Anti-Dumping Duty (ADD) is an import duty charged in addition to normal customs duty and is designed to allow the EC to take action against goods that are sold at less than their normal value in the EC market thus damaging EC competitors. Countervailing Duty (CD) is a customs duty imposed on goods that have received government subsidies in the originating or exporting country. It is actually possible to have both ADD and CD on the same product. According to EC statistics, on 31 October 2009, there were 135 anti-dumping and 8 countervailing measures in force.

How is an investigation started?

Investigations are only undertaken if there is sufficient evidence of a negative impact on EU producers. Complaints are usually started by UK or European Trade Associations rather than single companies because for an investigation to be undertaken it is necessary to show that:

• Imports from a particular country (outside the EU) are being dumped or subsidised for sale in the EU
• Import volumes are significant, and producers representing at least 25 per cent of total EU production of the particular goods are being affected

What is the procedure therein?

If the above has been shown the process is as follows:

• A complaint will be made identifying the complainant and the date the complaint was received as well as identifying the product in question and the current commodity code that it is classifiable under.
• The complainant will provide evidence as to the volume and prices of the imported product and then the complaint will be examined by the European Commission and the Advisory Committee.
• Should they both agree that the complaint is a valid one then an investigation will commence. At the end of this investigation, a publication of provisional measures and disclosure of provisional findings are made (please note that an investigation can be terminated early if there is insufficient evidence of dumping etc).
• Either a provisional ADD will be introduced or the investigation will be concluded. If a product has a provisional ADD levied on it then importers are required to pay the ADD when specified in the relevant EC regulation. The EC will then decide whether to make the provisional measures definitive (i.e. permanent) or to announce an end to the provisional measures. If it is the latter, then importers are entitled to seek repayment of the provisional ADD that you paid. Please note that the time-limit for claiming repayment is only 6 months.
• If a definitive ADD is introduced then you will be required to pay ADD until the ADD is repealed. This could have significant impact upon your margins and your supplier agreements.

Origin Issues

Origin in relation to ADD is conferred by the EC's non-preferential rules of origin (See ITS White Paper "The Customs Origin of Goods"). In general, goods may be considered to have originated in a named country if:

(a) They were wholly produced within that country, or;

(b) The last substantial operation in the processing or the manufacture of the goods which resulted in the manufacture of a new product, or represented an important stage of manufacture, was carried out in that country

Where ADD is imposed on goods exported from a named country, then the country from which the goods are dispatched is considered to be the country of export. If goods are exported from a country against which an anti-dumping measure applies, and you claim exemption from the duty on the grounds that the goods did not originate in that country, you will need to present a certificate of origin when you declare the goods.

Undertakings

The European Regulations provide for something known as an "undertaking". If an investigation is underway into goods that you are importing it may be stopped before a provisional or definitive duty is imposed if your supplier gives a satisfactory undertaking to either:

• Revise the price of the exported goods or;
• Stop exporting to the areas in question at the dumped price.

Alternatively, the European Commission may suggest an undertaking that the supplier is not bound to accept but the whole process is a difficult one as you must be able to satisfy the European Commission that the undertaking applied for eliminates the damaging effects of any dumping. If your supplier has provided an acceptable undertaking then they will also have to:

• Continually show that they are fulfilling the conditions of the undertaking and;
• Allow verification of the information they have provided.

If the supplier fails to do this, they then may be considered to have breached the terms of the undertaking and ADD will almost certainly be imposed by the Commission.

How do I know if my products attract ADD or countervailing duty?

If you subscribe to the UK Tariff then typing in your Commodity Code will identify whether ADD is relevant or not to your product. Alternatively, you can regularly check the Official Journal of the European Union or the HMRC website for ADD/CD measures in place. If you don't want the hassle of searching these sites then you can always subscribe to ITS free monthly publication "Anything to Declare?" which contains the latest additional duties measures in place. Just visit our website at www.internationaltradesolutions.co.uk to sign up.

How can ITS help?

International Trade Solutions is one of the leading independent customs consultancies in the UK. With over fifteen years of experience in customs law, we are renowned for our excellent results and client satisfaction rates. Additional Duties on imported goods is just one of the many areas that we specialise in. The services that we offer are:

• Reviews to determine whether your imports are caught by the measures, looking specifically at origin and classification rules
• Working with vendors to gain an exemption or lower rate of ASS
• Assistance with applications to the EU that are specific reasons why your imports should not attract ADD.

For a free first consultation or if you have any queries about ADD/CD or any other area of customs law then contact us on (01905) 619229 or alternatively email us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and one of our specialist consultants will be only too happy to help.