Anti Dumping Duty and India

7/30/2019 Anti Dumping Duty and India

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INTRODUCTION

ANTI- DUMPING DUTIES

Essentially deal with the price behavior of exporters

Dumping exists when normal value is more that the export price

Injury and casual lined are required to be proved.

The General Agreement on Tariffs and Trade lays down the principles tobe followed by the members of the countries for imposition of anti-dumping duties, countervailing duties and safeguard measures. Pursuantto the GATT, 1994 detailed guidelines have been prescribed under thespecific agreements, which have also been incorporated in the national

legislation of the member countries of the WTO. Indian laws wereamended with effect from 1.1.95 to bring them in line with the provisionsof the GATT agreements.

Dumping is said to have taken place when an exporter sells aproduct to India at a price less than the price prevailing in its domesticmarket. However, the phenomenon of dumping is parse not condemnableas it is recognized that producers sell their goods at different prices todifferent market. It is also recognized that price discrimination in the

form of dumping is a common international commercial practice. It isalso not uncommon that the export prices are lower than the domestic

prices. Therefore, from the point of view on anti dumping practices, thereis nothing inherently illegal or immoral about the practices of dumpingcauses or threatens to cause material injury to the domestic industry ofIndia, the Designated Authority initiates necessary action forinvestigations and subsequent imposition of anti-dumping.

LEGAL FRAMEWORK

* Based on article VI of GATT 1994* Customs Tariff Act, 1975-Sec, 9B(as amended in 1995)* Anti dumping duty rules [ Customs Tariff (Identification, Assessment and* Collection of Anti-Dumping Duty on dumped Articles and fordetermination of Injury) Rules, 1995]


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* Investigation and Recommendations by designated authority, Ministry ofCommerce.

Section 9A, 9B and 9C of the custom Tariff (Identification,Assessment and collection of anti-dumping duties on dumped articles andfor Determination of injury.) Rules, 1995 framed there under form legal

basis for anti-dumping investigations and for the levy of anti-dumpingduties. These laws are based on the Agreement on dumping, which is in

pursuance of article VI of GATT 1994.

DUMPING

Dumping occurs when the export price of goods imported into India is lessthan the value of like articles sold in the domestic market of the exporter.Importers at cheap or low price do not per se indicate dumping.

The Price at which like articles are sold in the domestic market ofthe exporter is referred to as the normal value of those articles.

WHAT IS DUMPING?Difference between normal value and export price is known as Margin OfDumping

Normal Value:

The normal value is the comparable price at which the goods undercomplaint are sold, in the ordinary course of trade, in the domestic market ofthe exporting country or territory.

NORMAL VALUE

* Comparable price of the like article when meant for home consumption* In the course of ordinary trade* Indian law refer to domestic price in the exporting country or


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If the normal value cannot be determined by means of domestic sales, TheAct provides for the following two Alternatives methods.

Comparable representative export price to an appropriate third country.Cost of production in the country of origin with reasonable addition foradministrative, selling and general costs and for profits

Export Price:

The export price of goods imported into India is the price paid orpayable for the goods by the first independent buyer.

Constructed Export Price

If there is no export price or the export is not reliable because of associationor a compensatory arrangement between the exporter or a third party, theexport price may be constructed on the basis of the price at which theimported articles are first resold to an independent buyer. If the articles arenot sold as above or not resold in the same condition as imported, theirexport price may be determined on a reasonable basis.

Margin Of Dumping

Margin of dumping refers to the difference between the normal value of thelike article and the export priced of the product under consideration. Marginof dumping is normally established on the basis of :-

* A comparison of weighted average normal value with weighted averageof prices of comparable export transactions: or

* Comparison of normal values and exports prices on a transaction-to-totransaction basis.

A normal value established on a weighted average basis may be compared toprices of individual export transaction if the designated authority finds apattern of export prices that differ significantly among different purchasers,regions, time period etc. It is significant to note that the alternative methodcomparing the normal values and exports is a major change introduced after


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the Uruguay round. The margin of dumping is generally expressed as apercentage of the export price.

Factors affecting comparison of normal value and export

price:

The export price and the normal value of the goods must be compared at the

same level of trade, normally at the ex- factory level for sales made near aspossible in time. Due allowances is made for differences that affect pricecomparability of a domestic sale and an export sale. These factors, interalias, include:

* Physical Characteristics

* Level of trade

* Quantities

* Taxation

* Conditions and terms of sale

It must be noted that the above factors are only indicative and theauthority considers any factor, which can be demonstrated to affect the pricecomparability.

Like ArticlesAnti dumping can be taken when there is an IndianIndustry, which produces Like Articles whenCompared to the allegedly dumped imported goods.

The article produced in India must either be

COMPARISION NORMAL VALUE V/S

EXPORT PRICEAt the ex- factory levelDue allowances for factors affecting comparisonWt. Av NV with WT Av, EP

NV-EP on a transaction-to-transaction basis

LIKE ARTICLEIdentical a-like in all respects

If not alike in all respects,having closely resemblingcharacteristics


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Identical to the dumped goods in all respect or in the absence of such anarticle, another article that has characteristics closely resembling thosegoods. The Indian industry must be able to show that dumped imports arecausing or are threatening to cause material injury to the Indian domesticindustry. Materials retardation to the establishment of an industry is alsoregarded as injury.

The material injury thereof cannot be based on mere allegations,statement or conjecture. Sufficient evidence must be provided to support thecontention of material injury. Injury analysis can broadly be divided in twomajor areas;

The Volume Effect

The Authority examines the volume of thedumped imports, including the extent towhich there has been or is likely to be asignificant increase in the volume ofdumped imports, either in absolute terms orin relation to production or consumption inIndia and its affect on the domestic industry.

The Price of the dumped imports on prices

in the Indian market for like articles,including the existence of price undercutting,or the extent to which the dumped importsare causing price depression or preventing

price depression or preventing priceincreases the goods which other wise wouldhave occurred.

