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DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE
ANTI –DUMPING DUTIES

SUBJECT
INTERNATIONAL TRADE LAW

NAME OF THE FACULTY

Saurabh Sood

Name of the Candidate

ANAMIKA
Roll No. & Semester

2013020
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ACKNOWLEDGEMENT

I would like to take this opportunity to thank MR.SAURABH SOOD for his invaluable support,
guidance and advice. I would also like to thank my friends who have always been there to
support me and last but not the least I would also like to thank the library staff for working long
hours to facilitate us with required material going a long way in quenching our thirst for
education.

ANAMIKA
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Contents
CHAPERISATION

INTRODUCTION

Rationale behind Dumping

Meaning of Anti-Dumping

Justifications for antidumping duty

ANTI-DUMPING LAW WITH SPECIFIC REFERENCE TO WTO & GATT

ANTI-DUMPING IN INDIA: INSTITUTIONAL ARRANGEMENT & EXISTING ADMINISTRATIVE

MECHANISM

LEGAL FRAMEWORK OF ANTI DUMPING IN INDIA

ANTI-DUMPING DUTIES

PROCEDURAL FORMALITIES FOR APPLYING FOR ANTI DUMPING DUTIES

REGULATORY FRAMEWORK

INTERNATIONAL CASES

1) European Communities — Definitive Anti-Dumping Measures On Certain Iron Or Steel Fasteners

From China

2) European Union — Anti-Dumping Measures on Certain Footwear from China

3) United States — Customs Bond Directive for Merchandise Subject to Anti-Dumping/Countervailing

Duties

INDIAN CASES

1) Designated Authority Anti-Dumping Directorate Ministry Of Commerce Vs. M/s. Haldor Topsoe
A/s.

2) Chhotu Lal Daga (Prop. of Rohit Enterprises) Vs. Commissioner of Customs (Port)

3) Rishiroop Polymers Pvt. Ltd. Vs. Designated Authority and Additional Secretary

CONCLUSION

BIBLIOGRAPHY

WEBLIOGRAPHY
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INTRODUCTION

Dumping, is a pricing practice where a firm charges a lower price for exporting goods than it
does for the same goods sold domestically. It is said to be the most common form of price
discrimination in international trade. Dumping can only occur at places where imperfect
competition exists and where the markets are segmented in a way such that domestic residents
cannot easily purchase goods intended for export. Antidumping duties were initiated with the
intention of nullifying the effect of the market distortions created due to such unfair trade
practices adopted by aggressive exports. They are meant to be remedial and not punitive in
nature. As a method of protection to the domestic industries, anti-dumping duties are thus
levied on the exporting country which has been accused of dumping goods in another country.
As the antidumping duty is only meant to provide protection to the domestic firms in the initial
stages, as per the international laws, the antidumping legislations may last for a maximum
period of five years. Antidumping measures are of two kinds:

• Antidumping duty: This is imposed at the time of imports, in addition to other customs
duties. The purpose of antidumping duty is to raise the price of the commodity when introduced
in the market of the importing country.

• Price undertaking: If the exporter himself undertakes to raise the price of the product then
the importing country can consider it and accept it instead of imposing antidumping duty.

Rationale behind Dumping

Dumping occurs when firms start using price discrimination as a strategy for profit
maximisation. The condition mandatory for dumping to take place is the presence of an
imperfect market where price discrimination between markets is possible.

Only if the above condition is satisfied is it profitable for the exporting firm to engage in
dumping. For any firm, price discrimination in favour of exports is more common because the
share of exports is usually lesser than the domestic demand. In the export market, individual
firms have lesser monopoly power and hence choose to keep prices lower in foreign markets
while charging higher prices for domestic markets. This can also be explained through the price
elasticity of demand for goods. In areas where the demand is price inelastic, producers tend to
charge a higher price. This is said to be the case in domestic markets. In foreign markets, price
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elasticity of demand is elastic and hence prices are low. Thus, if there is high elasticity on
export sales than on domestic sales, firms will dump.

Often, dumping is mistaken and simplified to mean cheap or low priced imports. However, it
is a misunderstanding of the term. Dumping implies low priced imports only in the relative
sense (relative to the normal value1), and not in absolute sense. Import of cheap products
through illegal trade channels like smuggling does not fall within the purview of anti-dumping
measures.

Meaning of Anti-Dumping

Anti-dumping can be seen as a protective device available to the states against problems
associated with the free trade. In the recent years a large number countries have become
frequent users of anti-dumping. Many of the heaviest anti-dumping users are countries who did
not even have an anti- dumping statute a decade ago.

Anti- dumping measures are not only legal but they are also flexible in usage. Further, anti-
dumping duties can be presented not as protection but as encounter against “unfair”
competition.

Justifications for antidumping duty

Anti-Dumping duties were introduced by the developed countries to protect their industries
against the low priced imports. Developing countries supported the inclusion of the provision
relating to anti-dumping duties under GATT because they wanted to levy of anti-dumping
duties to be under international regulation.

