Anti-dumping

The imposition of an anti-dumping measure

Before such protectionist measures become effective, the European Commission must conduct an investigation that is bound by strict procedural and substantive rules laid down in the Basic Anti-Dumping Regulation (Regulation (EU) No. 2016/1036). This Regulation broadly follows the WTO Anti-Dumping Agreement.

In order for a measure to be imposed, four criteria are assessed. It must be determined that:

• dumping has occurred;
• injury to the EU industry has been caused;
• there is a causal link between the injury and the dumping;
• the interest of the EU requires action to be taken to prevent the injury.

An anti-dumping measure is imposed, usually in response to a complaint, on specific goods from a specific country. Think for example of the measures that were imposed by the EU against solar panels and cells from China or measures against light thermal paper from Korea. China, however, is the “usual suspect” in anti-dumping cases. Anti-dumping is about non-preferential origin. Information on ongoing investigations and anti-dumping measures can be found on the following EU website: http://ec.europa.eu/trade/policy/accessing-markets/trade-defence.  

The percentage of an imposed anti-dumping duty can be quite high, depending on the dumping margin found in the investigation. For example, the current duty for bicycles from China is 48.5% and the duty for certain iron or steel fasteners can be as high as 86.5%.

Diversion of trade flows and duty evasion

There are risks associated with the import of goods subject to an anti-dumping duty. It regularly happens that after the application of an anti-dumping measure, trade flows are diverted to another third country. Suddenly fasteners are no longer originating and consigned from China, but declared for import in the EU as originating and consigned from Taiwan or Thailand, for example. If one or more member states or the European Commission observe that trade flows have shifted after the imposition of an anti-dumping measure and there is a suspicion of circumvention, an investigation may be launched to investigate what is going on. Is there simple transshipment in Taiwan or Thailand, or is there only simple processing of the goods in those countries that would not result in a change of the non-preferential origin of the product?

If, after investigation, the European Commission's Anti-Fraud Office OLAF ('OLAF') finds that the anti-dumping measure is being circumvented via other third countries, the customs authorities will usually be asked to recover the evaded duties. Claims can be quite substantial, especially if it involves larger and/or repetitive shipments with a high customs value. A certificate of origin offers no protection in such case. In practice, importers in the EU are regularly the victims of fraudulent schemes  set up to avoid the anti-dumping measures. To avoid becoming a victim of this, it is important to carefully investigate the origin of goods if an anti-dumping duty has been imposed  when they are imported into the EU from.

If it is suspected that the level of circumvention practices of an anti-dumping measure is so substantial that it possibly justifies the imposition of additional measures, a circumvention investigation may also be initiated on the basis of Article 13 of the Basic Anti-Dumping Duty Regulation. Upon completion of the circumvention investigation, it can be decided to adopt a circumvention regulation. The anti-dumping measure is then extended to goods declared as originating in or shipped from certain third countries other than the country against which the original measure was imposed. Manufacturers who do actually produce in those third countries can participate in the investigation and apply for an exemption from the circumvention measure.

A striking example of an anti-dumping measure that rapidly spread across South East Asia and beyond is the anti-dumping measure originally imposed on bicycles from China. This was extended to Cambodia, Pakistan, Philippines, Indonesia, Malaysia, Sri Lanka and Tunisia.

Collection of anti-dumping duties

In the first place, the customs authorities will address the declarant of the goods. This is the person in whose name the import declaration was made. In case of direct customs representation, in most cases the declarant  is the importer. However, the customs agent who lodged the import declaration is not free of financial risks during the verification period either. If this customs agent has indicated in the declaration towards the customs authorities that the payment of the import duties arising from the declaration is made through his deferment account, customs will take the position that the customs agent is financially liable for payment of any duties until the verification of the declaration is finalized.  

Registration and provisional anti-dumping duties

The Basic Anti-Dumping Duty Regulation allows for the registration of imports of the product under investigation during the investigation period and prior to the imposition of a definitive anti-dumping duty. It also allows for the imposition of a provisional anti-dumping duty. If a provisional duty is imposed, the payment of duties must be secured upon  release for free circulation of the goods in the EU. At the end of the investigation, a final decision is made as to whether the provisional duties secured will be definitively collected and to what level. Whereas with a provisional duty due to the provision of the security the declarant will be aware of the risk that he will have to pay the anti-dumping duties,  this is not necessarily the case with a registration. Registration can result in retrospective additional payments being required, without the declarant noticing any financial consequences at the time of import. Therefore importers should pay close attention to whether a registration is in place and be wary of the possible impact that this could have later.

For importers and logistics service providers who submit import declarations or outsource import declarations to specialized customs agents, it is very important to be aware of current investigations that are being carried out. Information about these is published in the Official Journal of the European Union.

Ploum's Customs, Trade and Logistics team

Ploum's Customs team has a great deal of knowledge and experience in the field of anti-dumping. We provide a lot of advice on this subject and litigate in appeal proceedings against customs assessments. We are involved in various appeals procedures against large anti-dumping claims related to among other things solar panels, biodiesel, fasteners, bicycles and seamless stainless steel pipes and tubes. You can contact us for advice on anti-dumping of assistance in litigations.