The consequent economic andfinancial impact of the dumped imports on

the concerned India industry can bedemonstrated, inter alias by:

Decline in outputLoss of salesLoss of market shareReduced profits

INJURY- EVALUATION OF

ECONOMIC INDICATORS

ACTUAL/POTENTIAL DECLINE INSales

* Output

* Profits

* Market Shari

* Productivity

* Return On Investment

* Capacity Utilization etc.

* Employment

* Investors/Stocks

* Ability to raise capital or investmentetc.


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Decline in productivityDecline in capacity utilization reduced return on investmentsPrice effectsAdverse effects on cash flow, inventories, employment, wages, growth,investments, ability to raise capital etc.

Injury analysis is a detailed and intricate examination of all factors. Itis not necessary that all the factors considered relevant should individuallyshow to the domestic industry.

CASUAL LINK

A casual link must exist between the material injury being suffered by

Indian industry and the dumped imports. In addition, other injury causeshave to be investigated so that they are not attributed to dumping. Some ofthese are volume and prices of imports not sold at dumped prices,contraction in demand or changes in the pattern of consumption, export

performance, productive of domestic industry etc.

A dumping investigation can normally be initiated only upon receipt ofreturn application by or on behalf of the domestic industry.

In order to constitute a valid application, the following two conditionshave to be satisfied:

The domestic producers expressly supporting the application must accountfor not less than 25% of the total production of the like articles by domesticindustry in India; and

STANDING TO FILE AN APPLICATION

* Express support of those who account for:

More than 25% of total domestic production, and

More than50% production by those supporting and those opposing theapplication


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Those domestic producers expressly supporting the application must accountfor more than 50% of the total production of the like articles by thoseexpressly supporting and by those opposing the application.

DOMESTIC INDUSTRY:

Domestic industry means the Indian producers of like articles as a

whole or those producers whose collective output constitutes a majorportion of total Indian production.

Producers who are related to exporters or importers are themselvesimporters of allegedly dumped goods shall be deemed not to form part ofdomestic industry.

Relief can be provided to the domestic industry in the form of anti-dumping duty or price under takings.

1. ANTI- DUMPING DUTIES:

Duties are imposed on a source a specific basis and can be expressedether on Ad valorem or specific basis. Non- cooperative exporters arerequired to pay the residuary duty, which is generally the highest of theco-operative exporters.

DOMESTIC INDUSTRY

Producers of like articles as a whole or those producers whose

output is a major proportion of total Indian production The following are excluded:

ImportersThose related to importers or exporters

Relief To Domestic Industry

Lesser duty ruleOnly that amount to duty which is sufficient to remove the

injury to the domestic industry


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Less duty Rule:

Under the GATT provision, the national authorities cannot impose dutieshigher than the margin of dumping. It is, however, suggested that itwould be desirable if the appropriate government authorities impose

lesser duties which is adequate to remove the injury to the domesticindustry. Under the Indian laws, the government is obliged to restrict theAnti-dumping duty to the lower of the two i.e. dumping margin and theinjury margin.

Injury margin:-

Besides the calculation of the margin of dumping, the designatedauthority also calculates the injury margin which is the difference

between the fair selling price due to the domestic industry and the landedcost of the product under consideration. Landed cost for its purpose istaken as the assessable value under the customs act and the basic customsduties.

INJURY MARGIN

Difference between the fair selling price and the landed value

Landed value is

Assessable value under customs act plan Basic customs duty

DE MINIMIS MARGINS

Margin of dumping

Exporter specific

Less than 2% of export price

Volume of dumped imports

Country specific

Less than 3% from individual country and cumulatively not

more than 7%


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De Minims Margin:

Any exporter whose margin of dumping is less than 2% the exportprice shall be excluded from the purview of anti-dumping duties even ifthe existence of dumping, injury as well as the casual link are established,investigations against any country are required to be terminated if thevolume of the dumped imports from that particular source are found to be

below 3% of the total imports, provided the cumulative imports from allthose countries who individually account for less than 3% are not morethan 7%.

2. Price Undertaking:

The designated authority may suspend or terminate investigation if the

exporter concerned furnished the undertaking to revise his price toimprove the dumping or the injurious effect of dumping as the casemay be. No undertaking can however be accepted before preliminarydetermination is made no anti-dumping duties are recommended onsuch exporters from whom price undertaking has been accepted. No

price undertaking may, however, be accepted in case it is found thatacceptance of such undertaking is impracticable or is unacceptable forany reasonApplication can be made by or on behalf of the concerned domesticindustry to the designated authority in the ministry of commerce foran investigation of when there is sufficient evidence that dumpedimports are causing or tare threatening to cause material injury to theIndian Industry producing like articles or are materially retarding theestablishment of an industry.Copies of the prescribed application proforma is available from theministry of commerce.

Information RequiredApplications should be submitted to the designated authority in the

ministry of commerce in the prescribed form. Guidelines on how tocomplete a questionnaire area part of the prescribed application

proformaThe proforma also advises the applicant of the type of evidencerequired in appropriate areas.

Period Of Investigation


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Neither the GATT agreement on anti dumping duty nor the Indianlaws provide for any specific guidelines regarding the period ofinvestigation. However, there are indications that the period shouldnot be, in any case, less than six months. It is, however, important thatthe period taken into consideration for detailed investigation should berepresentative and as recent as possible.

Confidential Information

Any information provided to the designated authority on aconfidential basis by any party shall not be disclosed to any other

party without the specific authorization of the party providing theinformation, if the designated authority is satisfied about itsconfidentiality. Interested parties supplying information on a

confidential basis are required to furnish non-confidential summariesthereof or a statement of reasons as to why such summarization is not

possible.If the designated authority is not satisfied that the confidentiality iswarranted or the provider or information was not willing to disclose itin a generalized form, then such information may be disregarded.An application received by the designated authority is dealt with asfollows:

Preliminary Screening:

The application is scrutinized to ensure that it is adequatelydocumented and provides sufficient evidence for initiation. If theevidence is not adequate, then a deficiency letter is issued normallywithin 20 days of the receipt of the application.

