House of Representatives

Explanatory Memorandum

Circulated by authority of the Minister for Home Affairs, the Honourable Jason Clare MP

Notes on clauses

Clause 1 - Short title

91. This clause provides for the Bill, when enacted, to be cited as the Customs Tariff (Anti-Dumping) Amendment Act 2013 .

Clause 2 - Commencement

92. Subclause (1) provides that each provision of this Act specified in column 1 of the table in that subclause commences, or is taken to have commenced, on the day or at the time specified in column 2 of the table. This subclause also provides that any other statement in column 2 of the table has effect according to its terms.

93. Item 1 in column 1 of the table provides that sections 1 to 3 and anything in this Act not elsewhere covered by the table will commence on the day on which the Act receives the Royal Assent.

94. Item 2 in column 1 of the table provides that Schedule 1 commences at the same time as the Customs Amendment (Anti-Dumping Measures) Act 2013 commences.

95. Item 2 in column 3 specifies the date of commencement as1 January 2014.

Clause 3 - Schedule(s)

96. This clause is the formal enabling provision for the Schedule to the Bill, providing that each Act specified in a Schedule is amended in accordance with the applicable items of the Schedule. In this Bill the Act being amended is the Customs Tariff (Anti-Dumping) Act 1975 .

97. The clause also provides that the other items of the Schedules have effect according to their terms. This is a standard enabling clause for transitional, savings and application items in amending legislation. In this Bill there is an application provision in item 7 of Schedule 1.

Schedule 1-Amendments

Customs Tariff (Anti-Dumping) Act 1975

98. The amendments contained in this Bill are complementary to the amendments contained in the Customs Amendment (Anti-Dumping Measures) Bill 2013. Together these amendments provide that the Minister is not required, in certain circumstances, to give mandatory consideration to a lesser duty in imposing dumping and countervailing duties.

99. Currently, in imposing anti-dumping and countervailing duty, the Minister must consider the desirability of fixing a lesser amount of duty than the dumping (or subsidy) margin where the imposition of that lesser amount is adequate to remove injury. That is, the Minister is required to consider a lesser duty in setting the amount of dumping or countervailing duty.

100. The amendments contained in this Bill amend the Dumping Duty Act to provide that the Minister is not required to give mandatory consideration to the lesser duty rule where (as relevant to the type of notice) the Minister is satisfied that one or more of the following apply in relation to the goods subject to a dumping or countervailing notice:

(a)

the normal value of the goods was not ascertained under subsection 269TAC(1) of the Customs Act because of the operation of subparagraph 269TAC(2)(a)(ii) of that Act;

(b)

there is an Australian industry in respect of like goods that consists of at least 2 small-medium enterprises, whether or not that industry consists of other enterprises;

(c)

the country in relation to which the subsidy has been provided has not complied with Article 25 of the Agreement on Subsidies and Countervailing Measures for the compliance period.

101. The first circumstance set out above relates to the finding, in a dumping investigation, that there is a situation in the market of the country of export such that sales in that market are not suitable for determining a normal value of the goods. This is a finding of fact by the Minister, based on an examination of the conditions in the market of export, which results in the normal value being established using an alternative methodology.

102. The second circumstance set out above relates to a finding, in either a dumping or a subsidy investigation, by the Minister that the Australian industry producing like goods comprises at least 2 small-medium enterprises. The definition of small-medium enterprise will be established by legislative instrument by the Minister.

103. The third circumstance set out above relates to a finding, for the purposes of a subsidy investigation, that a country has not complied with Article 25 of the Agreement on Subsidies and Countervailing Measures for the compliance period. Article 25 of the Agreement on Subsidies and Countervailing Measures requires Members of the World Trade Organization to provide notification of subsidies. The Minister will set, in a legislative instrument, the applicable time period which must be examined in deciding whether a country of export has complied with the obligations established under Article 25.

104. Countries that are not subject to the obligations established under the Agreement on Subsidies and Countervailing Measures (that is, countries that are not a Member of the World Trade Organization) will not be required to comply with this element.

