Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
ARTHUR ROBINSON & HEDD~RW1ICKS
LiBRARY
1997
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS LEGISLATION (ANTI-DUMPING) AMENDMENT BILL 1997
SUPPLEMENTARY EXPLANATORY MEMORANDUM
(Amendments to be moved on behalf of the Government)
(Circulated by authority of the Minister for Customs and Consumer Affairs,
The Hon Warren Truss MP)
11197 Cat No. 97 1708 0 ISBN 0644 364106
CUSTOMS LEGISLATION (ANTI-DUMPING) AMENDMENT BILL 1997
OUTLINE
The purpose of these amendments is to provide an additional methodology for determining
the normal value of allegedly dumped goods under section 269TAC ofthe Customs Act
1901. The new methodology will apply where goods are exported from a country in the
process oftransition to a market economy and a raw material input into the goods that
accounts for more than 10% ofthe costs of producing or manufacturing the goods is
supplied by a State owned enterprise.
(
The Customs Legislation (Anti-Dumping) Amendment Bill 1997 was introduced into the
House in June this year. Following the introduction of the Bill, officials from Customs, the
Anti-Dumping authority, the Department of Foreign Affairs and Trade and the Department
of Industry Science and Tourism conducted seminars with industry representatives to
explain and discuss the Bill. Industry expressed concern that the Bill did not address the
issue of government control over the price ofsignificant raw material inputs used in the
production ofthe goods under investigation.
In September, the Senate referred the Bill to the Economics Legislation Committee for
consideration. Although the majority report from the Committee recommended passage of
the Bill it commented "consideration should be given to the cost of raw material inputs
where investigators conclude that it exceeds 10% ofthe production process".
In light of these views, the Government proposes to amend the Bill to confer flexibility in
determining normal values by allowing the examination of significant raw material inputs
used in the production of the goods exported to Australia when those inputs are supplied by
a state owned enterprise.
The provisions contained within the Bill and the proposed amendments will operate in the
following manner. If it is identified that the domestic selling price ofthe goods under
consideration is subject to a price control situation the normal value of the goods exported
to Australia is to be determined having regard to all relevant information which may include
information obtained from a surrogate country.
Absent any such price control situation, the proposed amendments will allow the Minister to
proceed to examine the cost of production of the goods exported to Australia. If the
Minister is satisfied that a raw material accounts for more than 10% of the costs of
producing or manufacturing the exported goods (and is thereby considered to be significant)
and that the raw material is supplied by an enterprise which is wholly owned by a
government ofthe exporting country the cost of the particular item could be ignored and,
for normal value purposes, its cost could be estimated by the Minister by reference to other
relevant information which could, but need not necessarily, include the cost ofthat item in a
surrogate country.
FINANCIAL IMPACT STATEMENT
The amendments have no financial impact.
Page 2 Customs Legislation (Anti-Dumping) Amendment Bill 1997
CUSTOMS LEGISLATION (ANTI-DUMPING) AMENDMENT BILL 1997
NOTES ON AMENDMENTS
Amendment (1)
This amendment is a technical amendment to omit the word "exists and substitute the
word "applies" in the phrase a price control situation exists ."in proposed
"... ..
paragraph 269TAC(5D)(c) ofthe Customs Act 1901 (the Act). This amendment is for
consistency with proposed subsection (5E) which defines when a price control
situation will "apply" forthe purposes of subsection (5D).
Amendments (2) and (3)
These amendments effect technical drafting changes to proposed subsection
269TAC(5E) by replacing the terms "first-mentioned" and "those first-mentioned
goods" with "first referred to" and "the goods so referred to", respectively. These
changes provide for each of the classes of goods to which this provision relates to be
more clearly identified.
Amendment (4)
This amendment omits proposed subsections 269TAC(5F) and (5G) from item 2 of
Schedule 1 to the Bill and substitutes new proposed subsections 269TAC(5F), (5G),
(SH) and (5J).