Initiation:

When the designated authority is satisfied that there is sufficient

evidence in the application with regard to dumping, material injuryand caused link, a public notice is issued initiation an investigation todetermine the existence and effect of the alleged dumping.

The designated authority notifies the diplomacy representativeof the government of the exporting country before proceeding toinitiate the investigation. The initiation notice will be issued normally


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within 45 days of the date of receipt of a properly documentedapplication.

Access to information:The authority provides access to the non-confidential evidence

presented to it by various interested parties in the form of a public file,which is available for inspection after receipt of the responses.

Preliminary Findings:

The designated authority will proceed expeditiously with the conductof the investigation and shall in appropriate cases, make a preliminaryfindings containing the detailed information on the main reasons

behind the determination. The preliminary findings will normally be

made within 150 days of the date of initiation.

Provisional Duty:A Provisional duty not exceeding the margin of dumping may be

imposed by the central government on the basis of the preliminary findingsrecorded by the designated authority.

The provisional duty can be imposed only after the expiry of 60 daysfrom the date of initiation of investigation.

The provisional duty will remain in force only for a period notexceeding 6 months, extendable to 9 months under certain circumstances.

Oral Evidence:Interested parties who participate in the investigation can request the

designated authority for an opportunity to present the relevant informationorally. However, such oral information shall be taken into consideration onlywhen it is subsequently reproduced in writing. The authority may grant oralhearing any time during the course of the investigation.

Final DeterminationThe final determination is normally made within 150 days of the date of

preliminary determination.

Disclosure of information:The designated authority will inform all interested parties of the essentialfacts which form the basis for its decisions before the final finding is made.


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Time limit for investigation process:The normal time allowed by the statute for conclusion of investigation and

submission of final findings is per year from the date of initiation of theinvestigation. The above period may be extended by the central government

by 6 months.

Termination:The designated authority may suspend or terminate the investigation in thefollowing cases:

If there is a request in writing from the domestic industry at whoseinstance the investigation was initiated.

When there is no sufficient evidence of dumping or injury.If the margin of dumping is less than 2% of the export price

The volume of dumped imports from a country is less than 3% of thetotal imports of the like article into India or the volume of dumped importscollectively from all such countries is less than 7% of the total imports

Injury is negligible.

Retrospective measures:The act provides for levy of anti-dumping duty retrospectively, where-

1. There is a history of dumping which caused the injury of that theimporters was, or , should have been aware that the exporter practicesdumping and that such dumping would cause injury, and

2. The injury is caused by massive dumping, in relatively short time, soas to seriously undermine the remedial effect of anti-dumping duty.

Such retrospective application will not go beyond 90 days or the date ofimposition of provisional duty. Further, no retrospective application priorto the date of initiation of investigation is possible.

Review:

An anti dumping duty imposed under that act shall have the effect for 5years from the date of imposition, unless revoked earlier.The designated authority shall also revise the need for the continuedimposition of the anti dumping duty, from time to time . Such review can

be done or no the basis of request received from an interested party inview of the changed circumstances. A reviews shall also follow the same


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procedure prescribed for an investigation to the extent they areapplicable.The designated authority is also required to carry out a review fordetermining margins of dumping for any new exporter or producer forma country that is subject to anti-dumping for any new and are not relatedto any of the exporter of producers who are subject to anti dumping dutyon the product.

Appeal:

An appeal against the order of the designated authority may be filled withthe customs, excise and gold (control) appellate tribunal within 90b daysof the date of the order.

Refund Of Duty:If the anti dumping duty imposed on the basis of final findings is higherthan the provisional duty already imposed and collected, the differenceshall not be collected.If the final anti dumping duty is less than the provisional duty alreadyimposed and collected, the difference shall be refunded.If the provisional duty is withdrawn based on a negative final finding,then the provisional duty already collected shall be refunded.

Products imported by units in EPZ/100% EQUs, advanced licenseholders and by other exporters:Anti dumping duty is not payable on products imported by units in EPZsand 100% EOQs, as well as imports on products Imported by advancedlicense holders in terms of customs notification No.41.97-Cus dated 30-4-1997.The final anti-dumping duty paid on imported goods used in the

manufacture of export goods are liable to be refunded as duty drawbackin accordance with the drawback rules.

Applicability of Anti-dumping duties other measures:GATT agreement as well as the India provide that the injured domesticindustry is permitted to file for relief under the anti-dumping duty as well


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as countervailing duties. However, no articles shall be subjected to bothcountervailing and anti dumping duties to compensate for the samesituation of dumping of export subsidization.

GATT- ANTI DUMPING: AGREEMENT

Agreement on implementation of Article VI of the General Agreement ofTariffs and Trade 1994 (The Anti-dumping Agreement)

The Agreement on Implementation of Article VI of the GeneralAgreement on Tariffs and Trade 1994 (the AD Agreement) governs theapplication of anti dumping measures by Members of the WTO. Anti-dumping measures are unilateral remedies which may be applied by a

Member after an investigation and determination by that Member, inaccordance with provisions of the \ad \agreement, that an imported productis dumped and that the dumped imports are causing material injury to adomestic industry producing the like product.The AD Agreement sets forth certain substantive requirements that must befulfilled in order to impose an anti-dumping measure, as well as detailed

procedural requirements regarding the conduct of anti-dumping measures. Afailure to respect either substantive or procedural requirements can be takento dispute settlement and may be the basis for invalidation of the measure.Unlike the Agreement on Subsides and Countervailing Measures, the ADAgreement does not establish any disciplines on duping itself, primarily

because dumping is a pricing practice engaged in by business enterprises,and thus not within the direct reach of multilateral disciplines.

Article 1 of the AD Agreement establishes the basic principle that aMember may not impose an anti-dumping measure unless it determines,

pursuant to an investigation conducted in conformity with the provisions ofthe AD Agreement, that there are dumped imports, material injury, and acasual link between the dumped imports and the injury.

Determination of dumping

Article 2 contains substantive rules for the determination of dumping.Dumping is calculated on the basis of a fair comparison between normalvalue( the price of the imported product in the ordinary course of trade inthe country of import). Article 2 contains detailed provisions governing the


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calculation of normal value and elements of the fair comparison that must bemade.

