7 April 2006
TRADE REMEDIES TASK FORCE
THE JOINT STUDY OF THE ADMINISTRATION OF
AUSTRALIA’S ANTI DUMPING SYSTEM
The Trade Remedies Task Force (TRTF) welcomes the Joint Study of the Administration
of Australia’s Anti-Dumping System at a time when there is a critical need to examine
the overall operation of the anti dumping system in Australia. The review must ensure
that Australian industry can effectively access and use the anti-dumping regime in a
manner that is consistent with Australia’s WTO obligations under the Anti Dumping
Statistics from the WTO for 1998 to December 2004 (Attachment A) show Australia to
be quite clearly a moderate user of anti-dumping, well behind China, South Korea,
Indonesia, Malaysia, USA and Taiwan to name a few.
This submission is principally concerned with issues of transparency and process
improvement, and the clarification of Australia’s anti-dumping practice. Australian
Customs dumping practice and procedures, which in key areas to date have not been
documented, need to be documented and made available to all interested parties.
Some of the issues being considered in this Joint Study also arose for consideration as
part of the Willet Report of 1996 in the Review of Australia’s Anti Dumping and
Countervailing Administration. It is disappointing that a number of the Willet Report
recommendations have not been acted upon and the TRTF Submission highlights some
of these and urges action now.
The TRTF emphasises the need for all of industry, with special reference to small and
medium sized businesses, to have appropriate access to the anti-dumping regime and
the need for clarity, through more documentation of Customs procedures. This relates
in particular to the area of Initiation Standards for the application for dumping measures
as well as for Reviews and Continuation Inquiries.
The TRTF has recommended a more proactive role, consistent with the WTO and that of
other anti-dumping administrations, such as Canada, the EC and the US in assisting
business, particularly small and medium sized enterprises with the process of lodging an
The TRTF seeks a new Ministerial Direction on material injury which mandates a
thorough consideration of all injury factors. The Ministerial Direction should in particular
address the issue of the loss of potential profits, and consideration of the Industry Rate
of Return and Return on Investments.
Access to information remains a continuing area of concern. The TRTF is of the view
that a clear definition of what is considered to be confidential should be established.
This should be coupled with stronger enforcement of the requirement to provide
meaningful non-confidential versions of documents.
The TRTF considers that the making of a Preliminary Affirmative Determination is
occurring too late in the Investigation process.
Greater clarity is sought for the verification of exporters’ records of accounts.
The TRTF believes that there needs to be greater clarity where Customs is determining
a deductive export price and recommends that guidelines need to be provided on how a
deductive export price is determined under section 269TAB(1)(b).
The TRTF considers that duty absorption remains a concern because of the possibility
that if an exporter/ importer decides not to increase prices once measures have been
imposed, Australian industry will continue to suffer material injury, the very thing that the
imposition of dumping duty is meant to address. The TRTF recommends that
administrative arrangements need to be formalised that will set out where an application
for a review can be made in cases where duty absorption has occurred.
There is also a need to reconsider the question of the application of Retrospective
Measures, including the publication of guidelines to address issues relating to the
question of what evidence is required in order to put measures in place. Without proper
guidelines these measures are ineffective.
The TRTF also proposes that the Ministerial Direction on Country Hopping be re-issued.
1. ACCESS TO THE ANTI DUMPING SYSTEM
The present Application Form for commencing an anti-dumping action differs
significantly from the previous form in that it requires greater detail on the material injury
claims being made by the applicant. The Form requires the applicant to provide
information on costing and sales for a period of four years. A non confidential version of
the same Form sets out, by comparison with a base year, the percentage variations over
a four year period for each of the material injury criteria.
The application requires sufficient information to be provided, so that injury not caused
by dumped imports is not attributed to those imports.
Because of the relatively short time frame available under Australian law to investigate a
dumping complaint, it was considered desirable to have as much information as possible
on material injury set out in the Application Form itself, rather than seek the information
after the application is initiated, as is done in some other countries.
It was not the intention, nor could it be, to have that information verified as part of a
The Application Form itself has in substance been incorporated in A Handbook of Anti
Dumping Investigations by Judith Czarko, Johann Human and Jorge Miranda 1 . This is a
publication sponsored by the WTO to assist countries to understand anti-dumping law
The TRTF considers that it is not necessary to simplify the Application Form itself,
despite the fact that it has increased the cost to applicants of bringing a dumping
complaint. The TRTF considers that it is not in any party’s interest to have an
application form that is not comprehensive. The TRTF’s objective is to have a system in
place that ensures effective and fair competition in the market place by enabling action
to be taken against injurious dumping.
Nonetheless the alibility of companies to provide all the required information in the
Application Form is a critical issue and goes to the heart of our recommendation to
ensure that no company is denied speedy and effective access to anti-dumping
remedies, particularly if this is due to an inability to gather essential information.
1 (a) Proper basis for screening an application
The completion of the Application Form is only the first part of the screening process.
Two other issues in this process must be examined:
A Handbook on Anti Dumping Investigations by Judith Czarko, Johann Human and Jorge Miranda published by
Cambridge Univeristy Press 2003
i The appropriate standard to be adopted under the WTO Anti-Dumping
Agreement and Australian law in considering whether to accept or reject
and application; and
ii The criteria to be used by Customs’ Trade Measures Branch in reaching
Articles 5.1 to 5.5 of the WTO Anti-Dumping Agreement stipulate the requirements in
relation to the initiation of an application. These provisions are set out in Attachment B
of this submission.
1 (b) Obligations imposed on an applicant
Article 5.2 of the WTO Agreement sets out the responsibilities of an applicant in lodging
an application, while Article 5.3 deals with the obligations imposed on a dumping
authority in considering an application.
Article 5.2 provides that an application is required to supply evidence on dumping,
material injury and a causal link between the two. This is subject to several
Firstly, the applicant cannot simply make assertions, unsubstantiated by evidence;
Secondly, the applicant is only required to supply information that is reasonably
Finally, as the information is only for the purpose of initiation of an investigation, the
quality and kind of evidence cannot be such that is required to either make a preliminary
or final determination. 2
The requirement to provide information that is reasonably available has been interpreted
recently by the WTO Panel in United States Softwood Lumbar from Canada II case. 3 In
this case it was found that the requirement was intended to avoid putting an undue
burden on an applicant to supply information that was not reasonably available, but also
that it was not intended that an applicant submit all information that was reasonably
available. The Panel found that the only information the applicant was required to
supply was information that was both reasonably available and that was deemed
necessary to substantiate the alleged dumping, injury and causal link.
The Panel found that the requirement to provide information on material injury is fairly
high because the information is in the hands of the domestic industry.
The reference to factors listed in Articles 3.2 and 4 did not require that the application
address all of these factors, as the list is only illustrative. All an applicant needed to
address were those factors relevant to the applicant’s own case.
See Panel case of Guatemala Cement from Mexico par 7.64 and Mexico HFCDS par 7.74
United States-Softwood Lumbar from Canada II par 7.54
The Panel also found that there was no need for an applicant to provide an analysis of
the information provided in the application.
1 (c) Obligation imposed on a Dumping Administration
There is an obligation imposed on a dumping administration to determine if there is
sufficient evidence to justify the initiation of an application. However as stated by the
WTO Panel in Guatemala Cement II:
"[I]n accordance with our standard of review, we must determine whether an objective and
unbiased investigating authority, looking at the facts before it, could properly have determined
that there was sufficient evidence to justify the initiation of an anti-dumping investigation.
