Review of a Ministerial decision to publish a dumping duty notice under subsection 269tg(1) of the Customs act 1901 in relation to imports of tinplate from Taiwan

BACKGROUND

  1. As a member of the World Trade Organisation (WTO), Australia is bound by the World Trade Organisation Uruguay Round Anti-Dumping Agreement and Agreement on Subsidies and Countervailing Measures (the WTO Agreement).  Article 2.1 of the WTO Agreement provides that a product is considered dumped, ieintroduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.  (The export price is the price paid before any costs in respect of the goods after exportation are included.  Normal value is usually defined as the price at which a good would be sold in its home market.)
  2. Before any action may be taken against dumped goods the Australian industry concerned must demonstrate not only that there is dumping occurring, but that the industry has suffered material injury as a result.  This is done through an application to the Australian Customs Service (Customs) for an investigation into the facts of the case.  If Customs determines that dumping has occurred, it must then establish whether the Australian industry’s performance has deteriorated, whether any injury suffered would be considered material and whether the dumping has caused the material injury to the industry.  Any injury that has resulted from other, clearly identifiable sources must not be attributed to the dumping.  Even if it is found that dumping has not caused material injury, it must be determined whether future dumping threatens to cause material injury to the Australian industry.  This includes an assessment of whether any changes in circumstances would make that material injury both foreseeable and imminent unless anti-dumping measures were imposed.
  3. Under the provisions of the Customs Act 1901 (the Act) Customs has 155 days from the date of initiation of an investigation within which to make a recommendation to the Minister responsible for Customs (the Minister) concerning the imposition of interim anti‑dumping duty.  On the basis of Customs’ recommendations the Minister will then make a decision whether to impose definitive anti-dumping measures. 
  4. The Trade Measures Review Officer (the Review Officer) is appointed by the Minister for Justice and Customs to review certain decisions in relation to dumping matters.  The office of the TMRO has been set up as an independent administrative appeal mechanism in this respect – it has no investigative function.  It may review a prescribed range of decisions made by the Minister or by the Chief Executive Officer of Customs (CEO).  Reviews are conducted only on application from other interested parties.
  5. Subdivision B of Division 9 of the Act provides for reviews by the TMRO of certain decisions of the Minister, including decisions to take anti-dumping action under subsections 269TG(1) and 269TG(2) of the Act.  Subdivision B also describes the procedures to be followed in the conduct of a review.
  6. An applicant must establish to the satisfaction of the Review Officer that there are reasonable grounds to warrant the reinvestigation of the finding or findings specified in the application.  Section 269ZZG of the Act provides that the Review Officer must reject an application if satisfied that the applicant has failed to provide sufficient particulars in relation to the application, including particulars concerning the finding or findings to which the application relates, within the 30 day statutory period.  Unless an application is so unreasonable that it may be rejected in the first instance, the Review Officer will accept it at face value and undertake an investigation.  If an application is made by a party to the original decision, it will be assumed that the applicant has a right to request a review.
  7. Before conducting a review, the Review Officer must publish in a national newspaper a notice indicating that the Review Officer proposes to conduct that review.  Interested parties in relation to a reviewable decision by the Minister may make submissions to the Review Officer within 30 days after the publication of the public notice.
  8. The Review Officer must make a report to the Minister on the finding(s) specified in the application by recommending either that the Minister affirm the reviewable decision or that the Minister direct the CEO to reinvestigate the finding(s) which formed the basis of the reviewable decision.  The Review Officer must only have regard to information that Customs relied upon to make its decision and any relevant information provided in submission by interested parties.
  9. The Review Officer’s report must be made at least 30 days after the public notification of the review but not more than 60 days after that notification - or such longer period allowed by the Minister in writing because of special circumstances.
  10. If the Minister accepts a recommendation by the Review Officer to require the CEO to reinvestigate a finding or findings, s269ZZL prescribes that the Minister must, in writing, require the CEO to make further investigation of the finding(s) and report the result of that further investigation to the Minister within a specified period.  In addition, the Minister must, by public notice, indicate acceptance of the Review Officer’s recommendation, including particulars of the requirements made of the CEO.
  11. After receiving a report by the CEO in respect of a reinvestigation, the Minister must either affirm the reviewable decision or revoke that decision and substitute a new decision.  The Minister must give public notice of that decision.

