Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
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1997
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS LEGISLATION (ANTI-DUMPING) AMENDMENT BILL 1997
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Small Business and Consumer Affairs,
the Honourable GeoffProsser, MP)
88805 Cat.No. 96 9196 0 ISBN 0644 50481 1
CUSTOMS LEGISLATION (ANTI-DUMPING) AMENDMENT BILL 1997
OUTLINE
The purpose ofthis Bill is to amend the Customs Act 1901:
(i) to provide a special approach for determining normal values of allegedly dumped
goods from countries that are in the process of transition to a market economy as
announced by the Minister for Small Business and Consumer Affairs on
12 March 1997; and
(ii) in combination with the amendments to the Customs Tariff (Anti-Dumping) Act
1975 proposed in the Customs Tariff (Anti-Dumping) Amendment Bill 1996, to
clarify provisions ofthese Acts which relate to the manner in which interim
dumping and countervailing duties are collected.
Economies in transition assessment ofnormal value ofgoods
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The amendments to the normal value provisions in section 269TAC ofthe Customs
Act 1901 (the Customs Act) provide for a case by case approach to be taken by
Customs and the Anti-Dumping Authority in inquiries into th~ alleged dumping of
products from such economies. If Customs and the Authority are satisfied that the
exporter's domestic selling prices of the product under investigation are subject to
government control, normal values may be ascertained by reference to other relevant
information which may include the selling prices oflike goods in a "surrogate"
country.
To ensure that Australia is not in breach of its obligations as a member of the World
Trade Organization (WTO), the amendment provides for regulations to be made to
disapply the new methodology for calculating normal values in respect of specified
countries.
Interim dumping duties
The Bill also contains amendments which, in combination with those in the Customs
Tariff'(Anti-Dumping) Amendment Bill 1997, clarify the operation of the provisions of
the Customs Act and the Customs Tar~ffAnti-Dumping) Amendment Act 1975 which
(
relate to the manner in which interim dumping and countervailing duties are collected.
The amendments make it clear that such interim duties can be imposed, pending final
assessment of any dumping or countervailing duties, notwithstanding that the actual
export price and normal value, or the fact that a countervailable subsidy has been
received, have not yet been ascertained.
Although these amendments are to be taken to have commenced on 1 January 1993,
the date on which the interim dumping and countervailing duties were introduced, they
will not require importers to pay an amount of dumping duty beyond that which has
previously been demanded. The amendments merely seek to ensure that approximately
$12 million in interim duties collected since 1 January 1993 is not subject to legal
challenge.
Page 2 Customs Legislation (Anti-Dumping) Amendment Bill 1997
The Bill also contains a minor technical amendment to correct a cross reference in the
Anti-Dumping Authority Act 1988.
FINANCIAL IMPACT STATEMENT
The amendments in the Bill in relation to the assessment ofthe normal value of goods
in countries in transition to market economies have no financial impact.
The proposed amendments to clarify the operation of the interim dumping and
countervailing duties provisions, in combination with those proposed in the Customs
Legislation (Anti-Dumping) Amendment Bill 1996, will ensure that approximately $12
million in interim duties collected since 1 January 1993 is not subject to legal
challenge.
Customs Legislation (Anti-Dumping) Amendment Bill 1997 Page 3
CUSTOMS LEGISLATION (ANTI-DUMPING) AMENDMENT BILL 1997
NOTES ON CLAUSES
Clause 1 - Short Title
This clause provides for this Act to be cited as the Customs Legislation (Anti-
Dumping) Amendment Act 1997.
Clause 2 - Commencement
This clause provides for the commencement provisions ofthe various amendments
contained in this Act as set out below.
Subclause 2(1) provides that, subject to subsections (2), (3) and (4), the provisions of
this Act commence on the day on which this Act receives the Royal Assent. The
provisions to conm~ence upon Royal Assent are:
· the formal commencement and enabling clauses;
· the minor technical amendment to the Anti-Dumping Authority Act 1988 (the
ADA Act) in item 1 of the Schedule 1; and
· the application provisions in item 13 of Schedule 1.
