It is a debatable issue from which date the period of 5 years should be reckoned for determining the date on which imposition of definitive anti-dumping duty would expire, if no sunset review is conducted before such expiry (Article 11.3 of WTO: ADA). This debate assumed significance in respect of Indian practice after the delivery of a recent judgment [End Note 1] by the Hon’ble Supreme Court. This issue may arise only if a duty is imposed retroactively under Article 10.2 and/or Article 10.6. Many of the luminaries started looking towards the west to understand this issue. In EU, the practice is to secure provisional anti-dumping duty by guarantee and then collect it as definitive anti-dumping duty retroactively [End Note 2]. It is also provided in Article 11(4) of EU Regulation that definitive duty may be levied on goods entered for free circulation no more than 90 days before the application of provisional measures. However, for sunset review, the date of “imposition” of definitive duty is taken into account and the date from which such definitive duty is levied and collected is ignored. Similar is the system in US. Though EU and US are long standing practitioners of anti-dumping duty law, the long usage may not make a practice consistent. WTO: ADA made departure from certain practices followed for a very long period (cumulation of injury investigation against countries dumping and countries subsidizing, requirement to export before initiation of new shipper review etc.).
A practice followed for long without being questioned may only appear consistent but that is not the ultimate test. Therefore, an examination of the provisions of the WTO:ADA is necessary. In this regard the following Articles may be of relevance:
“7.2 Provisional measures may take the form of a provisional duty or, preferably, a security ‑ by cash deposit or bond ‑ equal to the amount of the anti‑dumping duty provisionally estimated, being not greater than the provisionally estimated margin of dumping. Withholding of appraisement is an appropriate provisional measure, provided that the normal duty and the estimated amount of the anti‑dumping duty be indicated and as long as the withholding of appraisement is subject to the same conditions as other provisional measures.”
“10.2 Where a final determination of injury (but not of a threat thereof or of a material retardation of the establishment of an industry) is made or, in the case of a final determination of a threat of injury, where the effect of the dumped imports would, in the absence of the provisional measures, have led to a determination of injury, anti‑dumping duties may be levied retroactively for the period for which provisional measures, if any, have been applied.”
“10.3 If the definitive anti‑dumping duty is higher than the provisional duty paid or payable, or the amount estimated for the purpose of the security, the difference shall not be collected. If the definitive duty is lower than the provisional duty paid or payable, or the amount estimated for the purpose of the security, the difference shall be reimbursed or the duty recalculated, as the case may be.”
“10.4 Except as provided in paragraph 2, where a determination of threat of injury or material retardation is made (but no injury has yet occurred) a definitive anti‑dumping duty may be “imposed” only from the date of the determination of threat of injury or material retardation, and any cash deposit made during the period of the application of provisional measures shall be refunded and any bonds released in an expeditious manner.”
“10.6 A definitive anti‑dumping duty may be levied on products which were entered for consumption not more than 90 days prior to the date of application of provisional measures, when the authorities determine for the dumped product in question that….”
“10.8 No duties shall be levied retroactively pursuant to paragraph 6 on products entered for consumption prior to the date of initiation of the investigation.”
“11.3 Notwithstanding the provisions of paragraphs 1 and 2, any definitive anti‑dumping duty shall be terminated on a date not later than five years from its imposition……”
“Footnote 12: As used in this Agreement "levy" shall mean the definitive or final legal assessment or collection of a duty or tax.”
Footnote 12 defines the term “levy” as definitive duty. Article 7.4 provides for provisional measures which includes the “form of provisional duty”. Therefore, interpretation regarding the computation of date of expiry cannot be different for cases where provisional measure was imposed in the “form of provisional duty” and where provisional measure resorted in any other manner like execution of bond. Article 10.2 does not provide imposition of definitive duty retroactively only in case where provisional duty was in force but also in all cases where provisional measure of any form was in force. It may also be noted that Article 10.6 also provides that a definitive anti‑dumping duty may be levied on products which were entered for consumption not more than 90 days prior to the date of application of provisional measures. It again contradicts the understanding that definitive duty is levied only on goods imported after final determination. Article 10.4 also indicates that definitive anti‑dumping duty may be “imposed” only from the date of the determination of threat of injury or material retardation. That provides an indication about use of the words “imposed” and “from the date of determination”. It means negatively that definitive duty may be levied from a date prior to the date of the determination. Article 10.8 again indicates that definitive duty may be levied retroactively, i.e. from the date prior to the date on which it is imposed.
Though Article 10.3 of WTO: ADA prohibits the collection of difference, however, this fact does not change the character of the duty imposed, levied and collected, i.e. the character of duty continues to be “Definitive” anti-dumping duty only.
In case where only a security or bond was obtained as provisional measure on imports, definitive duty can be collected retroactively in respect of such imports. In such case, it cannot be said that provisional duty was not imposed and therefore, the date from which this period of five years be computed would be the date from which definitive duty is imposed, i.e. the date on which provisional measure was imposed.
Further, in case where definitive duty is levied under Article 10.6, then the time period for expiry of definitive duty needs to be computed from date of such levy. Further, it seems illogical to say that though definitive duty may be levied and collected for 6 month plus 90 days prior to its announcement of imposition, such period may be excluded for computation of period of 5 years for expiry. The duty “levied” all through such period is only a definitive duty and there is only one duty, i.e. the definitive duty, which may be levied and retained. All the imports suffered only definitive anti-dumping duty.
In light of the above explanation, the words “from its imposition” used in Article 10.3 suggest a construction to calculate the time from the date from which definitive duty is imposed, levied and collected instead of from the date on which announcement by way of notification about such imposition published/issued.
Such an interpretation indicates that the practice followed in the west (EU and USA) for computation of period of five years may be wrong.
In light of above, it seems that definitive duty expires after a period of five years from the date from which imports suffered imposition, levy and collection of anti-dumping duty.
[The author is a Joint Partner, International Trade Practice, Lakshmikumaran & Sridharan, New Delhi]
End Note 1 - Commissioner of Customs, Bangalore v. G.M. Exports – C.A. No. 3889 of 2006, along with 7814/2012, 7894/2015, 7895/2015, 5119/2012, 3082/2011 and 3086/2011, decided on 23-9-2015
End Note 2 - Article 7(3) of Council Regulation (EC) No. 1225/2009, dated 30th Nov, 2009 and Article 3 of Council Implementing Regulation (EU) No. 1106/2013, dated 5th Nov, 2013