INVESTIGATION 320 ALLEGED DUMPING OF HOLLOW … · 2015. Anti-Dumping Notice (ADN) No. 2015/154 publicly notified the initiation of the investigation and is available at . 1.2 Purpose

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HSS exported from India and the United Arab Emirates – Importer Visit Report – Winston Scaffolding Pty Ltd (UTP Australia)

INVESTIGATION 320

ALLEGED DUMPING OF HOLLOW STRUCTURAL SECTIONS FROM INDIA AND THE UNITED ARAB EMIRATES

IMPORTER VERIFICATION VISIT REPORT

WINSTON SCAFFOLDING PTY LTD

& UTP AUSTRALIA PTY LTD

THIS REPORT AND THE VIEWS OR RECOMMENDATIONS CONTAINED THEREIN WILL BE REVIEWED BY THE CASE MANAGEMENT TEAM AND MAY NOT REFLECT THE FINAL POSITION OF THE ANTI-DUMPING COMMISSION

April 2016

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HSS exported from India and the United Arab Emirates – Importer Visit Report – Winston Scaffolding Pty Ltd & UTP Australia Pty Ltd

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CONTENTS

CONTENTS ................................................................................................................................................... 2

ABBREVIATIONS ......................................................................................................................................... 3

1 BACKGROUND AND PURPOSE ........................................................................................................ 4

1.1 BACKGROUND .................................................................................................................................... 4 1.2 PURPOSE OF VISIT .............................................................................................................................. 4 1.3 MEETING DETAILS ............................................................................................................................... 5 1.4 INVESTIGATION PROCESS AND TIMEFRAMES ......................................................................................... 5 1.5 VISIT REPORT ..................................................................................................................................... 6

2 THE GOODS ........................................................................................................................................ 7

2.1 DESCRIPTION ..................................................................................................................................... 7 2.2 TARIFF CLASSIFICATION ...................................................................................................................... 7

3 COMPANY DETAILS ........................................................................................................................... 9

3.1 COMMERCIAL OPERATIONS ................................................................................................................. 9 3.2 ACCOUNTING STRUCTURE AND DETAILS OF ACCOUNTING SYSTEMS ..................................................... 10 3.3 RELATIONSHIP WITH SUPPLIERS AND CUSTOMERS .............................................................................. 10 3.4 LIKE GOODS ..................................................................................................................................... 10

4 SALES ................................................................................................................................................ 12

4.1 GENERAL ......................................................................................................................................... 12 4.2 DISTRIBUTION AND SELLING .............................................................................................................. 12 4.3 SALES .............................................................................................................................................. 12

5 IMPORTS ........................................................................................................................................... 16

5.1 VOLUME OF TRADE ........................................................................................................................... 16 5.2 FORWARD ORDERS ........................................................................................................................... 16 5.3 ORDERING PROCESS AND PRICING ..................................................................................................... 16 5.4 VERIFICATION OF IMPORTS ................................................................................................................ 16 5.5 SELLING, GENERAL AND ADMINISTRATIVE (SG&A) COSTS ................................................................... 19

6 WHO IS THE IMPORTER AND EXPORTER ..................................................................................... 23

6.1 WHO IS THE IMPORTER? .................................................................................................................... 23 6.2 WHO IS THE EXPORTER? ................................................................................................................... 23

7 ARMS LENGTH ................................................................................................................................. 25

8 RECOMMENDATIONS ...................................................................................................................... 26

9 APPENDICES AND ATTACHMENTS ............................................................................................... 27

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ABBREVIATIONS

$ Australian dollars

ABF Australian Border Force

ACBPS Australian Customs and Border Protection Service

ADN Anti-Dumping Notice

AUD Australian dollars

CFR Cost and freight

CIF Cost, Insurance and freight

Commission Anti-Dumping Commission

Exporter Universal Tube and Plastic Industries Ltd and Universal Tube and Pipe Industries Ltd.

