By Hung Ou Yang
This article aims at dealing with Taiwan's anti-dumping investigation from the defensive angle so that importers or foreign enterprises involved could understand the feasible defensive measures under Taiwan's anti-dumping system.
The purpose of anti-dumping investigation is to reveal whether foreign producers have exported large quantities of products at unreasonably low price so as to injure domestic industries and then proper anti-dumping duties suitable for the protection of the domestic industries are justified. However, collateral damages may be caused to domestic importers who will eventually bear anti-dumping duties though apparently foreign producers are main targets of anti-dumping investigation. Therefore, opposing opinions in accordance with law must be submitted to the competent authorities as soon as possible, if one does not support the anti-dumping duties on certain product, to prevent unfavorable outcome.
Theoretically speaking, the defense may be initiated prior to domestic producers' filing for anti-dumping investigation. Because the preparation for filing an application for anti-dumping investigation is quite time-consuming, relevant rumors certainly will be circulated among the industries. If domestic producers' purpose is to urge foreign producers and domestic importers to raise the price of certain product so as to maintain fair competition, genuine anti-dumping investigation may not be necessary eventually. However, most of the defense will be conducted in accordance with law in the wake of the Ministry of Finance's (MOF) announcement of anti-dumping investigation.
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Collect Information from the MOF's Announcement
Defense strategy shall be formed in light of Articles 68 and Article 69 of the Customs Act, the Regulations Governing the Implementation of the Imposition of Countervailing and Anti-Dumping Duties ("Regulations") promulgated by the MOF, and other international anti-dumping treaties. Actually, lots of information may be disclosed in the MOF's announcement. In detail, the MOF's announcement will include the product involved under investigation (CCC code), countries and companies involved, importers, abstract of the application, procedure of the investigation, etc. Generally, relevant interested parties, like domestic importers and foreign producers, will be required to submit their opinions towards the scope of the products involved and the charges described in the application within twenty (20) days after the service of process. In the meantime, electronically public version of the application and forms of response could be downloaded from the website of the Customs Administration, MOF.
Pressure of Time-Limits Is the First Challenge When Defense Party Facing an Anti-Dumping Investigation
The International Trade Commission ("ITC"), Ministry of Economic Affairs, will take charge of the investigation of material injury to domestic industries one or two days after the MOF's announcement. The ITC will serve notices upon the foreign companies involved requiring facts and supporting information just in two weeks. ITC will also announce a hearing date at its discretion that generally will not be later than one month since the MOF's announcement. In other words, information about anti-dumping will appear overwhelmingly along with the pressure of time-limits, since the announcement of the MOF, especially the hearing, as the main battlefield, usually take place within one month after the MOF's announcement. This is quite challenging to foreign producers and importers who are not familiar with the law of anti-dumping.
In short, the petitioner has spent much time gathering resources and sufficient evidence to reach the MOF's threshold of anti-dumping investigation, but foreign producers and importers, on the opposite side, have only very urgent and limited time to respond to the challenge.
Identify the Issues and Seek Legal Professional's Assistance
The first and foremost for domestic importers to grasp includes: Does the anti-dumping investigation focus on specific product or more generally on the entire industry? Does the petitioner claim material injury caused by specific foreign producer or by the whole foreign importation? How large the scale of domestic industry? What are the quantities of the products imported? How many petitioners have filed for anti-dumping investigation? Does the whole domestic industry support the anti-dumping investigation? In light of those answers, you may evaluate if your business will be affected and if the answer is yes, you shall move to oppose the anti-dumping duties as soon as possible, such as expressing your opinions in twenty (20) days pursuant to the MOF's announcement. The first potential defense is requesting for narrowing down the scope of the products involved whenever it is favorable to the domestic importers. Anyway, to represent your opinions in a legal and proper way, you shall always seek legal professional’s assistance as soon as practicable.
Although domestic importers are also interested parties, the real protagonist to be investigated is the foreign producers involved. Importers' information will be too limited to refute the petitioner's allegations, if the foreign producers choose not to respond to the investigation. Hence, domestic importers, as the opposing parties, shall disclose information to foreign producers as soon as possible, or the foreign producers certainly will face difficulties of language barriers and run out of time seeking legal professional’s assistance in response to the investigation.
