TM 416C

TOPIC 3 – ANTI-DUMPING DUTY

By: Arnold S. Librado, LCB

 REPUBLIC ACT NO. 8752

The ‘’Anti-Dumping Act of 1999’’ provides

protection to a domestic industry which is
being injured or is likely to be injured by the
dumping of products imported into or sold in
the Philippines.
 REPUBLIC ACT NO. 8752

 It was signed on August 12, 1999 and took effect on September 4,

1999.

 Joint Administrative Order 01-2000 was issued to implement Republic

Act No. 8752 and its IRR which took effect on July 10, 2000.

 Tariff Commission Order 01-2000 was issued to prescribed internal

rules and regulations governing the conduct of formal investigation.

 The Dumping Duty is prescribed under Sec. 711 of the Customs

Modernization and Tariff Act (CMTA).
 REPUBLIC ACT NO. 8752

RATIONALE:

 To transform the domestic anti-dumping law into a more workable

and simple piece of legislation providing the safety nets against the
inflow of cheap dumped imports;

 To strengthen the rules governing the investigation of anti-dumping

cases;

 To align the domestic law with the WTO Agreement on Anti-

Dumping Practice.
 GOVERNMENT AGENCIES INVOLVED IN
ADMINISTERING THE ANTI-DUMPING LEGISLATION

1. Department of Trade and Industry-Bureau of Import Services

(DTI-BIS) or Department of Agriculture (DA)
- Receives the properly documented application
- Conducts preliminary investigation

2. Tariff Commission (TC)

- Conducts formal investigation
- Makes final determination for imposition of anti-dumping measure

3. Bureau of Customs (BOC)

- Takes charge in the imposition of the anti-dumping measures
 DUMPING

It occurs when foreign producers sell their

products to an importer in the domestic
market at prices lower than in their own
national markets or at prices below of cost
production.
 DUMPING
PRICE - $10.00
EXPORT

PRICE - $15.00 PRICE - $15.00

 ANTI-DUMPING PROTEST

What articles are covered by anti-dumping protest?

A dumping protest may cover any specific kind or class

of a foreign product which is being imported, sold or is
likely to be sold, into the Philippines at a price less than
its normal value, the importation or sale of which might
injure or retard the establishment of, or is likely to injure,
an industry producing like products in the Philippines.
 ANTI-DUMPING PROTEST

Who may file an anti-dumping protest?

A protest may be filed by, or on behalf of the domestic
Industry, in writing and embodied in a notarized form.

The applicant (protestant) is required to post a surety

bond. to be released only upon affirmative preliminary
determination.
 ANTI-DUMPING PROTEST

What importations are exempted from anti-dumping

protest?

 Products imported by, or consigned to, government

agencies not organized for profit and particularly
designated by law or proper authorities to import;

 Conditionally duty-free importations (Sec. 800, CMTA).

WHEAT FLOUR CASE
 DOMESTIC INDUSTRY

Domestic Industry refers to the domestic

producers of like products as a whole to
those whose collective output of the products
constitutes a major proportion of the total
domestic production of those products in the
industry concerned.
 DOMESTIC INDUSTRY

What is the threshold of support by producers for

the protest to be accepted?

 Support by domestic producers whose collective output

constitutes more than 50% of the total production of the like
product produced by the domestic industry;

 Support by producers accounting for at least 25% of the total

domestic production of the product alleged to be dumped.
WHEAT FLOUR CASE
 ANTI-DUMPING PROTEST

However, in special circumstances, the DTI or DA may

on its own motion, initiate an anti-dumping
investigation without having received a written
application by or on behalf of a domestic industry.
The concerned authorities should have sufficient
evidence of dumping, injury and a causal link to
justify the initiation of the investigation.
 INFORMATION REQUIRED WHEN APPLYING
FOR THE LEVY OF ANTI-DUMPING DUTY
 Volume of the domestic production of the producers making the
application;
 Description of the alleged dumped product;
 Names of the exporting countries, each known exporter or foreign
producer, and a list of the importers of the products;
 Information on dumping such as (i) prices at which the product is sold
in the domestic market of the exporting country, and export prices; (ii)
injury and causality; (iii) volume of dumped imports; and (iv) adverse
effects of such imports on domestic prices and on the domestic
industries.
 ANTI-DUMPING INVESTIGATION

Stages of Anti-Dumping Investigation:

A. Prima Facie Determination
B. Preliminary Determination
C. Final Determination
D. Issuance of Department Order
 ANTI-DUMPING INVESTIGATION

A. Prima Facie Determination

The DTI-BIS/DA, upon acceptance of the properly
documented protest/application, has 5 working
days to decide whether the facts would constitute
a dumping case.
 ANTI-DUMPING INVESTIGATION

B. Preliminary Determination
The DTI-BIS/DA initiates the investigation which includes
notification to the government of the country of export or
origin and all known interested parties, and distribution of
questionnaire to all concerned parties. DTI/DA has 30 working
days from receipt of the answer to the questionnaire to make its
preliminary determination of the need for the imposition of a
provisional anti-dumping duty.
 ANTI-DUMPING INVESTIGATION

C. Final Determination
In the conduct of its formal investigation, the Commission notifies all
interested parties; receives representations and/or the submissions;
holds preliminary conference and public consultations; and conducts
on-site investigation/data verification both foreign and domestic. The
Commission has 120 days from receipt of the advice from either
Secretary of DTI or DA to complete its investigation and submit its
report of findings to the Secretary.
 ANTI-DUMPING INVESTIGATION

D. Issuance of Department Order

Within 10 days from receipt of the affirmative final determination by the
Commission, the Secretary of DTI or DA issue a Department Order for the
imposition of an anti-dumping duty, unless the Secretary has earlier accepted an
undertaking from the foreign exporter to increase prices or cease exportation at
dumped prices.

In case of negative determination, either Secretary shall issue, through the

Secretary of Finance, after the lapse of the period for the petitioner to appeal to
Court of Tax Appeals, an Order from the Commissioner of Customs to
immediately release the anti-dumping bond to the importer.
 ANTI-DUMPING INVESTIGATION

Circumstances may a petition be rejected and the investigation

terminated:

1. Margin of dumping is de minimis, i.e. less than 2% of the export price;

2. Volume of imports from a particular country is negligible, i.e. less than 3% of

all imports of like products into the importing country. However, this rule
does not apply when countries with individual shares of less than 3%
collectively account for more than 7% of imports of the product under
investigation; or

3. Injury is negligible.
 ELEMENTS OF DUMPING

Four elements of dumping:

A. Like Product
B. Price Difference
C. Injury
D. Causal Link
 LIKE PRODUCT

Product produced by the domestic industry

which is identical or alike in all respects to the
article under consideration, or in the absence of
such a product, another product which, although
not alike in all respects, has characteristics
closely resembling those of the product under
consideration.
WHEAT FLOUR CASE
 PRICE DIFFERENCE

The amount by which the normal value (the

price prevailing exporting country) exceeds
the export price (selling price to an importer
in the Philippines.
 NORMAL VALUE

Normal Value is the foreign producer’s

domestic selling price of the article. It is the
comparable price in the ordinary course of
trade for the like product when destined for
consumption in the country of export or
origin.
 ALTERNATIVE NORMAL VALUE

 Comparable price charged for the like product when

exported to an appropriate third country; or

 Constructed value in the exporting country, calculated

on the basis of the production costs of imported
product, plus general, selling and administrative cost
and profit.
 EXPORT PRICE

Export Price is the price at which such product has

been purchased or agreed to be purchased, at
arm’s length transaction, by the person by whom
or for those whose account the product is
imported, excluding any post-exportation charges
such as ocean freight and overseas insurance.
 ALTERNATIVE EXPORT PRICE

 Constructed or deductive price based on the price at

which the imported product are first resold to an
independent buyer less all costs incurred between
importation and resale, i.e., customs duty, sales tax,
selling and administrative, and profit; or

 Reasonable price as may be determined by the

Secretary of DTI/DA or the Commission.
WHEAT FLOUR CASE
WHEAT FLOUR CASE
 INJURY

It means the material injury to a domestic industry, threat

of material injury or material retardation of the
establishment of a domestic industry. Injury test must be
based on positive evidence and shall involve an objective
examination of both (i) the volume of the dumped imports;
(ii) effects of dumped imports on prices in the domestic
market for like product; and (iii) the consequent impact of
these imports on the domestic producers of such products.
 FACTORS IN DETERMINING MATERIAL
INJURY TO THE DOMESTIC INDUSTRY
 Actual or potential decline in output, sales, market share,
profits, productivity, return on investments, or utilization
of capacity;

 Effects on domestic prices; and

 Actual or potential effects on cash flow, inventories,

employment, wages, growth and ability to raise capital or
investments.
MODALITIES IN DETERMINING THE PRICE
EFFECTS OF DUMPED IMPORTS
A. Price Depression – refers to the extent by the which the
domestic producer reduces its selling price in order to
compete with the allegedly dumped product.