FIS Free in Store

FOB Free on Board

HSS Hollow structural sections

NIP Non-injurious Price

PAD Preliminary Affirmative Determination

Parliamentary Secretary Parliamentary Secretary to the Minister for Industry

SEF Statement of Essential Facts

The Act Customs Act 1901

the goods the goods the subject of the application (also referred to as the goods under consideration or GUC)

UAE United Arab Emirates

USD American Dollar

UTP Australia UTP Australia Pty Ltd & Winston Scaffolding Pty Ltd & UTP Australia Pty Ltd

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1 BACKGROUND AND PURPOSE

1.1 Background

On 12 November 2015, Austube Mills Pty. Ltd. (ATM) lodged an application requesting that the Assistant Minister for Science and the Parliamentary Secretary to the Minister for Industry, Innovation and Science (the Parliamentary Secretary)1 publish a dumping duty notice in respect of hollow structural sections (HSS) exported to Australia from India and the United Arab Emirates (UAE).

ATM alleges that the Australian industry has suffered material injury caused by HSS exported to Australia from India and UAE at dumped prices. ATM alleges that the industry has been injured through:

price depression;

price suppression;

loss of profits;

reduced profitability;

reduced return on investment;

reduced employment;

reduced capacity;

write-down of goodwill associated with the HSS business;

reduced capital expenditure;

reduced research and development expenditure;

reduced attractiveness to reinvest; and

reduced capacity utilisation.

After consideration of the application, an investigation was initiated on 22 December 2015. Anti-Dumping Notice (ADN) No. 2015/154 publicly notified the initiation of the investigation and is available at www.adcommission.gov.au.

1.2 Purpose of visit

The purpose of the visit was to:

confirm that Winston Scaffolding Pty Ltd and UTP Australia Pty Ltd is the importer of HSS attributed to it within the commercial database and obtain information to assist in establishing the identity of the exporter(s) of this HSS;

verify information on imports of HSS to assist in the determination of export prices;

1 On 20 September 2015, the Prime Minister appointed the Parliamentary Secretary to the Minister for Industry, Innovation and Science as the Assistant Minister for Science.

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establish whether the purchases of HSS were arms-length transactions;

establish post-exportation costs;

identify sales and customers and verify sales volume, selling prices and selling costs;

obtain general information about the Australian market for HSS; and

provide the company with an opportunity to discuss any issues it believed relevant to the investigation.

1.3 Meeting details

Company Winston Scaffolding Pty Ltd (A.B.N. 12 081 340 392) UTP Australia Pty Ltd (A.B.N. 38 169 976 050)

Date of visit 11 February 2016

The following were present at various stages of the meetings.

Winston Scaffolding Pty Ltd

UTP Australia Pty Ltd

- Managing Director – Finance - Sales – Chief Financial Offer (Universal

Tube and Plastic LLC (UAE)). John Bracic – Consultant

the Commission

1.4 Investigation process and timeframes

We advised the company of the investigation process and timeframes as follows:

The investigation period is 1 October 2014 to 30 September 2015.

The injury analysis period is from 1 July 2011 for the purpose of analysing the condition of the Australian industry.

A preliminary affirmative determination (PAD) may be made no earlier than day 60 of the investigation (20 February 2016) and provisional measures may be imposed at the time of the PAD or at any time after the PAD has been made.2

2 PAD 320 was published with respect to exports of HSS from India and UAE on 22 February 2016. Public Record Item 15.

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The Commission will not make a PAD until (and if) it becomes satisfied that there appears to be, or that it appears there will be, sufficient grounds for the publication of a dumping duty notice and/or a countervailing duty notice. This was distinguished from the ‘reasonable grounds’ threshold for initiation of the investigation.

The Statement of Essential Facts (SEF) for the investigation is due to be placed on the public record by 10 April 2016, or such later date as the Assistant Minister for Science and the Parliamentary Secretary to the Minister for Industry, Innovation and Science (Parliamentary Secretary) allows under s.269ZHI of the Customs Act 1901 (the Act). The SEF will set out the material findings of fact on which the Commission intends to base its recommendations to the Parliamentary Secretary, and will invite interested parties to respond, within 20 days, to the issues raised therein.

