Anti Dumping Duty On The Alleged Product example essay topic

Introduction After the liberalization of Indian economy in 1990's competition has increased manifold in all sectors be it automobiles, pharmaceuticals, steel, sports equipment etc. As a result of this many goods had found its way into Indian markets at a very cheap price much cheaper that those sold in Indian markets. This resulted in dumping in a huge scale. As such to protect the Indian domestic industries and preventing the retardation of the domestic industries, Anti-dumping rules were formed in 1990's.

This paper had discussed the various aspects and rules followed in India in context of Anti-dumping duty. Dumping and anti dumping had been discusses. Anti dumping rules and anti dumping procedures had also been discussed. Also anti dumping cases initiated by India and against India had been discussed. Finally some of latest happenings in 2002-03 in context of anti dumping duty had also been touched upon. Dumping Many times the countries sell goods abroad at a price below that charged in the domestic market.

The product is exported at a price that is less that the cost involved in producing the product. This practice in international trade is known as dumping. In terms of law "an article is considered as being dumped if it is exported from a country at a price less than its normal value". Purpose of dumping Since the product is exported at a lower price this creates a demand for the product in the importing country due to its cheapness. This creates a good market for the product in the importing country more than that of the local product. Thus dumping is often employed by the country to create a greater market share for the product and ultimately gain a future monopoly for the product.

Anti-Dumping duty When an article is exported from any country at a price less than its normal price or when a country at a less price than its domestic price sells an article, a duty is imposed on such articles. This duty is known as Anti-Dumping duty. The extent of duty imposed on all products that is found to have been dumped depends on price of the product and not exceeding, in any case, the difference of the export price and normal price of such a product. Anti-dumping duty varies from country to country, product to product and the suppliers in the exporting countries.

Anti Dumping Laws in India - Customs Tariff Rules, 1995 These rules came into force on 1st Jan 1995. These rules govern the identification, assessment and collection of Anti-Dumping Duty on dumped articles and determination of export price, the normal price, the margin of dumping and the extent of injury. In accordance of the powers conferred by sub-section (6) of section 9 A and sub-section (2) of section 9 B of the Customs Tariff Act, 1975 (51 to 1975) and in accordance of the Customs Tariff (Identification, Assessment and Collection of Duty or Additional Duty on Dumped Articles and for Determination of Injury) Rules, 1985, the following rules had been made by the Central Government: - 1. Definitions These rules defines the following terms: (i)! y enAct": This means the Customs Tariff Act, 1975 (51 to 1975). (ii)! yen domestic industry": This means the whole lot of producers or industries in the country in which dumping of goods is being done. ( )! yen interested party": This includes the producers and trades in India who are producing or trading or importing products similar and identical to those products which are being dumped into the country. (iv)! yen provisional duty": This is an Anti-Dumping duty imposed under sub-section (2) of section 9 A of the act. (v)! yen specified country": Any country which is a part of WTO and also any country to which India has granted the status of MPN (most favored nation) 2.

Appointment of the designated authority The designated authority is appointed by the Central Government. The person should not be below the rank of a Joint Secretary to the Government of India. 3. Duties of the designated authority The followings are the duties of the designated authority: (i) to investigate the degree of existence of alleged dumping (ii) to determine the extent of harm and injury caused to the domestic industries due to alleged dumping ( ) to identify the products on which anti dumping duty can be imposed (iv) to submit the findings to the Central Government which includes normal price, export price, margin of dumping and the extent of injury caused to domestic industries (v) to recommend the amount of anti dumping duty to be levied (vi) to review the need for the continuance of anti dumping duty 4.

Anti dumping procedures followed in India These includes the procedures as how to file an application, when to file and what information to include. 5. Principles governing investigation 6. Confidential information This includes what all information should be classified as confidential 7. Accuracy of information The designated authorities should verify the accuracy of the information provided during the course of investigation 8. Investigation in other countries The designated authorities during the course of their investigation may also investigate in other countries if the case needs so.

However they have to get the consent of the concerned governments and concerned persons. 9. Determining the normal price, export price and margin of dumping 10. Determining the amount of injury caused by the alleged dumping of goods. 11. Provisional duty On the basis of findings provisional duty may be imposed by the Central government.