B. Price Suppression – refers to the extent by which the

allegedly dumped product prevents the domestic producer
from increasing the selling price of its own.

C. Price Undercutting – refers to the extent by which the

allegedly dumped product is consistently sold at a price
below the domestic selling price of the like product.
WHEAT FLOUR CASE
 CAUSAL LINK

It refers to a finding that the material injury

suffered by the domestic industry is the
direct result of the importation of the
dumped product. It must be clear that the
injury suffered is directly attributable to the
alleged dumping.
 CAUSES OF INJURY NOT RELATED TO
DUMPING IN DETERMINING CAUSATION
 Volumes and prices of imports not sold at dumped prices;
 Contraction in demand or changes in the patters of
consumption;
 Trade restrictive practices of, and completion between foreign
and domestic producers;
 Developments in technology; and
 Export performance and productivity of the domestic
industry.
WHEAT FLOUR CASE
 MEASURES/REMEDIES AGAINST
DUMPING
a. Provisional measure – takes the form of a provisional duty
or, a security by cash deposit or bond equal to the estimated
difference between the normal value and export price of the
protested article, the former being higher than the latter. It is
only applied after the DTI-BIS or DA has made a preliminary
affirmative determination no sooner than 60 days from the
initiation of the case. It is valid for four months, extendible
to six months upon request by the exporter.
 MEASURES/REMEDIES AGAINST
DUMPING
b. Definitive measure – the final anti-dumping duty
imposed, in addition to the regular duty and other
charges, on a protested product imported from a
specific country following an affirmative final
determination. It is valid for five years from the
date imposition.
 ANTI-DUMPING DUTY

It refers to a special duty imposed on the

importation of a product into the Philippines at
less than its normal value when destined for
domestic consumption in the country of export
or origin, it being the difference between the
export price and the normal value of such
product.
 ANTI-DUMPING DUTY

FORMULA:

ADD = NORMAL VALUE – EXPORT PRICE

 ANTI-DUMPING DUTY

Mr. John of the USA exports machinery to Mr.

Ram of India. He sells the machine to Mr. Ram
for $40,000 export price. However, Mr. John
sells the machinery of the same kind in the
local markets of the USA for $44,000.
 ANTI-DUMPING DUTY

ADD = NORMAL VALUE – EXPORT PRICE

ADD = $44,000.00 – $40,000.00

ADD = $4,000.00
 ANTI-DUMPING DUTY

A shipment of 150 metric tons of cold-rolled coils and sheets

from Midland Resources Inc. is the subject of an anti-
dumping petition. The petitioner alleged the normal value to
be $300.00 per metric ton against the export price of $240.00
per metric ton. The Tariff Commission, after thorough
investigation found the normal value to be $295.00 per
metric ton and recommend the imposition of anti-dumping
duty. Use rate of exchange P42.50/$1.00.
 ANTI-DUMPING DUTY

Find:

A. Surety bond

B. Anti-dumping bond

C. Anti-dumping duty
 ANTI-DUMPING DUTY

A. Surety bond

Surety bond = 150 MT x $240.00 x P42.50 x 0.10

Surety bond = P153,000.00

 ANTI-DUMPING DUTY

B. Anti-dumping bond

NV = 150 MT x $300.00 x P42.50 = P1,912,500.00

EP = 150 MT x $240.00 x P42.50 = P1,530,000.00

Anti-dumping bond = P382,500.00

 ANTI-DUMPING DUTY

C. Anti-dumping duty

NV = 150 MT x $295.00 x P42.50 = P1,880,625.00

EP = 150 MT x $240.00 x P42.50 = P1,530,000.00

Anti-dumping duty = P350,625.00

 ANTI-DUMPING DUTY

One year after the decision, another shipment of 100

metric tons of cold-rolled coils and sheets from
Midland Resources Inc. with export price of $270.00
per metric ton. Compute the anti-dumping duty with
rate of exchange P44.10/$1.00.
 ANTI-DUMPING DUTY

C. Anti-dumping duty

NV = 100 MT x $295.00 x P44.10 = P1,300,950.00

EP = 100 MT x $270.00 x P44.10 = P1,190,700.00

Anti-dumping duty = P110,250.00