Article 5.3 requires the authority to examine, in making this determination, the accuracy and
adequacy of the evidence in the application. Clearly, the accuracy and adequacy of the evidence is
relevant to the investigating authorities' determination whether there is sufficient evidence to
justify the initiation of an investigation. It is however the sufficiency of the evidence, and not
its adequacy and accuracy per se, which represents the legal standard to be applied in the case
of a determination whether to initiate an investigation." 4
The quality and kind of evidence required for initiation is therefore, as has been
previously stated, not the same level as that required to make a preliminary or final
determination. Indeed, evidence which would be insufficient to justify a preliminary or
final determination may well be sufficient to justify the initiation of an investigation.
There is no obligation imposed on a dumping administration to resolve all underlying
issues prior to a case being initiated, or to explain in a public document on how
underlying issues were resolved. 5
1 (d) Australia’s anti dumping legislation
Section 269TB and 269TC of the Customs Act 1901 deal with the lodgement and
consideration of a dumping application.
The responsibility imposed on Customs to accept an application is defined in a negative
way. The legislation provides that where Customs, has examined the application and
has had regard to any other information that is considered relevant, is not satisfied that
there appears to be reasonable grounds for the publication of a dumping duty notice
then the application shall be rejected.
In Marine Power Australia Pty Ltd v Comptroller General of Customs 6 , the court noted
that the language is such that Customs is not required to be positively satisfied in relation
to the matters set out in paragraphs (a) (b) and (c) of Section 260TC(1), rather Customs
Panel in Guatemala Cement 11 par 8.31
Mexico-HFCS par 7.94
Marine Power Australia Pty Ltd v Comptroller General of Customs 1989 FCA
has to reject the application if not satisfied. If Customs does not form an opinion on non
satisfaction, Customs is obliged to publish a notice initiating a dumping investigation.
As further stated in that case, the intention of adopting a negative state of mind
(“not satisfied" is to require a negative act "rejection"). The legislation does not require a
positive state of mind (”satisfied") to require a positive act (“acceptance").
The court noted that the four subsequent stages of the anti-dumping investigation process
manifest a legislative intent that there is an ongoing investigative process which,
particularly in its early stages, cannot be expected to empower Customs to form any view
other than one of a provisional nature.
Having regard to the provisions existing at the time, the court came to the view that all that
was required to make a determination under Section 269TC was a prima facie view. This
standard was referred to in the Second Reading Speech for the Bill that enacted the
provisions of Section 269TC.
Although that case was decided when the now abolished Anti-Dumping Authority had role
in the dumping investigation process, nothing has changed that would make the decision
in that case any less relevant now.
Reference is made in Section 269TC to Customs having regard to any other relevant
matter. This provision was originally inserted for the purpose of enabling Customs to
have regard to information contained in Customs data base, in particular information on
volume of imports and export prices.
This provision is not limited to such cases, and Customs could have regard to other
information from previous cases that are relevant to the application under consideration.
The provision cannot be used as a basis for conducting a verification visit, or to impose
a standard higher than required as part of the screening process.
The TMRO in the Review of a Decision by the CEO of the Australian Customs Service to
Reject an Application for the Publication of a Dumping Notice in respect of Certain Hollow
Steel Sections Exported to Australia from the People’s Republic of China, the Republic of
Korea, Malaysia and Thailand of 2005 noted the provisions of Section 269TC(2)(c ) which
“there appears to be reasonable grounds for the publication of a dumping notice” and the
TMRO stated it believed that to be true in this instance.
The TMRO went on to say that extensive conclusive evidence is not required to establish
reasonable grounds for the publication of a dumping duty notice, given the language of the
legislation and advice contained in Customs own publications and the Application Form.
The TMRO noted:
“Rather, evidence of a sufficient quality to establish a prima facie case to enable the
initiation of an investigation is required. It is the investigation phase, not at the screening
phase that the veracity of the evidence supporting the claims made in the application
should be tested.”
1 (e) The Application Form
The Application Form (Attachment C) itself states in the section under
“Important Information” that Customs does not require conclusive evidence to initiate an
application, but that any claim should be reasonably based. It continues on to state that:
“an application will be improved by the inclusion of supporting evidence and where the
source of the evidence is identified.”
It also states that when an investigation is initiated, Customs will verify the information
contained in the Application Form. The verification will be an on site visit which would
take several days. The Application Form then states:
“Applicant companies should be prepared to substantiate all Australian Industry financial
and commercial information submitted in the application. All worksheets used in the
preparation of the application should therefore be retained for verification.”
The TRTF supports this statement and emphasises that the information which has been
identified as subject to verification, should not be verified as part of the screening of the
application, as this function is part of the Investigation process.
The Handbook on Anti Dumping Practice referred to above provides a concise summary
of the responsibilities of a dumping authority when considering a dumping application,
• Not to require information of the quality and kind to support a preliminary or final
• Not to simply accept the evidence contained in an application at face value where
there is a clear indication that the information is not accurate or where if the
evidence was accepted would not lead to a fair comparison;
• This does not mean that authorities are expected to determine all possible
differences that might effect price comparability and perform complete
adjustments, or to verify evidence that has been submitted;
• Where on the face of the application, substantial questions are raised, then some
consideration would need to be given to the sufficiency of the evidence.
What is indicated above is that the application should be judged on the basis that it is
the first and preliminary stage of an ongoing process. The balance that needs to be
struck is between preventing unsubstantiated claims from being made and of requiring
an applicant to verify all information at this early stage.
The test of what information that an applicant can provide, is that which is reasonably
available, but this does not mean that all information that is reasonably available has to
What is meant by reasonably available can only be judged on a case by case basis,
having regard to the nature of the applicant. Although it is to be expected that an
applicant should be able to provide detailed information on its own company’s financial
affairs, small companies which usually lack overseas offices, find it difficult to obtain
information from an overseas market on normal value. On the other hand larger
multinational companies, given their greater financial resources and presence in
overseas markets are better placed to provide such information.
To assist applicants the TRTF believes that the Customs Dumping Manual (or published
guidelines) should set out the basic legal requirements applying to an applicant to
provide information and to Customs officers in considering that information.
Apart from setting out the various legal requirements, the document should also set out
the various methodologies and criteria used to assess a dumping application. The
inclusion of clear guidelines would assist both the applicant and Customs to know what
is expected at the screening stage. This would be of special importance to small to
medium sized enterprises.
1 (f) Assisting an Applicant
The difficulties faced by an applicant in understanding the anti-dumping process and in
gathering information are substantial, particularly for SMEs. The process also involves
considerable expenditure and commitment of resources on the part of applicants.
The cost of lodging an application is about 50 per cent of the total cost of running the
whole case. The cost of withdrawing and relodging an application can almost double the
eventual cost of lodgment.
It should be noted that the European Commission has, as part of the WTO Doha Round
negotiations, raised concerns about the expense applicants face when lodging an anti-
One way of assisting applicants is through a body such as the Australian Custom’s
Dumping Liaison Unit, which provides advice and support through the pre lodgment
The role of the Dumping Liaison Unit was recognized as far back as 1996. The Willet
Report 7 recommended the establishment of a formal industry liaison unit within the
Dumping Branch of Customs. Such a body was established to assist applicants affected
by dumping or subsidised imports to understand the investigative process. The function
of the Unit was to examine draft applications, but not to complete the application. The
Review of Australia’s Anti Dumping and Countervailing Administration p 39
Dumping Liaison Unit assisted both domestic industry and overseas manufacturers and
The TRTF supports the continued role of the Dumping Liaison Unit in assisting applicants,
but wants to see that role enhanced.
As noted in the WTO Handbook on Anti Dumping Practice at pages 28-29, it is
sometimes problematic for applicants to meet the information requirements of Article 5.1
of the WTO Anti Dumping Agreement which states:
“It is the experience of many investigating authorities that this situation is exacerbated by the
fact that their domestic industries do not always have a sufficient understanding of the process.