Determination of injury

Article 3 of the AD Agreement contains rules regarding the determination ofmaterial injury caused but dumped imports. Material injury is defined asmaterial injury itself, threat of material injury, or material retardation of theestablishment of a domestic industry. The basic requirement fordeterminations of injury, is that there be an objective examination, based on

positive evidence of the volume and price effects of dumped imports and theconsequent impact of dumped imports on the domestic industry. Article 3contains specific rules regarding factors to be considered in making

determinations of material injury, while specifying that no one or several ofthe factors which must be considered is determinative. Article 3.5 requires,in establishing the casual link between dumped imports and material injury,known factors other than dumped imports which may be causing injury must

be examined, and that injury caused by these factors must not be attributedto dumped imports.

A significant new provision, Article 3.3, establishes the conditions inwhich a cumulative evaluation of the effects of dumped imports from morethan one country may be undertaken. Under the rules, authorities mustdetermine that the margin of dumping from each country is not de minims,that the volume of imports from each country is not negligible and that acumulative assessment is appropriate in light of the conditions ofcompetition among the imports and between the imports and the domesticlike product.

Definition of industry

Article 4 of the AD Agreement sets forth a definition of the domesticindustry to be considered for purposes of assessing injury and causation. Thedomestic industry is defined as producers of a like product, which term isdefined in Article 2.6 as a product that is identical to, or in the absence ofsuch a product, one that has characteristics closely resembling those of , theimported dumped product under consideration. Article 4 contains special


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rules for defining a regional domestic industry in exceptionalcircumstances where production and consumption in the importing countryare geographically isolated, and for the evaluation of injury and assessmentof duties in such cases. Article 4 also establishes that domestic producersmay be excluded from consideration as part of the domestic industry if theyare related( defined as as a situation of legal or effective control) toexporters or importers of the dumped product.

Overview

A principal objective of the procedural requirements of the AD Agreement isto ensure transparency of proceedings, a full opportunity for parties todefend their interests, and adequate explanations by investigating authorities

of their determinations. The extensive and detailed procedural requirementsrelating to investigations focus on the sufficiency of petitions (throughminimum information and standing requirements) to ensure that merit lessinvestigations are not initiated, on the establishment of time periods for thecompletion of investigations, and on the provision of access to informationto all interested parties, along with reasonable requirements relate to theoffering, acceptance, and on the provision of access to information to allinterested parties, along with reasonable opportunities to present their viewsand arguments. Additional procedural requirements relate to the offering,acceptance, and administration of price undertakings by exporters in lieu ofthe imposition of anti-dumping measures. The AD Agreement requiresinvestigating authorities to give public notice of and explain theirdeterminations at various stages of the investigative process in substantialdetail. It also establishes rules of the timing of the imposition of anti-dumping duties, the duration of such duties, and obliges. Members to

periodically review the continuing need for anti-dumping duties and priceundertakings. There are detailed provisions guiding the imposition andcollection of duties under various duty assessment systems, intended toensure that anti-dumping duties in excess of the margin of dumping are not

collected, and that individual exporters are not subjected to anti dumpingduties in excess of their individual margin of dumping. Article 13 of the ADAgreement requires Members to provide for judicial review of finaldeterminations in anti-dumping investigations and reviews. Other provisionsestablish that Members may, at their discretion, take anti-dumping actionson behalf of and at the request of a third country, and recognize that specialregard must be given by developed country. Members to the situation of


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developing country. Members when considering the application of anti-dumping duties.

Specific Provisions

Initiation and conduct of investigations

Article 5 establishes the requirements for the initiation of investigations. TheAD Agreement specifies that investigations should generally be initiated

based on a written request submitted by or on behalf of a domesticindustry. This standing requirement is supported by numeric limits fordetermining whether there is sufficient support by domestic industry, andthereby warrants initiation. The AD Agreement establishes requirements forevidence of dumping, injury, and causality, as well as other information

regarding the product, industry, importers, exporters, and other matters, inwritten applications for anti-dumping relief, and specifies that, in specialcircumstances when authorities initiate without a written application from adomestic industry, they shall proceed only if they have sufficient evidence ofdumping, injury, and causality. In order to ensure that merit lessinvestigations are not continued, potentially disrupting legitimate trade,Article 5.8 provides for immediate termination of investigations in the eventthe volume of imports is negligible or the margin of dumping is de minims,and establishes numeric thresholds for these determinations. In order tominimize the trade disruptive effect of investigations, Article 5.10 specifiesthat investigations shall be completed within one year, and in no case morethan 18 months, after initiation.

Article 6 sets forth detailed rules on the process of investigation, includingthe collection of evidence and the use of sampling techniques. It requiresauthorities to guarantee the confidentiality of sensitive information andverify the information on which determinations are to be based to interested

parties and provide them with adequate opportunity to comment, and

establishes the rights of parties and provide them with adequate opportunityto comment, and establishes the rights of parties to participate in theinvestigation, including the right to meet with parties with adverse interests,for instance in a public hearing.

Imposition of provisional measures


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Article 7 relates to imposition measures. Articles includes the requirementsthat authorities make a preliminary affirmative determination of dumping,injury and causality before applying provisional measures, and therequirement that no provisional measures may be applied sooner than 60days after initiation of an investigation.

Price undertakings

Article 8 establishes the principle that undertakings to revise prices or ceaseexports at dumped prices may be entered into settle an investigation, butonly after a preliminary affirmative determination of dumping, injury, andcausality has been made. It also establishes that undertakings are voluntaryon the part of both exporters and investigating authorities. In addition, an

exporter may request that the investigations authorities. In addition, anexporter may request that the investigation be continued after an undertakinghas been accepted, and if a final determination of no dumping, no injury, orno causality results, the undertaking shall automatically lapse.

