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This Digest was prepared for debate. It reflects the legislation as
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CONTENTS
Customs Legislation (Anti-Dumping) Amendment Bill
1997
Date Introduced: 25 June 1997
House: House of Representatives
Portfolio: Industry, Science and Tourism
Commencement: The amendments relating to the
method for determining normal value commence on a day to be fixed
by proclamation, or failing that, six months after the Bill
receives Royal Assent. The amendments relating to interim dumping
and countervailing duties are taken to have commenced on 1 January
1993.
The major amendments:
- provide a new method for determining normal value in respect of
goods exported from countries whose economies are in transition
from command to market economies; and
- ensure interim dumping and countervailing duties can be imposed
prior to a final assessment of duties payable.
Anti-Dumping
Dumping occurs when products from one country are exported to
another country at prices less than their normal value.(1)
Australian anti-dumping law is the product of Australia's
obligations under the General Agreement on Tariffs and Trade, the
Agreement on Implementation of Article VI (the Anti-Dumping Code)
and the Agreement on Interpretation and Application of Articles VI,
XVI and XXIII (the Code on Subsidies and Countervailing Duties).
The Customs Act 1901 and the Customs Tariff
(Anti-Dumping) Act 1975 are the principal legislative
instruments relating to anti-dumping.
Where an application claiming dumping has been lodged with the
Anti-Dumping Authority (ADA), which administers Australia's
anti-dumping system, the ADA must determine whether there are
sufficient grounds to initiate an investigation. Within the
statutory 25 day period allowed for consideration of a claim, the
ADA considers matters including whether the goods meet the produced
in Australia requirements, injury factors, the adequacy and
accuracy of price evidence produced and whether a causal link
exists between the alleged dumping and injury to an Australian
industry.
Countervailing Duties
Countervailing duties are duties imposed on imports to offset
government subsidies to producers or exporters in the exporting
country.
Normal value of goods
Section 269TAC of the Customs Act 1901 sets out the
criteria that must be followed when determining the normal value of
goods exported to Australia. Determination of normal value of goods
is central to a determination of whether goods are being dumped
because dumping occurs when the products of one country are
exported to another country at prices less than their normal
value. Basically, the method used to determine normal value is
to use the price paid in the country of export. Other methods used
for determining normal value include constructing a value from the
cost of production, administrative, selling and general costs, and
where appropriate an amount for profit, or applying the price paid
for like goods sold to an appropriate third country.(2) Where
insufficient information has been supplied, or is not available, to
determine normal value under any of the latter methods, the normal
value is determined by the Minister having regard to all available
information.(3)
Subsection 269TAC(4) of the Customs Act 1901
Subsection 269TAC(4) of the Customs Act 1901 sets out
certain of the methods to be used by the ADA to determine normal
value where the government of the country of export has a monopoly,
or substantial monopoly, of the trade of the country and
determines, or substantially influences, the domestic price of all
goods in that country. These circumstances describe the situation
in a so called a 'command economy'. Where the Minister determines
that a command economy situation exists and other methods for
calculating normal value are not appropriate, the calculation
methods specified in paragraphs 269TAC(4)(c)-(f) must be used.
These methods include:
a value equal to the price of like goods produced or
manufactured in a country determined by the Minister or sold for
home consumption in the ordinary course of trade in that country,
being sales that are arms length transactions (paragraph 269TAC
(4)(c)); and
a value equal to the price payable for like goods produced or
manufactured in Australia and sold for home consumption in the
ordinary course of trade in Australia, being sales that are arms
length transactions (paragraph 269TAC (4)(f)).
Rationale for proposed amendments
The major amendments proposed by the Bill provide a new method
for determining normal value in respect of goods exported from
countries whose economies are in transition from command to market
economies.