However the provisional duty should not exceed the margin of dumping. Such a duty remains in force for a period not exceeding 6 months, which upon special request from the traders may be extended to 9 months. 12. Terminations of the dumping investigation The investigation may be terminated on the following reasons: (i) If it receives a request in writing for the same by the parties who have initiated the investigation (ii) If during the course of investigation the designated authority does not find sufficient evidence of dumping or injury caused to domestic industries ( ) If the margin of dumping is less than 2 percent of the export price (iv) If the quantity of the dumped goods is less than 3 percent of the imports of the domestic country (v) If the injury is negligible 13. Temporary suspension or termination of investigation due to price change The investigation may be suspended or terminated if (i) the exporter revise the prices so that no export of the product is made to India at the dumped prices and communicates the same to the designated authorities by writing (ii) the countries who are importing revise the prices so as to remove the dumping process. 14.

Final Results Within 1 year the designated authorities had to determine whether or not the product under investigation is dumped into India and had to submit their findings to the Central government. The findings should also include the following information on: (i) the export price, the normal price and the margin of dumping of the alleged product (ii) whether the import of the alleged product causes any harm or injury to the domestic industries and result in their retardation ( ) the facts, figures, reasons and law which had led to the conclusion (iv) the name of the suppliers and the supplying countries involved (v) description of the product (vi) explanation of the methods followed in the determination of normal price, export price and the margin of dumping (vii) explanation of the methods used and considerations taken to injury determinations 15. Levy of duty Within 3 months of the date of publication of the findings, the Central Government has to impose the Anti-Dumping duty on the alleged product. This Anti-Dumping duty should not exceed the margin of dumping. 16. Commencement of the duty The Anti-Dumping duty levied should take place from the date of its publication.

17. Refund of the Anti-Dumping duty If the Anti-Dumping duty imposed is higher than the provisional duty already imposed and collected then the difference should not be collected from the importers. If the Anti-Dumping duty fixed after the investigation is lower than the provisional duty already imposed and collected then the difference shall be returned to the importers. Anti-Dumping procedures in India For the imposition of Anti Dumping duties, first an investigation is done followed by the implementation.

- Filing application of duty against the alleged dumping goods The investigation is started only upon receipt of a written application by domestic producers on behalf of or by the entire domestic industry of the product. - The written application is considered valid only under the following conditions: (i) If domestic producers on behalf of domestic industry in India file the application, the domestic producers must account for not less than 25% of the total production of the same product by the domestic industry in India. (ii) The domestic producers filing the application must account for more than 50% of the total production of the same article by those opposing or expressly supporting the application. The concerned parties make applications to the Ministry of commerce. On receipt of such an application concerned authorities initiate an investigation when there is sufficient evidence that the products being dumped are causing or threatening to cause material injury to the industries producing same products or is retarding the growth of the like industry. - Filing of Application The application is filed when there is sufficient evidence that the products being dumped are causing or threatening to cause material injury to the industries producing same products or is retarding the growth of the like industry. - Details and information to be included in the application There is a prescribed form where applications are submitted.

The prescribed form also contains guidelines on how to complete a questionnaire. The following information (Part - lbL and Part - lbLlbL) should be included in the application: Part - lbL: Information regarding the alleged dumped goods and the dumping countries (i) Physical information (i.e. size, shape), technical information and specifications, quality, category, information related to customs classification and duty, import policies and uses. (ii) Information about the country dumping the alleged products ( ) Information regarding the time from which dumping of such alleged products had started (iv) The route through which such alleged products are being brought into the country and whether they are brought through third countries (v) Quantity and value of such alleged products that are being dumped into India from past 2 years to current year. (vi) Quantity and value of such alleged products from other countries (which are not alleged to be dumping) from past 2 years to current year. (vii) Name and address of the manufactures of the alleged dumped products and the exporters of the alleged dumped products. (v.) Name and address of the importers of the alleged dumped products. (ix) Name and address of the users or association of users of the alleged dumped products. Part - lbLlbL: Information regarding the Indian Industry who had filed the application (i) Name, address, contact person, telephone numbers and fax numbers of Indian producers who are lodging the complain (ii) Quantity and value of similar products of Indian producers filing the complain from past 2 years to current year. ( ) Quantity and value of similar products of Indian producers not filing the producers from past 2 years to current year. (iv) Information about the substitutes of the alleged dumped products, if they exist. (v) If any of Indian producers filing the complain is importing or exporting such products, then details of the quantity and value of imports and exports from past 2 years to current year. (vi) Similarities and dissimilarities in the alleged dumped products and the products being produced by the Indian producers filing the complain. (vii) Similarities and dissimilarities in the production process employed in alleged dumped products and in the products being produced by the Indian producers filing the complain. (v.) Informations regarding the normal value and export value of the dumped alleged goods Normal value: The normal value is the price at which the alleged dumped goods are being sold in the domestic market of the country exporting it. The information regarding the normal value can be obtained from the sale invoices in the domestic market of the exporting country. Export Price: The export price of goods imported into India is the price paid for the goods by the buyer.

