Manual on Anti Dumping , Countervailing Duties and Safeguard Measures

8/10/2019 Manual on Anti Dumping , Countervailing Duties and Safeguard Measures

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Manual on

Anti dumping duties,Countervailing duties and Safeguardmeasures

For Manufacturers, Traders, Importers &Exporters

Ra!umar S" Adu!ia

#"Com $%ons", ''"#, AIC(A, FCA

radu!ia)vsnl"com*ra!umarfca)gmail"com

+-.-+ /0+1*+-..0 -/1.

TA#'E 2F C23TE3TS

I" Introduction

1 Introduction to trade remedy measures2 Definition

2.1 Antidumping duties-What are they?2.2 Countervailing duties -What are they?2.3 afeguards measures-What are they?

3 . Anti-dumping and countervailing duties !imilarities and differences" #o $hom do these duties and measures apply?% Authorities regulating and implementing anti-dumping duties and countervailing duties

and safeguard measures.II" (T2 and 4ATT on Anti5dumping duties, Countervailing duties and

Safeguards measures

1. Introduction
mailto:[email protected]:[email protected]


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2. &A## Agreements2.1 Agreement on Implementation of Article 'I of the &eneral Agreement on

#ariffs and #rade 1((" 2.2 u)sidies and Countervailing

2.3 afeguards measuresIII" 6ispute Settlement

I7" Rules of 2rigin

7" 'egislative Frame 8or! for implementation and administration of trade

protection measures in India

7I" Anti5dumping duties

1 *ormal 'alue2 +,port rice3 Constructed +,port rice" argin of Dumping% /actors Affecting Comparison of *ormal 'alue and +,port rice

0 ie Articles In4ury Analysis5 *on-in4urious rice in relation to in4ury margin( Casual in16 Who can file an application?11 Domestic Industry12 Investigation for Anti-Dumping duties13 evy of anti-dumping duty1" Difference )et$een anti dumping duty and normal customs duty

7I" Countervailing duties

1 u)sidy7 its meaning

2 Initiation of Investigation3 Conduct of Investigation" Determination of in4ury and casual lin% Determination of In4ury0 +valuation of In4ury Casual in5 Assessment of su)sidy for countervailing duties( rocedural re8uirements16 rice 9ndertaings11 Imposition and Collection of Duties12 Duration7 #ermination and :evie$ of Duty

13 u)lic *otice1" Committee on u)sidies and Countervailing easures1% Dispute ettlement10 *otifications

7II" Safeguards measures

1 Critical circumstances2 Initiation of Investigation for safeguard duties3 Determination of in4ury for afeguards measures" Application of safeguard measures% rovisional easures


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0 Duration7 #ermination and :evie$ of easures pecial tatus

7III" Investigation

0 Anti-Dumping and Countervailing duties

. afeguard dutiesI9" Important (e: sites

A:out t;e :oo!

I" Introduction

0" Introduction to trade remed< measures

#he fundamental principles of the &A##;W#< system are reciprocity and non-

discrimination. =o$ever7 a num)er of e,ceptions to &A##>s non-discrimination rule

e,ist7 lie trade remedies measures7 government procurement7 and regional trading

agreements. #his )oo deals $ith trade remedies measures. #he trade remedies measures

refers to trade restrictions7 $hich can )e introduced under specific circumstances7

providing protection from imports )eyond the protection granted )y the tariff schedules

negotiated as part of &A##. #hese measures thus represent an e,ception to the

&A##;W#< fundamental principles of reciprocity and non-discrimination.

#emporary restrictions allo$ed )y the W#< are anti-dumping duties7 countervailing

duties7 and safeguard measures7 tariffs to assist $ith )alance of payments pro)lems7

tariffs to protect infant industries7 or tariffs for emergency protection@. ermanent

e,ceptions are general $aivers from )inding o)ligations7 $hich !in contrast $ith the

other mechanisms ! must )e formally approved )y the W#< Council.


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Countervailing duties and anti-dumping duties are special offsetting import ta,es allo$ed

)y the W#< under specific circumstances of unfair competition e,port su)sidies or

dumping on the part of trading partners@7 conditional on a detailed investigation sho$ing

that the domestic industry is )eing hurt. #hese are discriminatory measures7 in that they

are 4ust applied against one trading partner. afeguard measures are temporary trade

restrictions protecting an industry from fair competition7 )eyond the protection afforded

)y tariffs negotiated as part of &A##. #hey are non discriminatory measures as they are

applied to all trade partners.

#a)le 1.1 summarises the measures of trade protection measures regulated )y the W# lo$ price7 $hich is a situation $here an

e,porting firm sells its production in the importing country at a price )elo$ those applied

to identical or Blie> products in the country of the e,porter. pecifically7 if the firm sells

in the importing country at an average price )elo$ a )enchmar related to either the price

or the average costs of production in the home country7 the e,ported product is said to )e

Bdumped>. In principle7 antidumping duties are measures against unfair competition.


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." Countervailing duties5(;at are t;e are used together as the measures of

countervailing duty that are taen against the su)sidies availa)le to e,porters of foreign

countries.

Countervailing duties duties offsetting su)sidies@ do t$o thingsF they discipline the use

of su)sidies7 and regulate the actions that countries can tae to counter the effects of

su)sidies.

u)sidy generally means money or facility granted )y the state or a pu)lic )ody to eep

do$n the prices of the commodities .u)sidy may )e in the nature of direct or indirect

grant on production or e,portation of goods and also includes any special su)sidy on

transportation of any particular product.

Article 1.1 of Agreement on u)sidies and Countervailing easures defines u)sidy as

a means of financial contri)ution )y &overnment or any pu)lic )ody $ithin the territory

of the mem)er in form of direct transfer of funds7 potential direct transfer of funds or

lia)ilities or &overnment revenue $hich is due )ut is foregone or not collected or

provides goods or services other than general infrastructure or purchase goods. u)sidy

shall also )e deemed to e,ist if the &overnment entrusts or directs private entities to carry

out these functions or maes payment to funding mechanism $hich supports a

manufacturer or producer $ho is an e,porter.

Agreement on u)sidies and Countervailing easures further divides su)sidies into

a. rohi)ited su)sidies

). Actiona)le su)sidies

c. *on-actiona)le su)sidies $hich are summarily dealt $ith in art-II7 art-III and art-

I' of the Agreement on u)sidies and Countervailing easures.


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#he term countervailing means to offset the effect of something@ )y countering it $ith

something of e8ual force.

In international trade the term that is commonly used is BCountervailing measures>. #he

effect $hich are re8uired to )e offset are the effects of su)sidy )esto$ed upon )y any

country or territory directly or indirectly upon the manufacture or production of their

country $hich7 on e,port7 adversely hurts the domestic manufacturers and producers.