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Most Critical Phase for Anti-dumping Defense
During the anti-dumping investigation, the most critical and most tense phase in the defense shall be the period from the MOF's announcement to the ITC's hearing. For a lawyer who represents foreign companies involved, time is very limited but he needs to clearly communicate the procedure and important issues of and potential defense against the anti-dumping investigation, to the foreign clients. Most important of all, the lawyer must understand the product's domestic sale in the foreign client's country, to develop a comprehensive defense strategy.
The ITC's hearing adopts an adversary system. Commissioners of the ITC will serve as the chairmen and listen to statements of and examinations and answers between the parties. The petitioners have sufficient information available at hand and many advocates ready to express their opinions. But for the opposing parties, how to integrate the resources and opinions of all interested parties is undoubtedly a difficult task.
Although both parties have equal time (approximately forty minutes each) to state their opinions and argue during this procedure, those who book to participate in the hearing and stand on the opposing side usually consist of a large number of people. Hence, each of them may have a very short time to make statements. If every foreign company involved has sent its representative and appointed its lawyer to attend the hearing, conflicts among countries and conflicts among companies may also arise, in addition to the conflicts among lawyers who represent their own clients. Furthermore, there will be embassies of every foreign country, importers, and commercial or industrial organizations, who also wish to make their own statements. Obviously, without proper preparation in advance, it would be very chaotic for the opposing parties to speak in the hearing. Therefore, all the interested parties who stand on the opposing side shall coordinate well as many days as possible before the hearing begins. Not only should they seek common ground while reserving their differences, they should also integrate their strongest defense and make sure the sequence of speeches in the hearing, especially which lawyer shall speak for the longest period of time in order to present their arguments in order, otherwise the opposing parties will not be able to fully unfold their arguments in the hearing. Similarly, during the procedure of examinations and answers between the petitioners and the opposing parties, if each of the opposing parties attempts to ask its own questions off the wall, it is quite easy to lose focus for the opposing parties' position.
Before making the decision whether there is material injury to domestic industries, the ITC will review the information submitted by the petitioners and the interested parties and also take into account relevant information available to them. Hence, the opposing parties shall review the petitioner's information very carefully. For example, quantities and values of sales, profitability, employment of employees, capacity utilization, etc., of the petitioners and industries represented by them, in recent three years, shall be reviewed to know if the petitioners' figures were incorrect or inaccurate. Is the comparison based on recent three years? Is the petitioners' interpretation of these figures reasonable? If the petitioners are listed or over-the-counter companies, the opposing parties may make arguments by verifying the correctness of these materials against the public annual reports and financial reports.
The Best Defense Strategy Is to Cooperate with the Investigation
In terms of defense, termination of investigation may be requested if the petitioners are not able to provide sufficient evidence of subsidy, dumping or injury, according to Article 15 of the Regulations. However, since the MOF's announcement of anti-dumping investigation, the best defense strategy is always to cooperate with the investigation. Basically, pursuant to Article 21 of the Regulations, if an interested party fails to provide necessary information within the prescribed time limit or obstructs the investigation, the competent authority may review the information at hand and decide. So, if any interested party does choose not to cooperate with the investigation, such an interested party will suffer.
Lastly, it must be emphasized that within 30 days from the next day following the announcement of the MOF's preliminary determination, foreign producers involved in the case may file a written application for undertaking with the MOF, and if said period expires, the MOF will not accept any such application (Article 23 of the Regulations). The so-called undertaking refers to foreign producer's commitment to eliminate dumping so as to stop injuring our domestic industries. If the MOF approves such undertaking offered, the products involved may still be imported to Taiwan according to the conditions and prices undertaken. This will be a win-win situation. If foreign producers involved in the anti-dumping investigation did not cooperate, for example, did not file a response at all, or was selected to fill up the questionnaire but failed to do it, their opportunities to file for undertaking and get approved by the MOF will be narrow. On the other hand, if a foreign producer involved was not selected to fill up the questionnaire, but actively filled it up, there is still a chance to obtain the MOF's approval to close the case by undertaking. It is clear that the best defense strategy here is to actively cooperate with the investigation. Domestic importers, although on the opposing side, shall bear in mind with this best strategy and coordinate with foreign producers in the anti-dumping investigation, to seek the best commercial interests as the ultimate goal.
AUTHOR: Hung Ou Yang
Managing Partner
Taipei
+886-2-2707-9976
[email protected]
Copyright Brain Trust International Law Firm
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
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