ANTI-DUMPING AGREEMENT

• Agreement on Implementation of Article VI of

the GATT 1994
• Part I - Articles 1 to 15
• Part II- Articles 16 & 17
• part III- Article 18
• Annexures I & II

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 INVESTIGATION & IMPOSITION OF DUTIES

• Initiation, Investigations & Recommendations by Designated

Authority, DGAD, Department of Commerce.
• Designated Authority in India is a Single member authority
– Independent in nature
• Imposition & collection of anti-dumping duty and
countervailing duty by Department of Revenue, Ministry of
Finance
• A separate Directorate to deal with Safeguard measures in the
Ministry of Finance.

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Article -2.1 ADA
• When dumping?
• Export price less than the normal value.
• Normal Value- comparable price, in ordinary
course of trade, for like product in exporting
country.
• Home market sales in country of export-
Default option.

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Article -2.2 ADA
• If home market sales not in ordinary course of trade or
insufficient, then other two options for Normal Value.
• Sufficiency test- home market sales 5% or more of export
from exporting country of the product under consideration.
(Footnote 2 of ADA)
• Normal Value- other two options
• Comparable price of like product when exported to an
appropriate third country, provided that this price is
representative, or
• Cost of production in country of origin plus reasonable amount
for SGA and profits.
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Article -2.3 ADA Determination of ‘Export
Price’

• Determination of ‘export sales price’ of the like product and

adjustment wherever necessary;
OR
Export price construction,
– if exports are through related parties (Association or
compensatory arrangement between parties to transaction);
• Maximum reliance is on exporter’s data when cooperation is
available
• Export Price based on national trade statistics when cooperation is
not available
• Constructed Export Price in case of compensatory arrangements
between exporter and importer.
• Export Price adjusted to Ex-factory level

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 Article -2.4 ADA
• Fair Comparison of normal value and export price
for dumping margin determination.
– Model Matching / Grouping
• Closely resembling or similar models/types for model
matching
• At same level: Generally at Ex-factory level
– Adjustments and apple to apple comparison
• Physical characteristics
• Level of trade
• Quantities
• Taxation
• Conditions and terms of sale

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Article -2.4.2 ADA
Determination of Dumping Margin
– Normally to be established on Weighted
Average to Weighted Average comparison of
NV with EP
– Transaction to transaction comparison of NV
and EP
– Weighted average normal value with
individual export transactions in certain
situations- export prices differing in
regions,purchasers or time periods.
– Zeroing of negative dumping margin?

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Article -2.6 of ADA- Like Article

• Identification of ‘like product’ in the exporting

country market;
Identical Product
– In the absence of identical product closely
resembling product
• Follows the criteria of similarity of physical and
chemical characteristics, production process, and
technical and commercial substitutability with the
product under consideration

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Article -3 ADA - Injury
• Injury determination based on positive
evidence.
• Material Injury
– “harm which is not inconsequential,
immaterial, or unimportant”
• Threat of Material Injury
– “clearly foreseen and imminent”
• Lesser used provision. Used along with Material
Injury claim

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Article -3.4 ADA - Injury
• Mandatory examination Article 3.4 Economic
Parameters
• Relevant economic factors that are considered
when determining material injury include:
– Actual or potential decline in output, sales, market
share, profits, productivity, return on investment, and
capacity utilization;
– Factors affecting domestic prices;
– Actual and potential negative effects on cash flow,
inventories, employment, wages, growth, ability to
raise capital or investment;
– Actual and potential negative effects on the existing
development and production efforts of domestic
industry; and the margin of dumping.
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 Article -3.3 ADA Cumulation

• Cumulative injury analysis is done when

– Products from more than one country are being
simultaneously investigated
• Multi-country investigation
– Volume of imports from each country is above de
minimis or collectively account for more than 7% of
the imports of ‘like article’
– Dumping margin established against individual
countries is above de minimis
– In the light of conditions of competition between
imported articles and domestic like article.
• Examination of interchangeability of the products, and
channels of distribution etc. for satisfaction of conditions of
competition

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Article -3.5 ADA Causal Link

• Causal link between dumped imports and injury caused

to the domestic industry must be demonstrated.
• Establishment of causal link based on all relevant
evidence.
• Non-attribution analysis and examination of other
known factors.
• Following mandatory examination to be invariably done:
– Volume and prices of un-dumped imports
– Demand situation and its effect
– Changes in pattern of uses of the product under consideration
– Trade restrictive practices and conditions of competition
between foreign and domestic producers
– Developments in technology
– Export performance of the domestic industry
– Any other factor brought before the Authority 12
Article -4 Definition of Domestic Industry

• Domestic producers as a whole of the like

product or those whose collective output
constitutes a major proportion of the total
domestic production of the product.

• Producers related to the exporters and

importers, or who are themselves importers to
be excluded from the domestic industry for the
purpose of definition of domestic industry.

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Article 5.2 ADA - Application for AD
investigation

• To include evidence of dumping, injury

and causal link. All relevant particulars.
• Simple assertion, unsubstantiated by
relevant evidence not considered sufficient
for initiation of investigation.
• Application to contain information as is
reasonably available to the applicant.