In free trade, firms are allowed to charge different rates in different markets. The result would
be that firms would charge lower prices in foreign leading to material injury to the domestic
producers in the foreign market. Had price discrimination taken place by a monopoly firm
within one economy, the government would have intervened to stop consumer exploitation by
enforcing an Act similar to the MRTP Act, in India. Hence, in the international context, it is
the antidumping duty that protects the domestic producers initially and consumers in the long
run.

1
Normal value is the price at which the like articles are sold in the Domestic Market of the exporter.
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Usually, the intentions of charging such low prices to foreign consumers is to be able to wipe
out the domestic industries and eventually acquire monopoly power in the foreign market (i.e.
using predatory pricing). Thus it is on the ground of protecting the domestic industries that the
anti dumping duties have been justified.

ANTI-DUMPING LAW WITH SPECIFIC REFERENCE TO WTO &

GATT

The Agreement on Implementation of Article VI of the General Agreement on Tariffs and

Trade, 1994 (hereinafter referred to as “the Agreement”) governs the application of
antidumping measures by Members of the WTO. The provisions of the Agreement were first
negotiated during the Kennedy Round (1967) and later substantially revised during the Tokyo
Round (1979) of GATT negotiations. WTO rules allow the member countries to opt for anti-
dumping measures with specific stipulations. If a country today has anti-dumping legislations,
it must be consistent with the agreement. Anti-dumping measures are unilateral remedies which
may be applied by a Member after an investigation and determination by that Member, in
accordance with the provisions of the Agreement, if it is felt that an imported product is dumped
and that the dumped import is causing material injury to a domestic industry which produces a
similar product.2 The Agreement applies to trade in goods only. Trade in services is not covered
by this agreement.

The agreement contains provisions with respect to the following:

1. The Agreement sets out rules for the conduct of anti-dumping investigations, including
initiation of cases, calculation of dumping margins, the application of remedial
measures, injury determinations, enforcement, reviews, duration of the measure and
dispute settlement.
2. The Agreement provides for the right of contracting parties to apply anti-dumping
measures, i.e. measures against imports of a product at an export price below its
“normal value” (usually the price of the product in the domestic market of the exporting
country) if such dumped imports cause injury to a domestic industry in the territory of
the importing contracting party3.

2
Article 1
3
Article 3.5
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3. The Agreement provides for greater clarity and more detailed rules in relation to the
method of determining whether a product is dumped, the criteria to be taken into
account in determining whether dumped imports cause injury to a domestic industry,
and also the procedures to be followed in initiating and conducting anti-dumping
investigations.4 This investigation can initiate only on receiving an application,
containing the nature and extent of harm to the domestic industry being caused and the
complete description of the dumped products, from the domestic producers of the
similar product. If authorities decide to proceed to initiate an investigation, the
authorities shall notify the government of the exporting Member concerned.5
4. A new provision requires the immediate termination of an anti-dumping investigation
in cases where the authorities determine that the margin of dumping is de-minimis
(which is defined as less than 2 per cent, expressed as a percentage of the export price
of the product) or that the volume of dumped imports is negligible (generally when the
volume of dumped imports from an individual country accounts for less than 3 per cent
of the imports of the product in question into the importing country).6
5. It contains provisions relating to implementation and duration of anti-dumping
measures7. An anti-dumping duty shall remain in force only as long as and to the extent
necessary to counteract dumping which is causing injury.8 The Agreement lays the
“Sunset Provision” under which all anti-dumping measures shall expire five years after
the date of imposition (or the most recent review), unless a determination is made by
+the authorities that, in the event of termination of the measures, dumping and injury
would be likely to continue or recur.9 The agreement also provides for a judicial, arbitral
or administrative review for the duration such imposition.10
6. From many perspectives, the most significant feature of the WTO anti-dumping
framework is its dispute settlement procedure, which greatly strengthens the ability of
affected nations to challenge anti-dumping actions by other member nations. The
Agreement clarifies the role of dispute settlement panels in disputes relating to anti-
dumping actions taken by domestic authorities. Under the WTO's DSB (Dispute

4
Article 6
5
Article 12
6
Article 5.8
7
Article 11
8
Id 7 Para 1
9
Id 7 Para 3
10
Article 13
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Settlement Body), a case generally has to first proceed through a panel stage, then an
appeal to the Appellate Body. The Dispute Settlement Body has to accept or reject the
Appellate Body report within 30 days — and rejection is only possible by consensus.
7. 2The Agreement strengthens the requirement for the importing country to establish a
clear causal relationship between dumped imports and injury to the “domestic
industry”11 by evaluating all relevant economic factors related to the industry
concerned.
8. Provisions on the application of provisional measures12 are given. These measures are
applied when an investigation as per article 5 has been initiated or a preliminary
affirmative determination has been made of dumping and consequent injury to a
domestic industry
9. Provisions in respect of the use of price undertakings13 in anti-dumping cases have been
strengthened. Here proceedings may be suspended or terminated without the imposition
of provisional measures or anti-dumping duties upon receipt of satisfactory voluntary
undertakings from any exporter to revise its prices or to cease exports to the area in
question at dumped prices so that the authorities are satisfied that the injurious effect
of the dumping is eliminated.
10. The agreement provides that the provisional measures and anti-dumping duties shall
only be applied to products which enter for consumption after the time when the
decision for imposition of these measures enters into force. However, where a final
determination of injury is such that the effect of the dumped imports would, in the
absence of the provisional measures, have led to an injury to domestic producers, anti-
dumping duties may be levied retroactively for the period for which provisional
measures have been applied.14

