RESTRICTED
WORLD TRADE G/ADP/AHG/W/29
13October 1997
ORGANIZATION(97-4398)
Original: English Committee onAnti-Dumping Practices
AdHocGroup onImplementation
TIMELINE, CONFIDENTIAL INFORMATION, AND LESSER
DUTY RULE (PARAGRAPH 3OFWTO/AIR/643)
Information Provided byAustralia
Thefollowing communication, dated 7October 1997, hasbeenreceived fromthePermanent
Mission ofAustralia.
_______________G/ADP/AHG/W/29
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** Australian legislation doesnotcontain aspecific provision which provides forinterested parties
tomeet(those parties withadverse interests). However, interested parties aregiven afullopportunity
forthedefence oftheirinterests through thecourse oftheinvestigation. Thisisaccomplished through
themaintenance ofapublic record where written allegations andrebuttals maybemade. Interested
parties mayalsopresent further information during verification visits atcompany premises (information
given orally must besubsequently putinwriting forinclusion onthepublic record -subject to
confidentialityconsiderations).Further,theauthoritieswillconsultwithinterestedpartiesattheirrequest
during anystage oftheinvestigation, andwillarrange ameeting ofparties where allparticipants are
agreeable.
This flowchart represents theinvestigative process where theprima facie investigation,
preliminary finding andfinalfinding decisions arepositive. Avenues ofappeal totheAnti-Dumping
Authority existwhere:
- anapplication isrejected (anegative prima faciedecision);
- aninvestigation isterminated;
- anegative preliminary finding ismade.
Thetime-frames shown areforatypical anti-dumping and/or countervailing investigation.
These time-frames maybeextended inexceptional circumstances, including, inparticular:
- thecomplexity ornovelty oftheissues tobeconsidered;
- thevariety ofgoods tobeconsidered;
- thenumber ofpersons whose activities must beinvestigated; or
- thedifficulty ofobtaining evidence.
INFORMATION WHICH ISCONFIDENTIAL BYNATURE
Introduction
Article 6.5oftheWTO Anti-Dumping Agreement provides thatanyinformation which isby
nature confidential, orwhich isprovided onaconfidential basis, upon good cause shown, betreated
assuchbytheauthorities.
Australian Legislation
Sections 269ZI and269ZJ oftheCustoms Act1901(seepages 82-86 ofG/ADP/N/1/AUS/1)
setouttherequirements fortheprovision ofinformation toaninvestigation which isclaimed tobe
confidential orinformation whose publication would adversely affect aperson ’sbusiness orcommercial
interests. Interested parties arerequired toprovide anon-confidential summary which contains sufficient
detail topermit areasonable understanding ofthesubstance oftheinformation submitted inconfidence.
Section 269ZJ(5) oftheCustoms Actprovides thatwhere theauthorities disagree withaperson ’s
claim thatinformation isconfidential orwhose publication would adversely affect aperson ’sbusiness
orcommercial interests, anddespite theauthorities opinion, theperson making theclaim willnotprepare
anon-confidential summary forinclusion inthepublic record, theauthorities maydisregard that
information.
Australian legislation doesnotprovide adefinition ofinformation thatcanbeconsidered to
beconfidential orinformation whose publication would adversely affect aperson ’sbusiness or
commercial interests.
Australia doesnotprovide fordisclosure pursuant toaprotective order.G/ADP/AHG/W/29
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Information thatisConfidential byNature
Inorder fortheauthorities totreatinformation asconfidential byitsnature, itmustbe"secret"
i.e.thefactsorknowledge mustnotbeinthepublic domain. Thisisshown where theinformation
ordocuments arenotpartofpublic knowledge orarenotaccessible tothepublic. Documents or
information withthisstatus musthavesome particular "value" which setsthemapartfromcommonly
available material. Thelatter cannotberendered confidential bythemere presence ofastamp of
"secret" or"confidential".
Itisaccepted thatanyinformation which would giveacommercial advantage toacompeting
party, orthedisclosure orpublication ofwhich would cause anadverse affect tothecompetitive position
oftheperson, willbeconsidered confidential bynature. Suchinformation generally relates to"trade
secrets"includingmaterialscompositionproductionprocessesandequipmentspecifications.Information
alsoconsidered "confidential" willgenerally include commercial information suchascosts, sales,
purchases, client identification, inventories, profit, losses andexpenditure.
Other Information
Itshould benoted thatthereisasecond category ofinformation, which, although notofitself
confidential bynature, nevertheless isprovided totheinvestigating authorities ontheunderstanding
thatitwillbetreated as"confidential". Information inthissecond category isclaimed as"confidential"
byadesire toprotect theinterests ofthesource oftheinformation. Although thistypeofinformation
isnotcommonly submitted toaninvestigation, thiscircumstance generally arises inrelation to
information within theexporter 'sdomestic market, buthasincluded information onmaterial injury
claims. Where theinvestigating authorities aresatisfied thatdisclosure ofinformation maybeharmful
tothesource ofthatinformation, itwillbetreated as"confidential".