Subclause 2(2) provides that, subject to subsection (4), items 2, 3 and 4 of Schedule 1
commence on a day to be fixed by Proclamation. These items all relate to the new
method for calculating the normal value of goods exported from countries in transition
to a market economy. Proclamation commencement is proposed to enable
complementary regulations to be made with a commencement on the same day as the
amendments to the Customs Act 1901 (the Customs Act).
The Proclamation commencement is subject to the standard provision providing for
automatic commencement 6 months after Royal Assent if the relevant provisions have
not been proclaimed to commence within that time (subclause 2(4) refers).
Subclause 2(3) provides that items 5 to 12 are taken to have commenced on
1 January 1993. These items all relate to the amendments clarifying collection of
interim dumping and countervailing duties. The interim duty regime was introduced by
the Customs Legislation (Anti-Dumping Amendments) Act 1992, which commenced
on 1 January 1993. Interim duties have been collected since that date in accordance
with the intention ofthe regime and these amendments will ensure that approximately
$12 million in interim duties collected since 1 January 1993 is not subject to legal
challenge.
Clause 3 - Schedules
This clause is the formal enabling provision for the Schedule to this Act providing that
each Act specified in the Schedule is amended or repealed in accordance with the
applicable terms ofthe Schedule.
Page 4 Customs Legislation (Anti-Dumping) Amendment Bill 1997
The clause also provides that the other items of the Schedules have effect according to
their terms. This is a standard enabling clause for transitional, savings and application
items in amending legislation (item 13 of Schedule I refers).
SCHEDULE!- AMENDMENT OF ACTS
Anti-Dumping Authority Act 1988
Item I Subsection 7(3)
-
This item amends subsection 7(3) of the Anti-Dumping Authority Act 1988 by omitting
"11(5)" and substituting it with "11(4)" to correct an inaccurate cross reference to the
Customs Tariff(Anti-Dumping) Act 1975 ("the Anti-Dumping Act"). This is a minor
technical amendment only.
Customs Act 1901
Items 2 to 4
These items contain the proposed amendments to the normal value provisions in
section 269TAC of the Customs Act 1901 (the Customs Act)., The new subsections
269TAC(5D), (SE), (SF) and (5G) set out the special approach Customs and the Anti-
Dumping Authority (the Authority) may use in determining normal values for allegedly
dumped goods from countries that are in the process of transition to a market
economy.
Section 269TAC of the Customs Act 1901 provides for the assessment of the `normal
value' of imported goods, for the purpose of determining whether the goods have been
exported to Australia at less than that value (thereby dumped).
The structure ofthe section has been described as establishing a hierarchy of
methodologies by which normal values are determined. Investigating authorities must
progressively work through each ofthe prescribed methodologies until a point is
reached at which a normal value can be determined.
Until the latter part of last year subsection 269TAC(4) was utilised by investigating
authorities to ascertain normal values for goods exported from economies in transition,
for example China, by reference to information obtained in a "surrogate" country. In
` November of last year Customs obtained legal advice as to the scope of subsection
269TAC(4) That advice confirmed that the section was severely limited in its
application. Its stringent tests require that the Government ofthe country of export
has at least a substantial monopoly of all ofthe trade ofthe country not just in terms
-
of the goods under investigation, AND must also substantially influence the domestic
price of all goods in that country.
Therefore, although the governments of economies which are in a state of transition
from a command economy to a market economy may still maintain controls over the
domestic selling prices of a significant number of sensitive products, it cannot be said
that the extent ofthe control falls within the ambit of subsection 269TAC(4). Clearly,
Customs Legislation (Anti-Dumping) Amendment Bill 1997 Page 5
in such economies the government has moved from a position in which it maintained a
substantial monopoly over all of the trade ofthe country.
As subsection 269TAC(4) can have no further application to economies which are
considered to be in transition from a command economy to a market economy, the
I
determination of the normal values for exports from such economies, as a matter of
law, must be made in accordance with the remaining provisions of section 269TAC.