#he countering of the effect of the threat of in4ury and in4ury is carried on )y imposition

of countervailing duty in terms of domestic la$s )ased upon policies and guidelines laid

do$n in &A##.

u)sidies are implicit or e,plicit payments )y a government to the private sector in

return for some activity that it $ants to re$ard encourage or assist. 9nder W#< rules7

su)sidies may )e prohi)ited. Countervailing duties C'Ds@ are tariffs applied to offset

countervail@ the impact of e,port su)sidies granted )y the government of an e,porting

country. upposedly7 C'Ds should level the playing field for international competition

and mitigate distortions. It is possi)leE ho$ever7 that such remedy for su)sidies is more

harmful than the su)sidies themselves. C'Ds are often applied to appease sectoral

interests rather than discouraging or offsetting the threat or the implementation ofsu)sidies. Dumping and su)sidies Gtogether $ith anti-dumping measures and

countervailing duties C'D@ Gshare a num)er of similarities. any countries handle the

t$o under a single la$7 apply a similar process to deal $ith them and give a single

authority7 the responsi)ility for investigations.


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#he term safeguard is made up of t$o independent terms Bsafe> and Bguard>. It is

something that acts as a guard or protection or defense.

A safeguard measure is a temporary tariff or 8uota used to protect a domestic industry

from foreign e,porters.

W#< allo$s7 through its safeguard clause7 to impose temporary and nondiscriminatory

safeguards measures on imports that are causing in4ury.&A## agreement envisages the

circumstances of invocation of emergency provisions #he situation for $hich the

invocation of defensive and protective measures termed as Bafeguard measure> have

)een provided for7 are in cases $here the increase in import of any commodity is in such

increase and under such conditions $hich causes or threaten to cause serious in4ury to

domestic producers of similar or directly competitive products.

#he difference )et$een anti-dumping duties and safeguard measures is that the former

may only )e imposed $hen foreign e,porters are engaged in anti-competitive practices

$hile the latter may )e imposed on e,porters that have a fair competitive advantage. It

is not that the safeguards are non-discriminatory measures7 as they are e8ually applied to

all the trade partners.-" Anti5dumping and countervailing duties Similarities and differences

While discussing the C agreement7 one should distinguish clearly )et$een

Antidumping Duties AD@ and Countervailing Duties C'D@. ometimes AD and C'D

are referred to at the same time. #his is )ecause they share a num)er of similarities and

also many countries handle the t$o under a single la$7 apply a similar process to deal

$ith them and give a single authority responsi)ility for investigations. =o$ever7 these are

t$o different trade defense mechanisms availa)le to W#< mem)ers and are addressed )y

t$o different W#< Agreements. If a company e,ports a product at a price lo$er than the

price it normally charges in its o$n home maret7 it is said to )e dumping the product.

It is therefore a situation of international price discrimination. #he Agreement on

Implementation of Article 'I of &A## 1(("7 commonly no$n as the Anti-Dumping


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Agreement ADA@7 provides ela)oration on the )asic principles set forth in Article 'I of

&A## 7 to govern the investigation7 determination7 and application7 of anti-dumping

duties. #he W#< Agreement on u)sidies and Countervailing easures C@ on the

other hand disciplines the use of su)sidies7 and it regulates the actions countries can tae

to counter the effects of su)sidies. #he fundamental difference )et$een the t$o is $hile

dumping is an action )y a company7 for su)sidies7 it is the government that acts either )y

granting su)sidies directly or )y re8uiring companies to su)sidie certain customers.

Another important feature of AD and C is that the &A## agreements allo$ that the

in4ured domestic industry is permitted to file for relief under the anti-dumping as $ell as

countervailing duties. =o$ever7 simultaneous imposition of )oth countervailing and anti-

dumping duties to compensate for the same situation of dumping or e,port su)sidiation

is not allo$ed. Article 'I.% of &A## clearly specifies7 *o product of the territory of any

contracting party imported into the territory of any other contracting party shall )e

su)4ect to )oth anti-dumping and countervailing duties to compensate for the same

situation of dumping or e,port su)sidiation.

1"To 8;om do t;ese measures appl


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>"Aut;orities regulating and implementing t;ese measures"

#he )asic principles of the afeguards7 Countervailing and Anti-Dumping measures are

provided in the Article of &A## 1((".

Article 'IF Anti-dumping and Countervailing Duties

Article JIJF +mergency Action on Imports of articular roducts

Article J'IF u)sidies

#here are separate multilateral agreements entered into )y W#< mem)er Countries

$hich provide for the )asic frame $or for the implementation of the principles laid

do$n under the &A## agreements. #he mem)er Countries have also drafted their

domestic la$s in consonance of the multilateral agreements $ith respect to afeguards7

Countervailing and Anti-Dumping duties .India )eing one of the founder mem)er of the

erst$hile &A## has drafted its tatutes;amended its pre-e,isting tatutes for imposition

of afeguards7 Countervailing and Anti-Dumping measures in compliance of the

ultilateral Agreements .#he multilateral Agreements entered into )y the mem)er

countries on afeguards7 Countervailing and Anti-Dumping duties are as follo$s-

0"Agreement on Implementation of Article 'I of the &eneral Agreement on #ariffs and

#rade 1(("Agreement on anti-dumping measures@

."Agreement on u)sidies and Countervailing measures and-"Agreement on afeguards.

Article 10 Agreement on Implementation of Article 'I of the &eneral Agreement on

#ariffs and #rade 1(("7 and Article 2" on Agreement on u)sidies and Countervailing

measures and Article 13 on Agreement on afeguards provides for the formation of

respective committees under each of the agreements.


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0" Committee on Anti56umping ?ractises under Article 10 Agreement on

Implementation of Article 'I of the &eneral Agreement on #ariffs and #rade 1((".

Committee shall )e comprised of representative from each of the mem)er Countries. #he

W#< ecretariat shall act as the secretariat of the committee. #he committee shall elect

its o$n Chairman and shall meet not less than t$ice a year or as envisaged )y the

agreement at the re8uest of any mem)er.

#he committee shall have the po$er to set up such su)sidiary )odies as appropriate for its

functioning.

Committee and su)sidiary )ody under it may see information from any source it may

deem appropriate )ut it shall inform the mem)er country from $hose 4urisdiction the

information is collected.

em)er shall report $ithout delay all preliminary and final dumping action taen to the

committee.

+ach mem)er shall notify the committee

a@ as to $hich of its authorities are competent to initiate and conduct

investigation under the Agreement

)@ its domestic procedures governing the initiation and conduct of

anti-dumping investigations.

."Committee on Su:sidies and Countervailing Measuresand u)sidiary )odies under

Article 2" on Agreement on u)sidies and Countervailing measures.

Committee shall )e comprised of representative from each of the mem)er Countries. #he

W#< ecretariat shall act as the secretariat of the committee. #he committee shall elect

its o$n Chairman and shall meet not less than t$ice a year or as envisaged )y the

agreement at the re8uest of any mem)er.