TINPLATE

  1. On 10 March 2000 BHP Packaging Products (BHPP) lodged an application with Customs requesting that anti-dumping measures be imposed on tinplate exported to Australia from Taiwan and the United Kingdom.  BHPP claimed that exports from these countries were dumped and causing material injury to the Australian industry.  Customs initiated its investigation into the alleged dumping of tinplate from Taiwan and the UK on 30 March 2000.  On 31 July 2000 BHPP (the applicant and sole Australian producer of tinplate) withdrew its application in respect of the UK.
  2. The Australian market for tinplate is supplied by local production and by imports from a number of countries, including Taiwan and the United Kingdom.  The sole producer of tinplate in Australia is BHPP, which produces tinplate at its PortKembla mill in NSW.  Tinplate is used to produce a wide range of consumer and industrial containers, such as food cans, paint cans and aerosol cans.  Customs estimated that the value of the Australian market for tinplate was around $260million in 1999. 
  3. On 23 August 2000 Customs made a preliminary affirmative determination in respect of exports from Taiwan and imposed securities on these exports with effect from 7September 2000.
  4. In its final report to the Minister of 3 October 2000 Customs found that dumped exports of tinplate from Taiwan had caused material injury to the Australian industry in the first half of 2000.
  5. Customs accordingly recommended that the Minister take anti-dumping action under s.269TG(1) and s.269TG(2) against exports of tinplate from Taiwan.  Action under s.269TG(1) effectively converts securities collected (prior to any final decision by the Minister) to interim dumping duties and action under s.269TG(2) imposes interim dumping duties on future exports from Taiwan.
  6. The Minister accepted a price undertaking offered by Ton Yi Industrial Corporation (Ton Yi) of Taiwan (the sole Taiwanese exporter of tinplate to Australia) and deferred any decision to impose dumping duties under subsection 269TG(2) of the Act on future exports of tinplate from Taiwan.  The undertaking took effect from 10 January 2001 when a public notice was published.
  7. The Minister did however sign the 269TG(1) notice which converted securities collected between 7 September 2000 and 10 January 2001 to interim dumping duties.
  8. Subsection 269TG(1) of the Act states that the Minister may impose interim dumping duties on goods that have already been exported to Australia if those goods have been dumped and have caused material injury or would have caused material injury if the securities had not been imposed.

APPLICATION FOR REVIEW

  1. On 6 February 2001 Industry Trade Consultants (ITC Australia) on behalf of Ton Yi (the applicant) lodged an application with the Review Officer.  In accordance with section 269ZZA of the Act, the applicant requested a review of a decision by the Minister for Justice and Customs to publish a dumping duty notice under subsection 269TG(1) of the Act.
  2. Ton Yi is an interested party as defined by s269ZX of the Act by virtue of it being concerned with the exportation to Australia of the goods the subject of the reviewable decision of 10 January 2001 to publish a dumping duty under subsection 269TG(1) of the Act in respect of rolled coil or cut sheet products of non alloy steel of a thickness of less than 0.5mm and a width of 600mm or more, plated with tin and known as tinplate.  The tariff classification code of the imported goods is subheading 7210.12. 00, statistical code 19 and imports are duty free.
  3. The applicant submitted that Customs erred in its findings in relation to the following:
  • Like goods;
  • Normal values;
  • Export price and dumping margins;
  • Material injury;
  • Casual link;
  • Threat of future material injury;  and
  • Non-injurious price (NIP).