Following receipt and consideration of submissions made in response to the SEF, the Commission will provide its final report and recommendations to the Parliamentary Secretary. This final report is due no later than 25 May 2016, unless an extension to the SEF is approved by the Parliamentary Secretary.

1.5 Visit report

We explained to the company that we would prepare a report of our visit (this report) and provide it to the company to review its factual accuracy, and to identify those parts of the report it considers to be confidential.

We explained that, in consultation with the company, we would prepare a non-confidential version of the report, and place this on the investigation’s Electronic Public Record.

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3 COMPANY DETAILS

3.1 Commercial Operations

3.1.1 Australian Operations

Winston Scaffolding Pty Ltd is an Australian-based trading company incorporated in 1998, which specialises in importing HSS and scaffolding into Australia and New Zealand. The company is located in Bankstown NSW and has employees.

Winston Scaffolding is a wholly owned subsidiary of THA Investments Pty Ltd, a private Australian company located in NSW. Winston Scaffolding’s importer questionnaire states that it also trades as UTP Pipes Australia, Winston Steel and KHK Scaffolding Australia.

A second company, UTP Australia Pty Ltd, (Registered 6 June 2014) which is an importer of HSS from the UAE is also a wholly owned subsidiary of THA Investments Pty Ltd and operates out of the same location as Winston Scaffolding. Both companies are managed and operated by the same staff out of the same location.

UTP Australia Pty Ltd was registered in 2014 and started trading in July 2015. UTP Australia advised UTP Australia Pty Ltd would be the predominate entity involved in importing goods from the UAE.

As at September 2015, UTP Australia’s importer questionnaire response at Confidential Attachment Sales 2 indicated that the share of imports brought in by UTP Australia Pty Ltd was approximately [percentage of imports]. Import declarations in the ABF import database (Confidential Attachment IMP 2) for the same period did not mention UTP Australia Pty Ltd as the importer.

The bodies corporate comprising Winston Scaffolding and UTP Australia Pty Ltd will be collectively referred to as UTP Australia for the purpose of this investigation.

UTP Australia imports both the goods and other scaffolding products, which are not the goods. At its premise in Bankstown, the company operates a warehouse with stock of scaffolding products for local customers. UTP Australia ships directly to customers or via its warehouse.

3.1.2 Related Entities

UTP Australia imports the goods from the following three manufacturers located in the UAE:

Universal Tube and Plastic Industries Ltd; Universal Tube and Pipe Industries LLC; and, KHK Scaffolding & Formwork LLC.

The manufacturers and UTP Australia are all related through common shareholders who are part of the “Taurani group”, which started in the 1970’s as a steel trading entity called Dayal Steel in the UAE. For the purpose of this report, the above entities shall be collectively referred to as Universal Tube.

These exporters are a part of the investigation and further information is available on the Electronic Public Record (see www.adcommission.gov.au).

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3.2 Accounting structure and details of accounting systems

UTP Australia operates on a 1 July to 30 June financial year. UTP Australia provided copies of its financial statements and management accounts for the year ending 30 June 2015 (Confidential Attachments Finance 1 and 2) and management accounts for the investigation period (Confidential Attachments Finance 3).

3.3 Relationship with suppliers and customers

3.3.1 Suppliers

During the investigation period, UTP Australia imported goods purchased from Universal Tube and Plastic Industries Ltd and Universal Tube and Pipe Industries LLC and KHK Scaffolding LLC (collectively referred to as ‘Universal Tube’).

UTP Australia reinforced its view that whilst the Australian entities and the exporters had common shareholders, it indicated that the goods were transacted on an arms’ length basis. UTP Australia also noted it does not receive any rebates or discounts from Universal Tube.

3.3.2 Customers

UTP Australia provided a list of its customers and noted that it does not provide any rebates to customers. Some transactions referred to a discount however these were actually refunds relating to incorrect orders or quality issues. One transaction with a related entity was identified however this was an exception and no indicative of the normal course of trade.

