Court ruling clears up anti-dumping 'uncertainty'

A COURT ruling in September last year – defining how the five-year period for anti-dumping duty must be applied – has come into force, and the current duties on 33 product categories will be prematurely lifted, according to Riaan de Lange of SA Tariff and Trade Solutions. These include certain paper, blankets, chicken pieces, glass, carbon black, aluminium hollowware, stainless steel tubes and pipes, and automatic circuit breakers. It could see their local manufacturers – who have been relying on the duty to protect them from the unfair competition of “dumped” goods (goods which Itac accepts are being imported to SA at prices below cost) – being hit by a flood of cheap imports until the duties can be re-imposed. It would also likely mean that new investigations would have to be instituted by the International Trade Administration Commission (Itac), De Lange added, if the local producers of these goods felt that they were still being “materially affected” by the dumping. In a notice published in the December 19 Government Gazette, Itac made a two-fold statement. “It stated that it was considering recommending to the minister of trade and industry that certain anti-dumping duties should be terminated with effect from September 26, 2007,” said Pre Prinsloo, a partner in Durban-based lawyers Shepstone & Wylie, “and invited comments from the public by January 31, 2008 on the intended termination of the relevant anti-dumping duties.” This recommendation, he added, also followed the story published in the October 26 issue of FTW which revealed the Supreme Court of Appeal’s September 26 decision in the case of “Progress Office Machines v Itac and Others”. Basically the case hinged around which date would mark the start of the fiveyear period during which the anti-dumping duty would remain in force. Anti-dumping actions by Itac, according to De Lange, go through three phases. “The first is when Itac announces its intention to open an investigation,” he said, “publishing it in the Government Gazette, and asking for comment. “The second phase is when it determines and imposes a “preliminary payment”, but again asks for comment from importers and exporters. “The third date is when Itac determines and imposes the final duty.” The crux of the Progress Office Machines case was the date on which the five-year period for the anti-dumping duty started. Was it the date of determination of the final duty, as argued by Itac, or the date of imposition of the preliminary payment, as Progress insisted – two dates which could be as much as six months different. “In terms of section 56 of the Customs & Excise Act,” said Prinsloo, “the minister of finance is entitled to impose anti-dumping duty with or without retrospective effect. “The critical issue before the Supreme Court of Appeal was whether the imposition of the anti-dumping duty had to be calculated from the date of the imposition of the provisional payment or from the date of the Government Notice (issued by the minister of finance) imposing the anti-dumping duty with retrospective effect.” In this case, the Appeal Court agreed with the Progress interpretation, and said: “The imposition of the provisional payment effectively constitutes the imposition of an antidumping duty.” Said Prinsloo: “Considering that our Supreme Court of Appeal is our highest court (save for constitutional matters), the decision in the case of Progress Office Machines v Itac & Others is now law in SA – unless the Supreme Court overturns its decision.” He also suggested that the December government notice is simply a case of Itac aligning the legislation with the legal position set out in the decision by the Supreme Court of Appeal. “Unless the legislation is amended, the calculation of the five-year period will have to be in accordance with the position set out in the Progress Office Machines case.” While the Supreme Court position differs from that of the USA and European Union (EU) – where the five-year period is calculated with reference to the period of the definitive antidumping duty and excluding the period during which any provisional anti-dumping duty has been enforced – the consensus is that Itac is unlikely to take any further legal steps to change the finding. “It doesn’t look as though Itac will take the court ruling on appeal,” said De Lange. Indeed, Andre Erasmus, senior manager at trade and customs consultancy Deloitte, felt that it was a general tidying-up of a previously arguable situation. “SA industry must realise it’s no big deal,” he told FTW. “The court ruling now provides certainty from which date the anti-dumping duty period applies. Once the preliminary payment is decided, you know that’s the start of your five-year duty period.”