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2010-2011-2012
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS AMENDMENT (ANTI-DUMPING IMPROVEMENTS) BILL (No. 3) 2012
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Home Affairs,
the Honourable Jason Clare MP)
CUSTOMS AMENDMENT (ANTI-DUMPING IMPROVEMENTS) BILL (No. 3) 2012
OUTLINE
1. The purpose of this Bill is to amend the Customs Act 1901
(the Customs Act) to finalise the implementation of the Government's
reforms to Australia's anti-dumping system announced in June 2011.
2. This Bill implements several aspects of these reforms by:
2.1 amending the provisions dealing with countervailable subsidies to
more accurately reflect definitions and operative provisions of the
World Trade Organization (WTO) Agreement on Subsidies and
Countervailing Measures (ASCM);
2.2 introducing provisions under which the Australian Customs and
Border Protection Service (Customs and Border Protection) will, if
required, conduct inquiries to address the circumvention of trade
measures by exporters or importers of goods which are subject to
measures; and
2.3 strengthening the provisions that deal with non-cooperation in
anti-dumping investigations, reviews under Division 5 or
continuation inquiries.
FINANCIAL IMPACT STATEMENT
The Australian Government has provided $10.4 million over the forward
estimates to be absorbed by Customs and Border Protection for the
implementation of the June 2011 reforms to the anti-dumping system of
which this Bill forms part.
REGULATION IMPACT STATEMENT
The Explanatory Memorandum of the Customs Amendment (Anti-dumping
Improvements) Bill (No. 2) 2011 addresses the regulatory impact of this
Bill in section 4 (Regulation Impact Statement).
HUMAN RIGHTS COMPATIBILITY STATEMENT
This Human Rights Compatibility Statement was prepared in accordance with
Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
This Bill is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in the definition of
human rights in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
This Bill's purpose is to amend Part XVB of the Customs Act, which deals
with the imposition of trade measures in respect of imported goods
which are dumped, or subsidised by a countervailable subsidy, the
importation of which has caused, or threatens, material injury to
Australian industry.
This Bill implements aspects of the Government's reforms to Australia's
anti-dumping system announced in June 2011. This is the fourth tranche
of reforms.
This Bill will amend the Customs Act by:
1. amending provisions dealing with countervailable subsidies to more
accurately reflect the ASCM;
2. introducing provisions under which the Customs and Border
Protection will, if required, conduct inquiries to address the
circumvention of trade measures by exporters or importers of goods
which are subject to measures; and
3. strengthening the sampling provisions that deal with non-
cooperation in anti-dumping investigations, reviews under Division
5 or continuation inquiries; and
4. providing a number of minor amendments to the Customs Act.
Human Rights implications
5. This legislative instrument does not engage, impact on, or limit in any
way, the human rights and freedoms recognised or declared in the
international instruments listed in the definition of human rights at
section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Conclusion
6. This legislation does not raise any human rights issues.
Minister for Home Affairs
CUSTOMS AMENDMENT (anti-dumping IMPROVEMENTS) BILL (no. 3) 2012
NOTES ON CLAUSES
Clause 1 - Short title
1. This clause provides for the Bill, when enacted, to be cited as the
Customs Amendment (Anti-dumping Improvements) Act (No. 3) 2012.
Clause 2 - Commencement
2. Subclause (1) provides that each provision of this Act specified in
column 1 of the table in that subclause commences, or is taken to have
commenced, on the day or at the time specified in column 2 of the
table. This subclause also provides that any other statement in column
2 of the table has effect according to its terms.
3. Item 1 in column 1 of the table provides that sections 1 to 3 and
anything in this Act not elsewhere covered by the table will commence
on the day on which the Act receives the Royal Assent.
4. Item 2 in column 1 of the table provides that Schedules 1 to 3 commence
on a day to be fixed by Proclamation, and if any of the provisions do
not commence within 6 months beginning on the day the Act receives the
Royal Assent, they commence on the day after the end of that period.
5. Item 3 in column 1 of the table provides that items 1 to 7 in Schedule
4 will commence the day after this Act receives the Royal Assent.
6. Item 4 in column 1 of the table provides that item 8 in Schedule 4 will
commence the later of:
(a) the start of the day this Act receives the Royal Assent; and
(b) immediately after the commencement of Schedule 1 to the Customs
Amendment (Anti-dumping Improvements) Act (No. 1) 2012.
However, the provision(s) do not commence at all if the event mentioned
in paragraph (b) does not occur.
7. Item 5 in column 1 of the table provides that item 9 in Schedule 4 will
commence the day after this Act receives the Royal Assent.
Clause 3 - Schedule
8. This clause is the formal enabling provision for the Schedule to the
Bill, providing that each Act specified in a Schedule is amended in
accordance with the applicable items of the Schedule. In this Bill,
the Customs Act is the only Act being amended.
9. 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.
Schedule 1 - AMENDMENTs of THE CUSTOMS ACT 1901
A. Better align the countervailable subsidy provisions of the Customs
Act with the WTO Agreement on Subsidies and Countervailing Measures
10. Schedule 1 of the Bill will amend provisions dealing with
countervailable subsidies to more accurately reflect the ASCM. This
Bill:
1. amends the definition of subsidy in subsection 269T(1), to more
accurately reflect the language of Article 1 of the ASCM, and
clarify that a subsidy is a financial contribution or income or
price support that confers a benefit, whether directly or
indirectly, in relation to the goods exported to Australia;
2. repeals section 269TACC and replaces it with a simplified section
which deals with whether a financial contribution or income or
price support confers a benefit;
3. introduces a new section 269TACD to provide that, where a
countervailable subsidy has been received in respect of goods, the
amount of the countervailable subsidy is an amount determined by
the Minister in writing and that the amount of countervailable
subsidy should be worked out by reference to the units of those
goods;
4. amends section 269TAE to more effectively reflect the ASCM, in
particular, amending subsections 269TAE(2A) and (2C) to reflect
Articles 15.7 and 15.3 respectively; and
5. amends subsection 269TDA(14) to allow for the immediate termination
of a countervailing duty investigation where the authorities
determine that injury is negligible.