11
According to article 4 “Domestic industry” refers to the domestic producers as a whole of the like products
or to those of them whose collective output of the products constitutes a major proportion of the total
domestic production of those products
12
Article 7
13
Article 8
14
Article 12
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ANTI-DUMPING IN INDIA: INSTITUTIONAL ARRANGEMENT &

EXISTING ADMINISTRATIVE MECHANISM

India is a founding member of the GATT and the WTO. Until the 1990’s, India was not affected
by anti dumping policies as her markets were sufficiently protected by a high tariff rate and
quantitative restrictions. However, after Liberalisation in 1991, India has become a major user
of Anti dumping policies as those used by developing countries. India’s anti dumping laws are
in compliance with their WTO treaty obligations and are hence based on the Agreement on
Implementation of Article VI of GATT 199915. India has implemented, rather than challenged,
the existing international legal standards which were originally drafted to serve American and
European interests. In fact, despite the large numbers of antidumping measures implemented
by India, no WTO case has ever been brought against India’s antidumping laws.16

LEGAL FRAMEWORK OF ANTI DUMPING IN INDIA

Section 9A of the Customs Tariff Act, 1975 (hereinafter referred to as “the Act”) as amended
in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping
Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred
to as “the Rules”) framed hereunder, form the legal basis for anti-dumping investigations and
for the levy of anti-dumping duties. These are in consonance with the WTO Agreement on anti-
dumping measures. These rules form the legislative framework for all matters relating to
dumping of products, which include the substantive rules, rules relating to practice, procedure,
regulatory mechanism and administration.

1. The principle of imposition of anti-dumping duties was propounded by the Article VI of

General Agreement on Tariffs & Trade (GATT) 1994 – Uruguay Round

2. Indian legislation in this regard is contained in Section 9A and 9B (as amended in 1995) of
the Customs Tariff Act, 1975.

15
Press Information Bureau, “ Anti-dumping – checking unfair trade practices”, Available at
http://pib.nic.in/focus/fomar99/wto-7.pdf
16
Mark Wu , “Antidumping in Asia’s Emerging Giants”, Volume 53, Number 1, Winter 2012, Harvard
International Law Journal
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3. Further regulations are contained in the Anti-Dumping Rules [Customs Tariff

(Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for
Determination of Injury) Rules, 1995]

4. The Ministry of Commerce, Government of India is the Designated Authority for conducting
investigations pertaining to Anti-Dumping issues and forwarding its recommendations.

5. The responsibility for Imposition and Collection of duties as imposed /recommended by the
Adjudicating authority is upon the Ministry of Finance, Government of India.

ANTI-DUMPING DUTIES

The relief to the domestic industry against dumping of goods from a particular country is in the
form of anti-dumping duty imposed against that country, which could go up to the dumping
margin. Under the WTO arrangement, the national authorities can impose duties up to the
margin of dumping i.e. the difference between the normal value and the export price. The
Indian law also provides that the anti-dumping duty to be recommended / levied shall not
exceed the dumping margin. An anti-dumping duty imposed under the Act unless revoked
earlier remains in force for 5 years from the date of imposition. The Designated Authority by
the process of mid review is empowered to review the need for the continued imposition of the
anti-dumping duty from time to time. Such a review can be done suo-moto or on the basis of
request received from an interested party in view of the changed circumstances. 17 The WTO
Agreement as well as the Indian law provides that the injured domestic industry is permitted to
file for relief under both anti-dumping and countervailing duties. However, no article will be
subjected to both countervailing and anti-dumping duties to compensate for the same situation
of dumping.

ALTERNATIVE REMEDIES: The remedy against dumping is not always in the form of anti-
dumping duty. The investigation may be terminated or suspended after the preliminary findings
if the exporter concerned furnishes an undertaking to revise his price to remove the dumping
or the injurious effect of dumping as the case may be. No anti-dumping duty is recommended
on such exporters from whom price undertaking has been accepted.18

17
Rule 23(1) of the Anti Dumping Rules
18
Rule 15 of the Anti Dumping Rules
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INTERIM REMEDIES: An interim relief in the form of a provisional anti-dumping duty,

pending the finalization of investigation proceedings, can also be provided to the affected
domestic industry. The provisional duty can be imposed only after the expiry of 60 days from
the date of initiation of investigation and will remain in force only for a period not exceeding
6 months, extendable to 9 months under certain circumstances.19 If the final duty levied is less
than the provisional duty which has already been levied and collected, the differential amount
already collected as provisional duty shall be refunded. If the final duty imposed is more than
the provisional duty already imposed and collected, the difference shall not be collected.20