3.3.3 Like goods

UTP Australia confirmed that the imported goods subject to the investigation have the same characteristics as the goods description.

However, UTP Australia commented that the goods exported from the UAE were hot dipped galvanised (HDG) HSS for outdoor applications and should not be considered as similar to the ‘like goods’ produced by the Australian industry. UTP Australia highlighted that ATM currently produce pre-galvanised HSS which it claims is not similar in terms of physical likeness, functionality (end-use) and production process. UTP Australia noted the following:

Pre-galvanised HSS is more expensive due to the higher cost of pre-galvanised feedstock;

pre-galvanised HSS is not used in outdoor settings and is generally of a thinner section size of around 20mm outside diameter than HDG pipe;

pre-galvanised HSS is generally RHS form whereas hot dipped galvanised is better suited to CHS pipe ;

hot dipped HSS is cheaper and generally used outdoors and in the agriculture industry; and,

ATM does not possess hot dip galvanising facilities. On the basis that ATM does not produce HDG products, UTP Australia was of the view that anti-dumping measures should not apply to imports of HDG HSS.

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UTP Australia also commented that:

it has neither the need nor the desire to indulge in dumping activities; UTP Australia is not a new entrant into the marketplace, has no desire, need or

ability to significantly increase market share; the mills that it purchases from have limited capacity; and UTP Australia only operates on a commercial basis where profitability objectives

are met.

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UTP Australia advised it maintains a sales and service function through a team of business managers who regularly liaise with customers to provide pricing and order status updates. UTP Australia advised their customers regularly claim that their prices are generally higher than other importers and price negotiation is a lengthy and intense process.

All sales by UTP Australia to customers were in Australian dollars (AUD) with a credit term of between [days] from delivery date. We considered the invoice date to be the date of sale.

4.3.2 Sales verification to source documents

As part of its importer questionnaire response, UTP Australia provided details in relation to twelve importations which were selected by the Commission. The importer questionnaire also required the importer to identify the details of the Australian customer who would be the recipient of the goods imported with each shipment. Copies of these documents are at Confidential Attachment Sales 1.

The Commission compared the details shown on the supporting documents to the sales data reported in UTP Australia’s importer questionnaire response (Confidential Attachment Sales 2). The sales data was checked against the invoices in relation to customer name, invoice number and date, goods description, quantity sold (in pieces), and invoice value and was found to be accurate.

Since the importer’s invoices recorded the quantity of product sold on a pieces basis, UTP Australia’s importer questionnaire response did not provide the quantity of sales in terms of metric tonnes sold as this information is not captured or recorded in its sales system.

In response to the Commission’s request, UTP Australia revised its importer questionnaire Part C to provide the mass of each sale. This relied on its determination of the theoretical weight of the product. Where a sales invoice could be attributed to a specific importation, the Commission was able to compare the quantity sold in metric tonnes (as calculated on the sales report) to the quantity shown on the exporter’s packing lists. The Commission was able to check seven of the twelve shipments which indicated that the importer’s estimation of the weight of each sale was reasonably accurate.

4.3.3 Verification of payment by the customer

To evidence payment to the importer by the customer, bank statements relating to customer payments for shipments one and seven were selected for verification.

Shipment one

The goods imported for shipment one related to sales for two customers, [customer A] and [customer B]. The sales transaction to

Antec was selected for further verification.

The sale to [customer A] on invoice totalled incl-GST. UTP Australia’s Part C sales data in its questionnaire response also reported the same amount. The UTP Australia payment advice to [customer A] identified the invoice provided in relation to shipment 1 and two other invoices ( ). The payment advice for the three invoices totalled . The corresponding extract from the importer’s bank statement showed a deposit of the same amount from

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[customer A] (Confidential Attachment Sales 3). The account details on the bank statement extract provided by the importer were identical to the account details provided on UTP Australia’s invoice.

