DUMPING DUMPING

A non-Tariff barrier to Trade

or

Protection for Australian Industry

OVERVIEW

• Dumping, What is it?

• Understanding the terms

• Definitions

• Dumping Duty Elements

• Interim Dumping Duty

• Reassessment Procedures

Dumping, what is it?• A commercial decision

• Common business practice

• Selling goods below Current Domestic Value in the country of Export

Is it illegal?

Why do we have the legislation?

Protection of Australian industry!

Dumping is a simple exercise

• Basic principles?– Decide on criteria– Calculate values – Determine result

The devil is in the calculation

The Terms

• Normal Value S269TAC

• Export Price S269TAB

• Material Injury S269TAE

• Ascertained (Non-Injurious) Export PriceS269TACA

• Causal Effect S269TAE

• Dumping Commodities Register (DCR)

The Terms• Dumping

• Anti-Dumping Action

• Third Country Dumping

• Interim Dumping Duty

• Dumping Cash Securities

• Countervailing Duty

• Third Country Countervailing Duty

• Price Undertakings

References

• Customs Act – Part XVB, Division 1, Section 269T

• Customs Tariff (Anti-Dumping) Act– Section 8, 9 - Dumping Duties

– Section 10, 11 - Countervailing Duties

– Section 12 - Interim Duty not to exceed cash security

Dumping Commodities Register

DXP - adjustment for credit terms

DCR………..1% per month

When to deduct.

Currency Conversion

- at the “Customs ruling rate applicable at the date of the export transaction (valuation date)”

However -

“rate of exchange”…….“that best establishes the sale” S269TAF

Dumping Reason Codes

COMPILE Field Codes

Dumping Duty

Section 269TG, Customs Act

Section 8(2), Customs Tariff (Anti-Dumping) Act

Amount by which

Normal Value exceeds the

Export Price Section 8(6)

- Normal Value is determined by Customs investigation (S269TAC)

- Export Price is determined during the same investigation (S269TAB)

Interim Dumping Duty

Section 8(3), Customs Tariff (Anti-Dumping) Act

“pending final assessment of dumping duty payable”

Amount by which Normal Value exceeds Ascertained Export Price S8(4)

- Normal Value is determined by Customs investigation

- Ascertained Export Price is determined during the same investigation as the non-injurious export price

PLUS

Amount by which Ascertained Export Price exceeds Dumping Export PriceAscertained Export Price less the actual price at FOB in the export sale

Interim Dumping Duty• Two components

• Part (a) always payable

• Part (b) payable, re circumstances of sale

• Importers may apply for reassessment • Part XVB - Division 4, Customs Act, S269V onwards

– ACDN 99/019

• Requirements for reassessment– not more than 6 months after the end of the period– importer contends dumping duty less than collected

– ACDN 99/019

Application Processfor reassessment

• Lodged within the next period

• In writing

• Describe the goods on each consignment

• Provide an amount - the difference

• Customs has 155 days to recommend

• Information not supplied on time disregarded

Dumping Cash Security

• Interim measure, Section 269TD

•“sufficient grounds” (prima facie case)

- “preliminary affirmative action”

•require & take securities - 269TD(4)

• Conversion of securities to DD or IDD

• Interim duty collected not to exceed security•S12 CT(AD)Act

RECENT CASE - QUENOS, Polyethylene

LLPDE - ACDN 2003/27

RKOR

THAI

HDPE - ACDN 2003/28

RKOR

MLAY

SING

SWED

THAI

Revision of Securities for ACDN 2003/36

Anti-Dumping Investigations

Starting an investigation

Application process

Termination of an investigation

Timelines

Starting an investigation

Industry determines reason for current ills due to dumped imports

Builds its case based on known factorsloss of market shareloss of profits

Is able to quantify the amount of material injury

Is able to show a “causal link” between

dumping activity & material injury

Application process

Lodged in accordance with Section 269TB(1), where

(a) a consignment of goods(i) has been imported in Australia(ii) likely to be imported into Australia(iii) may be imported into Australia being like goods to

which (i) or (ii) applies -(b) there is, or may be, an Australian industry producing like goods; and(c) a person believes there are, or may be reasonable grounds for dumping or countervailing notice

that person may apply to the Minister

Application process

Section 269TB(2) - Third Country Dumping applicationwhere(a) a consignment of goods

(i) has been imported in Australia(ii) likely to be imported into Australia(iii) may be imported into Australia being like goods to

which (i) or (ii) applies -(b) there is, in a third country an industry producing like goods; and(c) the Government of that third country believes there are, or may be reasonable grounds for dumping or countervailing notice

that Government may apply to the Minister

Application process

The CEO must notify the government of the exporting countryonly if not deciding to reject the application

The CEO must notify the government(s) if countervailable subsidies suspected

of the exporting country - nominated exportersof any other country - allegedly providing subsidiesinvite consultation as to existence & level of subsidies

Application to be in approved form and lodged in approved manner

Definition of “sufficient part of domestic industry” Sec. 269TB(6)

Termination of an investigation

CEO must terminate investigation if

•no dumping margin or

•margin considered negligible (2%) Sec. 269TDA(1)

•no countervailing subsidy or

•subsidy considered negligible (2%) Sec. 269TDA(1), (16).

•volume is negligible (3% of total volume exported to Aust.)

•REFER ACDN 2003/30

Timelines

•Prima Facie screening 20 days

•Customs investigation

•Preliminary affirmative (securities available) 60 days•Statement of essential fact - 110 days (may be extended to 155 days)

•Recommendation to Minister - max 155 days

•Minister’s decision to impose duties or not

•Trade Measures Review Officer (Part XVB - Division 8, 9)

•reference if initial application rejected - 60 days

•reference if Customs investigation terminated

•interested party requests to review Minister’s decision - 30 days

•recommendation to Minister re review - 60 days

SummaryDumping action

Dumping Cash Securities

Interim Dumping Duty

Dumping Duty

Countervailing Duty

Third Country Dumping & Countervailing

Dumping Commodities Register

reason codes, exchange rates, interest

Application process

Review Process

RECENT CASE - QUENOS, Polyethylene

Practical questions answering guide

Similarity in structure of all dumping questionsRequirement to establish if dumping occursWhat will you need to calculate to answer the question?

USE FULL QUANTITIES!Identify the structure - what is the question?

Will Interim Dumping calculation be required?Structure your answer

Start by calculating DXP, from invoice detailsThen calculate AEP, from given detailsEnsure they are in same currency and level

Show your calculation workingsMake a decision - is Dumping Duty or Interim Dumping Duty payable ?Answer the Question asked!

Theory questions answering guide

•These are not usual but might include•Application process inc. timelines•Definitions

•Dumping, •Interim DD, •DD, •Countervailing D,•Subsidies•TMRO

•What is the examiner looking for?•How well do you know the Dumping legislation?•Do you understand the process?

Questions

Where are we now?

How much don’t you understand?