These provisions do not distinguish between "market economies" and those which are
considered to be "in transition Therefore, normal values for exports from economies
".
which are considered to be in transition from a command economy to a market
economy must be ascertained by the application of the same methodologies that are
required to be applied in the ascertainment of normal values for exports from countries
such as the United States of America and Germany. That is, there is presently no
flexibility available for investigating authorities to treat exports from economies which
are in transition differently from exports from other countries.
Investigating authorities require the flexibility to proceed to a methodology similar to
that provided in s. 269TAC(6) (ie have regard to all relevant information) as soon as
they are satisfied that the domestic selling prices of the goods under consideration are
subject to government control. The proposed amendment therefore aims to confer
such flexibility upon Customs and the Authority.
Item 2 After subsection 269TAC(5C)
-
This item introduces new subsections 269TAC(SD), (SE), (SF) and (5G).
New subsection (SD) provides an alternative "all relevant information" provision to
subsection 269TAC(6) to cover the situation where goods are exported to Australia
and the Minister is satisfied that:
(a) in the past the Government ofthat country of export had a monopoly, or a
substantial monopoly, ofthe trade of that country and determined, or
substantially influenced, the domestic price of goods in that country (ie that the
country previously would have met the terms of subsection 269TAC(4)); and
(b) the circumstances described in paragraph (a) no longer applies in relation to the
country of export; and
(c) a `price control situation' applies, within the meaning of subsection (5E), in
relation to like goods to the goods exported to Australia.
In the above situation, the normal value of the first-mentioned goods may be
determined by the Minister having regard to all relevant information.
New subsection (SE) describes the two different circumstances where a price control
situation would apply to the domestic selling price of like goods to the goods first
mentioned in subsection (SD) (ie the goods exported to Australia).
Page 6 Customs Legislation (Anti-Dumping) Amendment Bill 1997
The circumstances are as follows:
(a) where the exporter of those first-mentioned goods sells like goods in the country
of export and the domestic selling price of those like goods is controlled, or
substantially controlled, by a government (at whatever level) ofthat country; or
(b) if the exporter does not sell like goods in the country of export, then where there
are other sellers in that country of like goods and the domestic selling price of
like goods sold by some or all ofthose other sellers is so controlled or
substantially so controlled.
These are the only two circumstances where the new approach for ascertaining normal
values can be used. Therefore the new approach may only be adopted where the
Minister is satisfied that the domestic selling price of relevant goods sold by the
exporter, or where applicable another seller, is subject to substantial government
control.
New subsection (SF) makes it clear that although subsection 269TAC(4) does not
apply, the use of the "surrogate country" methodology for ascertaining normal values
in paragraphs 269TAC(4)(c), (d), (e) or (f) may be used under the "all relevant
information" methodology in new subsection (SD).
New subsection (SG) provides for the power to make regulations to disapply
subsection (SD) to a country for the purpose offulfilling Australia's international
obligations under an international agreement. This provision is intended to ensure that
Australia is not in breach of its obligations as a member ofthe World Trade
Organization (WTO).
It is proposed to make regulations to disapply subsection (SD) to all current WTO
members which will commence at the same time as these amendments. As additional
countries join the WTO, subject to the terms of their accession protocol, further
regulations will be made to disapply subsection (SD).
Item 3 - Subsection 269TAC(6)
This item effects a consequential amendment to subsection 269TAC(6), the existing
"all relevant information" provision to exclude its application when new subsection
(SD) applies.
Item 4 After subsection 269TAC(7)
-
This item introduces new subsection 269TAC(7A) which allows the Minister to
continue to use other provisions in section 269TAC [other than subsections (4) and
(5)] in relation to other goods exportedto Australia from a particular country where
the new subsection (SD) apply to certain goods exported from that country. This
provision reflects the policy that the focus ofnew subsection (SD) is not on the overall
status or classification ofthe economy in the country of export but on the domestic
selling prices of the goods under consideration when these prices are subject to
government control or substantial control.
