DISPUTING AN ABF DUMPING DUTY AUDIT
With dumping duty rates on some products being over 100%, it should be no surprise that the Australian Border Force (ABF) has a focus on dumping duty compliance. If the ABF selects your company for an audit, it is likely that they have done so with the expectation of identifying underpaid dumping duty. Failing to correctly respond to a dumping duty audit can result in a multi-million-dollar duty demand.
By the time of an ABF audit, it is usually too late to seek a lower dumping duty rate or argue that dumping duties should not be imposed. For instance, pointing out that there are no competing Australian products will be irrelevant to the ABF. The ABF will also have no interest in claims that your supplier sells at a profit or is more expensive than Australian made goods.
Additionally, there is usually little to be gained by being evasive or not providing the requested documents. There are legislative requirements to produce documents relating to the import of the goods and penalties can apply for not doing so. Additionally, evidentiary gaps may be filled in by the investigators in a manner that is adverse to the importer.
Areas that you should investigate
Are the goods covered by the dumping duty notice
The ABF often takes a wide view as to the goods that are subject to dumping duties. These goods are described in the dumping duty notice and may have been examined in the original investigation by Anti-Dumping Commissions. It may be the imported goods are “more than” the goods described in the dumping duty notice. Alternatively, while the goods may be very similar to the goods described in the dumping duty notice, there may be a slight difference, such as a failure to meet an applicable standard, that differentiates the goods.
If the imported goods are not the goods covered by the dumping duty notice, dumping duties should not apply.
Tariff classification
Generally, dumping duties apply to goods falling under a particular tariff classification. The tariff classification of a good is a specialist topic and there are many Court decisions on how to classify goods. In a dumping context, the key issue may be whether a product is classified as a commodity type product, say a steel tube, or is identified as a part of a structure. Winning a dispute regarding the tariff classification of a good can mean a demand for dumping duty completely falls away.
Which rate applies
Dumping duty rates are not static. It could be that case that there are multiple dumping duty rates applying over a four year audit period. Identifying the correct rate can significantly reduce the size of a claim. Often a key issue is whether the duty rate is determined by the date of export of date of import.
Dumping duty assessment
If there is dumping duty to be paid, it may be possible to have the rate reduced on recent imports by way of a dumping duty assessment. This is a process under which your imports in a particular period are reviewed and the specific rate for imports is determined. This rate may be significantly less than the default rate which the ABF is likely to apply. However, you must act quickly, there are strict time limits on when an application for a dumping duty assessment can be made.
Still not happy
In some cases there will be an opportunity for internal review, especially around issues such as tariff classification. However, on other occasions, the ABF position may be fixed and it is necessary to seek Tribunal of Court review. While there is not an automatic right to obtain Administrative Appeals Tribunal (AAT) review of a dumping duty decision, there are mechanisms to seek review via paying dumping duty and seeking a refund. Advice should be sought on this prior to lodging an AAT review application to avoid an ineffective and costly process.
Our experience
We have assisted many importers with dumping duty audits concerning a variety of products. Our assistance includes attending the audit, helping the importer prepare, reviewing the relevant commercial/shipping documents, advising on likely issues and preparing submissions in response to the ABF audit report.
If you have received an audit notice, we recommend seeking advice as early as possible. It is always easier to influence an ABF decision before it is made rather than trying to reverse the ABF position set out in an audit report.