105. The three circumstances described in the amendments are circumstances which can introduce complexity into a dumping or subsidy investigation. In such complex cases, delays can occur in the course of the investigation which impacts on the ability of the injured industry to recover as injury can continue to be sustained until the imposition of measures. The purpose of the amendments is to give the Minister discretion to consider the desirability of fixing a lesser duty in certain circumstances which could be characterised as complex. By imposing the maximum permitted duties in these complex cases, it is intended that a better environment for the recovery of the injured industry will be provided.

106. The effect of the amendments in Items 1 to 6 is to remove, in the circumstances specified, the Minister's mandatory consideration of a lesser duty in setting anti-dumping and countervailing duties.

107. Importantly, the removal of the mandatory consideration of a lesser duty in the identified circumstances does not prevent the Minister from considering and applying a lesser duty where those specified circumstances exist and where the Minister considers it would be appropriate to do so.

108. The Dumping Duty Act imposes dumping and countervailing duties in respect of goods.

109. Section 8 imposes dumping duty in relation to goods by virtue of a notice under subsection 269TG(1) or (2) of the Customs Act. Subsection 8(5B) requires the Minister to consider a lesser duty in circumstances where a notice is published under section 269TG (dumping duties). Item 1 inserts a new subsection 8(5BAA) that provides that the Minister is not required to give mandatory consideration to a lesser duty in the two circumstances specified.

110. Subsection 8(5BA) requires the Minister to consider a lesser duty in circumstances where a notice is published under section 269TG (dumping duties) and section 269TJ (countervailing duties) at the same time and in respect of the same goods. Item 2 inserts a new subsection 8(5BAAA) that provides that the Minister is not required to give mandatory consideration to a lesser duty in the three circumstances specified.

111. Section 9 imposes third country dumping duties by virtue of a notice under subsection 269TH(1) or (2) of the Customs Act. Subsection 9(5AA) requires the Minister to consider a lesser duty in circumstances where a notice is published under section 269TH (third country dumping duties). Item 3 inserts a new subsection 9(5AAA) that provides that the Minister is not required to give mandatory consideration to a lesser duty in the two circumstances specified.

112. Section 10 imposes countervailing duty in relation to goods by virtue of a notice under subsection 269TJ(1) or (2) of the Customs Act. Subsection 10(3C) requires the Minister to consider a lesser duty in circumstances where a notice is published under section 269TJ (countervailing duties). Item 4 inserts a new subsection 10(3CA) that provides that the Minister is not required to give mandatory consideration to a lesser duty in the two circumstances specified.

113. Subsection 10(3D) requires the Minister to consider a lesser duty in circumstances where a notice is published under section 269TJ (countervailing duties) and section 269TG (dumping duties) at the same time and in respect of the same goods. Item 5 inserts a new subsection 10(3DA) that provides that the Minister is not required to give mandatory consideration to a lesser duty in the three circumstances specified.

114. Section 11 imposes third country countervailing duties by virtue of a notice under subsection 269TK(1) or (2). Subsection 11(5) requires the Minister to consider a lesser duty in circumstances where a notice is published under section 269TK (third country countervailing duties). Item 6 inserts a new subsection 11(5A) that provides that the Minister is not required to give mandatory consideration to a lesser duty in the two circumstances specified.

115. Item 7 of the Bill contains an application provision in relation to the amendments contained in the Bill. The effect of the application provision is that the Minister will not be required, in the specified circumstances, to consider the desirability of fixing a lesser amount of duty where:

(a)

The dumping duty or countervailing duty notice is given on or after the commencement of the amendment and the application for the notice is made on or after the commencement of the amendment; or

(b)

The dumping duty or countervailing duty notice is given on or after the commencement of the amendment and the Minister initiates an investigation under section 269TAG(1) of the Customs Act on or after commencement of the amendment; or

(c)

The dumping duty or countervailing duty notice is given before the commencement of the amendment and on or after the commencement of the amendment, the Minister publishes a notice under subsection 269ZHG(1) of the Customs Act declaring the continuation of the anti-dumping measures concerned.

116. This means that in relation to a duty assessment conducted under Division 4 of Part XVB of the Customs Act, review conducted under Division 5 of Part XVB of the Customs Act, or accelerated review conducted under Division 6 of Part XVB of the Customs Act, the requirement relating to the Minister's consideration of the lesser duty rule will be consistent with the requirement that applied when the measures were imposed or last continued.