B. Anti-circumvention inquiries
11. Schedule 2 of the Bill amends the Customs Act to address prescribed
circumvention activities by importers and exporters.
12. Circumvention is a trade strategy used by the exporters and importers
of products to avoid the full payment of dumping and countervailing
duties. Circumvention behaviours take various forms and exploit
different aspects of the anti-dumping and countervailing system, but
they all aim to ensure that the relevant goods do not attract the
intended dumping or countervailing duty.
13. This Bill will allow the Minister to amend the original notice imposing
the dumping or countervailing duty, including by extending the notice
so that it applies to different goods, exporters and countries which
were not specified in the original notice. The Minister will exercise
these powers after considering a report by the Chief Executive Officer
of Customs (the CEO) regarding alleged circumvention activity that
provides reasons as to why the original notice should be altered or
remain the same.
C. Stronger provisions to address non-cooperative parties
14. Schedule 3 of the Bill strengthens the provisions that deal with non-
cooperation in relation to dumping investigations, reviews under
Division 5 or continuation inquiries. Schedule 3 also consolidates
and clarifies the provisions that deal with sampling in relation to
dumping and countervailable subsidy inquiries into one provision.
15. Sampling is undertaken where the number of exporters who provide
information is so large as to make a determination for each individual
exporter impracticable. The Minister may limit his or her examination
to a selected number of exporters who are a statistically valid sample
or are responsible for the largest percentage of the volume of the
exports from the country in question that can reasonably be
investigated.
16. Sampling is currently undertaken for dumping and subsidy investigations
under subsections 269TACB(8) and 269TACC(8) respectively.
17. Currently, the Customs Act, in section 269T, categorised an exporter of
goods to Australia as a 'selected exporter', 'residual exporter' or
'new exporter'. A new exporter was only relevant for the purposes of
an accelerated review under Division 6. Therefore a current exporter
of goods the subject of an anti-dumping investigation must have been
either a selected exporter or a residual exporter.
18. Customs and Border Protection considers that residual exporters should
only exist in cases where the Minister has applied
subsection 269TACB(8), known as the sampling provision. This provision
reflects Article 6.10 of the WTO Anti-Dumping Agreement (ADA), as
stated in the Explanatory Memorandum for the 1994 amendments. This
Article describes a process where, if the number of exporters from a
particular country is too large for an investigating authority to
examine each exporter individually, the investigating authority may
choose, or 'select', which exporters to examine as part of the
investigation. Article 9.4 of the ADA outlines the method for
calculating the dumping margin for residual exporters. This Article is
reflected in subsections 269TG(3B) and (3C).
19. In a recent review, an alternative interpretation has arisen which
would mean that non-cooperating exporters are provided with the
weighted average dumping margin of fully cooperative exporters and
therefore avoid the application of subsections 269TAB(3) and 269TAC(6),
which are the provisions intended to deal with non-cooperation in
accordance with Article 6.8 of the ADA.
20. The amendments in this Bill will prevent the possible manipulation of
the level of cooperation (which can occur when only the two rates are
implemented) by introducing three categories of exporters:
cooperative, residual and uncooperative. This will mean that the
Minister will be able to determine:
1. individual rates of duty for all cooperative exporters and any
uncooperative exporters for whom an individual export price and
normal value were calculated (these exporters will be named in the
notice);
2. a single rate of duty for all residual exporters (these exporters
will be named in the notice); and
3. a single rate of duty for all other exporters not named in the
notice -this will include non-cooperating exporters not covered by
an individual rate and new exporters.
21. This approach is consistent with the approach taken in a number of
other jurisdictions.
D. Minor amendments
22. Schedule 4 of the Bill amends the Customs Act to correct a number of
errors and make clarifications. The amendments:
1. clarify the operation of paragraphs 269TAE(2C)(c) and (d) to make
it clear that these provisions only operate in relation to
determinations made in connection with dumping duties;
2. amend subsection 269TDA(13) to provide consistency for both dumping
and subsidy investigations as to how the CEO terminates
investigations, where the CEO finds that there is negligible
injury;
3. amend the definition of interested party in subsection 269T(1) to
correct an existing error; and
4. correct minor errors in section referencing in section 269ZJ and
provide a clarifying amendment to paragraph 269ZZK(6)(c).
A. Schedule 1-Subsidies
Item 1 - Subsection 269T(1) (definition of subsidy)
23. This item amends repeals and replaces the definition of subsidy in
subsection 269T(1). The new definition clarifies that a subsidy
encompasses a financial contribution and any form of income or price
support, whether received directly or indirectly in relation to goods
exported to Australia that confers a benefit.
24. The new definition closely follows the language of, and is in
accordance with Article 1 of the ASCM which in defining subsidy does
not differentiate between direct and indirectly received subsidies.
Further Footnote 36 to Article 10 of the ASCM defines countervailing
duty as "a special duty levied for the purpose of offsetting any
subsidy bestowed directly or indirectly upon the manufacture,
production or export of any merchandise, as provided for in paragraph 3
of Article VI of GATT 1994".
25. This amendment clarifies that subsidies conferring a benefit indirectly
may be included in any benefit calculation under section 269TACC.