#he committee shall have the po$er to set up such su)sidiary )odies as appropriate for its

functioning.

#he Committee shall esta)lish a ermanent &roup of +,perts composed of five

independent persons7 highly 8ualified in the field of su)sidies and trade relations.

em)er shall report $ithout delay all preliminary and final dumping action taen to the

committee.


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#he e,perts $ill )e elected )y the committee and one of them $ill )e replaced every year

#he &+ may )e re8uested to assist a panel7 as provided for in paragraph % of

Article "#he &+ may )e re8uired to revie$ the evidence )y a mem)er of the use of a

prohi)ited su)sidy and mae recommendation to the Dispute ettlement Hoard@. #he

Committee may also see an advisory opinion on the e,istence and nature of any su)sidy.

#he &+ may )e consulted )y any em)er for an advisory opinion on the nature of any

su)sidy proposed to )e introduced or currently maintained )y that em)er. Hut such an

opinion $ill )e confidential and may not )e invoed in proceedings under Article .

Committee and su)sidiary )ody under it may see information from any source it may

deem appropriate )ut it shall inform the mem)er country from $hose 4urisdiction the

information is collected.

-. Committee on Safeguardsunder Article 13 on Agreement on afeguards. Committee

under the Agreement on afeguards has )een given a more significant and a )roader role

than the committees under Anti-dumping and C'D.

#he Committee $ill have the follo$ing functionsF

a@ to monitor7 and report annually to the Council for #rade in &oods on7 the general

implementation of this Agreement and mae recommendations to$ards its improvementE

)@ to find7 upon re8uest of an affected em)er7 $hether or not the procedural

re8uirements of this Agreement have )een complied $ith in connection $ith a safeguard

measure7 and report its findings to the Council for #rade in &oodsE

c@ to assist em)ers7 if they so re8uest7 in their consultations under the provisions of

this AgreementE

d@ to e,amine measures covered )y Article 16 and paragraph 1 of Article 117 monitor

the phase-out of such measures and report as appropriate to the Council for #rade in

&oodsE


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e@ to revie$7 at the re8uest of the em)er taing a safeguard measure7 $hether

proposals to suspend concessions or other o)ligations are su)stantially e8uivalent7 and

report as appropriate to the Council for #rade in &oodsE

f@ to receive and revie$ all notifications provided for in this Agreement and report

as appropriate to the Council for #rade in &oodsE and

g@ to perform any other function connected $ith this Agreement that the Council for

#rade in &oods may determine.

#o assist the Committee in carrying out its surveillance function7 the ecretariat shall

prepare annually a factual report on the operation of this Agreement )ased on

notifications and other relia)le information availa)le to it.

Administration of Safeguards, Countervailing and Anti56umping measures under

domestic 'a8s

All these three measures are administered )y the Central &overnment )y the follo$ing

t$o authoritiesF

1. Director &eneral afeguard@7 officer under Department of :evenue7 inistry of

/inance7 &overnment of India7 and

2. Directorate &eneral of anti-dumping and Allied Duties D&AD@ functioning under the

Dept. of Commerce in the inistry of Commerce and Industry. #he anti-dumping K

countervailing measures are administered in India )y the Directorate &eneral of Anti-

dumping and Allied Duties $hich $as set up on 13th April 1((5.

9nder the Domestic a$ the Central &overnment has the po$er to impose afeguards7

Countervailing and Anti-Dumping duties. Central &overnment under ection 5H has the

po$er to impose safeguard duty7 po$er to impose #ransitional product specific safeguard

duty on imports from eople>s :epu)lic of China under ection 5C7 po$er to impose

Countervailing duty on su)sidied articles )y $ay of *otification in the


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under ection (and po$er to impose Anti-dumping duty on dumped articles )y $ay of

*otification in the


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Hoth Anti-dumping and anti su)sidies K countervailing measures in India are

administered )y the Directorate &eneral of anti-dumping and Allied Duties D&AD@

functioning in the Dept. of Commerce in the inistry of Commerce and Industry and the

same is headed )y the Designated Authority. #he Designated AuthorityMs function7

ho$ever7 is only to conduct the anti-dumping;anti su)sidy K countervailing duty

investigation and mae recommendation to the &overnment for imposition of anti-

dumping or anti su)sidy measures.

(orld Trade 2rgani@ation $(T2

#he World #rade


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#he W#< is headed )y a inisterial Conference7 composed of all W#< mem)ers7 $hich

meets at least once every t$o years. It is7 ho$ever7 the &eneral Council &C@ -also made

up of the full mem)ership of the W#


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#he num)er of ultilateral and lurilateral are an important and )asic )uilding )locs of

W#


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taing steps against dumping. Accordingly7 the importing country $ould )e allo$ed to

tae action against dumping7 $henF

Dumping is not only said to have taen place )ut also sho$n to have taen place )y

the importing countryE

s home

country.

In case the a)ove factors are satisfied7 &A## and the corresponding Anti-dumping

Agreement7 allo$s a nation to tae action against the dumping under and in the manner

provided to in the said Agreement. *ormally7 anti-dumping is levied as a duty in addition

to the duty of customs normally levied. #he intention is to )ring the price closer to the

Bnormal value> or to do such as $ould remove the in4ury to the domestic industry in theimporting country.

W#< lays do$n principles for assessing $hether a particular product is )eing dumped

and also the e,tent of such dumping. #he agreement also provides three methods to

calculate a product>s normal value. #he first method is )ased on the difference

)et$een the price in the e,porter>s domestic maret called normal value@ and the price

charged for e,port to the su)4ect nation. In the a)sence of the price in the domestic

maret7 the second method is to compare the price charged )y the e,porter for e,ports to

another country that to the price charged on e,port to the su)4ect nation. In the a)sence

of such a compara)le price7 as a third alternative7 the normal price in the e,porting

maret is derived )y considering the e,porter>s production costs7 e,penses and his normal

profit margins7 $hich is then compared to the price charged for e,port to the su)4ect

nation. In all the three methods7 if the price charged for e,port to the su)4ect nation is


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materially lo$er from the compara)le price7 then dumping is presumed to have taen

place.


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referred to in the agreement as Bspecific su)sidies>7 $hich are categoried further into

Bprohi)ited su)sidies> and Bactiona)le su)sidies>. #he term Bsu)sidy> has )een defined to

mean any financial contri)ution provided )y a &overnment or a u)lic Hody in the form

of transfer of funds7 ta, incentives7 provision of goods or service or any other form of

income or price support. u)sidies7 )y their very nature7 can distort free international

trade. In order to see discipline on the use of su)sidies7 mem)er nations at W#< have

entered into an agreement called the Agreement on u)sidies and Countervailing

easures7 $hich regulates su)sidies and also provides for counter actions against the

effects of su)sidies.