The information regarding the export price can be collected from import documents. (ix) Information about the quantity and the value of imported goods in the country The quantity and value of imported goods can be obtained from some published sources, like Directorate General of Commercial Intelligence & Statistics (DGC I&S) publications, Customs Daily Lists etc. - Time period within which anti-dumping duty can be imposed An anti-dumping duty imposed under the Act unless revoked earlier remains in force for 5 years from the date of imposition. - Periodical review of anti dumping duty once levied The power to review the need for the continued imposition of the anti-dumping duty, from time to time, lies with the designated authority in the Ministry of Commerce. The review is done on the basis of request received from an interested party in view of the changed circumstances. The review also follows the same procedures prescribed for an investigation. - Who pays duty?

The importers pay the Anti-dumping duty imposed. - Action in case of continuance or increase of dumping In such a case a request for review can be made by the affected industries to the designated Authority in the Ministry of Commerce. - How is the duty imposed? The anti dumping duty is imposed by the Central government.

The Central government has the time period of 3 months from the date of publication of final findings by the designated authority of the Ministry of Commerce within which it may impose the duty. - In case some information is not available or if the concerned parties do not co-operate When an interested party refuses access to or does not provide necessary information within a stipulated period, the investigation by the authorities is done on the basis of the facts available to it and then recommendations are made to the Central Government. - Domestic Industry applying for the imposition of provisional Anti Dumping duty In such a case, a provisional duty may be imposed by the Central Government on the basis of the preliminary finding recorded by the Designated Authority. Such a duty does not exceed the margin of the dumping.

The imposition of the provisional duty takes place only after the expiry period (i.e. 60 days) from the date of initiation of investigation. The provisional duty remains in force for a period not exceeding 6 months, which can be extended to 9 months under certain circumstances. - Items on which anti dumping duty are imposed Anti dumping duty is imposed only on imports, which are dumped. Anti dumping duty applies to all imports and products and from whatever source, if they are found to be dumped and are causing harm to domestic industry. - Provision for any appeal against the imposition of anti dumping duty. An appeal against the imposition of anti dumping duty can be filed with the Customs, Excise and Gold (Control) Appellate Tribunal within 90 days of the date of the order.

Anti dumping cases initiated by India Since 1992, India has initiated 158 anti-dumping cases in an attempt to save its domestic industry. Out of these final findings had been issued in 117 cases. India is close behind the US and the European Union in initiating anti-dumping cases. India initiated the maximum number of anti-dumping investigation in 2001. It moved up from the 12th place in 1996 to third in 1999.

After the liberalization of Indian markets, in 1990's, the fear of cheap imports from foreign players and the increase in competition led to such a move. The companies that have been affected by dumping have come together under the banner of Foundation for Promotion of Indian Industry (FPI I) in an attempt to protect the domestic industry. The FRI I also looks into the problems of database management, which is necessary in its fight against dumping. Anti dumping cases initiated by India during 2002-2003 India leads in using anti dumping measures and initiating investigations in 2002-2003. During 2002-03 India initiated investigations into the import of 30 products. China figured in 15 of those cases.

6 cases each were initiated against Taiwan and Korea and 4 cases against Singapore. Of the 30 products under investigation, 11 pertain to chemicals and petrochemicals sector, 5 to consumer goods, 4 to steel and other metals, and 3 to pharmaceuticals. Anti dumping cases initiated against India 82 anti-dumping cases had been initiated against exports from India. The EU (European Union), the US and South Africa have initiated the maximum number of anti-dumping cases against India over last few years. The EU had initiated 22 of the 69 anti-dumping cases against India since 1992. The US comes next with a dozen cases.

It is closely followed by South Africa, which had initiated 11 cases. Canada, Indonesia and Brazil had initiated 5, 4 and 3 cases respectively. Thus maximum cases has been initiated by European Union (33 per cent), followed by the US (17 per cent), South Africa (13 per cent), Indonesia (7 per cent), Canada (6 per cent), and Brazil (5 per cent). Argentina, Australia, Egypt, Mexico, Turkey, Thailand and Trinidad and Tobago accounted for a share of 1.5 per cent each, totaling 19 per cent. The highest number of such cases continued to be on engineering products, including steel products accounting for 32 per cent of the total cases followed by textiles (19 per cent), drugs, pharmaceuticals and basic chemicals (18 per cent) rubber / plastics (13 per cent) and consumer / industrial goods (12 per cent).