Until recently the methods for determining normal value in
subsection 269TAC (4) were used to determine normal value for goods
exported from command economies by reference to information
obtained in a third country. As noted in the Second Reading Speech
to the Bill, the Australian Customs Service has received legal
advice that has limited the application of the calculation methods
in subsection 269TAC (4). Effectively, the Government cannot use
the methods in respect to goods from economies which are in
transition from command to market. As a consequence, determination
of normal value in respect of goods from transitional economies
must be made in accordance with the remaining provisions of section
269TAC. As stated in the Second Reading Speech to the Bill:
These provisions at present do not distinguish between "market
economies" and those which are considered to be "in transition".
Therefore, normal values for exports must be ascertained by the
application of the same methodologies that are required to be
applied in the ascertainment of normal values for exports from
countries such as the United States of America and Germany. That
is, there is presently no flexibility available for investigating
authorities to treat exports from economies which are in transition
differently from exports from other countries.
Interim dumping duties
Where a positive preliminary finding of dumping occurs, action
is usually taken against future imports by the imposition of
provisional duties, that is, interim dumping duties. The rate of
duty is based on the dumping margin found during the preliminary
finding inquiry, that is, the difference between the normal value
(non-injurious price) and the export price of the goods.
Interim and final dumping duty are imposed by section 8 of the
Customs Tariff (Anti-Dumping) Act 1975 on goods subject to
a notice under section 269TG of the Customs Act 1901.
Basically, subsections 269TG(1) & (2) of the Customs Act
1901 provide that final and interim dumping notices apply to
goods or like goods when the amount of the export price is less
than the amount of the normal value of the goods. As correctly
noted in the Explanatory Memorandum to the Bill, in the case of
interim dumping duties the export price and normal value have not
been calculated because their collection is "intended to be pending
final assessment of the interim dumping duty payable". As such, it
is arguable that it is not possible to impose interim dumping duty
until the actual amounts of export price and normal value are
calculated. The Government has accepted this argument and the
amendments proposed by items 5 and
6 of Schedule 1 of the Bill seek to resolve the
perceived problem.
The purpose of item 2 of Schedule 1, which
inserts new subsections 269TAC(5D)-(5G), is to
provide for a new method of determining normal value for goods
exported to Australia from countries whose economies are in
transition from command to market.
Under proposed subsection 269TAC(5C) where the
Minister is satisfied that:
- goods are exported to Australia from a country which in the
past the government had a monopoly, or a substantial monopoly, of
the trade of that country, or substantially influenced domestic
prices of goods in that country; and
- the above circumstances no longer apply; and
- a price control situation exists in relation to like goods to
those exported;
the normal value of the exported goods is an amount determined
by the Minister having regard to all relevant information.
A definition of "a price control situation" is contained in
proposed subsection 269TAC (5C). A price control
situation will exist in relation to like goods to those exported
if:
- the exporter sells like goods in the country of export and the
domestic selling price of those goods is controlled, or
substantially controlled, by a government of that country; or
- the exporter does not sell the goods in the country of export
but there are other sellers in that country of like goods and the
domestic selling price of those goods is controlled, or
substantially controlled.
The effect of items 5 and 6 of
Schedule 1 is to ensure that interim dumping and countervailing
duties can be imposed in respect of goods and like goods exported
to Australia prior to a final assessment of duties payable on those
goods.
Note: The amendments relating to interim
dumping and countervailing duties are taken to have commenced on 1
January 1993. The reason for that date is to ensure that duties
collected since the commencement of the provisions, which was 1
January 1993, are not subject to legal challenge.
- Lawrie Willett , Review of Australia's Anti-Dumping and
Countervailing Administration, ISBN 0642258996, September
1996, p. 23.
- Ibid., p. 60.
- Ibid., p. 61.
Ian Ireland and Tas Luttrell
30 September 1997
Bills Digest Service
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sources should be consulted to determine whether the Bill has been
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amendments.
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ISSN 1328-8091
© Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library,
1997.
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Last updated: 7 October 1997
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