Like Goods

The applicant’s claims are: 

‘Ton Yi contends that in circumstances where identical goods are sold on the domestic market in the country of export that the domestic selling price of these goods should be compared to the export price of identical goods.

Only in circumstances where there are no domestic sales of identical goods may the price be compared to goods which, although not identical goods, exhibit characteristics closely resembling the exported goods.

Customs’ finding that identical goods could be grouped with other similar goods having characteristics closely resembling the exported goods is incorrect.  Customs should have determined a normal value for identical goods pursuant to subsection 269TAC(1) of the Act or, in the absence of suitable sales of identical goods, a normal value for these goods should have been determined pursuant to paragraph 269TAC(2)(c) or (d) of the Act.

Furthermore, it is contended that the goods under inquiry exhibit a number of different characteristics (thickness, width, tin coating etc) which renders them non-substitutable and not interchangeable for many applications required by canning customers.  For this reason, the normal value where there are no sales of identical goods in the country of export should have taken into account each thickness, width and coating difference should have been established by reference to section 269TAC(2)(c) of the Act.  For goods exported for which there are not identical or like goods sold on the domestic market, the normal value should have been established by reference to subsection 269TAC(2)(c) of the Act.  Adjustments to these normal value based on cost difference should have been made pursuant to subsection 269TAC(8) or (9) of the Act respectively.

Customs’ approach to this task was to apply a weighted average methodology covering all goods for the purpose of determining normal value and export price for each thickness and this has had the effect of distorting the margin of dumping both in terms of its absolute value (or magnitude) as well as to disguise the declining incidence of dumping in the later stages of the investigation period.  The broad brush approach adopted by Customs which flowed from its treatment of ‘like goods’ also distorted the assessment of material injury, causation and NIP.

The incidence of dumping declined substantially during the investigation period to the point where it is claimed there was no dumping in the later quarters under investigation.‘

Review Officer’s assessment in relation to like goods

  1. The Review Officer affirms Customs’ assessment that there were no factors affecting the domestic market for tinplate in Taiwan that would preclude the use of sales in that market for normal value purposes.  The Review Officer does not accept the claim that Customs erred in its treatment of the like goods issue and affirms Customs’ opinion that, when considering the issue of like goods that it addresses the issue on broad based grounds rather than focusing too narrowly. 
  2. The Review Officer affirms Customs decision in relation to its assessment of the issue of like goods and does not believe that Customs erred in its consideration of TonYi’s concerns in relation to the issue of tin coating being a significant cost component.  The Review Officer further affirms Customs decision to assess the normal values under subsection 269TAC(1) of the Act using quarterly weighted invoiced prices of domestic sales specifications that matched in gauge and tin coating with those that had been exported to Australia.
  3. The Review Officer affirms Customs’ decision to calculate the percentage difference between the gauge exported to Australia and the nearest gauge sold on the domestic market with the same tin coating using BHPP’s price list for specifications with no domestic sales of the same gauge
  4. The Review Officer does not accept the applicant’s claim that Customs normal values should have been established by reference to paragraph 269TAC(2) (c) of the Act.  Customs made adjustments for those specifications where there was no comparable domestic sale of the same tin coating or gauge.  Based on the evidence relied upon by Customs, the Review Officer affirms Customs’ decision to determine normal values for Ton Yi under subsection 269TAC(1) of the Act using selling prices for like goods with certain adjustments under subsection 269TAC(8) of the Act.
  5. The Review Officer does not accept that Customs erred in its determination of normal values as claimed by the applicant in its assertion that Customs approach using a weighted average distorted the margin of dumping.  The Review Officer affirms Customs’ decision to establish a weighted-average domestic selling price over the period of investigation for those specifications that were comparable in gauge and tin coating to those exported to Australia.