Customs Legislation (Anti-Dumping) Amendment Bill 1997 Page 7
Item 5 and 6 - Subsections 269TG(l) and (2)
Final dumping duty and interim dumping duty are imposed by subsections 8(2) and (3),
respectively, of the Customs Tariff(Anti-Dumping) Act 1975 (the Anti-Dumping Act)
on goods the subject ofa notice under subsections 269TG(1) or (2) ofthe Customs
Act. A notice under subsection 269TG(I) is intended to apply retrospectively to the
goods that were the subject ofa dumping inquiry under Part XVB ofthe Customs Act
and to like goods exportedto Australia after a preliminary finding of dumping under
section 269TD but before the publication ofthe notice. A notice under subsection
269TG(2) applies to like goods exportedto Australia ~ the publication of the
notice.
The present wording of subsections 269TG(1) and (2) currently provides that the
notices under these subsections apply to goods, or like goods, the amount of the
export price of which is less than the amount oftheir normal value. In the case of
interim dumping duties, these values have not yet been established, as their collection
is intended to be "pending final assessment of the dumping duty payable". It therefore
might be argued that it is not possible to impose interim dumping duty under
subsection 8(3) of the Anti-Dumping Act until sUch time as the actual amounts are
ascertained. Once actual values are ascertained, however, final dumping duties are
imposed. Therefore, to interpret subsections 269TG(1) and (2) in this way defeats the
purpose of impositig interim duties.
Items 5 and 6 are therefore necessary to correct the above anomaly by making it clear
that interim dumping duties are imposed by section 8(3) ofthe Anti-Dumping Act in
respect of:
· in the case of subsection 269TG(1) like goods that were exported to Australia
-
after the CEO made a preliminary finding under section 269TD that there were
sufficient grounds for the publication of a notice under subsection 269TG( 1) in
respect ofthe goods referred to in paragraph 269TG(1)(c) (ie the goods the
subject of the inquiry) but before the publication of that notice (item 5 refers); and
· in the case of subsection 269TG(2) like goods that are exportedto Australia after
-
the date of publication ofthe notice or such later date as is specified in the notice
(item 6 refers).
A complementary amendment to subsection 8(2) ofthe Anti-Dumping Act is also
proposed in the Customs Tariff (Anti-Dumping) Amendment Bill 1997 to ensure that
actual values are still required to be ascertained in order for final dumping duties to be
imposed.
Items 7 to 12 - Subsections 269TH(!), (2); 269TJ(!), (2); and 269TK(1),( 2)
Items 7 to 12 effect similar amendments to those in items 5 and 6 above to the
corresponding provisions in subsections 269TH, TJ and TK dealing with notices made
in respect of third country dumping duties, countervailing duties and third country
countervailing duties, respectively. Like subsections 269TG(1) and (2), these
Page 8 Customs Legislation (Anti-Dumping) Amendment Bill 1997
provisions can currently be interpreted to require the actual amount of export price and
normal value, or the fact that a countervailable subsidy has been received, to be
ascertained before interim duties can be collected.
Item 13 Application provisions
-
Sub-item 13(1) provides that, despite the amendments of the Customs Act made by
items 2, 3 and 4 of the Schedule, the Customs Act as in force immediately before the
day on which those items commence, continues to apply as though those amendments
had not been made in relation to applications under subsection 269TB(1) or (2) that
were made before that day.
This provision means that all applications on hand at the time the amendment to
section 269TAC commences must be considered against the current provisions for
ascertaining normal value.
Sub-item 13(2) inserts a saving provision to ensure that any notice given by the
Minister under subsections 269TG(1) or (2), TH(1) or (2), TJ(1) or (2), or TK(1) or
(2) ofthe Customs Act on or after 1 January 1993 is taken to have effect as if it had
been given under that subsection as amended by this Act. This provision means that
notices made between 1 January 1993 and the enactment ofthese amendments (and
consequently the interim dumping and countervailing duties imposed and collected
pursuant to them) are to be treated as if they were made in accordance with the
amendments proposed above.
Printed by Authority by the Commonwealth Government Printer
Customs Legislation (Anti-Dumping) Amendment Bill 1997 Page 9
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