Duration, termination, and review of anti-dumping measures

Article 11 establishes rules for the duration of anti-dumping duties, andrequirements for periodic review of the continuing need, if any, for theimposition of anti-dumping duties or price undertakings. These requirementsrespond to the concern raised b the practice of some countries of leavinganti-dumping duties shall normally terminate no later than five years afterfirst being applied, unless a review investigation prior to that date establishesthat expiry of the duty would be likely to lead to continuation or recurrenceof dumping and injury. This five year sunset provision also applies to

price undertakings. The AD Agreement requires authorities to review theneed for the continued imposition of a duty upon request of an interested

party.

Article 18.3 establishes the effective date of the AD Agreement, providingthat it is applicable to investigations and reviews of existing measuresinitiated pursuant to applications made on or after the entry into force of theAD Agreement by the date of entry into force of the AD Agreement. UnderArticle 18.5, Members are required to notify their anti-dumping laws andregulations to the Committee.


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Annex I to the AD Agreement establishes procedures for on the spotinvestigations, which are generally undertaken in the territory of anexporting Member to verify information provided by foreign producers orexporters. Annex II to the AD Agreement sets forth provisions on the use ofbest information available in investigations, specifying the conditionsunder which investigating authorities may rely on information from a sourceother than the person concerned.

The Ministerial Decision on Anti-Circumvention, which is not part of theAD Agreement, noted that the negotiators had been unable to agree on aspecific text dealing with the problem of anti-circumvention, recognized thedesirability of applying uniform rules in this area as soon as possible, andreformed the matter to the Committee for resolution. The committee hasestablished an Informal Group on Anti Circumvention, which is open to

participation by all Members, to carry out the task assigned by the Ministers.

ANTI DUMPING DOCUMENTATION

The directorate has considered the need to streamline anti dumpingdocumentation so as to make it more concise and comprehensive. This

publication contains the revised format and guidelines for applicationsseeking anti dumping action.

The petitioners are expected to furnish documented petition with theinformation as per the revised format and the footnotes in each part thereof.The information so submitted should be drawn from reliable sources.Wherever required the petitioners should annex the copies of requisitedocuments to substantiate facts and figures presented.

The officers if the directorate will be available for any assistance required in

the completion of fully documented petition to present prima facie evidenceof dumping, injury and casual link thereof as required by the rules governingthe process of anti dumping duty investigations.

The applicant is advised to familiarize themselves with sections 9a, 9b and9c of the Custom Tariff Act, 1975 and the Customs Tariff (identification,


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assessment and collection of anti dumping duty on dumped articles and fordetermination of injury0 Rules, 1995 before filing a petition. The applicantmay also refer to the brochure issued by this directorate on the subject.

The designated authority would initiate investigations to determine theexistence, degree and effect of any alleged dumping upon receipt of a

properly documented petition by on on behalf of the domestic industry inaccordance with rule5(1)

Rules 5(5) requires the designated authority to examine the accuracy andadequacy of the evidence provided in the application and satisfy itself thatthere is sufficient evidence regarding dumping, injury where applicable and

a casual link between imports and the alleged injury to justify the initiationof an investigation.

No petition will thereof be taken on record of this directorate until is fullydocumented and until all informations elicited therein are furnished by the

petitioner. Incase of any problem faced in filling the application theconcerned case officer of the directorate may be contracted for assistanceand help. The petitioner must ensure that the application filed by them iscomplete in all respects and is fully documented, so that it may be taken onrecord by the authority and necessary action initiated.

The petition should specifically cover, inter alias, the following:Information on the imported productInformation on the domestic industry and the domestic marketEvidence of dumpingEvidence of injury, andEvidence of casual link

Confidential information: Rule 7 permits an interested party to furnishinformation the disclosure of which would be of significant competitiveadvantage to a competitor or because its disclosure would have asignificantly adverse effect upon a person supplying the information or upona person from whom that person acquired the information, shall be treated as


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such, evidence relating to normal value, export price, costing, profitability,specific adjustments in pricing are examples of such information which isusually accepted be designated authority as confidential. If confidentiality isclaimed on any other aspect, which generally is not the above criteria, theapplicant should give a brief statement of reasons as to why that particularinformation needs to be kept confidential. Incase such information isfurnished on confidential, the designated authority may disregard suchinformation. It is utmost important that each page and supplementaryinformation furnished on confidential basis is clearly marked Confidentialon the face of it, failing which the request for confidentiality may not beentertained.

All documents/arguments/submissions or correspondence made on a

confidential basis should necessarily be accompanied by a non-confidentialsummary, failing which such communication is liable to ignored withoutmaking any other further reference to the supplier of such information, inview of the time limit laid down under the law.

The potential is required to be submitted in two copies along with one nonconfidential version thereof. The designated authority may, however, requireadditional copies before initiation of investigation or at any time during thecourse of the investigations.

The designated authority may provide any information submitted by theapplicant on non-confidential basis to other interested parties in accordancewith rule 6.

The petition should contain information as detailed in the enclosedproforma. The proforma enclosed is not a fill-in proforma and, thereforeshould be treated as a questionnaire. Any information, not requested in the

proforma which may be of importance may also be furnished.

Applicants are advised to consider a time period for providing information.The time period chosen for furnishing information should preferably be 12months or more. It is desirable that this period be most recent andcorrespond to the accounting year of the domestic industry. All information,unless otherwise specified should relate to this period.


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The designated authority may request any additional and or supplementaryinformation any time before or after initiation of investigation.

All information unless otherwise specified should relate to the relevantproduct.

The designated Authority requires information on the extent of injury uponinitiation. The information generally required to be furnished is indicated in

part IV of these guidelines.

The application should be addressed to:Designated AuthorityDirectorate General of Anti-dumping and Allied DutiesMinistry of commerce

Udyog Bhavan, New Delhi 110 011

Please complete the certificate as at Format F for submission along withthe petition

Imported Product InformationPlease provide complete information on the product which is alleged to bedumped in India. The following information is relevant in this section of thecomplaint:Complaint description of alleged dumped goods, including information onits size, quality, category and uses of such goods along with any applicabletechnical specifications or standards and the ITC (HS) classification, customclassification, custom duty, import policy (including advance licensing

provisions)

Country of origin of the alleged dumped goods.

