The provisions relating to anti-dumping measures under the Customs Tariff Act 1975 (“Act”) and the Customs Tariff (Identification, Assessment & Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (“AD rules”) provide for different time periods for different stages of proceedings. This article seeks to analyze whether the time period for completing a mid-term or sunset review can be extended beyond the statutory time period of 12 months, and whether such extension is in consonance with the Act and AD Rules.
Legal Framework of Time Period for Investigations and Reviews
Rule 17(1) of the AD Rules provides a period of one year to the Designated Authority to conclude the original anti-dumping investigation. The proviso to Rule 17(1) empowers the Central Government to extend further the period of one year by six months to conclude the investigation in the event that “special circumstances” exist. Rule 18 of AD Rules provides for the levy of duty based upon the recommendation issued by the Designated Authority.
Mid-term reviews are dealt with under Rule 23(1A) of AD Rules. Rule 23(1A) states that the Designated Authority shall review the need for continued imposition of anti-dumping duty and upon completing such review, the Designated Authority shall recommend to the Central Government for its withdrawal, where it comes to a conclusion that the injury to the domestic industry is not likely to continue or recur if the anti-dumping duty is removed or varied and is therefore no longer warranted.
The scope of a sunset review is somewhat different and is dealt with under Section 9A(5) of the Act read with Rule 23(1B) of AD Rules. Section 9A (5) of the Act states that anti-dumping duty shall cease to have effect on the expiry of five years from the date of imposition of such duty, unless it is revoked earlier. The first proviso to Section 9A(5) of the Act affirms that if the Central Government is of the opinion that cessation of the duty is likely to lead to continuation or recurrence of dumping and injury, then such duty may be extended for a further period of five years.
Rule 23(1B) of the AD Rules provides that anti-dumping duty, once imposed, shall be effective for a period not exceeding five years, unless the Designated Authority comes to a conclusion on a review initiated before that period that the expiry of the said anti-dumping duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry. Therefore, in a sunset review, the question that arises for consideration is whether the expiry of the anti-dumping duty in existence is likely to lead to continuation or recurrence of dumping and injury to the domestic industry. On the other hand, in a mid-term review, the question that arises for consideration is whether the injury to the domestic industry is not likely to continue or recur if the anti-dumping duty is removed or varied and is therefore no longer warranted.
It is important to note that the second proviso to Section 9A(5) of the Act provides that the Central Government may extend the levy of the anti-dumping duty for a period of one year, if the sunset review is not concluded before the expiry of five years from the date of imposition of the duty. With regard to both mid-term and sunset reviews which are conducted pursuant to Rule 23 of the AD Rules, Rule 23(2) is negatively worded and provides that such reviews shall be concluded within a period not exceeding twelve months from the date of initiation of such review.
It may be recalled that Rule 17(1) of AD Rules read with the first proviso to Rule 17(1) provides that the Designated Authority shall, within one year from the date of initiation of an investigation submit its findings to the Central Government, unless the Central Government in its discretion extends further this period of one year by six months. Rule 23(2), which lays down timelines for reviews, provides that reviews shall be concluded within a period not exceeding twelve months from the date of initiation of such review.
Interestingly, Rule 23(3) borrows certain other provisions from AD Rules, such as Rules 6, 17, 19, 20 including Rule 17 which is applicable mutatis mutandis in case of a review. Therefore, a preliminary question that arises is whether the discretionary extension of the time period by six months which is provided in the proviso to Rule 17(1), becomes applicable to the twelve month time period for conducting reviews laid down in Rule 23(2), due to the mutatis mutandis reference in Rule 23(3). A reading of Rule 23(3) suggests that the time period for concluding an investigation under Rule 17(1) may not be applicable to the time period for concluding a review in Rule 23(2).
One possible reason in support of this interpretation is that the expression mutatis mutandis means “all necessary changes having been made; with the necessary changes”[see end note 1]. Therefore, the rule of mutatis mutandis may be more in the nature of a rule of ‘adaptation’ as opposed to a simple rule of ‘adoption’. Hence, Rule 17 is required to be borrowed for the purpose of Rule 23 with necessary changes but in as much as the specific timeline for the review as provided by Rule 23(2), Rule 17 may not be applicable.
As far as a sunset review is concerned, the following reasons support the interpretation of Rules 23(1B) and (2) that the time period for completing the same cannot be extended beyond 12 months:
(i) First, the extension of the period of anti-dumping duty during the pendency of sunset review is for a period of “one year” under the second proviso to Section 9A(5) of the Act. It is relevant to note that if a duty is not extended before expiry, then it amounts to reviving a dead duty which is not in consonance with Section 9A(5) of the Act and Rule 23(1B) of AD Rules. Bearing in mind this fact, the purpose of a sunset review (determining the likelihood of continuation or recurrence of dumping and injury) would be better served if the review was completed well in advance of the date of expiry of the duty. Furthermore, the Central Government may take some time to take a decision on the recommendation of the Designated Authority. In order to ensure that the Ministry of Finance gets sufficient time to consider the recommendation of the Designated Authority so that duty can be levied if need be, before the expiry of the existing duty, the sunset review may have be completed well in time. Probably, Designated Authority may complete the sunset review before expiry of 9 months from the date of completion of five year period leaving three months to the Ministry of Finance for taking a final decision. In any case, if the Designated Authority takes 12 months to complete the investigation, it will leave no time for the Finance Ministry to consider the recommendations and impose the duty before expiry of 12 months. That being the case, the question of extending the period for completing the review beyond 12 months does not arise.
(ii) Second, it can also be seen from the wording of the above provisions that the time periods laid down in Rules 17(1) and 23(2) of AD Rules are mandatory in nature. Any relaxation in the time period will disturb the legitimate expectations of interested parties and prejudice their economic interests.
(iii) Third, in case sufficient evidence exists for non-continuation of anti-dumping duty in a sunset review, the Designated Authority makes the appropriate recommendation in time and the duty may be withdrawn accordingly at the earliest. In case the time period for concluding the investigation is allowed to be extended, the collection of anti-dumping duty may be carried out without due justification.
As far as a mid-term review is concerned, it is essential to note that its primary objective of ascertaining the change in circumstances, which necessitates the modification of removal of duty, may not be served if the time period is extended and it is not possible to correctly ascertain the change in circumstances after the lapse of an inordinately long time period.
It can be seen that the practice of the Designated Authority and Ministry of Finance with respect to extension of time period for reviews is required to be corrected. This issue is extremely critical both from the standpoint of the exporter as well as the domestic industry. When the time period for completing a review is extended, it prejudices the exporter to the extent that it distorts market conditions. Equally, such extension of time period deprives the domestic industry of protection for a period of six months when the review is being conducted by the Designated Authority and an additional three months for the Ministry of Finance to take a final decision about the continuation of duty.
Perhaps, it will be appropriate for the Designated Authority to issue a public notice clarifying the timelines applicable for completing a sunset review as well as a midterm review.
[The author is an Associate, International Trade Team, Lakshmikumaran & Sridharan, New Delhi]
- Black's Law Dictionary (9th ed. 2009)