Assistance with the process is sometimes offered by the governments, especially in a case of
small to medium-sized enterprises.
However in order to safeguard the objectivity of the investigators to be involved in the
investigation, if and when initiated, and to ensure that their early exposure to the details of the
matter before initiation will not compromise the requirement that the investigation be conducted
in an unbiased manner, authorities might consider appointing different staff members as
investigators to those who assisted the applicants in the pre initiation stage of the process."
The TRTF acknowledges that members of the Dumping Liaison Unit who advise an
applicant about a draft application cannot have any role in the subsequent specific
dumping investigation itself.
The experience of Australian industry in using the Dumping Liaison Unit to screen draft
applications has been mixed. . It is accepted that the role of the Unit can never be one
of formally accepting an application as part of the process of commenting on draft
applications. However, there are examples where applications that have gone through
the process of using the Dumping Liaison Unit, have had an application initiated but then
rejected at the Investigations Stage for what are regarded by the Investigation Section
as obvious flaws in the application. This would clearly indicate that there is a lack of
common approach between the Dumping Liaison Unit and Investigations Sections as to
what is considered to be a properly documented application.
The TRTF proposes that a staff member from the Investigations Section be assigned to
assist in the review of draft applications, but that person then be excluded from any
consideration of the relevant case if the application is subsequently accepted.
In addition it is critical for applicants to have published guidelines which would identify
criteria which are taken into account in deciding whether to accept or reject an
The Willet Report did not go into any particular detail on how the level of assistance that
was recommended would be implemented. The prevailing view that appears to have
been adopted by Customs is that the assistance provided should be fairly limited. The
TRTF believes this approach is not sufficient and that Australia should adopt some of
the important practices used in other countries:
A Parliamentary Sub Committee considered the question of the role of SMEs in 1996
and made recommendations that the government should ensure” fair and equal” access
of SMEs to the dumping system 8 .
The Auditor General’s Office examined the administration of Canada’s anti-dumping
program in the light of the recommendations made by the Parliamentary Committee in
The Parliamentary Committee found that there were concerns held by industry regarding
the cost burden of the anti-dumping process, in particular, small producers and
businesses having viable access to the process. Small producers did not have the in-
house technical skills to undertake the necessary gathering of information and analysis.
The legal costs required for dealing with a long process of investigation and review were
found to be prohibitive for small producers.
The Committee recommended that consideration be given to assisting these businesses
in preparing their documentation and in reducing the cost of participation 9 .
The Auditor General’s Report 10 which examined the Canadian Anti-Dumping program in
the light of the recommendations of the Sub Committee found that the barriers to access
by SMEs were:
• Cost of compliance with legislative requirements and significant paper burden;
• The complexity, formality and duration of the process;
• The lack of knowledge of the procedural aspects;
• The need to work together with other small producers or through producer
First Report of the Sub Committee on the Review of the Special Import Measures Act,- Chapter 2
Report of the Auditor General of Canada to the House of Commons 2002- Chapter 3
In relation to cost, 70 per cent of the complainants felt that the process was too costly.
Figures ranging between C$100,000 to C$500,000 and in some cases up to C$1million
were quoted for the use of Counsel by applicants.
Although the Canadian system is bifurcated and use of legal counsel is not a feature of
the Australian anti-dumping system, the figure of between C$100,00 to C$500,000 (
depending on complexity of the case and number of participants) would be within the
range of costs incurred in Australia, when the use of the applicant’s internal resources is
The Canadian Border Service Agency has a web site dedicated to providing contact
points for SMEs in the Administration, and it has a mandate to improve access and to
provide support to SMEs in the preparation and drafting of complaints. This includes
assistance in information-gathering and assisting a complainant to make an informed
decision as to whether or not to lodge a complaint. Follow-up assistance is provided in
obtaining missing information to complete the complaint if this is required. Dedicated
resources are set aside for this purpose and a contact person is made available during
the investigation phase.
The European Commission
The EC has recognized the particular needs of SMEs.
The Commission states:
“As small or medium sized producers you should not wait until irreparable damage is caused to
you by dumped or subsidised imports or from a sudden increase in imports from third countries.
Make sure you know your problem caused by imports from third countries and the way to solve
“Contact the Commissions Trade Defence Helpdesk that has been established specifically to
provide assistance to the SMEs in areas of trade law defence instruments. The assistance can
be in Brussels or at your premises, and all the details of what you have to do and which
information you need to provide will be clarified to you.
“Use the online guide on how to lodge a complaint/request for imposition of anti dumping and
anti subsidy duties. These provide the skeleton for your document and useful explanations. If
you need help to provide some information, contact us.”
EC Trade Issues, Respect the Rules, Fair Trade for Small to Medium Sized Enterprises
The EC makes it clear that trade remedies are not just meant for large companies. The
assistance extends to on-site visits and in guiding applicants through the process of
drafting a complaint. Special guides, which are available electronically, have been
specially designed to assist SMEs.
The nature of the assistance provided extends to collecting relevant information needed
for the complaint, including accessing official importer and exporter statistics.
The EC does not act as legal counsel or advocate if the complaint is subsequently
lodged and investigated.
The United States
The US has a special office, called the Trade Remedies Office, which provides small
businesses with technical assistance in seeking relief under US trade laws, including
anti dumping laws. Assistance is limited to small businesses or small trade
associations. The office is located within the United States International Trade
Technical assistance includes informal advice, assistance, and informal legal support to
assist applicants in determining the appropriateness of pursuing trade remedies, and to
assist in the preparation of dumping applications.
This technical assistance does not extend to the provision of legal representation in
cases or the Office providing advocacy services in individual cases as they progress.
Summary – Section 1
Clearly there is a widespread recognition in other countries of the cost and complexity of
undertaking an anti dumping action for all companies, and of the special needs of SMEs,
and the need for dumping administrations to provide some form of assistance to
applicants. The TRTF recommends that the provision of this support service be through
the Customs Service. This assistance should comprise the provision of dedicated
resources tasked to assist SMEs in the preparation of an anti-dumping complaint. It
should be extended to include information-gathering and, in particular, access to official
records on the goods imports.
Guidelines should be provided to applicants with a clear understanding of the
information requirements of the dumping application. These guidelines should be
designed with particular regard to the needs of SMEs. This may require separate
guidelines from those that apply to better-resourced applicants, such as large
companies. Guidelines need to be developed and published setting out how an
application is screened.
The TRTF believes that the provision of assistance should not extend to the obtaining of
formal legal advice and no advocacy service should be provided once a case has been
There should be a clear acknowledgement that the application process is not a
The legal standard to be applied in assessing an application needs to be clearly
enunciated with regard to:
• The establishment of a domestic industry;
• The evaluation of normal value and export price information; and
• The evaluation of material injury and a casual link.
The evaluation should set out the methodology to be used, and where there is a
departure from this, reasons for doing so should be provided as a matter of course. The
information sources used to determine the accuracy and adequacy of the information
should be specified.
These guidelines need to be available on the Customs web site.
2. MATERIAL INJURY
Section 269 TAE of the Customs Act sets out those factors which are used in making a
finding as to whether material injury exists in a given case. The Australian Government
has confirmed that the criteria set out in that Section reflect those in Article 3.4 and 3.5
of the WTO Anti-Dumping Agreement.
Neither that Section nor the WTO Anti-Dumping Agreement set out what is meant by
the term” material injury”. The Anti-Dumping Authority in its Report No 4 on Material
Injury in 1989, stated that “material injury was injury that was not immaterial,
insubstantial or insignificant and was greater than that was likely to occur in the normal
ebb and flow of business”. The TRTF supports this definition of what is “material”.