Items 2 - Subsections 269T(2AA), (2AB) and (2AC)
26. This item repeals current subsections 269T(2AA), (2AB) and (2AC) and
substitutes a single new subsection 269T(2AA).
27. Current subsections 269T(2AA), (2AB) and (2AC) are redundant due to the
new definition of subsidy and other amendments proposed in the Bill.
28. The new subsection 269T(2AA) provides the circumstances in which a
benefit may be conferred and is intended to emphasise that a benefit
may be conferred indirectly in relation to goods exported to Australia.
Items 3 - Subsection 269TAAC(3)
29. This item repeals and replaces subsection 269TAAC(3) to ensure that it
more closely follows the requirements and language of Article 2.1(b)
and Footnote 2 of the ASCM.
30. Subsection 269TAAC(1) relevantly provides that a subsidy is a
countervailable subsidy "if it is specific ...". Subsection 269TAAC(2)
sets out circumstances in which a subsidy is specific. The new
subsection 269TAAC(3) sets out circumstances where a subsidy is not
specific, and therefore cannot be regarded as a countervailable
subsidy.
Items 4 - Subsection 269TAAC(4)
31. This item amends subsection 269TAAC(4) by deleting the words "Despite
the fact that access to a subsidy is established by objective criteria,
the" and substitutes the words "The".
32. Article 2.1(c) enables a determination that a subsidy is specific by
reference to other factors, despite the appearance of non-specificity
from the application of the principles laid down in the earlier
subparagraphs of Article 2.1. Those principles include, but are not
limited to, "objective criteria".
33. The new subsection 269TAAC(4) provides that the Minister may, having
regard to the matters set out in paragraphs (a) to (d) of this
subsection, determine that a subsidy is specific. This amendment
ensures that subsection 269TAAC(4) more accurately reflects the ASCM.
Item 5 - Section 269TACC
34. This item repeals and replaces section 269TACC, and inserts a new
section 269TACD.
35. New section 269TACC is simpler and clearer than the current
section 269TACC, and is limited to determining whether a benefit has
been conferred by a financial contribution or income or price support.
This section is intended to reflect Article 14 of the ASCM which
provides guidance in determining whether a benefit is conferred.
36. New subsection 269TACC(1) provides that, subject to
subsections 269TACC(2) and (3), the question of whether a financial
contribution or income or price support confers a benefit is a matter
to be determined by the Minister having regard to all relevant
information.
37. New subsection 269TACC(2) provides that a benefit is conferred where a
direct financial payment is received from any of the following:
1. a government of a country;
2. a public body of a country;
3. a public body of which a government of a country is a member;
4. a private body entrusted or directed by a government of a country
or by such a public body to carry out a governmental function.
38. This provision mirrors the effect of the current subsection 269TACC(2)
that prescribes that a benefit is taken to be conferred if a financial
contribution in respect of goods is a direct financial payment.
Guidelines for financial contributions
39. New subsection 269TACC(3) sets out guidelines to which the Minister
must have regard when determining whether a financial contribution
confers a benefit. These guidelines:
1. reflect Article 14(a) of the ASCM in determining whether provision
of equity capital by a government or body confers a benefit
(paragraph 269TACC(3)(a));
2. reflect Article 14(b) in determining when a loan by a government or
body confers a benefit (paragraph 269TACC(3)(b));
3. reflect Article 14(c) in determining when a guarantee of a loan by
a government or body confers a benefit (paragraph 269TACC(3)(c));
and
4. reflect Article 14(d) in determining when the provision of goods or
services for less than adequate remuneration, or the purchase of
goods or services for more than adequate remuneration, by a
government or body confers a benefit (paragraphs 269TACC(3)(d) and
(e)).
40. New subsection 269TACC(4) provides that the Minister, for the purposes
of paragraphs 269TACC(3)(d) and (e), is to have regard to the
prevailing market conditions for like goods or services in the country
where those goods or services are provided or purchased when
determining the adequacy of remuneration in relation to those goods or
services. The provision reflects the last sentence of Article 14(d) of
the ASCM.
Section 269TACD Amount of countervailable subsidy
41. New section 269TACD deals with the amount of countervailable subsidy.
Subsection 269TACD(1) provides that where the Minister is satisfied
that a countervailable subsidy has been received in respect of goods,
the amount of the countervailable subsidy is an amount determined by
the Minister in writing. This reflects the broad approach taken in
Footnote 36 of Article 10 of the ASCM as quoted in paragraph 24 of this
Explanatory Memorandum.
42. Subsection 269TACD(2) provides that where the amount of countervailable
subsidy received in respect of goods has not been quantified by
reference to units of those goods the Minister must do so. The amount
of countervailable subsidy per unit of goods is used in determining the
duty payable under a countervailing duty notice, if the Minister
decides to impose measures.
Item 6 - Subsections 269TAE(1) and (2)
43. This item makes a minor consequential amendment to
subsections 269TAE(1) and (2) which is necessary due to Item 7.
Item 7 - After subsection 269TAE(2A)
44. This item inserts a new subsection 269TAE(2AA) requiring that when
making a material injury determination under subsections 269TAE(1) or
(2) that the determination must be based on facts and not merely on
allegations, conjecture or remote possibilities. This reflects the
wording of Article 15.7 of the ASCM.
Item 8 - After paragraph 269TAE(2C)(d)
45. This item inserts a new paragraph 269TAE(2C)(da) into section 269TAE to
ensure that section 269TAE more closely reflects Article 15.3 of the
ASCM regarding when the cumulative effects of exportations from
different countries may be considered.
Item 9 - At the end of section 269TC
46. This item inserts a new subsection 269TC(10) that ensures that the CEO
is able to include any new subsidies discovered during the course of an
investigation, particularly where this subsidy was not identified in
the original application. This is in accordance with the Article 10
and footnote 36 of the ASCM.