Proposedsubsection 269TAC(5F)
This subsection remakes proposed subsection (5F) as it currently appears in the Bill
with slightly modified wording. The new wording makes it clear that although
subsection 269TAC(4) ofthe Act does not apply to a country ofexport (ie the
economy of a particular country can no longer be regarded as a command economy),
when determining the normal value of goods using the "all relevant information"
methodology the Minister may use the "surrogate country" methodologies in
paragraphs 269TAC(4)(c), (d), (e) or (f) as if subsection 269TAC(4) did apply.
Proposed subsection (5G)
This new subsection gives effect to the Government's decision to provide an additional
methodology for determining the normal value of allegedly dumped goods from
countries that are in the process of transition to a market economy where a raw
material input into the goods that accounts for more than 10% of the costs of
producing or manufacturing the goods is supplied by a State owned enterprise.
This new provision can operate in respect ofgoods exported to Australia when the
Minister is satisfied that:
(a) in the past the Government ofthe country of export had a monopoly, or a
substantial monopoly, of the trade of that country and determined, or
Customs Legislation (Anti-Dumping) Amendment Bill 1997 Page 3
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) proposed subsection 269TAC(5D) does not apply (ie a price control situation
does not apply in respect of the whole goods); and
(d) a raw material used in producing the or manufacturing the exported goods is
directly supplied to the producer by an enterprise that is wholly owned by a
government (whether national or provincial) of the country of export; and
(e) the cost of that raw material to the producer or manufacturer of the exported
goods exceeds 10% ofthe total costs actually incurred in the production or
manufacturing of the exported goods.
Ifthese preconditions are met, the normal value of the exported goods is to be
calculated as the sum of:
· an amount the Minister determines, having regard to all relevant information, to
be the `value' (as opposed to the actual `cost') of the state supplied raw materials
that exceed the 10% threshold) (new paragraph 269TAC(5G)(f) refers);
- This paragraph allows the Minister to substitute a replacement value for the
cost of the state suppled raw material, which the Minister can determine
having regard to all relevant information. This substituted value may be
determined by reference to, amongst other things, the cost oflike raw
materials supplied by non state owned enterprises within the country of
export or the cost oflike raw materials in a surrogate country (see proposed
subsection (5H)).
· the amount ofthe production and manufacturing costs actually incurred by the
producer or manufacturer (excluding the costs of the state supplied raw material
covered by paragraph (0) (new paragraph 269TAC(5G)(g) refers); and
· an amount determined by the Minister to be the administrative, selling and general
costs plus the profit on a sale ofthe goods if, instead ofbeing exported, the
goods were sold in the domestic economy ofthe country of export (new
paragraph 269TAC(5G)(h) refers). (This element is modelled on current
subparagraph 269TAC(2)(c)(ii) of the Act).
Proposed subsection (SH)
This subsection provides for range of" surrogate country" methodologies (modelled on
paragraphs 269TAC(4)(c), (d), (e) and (I) of the Act for establishing the normal value
of whole goods) that the Minister can, but is not required to, use when having regard
to "all relevant information" for the purposes ofdetermining the substitute value for
Page 4 Customs Legislation (Anti-Dumping) Amendment Bill 1997
the cost of the state supplied raw materials that exceed the 10% threshold under
paragraph 269TAC(5G)(f).
Proposed subsection (5J)
This subsection remakes proposed subsection (5G) ofthe current Bill to provide that
regulations can be made to disapply both subsection (5D) and (5G) to a country for the
purpose of fulfilling Australia's international obligations under an international
agreement.
Amendment (5)
This is a technical drafting amendment to include in proposed subsection 269TAC(7A)
a reference to proposed subsection (5G). This amendment ensures that the Minister
may continue to use other provisions of section 269TAC for the purposes of
determining the normal value of goods exported from a particular country,
notwithstanding the fact that proposed subsection (5G) has been used to determine the
normal value of other goods exported from that country..
Customs Legislation (Anti-Dumping) Amendment Bill 1997 Page 5
I
I
I
I
I
S
I
Printed by Authority by the Commonwealth Government printer
1 1 ~liI I ~I l ~I I
fl
M
9 780644 364102
Index]
[Search]
[Download]
[Bill]
[Help]