The dumping of goods, a form of international price discrimination, is the practice of a supplier selling goods in the export market at a price lower than its domestic market. Dumping is, therefore, an unfair business practice, actionable under domestic and international law when it causes, or threatens to cause, material injury to local manufacturers who produce identical or similar goods to the dumped import.
It is immediately obvious that anti-dumping duties are very necessary to protect the local market.
Anti-dumping investigations are conducted by the International Trade Administration Commission of South Africa (ITAC), and follows a precise procedure that includes a detailed documented application, the initiation of an investigation via a Government Gazette notice, receiving responses from affected parties and the verifying of information, a preliminary determination by the Commission, a final determination and recommendation to the Minister of Trade & Industry and, finally, the implementation of the decision through publication in the Government Gazette.
The recommended anti-dumping action is product-specific by HS Code and may be targeted against specific suppliers in specific countries of origin and may be imposed as a Schedule 2 Part 1 duty or as Provisional Payment for a limited period. The imposition of these actions is reviewed after a period prescribed by the Commission and, depending on the findings of the review, the anti-dumping duties may be imposed for a further period, or they may be terminated.
Why then use the term ‘a necessary evil’? Last month, a Provisional Payment in relation to anti-dumping duty was imposed on other screws, fully threaded with hexagon heads (excluding those of stainless steel) imported from China to the extent of 166,07% up to and including 13 September 2025. In effect, any importer purchasing this product from any supplier in China, regardless of price or quantity, is liable to lodge the required Provisional Payment. This is obviously in addition to the Schedule 1 Part 1 duty of 30%. Alarmingly, it must be noted that a Provisional Payment is a cash payment, while the Schedule 1 duty is deferred. Taking a consignment value of R150 000, the deferred duty amounts to R45 000, but the cash payment to SARS amounts to R249 105. The financial impact on a small- to medium-size company’s cash flow is obvious, even though they have made a legitimate purchase.
How did ITAC arrive at the anti-dumping rate of 166,07%? In its 100-page report on the investigation into the dumping of these screws, it published the following formula: Ex-factory normal value R51,09/kg – Less ex-factory export price R18,59/kg – Margin of dumping R32,5/kg – FOB export price R19,57/kg – Margin of dumping as a percentage of FOB export price = 166,07%. While the formula appears to be sound, one must question the Commission’s decision to impose such a high rate of anti-dumping duty as a Provisional Payment, considering it is accepted as a cash payment. If, on 15 September, the Commission decides to terminate the anti-dumping provision, all affected importers will have the Provisional Payments liquidated in their favour but will not be able to claim the substantial amounts of interest accrued. The reasons for imposing anti-dumping duties are clear and understood, but legitimate importers are unfairly impacted.