47. Article 10 of the ASCM provides that:
"Members shall take all necessary steps to ensure that the
imposition of a countervailing duty on any product of the territory
of any Member imported into the territory of another Member is in
accordance with the provisions of Article VI of GATT 1994 and the
terms of the Agreement".
48. The term 'countervailing duty' in Article 10 is defined in Footnote 36
of the ASCM as "a special duty levied for the purpose of offsetting any
subsidy bestowed directly or indirectly upon the manufacture,
production or export of any merchandise, as provided for in paragraph 3
of Article VI of GATT 1994".
49. It is generally understood that Footnote 36 to Article 10 of the ASCM
allows the investigating authority to include any subsidy discovered in
the course of an investigation into the scope of the investigation
regardless of whether that subsidy was specified in the application for
countervailing duty.
Item 10 - Subparagraph 269TDA(2)(b)(ii)
50. This item amends subparagraph 269TDA(2)(b)(ii) by omitting the words
"after the start of" and substituting "during". This corrects a
drafting error in the current provision. Under the amended provision
the CEO would have to terminate an investigation if the amount of
countervailable subsidy never exceeds the negligible level of
countervailable subsidy (as defined in subsection 269TDA(6)) during the
investigation period, rather than the open-ended period from the start
of the investigation period.
51. As the investigation period is required to be published in the
initiation notice as required by paragraph 269TC(4)(bf) the period
which has to considered is transparent and fair to all parties.
Item 11 & 12 - Subsection 269TDA(14) (heading) & Paragraph 269TDA(14)(b)
52. This item amends subsection 269TDA(14) to clarify that the CEO must
terminate an investigation if the CEO is satisfied that the injury if
any, to an Australian industry that has been, or may be, caused by the
export of goods is negligible, without having to find that a
countervailable subsidy has been received.
53. On one literal interpretation of the current subsection 269TDA(14),
there must be a determination that a countervailable subsidy has been
received before the CEO may terminate an investigation because injury
to Australian industry is negligible.
54. The amendment reflects Article 11.9 of the ASCM which requires
immediate termination of an investigation where the authorities
determine that injury is negligible. That requirement is not dependent
on a determination that a countervailable subsidy has been received.
Item 13 - Application provisions
55. This item applies the amendments made by items 1 to 8 (eg the
amendments to the definition of subsidies, the calculating benefit and
the determination of material injury), to investigations that are
initiated, or to reviews or inquiries that begin, on or after the
commencement of those items.
56. This item applies the amendments made by item 9, to allow for
subsidies found during investigations to be examined in said
investigation, applies in relation to investigations that:
1. are initiated on or after the commencement of that item; and
2. were initiated before that commencement but that were not completed
immediately before that commencement.
57. The amendments made by items 10 to 12 to the termination provisions in
section 269TAE apply in relation to investigations that are initiated
on or after the commencement of those items.
B. Schedule 2-Circumvention Activity
Item 1 - After subsection 269SM(5)
58. This item inserts new subsection 269SM(5A) which provides an overview
of the new Division 5A, anti-circumvention inquiries.
Subsection 269SM(5A) deals specifically with the rights of persons to
ask the CEO to conduct an anti-circumvention inquiry to address the
potential evasion of certain dumping duty notices or countervailing
duty notices.
Item 2 - Subsection 269T(1)
59. This item defines circumvention activity as having the same meaning as
that given in the new section 269ZDBB, as inserted by item 6.
Item 3 - Subsection 269T(1) - (after paragraph (b) of the definition of
interested party)
60. In conjunction with item 1, Schedule 4, this item amends the definition
of interested party so that it applies to new Division 5A in a similar
way to other existing parts of the Customs Act, for example, Division 5
of the Customs Act ("Review of anti-dumping measures").
Item 4 - Subsection 269T(4E)
61. This item amends subsection 269T(4E), which defines references to
variable factors relevant to a review under existing Division 5 of the
Customs Act ("Review of anti-dumping measures"). The amendment ensures
that the definition in this subsection will also apply to anti-
circumvention inquiries under new Division 5A.
Item 5 - Subsection 269TE(1) (paragraph (a) of the definition of
recommendation)
62. This item amends subsection 269TE(1) ("CEO to have regard to same
considerations as Minister"), which provides that the CEO is to have
regard to the same considerations as the Minister when making certain
recommendations or decisions. The amendment includes a reference to
new subsection 269ZDBG, as inserted by item 6, and ensures that the
subsection applies to recommendations in a report made under new
Division 5A.
Item 6 - After Division 5 of Part XVB
63. This item inserts the new Division 5A ("Anti-circumvention Inquiries"),
consisting of sections 269ZDBA to 269ZDBE, which will provide for anti-
circumvention inquiries.
Section 269ZDBA - What this Division is about
64. New section 269ZDBA provides an overview of new Division 5A including
prerequisites for lodging a valid application and the roles and powers
of the Minister and the CEO. It is a merely explanatory section, and
is not a substantive provision.
65. New section 269ZDBA provides an overview of new Division 5A including
prerequisites for lodging a valid application and the roles and powers
of the Minister and the CEO of Customs and Border Protection.
66. The new Division will allow persons representing, or representing a
portion of, the Australian industry producing like goods to apply for
an anti-circumvention inquiry in relation to a dumping duty notice
published under subsection 269TG(2) or countervailing duty notice
published under subsection 269TJ(2). Additionally, the Minister can
initiate an anti-circumvention inquiry. Under the new Division, the CEO
will provide a report, including recommendations, to the Minister
following an accepted application or request from the Minister. The
CEO's report will recommend that the Minister alter the relevant notice
or not. The Minister, after considering the CEO's report, is empowered
to amend the notice or to leave the relevant notice unaltered.