RETROSPECTIVE ANTI DUMPING DUTIES: Anti-dumping duty can also be levied on a

retrospective basis in cases where injury is caused due to massive dumping of an article
imported in a relatively short time, which in the light of the timing and the volume of imported
article dumped and other circumstances, is likely to seriously undermine the remedial effect of
the antidumping duty liable to be levied. However, the anti-dumping duty cannot be levied
retrospectively beyond 90 days from the date of issue of notification imposing duty.21

PROCEDURAL FORMALITIES FOR APPLYING FOR ANTI DUMPING DUTIES

Applications for anti- dumping protection can be made by or on behalf of the concerned
domestic industry to the Designated Authority (officer of level of Additional Secretary to the
Government of India who heads the DGAD) in the Dept. of Commerce for an investigation
into alleged dumping of a product into India. As per the regulations set by the DGAD, an
application for protection can be made either by an individual petitioner (domestic producer)
commanding 25% of the production capacity of the entire market or by a group of producers
who collectively hold 50% of the total market capacity.

Any industry is subject to protection if and only if there is sufficient evidence furnished by the
petitioner/s regarding;

i. Dumping of goods in question;

ii. Injury to the domestic industry; and

iii. A causal link between the dumped imports and alleged injury to the domestic industry.

19
Rule 13 of the Anti Dumping Rules
20
Rule 21 of the Anti Dumping Rules
21
Section 9A (3) of the Customs Tariff Act, 1975
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Broadly, injury may be analysed in terms of the volume effect and price effect of the dumped
imports. Economic indicators having a bearing upon the state of industry as the magnitude of
dumping, and the decline in sales, selling price, profits, market share, production, utilisation of
capacity etc are some of the parameters by which injury to the domestic industry is to be
assessed. Existence of dumping can be estimated by calculating the dumping margin which is
the difference between the Normal Value of the like article and the export Price of the product
under consideration.

Dumping margin= Normal value- Export price

The normal value is the comparable price at which the goods under complaint are sold, in the
ordinary course of trade, in the domestic market of the exporting country or territory while the
export price of goods imported into India is the price paid or payable for the goods by the first
independent buyer.

REGULATORY FRAMEWORK

Anti-dumping, anti-subsidies & countervailing measures in India are administered by the

Directorate General of Anti-dumping and Allied Duties (“DGAD”) functioning in the
Department of Commerce in the Ministry of Commerce and Industry and the same is headed
by the “Designated Authority”. The Central Government may, by notification in the Official
Gazette, appoint a person not below the rank of a Joint Secretary to the Government of India
or such other person as that Government may think fit as the Designated Authority.22

The Designated Authority is a quasi-judicial authority notified under the Customs Act, 1962
which is designated to initiate necessary action for investigations and subsequent imposition
of anti-dumping duties.23 A senior level Joint Secretary and Director, four investigating officers
and four costing officers assist the DGAD. Besides, there is a section under the DGAD headed
by the Section-Officer to deal with the monitoring and coordination of the functioning of the
DGAD.

The Designated Authority’s function, however, is only to conduct anti-dumping/anti subsidy

& countervailing duty investigation and make recommendation to the Government for

22
Rule 3 (1)
23
Though the WTO Agreement does not require the authorities for dumping and injury determination to be
distinct and separate, national practices in this respect van`. Generally, while the developing countries have
single authority to deal with both dumping and injury, developed countries like the US, Canada and the EU
have elaborate anti-dumping machinery
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imposition of anti-dumping or anti subsidy measures. Such duty is finally levied by a

Notification of the Ministry of Finance.

The law provides that an order of determination of existence, degree and effect of dumping is
appealable before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT),
formerly the (Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT)) — a judicial
tribunal, within 90 days. It reviews final measures and is independent of administrative
authorities. This is consistent with the WTO provision of independent tribunals for appeal
against final determination and reviews.

However, many petitions are also filed before the High court (under Article 226 of the
Constitution) and also the Supreme Court of India. Due to large pendency in both these courts,
it causes disruptions in trade during the interim period. Thus there have been demands for a
specially designated bench in the Supreme Court for this purpose.24

INTERNATIONAL CASES

1) European Communities — Definitive Anti-Dumping Measures On Certain Iron Or

Steel Fasteners From China25

On December 4, 2008, within the European Union, 15 members were in favor and 12 votes
were against the adoption of imposing a five-year average of 80 percent anti-dumping duties
on the screw and nut products from China. In 2009, the EU decided to impose anti-dumping
duties of up to 87 percent for the next five years on fasteners imported from China and required
Chinese exporters to prove that they meet with the “single duty” requirements when they
responded to anti-dumping cases, bringing a heavy burden and unfair treatment to Chinese
companies.

On January 28, 2009, the Ministry of Commerce spokesman Yao Jian made a speech on the
EU's final decision regarding anti-dumping measures on China's export of fasteners. Yao said
the Chinese government and industries had expressed strong dissatisfaction and that there were
many discrepancies in the European Union's case filing, investigation and adjudication process

24
Raju, K. D., “World trade Organization Agreement on Anti-dumping”, Wolter Kluwer Law & Business Series,
Aspen Publishers, Inc., p. 233
25
DISPUTE DS397
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with regard to WTO rules. He added that the EU anti-dumping practice, lacking fairness and
transparency, leaned towards trade protection, which greatly hurt the legitimate rights of
Chinese fastener enterprises. China resorted to the WTO to resolve the issue.