The findings of the Report were picked up in the first Ministerial Direction given in
1990 12 , which stated that material injury will rarely be taken to have been proven when
an Australian industry has not suffered a “material diminution of profits or where the
dumped or subsidised imports do not hold or threaten to hold a sufficient share of the
market to cause or threaten material injury”. The Ministerial Direction acknowledged
that in a rare case, material injury may exist, notwithstanding that profits have not been
materially reduced or despite the fact that dumped or subsidised imports hold only a
small share of the Australian market. Finally, any finding as to material injury had to be
made on observable facts and not on unsupported assertions that the industry would
have been more profitable if dumping had not occurred.
A letter clarifying the original direction was issued in 1991 13 to address the situation
where an industry is facing economic downturn or where an industry’s rate of growth has
been substantially reduced because of the presence of dumped imports.
The TRTF has sought to bring greater clarity in the application of the rules to the
situation where some industries are operating in an expanding market, but are losing
market share and are being deprived of profits from sales to dumped imports.
Clarification was sought so that an applicant would know that it could put forward a claim
of material injury based on the loss of market share and loss of profits in such a
It is also important that there exist a common understanding between Customs and the
TMRO on matters of interpretation.
Minister Direction issued by David Beddell in 1990
Letter from the Minister for Industry, Technology and Commerce to the Comptroller General, dated 16 December
The particular issue on which the TRTF has sought clarification is the role that profits
play in arriving at a finding of material injury. The TRTF accepts that a finding of
material injury is in most cases, but not all, dependent on a finding of profit. What has
not been clear is whether the term “profit”, as used in the Ministerial Direction, means
actual or potential profit.
As noted in the Customs Dumping Manual, Article 3.4 of the WTO Anti-Dumping
Agreement refers to actual and potential in relation to all the indicators (with the obvious
exception of the level of dumping margin). In essence, indicators of material injury can
be based on what has occurred, or what may occur. However, in either case, any
finding on material injury can only be made on the basis of positive evidence, the test
set out in Article 3.4.
The TRTF is concerned that there is still debate about whether potential profits (or as it
has been referred to, “profits forgone”) can be considered an appropriate test for
material injury, even though it is clearly referred to in the WTO Anti-Dumping
Agreement and accepted under Section 269TAE of the Customs Act 1901.
The TRTF has previously referred to the case of a company faced with competition from
dumped imports in an expanding market.
Another example is that of a company that has only recently commenced its business in
the last few years. In such a case all the material indicators, in terms of sales, market
share and profit may be positive, because of the low starting base. This company may
find that its growth is being undermined by the impact of dumped goods.
The TRTF has stressed that it is only focusing on those cases where it can be
established that there is a direct relationship between the loss of market share and the
increase in dumped goods. The need to make reference to a loss of potential profits
exists because both Customs and the TMRO rely on loss of profits as the major
indicator of material injury. However, this indicator has historically been determined by
reference to the level of actual profits received by a company.
The ability to refer to potential loss of profits as one indicator of material injury is also
very important to underpin arguments on other material injury indicators, in particular
return on investment and the ability to raise capital for reinvestment.
A failure to acknowledge a loss of potential profits in assessing an applicant’s claims
would mean that an applicant in an industry which has been increasing its sales - and
therefore profit - would not be in a position to lodge an application. This would be
because there would be no finding of injurious dumping where that dumping did not
affect the historical level of profit. In some cases, this level could have been suppressed
by previous sporadic dumping. The failure to acknowledge the loss of potential profits is
to enable an exporter to benefit in an expanding market, rather than the Australian
industry, which is then denied the benefit of anti-dumping measures in such a
In the Review of a Decision by the Chief Executive Officer of the Australian Customs
Service to Terminate the Investigation into Alleged Dumping of Certain Hollow Steel
Sections from the Peoples Republic of China, the Republic of Korea, Malaysia and
Thailand of 2005 by the TMRO the question of “profits foregone” was considered.
Several comments were made in that Report which are of concern to the TRTF.
Firstly it was stated that:
“The concept of “profit foregone” necessarily involves hypothesis, speculation and
conjecture- it is essentially an unsupported assertion which cannot be supported or
evidenced by observable fact and is therefore, not consistent with the Ministerial
While it is correct to say that the Ministerial guidelines refer to making a decision based
on observable facts, and not by unsupported assertions that an industry would be far
more prosperous if dumping had not occurred, however Australia should adopt the test
under the WTO Anti-Dumping Agreement which notes that any decision must be based
on positive evidence . 15
The statement made by the TMRO seems to assume that any “potential” fact is non
observable. If this was a correct test to apply, then all references to “potential” in Article
3.4 of the WTO Anti-Dumping would not be applicable as they can never meet the test
of being “observable”. The TRTF believes that the Ministerial Guideline needs to be
amended to delete the reference to “observable fact” and be replaced with “positive
In the case referred to above, the TMRO stated that where a company does not lower its
price to match that of dumped goods, it cannot be considered to have suffered material
injury as any loss of market share was a result of commercial decisions and strategies,
which are the responsibility of the company’s management.
Review of a Decision by the Chief Executive Officer of the Australian Customs Service to Terminate the
Investigation into Alleged Dumping of Certain Hollow Steel Sections from the Peoples Republic of China, the
Republic of Korea, Malaysia and Thailand par 42
Article 3.1 A determination of injury for the purpose of Article VI of GATT 1994 shall be based on positive
evidence and involves an objective examination of both (a) the volume of the dumped imports and the effect of
dumped imports on prices in the domestic market for the like product, and (b) the consequent impact of these imports
on domestic producers of such products”
There are a variety of reasons why a company maintains prices, the primary reasons
being the inability to cut margins any more in order to sustain the business, or the need
not to disrupt existing committed commercial relations.
Having made such a decision, a company should not be obligated as a matter of course
to lower its prices to meet an unfair dumped price, in order to be found to be materially
Finally, in the case outlined above, comment is made by the TMRO that if an industry
claims that it has suffered material injury in the form of inadequate return on investment,
it is not the function of the TMRO, nor is it the function of Customs, to assess or
evaluate what may or may not be an adequate return on investment. 16
The TRTF is of the view that it clearly is a function of a dumping authority to consider the
evidence that is put forward on what is or is not an adequate return on investment, as
part of its overall consideration of whether an applicant has suffered material injury.
The Willet Report specifically considered the concerns of Australian industry that neither
Customs nor the Anti-Dumping Authority were considering arguments relating to return
on investment being put forward by Australian industry in applications for anti dumping
measures. The Report highlighted the concern expressed at the time of the persistent
failure on the part of the investigating authorities to have regard to fundamental financial
factors, in particular the concept of internal rate of return or return on investment.
The Willet Report acknowledged the importance of recognising both factors in a
Ministerial Determination, and suggested that, given the importance of these factors, the
Minister issue a direction highlighting the need to consider the impact of dumping or
subsidisation on the Industry’s Return On Investment and Industry Rate of Return. In
doing so, it was noted that the Minister would need either to modify or repeal those
portions of the 1990 Ministerial Direction which refer to “diminution of profits”.
Summary – Section 2
The TRTF recommends the updating of the Ministerial Guidelines on Material Injury and
the incorporation into those revised Guidelines the Ministerial letter of clarification
referred to above.
