Antidumpingduties Chinese fasteners 'unscrewed'
By Council Regulation (ECG) no. 91/2009 the European Union has imposed a definitive anti-dumping duty on imports of certain iron or steel fasteners originating in the People’s Republic of China. For a long time, upon importation in the EU importers had to pay an anti-dumping percentage of at least 85% applicable to the net free-at-Community-frontier price, before duty. In 2011 this measure was extended to fasteners consigned from Malaysia. Of course the anti-dumping regulation encountered opposition from Chinese exporters and importers in the EU as well. By Regulation (EC) no 924/2012 the antidumping percentage was lowered to a still considerable percentage of 74,1% (all other companies).
China wins the battle for anti-dumping on fasteners with the WTO
China has always claimed that the EU antidumping measures on fasteners infringed the provisions of the WTO Anti Dumping Agreement. The subject Agreement sets the conditions under which countries are allowed to impose anti-dumping duties on certain products and against certain countries as well as the procedures that have to be observed in such cases. After the antidumping regulation on fasteners had already been the subject of discussions in WTO context in 2011, at the end of 2013 China requested the WTO to establish a so-called compliance panel. This panel has indeed found several inconsistencies. Thereupon the EU appealed the panel report, but without success. The Appellate Body confirmed the inconsistency of the EU anti-dumping measures on fasteners with the Anti Dumping Agreement and advised the WTO Dispute Settlement Body to request the EU to bring the measures found to be inconsistent into conformity with the obligations under the Anti Dumping Agreement.
European Commission withdraws antidumping regulation
As a result of the WTO-ruling on 26 February 2016 the Commission adopted Commission Implementing Regulation (EU) 2016/278 repealing the definitive anti-dumping duty on certain iron or steel fasteners originating in China, extended to imports of fasteners consigned from Malaysia (Official Journal EU 27 February 2016). Apparently, the Commission is of the opinion that the inconsistencies found are of such nature, that it is not possible to nail shut the measure again. Therefore, the Commission decided to withdraw the regulation in full. With that the Commission explicitly notes that in view of inconsistencies found by the compliance panel and Appellate Body it is appropriate to repeal the measures, and not modify them as it did in 2012.
No retroactive effect
The Commission may have decided to throw in the towel for the future, as was to be expected, the Commission has no intention to pay back (at least not without a fight) the considerable amounts of anti-dumping duties which have been paid by declarants / importers as from 2009 upon importation of Chinese fasteners in the EU. It is however clear that the Commission sees it coming. Therefore, in article 2 of the Commission Implementing Regulation (EU) 2016/278 the Commission leaves no room for doubt about the fact that it will not admit retroactive effect: “The repeal of the anti-dumping duties […] shall take effect from the date of the entry into force of this Regulation […] and shall not serve as a basis for the reimbursement of the duties collected prior to that date”.
Future will show
The fact that the Commission considers it necessary to include in the Regulation that reimbursement of duties already collected, speaks volumes. The anti-dumping measures are explicitly repealed because of the inconsistencies found in WTO context. While it is true that the EU does not have to reimburse the duties under the WTO, several of the violations identified by the WTO Appellate Body equally constitute breaches of the EU’s basic anti-dumping Regulation. And breaches of that basic Regulation are in fact grounds for claiming the repayment or remittance of anti-dumping duties paid or claimed, for the past three years. Obtaining the reimbursement/remittance of the duties will require obtaining the annulment of the Regulations imposing the anti-dumping duties. Annulments are decided by the Court of Justice of the EU, at the request of a customs court of an EU member state asked to decide a dispute concerning the (re)payment of the duties imposed by the customs authorities.
What does all this mean for you?
The past years fastener importers and customs forwarders who have submitted import declarations for principals in their own name, have paid considerable amounts of anti-dumping duties to the EU, that is in the primary declaration process, or later on when confronted with additional tax assessments. Such additional tax assessments have for example been imposed because the customs authorities took the position that the country of origin declared upon importation had not been correct and should be corrected in ‘originating in China’. Should the Court of Justice eventually rule that the antidumping Regulation on Chinese fasteners the EU has adopted in 2009 is invalid, anti-dumping duties paid will have been wrongly imposed and if paid, paid in error. In that case the customs authorities will have to grant timely submitted requests for repayment/remittance. On the basis of Community customs law these requests are subject to a time limit of three years, starting to run as from the moment of the notification of the customs claim by the customs authorities to the interested person. This time limit is strict and the fact that an affected person could not anticipate the illegality of the EU Regulation, will not be accepted as an excuse for a belated request. Therefore a positive outcome with the Court of Justice can in most cases not be awaited without at least submitting a formal request for reimbursement/remittance.
Safeguard your right to repayment/remittance in time!
We strongly advise affected parties (importers and/or customs forwarders) to take action and, in view of the three-year time limit, to immediately preserve their rights by submitting formal requests for repayment/remittance. When such request is submitted, further developments and the outcome with the Court of Justice can be awaited. Apart from this, it is essential to include in pending objections and appeal proceedings before national customs courts the new argumentation that additional tax assessments should be annulled on the ground of invalidity of the underlying anti-dumping Regulation.
What can Kneppelhout do for you?
Kneppelhout & Korthals Lawyers specializes in international trade and Community customs law. Our team of customs specialists can assist you with submitting formal request for repayment/remittance. We will take care of the fact that these requests comply with all formal and material requirements, will timely preserve your rights, take care of communication with the customs authority and will keep a close watch on the further developments in Brussels and Luxembourg. We will carry out these activities for a sharply reduced hourly rate. Apart from this, we can advise you on the further argumentation you need to put forward in respect of the invalidity of the anti-dumping Regulation in pending objection and appeal proceedings in respect of additional tax assessments in which anti-dumping duty has been imposed as a result of the importation of Chinese fasteners. In case you need more information on our services, including the terms and conditions, or want to come into action and call in our services, please contact one of our customs specialists.
Free information event
On Thursday 7 April 2016 Kneppelhout & Korthals and Green Lane, the alliance of European Customs and Trade Law Firms, organize in Rotterdam an information event titled: “Antidumpingheffing Chinese bevestigingsmiddelen op ‘losse schroeven’”. Kneppelhout lawyers, as well as international trade lawyers from McGuireWoods in Brussels, will explain why the anti-dumping duties levied on fasteners originating in China and Malaysia are likely illegal, and what could be done about it.
Register here (in Dutch) - there are a limited number of places.