Shipment seven

With regard to shipment seven, sales resulting from this shipment related to two sales to [customer B] (Invoice and ). The total amount for both invoices

was incl-GST. UTP Australia’s Part C sales data in its questionnaire response also reported the same amount. The payment advice to the customer identified both invoices and the correct amount however also included payments in relation to thirteen other invoices. The total amount paid by the customer was . The corresponding bank statement extract provided by the importer showed a deposit of

from [customer B] (Confidential Attachment Sales 3). The payment made by Steelforce was inclusive of a group of payments relating to two payment references (Confidential Attachment Sales 4). Documentation for both payment references have been provided and reconcile to the amount deposited by

[customer B]. The account details on the bank statement extract provided by the importer were identical to the account details provided on UTP Australia’s invoice.

4.3.4 Sales verification to financial statements

UTP Australia provided the Winston Scaffolding Pty Ltd financial statements which indicated sales revenue for all products was approximately $ [Australian dollars] in the 2014/15 financial year (Confidential Attachment Finance 1). It also provided Winston Scaffolding Pty Ltd management accounts) at Confidential Attachment Finance 2 which were found to reconcile with the financial statements.

The Winston Scaffolding management accounts for the investigation period indicated total sales of $ [Australian dollars] (Confidential Attachment Finance 3). This reconciled with the total sales reported in the income and expense analysis worksheets provided at Confidential Attachment Finance 4. However, it is the Commission’s understanding that this amount includes sales of $ [Australian dollars] relating to UTP Australia Pty Ltd and also includes sales which are not the subject of this investigation.

The income and expense analysis worksheets at Confidential Attachment Finance 4 included sales for the four business units which operate within the Winston Scaffolding Pty Ltd business. UTP Australia advised that the income reported for the UTP Pipes Australia and Winston Steel business units were relevant in terms of the data provided in Part C of its importer questionnaire.

Total sales reported under the UTP Pipes Australia and Winston Steel business units in the income and expense analysis worksheets was $ [Australian dollars] million compared to $ [Australian dollars] million reported in its importer questionnaire. The observed variance of less than once percent is not considered material. After accounting for sales that were not considered the goods subject to the investigation, total sales of HSS reported in Part C of its importer questionnaire was $ [Australian dollars].

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4.3.5 Rebates and discounts

During the verification visit, we established that the invoiced price was the price paid on the transactions which were sampled. As indicated previously, UTP Australia did not offer rebates or discounts for the sale of HSS to its customer during the investigation period.

UTP Australia provided data to allow the calculation of credit adjustments previously referred to as “discounts” in section 3.3.2. The data revealed that “discounts” amounted to approximately AUD$ [Australian dollars] per annum. The commission calculated that these adjustments represented less than 1 percent of total sales and therefore considered not material

4.3.6 Profitability of sales

We compared the selling prices in the Australian market with the corresponding full cost to import and sell reported for each shipment in Part B of UTP Australia’s importer questionnaire response.

We identified that all shipments in Part B of UTP Australia’s importer questionnaire response were profitable with the exception of shipments 11 and 12 which indicated small losses. UTP Australia advised these losses were a result of unhedged foreign exchange movement. The Commission found this explanation to be acceptable.

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5 IMPORTS

5.1 Volume of trade

The Australian Border Force (ABF) import database indicates that UTP Australia imported [quantity] tonnes of the goods from the UAE during the investigation period, all from Universal Tube (Confidential Attachment IMP 1).

A comparison to the data provided by Universal Tube in its exporter questionnaire shows that total exports to UTP Australia during the investigation period was 16,594 tonnes. Universal Tube also reported that exports sales are made on a theoretical weight basis.

The Commission compared the export volume reported in Part B of UTP Australia’s importer questionnaire (Confidential Appendix 1) to the relevant Universal Tube invoices and its exporter questionnaire. The invoices sampled indicated that the export quantity had been accurately recorded in the importer questionnaire response. In some cases, one shipment related to several exporter invoices. To check the accuracy of the export volumes reported in the ABF import database, a further sample of shipments were selected where the shipment was in relation to one invoice only. The export volume declared in the ABF import database for these shipments were found to be accurate when compared to the exporter’s invoices and exporter questionnaire response.