#he W#< Agreement differentiates non-permissi)le su)sidies into t$o )road categories

i.e. prohi)ited su)sidies and actiona)le su)sidies. #he Agreement also had originally

contained a third category7 namely non-actiona)le su)sidies7 $hich e,isted for five years7

ending on 31-Dec-1((( and $hich did not get e,tended. #he meaning of the terms

prohi)ited su)sidies and actiona)le su)sidies are e,plained )elo$F

rohi)ited su)sidiesF u)sidies that re8uire the recipients to meet certain e,port

targets or to use domestic goods instead of imported goods $ould fall under the

category of prohi)ited su)sidies. #hey are prohi)ited )ecause they are specifically

designed to distort international trade and are therefore liely to hurt trade )et$een

countries. #hey can )e challenged in the W#< dispute settlement procedure $here

they are handled under an accelerated timeta)le. If the dispute settlement procedure

confirms that the su)sidy is prohi)ited7 then the country providing such su)sidy must

$ithdra$ them immediately and in the a)sence of $hich7 the complaining country

can tae counter measures including imposition of countervailing duty $hen domestic

producers are hurt )y imports of su)sidied products.

Actiona)le su)sidiesF u)sidies $hich have an adverse effect on the interest of the

complaining country $ould fall under the category of actiona)le su)sidies. #he

complaining country need not )e the importing country and may )e any country

$hose interest is said to )e affected adversely. W#< defines actiona)le su)sidy to )e

of three types i.e. those $hich arise $hen any su)sidy hurts the domestic industry of


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importing country or is such $hich has the effect of reducing the share of the

competing country in the competing e,port maret or is such $hich mae the

imported goods uncompetitive to domestic goods.


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shall not apply to certain countries included in Anne, 'II of the Agreement. #hese

countries are permitted to provide e,port su)sidies. As India is one of the countries

included in Anne, 'II7 it can provide e,port su)sidies. #he fle,i)ility to an Anne, 'II

country for providing e,port su)sidies on a product is contingent on the country

concerned not having reached e,port competitiveness in that product. In case e,port

competitiveness in a product has )een reached7 Article 2.% of the AC re8uire that the

e,port su)sidies on it )e phased out over a period of eight years.

After the phase-out period7 the country concerned $ould )e prohi)ited from granting

e,port su)sidies on the product concerned. =o$ever7 the fle,i)ility to grant e,port

su)sidies on other products7 $hich have not reached e,port competitiveness7 $ould not)e affected )y some other product having reached e,port competitiveness.

Article JIJ of &A##7 1((" and so also &A##7 1("7 lays do$n the provisions $ith

respect to safeguards. W#< allo$s a mem)er nation to restrict imports of a particular

product $hen the domestic industry is in4ured or threatened $ith in4ury to )e caused )y

the surge in imports of any product into its country. =o$ever7 to 4ustify any action

referred to as Bsafeguard>@7 )y the mem)er nation against such surge in imports7 the

in4ury $ould need to )e serious. In order to see implementation of Article JIJ and to

provide the manner and use of safeguard measures7 mem)er nations at W#< have entered

into an agreement called the Agreement on afeguards. =o$ever7 the W#< discourages

its mem)er nations from entering into )ilateral negotiations outside the auspices of &A##

either )y adopting to restrain e,ports Bvoluntarily> or )y agreeing to other means such as

sharing of marets7 etc.

#he W#< agreement sets out the criteria for assessing $hether serious in4ury $as

caused or threatened to )e caused and the factors $hich must have )een considered in

determining the impact of imports on the domestic industry. #he surge in imports may )e

considered to )e either real increase in imports i.e. a)solute increase in value or volume

or it may )e a relative increase in imports i.e. say an increase in the share of imports in a

maret $hich is shrining. W#< provides that any safeguard measure $hen imposed


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should )e applied only to the e,tent necessary7 so as to prevent or give remedy to the

serious in4ury $hich has )een caused or is threatening to cause. /urther7 $hen

8uantitative restrictions 8uotas@ are imposed7 the measure should )e such as $hich

$ould not normally reduce the 8uantities of imports )elo$ the annual average for the last

three representative years7 unless clear 4ustification is given that a different level is

necessary to prevent or remedy serious in4ury.

#he W#< agreement sets out the re8uirements for conducting safeguard investigations )y

national authorities. In this regard7 it emphasies the national authorities to )e

transparent and to follo$ esta)lished rules and practices7 avoiding there)y7 any ar)itrary

methods in safeguarding the interest of domestic industry.

/urther7 the authorities conducting investigations have to announce pu)licly $hen

hearings are to tae place and provide other appropriate means for interested parties to

present evidence. #he implementation of the safeguard measure should not in principle

)e targeted at imports from a particular country )ut 8uotas may )e allocated among

supplying countries in the manner descri)ed in the agreement7 including in the

e,ceptional circumstance. A safeguard measure $hich has )een implemented )y a

mem)er nation7 should not last for more than four years7 although the safeguard measure

can )e e,tended for a further period up to eight years7 su)4ect to a determination )y

competent national authorities that the safeguard measure are considered necessary in the

interest of industry. *ormally7 $hen a country restricts imports in order to safeguard its

domestic producers7 it must give something in return to the e,porting country. W# commitments. In this regard7 mem)er nations have to report each phase of a

safeguard investigation and related decision-maing for revie$ )y the said committee.


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."0 Agreement on Implementation of Article 7I of t;e 4eneral Agreement on

Tariffs and Trade 01

#he Agreement is divided into 3 parts and contains 15 Articles and 2 Anne,es.

Article 'I of &A## 1((" authories the imposition of a specific anti-dumping duty on

imports from a particular source7 in e,cess of e,isting rates7 $hen dumping causes or

threatens in4ury to a domestic industry7 or materially retards the domestic industry.

#he Agreement on Implementation of Article 'I of &A## 1(("7 also commonly no$n

as the Anti-Dumping Agreement7 further ela)orates on the principles esta)lished in

Article 'I7 to govern the investigation7 determination7 and application7 of anti-dumping

duties.

#he Anti-Dumping Agreement esta)lishes detailed procedural rules for the initiation and

conduct of anti-dumping actionsF the investigations7 the imposition of measures7 and the

duration and revie$ of measures. It defines dumping as the introduction of a product intothe commerce of another country at a price )elo$ its Bnormal value>. *ormal value is

defined as the compara)le profita)le domestic price7 ad4usted to an e,-factory level. If a

domestic price is not availa)le7 or is not representative7 the costs of production plus a

reasona)le margin for sales7 e,penses and profit@ or compara)le e,port prices to third

countries ad4usted to an e,-factory level@ can )e taen as the normal value.