FINDINGS OF THE PANEL

The WTO set up an expert panel on Oct 23, 2009 after China initiated the WTO case on July
31, 2009. On July 15, 2011, the WTO issued a final ruling on the case concluding that the
section 5, Article 9 of the EU Anti-dumping Law against China was in violation of WTO rules;
the anti-dumping measures taken against Chinese fastener by the European Union in January
2009 were contrary to the provisions of the WTO Anti-Dumping Agreement, and that the EU
should withdraw the anti-dumping order. The WTO ruled the EU's single duty requirements
and practices are discriminatory and violated WTO rules.

2) European Union — Anti-Dumping Measures on Certain Footwear from China26

The shoe dumping case was the second brought by China against the EU at the WTO. China
launched the shoe case in February 2010 after the EU decided to extend the duties on shoes
from China and Vietnam, after shoemakers in Spain and Italy complained they could not
compete against the cheap imports. The duties also faced opposition within Europe, since they
forced consumers to pay more for their shoes. The Federation of the European Sporting Goods
Industry, whose members include companies such as Adidas, Puma and Nike, launched a legal
case against the European Union complaining they had suffered losses as a result of the duties
on shoes from China and Vietnam.

FINDINGS OF THE PANEL

The WTO dispute panel largely backed the complaint by China that anti-dumping duties
imposed by the European Union (EU) on certain leather footwear imports breached global rules
and held that the anti-dumping duties were inconsistent with the EU's obligations under the
WTO and that some aspects of the original investigation and expiry review were out of step
with the anti-dumping agreement.

The WTO panel also upheld China's challenge to the EU's method for calculating the anti-
dumping duties, saying the EU's approach systematically produced a result which punished

26
DISPUTE DS405
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normal pricing behaviour. It also concluded that the EU calculated and imposed the anti-
dumping duties in a way which impermissibly discriminated against the vast majority of
Chinese suppliers solely because they were Chinese, thus violating the cornerstone non-
discrimination provision of the WTO Agreement.

3) United States — Customs Bond Directive for Merchandise Subject to Anti-

Dumping/Countervailing Duties27

The US Southern Shrimp Alliance (SSA) – an alliance of eight southern coastal States
representing the harvesters, processors and distributors of US wild caught shrimp, filed a
petition in 2003 in the US Department of Commerce (DOC) and the US International Trade
Commission (ITC). The petitioners alleged that the exporters from Thailand, China, Vietnam,
India, Brazil and Ecuador were selling shrimp at lower prices than in their home markets and
were materially injuring the domestic industry in the US. This they justified by showing the
sudden drop in the harvest by more than half from $1.25bn in 2000 to $560mn in 2002. In
short, they alleged that these countries are dumping their shrimps in the US market.

Under a 1991 Customs Bond Directive, the US required importers subject to antidumping
action to post a custom bond equivalent to the greater of US$50,000 or 10 percent of the duties
paid during the preceding year. As per a 2004 US Customs and Border Protection enactment,
(the Enhanced Bond Requirement, or EBR) exporters were additionally required to post a
minimum bond equivalent to the anti-dumping duty margin, multiplied by the value of imports
of shrimp in the preceding year as well as pay cash deposit equal to the amount of anti-dumping
duty per entry. India also claimed that in order to post these bonds, the shrimp exporters had to
put up a surety equivalent to the bond amount to the banks that financed the bonds. Apart from
causing excessive financial burden on exporters paying the anti-dumping duties, this enhanced
bond requirement was claimed to be illegal since WTO rules do not allow an importer to
counter dumping with specific measures besides antidumping duties.

In January 2005, ITC confirmed the US DOC’s determination and slapped anti-dumping duties
equal to dumping margins (i.e. by how much the normal value price exceeds the export price)
on non-canned shrimp that the DOC calculated to range from 2.35 percent to 67.8 percent for
Brazil, Ecuador, India and Thailand; up to 25.76 percent for Vietnam; and up to 112.81 percent

27
DISPUTE DS345
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for China. Although the above tariffs were not as high as the Alliance had requested (up to 200
percent), they hailed this decision.

On 6 June 2006 India requested separate consultations with the US on the amended bond
directive and the EBR imposed by the US on imports of frozen warm water shrimp from India.

In its request, India claimed that the measures under the amended directive were in violation
of the WTO ADM as well as the GATT. However this consultation also failed to resolve the
dispute and subsequently the DSB established another separate panel allowing Brazil, China,
European Communities, Japan and Thailand to act as third parties.

The main issues in these disputes were that the imposition of EBR and application of the
practice known as ‘zeroing’ by the US on importers of shrimp products from India were
inconsistent with WTO agreements. In the absence of an agreement between the parties, the
WTO Director- General composed a three member Panel. The Panel issued the Interim Report
to the parties on 9 October 2007 and the Final Report to the parties on 13 November 2007.