As the basis of the sample of invoices which were selected for verification, the volumes of trade reported in the ABF database for exports to UTP Australia appear to be accurate.

5.2 Forward orders

UTP Australia provided the quantity and value of forward orders in its importer questionnaire response. We assessed these and noted no unusual trends in relation to forward orders when compared to past trading patterns.

5.3 Ordering process and pricing

Refer to Section 4.3.1 for the ordering process and pricing.

5.4 Verification of imports

Prior to the visit, UTP Australia provided the Commission with information on twelve selected shipments in the cost to import and sell spreadsheet in Part B of its importer questionnaire response (Confidential Appendix 1).

UTP Australia provided supporting documents for each import selected for verification (Confidential Attachment IMP 2). The package of documents included copies of the purchase order, commercial invoice, bill of lading, packing list, remittance advice, and various importation cost documents.

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The Commission noted with UTP Australia that all of its imports from the UAE were declared under the 7306.90.00 tariff code rather than the other available tariff codes which more accurately account for the imports. UTP Australia indicated it was not aware of this practice and would endeavour to work with its customs broker for future imports.

5.4.1 Supplier invoice details

We used the supplier’s commercial invoices at Confidential Attachment IMP 2 to verify the identity the exporter and the importer. HSS was found to have been exported by two entities, Universal Tube & Plastic Industries Ltd and Universal Tube & Pipe Industries L.L.C. Details regarding the identity of the exporter were compared to the ABF import database entries.

Two shipments (three and seven) in the sample selected by the Commission stated the exporter as Universal Tube & Pipe Industries L.L.C. Comparison to source documents showed this to be correct. However, the corresponding ABF import declarations listed Universal Tube & Plastic Industries Ltd as the exporter/supplier. The Commission compared UTP Australia’s declarations in the ABF import database to the data provided by Universal Tube in its exporter questionnaire response. A brief analysis indicated that the volume of HSS where Universal Tube & Pipe Industries L.L.C was declared as the exporter was significantly understated by UTP Australia in the ABF import database.

A comparison between the supporting documents and the ABF import database for the remaining ten shipments found that the exporter had been correctly declared.

Further examination of the two commercial invoices sampled in relation to exports by Universal Tube & Pipe Industries L.L.C indicated that the importer’s purchase order was to in relation to a different entity, Universal Tube & Plastic Industries Ltd.

Despite the above inaccuracies, the supporting documents provided for the twelve shipments sampled confirmed that the goods description, net weight, value of the goods, invoice amount, currency, delivery terms and payment terms were accurate when compared to the ABF import database and Part B of the importer questionnaire response.

5.4.2 Payment by the importer to the exporter

To verify the importer’s payment to the exporter the Commission selected one shipment at random (shipment 1) (Confidential Appendix 1) during the visit. Shipment 1 from the sample related to two containers which were itemised on separate invoices. The specific example selected was in relation to invoice number dated August 2014. The total value of the invoice was .

To evidence payment of this invoice UTP Australia provided an extract from its January 2015 bank statement and the remittance advice for Winston Scaffolding Pty Ltd (Confidential Attachment IMP 3). The transaction details on the bank statement matched the account name and number on the exporter’s invoice. The invoice number and amount could also be identified on the remittance advice. The total value of payments on the remittance advice matched the amount which was debited from the importer’s bank account. A review of the remittance advice provided for the remaining eleven shipments also found that the invoiced amounts could be identified in the

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and management accounts (Confidential Attachment Finance 2) for FY2014/15. The management accounts showed a total SG&A expenditure of $ [Australian dollars] compared to $ [Australian dollars] reported in the financial statements.

Having being satisfied that the management accounts reflected its income statement for the most recent financial year, the Commission compared the profit and loss statements for the investigation period (Confidential Attachment Finance 3) to the business unit income and expense analysis (Confidential Attachment Finance 4).

The Commission observed that the figures contained in the relevant accounts in the profit and loss statement reconciled to the amounts for the corresponding cost items in the business unit income and expense analysis. On this basis the Commission was satisfied that the management accounts are complete and accurate.

