Explanatory Memorandum
(Circulated by authority of the Assistant Minister for Industry, Innovation and Science, the Honourable Craig Laundy, MP)NOTES ON CLAUSES
Clause 1: Short title
1. This clause provides for the Bill, when enacted, to be cited as the Customs Amendment (Anti-Dumping Measures) Bill 2017.
Clause 2: Commencement
2. The table in this clause sets out the commencement date for when the Bill's provisions commence.
Clause 3: Schedule(s)
3. This clause is a machinery clause that enables the Schedule to amend the Customs Act. The Bill contains one schedule.
4. For ease of description, this explanatory memorandum uses the following abbreviations:
'Accelerated Review' means the process set out under Division 6 of Part XVB of the Customs Act
'Anti-Dumping Agreement' means the World Trade Organization Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
'Agreement on Subsidies and Countervailing Measures' means the World Trade Organization Agreement on Subsidies and Countervailing Measures
'Commissioner' means the 'Commissioner of the Anti-Dumping Commission' established under Part XVB of the Customs Act
'Customs Act' means the Customs Act 1901
'Division' means a Division of Part XVB of the Customs Act (unless otherwise specified)
'Dumping Duty Act' means the Customs Tariff (Anti-Dumping) Act 1975
'Exporter' means a person who exports goods to Australia
'Review' and 'Review of measures' mean a 'review of anti-dumping measures' under Division 5 of Part XVB of the Customs Act (not to be confused with Accelerated Review)
'Minister' refers to the Minister with responsibility for anti-dumping matters referred to throughout Part XVB of the Customs Act.
Schedule 1 - Amendments
Customs Act 1901
Item 1 - Subsection 269TAB(1A)
5. This item repeals subsection 269TAB(1A). Subsection 269TAB(1A) is reproduced, with minor amendment, by Item 3.
Item 2 - After subsection 269TAB(2)
Overview of Item 2
6. This Item inserts new subsections to section 269TAB that set out specific methods that the Minister may use to establish the export price in relation to certain Exporters.
7. Current subsection 269TAB(1) is used to establish the export price of goods in circumstances where there has been an actual exportation of goods from the relevant country to Australia during the period being examined by the review.
Detail of Item 2
New subsection 269TAB(2A)
8. New subsection 269TAB(2A) sets out when the specific methods are available to the Minister. If it is open to the Minister to establish the export price under either subsection 269TAB(1) or new paragraph 269TAB(2B), the Minister may apply whichever method he or she considers appropriate.
9. The specific methods do not apply to an Accelerated Review under Division 6. Exporters eligible for an Accelerated Review are new Exporters that have never exported to Australia and never been found to be dumping. As such, these Exporters cannot be considered to be attempting to take advantage of the unintended consequence to receive a more favourable rate of duty.
10. Paragraph 269TAB(2A)(a) sets out a requirement that the specific methods under subsection 269TAB(2B) are only available when ascertaining an export price during a review under Division 5. This paragraph covers any review under Division 5. This includes reviews involving an individual Exporter, multiple Exporters or Exporters of those goods generally.
11 Paragraph 269TAB(2A)(b) permits the use of the specific methods under new subsection 269TAB(2B) when the Minister determines that there is insufficient or unreliable information available from the Exporter to ascertain the export price for that Exporter due to an absence or low volume of exports of those goods by that Exporter during the period being examined by the review.
12. If the Exporter made no exports during the period being examined by the review, there is insufficient information to ascertain the export price under subsection 269TAB(1). If the Exporter made a low volume of exports during the review period the Minister must consider whether or not to determine that the information provided by the Exporter in relation to those exports is insufficient or unreliable to ascertain an export price. The Minister must consider the list of factors at new paragraphs 269TAB(2A)(b)(i)-(iii) when making that determination.
13. After having regard to the factors, the Minister may determine that the information available in relation to exports by that Exporter (if any) is insufficient or unreliable for the purpose of ascertaining an export price for that Exporter. The Minister may have access to additional information from sources other than the Exporter when conducting a review of measures that would allow an export price to be ascertained. The availability of this additional information is irrelevant for the purpose of making the determination that the information provided by the Exporter in relation to their exports is insufficient or unreliable.
14. New paragraph 269TAB(2A)(b)(i) requires consideration of the previous volumes of exports (if any) of the goods that are the subject of the review to Australia by that Exporter. If the previous volumes of exports are much higher than the volume of exports during the period being examined by the review, this may indicate that the Exporter has adopted a strategy of low volume exports in an attempt to exploit the unintended consequence of the review of measures to obtain a more favourable rate of duty. This may be relevant in the Minister's determination that the information (if any) provided by the Exporter is insufficient or unreliable for the purpose of determining an appropriate export price and that the specific methods prescribed under new subsection 269TAB(2B) should be applied.