Review of a Decision by the Chief Executive Officer of the Australian Customs Service to Terminate the
Investigation into Alleged Dumping of Certain Hollow Steel Sections from the Peoples Republic of China, the
Republic of Korea, Malaysia and Thailand par 45
The Guidelines need to recognise that a loss of potential profits can be used as one
factor in determining whether or not material injury exists. The reference to the
diminution of profits should be omitted.
The reference to “observable” in the Ministerial Direction should be omitted and replaced
by the correct WTO language of “positive evidence”.
The TRTF believes that the statements made by the TMRO are incorrect.
The TRTF endorses the comments made in the Willet Report that the Ministerial
Direction should highlight the impact of dumping on an industry’s ROI and IRR.
The TRTF recommends that Customs and the TMRO consider and evaluate evidence
on what is an adequate return on investment, if such an argument is put forward by the
3. CONSIDERATION OF LIKE GOODS
The TRTF believes that the criteria set out in the Customs Dumping Manual on “like
goods”, to be reasonable and reflects the WTO jurisprudence in this area.
In the case of the description of “like goods” in the Application Form, the question of
what constitutes “like goods” does not have to be resolved at screening stage, although
the early resolution of this issue is important.
In cases where it is factually difficult to make a proper assessment, the approach of
Customs to advise parties of its tentative view, and to publish an issues paper and seek
formal submissions as part of the ongoing investigation is considered to be a sound
approach. The broader definition of “like goods” needs to be adopted during the
investigation phase, in order that the potentially necessary cost and price information is
obtained. This information can be discarded if the subsequent view is that a narrow
definition of “like goods” is the appropriate one.
4. THE PUBLIC FILE SYSTEM AND CONFIDENTIALITY
The issue of confidentiality and access to information provided during the course of an
investigation remains a continuing area of concern.
Although the public file system is considered to be satisfactory, there are concerns
about instances of the failure to have non-confidential versions of documents placed on
the public file in a timely manner.
As noted in the Willet Report, modern technology opens up the possibility of having the
public file system available to be accessed electronically. This option is strongly
recommended by the TRTF, for adoption by Customs.
With regard to improving the public file system, (if any part is needed to be retained in
hard copy) it is desirable that there be a document which sets out how to access the file,
the hours of access, the means of obtaining that access, and who is allowed access to
The Willet report also highlighted the problem of the abuse of the requirement placed on
parties to provide an adequate non-confidential summary of documents and the failure
to have these documents placed promptly on the public file.
In meeting this requirement, parties often blank out sections of a document and then
provide this censored document as the non-confidential version for filing on the public
file. It is the TRTF’s view that this practice does not adequately meet the requirement to
provide a non-confidential summary.
At the time of the Willet Report, the concern over the provision of inadequate non-
confidential versions was addressed by the statement that the legislation had been
amended from the discretionary right being granted to a party to provide a non-
confidential version to the mandated requirement to supply a non confidential version.
The failure to enforce this requirement remains a concern.
In the article “The 10 Major problems with the Anti Dumping instruments in Australia” 17
the authors Danny Moulis and Patrick Gay raised the issue of non-confidential version of
As the authors pointed out, the Customs Dumping Manual takes a restrictive
interpretation of what is confidential information. The legislation requires that the non-
Journal of World Trade Law 39(1) 75-85,2005
confidential version enables a reasonable understanding of the substance of the
information, and that merely deleting information does not meet this requirement. The
result is that the non confidential versions can be very difficult to interpret.
The TRTF shares these concerns. It recommends that Customs impose greater
discipline on all parties to provide adequate non-confidential summaries.
The TRTF recognises that the question of confidentiality is a difficult issue. One way of
providing greater clarity in this area is to have a more detailed prescription of what
constitutes confidential information. Customs recognised this in its submission to the
WTO Doha Round negotiations. A copy of that document is Attachment D of this
The substance of that submission is that information could be considered to be
confidential if it is not in the public domain and its disclosure would likely, inter alia:
• Be of significant competitive advantage to a competitor, e.g. production costs,
distribution costs, upstream and downstream pricing data, profit or loss margins,
certain conditions of sale, business sales statistics, research/invention data,
technical designs, business or trade secrets concerning the nature of a product or
production process, specifications of components, capacity data, investment
data, inventory data, performance /profitability data, details of margin of dumping
and adjustment calculated by investigating authorities;
• Have a significant adverse effect on the party who submitted the information, or
the party from whom the information was acquired by the party submitting the
information e.g. customer and supplier lists;
• Have significant adverse effects upon any party to whom the information relates
e.g. statistical/ market share information;
• Prejudice the commercial position of a person who supplied or who is the subject
of the information;
• Prejudice the security or defence of a Member [of the WTO], or the International
relations of a Member;
• Prejudice the entrusting of information to the authorities of a Member;
• Prejudice the supply of similar information or information from the same source;
• Disclose a trade secret;
• Effect the maintenance of legal privilege.
The TRTF submits that guidance on what is considered to be confidential information
should be set out in the Dumping Manual. This would assist in bringing greater clarity
and certainty as to what constitutes appropriate claims for confidentiality.
At the time of the Willet Report, the possibility of introducing a system of Administrative
Protective Orders (similar to those used in the United States) was discussed. There was
little support for the introduction of such a system because it would create significantly
more expense. The TRTF has the view that the introduction of such a system would be
too complex and expensive.
The TRTF believes that more discipline on the provision on non-confidential summaries
and clarity as to what constitutes confidential information would be a more effective and
less costly solution.
5. VERIFICATION OF INFORMATION FROM IMPORTERS AND EXPORTERS
The TRTF considers that generally speaking the Exporter Questionnaire is adequate for
providing an appropriate basis for verifying information.
The TRTF strongly believes that an exporter should only be considered to have
cooperated with an investigation if a properly documented response is provided within
the time stipulated by Customs. It is accepted that extensions sometimes need to be
granted to an exporter in certain circumstances. However, any extension that is granted
should not compromise the investigation timetable.
It is also assumed that no overseas investigation would be carried out if there was a
failure on the part of an exporter to provide a substantially compliant response to the
The need to provide an anti-dumping applicant with the opportunity to comment on an
exporter questionnaire before it is sent to the exporter has been recognised by Customs.
Whilst local industry often does not take up this option, nonetheless this process should
be formalised by having a procedure set out with a time table for providing comment.
From time to time technical accounting difficulties may arise. These issues may be
raised by the applicant or arise out of the response given by the exporter, or from the
verification visit. In these cases Customs should access professional accounting advice,
whether within Customs or externally through appropriately-skilled accounting firms.
Any advice that is obtained should, for reasons of transparency, be placed on the public
file so that all parties with an interest are aware of it.
The process of verification of an exporter’s records starts from the basis of accepting
those records, provided they are kept in accordance with generally accepted accounting
standards and reasonably reflect the costs associated with the production and sale of
the product concerned.
The Customs Dumping Manual 18 makes reference to a legal opinion which interpreted
the Minister’s right to reject costs recorded in the exporter’s accounts as being limited to
the situation where those costs vary significantly in comparison to the costs of other
exporters. The Manual states that Customs will also have regard to international
accounting standards to assist in determining whether records do reasonably reflect
costs. It is not clear whether the legal advice was meant to be determine the issue, but
Dumping Manual page 68
it is assumed that it was not, given the statement concerning the use of international
Of particular concern to the TRTF is the practice of some countries of passing laws
which enable losses to be capitalised.
The Australian Customs Dumping Manual should make it clear that where such
practices exist, or where there are significant variations between the general accounting
practice of a country and international accounting standards, that costs determined on
that basis cannot be considered to be reasonable for the purposes of an anti-dumping
Another methodology for determining whether cost can be considered to be reasonable
is to have regard to costing methodologies used in the particular industry, including in
Australia. Where a company’s records or other documentation are inconsistent with
what is general industry practice, then this incompatibility should lead to the
determination that the costs in question are not reasonable.
