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ARTICLES

LEGAL RESOURSES

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    • ARTICLE 46: APPLICABLE RULES TO OBTAIN THE RECONSTRUCTED VALUE

     

    For the purposes of section II of article 31 of the Law (LCE: Art. 31), the following rules will apply:

  • The cost of production will include the cost of direct materials and components, the cost of direct labor and indirect manufacturing costs. In turn, indirect manufacturing costs should include:

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  • The cost of indirect materials and components;

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  • The cost of indirect labor;

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  • The cost of energy, including electricity and fuels;

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  • Depreciation of assets destined for production, and

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  • Other indirect expenses that are applicable.

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    The cost of production must be obtained through the weighted average cost incurred in all the plants, of each exporter, that manufactures the merchandise under investigation.

     

    As a general rule, the cost of packaging will be considered part of the cost of production;

     

  • For the determination of general expenses, administration and sales, financial and other expenses not directly distributable, including those related to research and development and the depreciation of assets not intended for production, should be considered;

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  • Indirect costs and expenses will be distributed to the product under investigation proportionally. In particular, the proration methods must assign a proportional contribution to the product under investigation in each of the indirect costs and expenses. The Ministry (RLCE: Art. 1) will reconcile the accounting information available in order to verify that, if the participation assigned to the product under investigation is added to those determined for the products not investigated, each of the indirect costs and expenses would be fully absorbed or partially.

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    The assignment methods must show an obvious and reasonably verifiable relationship between the cost or expense to be distributed and the proration basis that applies;

     

  • Regarding general expenses that are not directly assignable to the product under investigation, when the accounting information available distributes a portion of said expenses at the departmental level and another at the corporate level, both rubrics will be prorated to the product investigated preferably on the basis of the sales cost.

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    In the second case, the assignment of general expenses to the product under investigation must be equivalent to the general expense observed on average for all the company's products. For the purposes of this calculation, general expenses should be normalized in terms of cost of sales. The average general expenses will be estimated by dividing the general expenses by the cost of sales, according to the figures reported in the financial statements of the company. The general expenses attributable to the product under investigation shall be determined by multiplying the resulting factor by the specific cost of sales of said product;

     

  • Both the cost of production and general expenses must include all its fixed and variable components.

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    The costs related to the idleness of the factors of production will be considered as fixed costs and, as the case may be, will be assigned directly to the product under investigation or distributed to it in a proportional manner;

     

  • Depreciation charges must include both depreciation of assets in use, and depreciation of assets out of use;

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  • In general terms, recoveries of costs and expenses must be deducted from the rubrics to which they correspond;

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  • Financial expenses should be estimated in net terms, excluding financial income that is not related to normal business activities, such as those derived from permanent or long-term investments;

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  • All general expenses recognized in the fiscal year corresponding to the investigation period must be taken into account. However, these expenses must be prorated to the investigation period in a proportionally manner.

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    As an exception to the previous rule, the expenses recognized in a fiscal year may be distributed over a longer period, when:

     

  • The nature of the expense in question justifies this procedure, and

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  • The Ministry has accounting information from previous years that allows it to include in the expenses of the investigation period a participation in previously incurred expenses that must be distributed analogously;

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  • The Ministry may exclude those general expenses that are of an extraordinary nature, that is, that occur incidentally or infrequently, essentially represent a loss of equity capital and are not related to the generation of income. This exclusion will be considered exceptionally;

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  • As a general rule, the profit margin will not be higher than that normally obtained in the sale of products of the same generic category in the country of origin.

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    When the margin of price discrimination is estimated by the type of merchandise, for purposes of calculating the profit margin, the generic category will be understood as the types of merchandise for which the normal value is determined according to internal prices. In particular, the profit margin will be estimated according to the weighted average profit margin observed in internal sales that serve as a basis for establishing normal values based on prices.

     

    If this method is not applicable because no normal value per class of merchandise is determined on the basis of prices, the first category of goods will be understood as a generic category, according to the company's accounting information systems, which contains the product under investigation and with regarding which there are profit figures.

     

    When the accounting information available only refers to profits at the corporate level, the company as a whole will be considered as a generic category. In these cases, the profit margin for the product under investigation must be equivalent to the average margin observed for all the company's products. In particular, the average margin should be calculated by dividing the profits, before being affected by direct taxes and by third party participation on them, by the cost of sales, according to the corporate data. The profit attributable to the product under investigation shall be determined by multiplying the resulting average margin by the specific cost of sales of said product.

     

    The methods described in the previous paragraphs should be discarded when a profit margin is obtained that does not reflect a long-term condition, but a transitory or temporary situation. In these cases, the profit margin should be calculated on the basis of additional financial information that strictly corresponds to the investigation period; if this last procedure is not satisfactory, the Ministry will determine the profit margin by any other method of economic and accounting research, as well as based on the facts that are known, and

     

  • For the purpose of comparing the sum of costs and expenses with internal prices, and comparing the reconstructed value with export prices, the Ministry may consider the desynchronization between production and sales that are relevant.

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    For the purpose of calculating the above concepts, the Ministry will accept as valid the generally accepted accounting principles that prevail in the country of origin as long as they do not contravene the legislation on unfair international trade practices and other legal provisions that are applicable.