15. New paragraph 269TAB(2A)(b)(ii) requires consideration of the patterns of trade for those goods. For example, some goods are specialty or custom products that are consistently exported in low volumes. Considering patterns of trade may involve an examination of the previous patterns of trade for the Exporter in question, or the pattern of trade generally among Exporters of goods from the country of export. The Minister may also consider the pattern of trade in other ways. For example, if a decline in the pattern of trade from the Exporter reflects a similar decline in the pattern of trade from the country of export generally, during the period being examined by the review, this may demonstrate that low volumes are indicative of broader market trends, rather than a strategy of low volume exports in an attempt to exploit the unintended consequence of the review of measures to obtain a more favourable rate of duty. This may weigh in favour of the Minister determining that the information (if any) provided by the Exporter is sufficient and/or reliable for the purpose of determining an appropriate export price and that the specific methods prescribed under new subsection 269TAB(2B) should not be applied.
16. New paragraph 269TAB(2A)(b)(iii) requires consideration of whether or not the absence or low volume of exports by the Exporter has occurred due to factors that are outside of the control of the Exporter. Such factors may include supply disruptions or natural events that reduce production levels (e.g. a flood, drought or fire). If the Minister is satisfied that such an event occurred, and that it was reasonably beyond the control of the Exporter, this indicates that the low volume of exports is unlikely to be a strategy employed by an Exporter in an attempt to exploit the unintended consequence of the review of measures to obtain a more favourable rate of duty. This may weigh in favour of the Minister determining that the information (if any) provided by the Exporter is sufficient and/or reliable for the purpose of determining an appropriate export price and that the specific methods prescribed under new subsection 269TAB(2B) should not be applied.
17. None of the above affects the pre-existing ability of the Minister to disregard information that he or she considers to be unreliable under subsection 269TAB(4).
18. The note to subsection 269TAB(2A) draws attention to the operation of new subsection 269TAB(2C).
19. The amendments do not apply in relation to Accelerated Reviews under Division 6 of Part XVB of the Customs Act.
20. A 'New Exporter' (as defined under section 269T of the Customs Act) may be eligible to apply for either an Accelerated Review under Division 6 or a review of measures under Division 5. Such an Exporter might also become involved in a review of measures under Division 5 due to an application lodged by another party.
21. If the New Exporter applies for an Accelerated Review, the new provisions have no effect. It is not intended that a New Exporter will be caught by the new provisions in a review of measures, because they will be able to access the Accelerated Review mechanism.
New subsection 269TAB(2B)
22. New subsection 269TAB(2B) empowers the Minister to determine the export price in accordance with specific methods described in new paragraphs 269TAB(2B)(a), (b) and (c). The purpose of these methods is to establish an export price that is reasonably reflective of the export price that would have existed, had the Exporter made exports (or made exports of a greater volume).
23. An export price determined in accordance with this subsection may be adjusted under new subsection 269TAB(2G).
24. The methods in subsection 269TAB(2B) are not hierarchical. The Minister may have regard to any method that they consider is most appropriate to apply to the circumstances of the case.
25. New paragraph 269TAB(2B)(a) sets out a method by which the Minister may determine the export price based on an export price established under subsection 269TAB(1) in relation to the same Exporter for a decision listed in new subsection (2D). For example, if an Exporter had an export price established as part of a previous dumping investigation for the same goods that are the subject of the present review of measures, the Minister can have regard to this in determining an export price for that Exporter.
26. If an export price has been established for the same Exporter under a method other than subsection 269TAB(1) it may not be used as a basis for determining an export price under this method. For example, if an export price was established for the same Exporter by an earlier review of measures under subsection 269TAB(3), that export price could not form the basis for an export price in the present review determined under this method. This is to ensure that the export price in the present review of measures reflects the Exporter's circumstances as accurately as possible, and that the export price is not based on one that was previously constructed, such as under subsection 269TAB(3) with regard to all relevant information.
27. The decision upon which the export price may be based under this method is not time restricted by the operation of new subsection 269TAB(2E). However, the decision on which the export price may be based is intended to be as contemporaneous and relevant as possible.
28. For example, an export price for an Exporter that is the subject of a current review (e.g. in 2017) may be based upon the export price previously established for that Exporter and published in a subsection 269TG(2) notice (e.g. from 2014) that gave rise to the current anti-dumping measures. However, it would not be appropriate to base an export price for the current review on an export price from a similar notice in relation to prior anti-dumping measures at an earlier time (e.g. from 2005) that have since been revoked (e.g. in 2010).