When it has )een esta)lished that the e,port price is less than the normal value7 dumping

has occurred. =o$ever7 according to the Anti-Dumping Agreement7 )efore )eing allo$ed

to impose an anti-dumping duty the importing country has also toF

-- determine the e,tent of the Bdumping margin>7 that is as to ho$ much the e,porter>s

domestic price e,ceeds the e,port price7 and $hich is used as a )ase to compute the

rate of antidumping dutyE

-- sho$ that dumping is causing material in4ury in the domestic maret.


25/95

Disputes in the anti-dumping area are su)4ect to )inding dispute settlement )efore the

Dispute ettlement Hody of the W#


26/95

#he Agreement is divided into 11 parts and contains 32 Articles and Anne,.

u)sidies $hich directly or indirectly affect trade flo$s are regulated )y the W#< $hich

defines $hat is a su)sidy and $hich su)sidies are for)idden and the countervailing

measures to offset their effects.

#he 9ruguay :ound of &A## negotiations produced the Agreement on u)sidies and

Countervailing easures C@. It also esta)lished separate rules for agricultural

su)sidies in the W#< Agreement on Agriculture7 and too some minimal steps to$ard

addressing su)sidies issues in services industries $ithin the &eneral Agreement on #rade

in ervices &A#@.

#he Agreement on u)sidies and Countervailing easures disciplines the use of

su)sidies7 and regulates the actions that countries can tae to counter the effect of

su)sidies imposed )y others. W#< disciplines relating to su)sidies have a t$o fold

o)4ectiveF -

/irstly7 to esta)lish rules that avoid or reduce adverse effects on mem)ers7 and prevent

the use of su)sidies to nullify or impair concessions and7

econdly7 toP regulate the use of countervailing duties )y mem)ers seeing to offset the

in4urious effects of foreign su)sidiation of products.

#he structure of the C Agreement is the follo$ing-

art I defines the coverage of the discipline and provides a definition of the term

Bsu)sidy>.

arts II7 III and I' classify su)sidies into categories and esta)lish rules for dispute

settlement and procedures.

art ' esta)lishes the su)stantive and procedural re8uirements that must )e fulfilled for

the application )y a em)er of a countervailing measure against su)sidied imports.

arts 'I and 'II define the institutional structure and modalities for implementation of

the Agreement.


27/95

art 'III esta)lishes special treatment rules for developing country em)ers.

art IJ contains transitional rules for developed country and economies in transition.

arts J and JI descri)e7 respectively7 a general dispute settlement provision and final

provisions.

According to the Agreement>s definition7 a su)sidy entails a financial contri)ution )y a

government7 in the form ofF

a@P a direct transfer of funds

)@Pa decision to forego revenue that is other$ise due7

Pc@ the provision of goods and services

d@Pan income or price support scheme7 if the financial contri)ution confers a )enefit.

#he definition of su)sidy as a financial contri)ution esta)lishes that not all government

programs are su)sidies.


28/95

Actiona:le su:sidies are measures that are permitted )ut may give rise to a consultation

or to the imposition of countervailing duties if the complaining country can demonstrate

that the su)sidy has damaged its interests. #he agreement defines three types of damageF

damage to a domestic industry in an importing countryE

damage to rival e,porters from another country $hen the t$o compete in

third maretsE

damage to e,porters trying to compete in the su)sidiing country>s

domestic maret.

#hree types of adverse effects can )e challenged multilaterallyF

In4ury to domestic industry.

erious pre4udice. #his type of adverse effect can arise $hen a su)sidy causesF

1@displacement of e,ports7 even in a third country maretE

2@ significant price reductions or loss in sales

3@ an increase in the su)sidiing mem)er>s share of $orld maret

*ullification or impairment of )enefits accruing under the &A## 1((".

art ' of the C Agreement esta)lishes detailed rules regarding the initiation and

conduct of countervailing investigations7 the imposition of preliminary and final

measures7 and the duration of measures. ost of the procedural rules of the C

Agreement are the same as those in the Anti-Dumping Agreement.

If the Dispute ettlement Hody rules that the su)sidy does have an adverse effect7 the

su)sidy must )e $ithdra$n or its adverse effect must )e removed immediately. Again7 if

domestic producers are hurt )y imports of su)sidied products7 countervailing duty can

)e imposed provided that the importing country proves that the import su)sidy e,ists7 that

the domestic industry has )een in4ured and that there is a causal lin )et$een the t$o.

#he su)sidied e,porter may agree to raise its e,port prices as an alternative to )eing

charged countervailing duties on its e,ports.

W#< mem)ers are re8uired to notify their su)sidy programs to the W#< secretariat each


29/95

year7 giving information on the type of su)sidy7 the amounts involved7 duration7 their

policy o)4ective as $ell as statistics allo$ing their trade effect to )e determined.

With regard to countervailing measures7 mem)ers are re8uired to report legislation and

regulations7 all actions taen as $ell as competent authorities and domestic procedures.

em)ers must also su)mit semi-annual reports on countervailing duty actions taen.

pecial e,emptions $ere granted to developing countries and economies in transition.

east developed countries and developing countries $ith less than O17666 per capita &*

are e,empted from disciplines on prohi)ited e,port su)sidiesE other developing countries

had to remove e,port su)sidies )y 2663. Import-su)stitution su)sidies0 had to )e

eliminated )y 2663 in least-developed countries and )y 2666 in other developing

countries. #ransition economies had to phase out su)sidies )y 2662.

."- Agreements on Safeguards"

#his Agreement contains 1" Articles and 1 Anne,.

afeguard protection is an Import protection provided under the afeguards Clause7 that

is Article JIJ of the &A##. #his article permits countries to restrict imports causing

in4ury through temporary and nondiscriminatory restrictions. #he Agreement on

afeguards & Agreement@ illustrates the rules for application of safeguard measures

relative to Article JIJ of &A## 1((".

#he W#< Agreement defines safeguard measures as emergency actions $ith respect to

increased imports of particular products7 $hen such imports have caused or threaten to

cause serious in4ury to the importing em)erMs domestic industry. uch measures can

consist of 8uantitative import restrictions or of duty increases to rates higher than those

agreed $ithin the W#


30/95

#he guiding principles of the Agreement are that

measures must )e temporary

they may )e imposed only $hen a surge in imports is found to cause or threaten

serious in4ury to a competing domestic industry

that they generally@ )e applied on a non-discriminatory $ay

and that the em)er imposing them generally@ must pay compensation to the

em)ers $hose trade is affected

#he agreement sets out criteria for assessing $hether serious in4ury is )eing caused or

threatened7 and the factors $hich must )e considered in determining the impact of

imports on the domestic industry. &A## rules esta)lish that safeguards should only )e

used $hen imports increase une,pectedly. #he W#s afeguards Committee oversees

the operation of the Agreement.

A safeguard measure should not last more than four years7 even though it can )e e,tended

up to eight years7 su)4ect to a determination )y competent national authorities that the

measure is needed and that there is evidence the industry is ad4usting. easures imposed

for more than a year must )e progressively li)eralied.