Normal values

The applicant’s claims are:

‘Customs determination of normal value was overstated by its refusal to give proper regard to the need for adjustments or due allowances under subsection 269TAC(8) of the Act reflecting the difference in the circumstances of sale and terms of trade between domestic sales and export sales.  It was unreasonable to ignore the obvious and significant volume difference between Taiwanese domestic sales involving many many small customers serviced on a just in time basis with export sales to Amcor, a single export customer where the logistics of sea transport require production to be containerised and immediately shipped in accordance with an agreed supply schedule.

Sales to Amcor far-exceeded sales to any domestic customer and the unreasonableness in Customs ignoring this is patently obvious.  This raises serious concerns regarding the following due allowances which were either rejected by Customs when advising the Minister or were not appropriately or properly taken  into account, for example:

  • The selling, general and administration costs incurred in sales where the domestic sales department salesmen’s costs were not adjusted to reflect the lower level of salary costs in administering export sales to a single major export customer such as AMCOR as against the cost of administering to the needs of a great many small volume domestic customers purchasing standard product different to the special requirements of AMCOR;
  • The cost of working capital or funds involved in holding domestic sales inventory was not recognised and did not reflect the fact that export sales were made to order and shipped direct from the mill to the port of export (in containers) where as domestic sales are held in warehouse because domestic sales involve a much smaller volume and a much greater number of transactions with regular truck delivery.  Customs failed to take into account these differences in warehousing and distribution costs.
  • The normal value approach adopted by Customs also failed to give proper regard to rebates/commissions paid on domestic sales by adjusting the price of specific sales but instead used a weighted average cost to be applied to domestic sales including those for which no rebate/commission was paid.  This distorted the margin of dumping for selected products.  A transaction by transaction approach should have been applied so the rebate/commission was deducted from the sales transaction to which it referred.
  • The amount of rebates/commissions paid was known at the time the transaction was made.  This affected the price and should have rendered the transaction non-arms length as defined by section 269TAA of the Act so that the normal value could be determined pursuant to paragraph 269TAC(2)(c) or (d) of the Act.
  • Differences in product specification, for example tin coating thickness, have been taken into account by Customs applying the price difference recorded in BHP’s published Price List which has then been applied to Ton Yi’s domestic selling prices.  This is an error of law not permitted by subsection 269TAC(1) or subsection 269TAC(8) and is conflict with numerous Federal Court decisions including (Kanthal Australia v Minister for Industry and Commerce and others).

Ton Yi is of the view that where identical goods are sold on the domestic market then the normal value should be determined by reference to domestic sales data.  Where identical goods are not sold then the normal value should be determined by reference to the cost to make and sell especially in circumstances where it is acknowledged that a due allowance must be made for differences in tin coating etc.  This data was available by reference to the cost to make and sell data for individual specifications of GUI and was supplied and verified for each thickness and coating configuration. 

The difference in the cost to make and sell between different product specifications provided a more accurate and reasonable basis on which to make adjustments to the Taiwanese domestic selling price for such differences rather than BHP’s published price list (or its actual net realisable selling prices).  The approach adopted by Customs in relying on BHP’s published price list to make adjustments to the Taiwanese domestic selling price would only be permitted under subsection 269TAC(6) of the Act and this is not the section on which the Minister proceeded in making the decision to publish a TG(1) notice.’