Section 269ZDBB - Circumvention activities
67. New section 269ZDBB outlines four activities which will each be
considered to be circumvention activities for the purposes of new
Division 5A:
1. assembly of exported parts in Australia;
2. assembly of exported parts in a third country;
3. export of goods through one or more third countries; and
4. certain arrangements between exporters.
68. Additionally, new subsection 269ZDBB(6) allows for additional
circumvention activities to be prescribed by regulations.
Assembly of exported parts in Australia
69. New subsection 269ZDBB(2) provides that circumvention activity occurs:
1. when goods are exported to Australia in individual parts and
assembled in Australia;
2. the goods are manufactured in a foreign country that is the subject
of a dumping duty and they are then bought in parts to Australia;
3. these parts are then assembled in Australia, with or without other
parts, to create the goods that are the subject of the notice;
4. the total value of the parts manufactured in the foreign country is
a significant proportion of the final assembled goods; and
5. section 8 or 10 of the Customs Tariff (Ant-Dumping) Act 1975
(Dumping Duty Act) which applies to like goods that are exported to
Australia being subject to measures, does not apply to the export
of circumvention goods to Australia.
Assembly of parts in a third country
70. New subsection 269ZDBB(3) provides that circumvention activity occurs:
1. when goods are manufactured as individual parts in a foreign
country that is the subject of the dumping notice;
2. these parts are then assembled in a foreign country that is not the
subject of the dumping notice, with or without other parts being
added to create the goods;
3. the parts that are assembled in the foreign country not subject to
measures, then form the goods that are subject to the dumping
notice;
4. these goods are then exported to Australia;
5. the total value of the parts manufactured in the country subject to
measures must be a significant proportion of the customs value of
the circumvention goods (customs value is defined in section 159 of
the Customs Act); and
6. section 8 or 10 of the Dumping Duty Act which applies to like goods
that are exported to Australia being subject to measures, does not
apply to the export of circumvention goods to Australia.
Export of goods through one or more third countries
71. New subsection 269ZDBB(4) provides that circumvention activity occurs:
1. when goods that are subject to the anti-dumping measures are
exported to Australia from a foreign country that isn't the subject
of the notice;
2. before that export, there were one or more other exports of the
same goods from a foreign country to another foreign country;
3. the first exporter of those exporters from which the goods were
exported was the country that was subject to the measures; and
4. section 8 or 10 of the Dumping Duty Act which applies to like goods
that are exported to Australia being subject to measures, does not
apply to the export of circumvention goods to Australia.
Arrangements between exporters
72. New subsection 269ZDBB(5) provides that circumvention activity occurs
if the goods that are the subject of the anti-dumping measure are
exported to Australia from the original exporter through another
exporter who is subject to a lesser rate of duty or is exempt from
duty.
Section 269ZDBC - Applications and requests for conduct of an
anti-circumvention inquiry
Applications for anti-circumvention inquiries
73. New section 269ZDBC provides that an anti-circumvention inquiry can be
initiated in one of two ways: by application by a person representing
Australian industry or by request by the Minister. The section also
outlines the prerequisites for an application or request from the
Minister.
74. In relation to an applicant:
1. an original notice imposing measures must have been published;
2. the person must represent, or represent a portion of, the
Australian industry producing like goods;
3. the person must consider that one or more circumvention activities
in relation to the notice have occurred; and
4. the person must also consider that it would be appropriate to alter
the notice because of the circumvention activities.
75. Similarly, in relation to requests from the Minister:
1. an original notice imposing measures must have been published;
2. the Minister must consider that one or more circumvention
activities in relation to the notice have occurred; and
3. the Minister must also consider that it would be appropriate to
alter the notice because of the circumvention activities.
Section 269ZDBD - Content and lodgement of applications for conduct of an
anti-circumvention inquiry
Content of application
76. New section 269ZDBD outlines the matters which should be included in an
application to initiate an anti-circumvention inquiry and the ways in
which the application should be submitted. Applications should:
1. be in writing;
2. be in an approved form;
3. contain such information as the form requires; and
4. be signed in the manner indicated by the form.
77. The application form should include:
1. a description of the kinds of goods that are the subject to the
original notice;
2. a description of the original notice subject of the application;
3. a description of the circumvention activities that the applicant
considers has occurred; and
4. a description of the alterations to the original dumping notice
that the applicant considers necessary.
Lodgement of application
78. New subsection 269ZDBD(3) outlines the way in which applications should
be submitted:
1. leaving it at Customs House, Canberra; or
2. posting it to the postal address specified in the approved form; or
3. sending it via electronic facsimile.
Section 269ZDBE - Consideration of applications and requests for conduct of
an anti-circumvention inquiry
Application
79. New section 269ZDBE outlines the way in which the CEO will address
applications. The CEO must consider the application within 20 days of
receiving it and either reject the application in writing, or publish a
notice indicating that an anti-circumvention inquiry will be conducted.
80. New subsection 269ZDBE(2) requires that, when considering the
application, the CEO should consider whether, among other things, there
appear to be reasonable grounds for asserting that one or more
circumvention activities have occurred.
Requests
81. Similarly, new subsection 269ZDBE(5) requires that when the Minister
requests the CEO to conduct an anti-circumvention inquiry, the CEO must
publish a notice indicating that an anti-circumvention inquiry will be
conducted.
