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ARTICLE  48:  CONCEPT  OF  CENTRALLY  PLANNED  ECONOMY  AND  OF  SUBSTITUTE  COUNTRY

For  the  purposes  of  article  33  of  the  Law  --255-Art.  33--,  centrally  planned  economies  are  understood  to  be  non-market  economies,  regardless  of  the  name  with  which  they  are  designated,  whose  cost  and  price  structures  do  not  reflect  market  principles,  or  in  which  companies  in  the  sector  or  industry  under  investigation  that  have  cost  and  price  structures  that  are  not  determined  according  to  these  principles.

In  order  to  determine  whether  an  economy  is  a  market  economy,  the  following  criteria  will  be  taken  into  account,  among  others:  that  the  currency  of  the  foreign  country  under  investigation  is  generally  convertible  in  international  currency  markets;  that  the  salaries  of  that  foreign  country  be  established  through  free  negotiation  between  workers  and  employers;  that  the  decisions  of  the  sector  or  industry  under  investigation  on  prices,  costs  and  supply  of  inputs,  including  raw  materials,  technology,  production,  sales  and  investment,  are  taken  in  response  to  market  signals  and  without  significant  interference  from  the  State;  that  foreign  investments  and  co-investments  with  foreign  firms  be  allowed;  that  the  industry  under  investigation  exclusively  owns  a  set  of  accounting  records  that  are  used  for  all  purposes,  and  that  are  audited  in  accordance  with  generally  accepted  accounting  principles;  that  the  production  costs  and  financial  situation  of  the  sector  or  industry  under  investigation  are  not  distorted  in  relation  to  depreciation  of  assets,  nonperforming  credits,  barter  trade  and  debt  compensation  payments,  or  other  factors  that  are  considered  relevant.

A  substitute  country  means  a  third  world  country  with  a  market  economy  similar  to  the  exporting  country  with  a  non-market  economy.  The  similarity  between  the  substitute  country  and  the  exporting  country  will  be  reasonably  defined,  so  that  the  normal  value  in  the  exporting  country  can  be  approximated  on  the  basis  of  the  internal  price  in  the  substitute  country.  In  particular,  for  the  purpose  of  selecting  the  substitute  country,  should  be  considered  the  economic  criteria  such  as  the  similarity  of  production  processes,  the  cost  structure  of  factors  that  are  intensively  used  in  said  process,  corresponding  to  the  product  under  investigation  or,  if  not  possible,  to  the  most  restricted  group  or  range  of  products  that  include  it  both  in  the  country  of  origin  and  in  the  substitute  country.

The  merchandise  on  which  the  normal  value  is  determined  must  originate  in  the  substitute  country.  When  the  normal  value  is  determined  according  to  the  export  price  of  the  substitute  country  to  a  third  party,  said  price  must  refer  to  a  market  other  than  Mexico.  If  there  is  no  substitute  country  with  a  market  economy  in  which  identical  or  similar  merchandise  to  those  exported  by  the  country  with  a  non-market  economy  are  produced,  the  Mexican  market  itself  may  be  considered  as  a  substitute  country.