FINDINGS OF THE PANEL

In its findings, the three member panel held that the applications of EBR on Indian shrimp
exports were inconsistent with the rules of the WTO Anti-dumping Agreement as well as the
GATT and due to this bond, the Indian shrimp exporters had to incur prohibitive costs on their
exports. Further on, it held that the US violated both the Anti-dumping and the Subsidies and
Countervailing Measures (SCM) Agreement because it failed to notify the amended Custom
Bond Directive to the Anti-dumping and SCM Committees.

Also, it was concluded that the use of ‘zeroing’ by the US breached US obligations under the
Anti-dumping Agreement for the reason that the US did not calculate dumping margins on the
basis of the ‘product as a whole’. Consequently, the panel’s conclusion and recommendation
was that the US had to bring its measures into conformity with its obligations under the WTO
Anti-dumping Agreement and the GATT 1994.
 P a g e | 17

INDIAN CASES

1) Designated Authority Anti-Dumping Directorate Ministry Of Commerce Vs. M/s.

Haldor Topsoe A/s.28

FACTS

Catalysts were imported from Denmark. A complaint of dumping was lodged with the
designated authority. The designated authority undertook to cause investigation. However, the
exporter did not furnish information about the export price of the catalyst to the other third
countries when no domestic sales were made in them.

The exporter insisted that normal price be determined on cost of production basis. The authority
rejected this. The designated authority, instead, proceeded to rely upon the price of like catalyst
sold by a German manufacturer. On this basis, the designated authority gave its finding and
recommended imposition of anti-dumping duty. It recommended two rates, depending upon
the end-use of the catalysts in India.

The exporter challenged the finding in appeal to the tribunal. It was argued that the anti-
dumping duty is country-specific and exporter-specific and therefore, the price of the German
exporter cannot be relied upon. The tribunal accepted the argument of the appellant. The
tribunal concluded that the action of the designated authority is clearly in violation of the
specific provisions contained in section 9A of the Act.

Even though the appellant did not co-operate to provide the information, the tribunal refused
to be persuaded to recognize the price of another exporter for like article. According to the
tribunal, it was wrong for the Central Government to extend the time of one year for completing
the investigation, without providing an opportunity to the appellant.

Yet another question was agitated in appeal. Was it legal to recommend two rates of anti-
dumping duty for the same product? The tribunal answered the question in the negative, saying,
“We are not able to up hold the action of the designated authority.”

The designated authority decided to contest the order of the tribunal in the Supreme Court.

28
AIR2000SC2556
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JUDGEMENT

The judgment of the apex court set aside the order of the tribunal on more than one count. On
the basic question whether reliance upon the price of the other exporter falls within the domain
of correctness, the Supreme Court reversed the finding of the tribunal. The court rejected the
theory of exporter-specific or country-specific argument. The court observed:

“By holding anti dumping duty to be exporter-specific, the tribunal could not have restricted
the scope of the investigation only to materials to be produced by a party against whom an
investigation is being conducted. Such an interpretation of the statute is wholly contrary to the
very scheme of the statute.”

It felt that the legal provisions did not call for any doubt or confusion.

“On a careful reading of section 9A of the Tariff Act and Rule 6 of the rules, it is clear that the
statute has no where put such a restriction on the investigating authority. On the contrary, the
perusal of the said provisions clearly shows that the normal value will have to be determined
with reference to comparable price, the word comparable price in the context can only be with
reference to the price of similar articles sold under similar circumstances irrespective of the
manufacturer.”

The apex court rejected the tribunal's finding on the question of two different rates of anti-
dumping duty. The Supreme Court observed that the tribunal did not give any specific reason
why the two different margins cannot be made applicable based on different import duties
applicable to the concerned catalyst.

2) Chhotu Lal Daga (Prop. of Rohit Enterprises) Vs. Commissioner of Customs (Port)29

FACTS

Central Government imposed anti-dumping duty on Compact Fluorescent Lamps (CFL)

originating in or exported from China under Notification No. 128/2001-Cus. dated 21.12.2001.
Imposition of anti-dumping duty was made on a provisional basis pending final determination
and such provisional duty was effective up to and inclusive of 20.06.2002. The Notification
provided for separate anti-dumping duty on CFL without choke and with choke. The same

29
2008(120)ECC277
 P a g e | 19

Notification also imposed anti-dumping duty on CFL without choke originating in or exported
from Hong Kong. Subsequently, definitive anti-dumping duty was imposed by Notification
No. 138/2002-Cus. dated 10.12.2002. The anti-dumping duty on CFL with choke originating
in or exported from Hong Kong was imposed for the first time under Notification No.
138/2002. The appellant imported the impugned CFL with choke of Chinese origin from a
supplier in Hong Kong. The bill of entry was noted on prior entry basis on 02.12.02 and the
vessel carrying the said goods was granted Entry Inwards on 09.12.2002. The main issue in
dispute in this case is whether the anti-dumping duty is payable on such imports made during
the interregnum, i.e., between 21.06.2002 and 09.12.2002, after the provisional duty lapsed but
before the definitive duty was notified.