Since when such goods from the named country is being imported in the

Indian market and when did dumping starts.

Whether such goods are shipped to India through third countries.

Volume, value and avg.cif value of such dumped goods imported into Indiafrom each country alleged to be dumping the goods for the past two years todate and the source of information thereof.


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Volume, value and avg.cif value of such dumped goods imported from othercountries, not alleged to be dumping the goods, for the past two years andthe current year to date and the source of information thereof.

Name and address of known exporters and manufacturers of the allegeddumped goods.

Name and address of known importers of the alleged dumped goods in India.

Name and address of association of the users of the alleged dumped goods inIndia.

Note: Data on the volume and value of imported goods can be determinedfrom some published sources, such as the directorate General of Commercial

Intelligence & Statistics (DGCI&S) publications, Customs Daily and/orinformation otherwise available. Source of information must be specifiedwhile furnishing information.

3. Estimates of Export Price.Provide the following information, country-wise, with respect to theExport Price of the product for the last financial years and the currentyear to date.

Average Export Price to India and the basis of prices( e.g.FOB,CIF,FOR)

Costs per unit after ex-factory and before exports to India that theexporters should have incurred towards items such as inland freight,insurance, taxes, etc. (information on each of these items is to be givenseparately and should be supported with sufficient evidence):

The benefits which accrue to the exporters in the subject country onexports made to India which are not available to the exporter in case ofsales in the home market.

Net exporter price after adjustments towards, freight, insurance, inlandfreight, storage etc:

4. Estimates of Dumping Margin:


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Provide details of estimates dumping margin in case of each alleged to bedumping the subject goods in India. The information may be in followingformat

In local currencyof exporter Exchange RateVis--vis $ In US $

Normal value

Export price

Dumping margin

Evidence of InjuryPlease provide complete information on how imports of the allegeddumped goods caused or threaten material injury to the domestic industry

or materially retards its establishment. The following information isrelevant for this section of the complaint:

Changes in market share held by Indian producersIncreased imports from the subject countrySignificant decline in the production of the petitionerSignificant decline in the utilization of capacity of domestic industry(Under utilization of capacity)

Significant decline in the sales volume of the petitionerSelling price (evidence of price erosion, price undercutting, pricesuppression or price depression);Evidence of lost contracts of declining sales;Employment (employment levels, lay-off of employees due to increasedalleged dumped imports);Profitability (History of profit levels for the petitioner and industry);

Please give the above information as per proforma IV A and IV B.

INJURY INFORMATION ON DOMESTIC INDUSTRYPROFORMA IV A

Provide information for the domestic industry as a whole for theperiod of investigation and the preceding two financial years in theformat given below:


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Sr.no Particulars Year I Year II Period Of Investigation

Qty. Value Qty. Value Qty. Value

1 Imports

From thesubjectcountryOtherCountry

2 InstalledCapacity

3 Production

4 CapacityUtilization

5 CaptiveConsumption

6 IndigenousSale

7 Export Sale

8 OpeningStock

9 ClosingStock

10 Cost of Sales11 Profit/Loss

12 Investments

13 Net worth

14 Capitalinvestmentfor expansion

15 Employment

16 Demand

(1+5+6)17 Market share

18 Any other factor

Notes:1. Please indicate unit of measurement wherever applicable


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2. Indicate basis of estimating demand, if it is other than what isspecified in the format above.

3. Furnish the balance sheet and financial statements for theseyears for the company as a whole for the unit and the specific

product in question when the company is a multi-unit andmulti-product one.

*(Indigenous sale by the domestic industry as a percentage ofdemand)

COUNTRY-WISE LANDED VALUE- \Proforma IV BProvide details regarding export price, custom duty etc. and workout the landed value of imports per unit of the alleged dumped

product for each of the subject country

Name of the exporting country

Sr.no Particulars Year 1 Year II Period Of Investigation

Qty. Value Qty. Value Qty. Value

1 Avg. FOB price(US$)

2 Charges after

FOB and beforeCIF1. Freight2. Insurance3. Other

charges

3 Avg. CIF price(US$) (1+2)

4 Avg. Exchangerates

5 Avg. CIF price(Rs) (3*4)

6 Landing charges

7 Avg. Assessablevalue(5+6)


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8 Customclearance andhandlingcharges

9 Custom DutyBasicAuxiliaryCountervailingDuty

10 Landed value of imported

product (7+8+9)

11 Avg. sellingprice of

indigenousproduct

1. Includingexciseduty

2. Excluding exciseduty

Notes:1. Separate proforma for each of the exporting country is to befurnished.

2. Break up of custom duty is to be indicated separately.3. Supporting date/details are to be attached

In the absence of FOB price, the statement may be prepared form otherstage.

Evidence of casual linkPlease provide information on the factors which establish that the injury to

the domestic industry is due to dumping from the subject country. Factorsother than dumping are also at the same time causing injury to the domesticindustry must be segregated. Provide information on the following:The following information is relevant for this section of the complaint:

Volume and value of imports from country other than the subject countryand an explanation on why imports from these country are not causing injuryto domestic industry.


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Demand of the product for the past three years including current year. Incase the demand has undergone substantial charge, an explanation on whychanges in the demand has not caused injury to the domestic industry.

Provide explanation on whether trade restrictive practices of a competitionbetween the foreign and domestic producers, development technology, theexport performance or the productivity of the domestic industry or any otherknown factors have not caused injury to the domestic industry.

Costing informationPlease provide information on the following within one month of theinitiation of investigations.

Product process: Stage wise process of manufacturing and various routes ofmanufacture. Process flow chart indicating cycle time taken at each process.Raw materials and packing materials consumption and reconciliationstatement as per format ARaw material consumption norms and comparison with actual as per formatB

A statement showing cost of production as per format CI and CII intofixed, variable and semi variable. The semi variable expenses may further beclassifiedUtilities consumption statement as per format D for the investigation

period and previous three years.Calculations of working capital as follows:

Working capital as per balance sheetWorking capital as per bank limitsWorking capital as per production cycle time.