Content of notice
82. New subsection 269ZDBE(6) outlines the content of the inquiry notice
and provides that the notice must:
1. describe the types of goods to which the anti-circumvention inquiry
relates;
2. describe the original notice;
3. state that the inquiry will examine whether circumvention
activities have occurred;
4. indicate that a report will be made to the Minister within 155 days
after the publication of the inquiry notice (or within a longer
period that the Minister allows under section 269ZHI);
5. invite interested parties to lodge submissions within 40 days;
6. state that within 110 days of the publication of the inquiry notice
(or a longer period if the Minister allows), the CEO will place on
the public record a statement of the essential facts; and
7. invite interested parties to lodge submissions in response to the
statement of essential facts within 20 days.
Section 269ZDBF - Statement of essential facts in relation to conduct of an
anti-circumvention inquiry
83. New section 269ZDBF provides that the CEO must place on the public
record a statement of essential facts on which the CEO proposes to base
a recommendation to the Minister about the original notice, within 110
days of publishing the inquiry notice (or a longer period if allowed by
the Minister). The CEO must have regard to the anti-circumvention
inquiry application or request, and any submissions that are received
within 40 days. The CEO may also take into account any other matters
that the CEO considers relevant.
Late Submissions
84. New subsection 269ZDBF(3) provides that the CEO is not obliged to have
regard to submissions received after the end of the 40 day period if
this will prevent the timely publication of the statement of essential
facts.
Section 269ZDBG - Report on anti-circumvention inquiry
CEO Recommendations
85. New section 269ZDBG provides that the CEO must provide a report to the
Minister within 155 days after the publication of the inquiry notice
(or such longer period that the Minister approves). This report must
recommend that:
1. the original notice remain unaltered; or
2. the original notice be altered, and the alterations to be made.
86. In deciding on the recommendation or recommendations, the CEO must have
regard to:
1. the application or request for the anti-circumvention inquiry;
2. any submissions which the CEO has relied on to formulate the
statement of essential facts;
3. the statement of essential facts;
4. any submissions about the statement of essential facts received
within 20 days of the statement being published; and
5. any other matters the CEO considers relevant to the anti-
circumvention inquiry.
Late submissions
87. The CEO is not obliged to have regard to submissions received after the
end of the 20 day period if they would prevent the timely preparation
of the report to the Minister.
Reasons for CEO recommendation
88. The report to the Minister must include a statement of the CEO's
reasons for any recommendation in the report which:
1. sets out the material findings of fact on which that recommendation
is based; and
2. provides particulars of the evidence relied on to support those
findings.
Section 269ZDBH - Minister's powers in relation to anti-circumvention
inquiry
Minister's decision
89. New subsection 269ZDBH(1) provides that the Minister will consider the
CEO's report, and any other information the Minister considers
relevant, and publish a declaration stating whether the original notice
is to be altered or remain unaltered, and specify the date from which
any alteration takes effect.
90. New subsection 269ZDBH(2) outlines the kinds of alterations that may be
made to the original notice including:
1. different goods that are to be the subject of the original notice;
2. different foreign countries that are to be the subject of the
original notice;
3. different exporters that are to be the subject of the original
notice;
4. in relation to existing exporters that are the subject of the
original notice-the specification of different variable factors in
respect of one or more of those exporters; and
5. in relation to exporters that are to be the subject of the original
notice-the specification of variable factors in respect of those
exporters.
Timing of decision
91. The Minister must publish the declaration within 30 days of receiving
the CEO's report. Alternatively, the Minister make take a longer
period to publish the declaration if the Minister considers that there
are special circumstances, in which case the Minister must give public
notice of the longer period.
Notification of declaration
92. The Minister must inform an effected exporter, or exporters, of the
outcome of the declaration as soon as practicable.
When declaration takes effect
93. Subsection 269ZDBH(8) provides that the day which the Minister
specifies under subsection 269ZDBH(1) as being the day from which the
declaration takes effect, must not be earlier than the day of
publication of the notice under subsections 269ZDBE(4) or (5).
Therefore the Minister will be empowered to extend the measures with
some limited retrospective effect, up to the day when the anti-
circumvention inquiry was notified, but not any earlier. The Minister
could specify any day after that day as being when the declaration
takes effect, including a day in the future, in which case the
declaration would not have any retrospective effect.
Item 7 - After paragraph 269ZHI(1)(e)
94. This item amends existing section 269ZHI to allow the CEO of Customs
and Border Protection to request extensions in respect of:
1. the 110-day period in which the CEO must publish the statement of
essential facts in regard to anti-circumvention inquiries; and
2. the 155-day period for providing the Minister with the CEO's
report on the anti-circumvention inquiry.
Item 8, 9 & 10 - Subsection 269ZJ(1), paragraph 269ZJ(5)(a) & paragraph
269ZJ(6)(a)
95. These items amend existing section 269ZJ ("CEO to maintain public
record for certain purposes") which requires the CEO to maintain and
deal appropriately with public records. It ensures that the provisions
apply similarly to applications or requests for an anti-circumvention
inquiry as they do under other parts of the Customs Act, for example,
existing Division 5 ("Review of anti-dumping measures"). In particular,
paragraphs 269ZJ(5)(a) and 269ZJ(6)(a) provide that the CEO is able to
disregard certain information in cases where there is a dispute as to
the confidential nature of information provided.
Item 11 - Section 269ZX (after paragraph (aa) of the definition of
interested party)
96. This item expands the definition of interested party in existing
section 269ZX, Division 9 ("Review by Review Officer"). The expanded
definition ensures that person who applied for an anti-circumvention
inquiry is included in the definition of interested party for the
purposes of Division 9.
Item 12 - After paragraph 269ZZA(1)(c)
97. This item amends existing section 269ZZA ("Reviewable decisions") to
include the Minister's decision to publish a declaration, under new
section 269ZDBH, as a decision reviewable by the 'Review Panel'. The
Review Panel will be introduced by Customs Amendment (Anti-dumping
Improvements) Act (No. 1) 2012 (Currently called the Customs Amendment
(Anti-dumping Improvements) Bill (No. 2) 2011). Currently, the Customs
Act provides that review functions are to be undertaken by a "Review
Officer".