Prior to the verification visit, UTP Australia provided its estimate of the SG&A expenses for each shipment sampled at Part B of its importer questionnaire response (Confidential Appendix 1). The figures reported by UTP Australia fluctuated from between [percentage variance] during the investigation period.

The SG&A costs included expenses relating to employees and office and warehouse facilities. It was noted that certain costs such as rent and other facility expenses were not apportioned at the same rate for all business units. This was justified on the basis that some containers are shipped directly to customers rather then transit through the Sydney warehouse such as is the case for Winston Steel. The Winston Steel business unit appeared to have the highest allocation of warehouse related expenses.

In order to further understand the approach to UTP Australia’s calculations, during the visit the SG&A cost of per cent reported for Shipment 5 was selected for verification. The SG&A costs reported in relation to the shipment relied on the figures contained in the management accounts for February 2015 (Confidential Attachment Finance 5). The management accounts summarised income and expenses for the month and for each business unit in the UTP Australia group. As shipment 5 relates to an importation by UTP Pipes Australia, the SG&A costs were apportioned on the basis of the UTP Pipes Australia business unit’s reported revenue. The figure of percent appears to be reasonable.

5.5.2 Container Unpacking Fee

The Commission observed in the business unit income and expense analysis at Confidential Attachment Finance 4 that the UTP Pipes Australia business unit was charged amounts by the Winston Steel business unit for container unpacking.

The Commission selected container unpacking fee the month February 2015 where UTP Pipes Australia was charged $ [Australian dollars] by Winston Steel (Confidential Attachment Finance 5).

A review of the accounts provided in the profit and loss statement at Confidential Attachment Finance 3 did not indicate separate accounts for unpacking costs incurred and income received for unpacking services. Although unpacking fees were listed in the income and expense analysis, no information was provided in the profit and loss statement to substantiate how the unpacking fees could be verified. Calculating unpacking fees is problematic since the transfer of funds is a hypothetical process which

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6 WHO IS THE IMPORTER AND EXPORTER

6.1 Who is the importer?

We reviewed the documents provided in respect of the selected shipments. UTP Pipes Australia and UTP Australia Pty Ltd were the customers shown on the exporter’s invoices which were selected for sampling. However, in contrast to the ABF import database declarations, Winston Scaffolding Pty Ltd was not. Cross references to the exporter’s questionnaire indicated that a very small volume was actually exported to the Winston Scaffolding Pty Ltd. Notwithstanding the details shown on the import documents, UTP Pipes Australia is a trading name for Winston Scaffolding Pty Ltd, and the relevant import documents indicated the ABN for Winston Scaffolding Pty Ltd. Irrespective of the name of the importer shown in the ABF database and the exporter’s invoice, the Commission is satisfied that sufficient information has been provided that supports that Winston Scaffolding Pty Ltd, either under its own name or other trading names, and UTP Australia Pty Ltd;

is named as the buyer on the invoices; arranges and pays for goods to be transported from the port of destination to the

customer; is named as the consignee on the bill of lading; and pays for the delivery of goods to the customer;

We consider UTP Australia to be the beneficial owner of the goods at the time of importation, and therefore the importer.

6.2 Who is the exporter?

The Commission will generally identify the exporter as:

a principal in the transaction, located in the country of export from where the goods were shipped, who gave up responsibility by knowingly placing the goods in the hands of a carrier, courier, forwarding company, or their own vehicle for delivery to Australia; or

a principal in the transaction, located in the country of export, who owns, or previously owned, the goods but need not be the owner at the time the goods were shipped.

It is common for traders and other intermediaries to play a role in the exportation of the goods. These parties will typically provide services such as arranging transportation, conducting price negotiations, arrange contacts with the producer, etc.

In such cases, the trader typically acts as an intermediary who, although one of the principals, is essentially a facilitator in the sale and shipment of the goods on behalf of the manufacturer. Typically the manufacturer as a principal who knowingly sent the goods for export to any destination will be the exporter.