Interests on term loans: statement of term loan outstanding at the beginningof the year, at the end of the year, interest paid/payable on term loans andaverage rate of interest on term loans.

Over due and/ or compounding interest; statement showing details ofoverdue and/or compounding interest: statement showing details of overdueand/or compounding interest provided in the annual audited accountsrelevant to the period of investigationDepreciation : statement showing gross and net block for the investigation

period and previous year.


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Particular OpeningStockQty. Ratevalue

PurchasesQty. Ratevalue

ClosingStockQty. Ratevalue

ConsumptionQty. Ratevalue

Raw material(term wise)

Packingmaterials(Item wise)

Total

Note: This statement should be for the investigation period

STATEMENT OF RAW MATERIAL CONSUMPTION

Format B

Particular Unit ConsumptionPer Unit of

production

Actualconsumption

per unit ofproduction

Year1 Year2Year3

Average ofrate ofinvestigation

Raw material(Item wise)

Total cost perunit of

productionconsideringrates for theinvestigation

period


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STATEMENT OF COST OF PRODUCTION-(FORMAT C)

Name of the companyInstalled capacity

Production in InstalledCapacity Utilization(%)

Capacity utilization inInvestigation period

Sales (Quantity)

Particulars Previous accountingYearQty. Rate value cost perunit

Investigation periodQty. rate value cost perunit

ManufacturingexpensesRaw Materials(Specific the major rawmaterial)UtilitiesDepreciationOthers (Please specifythe nature of

expenditure)AdministrativeExpensesVariableFixed

Financial Expenses

-Variable-Fixed

Less: Misc. Income(from productconcerned)

Total cost to make andsell

Selling Price

Profit/Loss


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Note: Please Specify the unit, wherever applicableThe information in this proforma to be certified by practicing cost

accountant

ALLOCATION AND APPORTIONMENT OF EXPENDITURE-FORMAT

(CII)

Please provide the basis along with the amount allocated to the subjectproduct and to other products out of the total expenses of the company, asper following format

SI ParticularExpenses

Totalapplicable to

product

underinvestigation

Shareapplicable to

product

underinvestigation

Share notallocationapportionmen

t

Basisof

1 2 3 4 5 6

Raw material(item wise)Consumable storesand spares/otherinputsUtilities (Power,

fuel, Steam, etc.)Direct LaborManufacturingOverheads(Specifyunder majorheads)Research andDevelopmentAdministrativeOverheads

Selling &Distribution costDepreciationFinancial expensesOther misc.expensesTotal expenditure


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SalesOther incomeTotal incomeProfit/Loss

Note:1. The information in this proforma is to certified by a practicing cost

accountant.All items and expenditure shall be reconciled with annual accounts

STATEMENT OF CONSUMPTION OF UTILITIESFormat D

Particular ConsumptionNorms(per unit

of) productionY1 Y2 Y3 POI

Actualconsumption

(Per unit ofproduction)Y1 Y2 y3

Investigationperiod

Units Rate

a) Power

b) Water

c) other(Please Specify)

Total Costconsidering

investigationperiod rates

Note: The details should be in terms of utilities purchased and paid by thecompany.

The rate should be the average cost for the investigation period.

Issues Relating To Anti-dumping Duty

Recent years have seen increasing resort to anti-dumping actions. In a

number of cases investigation are started even in cases where the industryclaiming injury has not been able to produce, before the investigatingauthorities, satisfactory evidence of dumping or injury. Newinvestigations have often been started on the same products immediatelyafter the termination of an investigation. This is particularly true ofexports of developing countries which are being subject to more andmore anti-dumping and countervailing measures. The uncertainty and


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restrictiveness of these measures have created trade disruption affectingnot only particular consignments but also longer-term trade in thetargeted product. Benefits from trade liberalization have beenconsiderably neutralized by the unfair use of anti-dumping measures,including back-to-back anti dumping investigations on the same productswhich have frustrated the expectations created during the UruguayRound.

The lack of clarity in certain provisions has compounded the problem,including the fact that Article 15 of the Agreement which provides theonly reference to the special situation in developing countries isambiguous and practically inoperative. Furthermore, in cases where thereare no sales, or the sales in the domestic market are low, the investigatingauthorities rely on constructed value calculated on the basis of cost of

production, even where data on price comparison purposes. Experiencehas shown that the determination of the constructed value is often not fairand results in harassment of exporting firms that are alleged to bedumping. Moreover, certain provisions, particularly those relating to deMinims dumping margin and the threshold volume of imports belowwhich no anti-dumping duty shall be levied, need to be revised in view ofthe changed global trade and economic scenario, especially for exportsfrom developing countries. The concerns arising out of increasedsusceptibility of developing countries to the incidence of dumping intotheir economy, as they liberalize their import regimes, also needs to beaddressed.

The special provisions in the Agreement relating to settlement of disputesin the anti-dumping area which inter alias require panels not to challengethe evaluation of facts made by the investigating authorities, whereestablishment of facts was proper and the evaluation was unbiased andobjective needs to be modified to provide that the common rules

provided by the Dispute Settlement Understanding apply to disputesrelating to anti-dumping actions. The following amendments are

therefore necessary in order to ensure that developing countries receivethe due benefits of global trade liberalization.

Indias proposals Regarding the Anti-Dumping Agreement

Article 15 of the Agreement on Implementation of Article VI is only a bestendeavor clause. Consequently, Members have rarely, if at all, explored the


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possibility of constructive remedies before applying anti-dumping dutiesagainst exports from developing countries. Hence, the provisions of Article15 need to be operational zed and made mandatory.

In order to restrict the initiation of back-to-back investigations, it should beprovided that no investigation would be initiated for a period of 365 daysfrom the date of finalization of a previous investigation for the same productresulting in non-imposition of duties. However, if for any exceptionalreasons such an investigation has to be initiated it must have the support ofat least 75 per cent of the domestic industry.