JUDGEMENT

The Supreme Court noted that “...the erstwhile GATT and its successor WTO, through multi-
lateral negotiations, have been bringing down tariff barriers and liberalising international
trade. However, to prevent unfair trade under liberalised trading systems, WTO has mandated
trade remedy measures such as anti-dumping duty against dumped imports, countervailing
duty against subsidized imports and safeguard measures against surge in imports. Such
measures are necessary to prevent unfair trade by foreign suppliers to the detriment of
domestic industry in the absence of a protective import tariff wall. That anti-dumping duty is
not so much of a revenue measure, is evident from the fact that some of the WTO member-
countries have made provisions for making payments from the collected anti-dumping duty to
the injured domestic industry.”

The appellant contended that since the import has taken place from a supplier in Hong Kong,
in terms of paragraph 2 of the Notification No. 138/2002, the anti-dumping duty for CFL with
choke exported from Hong Kong, should be charged only with effect from the date of the
Notification i.e. 10.12.02. The Supreme Court rejected this contention. In the case of the
appellant, the goods were of Chinese origin and hence, these satisfy the condition of
'originating in, or exported from China', notwithstanding the fact that they were re-exported
from Hong Kong. Since the anti-dumping duty in respect of CFL with choke originating in, or
exported from China was levied from 21.12.2001, thus impugned import made by the appellant
had to pay the anti-dumping duty notified under Notification No. 138/2002.

The Appellant also pleaded that the quantum of anti-dumping duty was very high and he was
not in a position to pay the same. Rejecting his contention, the court held that “...one of the
 P a g e | 20

purposes of levying anti-dumping duty on a provisional basis for a period of six months on
preliminary determination is to make aware all exporters and importers concerned regarding
the initiation and continuance of anti-dumping investigation against dumped imports from
specific countries/exporters... In any case, the purpose of anti-dumping duty is to remove the
injury caused by dumped imports...the plea that the anti-dumping duty is excessive and that the
same cannot be borne by the importer, cannot be a basis for not demanding it from the subject
imports.”

3) Rishiroop Polymers Pvt. Ltd. Vs. Designated Authority and Additional Secretary 30

FACTS

he Appellant was the sole agent of Acrylonitrile Butadiene Rubber [for short "NBR"] as
manufactured by Korea Kumho Petrochemicals Limited [for short "KKPC"].

The subject goods were being imported into India for near about a decade. The subject anti-
dumping duty proceedings were related to NBR31 which was a synthetic rubber mainly used in
the manufacture of other rubber articles such as oil seals, hoses, automobile product, rice
dehusking rolls etc.

Gujarat Apar Polymers Ltd. (GAPL), hereinafter referred to Respondent No. 3, were the
manufacturers of some grades of NBR. Respondent No. 3 by means of complaint dated
3.11.1995 addressed to the Additional Secretary being the designated authority under Section
9 of the Tariff Act in the Ministry of Commerce, stated that the import of bales of the said
consignment from Germany was causing injury to its productions. Proceedings were initiated
by the Public Notice dated 1.3.1995 against export of NBR from Germany and Korea. The
period of investigation was 1.10.1994 to 31.3.1995.

The designated authority after considering the entire data of facts came to the conclusion that

1) NBR originating in or exported from Germany and Korea had been exported to India below
its normal value;

2) Consequently, the domestic industry had suffered material injury;

30
(2006) 4 SCC 303 : MANU/SC/1451/2006
31
NBR is a generic term and has various grades and physical forms.
 P a g e | 21

Thus, anti dumping provisions were imposed and the designated authority confirmed its
preliminary finding dated 3012.1996.

In 2001, the designated authority received requests for Mid-term review of the dumping
provisions carried out under Rule 23 of the Rules. The Authority concluded that the domestic
industry, during the review period of investigation, had faced injury due to continued dumping
by the plaintiff despite anti dumping measures. Thus, the authority recognized the need for
continuation of imposition of definitive anti dumping duty on all imports of SB.

Additionally, the authority also turned down the appellant’s request for a Sunset review on the
same grounds that the dumping of the subject goods is continuing from the subject countries
and thus domestic industry was suffering material injury; Further, the authority also observed
that the material injury to the domestic industry would intensify if anti-dumping duty is
removed.

The designated authority’s decision was challenged by the appellant that all the 14 parameters
given in Para (iv) of Annexure-II relating to principles of determination of injury were required
to be determined but had not been taken into account and that only some of the parameters
were considered.

JUDGEMENT

The Supreme Court, while rejecting the appellant’s contention, held that the review enquiry
should be limited to see as to whether the conditions which existed at the time of imposition of
anti-dumping duty have altered to such an extent that there is no longer justification for
continued imposition of the duty. The Supreme Court held that the enquiry was limited to the
change in the various parameters like the normal value, export price, dumping margin, fixation
of non-injurious price and injury to domestic industry. The said enquiry had to be limited to
the information received with respect to change in various parameters. It was said that the entire
purpose of the review enquiry is not to see whether there is a need for imposition of
antidumping duty but to see whether in the absence of such continuance dumping would
increase and the domestic industry suffer. It was also held that final findings recorded by the
designated authority at the time of initial imposition of anti-dumping duty on the existence of
injury to the domestic industry must be considered to continue to remain valid, unless it is
proved to be otherwise, either by the designated authority in suo moto review or by the
applicant seeking the review.
 P a g e | 22

The Supreme Court further observed that in the absence of new material, the designated
authority was not required to apply afresh parameters or criteria enumerated in paragraph (iv)
of Annexure II, which had already been done at the initial stage of imposition of anti-dumping
duty.