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Article 5 ADA - Application for AD
investigation

Pre-initiation procedure
• Application for investigation -
(a) by the domestic industry; or
(b) suo moto initiation
• Single Investigation Team for both dumping and injury
– A two member team
• Pre-initiation examination
– Determination of domestic like product
– Examination and collection of data on domestic industry
– Standing of domestic industry
– Accuracy/adequacy of evidence on both dumping and injury
• Obligation on Investigating authority to examine the ‘adequacy’ and ‘accuracy’ of
evidence in application before initiation-Art. 5.3
• Standing requirement for making application-Art. 5.4
– Test of 50% support.
– Test of 25%-domestic producers making application to account for 25%
production of the product.
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Article 5 ADA - Application for AD investigation

• Mandatory requirement to inform

government of the exporting country
before initiation- Art. 5.5
• Article 5.8- De Minimis provisions:
– De Minimis margin of dumping <2%
– Negligible volume of imports-De minimis <3%
of total imports in importing country.
– Individually <3% but together with other
countries >7%- not treated as De Minimis or
negligible.
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Article 6 ADA- Evidence

• 6.1 -exporters are generally given 30 days

time to furnish questionnaire response.
Extensions allowed on cause shown.
• 6.2- All interested parties full rights to
defend their interests.
• 6.3 - oral hearings.
• 6.4- Obligation on Authority to provide
timely opportunity to all to see the
information- maintenance of Public file.
• 6.5- Confidential information- to be
treated confidential on good cause shown17
Article 6 ADA- Evidence

• 6.5 Confidentiality-
• 6.5.1-Non-confidential summaries-
sufficient details and meaningful.
• 6.5.2- If confidentiality not
warranted/parties not willing to make
information in sufficient non confidential
form, Authority may disregard such
information BUT cannot make such
information public.
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Article 6 ADA- Evidence

• 6.7- Exporter’s verification.Annex I

• 6.8-Use of ‘Facts Available’ in case of non-
cooperation by interested parties.
– Annex II gives guidance.
• 6.9- Disclosures of ‘essential facts’
– an important mile stone of the investigation.
– probably last chance to offer comments.
• 6.10-Limited Examination or ‘sampling’.
– Exporters, producers,importers or types of products so large.
– Statistically valid sample or selection of exporters which can
reasonably be investigated but to cover largest volume of 19
exports from the country.
Article 6 ADA- Evidence

• 6.11- Interested Parties

– exporter, foreign producer, importer, trade or
business association, governments of the
exporting country, producers in the importing
country.
• 6.12 Industrial Users of the product-
– right limited to give information relevant to
the investigation.

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Article 7 Provisional Measures

• 7.3- Not before 60 days from the date of

initiation.
• Where preliminary affirmative
determination of dumping, injury & causal
link. Such measures necessary to prevent
injury being caused during investigation.
• Provisional measures in force for 4 to 6
months or in case of members following
Lesser Duty , these periods are 6 to nine
months. 21
Article 8- Price Undertakings

• 8.1 - Proceedings can be suspended or

terminated on voluntary price undertakings.
• 8.2 Acceptance after preliminary affirmative
findings of dumping & injury.
• 8.3-Refusal, if impractical or as a general policy-
Reasons to be given.
• 8.6-periodical information of export prices.In
case of violation of undertakings, investigation
recommences and provisional measures come
into effect.
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Article 9 Imposition & Collection of Duties

• 9.1 Duty less than dumping margin-

optional. Some members including India,
EC, NZ Land, Australia follow Lesser Duty
Rule.
• 9.3.1- Retrospective assessment system.
Determination of final liability on actual
export transactions.
• 9.3.2-Prospective assessment system-
refund applications in cases of duty paid in
excess of actual dumping margin.
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Article 9.5 New Shippers Review

• Asked by new exporters or those who did not

ship during original investigation period.
• provided the exporter has not exported during
original investigation and not related to any of
the exporters or producers who are subject to
antidumping duty on the product
• New Dumping Margin determined for such new
shippers.
• Provisional assessment of imports during the
pendency of such reviews.
• Generally conducted on accelerated basis.
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Article 11-Reviews

• Article 11.2 – (Rule 23)– Changed circumstances

or revocation review

• Article 11.3 – [Section 9A(5)] - Expiry or sunset

review

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Article 11- Reviews

• Article 11.1 provides that an AD duty shall remain in force only as

long as and to the extent necessary to counteract dumping which is
causing injury;
• 11.2- If there is a changed circumstance in which either dumping or
injury to the domestic industry ceased or changed any interested
party can request for an interim review
• Could be suo moto, by the authorities
• Or upon a substantiated request from any interested party
• After a reasonable period has passed from the date of its imposition:
generally one year
• Follows same procedure as in the original investigation except
interim findings.
• May lead to termination or modification of the definitive duty

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Article 11.3 - Expiry or Sunset Reviews

• Objective
– To determine whether the expiry of ADD is likely
to lead to the continuation or recurrence of
dumping and injury.
• Initiation
– Own initiative or duly substantiated request made
by the domestic industry. However, seldom self
initiated. Usually, an alert letter is issued to the
DI which may substantiate the need for
continuation of ADD.
– Agreement does not give much guidance on the
standards to be followed for the review to lead to
conclusion whether expiry will lead to
continuation or recurrence.

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 Article 13- Judicial Review

• Independent Judicial review system

mandatory.
• In India CESTAT is the appellate authority.
• Section 9C of the Customs Tariff Act
contains the enabling provision.
• Notification of the Dept. of Revenue on the
Final Findings of the Designated Authority
can be challenged.
• Appeal can be filed within 90 days of the
date of order under appeal. 28
Article 15 Developing country members

• Special regard to be given by developed

country Members to the developing
country members while applying AD
measures.
• Possibility of constructive remedy before
applying measures, like price undertakings
etc.
• Article hardly operational.
• Implementation related issue of Doha
Round 29
Article 17 Consultation and Dispute Settlement

• Dispute Settlement Understanding

applicable to consultation and settlement
of disputes arising out of AD agreement.
• Complaining party may seek consultations.
• If consultations fail request for setting of
Panel by Dispute Settlement Body (DSB).

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