5 (a) Deductive Export price
Section 269TAB(1)(b) of the Customs Act 1901, reflects the provisions of Article 2.3 of
the WTO Anti Dumping Agreement in relation to the question of whether an export price
is unreliable because of an association or compensatory arrangement between the
importer and third parties. This matter is discussed in “A Handbook on Anti Dumping
What are considered non arms length transactions are set out in section 269TAA of the
Customs Act 1901.
That section provides amongst other things, that where a sale is not considered to be an
arms length transaction, that the export price is the price of the goods sold by the
exporter in the first sale to an independent purchaser, less prescribed deductions.
The TRTF recommends that Customs publish guidelines on what information it has
regard to in establishing an export price under Section 269TAB(1)(b). In particular what
are considered the costs, charges or expenses arising in relation to the goods and the
profit on the sale and how that information is verified.
A Handbook on Anti Dumping Investigtions by Judith Czako, Johann Human and Jorge Miranda page 134
5 (b) Verification in China and role of Customs Beijing Office
Because of China’s size, language differences and business culture it provides a major
challenge for Australian industry in obtaining in-country information, and in Customs
ability to conduct on the spot verification.
The TRTF commends the Australian Government for providing Customs officers in
Beijing to assist in anti-dumping investigations. Although the functions of these officers
may be wider than anti- dumping investigations, it is important that the primary role of
these positions is specifically dedicated to such investigations.
It is important to clarify whether these officers would be available to assist an applicant
in obtaining information on the domestic market in China, and in particular whether
these officers would assist and participate in the in-country verification process being
undertaken by Customs officers from Australia. It would helpful for Australian industry to
know the specific roles the Beijing-based officers will be expected to perform in relation
The TRTF would expect that these officers will have received detailed training in
Australia’s anti-dumping law and practice, in particular on the verification of information.
The opportunity should be made available for these officers to return to Australia to
participate in briefings on individual cases and to speak to applicants. If necessary,
these officers should also be available for briefings that applicants and Customs may
need to hold in Beijing.
5 (c) Government Influence on Costs and Prices
The TRTF and Australian manufacturers generally, fought hard last year to ensure that
with granting China market economy status, Australia’s anti-dumping system was not
compromised. The particular concern related to the criteria used to assess normal value
where the criteria might not reflect true market conditions or where input costs are
influenced by Government behaviour. At that time manufacturing industry congratulated
the Government in responding to these concerns by amending the Customs Manual
(see Attachment D). The TRTF would expect that the guidance given in the Manual
would be applied in all relevant investigations. The TRTF will be keeping a close
watching brief on the applications of the standards set out in the Customs Dumping
6. PRELIMINARY DETERMINATION
The TRTF is very concerned that Australian industry is suffering material injury whilst an
investigation is proceeding because of a failure by Customs to impose securities for
interim duties on exporters, as is allowed under Article 7.1 of the WTO Anti Dumping
Agreement and under Section 269TD of the Customs Act 1901.
Section 269TD of the Customs Act provides that a preliminary affirmative determination
cannot be imposed any earlier than 60 days from the date of the initiation of an
investigation. This reflects the provisions of Article 7.1 of the WTO Anti-Dumping
Agreement. In making a determination, Customs may base this on the fact that it is
satisfied that there appears to be sufficient grounds for the publication of a Dumping
In coming to this decision, Customs must have regard to the application and to any
submissions received within 40 days after the date of the initiation of the investigation.
Customs can also have regard to any other relevant matter. There is no obligation on
Customs to have regard to any submission received after the 40 day period elapses, if
to do so would prevent the timely consideration of the question whether or not to make a
preliminary affirmative determination 20 .
Having made such a determination, Customs can accept securities in respect of interim
duty that may become payable if satisfied that it is necessary to do so to prevent
material injury to an applicant 21 .
The findings that need to be made to support the imposition of a Preliminary Affirmative
Determination are of a provisional nature. This arises from the description of the
measures as being “provisional”. The nature and form of evidence required to impose
provisional measures is not prescribed in the WTO Anti Dumping Agreement, whereas it
is in the Customs Act 1901.
On the initiation of an investigation , there is an obligation imposed under Section
270TC(4) (c ) inviting interested parties to lodge a submission within 40 days of the
initiation concerning the publication of a notice.
There is no definition of what constitutes a submission. It is an open question as to
whether a submission is intended to include an Exporter questionnaire response. The
Customs Act is silent on the question of the Exporter Questionnaire and instead reliance
is placed by Customs on Article 6.1.1 of the Customs Act. Under that article, an
Sec 269TD(2) of Customs Act 1901
Sec 269TD(4) of Customs Act 1901
Exporter Questionnaire is sent after the initiation of an investigation to an exporter, with
the exporter being given 30 days to reply, subject to any agreed extensions. The
exporter is not considered to have received the Questionnaire until a week has elapsed
after it has been posted. 22 This means that under the agreement, if an Exporter
Questionnaire was sent out at the date of initiation, a response would only be available,
at the earliest, on day 37. The reference to submissions being received by day 40
would therefore not allow this information to be verified.
Even assuming that a “submission” included Exporter Questionnaire responses, it was
not intended that an Exporter Questionnaire be verified before it could be considered in
making a Preliminary Determination.
In the letter of 28 July 2005 to the Chairman of the TRTF, the Minister for Justice and
Customs provided a response on the issue of preliminary affirmative determinations
being imposed closer to day 60, which is the date from which a Preliminary Affirmative
Determination can be made.. The Minister stated that Customs advised him that to do
so would require Customs to, in virtually all cases, act on unverified data. It was further
stated that the issuing of a preliminary affirmative determination requires analysis, and
to do otherwise may expose the measures to judicial review and/or allegations of WTO
The TRTF would emphasise that the use of unverified data in no way precludes a proper
analysis of information in order to arrive at preliminary affirmative finding.
The TRTF believes that there is no inconsistency with the WTO Anti Dumping
Agreement which arises out of the use of non verified information, and as such as there
is no obligation to only use that information provided under the WTO Anti Dumping
Further, the Customs Act itself, for the reasons given above, does not require that a
Preliminary Affirmative Determination can only be based on verified information.
Indeed, an insistence on following this approach would result in not preliminary nor
provisional, but final findings being made at this stage of the Investigation. This is not
consistent with the role that provisional measures perform in providing a basis to prevent
material injury to an applicant while an investigation is being completed.
The present practice in most cases is to consider the question of imposition of
provisional measures at day 120, when a Statement of Essential facts is produced. This
statement is in effect a draft of the final report. This is different to the function that is to
be undertaken in order to make a preliminary determination.
Article 6.1.1 and footnote 15 to that article
The TRTF accepts that the decision to impose provisional measures cannot be made by
day 60. By this time there should have been a visit to the applicant and to the importer
to enable some provisional estimate of the market to be made, and to determine the
scale of material injury to the applicants. Exporter Questionnaire responses should be
available to Customs soon after day 60, but it would be unusual for a verification visit to
have taken place within this timeframe. Where there is sufficient evidence to come to a
provisional finding on material injury, and the exporter questionnaire response indicates
that dumping is occurring, then this should enable a positive preliminary finding to be
made on dumping, material injury and the casual link.
The TRTF would emphasis that the issue as to whether or not to insist that no
preliminary determination needs to be made is one of policy, not law or WTO precedent.
However to insist on this being the only method to be used, negates the purpose of the
measures themselves. The practical consequence of this is to expose the applicant to
material injury while the investigation continues.