ListofInformation Treated asConfidential byNature
Typically, thefollowing non-exhaustive listofinformation isgathered inthecourse ofan
investigation andistreated asconfidential byitsnature.G/ADP/AHG/W/29
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COMMON ELEMENTS
1.Company Background
Information concerning public companies (e.g. "Proprietary Limited" or"Limited" companies) and
other companies incorporated under Corporations Lawisreadily available viaGovernment agencies.
However, there isnorequirement forpublication ofinformation relating toprivate companies (e.g. sole
traders, family companies andtrusts) thusthisinformation maybeconsidered confidential bynature.
Thisbackground information includes:
- ownership
- organizational structure andfunctions ofdivisions
- audited profit andlossaccounts
- administrative, selling &general costs
- non-operating income andexpenses
- totalsales revenue perannum
Company andmarket information (forallcompanies) which would normally beconsidered
confidential bynature includes:
- accounting structure e.g.profit centres orcentral accounting
- charts ofaccount andledgers
- commercial relationships withsuppliers
- agreements/contracts withsuppliers
- levels ofsales (e.g. distributor, retail)
- methods ofsale(e.g. bulk, containers)
- projections andmarketing strategies
- factors affecting sales andcompetition
- market share ofcompany
- major competitors
- market price leaders/discounting practices
- major customers
- selling anddistribution arrangements
2.Sales ontheDomestic Market
- sales history
- inventories
- sales volumes
- netsales revenue
- purchase orders
- confirmation orders
- price lists
- sales invoices
- sales costs
packaging
inland freight
handling charges
insurance
- agreements/contracts withcustomers
- forward orders
- payment documentation e.g.T/Ts, Letters ofCredit, Bills ofExchange
- bank statements
- payment terms
- sales taxpayable
- sales incentivesG/ADP/AHG/W/29
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COMPLAINANT
1.Company Background -asabove
2.Sales ontheDomestic Market -asabove
3.Manufacturing
- technical specification sheets
- materials content data
- production processes information
- production equipment specifications
- production capacity
- production standards andvariances
- production volumes
- no.production staff
- costs ofproduction
factory overheads
labour costs
rawmaterials cost
research anddevelopment costs
royalties/licence fees
finance costs
- changes instocks
EXPORTER
1.Company Background -asabove
2.Sales ontheDomestic Market -asabove
3.Manufacturing -asabove
4.Exports
- volume andvalue oftrade percountry andimporter
- level oftrade
- models/types ofgoods exported
- purchase orders
- confirmation orders
- contracts
- price lists
- invoices
- packing
- BillsofLading orAirWaybills
- place ofexport
- level ofsales e.g.f.o.b., c.i.f.
- terms ofsales e.g.sight, 60daysfrom BillofLading
- forward orders
- sales costs
packaging/packing
inland freight
container handling charges, portcharges
customs charges
drawback
overseas freight
insurance
- payment documentation e.g.T/Ts, Letters ofCredit, BillsofExchange
- anyrebates/discounts notshown oninvoice
- anyfinancial assistance, advertising materials, warranty etc.supplied toimporters
- currency andconversion rateG/ADP/AHG/W/29
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IMPORTER
1.Company Background -asabove
2.Sales ontheDomestic Market -asabove
3.Imports
-import volumes
-price lists
-forward orders
-purchase orders
-confirmation orders
-salesinvoices
-customs entries
-packing lists
-AirWaybills/ BillsofLading
-levelofsalese.g.f.o.b., c.i.f.,
-terms ofsalese.g.sight, 60daysfrom BillofLading
-payment documentation e.g.T/Ts, Letters ofCredit, BillsofExchange
-finance costs
-forward exchange contracts
-import costs
freight charges
insurance
container handling charges, portcharges
customs duty/sales tax
customs brokers fees
inland freight
warehousing
NON INJURIOUS PRICE CALCULATION -THE LESSER DUTY RULE
Introduction
Thedifference between thenormal value andexport price (ortheamount ofcountervailable
subsidy) setsthemaximum amount ofdutypayable.
Article 9.1oftheWTO Anti-Dumping Agreement notes thatitisdesirable thatanti-dumping
dutybelessthanthedumping margin ifsuchlesser dutywould beadequate toremove theinjury to
thedomestic industry. Article 19.2oftheAgreement onSubsidies andCountervailing Measures mirrors
thisprovision inrelation tocountervailing duty.
