DUMPING DUTY ASSESSMENTS
With rates sometimes exceeding 100%, dumping duties are one of the key focus areas of the Australian Border Force and importers. Importers can face unexpected dumping duty bills that run into the millions of dollars and feel that they have no ability to fight the duty. For some importers, one way of lowering the cost of a dumping duty bill is to make an application for a dumping duty assessment. This does not involve arguing that the goods are not covered by the dumping duty notice, but rather is a claim that the rate is too high.
In some cases, a dumping duty assessment could see a rate near 100% significantly reduced.
How can the rate change
Following a dumping duty investigation, the duties that are imposed on subsequent imports are referred to as interim dumping duties. This is because those duties are based on the historical information reviewed in the investigation, but may not be the correct rate for subsequent imports. Importers have the right to apply for a dumping duty assessment under which the actual dumping margin for those imports is determined. Realistically, an importer can only do this with assistance from the overseas supplier. Where this assistance is available, a dumping duty assessment can be a method of significantly reducing duty on past imports.
The actual rate may be significantly lower than the amount paid at import. This is because the importer may have been subject to an “all other importer” rate. This is not a rate for a specific exporter, but rather is a figure calculated by reference to data provided by other exporters and is designed to produce a very high duty rate. If an actual exporter is assessed and the margin based on their real data, the dumping margin may be a lot lower than the made up rate.
The catch is that an application for a dumping duty assessment must be made within 6 months of the end of relevant importation period. Each 6 month period following the imposition of dumping duties is an importation period. For example, if dumping duties were first imposed on 1 January, the first importation period would be 1 January – 30 June. An application for a duty assessment for imports during that importation period would have to be lodged by 31 December.
The Anti Dumping Commission (ADC) has repeatedly said that complete applications for a dumping duty assessment need to be lodged prior to the due date. It asks for applications to be lodged well in advance of this date so that if there are deficiencies in the application, these can be cured by the due date. The ADC’s position was that a deficient application could not be cured after the due date, ending the right for a dumping duty assessment.
Whether this position was correct was considered by the Federal Court in Downer Utilities Australia Pty Ltd v Commissioner of the Anti-Dumping Commission  FCA 1190. This case concerned an application for a duty assessment required to be lodged by 2 January 2018 and which was lodged on 29 December 2017. The lodgement was incomplete as not all required imports were listed and some listed figures were not totalled. The failure to total the relevant figures was due to a problem with the ADC electronic form.
The representative for Downer tried calling the ADC regarding the problems with the ADC form. However, due to the Christmas and New Year period, the ADC did not respond to the query.
The legislation gives the ADC 20 days to review an application and form a view on whether or not it is deficient. The issue in this case was, if a deficiency was identified in that 20 day period, did the ADC have an obligation to inform the applicant and allow them to correct the deficiency?
The ADC argued that the 20 day period was merely for it to screen the application, and that it did not have an obligation to inform applicants of deficiencies and even if it did, applicants could not cure those deficiencies after the due date.
The Court held that:
deficiencies could be cured in the 20 day screening period; and
the ADC had an obligation to inform Downer of the deficiencies (which were minor) and allow them the opportunity to correct these in that 20 day period.
The ADC’s rejection of the application in the circumstances meant that Downer was denied procedural fairness and Downer was able to have the decision set aside.
A more lenient approach?
The decision is important as previously the ADC has been very strict in its view that deficiencies could not be cured after the initial due date. Applicants who have had applications rejected due to deficient applications may have been denied procedural fairness.
The decision hopefully makes seeking dumping duty assessments easier for importers. Often an assessment is sought after an Australian Border Force audit results in an unexpected dumping duty liability. In these circumstances, the importer may only find out about the dumping duty liability near the due date for the dumping duty assessment application. This is likely to result in rushed applications that may have minor deficiencies. This decision is a clear message to the ADC that it cannot take advantage of minor deficiencies to deny a substantially compliant claim. Rather, the ADC must notify the applicant of the errors and allow them the opportunity to correct those errors.
Tips for the future
If significant dumping duty is payable, importers should quickly determine the due date for a dumping duty assessment. If the time-frame has not passed, the importer should speak to the exporter about whether that exporter will cooperate with a dumping duty assessment.
If there is a willingness to assist, the importer and exporter should be able to work together to determine a likely outcome of a dumping duty assessment application. The previous investigation report and associated documents will provide a good guide to the ADC’s methodology in calculating the dumping margin. The size of a likely refund can inform whether there is any merit in proceeding with a dumping duty assessment.
If the importer plans to proceed with an assessment, the importer should obtain a list of imports during the importation period. Not listing all imports can be a reason for the ABF to reject the application.
Of course, the best approach is to lodge the assessment application well before the due date. Importers have 6 months in which to lodge an application. Lodging early will allow the ADC time to notify the applicant of errors prior to the due date, enabling a compliant form to be lodged.
A dumping duty assessment is not the answer for all importers. However, it should be one of the options that is considered. As it is time-sensitive, this option should be considered as early as possible.