The TRTF recommends that provisional measures be imposed as soon as there is
sufficient information to support a preliminary determination. That decision should occur
as soon as possible after day 60, but no later than day 90. Where the Exporter
Questionnaire response is clear, then this should be sufficient, if the response is not
clear on the question of dumping, then a verification visit, which should occur well before
day 90, will have taken place.
Summary – Section 6
There needs to be recognition by Customs that a Preliminary Determination can be
made in cases where information is not verified.
The focus should be on when there is sufficient information to make such a decision, not
on waiting until the issuing of a Statement of Essential Facts.
There should be an administrative deadline of 90 days after initiation that requires
Customs to make a decision based on the information that is available at that time.
7. RETROSPECTIVE MEASURES
Section 269TN(3) and (4) of the Customs Act provides that dumping measures can be
imposed retrospectively on products that have entered the Australian market up to 90
days prior to the date of the application of provisional measures if:
(a) the goods have been imported by an importer who knew or ought to have known,
that the amount of the export price of the goods was less than the normal value
and that by reason thereof material injury would be caused to an Australian
(b) that the goods of a kind have been exported to Australia on a number of
occasions which has caused injury, or but for the publication of a dumping notice,
would have been determined to have caused material injury to an Australian
industry by reason of the amount of the export price of the goods being exported
being less than the normal value of the goods exported.
These provisions reflect the conditions set out in Article 10.6 of the WTO Anti-Dumping
Agreement, with the term “massive” used to describe the level of imports being
interpreted in (b) above as “ goods of a kind having been imported on a number of
occasions”. This reflects the nature of the dumping that is being targeted, that is,
These provisions were considered in the Willet Report, where it was observed that the
provisions had not been used for over 10 years. Since that Report was published there
has been no occasion when retrospective measures have been applied.
The Willet Report stated that it was extremely difficult to obtain evidence of intent. The
Anti-Dumping Authority expressed the view that Australia’s legislation implied that a
history of dumping during the investigation period would be insufficient to establish the
history required, as regard could only be had to prior involvement in earlier dumping
investigations. The recommendation in the Willet Report was that clarification be
obtained on this question.
The Customs Minister’s response on this question (in the letter of 28 July 2005 to the
TRTF) was to advise that the difficultly was that the “knowing test” was a subjective test
of the knowledge and intent of the importer. The Minister stated that Customs would
undertake to examine WTO precedent and consult with legal counsel to identify
acceptable evidentiary standards for the application of the “knowingly dump” test.
The TRTF is aware of only one WTO Panel decision which dealt with the issue of Article
10.6 which is the case of US Hot Rolled Steel from Japan. US law provides for the
imposition of retrospective measures where there is found to be a “critical circumstance”,
the terminology used in US legislation to deal with Article 10.6 and 10.7 of the WTO Anti
The findings of the Panel in that case were:
• that the evidential standard to be applied was that set out in Article 10.7 of the
WTO Anti-Dumping Agreement which was that of “ sufficient evidence”;
• Although Article 10.6 of the Agreement presupposes a final determination of
dumping and injury, in order to impose definitive duties, Article 10.7 provides that
certain preliminary measures may be taken “after initiation”;
• At the time of making such a preliminary determination, the information contained
in the application is sufficient in relation to dumping injury and casual link to
initiate a case, it is sufficient for the purpose of making a preliminary
• There was no linkage between making a preliminary finding in relation to
application of provisional measures and a preliminary finding of critical
circumstance under Article 10.6 and 10.7;
• Although there must be additional evidence on the level of imports to be obtained
to satisfy the requirements of Article 10.6, this did not mean that there had to be
additional evidence on dumping, injury and casual link;
• That is not necessary to wait until the end of the investigation process to make a
final determination on critical circumstance; and
• The US system imputed “knowledge” based on the level of dumping set out in
the application was considered sufficient evidence.
Other factors which are used to establish “knowledge” are whether an exporter has
dumped goods into other countries (normally established by reference to WTO semi-
annual returns), or whether they have dumped goods into the same country before.
Another factor is the level of dumping, i.e the greater the amount, the greater the level of
“knowledge” that can be imputed to the importer that it ought to have known that it was
dumping goods. At present the Dumping Application Form does not specify if the
applicant is asking for the imposition of measures under Section 269TN (4).and (5) in
relation to countervailing measures.
As stated above, the TRTF considers the test of “knowing” can be based on information
other than the subjective opinion of the importer.
Summary – Section 7
There is a need to clarify under what circumstances Customs will be in a position to
make a finding under Section 269TN(4) or (5).
The legal opinion foreshadowed in the Minister’s letter to the TRTF needs to be obtained
and due consideration needs to be given to the general principles set out in the WTO
Panel case of US –Hot Rolled Steel from Japan.
Guidelines need to be prepared to establish the evidential standard that is required, and
which factors can be used to establish the required knowledge to attribute to an
individual importer. The US approach of having regard to the level of dumping is
considered to be sound,
A review of the present linkage of the imposition of a security, which requires a
preliminary finding, needs to be examined in the light of the comments made in the WTO
Panel case referred to above.
8. DUTY ABSORPTION
In the Minister for Justice and Customs letter of 28 July 2005, to the Chairman of the
TRTF it was stated that, in response to a request for a duty absorption scheme, similar
to the European model, a similar approach was available administratively to Customs.
The need for a duty absorption scheme is something that the TRTF continues to
recommend. The TRTF seeks guidelines based on the administrative options available
to Customs, in particular the circumstances in which such a request can be made, what
would be reviewed in such a case and what guidance the Minister would propose to give
to Customs in this regard.
9. COUNTRY HOPPING
The TRTF highlights the fact that the Minister has previously noted the concerns of the
TRTF in relation to the 1992 Ministerial Guidelines, and has foreshadowed that new
Guidelines will be issued. The TRTF looks forward to the new Guidelines, being issued.
10. ORGANISATION OF CASE MANAGEMENT
In regard to the question of allocation of work as part of case management, there are
two points of view. On the one hand it is useful when an application is lodged to have
the work assigned to a group which is familiar with the industry sector in which the
applicant operates. Officers in the section which regularly deal with the one sector build
up their expertise on the particular features of the sector, the market, conditions of
On the other hand, where there is a long association between Customs officers and
industry representatives, there can be the downside of the issues being considered too
familiar and parties falling into a pattern of behaviour based on prior experience, without
due regard to the particular circumstances of the case under consideration.
In order to strike a balance between the desirability of officers being able to build up
their expertise on an industry and the need to ensure fresh insights into the process, the
TRTF recommends the practice whereby a particular Customs team only undertakes
work on two cases in the same industry sector. After this, the team should be assigned
to work on a case in a different sector.
There are no guidelines given to Customs in the Customs Manual as to how Customs
should determine whether or not to accept an application to review measures, or an
application for continuation of measures.
10 (a) Review of Measures
Division 5 of the Customs Act sets out the grounds for affected parties to seek a review
of dumping measures. An application can be made which requires an applicant to
specify whether it is seeking either a review of variable factors, or it is seeking to have
the measures revoked. 23
Guidelines are provided to assist an applicant in completing the Application Form, but
there should be Guidelines published that set out how Customs should approach
making a determination on whether or not to accept an application for a review.
In addition, Guidelines should set out those circumstances in which the Minister decides
to initiate a case, in particular where an application is sought for a review of variable
factors, and the Minister requests a review on whether the measures should remain.
Guidance should be provided as to what other information Customs will have regard to
under section 269ZC (1) (b) to any other matter in determining whether or not to accept
an application for review.
10 (b) Review of Continuation of Measures
In the same way that no guidance is provided on the conduct of Review of Measures,
also no guidance is given by Customs on what principles are used in deciding to accept
or reject an application for the Continuation of Measures.
