate and the authorities concerned judge such measures necessary to prevent injury being caused during the investigation;

(b) Provisional measures may take the form of provisional countervailing duties guaranteed by cash deposits or bonds equal to the amount of the subsidisation calculated on a provisional basis;

(c) Provisional measures shall not be applied sooner than  60 days from the date of initiation of the preliminary investigation;

(d) The application of provisional measures shall be limited to as short a period as possible, not exceeding 120 days.

  1.         Where investigations by COTED continue beyond the period allowed for the maintenance of provisional measures under sub-paragraph 1(d), the Member State imposing the measures may continue with such measures until a definitive determination is made by COTED.
  1.         The Member States which are parties to an investigation to verify the existence and the effect of alleged subsidisation, may seek or accept, as the case may be, undertakings from the Member State alleged to have granted or to be maintaining a subsidy. Undertakings may take the form of:

(a)        withdrawal, or limiting the amount of, the subsidy to such an extent that injury, nullification, impairment, serious prejudice or serious adverse effects, as the case may be, are eliminated; or

(b) a guarantee from the exporter benefiting from the subsidy to raise his price to such an extent that the injurious effect is eliminated.

  1.         If a Member State accepts a voluntary guarantee pursuant to sub-paragraph 3(b), then the accepting Member State shall notify COTED and promptly suspend proceedings, and any provisional measures which may have been imposed shall be withdrawn with immediate effect.
  1.         In the event that investigations to determine subsidisation have been concluded and the evidence proves injury, nullification, impairment or serious prejudice, or serious adverse effects, as the case may be, a Member State may impose countervailing duties retroactively to account for the entire period during which provisional measures have been in force. Such retroactively applied duties shall take into account the definitively assessed countervailing duties and the amount guaranteed by cash deposit or bond and:

(a) where the definitive countervailing duties are higher than the provisional duties, the difference shall not be collected;

(b) where the definitive countervailing duties are lower than the provisional duties, the excess of the deposit shall be refunded or the bond released promptly.

  1.        No Member State shall impose countervailing duties other than provisional countervailing duties without prior authorisation from COTED and the determination and imposition of definitive countervailing duties shall be governed by the relevant provisions of the WTO Agreement on Subsidies and Countervailing Measures.
  1.         COTED shall keep under review all counter-measures imposed by the Member States and shall ensure that the Member States observe the conditions and timetable for review and withdrawal of counter-measures that it may have authorised.
  1.         The Member States undertake to co-operate in establishing harmonised legislation and procedures in accordance with the provisions of this Chapter.