#hus7 safeguard measures7 unlie anti-dumping measuresF

do not re8uire finding evidence of unfair practicesE

generally must )e non discriminatoryE

generally must )e paid for )y the em)er applying them.

Hecause they are non discriminatory7 and they are costly for the country applying them7

they are safeguards are general less distortive than other contingent measures and $hen

applied their effects on the $hole national economy is generally taen into account.

#o some e,tent developing countries> e,ports are shielded from safeguard actions

)ecause importing countries can apply safeguard measure to a product from a developing

country if the developing country is supplying a significant share of the imports of that

product.


31/95

#he use of safeguards first )egan in the 1("6s $hen the 9.. )egan to pursue a li)eral

trade agenda. /earing that the lo$ering of a tariff on some particular good as part of a

trade agreement could result in a larger than e,pected import surge that $ould hurt

domestic firms7 the 9.. government insisted that a safeguard provision )e part of every

trade treaty that it signed.

rior to the 9ruguay :ound>s revisions to the safeguard rules in 1(("7 the use of a

safeguard measure $as su)4ect to measured retaliation. As part of the 9ruguay :ound

reforms7 the safeguard rules changed so that safeguards are no longer su)4ect to

retaliation for the first three years they are in effect. #his modification $as intended to

mae nondiscriminatory safeguards more attractive for protection- seeing governments

relative to discriminatory antidumping duties.

III" 6ispute Settlement

#he po$er to settle international disputes $ith )inding authority distinguishes the World

#rade


32/95

the evidence and present a report to the DH recommending a course of action $ithin si,

months. #he panel can solicit information and technical advice from any relevant source7

though it is not re8uired to do so. s non-compliance $ith panel rulings in the goods-)ased

Hanana dispute.


33/95

In on of the latest meeting of W#s Dispute ettlement Hody DH@7 a panel $as

esta)lished at India>s re8uest to e,amine the 9 customs )ond directive for merchandise

su)4ect to anti-dumping; countervailing duties. India had formally lodged a complaint on

Lune 0 this year against 9A as 9 Commerce Department had imposed 16.1 percent

anti - dumping duty on shrimp imported from India $ithout adhering to Beroing>

principles of anti -dumping duty. #als )et$een the t$o countries failed7 leaving India

$ith no other option )ut to )ring it to the DH7 and though the 9 re4ected India>s first

re8uest7 the DH automatically esta)lished it in the second instance.

India>s complaint to DH is that the and la$s and regulations of the 9 imposed on

importers of certain $arm $ater shrimp from India are ar)itrary and discriminatory in

nature and are inconsistent $ith several provisions of the Anti-Dumping Agreement7 the

u)sidies and Countervailing easures Agreement and the &A##.

I7"Rules of 2rigin

:ules of origin are the criteria used to define $here a product $as made. #hey are an

essential part of trade rules )ecause a num)er of policies discriminate )et$een e,porting

countriesF 8uotas7 preferential tariffs7 anti-dumping actions7 countervailing duty charged

to counter e,port su)sidies@7 and more. :ules of origin are also used to compile trade

statistics7 and for made in ... la)els that are attached to products. #his is complicated )y

glo)aliation and the $ay a product can )e processed in several countries )efore it is

ready for the maret.

#he :ules of


34/95

reasona)le mannerE and that they are )ased on a positive standard in other $ords7 they

should state $hat does confer origin rather than $hat does not@

#he Agreement on :ules of


35/95

7"'egislative Frame 8or! for implementation and administration of

trade protection measures in India

#he provisions governing the levy of anti-dumping 7countervailing and safeguard duty

are contained in the Customs #ariff Act7 1(% (hereinafter referred to in this section as

Act)and the :ules made there under. #hese can )e summed up as in the #a)le num)er

%.1 given )elo$F

6utiesCustoms Tariff Act, 0>5

?rovisions

Rules governing trade remedies

measures

3otifications

3um:er

3otifica

Issued

under r

Anti-dumping

ection (A

ection (C

Customs #ariff Identification7

Assessment and Collection ofAnti-dumping Duty on DumpedArticles and for Determination ofIn4ury@ :ules7 1((%

2;(% ! Cus

*#@7 dated61-61-1((%7

ection(AA

ection (H

Countervailing

duties

ection (

ection (C

Customs #ariff Identification7Assessment and Collection ofCountervailing Duty onu)sidied Articles and forDetermination of In4ury@ :ules7

1((%

*o. 1;(% !Cus *#@7dated 61-61-1((%

ection (H

afeguardsmeasures

ection 5C #he Customs #ariff Identificationand Assessment of afeguardDuty@ :ules 1((

*o. 3%;( !Cus *#@7dated 2(-6-1((

*o. 56;2! Cus *dated 2(1((

ection 5H Customs #ariff #ransitionalroducts pecific afeguard Duty@:ules7 2662

*o. 3";2662 !Cus *#@7dated 11-60-2662

*o. 56;2! Cus *dated 26266%

#he provisions governing the levy of anti-dumping duty are contained in the Customs

#ariff Act7 1(% and the :ules made there under. ection (A of the Act7 provides for levy

and collection of anti-dumping duty on import of articles considered as )eing dumped

into India from a country outside India. In this regard7 the &overnment has issued

*otification *o. 2;(% ! Cus *#@7 dated 61-61-1((%7 providing for Customs #ariff

Identification7 Assessment and Collection of Anti-dumping Duty on Dumped Articles

and for Determination of In4ury@ :ules7 1((% to determine the manner in $hich the


36/95

articles lia)le for anti-dumping duty are to )e identified7 the manner in $hich e,port

price7 normal price7 the margin of dumping is to )e determined and the manner in $hich

the duty is to )e collected and assessed under the Act.

#he Act contains separate provisions providing for refund in certain circumstances7 the

circumstances under $hich levy under ection (A $ould not )e applica)le and the

procedure for appeal. #hese are contained in ection (AA7 ection (H and ection (C of

the Act7 respectively. Accordingly7 ections (A7 (AA7 (H and (C together $ith the rules

referred to a)ove7 contain the provisions governing Anti-dumping in India.

#he provisions governing the levy of countervailing duty is contained in the Customs

#ariff Act7 1(% and the :ules made there under. ection ( of the Act7 provides for levy

and collection of countervailing duty on import of su)sidied articles into India from a

country outside India. In this regard7 the &overnment has issued *otification *o. 1;(% !

Cus *#@7 dated 61-61-1((%7 providing for rules to determine the manner in $hich the

su)sidied articles lia)le for countervailing duty are to )e identified7 the manner in $hich

su)sidy provided is to )e determined and the manner in $hich the duty is to )e collected

and assessed under the Act. #hese rules are called Customs #ariff Identification7

Assessment and Collection of Countervailing Duty on u)sidied Articles and for

Determination of In4ury@ :ules7 1((%.