In the current case, the Designated Authority in its findings in the Mid Term Review
proceedings and also the Sunset review proceedings had categorically stated that all the factors
have been taken into consideration while determining continuance of the anti-dumping duty.
Thus it was held that the argument of the appellant that all relevant factors have not been
considered had no factual foundation.

the role of dispute settlement panels in disputes relating to anti-dumping actions taken
by

domestic authorities. On the methodology for determining that a product is exported at a

dumped

price, the new Agreement adds relatively specific provisions on such issues as criteria
for

allocating costs when the export price is compared with a 'constructed' normal value and rules
to

ensure that a fair comparison is made between the export prices and the normal value of a
product

so as not to arbitrarily create or inflate margins of dumping."

Despite this positive self-assessment about the refinements of antidumping related provisions

in WTO, it is only easy to find opinions that express concerns about shortcomings of the current

WTO provisions on antidumping, like in Baldwin (1999), Finger et al. (2000), Blonigen
and

Prusa (2001). Because Baldwin (1999) makes most explicit and detailed suggestions as
well as
 P a g e | 23

criticisms on the current antidumping provisions of WTO, I summarize them as follows:

Criticisms

a)

No general efficiency basis for opposing the sale of a product at a lower price abroad than a

home or at a price below average costs.

The case for antidumping provisions on economic efficiency grounds is based on

predatory pricing, but such a case is almost impossible to find among AD cases.

b)

The modification of existing dumping rules to include the

cumulation requirement.

Cumulating imports across countries as opposed to a country-by-country basis in

determining injury makes affirmative injury findings more likely to happen.

c)

Introduction of a standard review for dispute settlement panels in AD cases that makes
it

very difficult to overturn an AD decision by a national government.

Suggestions

a)

Introducing the competition policy that eliminates need for AD provisions.

The best long-run solution for curbing the misuse of the AD provisions of WTO.
 P a g e | 24

b)

Requiring the level of antidumping duties or price increase under price undertakings

be no

higher than necessary to remove the injury to the domestic industry and in no case
higher

than the margin of dumping. (The current WTO provisions state only that "it is desirable.")

Since WTO dumping provisions condemn dumping only if it causes material injury, it

seems appropriate that any remedial action be sufficient only to remove the injury.

c)

Permitting below-costs sales under certain circumstances.

In the presence of strong learning-by-doing effects, below-cost sales should be regarded

as a part of normal business practices. For the circumstances where a domestic firm

would be allowed to have below-costs sales, thus, foreign firms also should be permitted

to do so.

d)

Comparing the "cost margin" with the dumping margin.

In the case where the price gap between the foreign and the domestic markets (dumping

margin) is greater than the cost margin of shipping the product back to the foreign

market, then it may be that the domestic industry is using the antidumping laws to
 P a g e | 25

enforce a cartel-like price agreement with foreign producers. If the cost margin is less

than the dumping margin, then the corresponding AD measures should only remove the

injury related to this cost margin.

e)

Establishing a monitoring system (by the administering authorities) aimed at ensuring

that

any price increases following the imposition of AD duties or a suspension agreement are no

greater than necessary to restore the domestic price to its pre-dumping level.

CONCLUSION

Today large numbers of countries have become frequent users of anti-dumping measures. Anti-
dumping has unique combination of political and economic manipulability. During the last
fourteen years of WTO, the use of anti- dumping has become rampant that it is criticized as
threatening to limit the market access achieved under GATT/WTO trade negotiations over the
last fifty years or so. On the one hand, there is fear that anti – dumping measures are used for
protectionist purpose. On the other hand, many support it because it can be used as encounter
against ‘unfair’ trade practices.

It has been seen that Anti dumping policies are being initiated mostly by major players in the
business. These dominants producers lobby and litigate antidumping cases. In the process, they
incur huge expenditure sacrificing economic efficiency. Thus, antidumping policies that are
designed to ensure fair competition and improve economic efficiency may in fact reduce them.
To minimise the manipulation of the law for protectionist purpose and to limit discretionary
powers of the authorities, more explicit rules should be developed and definitions of different
concepts used in the process should be given clearly and the procedure of determining dumping
should be made more transparent.
 P a g e | 26

BIBLIOGRAPHY

1. Aggarwal, Aradhna., “The anti-dumping agreement and developing countries”, Oxford

University Press, (New Delhi : | New York )

2. Raju, K. D., “World trade Organization Agreement on Anti-dumping”, Wolter Kluwer

Law & Business Series, Aspen Publishers, Inc.

WEBLIOGRAPHY

1. Mark Wu , “Antidumping in Asia’s Emerging Giants”, Volume 53, Number 1, Winter

2012, Harvard International Law Journal, Available at www.harvardilj.org/2012/01/issue_53-
1_wu/

2. www.cci.gov.in/