De Minims Dumping:

The existing de Minims dumping margin of 2 per cent of export price belowwhich no anti-dumping duty can be imposed needs to be raised to 5 per centfor developing countries, so as to reflect the inherent advantages that theindustries in these countries enjoy comparable production in developed.The major users have so far applied this prescribed de Minims only in newlyinitiated case, not in review and refund cases. It is imperative that the

proposed de Minims dumping margin of 5 per cent is applied not only innew cases but also in refund and review cases

The threshold volume of dumped imports which shall normally be regardedas negligible should be increased from the existing 3 per cent to 5 per centfor imports from developing countries. Moreover, the stipulation that antidumping action can still be taken even if the volume of imports is below thisthreshold level, provided countries which individually account for less thanthe threshold volume, collectively account for more than 7 per cent of theimports, should be deleted.

The lesser duty rule should be made mandatory while imposing an anti-

dumping duty against a developing country member by any developedcountry.

The definition of substantial quantities as provided for in Article 2.2.2 isstill very restrictive and permits unreasonable findings of dumping. Thesubstantial quantities test should be increased form the present threshold of20 per cent to at least 40 per cent.


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In cases where there are no or low sales of like product in the domesticmarket, resort to constructed value on the basis of cost of production shouldonly be made where the investigating authorities find that prices charged bythe same exporter to third- country markets are not available or are notrepresentative.

As developing countries liberalize, the incidence of dumping in to thesecountries is likely to increase. It is important to address this concern, sinceotherwise the momentum of import liberalization in developing countriesmay suffer. There should therefore be a provision in the Agreement, which

provides a presumption of dumping of imports from developed countriesinto developing countries, provided certain conditions are met.

Presently there is a different and more restrictive standard of reviewpertaining to adjudication in anti-dumping cases. There is no reason whythere should be such a discrimination for anti-dumping investigations.Hence, Article 17 should be suitably modified so that the general standard ofreview laid down in the WTO Dispute Settlement Mechanism, appliesequally and totally to disputes in the anti-dumping area.

The annual review provided under Article 18.6 has remained a proformaExercise and has not provided adequate opportunity for Members to addressissue of increasing anti-dumping measures and instances of abuse of theAgreement to accommodate protectionist pressures. This Article must be

Appropriately amended to ensure that the annual reviews are meaningful andPlay a role in reducing the possible abuse of the Anti-dumping Agreement.

CONCLUSIONS

Anti-dumping duties are levied in derogation o MFN treatment as productand company specific duties. No action against dumped imports can betaken unless the dumped imports can be taken unless the dumped importscan be shown to have caused injury to the domestic industry. Often theimporters or the consumers of the dumped imports may have an interestopposed to that of the domestic industry as their main interests lies in getting


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goods at as cheap a price as possible. The investigating authorities have,generally held that this may not be in the ultimate interest of consumers.

Dumped imports, due to unfair competition they offer, may in duecourse wipe out the domestic industry which may lead to monopolisticsitituations and limit the choice available to consumers.

While the Agreement on Implementation of Article VI of the GATTpermits levy of anti-dumping duties up to the full margin of dumping itrecommends levy of lesser duty, if such lesser duty is adequate to removeinjury to the domestic industry. Some of these countries, however, levy fulldumping margin asanti-dumping duties, including the USA and Canada,which can be considered to be providing an undue protection out theirdomestic industry.

As the number of anti-dumping investigations are increasing day byday, they are causing serious threat to exporters and foreign producers, evenif they do not resort to dumping practice because not only the cost ofdefending anti dumping actions are heavy it also requires a lot of time andenergy to collect and furnish the requisite information to the investigatingauthorities. This may have serious impact on the markets of the targetedexporters. They have, therefore to be vigilant against frivolous complaints.On the other hand, the domestic industry also needs to be prompt in filinganti-dumping applications as it takes a considerable time for the authoritiesto levy protective measures and any delay may harm the interests of thedomestic industry.

As the number if anti-dumping investigations are increasing day byday, they are causing serious threat to exporters and foreign producers, evenif they do not resort to dumping practice because not only the cost ofdefending anti-dumping actions are heavy it also requires a lot of time andenergy to collect and furnish the requisite information to the investigating

authorities. This may have serious impact on the markets of the targetedexporters . They have, therefore, to be vigilant against frivolous complaints.On the other hand, the domestic industry also needs to be prompt in filinganti-dumping applications as it takes a considerable time for the authoritiesto levy protective measures and any delay may harm the interests of thedomestic industry.


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RECOMMENDATIONS

The domestic industry should avoid any delay in filing of anti-dumpingapplications, as anti-dumping duties cannot be applied before 60 days formthe date of initiation of investigation.The domestic industry should build up their own data base which would helpthem in anti-dumping investigations against dumped imports.The exporters and foreign producers would do well to fully co-operate withthe investigating authorities. If they do not cooperate and do not furnish therequisite information, the authorities may act on the basis of the bestinformation available which may often be to their disadvantage. Besides,the non-cooperating exporters attract a higher rate of duty.The exporters and foreign producers should furnish information and repliesto Questionnaires within the stipulated time or they should seek extension of

time before the expiry of the given time, as the investigations are to becompleted in a time bound manner and unless the authorities receive arequest in time, they may not be able to consider any information furnishedsubsequently.It may be advantageous to the exporters to furnish price-undertakings as thatwould enable them to realize more money for their exports instead ofallowing the government of the importing country to recover the differentialas anti dumping duties. In both the cases, the cost to the importers is same.The exporters should not try to compensate foreign buyers for anti-dumpingduties borne by them as any such action may result in a cascading effect i.e.it may result in levy of further enhanced anti-dumping duties.As the number of anti-dumping investigations are increasing both againstimports and exports. Commensurate resources would need to be provided forstrengthening the national administrations for conducting investigations aswell as for providing the necessary assistance and guidance to the domestic

producers.

BIBLIGROPHY:

MAGAZINESEXIM INDIA news letter

NEWSPAPERS:THE ECONOMIC TIMESBUSINESS STANDARD


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FINANCIAL EXPRESSTHE TIMES OF INIDA

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Anti Dumping Duty and India