Item 13 - After paragraph 269ZZD(b)
98. This item amends section 269ZZD ("When must an application be made?")
to provide that an application for a review of an anti-circumvention
inquiry must be made within 30 days after the relevant declaration is
published under new subsection 269ZDBH(1). This item amends section
269ZZD as outlined in Customs Amendment (Anti-dumping Improvements) Act
(No. 1) 2012.
Item 14 - Subsection 269ZZK(6) (after paragraph (c) of the definition of
relevant information)
99. This item amends section 269ZZK ("The review"). It provides that,
where a reviewable decision was made because of an anti-circumvention
inquiry, then the relevant information to be used in the review was the
information which the CEO had regard to under new subsection 269ZDBG(2)
when making the findings set out in the report. This item amends
section 269ZZK as outlined in Customs Amendment (Anti-dumping
Improvements) Act (No. 1) 2012.
Item 15 - Application provisions
100. This item determines the original notices to which the anti-
circumvention provisions in this Bill apply, and the period which can
be investigated under an anti-circumvention inquiry.
101. In effect, this item provides that the Minister may make a
declaration, under new section 269ZDBH, as a result of an anti-
circumvention inquiry, affecting an original notice whether that notice
was published before, on or after the date on which the anti-
circumvention provisions in this Bill come into effect.
102. Additionally, the effect of this item is that an anti-circumvention
inquiry can take into account circumvention activity which has occurred
before, on or after the date on which the anti-circumvention provisions
in this Bill come into effect.
C. Schedule 3-Sampling
Item 1 - Subsection 269T(1)
103. This item introduces a new definition of "cooperative exporter" into
subsection 269T(1). A cooperative exporter is an exporter of goods
that are the subject of an investigation, a review under Division 5 or
a continuation inquiry in relation to a dumping duty notice where those
goods were examined as part of that process and the exporter was not
"an uncooperative exporter". An "uncooperative exporter" is defined in
a definition inserted into subsection 269T(1) by item 4 of Schedule 3.
The new definitions of "cooperative exporter" and "uncooperative
exporter" apply regardless of whether sampling has been undertaken
under the sampling provisions in the new section 269TACAA.
Item 2 - Subsection 269T(1) (definition of residual exporter)
104. This item repeals the current definition of "residual exporter" and
substitutes a new definition. A residual exporter under the new
definition is an exporter of goods that are the subject of an
investigation, a review under Division 5 or a continuation inquiry in
relation to a dumping duty notice, where:
1. the exporter's exports were not examined as part of the
investigation, review or inquiry; and
2. the exporter was not an uncooperative exporter in relation to the
investigation, review or inquiry.
105. This would typically mean when sampling has been undertaken and the
exporter was willing to cooperate in the investigation but was not
chosen to be examined.
Item 3 - Subsection 296T(1) (definition of selected exporter)
106. This item repeals the definition of "selected exporter", which is
redundant due to other amendments made by this bill.
Item 4 - Subsection 269T(1)
107. This item introduces a definition of "uncooperative exporter". An
uncooperative exporter is an exporter of:
1. goods, that are the subject of an investigation, a review under
Division 5 or a continuation inquiry in relation to a dumping duty
notice (the relevant process), or
2. like goods to those subject to the relevant process,
where the exporter has not cooperated within that process such that the
CEO was satisfied that the exporter:
3. did not give the CEO information the CEO considered to be relevant
to the process within a period the CEO considered to be
reasonable; or
4. significantly impeded the relevant process.
Item 5 - After section 269TAC
Section 269TACAA Sampling
108. This item inserts a new sampling provision, section 269TACAA to
consolidate and clarify the operation of the sampling provisions of the
Customs Act. Currently, sampling provisions are located for dumping in
subsections 269TACB(7) to 269TACB(9) and for subsidies in
subsections 269TACC(8) to 269TACB(9). Those subsections will be
repealed by other items, and new section 269TACAA will be the only
sampling provision. New section 269TACAA provides for sampling in
relation to both dumping and countervailing notices, in relation to
original investigations, reviews under Division 5 and continuation
inquiries.
109. Article 6.10 of the ADA provides for sampling in relation to dumping
inquiries. There is no similar provision supporting sampling under the
ASCM but it is accepted practice internationally for sampling exercises
to be undertaken in relation to subsidies investigations.
110. This sampling provision also reflects Article 6.10 such that the
findings of the relevant investigations, review under Division 5 or
continuation inquiry can be made based on the information obtained from
an examination of a select number of exporters where the number of
exporters who provide information to the relevant process is so large
as to make a determination for each individual exporter impracticable.
111. The Minister may limit his or her examination to a number of select
exporters, under this sampling provision, to:
1. a reasonable number of exporters which are statistically valid
sample, or
2. exporters who are responsible for the largest percentage of the
volume of the exports from the country in question which can be
reasonably be investigated.
112. The subsection 269TACAA(2) allows for an exporter not initially
selected under subsection 269TACAA(1) to submit information and be
included in the examination where it is decided doing so would not
impede the investigation.
Section 269TACAB Dumping duty notice-export prices and normal values for
different categories of exporters
113. This item inserts a new section 269TACAB which provides for the
Minister in publishing a dumping duty notice to set export prices and
normal values for different categories of exporters, namely
uncooperative exporters and residual exporters.
Uncooperative exporters
114. The new subsection 269TACAB(1) directs the Minister to work out the
export price and the normal value of the uncooperative exporter in an
investigation, review under Division 5 and continuation inquiry under
subsections 269TAB(3) and 269TAC(6) respectively.