#he Act contains separate provisions for the circumstances under $hich the levy under

ection ( $ould not )e applica)le and the procedure for appeal. #hese are contained in

ection (H and ection (C of the Act7 respectively. Accordingly7 ections (7 (H and (C

together $ith the rules referred to a)ove7 contain the provisions governing Countervailing

Duty in India.

#he domestic la$ to implement the provisions of the Agreement on afeguards has )een

enacted under ection 5H $hich provides for provides for levy and collection of

safeguard duty on import of articles from a country outside India to protect its domestic

from serious in4ury and ection 5C $hich provides for provides for levy of specific

safeguard duty on imports from the :epu)lic of China7 $here the imports cause or

threaten to cause maret disruption to domestic industry 7of the Customs #ariff Act7 1(%.


37/95

#he Customs #ariff Identification and Assessment of afeguard Duty@ :ules7 1(( and

Customs #ariff #ransitional roducts pecific afeguard Duty@ :ules7 2662 issued )y

Central &overnment vide *otification *o. 3%;( ! Cus *#@7 dated 2(-6-1((7 provide

for rules governing the procedural aspects of afeguard duties. #$o other *otification are

/irst 7*otification *o. *o. 56;266% ! Cus *#@ dated 26-6(-266% issued under #he

Customs #ariff Identification and Assessment of afeguard Duty@ :ules7 1(( and

econd *otification *o. 56;266% ! Cus *#@7 dated 2(-6-1(( issued under Customs

#ariff #ransitional roducts pecific afeguard Duty@ :ules7 2662

7I" Anti5dumping duties

#he provisions governing the levy of anti-dumping duty are contained in the Customs

#ariff Act7 1(% (hereinafter referred to in this section as Act)and the :ules made there

under. ection (A of the Act7 provides for levy and collection of anti-dumping duty on

import of articles considered as )eing dumped into India from a country outside India. In

this regard7 the &overnment has issued *otification *o. 2;(% ! Cus *#@7 dated 61-61-

1((%7 providing for rules to determine the manner in $hich the articles lia)le for anti-dumping duty are to )e identified7 the manner in $hich e,port price7 normal price7 the

margin of dumping is to )e determined and the manner in $hich the duty is to )e

collected and assessed under the Act. #hese rules are called Customs #ariff

Identification7 Assessment and Collection of Anti-dumping Duty on Dumped Articles

and for Determination of In4ury@ :ules7 1((% (hereinafter referred to in this section as

Rules).

#he Act contains separate provisions providing for refund in certain circumstances7 the

circumstances under $hich levy under ection (A $ould not )e applica)le and the

procedure for appeal. #hese are contained in ection (AA7 ection (H and ection (C of

the Act7 respectively. Accordingly7 ections (A7 (AA7 (H and (C together $ith the rules

referred to a)ove7 contain the provisions governing Anti-dumping in India.


38/95

rinciples governing the determination of *ormal value7 e,port price and margin of

Dumping are laid do$n under Anne,ure I to the Customs #ariff Identification and

Assessment and Collection of Anti-dumping Duty on Dumped Articles and for

Determination of In4ury@ :ules7 1((%. #he understanding of the anti-dumping practices

and procedures is not feasi)le $ithout understanding the terms *ormal value7 e,port

price and margin of Dumping

Dumping occurs $hen the e,port price of goods imported into India is less than the

*ormal 'alue of Blie articles> sold in the domestic maret of the e,porter. Imports at

cheap or lo$ prices do not per se indicate dumping. #he price at $hich lie articles are

sold in the domestic maret of the e,porter is referred to as the *ormal 'alue of those

articles.BSec A$c

0 3ormal 7alue BSec A$c

#he normal value is the compara)le price at $hich the goods under complaint are sold7 in

the ordinary course of trade7 in the domestic maret of the e,porting country or territory.

If the normal value cannot )e determined )y means of domestic sales7 the Act provides

for the follo$ing t$o alternative methodsF

l. Compara)le representative e,port price to an appropriate third country.

1. Cost of production in the country of origin $ith reasona)le addition for

administrative7 selling and general costs and for profits.

B*ormal 'alue> is one of the most important factors in determination and assessment of

level of dumping. In any anti-dumping investigation it is the normal value $hich $hen

compared $ith the e,port price determines the margin of dumping.

. Export ?rice BSec A $:

#he e,port price of goods imported into India is the price paid or paya)le for the goods

)y the first independent )uyer.

- Constructed Export ?rice BSec A $:

#here may )e a situation $here the domestic sales or third country sales of lie product

are not in the ordinary course of #rade or the sales in the domestic maret of the


39/95

e,porting country are very lo$ in volume If there is no e,port price or the e,port price is

not relia)le )ecause of association or a compensatory arrangement )et$een the e,porter

and the importer or a third party7 the e,port price may )e constructed on the )asis of the

price at $hich the imported articles are first resold to an independent )uyer. If the articles

are not resold as a)ove or not resold in the same condition as imported7 their e,port price

may )e determined on a reasona)le )asis.

1 Margin of 6umping

argin of dumping refers to the difference )et$een the *ormal 'alue of the lie article

and the +,port rice of the product under consideration. argin of dumping is normally

esta)lished on the )asis ofF-

-Pa comparison of $eighted average *ormal 'alue $ith a $eighted average of prices of

compara)le e,port transactionsE or

-Pcomparison of normal values and e,port prices on a transaction to transaction )asis.

A *ormal 'alue esta)lished on a $eighted average )asis may )e compared to prices of

individual e,port transactions if the Designated Authority finds a pattern of e,port prices

that differ significantly among different purchasers7 regions7 time period7 etc. It is

significant to note that the alternative method of comparing the normal values and e,port

prices is a ma4or change introduced after the 9ruguay :ound. #he margin of dumping is

generally e,pressed as a percentage of the e,port price.

> Factors Affecting Comparison of 3ormal 7alue and Export ?rice

#he e,port price and the normal value of the goods must )e compared at the same level

of trade7 normally at the e,- factory level7 for sales made as near as possi)le in time. Due

allo$ance is made for differences that affect price compara)ility of a domestic sale and

an e,port sale. #hese factors7 inter alia7 includeF

hysical characteristics

evels of trade

Quantities


40/95

#a,ation

Conditions and terms of sale

It must )e noted that the a)ove factors are only indicative and any of the factors $hich

can )e demonstrated to affect the price compara)ility7 is considered )y the Authority for

the purpose of comparison.

/ 'i!e Articles

Dumping can )e a su)4ect matter of anti-dumping regulation only $here the product

alleged to )e dumped is produced or a product of a lie nature is produced in India. Anti-

dumping action can )e taen only $hen there is an Indian industry $hich produces lie

articles $hen compared to the allegedly dumped imported goods. #he article produced

in India must either )e identical to the dumped goods in all respects or in the a)sence of

such an article7 another article that has characteristics closely resem)ling those goods.