Little information is provided on how Customs evaluates an application for the
Continuation of Measures, or what factors Customs considers in deciding whether or not
to continue measures.
There have been several WTO Panel and Appellant Body reports dealing with what are
referred to as sunset reviews, which in Australia are called Continuation Inquires.
Those Panel and Appellate Body reports have highlighted that:
• A sunset investigation is fundamentally different to the original investigation;
• The role of an investigating authority is both investigative and adjudicative 24 ;
• It is not necessary to calculate a dumping margin as part of a sunset review, nor
could you rely on dumping margins established in the original investigation 25 ;
• There is no requirement that a likelihood determination has to be based on
company specific findings, it can be based on country wide findings 26 ;
• What is required is to find only injury, not material injury, so there is no
requirement to make a determination based on the injury factors set out in Article
3 of the WTO Anti Dumping Agreement 27 ;
• You are entitled to cumulate in a sunset review, but you are not bound by the
requirements as to conditions of competition that apply in an original
investigation 28 ; and
• There was no requirement for authorities to apply the Article 5.8 de minimis
threshold in a sunset review.
These developments have only occurred in the past few years and have not been
incorporated in the Dumping Manual. The TRTF recommends that the Manual be
amended to reflect these findings. Furthermore, the reference to “injury” being “material
injury” in section 269ZHD (2) of the Customs Act 1901 as part of consideration of an
application for Continuation of Measures is incorrect and should be replaced by a
reference to “injury”.
The Customs Dumping Manual does not set out which factors Customs has regard to in
determining whether or not to make a finding on whether or not to continue anti-dumping
measures. The TRTF recommends that the Customs Dumping Manual or Guidelines
provide information on how Customs deals with initiation applications, including what
factors are considered in this process.
US_Corrosion Resistent Carbon Steel Flat Products from Japan (AB par 111)
US_Corrosion Resistent Carbon Steel Flat Products from Japan (AB par 124)
US_Corrosion Resistent Carbon Steel Flat Products from Japan (AB par 149 and 156
US_Oil Country Tubular Goods from Argentina ( AB par 304)
US_Oil Country Tubular Goods from Argentina ( AB par 304)
See Separate Document titled: “TRTF Attachment A_WTO Statistics”
WTO ANTI-DUMPING AGREEMENT - EXTRACT
Article 5 Initiation and Subsequent Investigation
5.1 Except as provided for in paragraph 6, an investigation to determine the existence, degree and
effect of any alleged dumping shall be initiated upon a written application by or on behalf of the
5.2 An application under paragraph 1 shall include evidence of (a) dumping, (b) injury within the
meaning of Article VI of GATT 1994 as interpreted by this Agreement and (c) a causal link between the
dumped imports and the alleged injury. Simple assertion, unsubstantiated by relevant evidence, cannot
be considered sufficient to meet the requirements of this paragraph. The application shall contain such
information as is reasonably available to the applicant on the following:
(i) the identity of the applicant and a description of the volume and value of the domestic
production of the like product by the applicant. Where a written application is made on behalf of
the domestic industry, the application shall identify the industry on behalf of which the
application is made by a list of all known domestic producers of the like product (or associations
of domestic producers of the like product) and, to the extent possible, a description of the
volume and value of domestic production of the like product accounted for by such producers;
(ii) a complete description of the allegedly dumped product, the names of the country or countries
of origin or export in question, the identity of each known exporter or foreign producer and a list
of known persons importing the product in question;
(iii) information on prices at which the product in question is sold when destined for consumption in
the domestic markets of the country or countries of origin or export (or, where appropriate,
information on the prices at which the product is sold from the country or countries of origin or
export to a third country or countries, or on the constructed value of the product) and
information on export prices or, where appropriate, on the prices at which the product is first
resold to an independent buyer in the territory of the importing Member;
(iv) information on the evolution of the volume of the allegedly dumped imports, the effect of these
imports on prices of the like product in the domestic market and the consequent impact of the
imports on the domestic industry, as demonstrated by relevant factors and indices having a
bearing on the state of the domestic industry, such as those listed in paragraphs 2 and 4 of
5.3 The authorities shall examine the accuracy and adequacy of the evidence provided in the
application to determine whether there is sufficient evidence to justify the initiation of an
5.4 An investigation shall not be initiated pursuant to paragraph 1 unless the authorities have
determined, on the basis of an examination of the degree of support for, or opposition to, the
application expressed(13) by domestic producers of the like product, that the application has been made
by or on behalf of the domestic industry.(14) The application shall be considered to have been made “by
or on behalf of the domestic industry” if it is supported by those domestic producers whose collective
output constitutes more than 50 per cent of the total production of the like product produced by that
portion of the domestic industry expressing either support for or opposition to the application.
However, no investigation shall be initiated when domestic producers expressly supporting the
application account for less than 25 per cent of total production of the like product produced by the
In the case of fragmented industries involving an exceptionally large number of
(footnote original) 13
producers, authorities may determine support and opposition by using statistically valid sampling
Members are aware that in the territory of certain Members employees of domestic
(footnote original) 14
producers of the like product or representatives of those employees may make or support an
application for an investigation under paragraph 1.
5.5 The authorities shall avoid, unless a decision has been made to initiate an investigation, any
publicizing of the application for the initiation of an investigation. However, after receipt of a properly
documented application and before proceeding to initiate an investigation, the authorities shall notify
the government of the exporting Member concerned.
See Separate Document titled: “TRTF Attachment C_Application Form”
CUSTOMS DUMPING MANUAL
EXCERPTS RELATING TO GOVERNMENT INFLUENCE
ON COSTS AND PRICES
“(63) Sales that would otherwise be relevant for determination of normal value may be
unsuitable because the price does not reflect a fair price in normal market conditions. The
legislation does not define market situations that would render domestic sales as unsuitable.
The investigation and analysis of each case must fully set out the reasons for the unsuitability of
sales before determining normal value under succeeding provisions of s.269TAC.
(64) In considering whether sales are not suitable for use in determining a normal value under
subsection (1) because of the situation in the market of the country of export Customs has
regard to factors such as whether the prices are artificially low, whether there is significant barter
trade or whether there are other conditions in the market which render sales in that market not
suitable for use in determining prices under subsection 269TAC(1)
(65) The concept of “artificially low pricing” is adopted from the EU. Government influence on
prices or costs could be one cause of “artificially low pricing”.
(66) “Government influence” means influence from any level of government.
(67) Prices do not have to reflect perfect market competition to be suitable. For example if a
market is distorted because of monopoly supplier situation the price may be considered
acceptable, especially if the prices are not artificially low.
(68) As another example, prices may be artificially low because of significant governmental
distortion of the domestic market due to the presence of government owned enterprises. The
presence of government owned enterprises may not, of itself, lead to a conclusion that the sales
are unsuitable. Rather, Customs looks to such matters as the numbers of government owned
enterprise, whether they are trading unprofitably so as to significantly lower prices in the market
such that the prices of private enterprises in the market are also lowered and whether market
conditions can no longer be said to prevail.
(69) Prices may also be artificially low because of significant government distortion of the
domestic market due to government influence on the costs of inputs. Again the mere existence
of any government influence on the costs of inputs would not be enough to make sales
unsuitable. Rather, Customs looks to the effect of this influence on prices and the extent to
which market conditions can no longer be said to prevail. It should be noted government
influence on costs can only disqualify the sales if those costs can be shown to be affecting the
prices by making those prices artificially low. Government influence on costs is also considered
at paragraph 140 with respect to the tests in regulation 180.”