Australian Legislation
Inaccordance withss.8(5A), 8(5B), 9(5A) 10(3C), 10(3D), and11(5) oftheCustoms Tariff
(Anti-Dumping Act)1975 (seepages 93-101 ofG/ADP/N/1/AUS/1), theMinister must haveregard
tothedesirability offixing alesser amount ofdutysuchthatthesumoftheexport priceandthelesser
amount ofdutydoesnotexceed thenon-injurious price. Inother words, aprice sufficient toremove
theinjury caused bythedumping and/or countervailing.G/ADP/AHG/W/29
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Section 269TACA oftheCustoms Act1901defines thenon-injurious price asthe"minimum
price necessary ...toprevent theinjury ...",butdoesnotgiveamethod forcalculating thisprice.
Practice
Theusual method fordetermining anon-injurious price (NIP) is,first, todetermine an
"unsuppressed selling price" (USP) forthegoods inAustralia. Inassessing theUSP, customs preference
istoexamine themarket forprices ofthelocally produced goods atatimewhen themarket wasnot
affected bydumping orsubsidization.
Themarket maynotalways, however, allow areliable measure oftheUSP. Theprevailing
market price maynotbeareliable measure because itisaffected bydumping. Further, ifdumping
hasbeenoccurring forsome timethenitmaynotbepossible touseapricebefore thedumping occurred
astheprice isdated andnolonger relevant. Theindustry mayhaveundergone significant structural
changes since thetimeitwasunaffected bydumping orsubsidization.
Insuchcircumstances itmaybenecessary tocalculate theUSPfromthelocalproducer 'scurrent
costtomake andsell,plusanestimate oftheprofit (ifany). Profit onsalesbyclosely related industries
maybeexamined using published profit surveys (e.g. from stock exchange information, business
publications ortheAustralian Bureau ofStatistics); ortheindustry mayprovide details ofthemargin
onsalestheynormally would haveachieved intheabsence ofdumping orsubsidization. Where it
isapparent thattheindustry would beselling ataloss(even intheabsence ofdumped orsubsidized
goods inthemarketplace) a"nil" profit willbeallocated.
Once theUSPhasbeendetermined, allrelevant costswhich would beincurred byanimporter
arededucted toarrive ataFree-On-Board (f.o.b.) price. TheNIPisnormally calculated inf.o.b.
terms forthecountry ofexport asthemajority ofanti-dumping andcountervailing duties arebased
onf.o.b. prices. (Itishowever possible fortheNIPtobesetatanex-factory level.)
Deductions aremade using information relating tothemostefficient representative importer
(i.e.usually theimporter withthelowest on-costs, atthechosen levelofcustomer). Deductions will
include allcosts incurred ingetting thegoods from theexport f.o.b. point (oranother point if
appropriate) tothechosen level ofcustomer inAustralia, including allinto-store costs andduties.
These costs areusually identified during verification visits toimporters intheordinary course ofan
investigation. Anexample ofthecalculation ofaNIPderived from aUSPisshown below:G/ADP/AHG/W/29
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EXAMPLE OFNON-INJURIOUS PRICE CALCULATION
$A/unit
USP(market orcosts based) 1.200
LessProfit (ifany) 0.150
LessAS&G expenses 0.175
Lesspackaging costs 0.0891
Lessintostore costs 0.005
Lesso/sfreight &insurance 0.064
Duty inclusive price 0.717
Lessdutyat10% 0.0652
NIP(N) 0.652
NIPperdozen 7.824
$USperdozen ($1A=$US0.7858) 6.148
1Anexample ofwhere animporter engages inavalue-added activity; inthiscase
packaging.
2Duty maybecalculated asfollows:
ifX=thedutyinclusive price (0.717)
Y=thedutyrateexpressed asadecimal (0.10)
N=NIP
N+(YxN)= X,then
So,duty$=(X-N)
=0.717-0.652
=0.065
OR,
therefore dutyamount =
Alternatively, ifthedutyratewere tobeexpressed asapercentage thenthedutyamount
=G/ADP/AHG/W/29
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Thedeductions shown areexamples only; there maybeother deductions required e.g.for
salestax.Costs ofimportation areusually obtained fromactual costsincurred bytheimporter, although
insome cases costs maybecalculated e.g.profit orAS&G expenses could bebased onapercentage
oftheUSP.
AllNIPs areexpressed inAustralian dollars. Anycosts incurred inanother currency are
converted toAustralian dollars attherateofexchange applying onthedatethatthecharge waslevied.
Incalculating theUSPandtheNIP,acashprice basis willbeused. Ifexport salestoAustralia are
formore than30dayterms, thenanamount forcredit terms willbeadded ontothecashNIP.
Theactual dutyrateapplicable tothegoods when entered forhome consumption inAustralia
istherateusedincalculating theNIP. Itispossible thatthere maybetwoseparate NIPs fortheone
country, oneforgoods which areeligible for,andattract thepreferential dutyrate(fordeveloping
countries), theother forgoods atthegeneral rate.
TheDuty Payable
Thecalculated NIPiscompared totheascertained normal value todetermine which islower.
Where theNIPislower, theinterim dumping dutypayable isthedifference between theascertained
export price andtheascertained NIP.