29. Despite not having the same time restraints as new subsection 269TAB(2E)(a), it is intended that export prices made for a decision mentioned in new subsection 269TAB(2D) will not be relied upon if they were established so long before the present review as to be considered unreliable. These export prices may be disregarded by the Minister in accordance with subsection 269TAB(4).
30. Similar to the operation of new subsection 269TAB(2E)(b), the export price may be based on a decision listed in new subsection 269TAB(2D) that was made before, or on the same day as, the day that the Minister determines the export price for the Exporter the subject of the review. This will allow the Minister to have access to the most contemporaneous export price established for the Exporter for the purposes of a decision under subsection 269TAB(2D).
31. New paragraph 269TAB(2B)(b) sets out a method by which the Minister may determine the export price based on exportations of like goods (as defined in Section 269T) by the Exporter to an appropriate third country. This provision is intended to be used in a similar way as the corresponding method in paragraph 269TAC(2)(d).
32. The price paid, or payable, under this method is in relation to transactions made during the period being examined by the review. This paragraph is distinguishable from the methods in new paragraphs 269TAB(2B)(a) and (c), which both permit the determination of the export price based on information from a time earlier than the period being examined by the present review of measures.
33. Transactions to a third country that are prior to the period being examined by the review are likely to be unreliable and may be disregarded by the Minister in accordance with subsection 269TAB(4).
34. New subsection 269TAB(2F) applies to the selection of an appropriate third country under this method.
35. New paragraph 269TAB(2B)(c) sets out a method by which the Minister may determine the export price, having regard to export prices determined by the Minister in relation to other Exporters from the same country of export for a decision listed in new subsection (2D). This will allow the Minister to have access to contemporaneous export prices from the same country of export as the Exporter that is the subject of the present review of measures, which the Minister may consider represent the most accurate basis for determining an export price.
36. New subsection 269TAB(2E) also applies to the decisions relied upon when the method under this paragraph is used.
37. As explained in relation to new paragraph 269TAB(2B)(a) above, if an export price has been established for the same Exporter under a method other than subsection 269TAB(1), it may not be used as a basis for determining an export price under this method. For example, if an export price was established for the same Exporter by an earlier review of measures under subsection 269TAB(3), that export price could not form the basis for an export price in the present review determined under this method. This is to ensure that the export price in the present review of measures reflects the Exporter's circumstances as accurately as possible, and that the export price is not based on one that was previously constructed, such as under subsection 269TAB(3) with regard to all relevant information.
38. The export prices relied upon under this method must have been established in relation to exports to Australia from the same country of export. For example, a review may be undertaken in relation to Exporters A and B from Japan and Exporter C from the USA. If Exporter A is a low volume exporter and the Minister determines Exporter A's export price under this this method, the Minister may have regard to the export price established for Exporter B in the same review but not the export price in relation to Exporter C.
39. The export price used must be the export price ultimately determined by the Minister in the relevant notice. For example, a potential export price set out in a Statement of Essential Facts in a review of measures should not be relied upon in a determination made under this subsection. Notwithstanding this, a Statement of Essential Facts may set out that the Commissioner intends to recommend that the Minister determine an Exporter's export price under this subsection on the basis of an export price from a process (for example, a continuation review) currently underway but not yet decided. However, the ultimate determination in the present review must have regard to the export price fixed or ascertained by the Minister (in the example of a continuation review, this would be the export price fixed by notice under section 269ZHG(1)).
40. Where the Minister determines the export price under this paragraph having regard to the export prices of multiple Exporters, the Minister may use an average or weighted average of those export prices.
New subsection 269TAB(2C)
41. New subsection 269TAB(2C) allows new subsections 269TAB(2A) and (2B) to be used in circumstances where the exporter has not made any exportations to Australia during the period being examined by the review. Where no exports have occurred, the Minister may deem exports to have taken place so that an appropriate export price can be calculated under new subsections 269TAB(2A) and (2B).
New subsection 269TAB(2D)
42. New subsection 269TAB(2D) sets out a list of decisions referred to in new paragraphs 269TAB(2B)(a) and (c). Export prices determined by the Minister in notices of the types listed in this subsection may be used for the purpose of determining an export price for the Exporter subject to the present review.
43. New paragraph 269TAB(2D)(a) sets out a list of prescribed decisions that establish an export price to which the Minister can have regard in determining an export price for the Exporter in the present review of measures under subsections 269TAB(2B)(a) and (c). New paragraph 269TAB(2D)(b) provides for further decisions to be prescribed by regulation. This will allow the Minister to have regard to relevant export prices determined as part of additional decisions that may subsequently be reflected in legislation.