Residual exporters
115. The new subsection 269TACAB(2) reflecting Article 9.4 of the ADA by
requiring that, in ascertaining a normal value and export price for
goods of a residual exporter in an investigation, review under Division
5 or continuation inquiry that:
1. the export price must not be less than the weighted average of
export prices for like goods of cooperative exporters from the
same country of export; and
2. the normal value must not exceed the weighted average of normal
values for like goods of cooperative exporters from the same
country of export.
116. The new subsection 269TACAB(3) requires for the purposes of the new
subsection 269TACAB(2) that the weighted average of export prices and
normal values of the cooperative exporters must not include any export
price or normal value where the Minister has determined:
1. that there is no dumping; or
2. that the dumping margin, when expressed as a percentage of the
export price or weighted average of export prices used to
establish that dumping margin, is less than 2%.
117. Note that the new section 269TACAB only deals with dumping duty
notices. The proposed new section 269TAACA introduced by the Customs
Amendment (Anti-dumping Improvements) Bill (No. 2) 2012 deals with the
determination of countervailable subsidy if there is a lack of
cooperation in a relevant investigation, review or continuation
inquiry.
Item 6 - Subsections 269TACB(7), (8) and (9)
118. This item deletes these subsections, and is a consequential amendment
to the consolidation of the sampling provision by item 5 of Schedule 3.
Item 7 - Subsections 269TG(3B) and (3C)
119. This item deletes these subsections, and is a consequential amendment
to the insertion of new subsection 269TACAB(3) by item 5 of Schedule 3
which replaces these repealed provisions.
Item 8 - Subsections 269TH(5) and (6)
120. This item deletes these subsections, and is a consequential amendment
to the insertion new subsection 269TACAB(3) by item 5 of Schedule 3
which replaces these repealed provisions.
Item 9 - Paragraphs 269ZE(2)(b) and (3)(b)
121. This item sets out a consequential amendment to the repeal of the
definition of selected exporter in item 3 of Schedule 3 and the
creation of new sampling provision in item 5 of Schedule 3. The
amendment means that in furtherance to the right to reject an
application for an accelerated review or terminate an accelerated
review under paragraphs 269ZE(2)(a) and (3)(a), the CEO may so reject
or terminate if satisfied that the relevant exporter is related to an
exporter whose exports have been examined in relation to the
application for publication of the original notice.
Item 10 - Subsection 269ZE(4)
122. This item is a consequential amendment to the repeal of the definition
of selected exporter in item 3 of Schedule 3 and the creation of new
sampling provision in item 5 of Schedule 3.
Item 11 - Application provision
123. This item applies the amendments made in Schedule 3 such that the new
sampling provisions apply in relation to investigations that are
initiated, or to reviews under Division 5 or continuation inquiries
that begin, on or after the commencement of this Schedule.
D. Schedule 4-Other amendments
Item 1 - Subsection 269T(1) (definition of interested party)
124. This item repeals and amends the definition of interested party in
subsection 269T(1). Currently this definition only applies in relation
to applications made to the CEO under section 269TB, that is, to
original investigations. The definition is amended so that it is also
applicable to applications and requests made in relation to a review of
anti-dumping measures (Division 5) and continuation inquiries
(Division 6A).
Item 2 & 3 - Paragraphs 269TAE(2C)(c) & 269TAE(2C)(d)
125. This item amends paragraphs 269TAE(2C)(c) and (d) to clarify that
these provisions only operate in relation to determinations made in
connection with dumping duties and not countervailing duties.
Item 4 & 5 - Subsection 269TDA(13) (heading) & Paragraph 269TDA(13)(b)
126. These items amend subsection 269TDA(13) to ensure that there is a
consistent approach to termination where there is negligible injury.
This amendment reflects the amendments made in item 11 and 12 of
Schedule 1 to subsection 269TDA(14) (CEO must terminate investigation
if subsidisation causes negligible injury) but applies it in the
instance of a dumping investigation.
127. Item 5 amends subsection 269TDA(13) to ensure that the CEO can
terminate an investigation where it is found that the injury if any, to
an Australian industry or an industry in a third country has been, or
may be, caused by the dumping is negligible without having to find that
dumping has taken place.
128. A literal interpretation of the current subsection 269TDA(13) requires
a determination that there has been dumping before the CEO may
terminate an investigation because injury to Australian industry is
negligible. This is inconsistent to the requirements of Article 5.8 of
the ADA to terminate where 'there is not sufficient evidence of either
dumping or injury'.
Item 6 & 7- Paragraph 269ZJ(5)(a) & Paragraph 269ZJ(6)(a)
129. This item amends the Customs Act to correct a minor errors in
referencing in paragraphs 269ZJ(5)(a) and (6)(a). These amendments
ensures that the CEO may disregard information supplied to the CEO, as
per the current conditions in subsections 269ZJ(5) and (6), in relation
to applications for continuation inquiries.
Item 8 - Subsection 269ZZK(6) (paragraph (c) of the definition of relevant
information)
130. This item amends the Customs Act to amend an error in
paragraph 269ZZK(6)(c) to ensure that the definition of 'relevant
information' takes into account a request by the Minister to the CEO to
initiate a review under Division 5.
Item 9 - Application provisions
131. This item applies the amendments made by items 4 and 5, to allow for
the termination of investigation where there is no injury to
investigations that are initiated on or after the commencement of those
items.
132. This item applies those amendments made by items 6 and 7, which
correct errors in paragraphs 269ZJ(5)(a) and (6)(a), to applications
for continuation inquiries made on or after the commencement of those
items.