Therefore, depending on the facts, the Commission considers that only in rare circumstances would an intermediary be found to be the exporter. Typically this will

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occur where the manufacturer has no knowledge that the goods are destined for export to any country and the essential role of the intermediary is that of a distributor rather than a trader.

After reviewing the shipment documents we are satisfied that Universal Tube:

is named as the supplier on the invoice; is named as the consignor on the bill of lading; and receives payment from UTP Australia.

Subject to further inquiries, we are satisfied that Universal Tube can be considered exporter of the goods imported by UTP Australia. To our knowledge, Universal Tube is a principal in the country of export, which manufactures the goods and arranged for the goods for shipment directly to UTP Australia.

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7 ARMS LENGTH

In determining export prices under section 269TAB (1) (a) and normal values under section 269TAC (1), the Act requires that the relevant sales are arm’s length transactions.

Section 269TAA outlines the circumstances in which the price paid or payable shall not be treated as arm’s length. These are where:

there is any consideration payable for in respect of the goods other than price;

the price is influenced by a commercial or other relationship between the buyer, or an associate of the buyer, and the seller, or an associate of the seller; and

in the opinion of the Parliamentary Secretary, the buyer, or an associate of the buyer, will, directly or indirectly, be reimbursed, be compensated or otherwise receive a benefit for, or in respect of, the whole or any part of the price.

UTP Australia stated that it does not receive any reimbursement, rebates or other support from its supplier in respect of the goods. UTP Australia advised that the invoiced price was the price paid.

We reviewed the documentation for the selected shipments and did not find any evidence, in respect of the purchase of HSS, that:

there is any consideration payable for in respect of the goods other than price;

the price was influenced by a commercial of other relationship between UTP Australia and Universal Tube; and

UTP Australia, or an associate of UTP Australia, was directly or indirectly reimbursed, compensated or otherwise received a benefit for or in respect of the whole or any part of the price.

We are satisfied that import transactions between UTP Australia and its suppliers are at arm’s length in terms of section 269TAA.

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8 RECOMMENDATIONS

From our investigations, we are of the opinion that, for the goods imported by UTP Australia from Universal Tube:

the goods have been exported to Australia otherwise than by the importer;

the goods have been purchased by the importer from the exporter; and

the purchases of the goods by the importer were arm’s length transactions.

Subject to further inquiries with these exporters, we recommend that the export price for HSS imported by UTP Australia from Universal Tube can be established under section 269TAB(1)(a) of the Act, having regard to all the circumstances of the exportation.

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9 APPENDICES AND ATTACHMENTS

Confidential Appendix 1 Costs to import and sell calculations

Confidential Attachment IMP1 ABF import data listing

Confidential Attachment IMP2 Source documents for import shipments provided by UTP Australia

Confidential Attachment IMP3 Evidence of payment by the importer to the exporter

Confidential Attachment Finance 1 Winston Scaffolding Pty Ltd Financial Statements for year ending 30 June 2015

Confidential Attachment Finance 2 Winston Scaffolding Pty Ltd - Profit and Loss statements (management accounts) for year ending 30 June 2015.

Confidential Attachment Finance 3 Winston Scaffolding Pty Ltd - Profit and Loss statements (management accounts) for October 2014 to September 2015.

Confidential Attachment Finance 4 Winston Scaffolding Pty Ltd - Business Unit Income and Expense Analysis for period October 2014 to September 2015.

Confidential Attachment Finance 5 Winston Scaffolding Pty Ltd - Business Unit Income and Expense Analysis for February 2015

Confidential Attachment Finance 6 February 2016 Rental Invoice

Confidential Attachment Sales 1 Commercial sales invoices

Confidential Attachment Sales 2 Revised Part C of importer questionnaire

Confidential Attachment Sales 3 Evidence of payment for Australian domestic sales.

Confidential Attachment Sales 4 Supplementary payment data.

Documents

INVESTIGATION 320 ALLEGED DUMPING OF HOLLOW … · 2015. Anti-Dumping Notice (ADN) No. 2015/154 publicly notified the initiation of the investigation and is available at . 1.2 Purpose