New subsection 269TAB(2E)
44. New subsection 269TAB(2E) operates in conjunction with subsection 269TAB(2D) to impose a time restriction in relation to applying the method set out in new paragraph 269TAB(2B)(c). For a decision to be used under subsection 269TAB(2B)(c), it must have been made no earlier than 2 years before the publication of the notice of the present review of measures being undertaken, and no later than the day that the decision on the present review of measures is made.
45. A time range on the decisions that may be relied upon for the purpose of determining an export price under new paragraph 269TAB(2B)(c) is imposed. This ensures that any export price information relied upon is contemporaneous. New paragraph 269TAB(2E)(a) sets the beginning of the time range. The earliest export price information that can be used must be from a relevant decision made no longer than 2 years prior to the date that notice is given in relation to commencing the present review.
46. Export price information relied upon under the method set out in new paragraph 269TAB(2B)(a) is not affected by this time limit. This distinction exists because information provided by the Exporter is likely to be more reliable than information provided by other Exporters. However, whether particular information is more reliable and appropriate to use in any particular case is a matter for the Minister to determine in light of the facts of the case.
47. New paragraph 269TAB(2E)(b) sets the end of the time range. The most recent export price information that can be used may be from a relevant decision made on the same day that the Minister makes a determination in the present review. This will allow the Minister to have access to the most contemporaneous export price available under this method. For example, this will allow the Minister to access export prices (from the same country of export as the Exporter the subject of the present review) that have been established as part of an all-exporter review.
New subsection 269TAB(2F)
48. New subsection 269TAB(2F) sets out matters the Minister may take into account when determining whether a third country is an appropriate third country for the purpose of new paragraph 269TAB(2B)(b). This provision is intended to be utilised in a similar way as the corresponding guidance in subsection 269TAC(5C).
New subsection 269TAB(2G)
49. New subsection 269TAB(2G) provides for adjustments to be made to the export prices determined under new subsection 269TAB(2B). The objective of these adjustments is to ensure that the export price reflects what the export price would have been, had the Exporter made exports of a sufficient volume during the period under examination by the review.
50. New paragraph 269TAB(2G)(a) anticipates situations where the export price is based on information from an earlier period. An adjustment to reflect market changes since that time may be appropriate. For example, if the export price is determined under the method set out in new paragraph 269TAB(2B)(a) and the only prior determination of an export price for that Exporter was in the original investigation, a long period of time may have passed since the time the Minister made that earlier determination. In that case, an adjustment to the export price to reflect the general movement in prices in the market may be appropriate. Such an adjustment might be performed on the basis of movements of a benchmark or index selected by the Minister.
51. New paragraph 269TAB(2G)(b) anticipates situations where the export price is based on information that was in relation to different products to those produced and/or exported by the Exporter. An adjustment to reflect that difference may be appropriate. For example, if the export price is determined under the method set out in new paragraph 269TAB(2B)(c), the export price (or prices) relied upon may have been established in relation to a certain mix of products that is different from the products produced, or traditionally exported, by the Exporter the subject of the present review. In that case, an adjustment to the export price to reflect the product mix for the Exporter the subject of the present review may be appropriate.
52. Whether or not to apply any adjustments, and the type of the adjustments, is a matter for the Minister to determine based on the information available.
Item 3-At the end of section 269TAB
53. This Item reproduces subsection 269TAB(1A), which is repealed by Item 1 of this Bill.
54. New subsection 269TAB(6) expands this application to establishing the export price for an Exporter under new paragraph 269TAB(2B)(b). This is consistent with the treatment of transactions considered when applying paragraph 269TAC(2)(d) for the purpose of establishing a normal value.
55. The constructed export price methods described in new paragraphs 269TAB(2B)(a) and (c) are not affected, as the export prices will have already been subject to consideration of arm's length transactions in line with subsection 269TAA(1), due to the requirement that such export prices relied upon were established in accordance with subsection 269TAB(1).
Item 4- Application of amendments
56. This item contains an application provision in relation to the amendments contained in the Bill. The application provision applies to all the items in the Schedule.
57. The application provisions apply the Bill to any reviews for which an application is lodged, or request is made, on or after the commencement of the Schedule.
58. The application provisions also apply the Bill to: applications that have commenced, or that have been requested by the Minister, prior to commencement of the Schedule; and any applications that have been made to the Anti-Dumping Commissioner prior to commencement of the Schedule but for which notice of the review has not yet been given.
59. This includes reviews that have been extended by the Minister under subsection 269ZC(4), requested by the Minister under subsection 269ZC(5), or which have not been extended by the Minister under subsection 269ZC(6).