Inur< Anal. aterial retardation

to the esta)lishment of an industry is also regarded as in4ury. #he material in4ury or threatthereof cannot )e )ased on mere allegation7 statement or con4ecture. ufficient evidence

must )e provided to support the contention of

material in4ury. In4ury analysis can )roadly )e

divided in t$o ma4or areasF

The Volume Efect

The Authority examines the volumeof the dumped imports, includingthe extent to which there has been

or is likely to be a signicantincrease in the volume of dumpedimports, either in absolute terms orin relation to production orconsumption in India, and its aecton the domestic

T;e ?rice Effect

#he effect of the dumped imports on prices in thIndian maret for lie articles7 including thee,istence of price undercutting7 or the e,tent to$hich the dumped imports are causing pricedepression or preventing price increases for thegoods $hich other$ise $ould have occurred. #hconse8uent economic and financial impact of the

dumped imports on the concerned Indian industrcan )e demonstrated7 inter alia )yF - decline in output

P -loss of salesP -loss of maret shareP -reduced profits -decline in productivity -decline in capacity utiliation -reduced return on investments -price effects -adverse effects on cash flo$7 inventories7

employment7 $ages7 gro$th7 investments7a)ility to raise capital7 etc.


41/95

In4ury analysis is a detailed and intricate e,amination of all the relevant factors. It is not

necessary that all the factors considered relevant should individually sho$ in4ury to the

domestic industry )ut the ascertainment of in4ury or threat of in4ury on any of the relevant

factor can )e a consideration in the investigation carried out for the purpose of ant-

dumping.

D 3on5inurious ?rice in relation to inur< margin

*on-In4urious rice *I@ is that level of price7 $hich the industry is7 e,pected to have

charged under normal circumstances in the Indian maret during the eriod defined. #his

price $ould have ena)led reasona)le recovery of cost of production and profit after

nullifying adverse impact of those factors of production $hich could have adversely

effected the company and for $hich dumped imports can>t )e held responsi)le.

Hesides the calculation of the margin of dumping7 the Designated Authority also

calculates the In4ury argin for the Domestic Industry. #he In4ury argin is the

difference )et$een the *on-In4urious rice due to the Domestic Industry and the anded

'alue of the dumped imports.

anded 'alue for this purpose is taen as the assessa)le value under the Customs Act and

the applica)le )asic Customs duties e,cept C'D7 AD and special duties.

/or calculating *on-In4urious rice7 the Authority calls for costing information from the

domestic industry in the prescri)ed proforma for the period of investigations and for three

previous years. Accounting records maintained on the )asis of &enerally Accepta)le


42/95

Accounting rinciple &AA@ form the )asis for estimating *on-In4urious rice. In the

estimation of *on-In4urious rice for the Domestic Industry7 the Authority maes

appropriate analysis of all relevant factors lie usage of ra$ material7 usage of utilities7

captive consumption etc. and the actual e,panses during the eriod of Investigation

including the investments7 the capacity utilisation etc. #he *on-In4urious rice for

Domestic Industry is determined considering the reasona)le return on the capital

employed.

#he upreme Court of India has held that the computation of non-in4urious price *I@

under the country>s antidumping la$ must apply for an entire industry and not to only

particular companies or enterprises. #he court $as ruling on a petition filed )y :eliance

Industries td :I@ against an order of the Designated Authority DA@ for anti-dumping

in the inistry of Commerce.

:I7 the sole producer of pure terephatalic acid #A@ in India7 had sought imposition of

anti-dumping duty on #A imported from Lapan7 alaysia7 pain and #ai$an. #he DA

had recommended a duty of :s %21 per metric tonne on #A originating only from pain.

#he DA had not recommended duty on imports from Lapan and alaysia on the grounds

that they $ere a)ove the non-in4urious price.

#he C )ench of 4udges Asho Hhan and arandey Rat4u saidF #he DA has clearly

erred in la$ )ecause it $as re8uired to carry out the determination of in4ury and

computation of *I for the domestic industry as a $hole and not in respect of any

particular company or enterprise.

#he )ench noted that the purpose of the antidumping la$ $as prevention of destruction

of domestic industries. #he antidumping la$ is e,tremely important for the country>s

industrial progress and hence there should )e total transparency and fairness in its

implementation7 the )ench said.

Causal lin!

A Bcausal lin> must e,ist )et$een the material in4ury )eing suffered )y the Indian

industry and the dumped imports. In addition7 other in4ury causes have to )e investigated

so that they are not attri)uted to dumping. ome of these are volume and prices of


43/95

imports not sold at dumped prices7 contraction in demand or changes in the pattern of

consumption7 e,port performance7 productivity of the domestic industry etc.

0+ (;o can file an application=

A dumping investigation can normally )e initiated only upon receipt of a $ritten

application )y or on )ehalf of the Domestic Industry. In order to constitute a valid

application7 the follo$ing t$o conditions have to )e satisfiedF

1 .#he domestic producers e,pressly supporting the application must account for not less

than 2%N of the total production of the lie article )y the domestic industry in IndiaE and

2. #he domestic producers e,pressly supporting the application must account for more

than %6N of the total production of the lie article )y those e,pressly supporting and

those opposing the application.

00 6omestic industr$1 of t;e Anti 6umping Rules

#hough the Designated Authority initiates the proceedings for anti dumping action on the

)asis of a petition received from the domestic industry alleging dumping of certain goods

and the in4ury caused to it )y such dumping. =o$ever7 Rule >$1of the Anti Dumping

:ules provides for suo-motuinitiation of anti dumping proceedings )y the Designated

Authority on the )asis of information received from the Collector of Customs appointed

under the Customs Act7 1(02 or from any other source. In such circumstances7 the

Authority initiates the anti dumping investigation on its o$n $ithout any

complaint;petition filed in this regard provided the Authority is satisfied that sufficient

evidence e,ists as to the e,istence of dumping7 in4ury and causal lin )et$een the

dumped imports and the alleged in4ury. It is further clarified that after initiation7 the suo-

motu investigation follo$s the same procedure as the one )ased on a petition as

mentioned in the Anti Dumping :ules.

+ssential re8uisites for the initiation of an investigation for the purpose of Anti-dumping

are as follo$sF-

a@ ufficient evidence to the effect that E

i . there is dumping

ii. there is in4ury to the domestic industryE and

iii there is a causal lin )et$een the dumping and the in4ury7 that is to say7


46/95

that the dumped imports have caused the alleged in4ury.

)@ #here shall )e domestic producers e,pressly supporting the anti dumping application.

must account for not less than 2%N of the total production of the lie article )y the

domestic industry.

0- 'ev< of anti5dumping dut

Manual on Anti Dumping , Countervailing Duties and Safeguard Measures

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Transcript of Manual on Anti Dumping , Countervailing Duties and Safeguard Measures