Review Officer’s assessment in relation to normal value

  1. The Review Officer affirms Customs’ assessment of normal values under subsection 269TAC (1) based on the evidence relied upon by Customs.  Customs established a weighted-average domestic selling price over the period of investigation for those specifications that were comparable in gauge and tin coating to those exported to Australia.  Customs also used these weighted-average selling prices for which there were no domestic sales with a comparable tin coating or gauge.  Customs used the BHPP price list to establish the proportionate relationship for the different coating or gauge.  The Review Officer affirms Customs’ decision to use weighted average domestic selling prices and also affirms its decision to use BHPP’s price list in the absence of sales of comparable tin coating or gauge.
  2. The Review Officer does not accept the claim that Customs should have made an adjustment for sales and general administration cost based on the claim that five sales staff were used to administer sales in the domestic market while only one staff was engaged in the administration of export sales.  Customs, based on their investigation, reported that there was no evidence that accounted for Ton Yi’s export sales team responsible for export sales nor was there any accountable evidence provided that demonstrated how the claimed domestic sales expenses affected the respective selling prices.  Customs considered that these types of selling expenses were part of the company’s general overhead expenses and no adjustment was considered necessary in this case.  The Review Officer affirms Customs decision not to make an adjustment for differences in selling expenses. 
  3. The Review Officer also affirms Customs' assessment that a difference in circumstances of sales is by itself insufficient to warrant acceptance of an adjustment.  The Review Officer also affirms Customs’ opinion that there must be a demonstrated impact on the selling prices and evidence in support.
  4. Customs report indicated that there was no evidence of accounts in support of the claimed adjustment for inventory carrying costs.  Customs further indicated that the costs were notionally calculated based on the interest revenue foregone between the completion of production and the sale of the goods.  Customs again was not provided with evidence to demonstrate that the claimed cost had affected the relevant selling prices.  Accordingly Customs concluded that no adjustment was necessary.  The Review Officer affirms Customs decision based on the absence of supporting evidence, not to accept a claim for this adjustment.
  5. The Review Officer affirms Customs’ decision to use the weighted average for a rebate adjustment.  Customs used data provided by Ton Yi on all its sales of prime coil and sheet over the period of investigation.  Customs excluded those sales that included a discount as it applied to ‘returned goods’.  Customs verified this during its normal value visit to Ton Yi. 
  6. The Review Officer also affirms Customs’ determination to make an adjustment for rebates/commission of NT$1.62 per kilogram for prime coil and NT$0.90 for prime sheet tinplate.
  7. The claim by the applicant that the sales on Taiwanese domestic market that included a rebate should have been treated as non arms-length, was not accepted by Customs.  Customs considered that these transactions were arms-length as there was no evidence to indicate that they should be treated otherwise.  The Review Officer affirms Customs decision to treat these transactions as arm-length transactions.
  8. The Review Officer affirms Customs’ determination of normal values under subsection 269TAC(1) of the Act and also affirms Customs’ decision to make certain adjustments under subsection 269TAC(8) to ensure comparability with export prices.  The Review Officer also affirms Customs’ decision not to make an adjustment for differences in selling costs and inventory costs.

Dumping margins

The applicant’s claims are:

‘Customs’ decision to determine a weighted average export price based on exports over five quarters (being the defined period of investigation) when it was clearly evident that the export price had been increased and the exchange rate had substantially increased the export price when converted from $US to Australian $ has lead to a substantial understatement of the export price thus exaggerating the margin of dumping.  This coupled with the failure to correctly determine and apply appropriate adjustments to the normal value more appropriately determined under paragraph 269TAC (2)(c) of the Act), has lead to an overstatement of the normal value and consequently, an exaggerated level of dumping margin when compared to an understated export price.

Customs initially determined dumping margins by quarters for each of the five quarters under investigation but recognised the margin of dumping had substantially declined during this period and by the fifth quarter, it had but disappeared and was continuing to decline beyond the investigation period virtue of price of prices increases and a deteriorating exchange rate.  For this reason, a weighted average approach incorporating the five quarters was adopted otherwise the absence of dumping in the latter periods would have made it difficult for the inquiry to continue.’

Review Officer’s assessment in relation to dumping margins

  1. Section 269TACB of the Act provides that an assessment of dumping margins may be established on the basis of a comparison of either:
  • weighted averages of comparable normal values and export prices; or
  • normal values and export prices on a transaction-by-transaction basis; or
  • a weighted average of normal values and individual export price transactions (if the export price differs significantly between purchasers, regions, or time periods).
  1. Section 269TACB thus prescribes alternative methodologies for determining whether dumping has occurred and for determining dumping margins.  The choice of assessment methodology is discretionary. 
  2. Customs is not obliged to choose one methodology over another to determine dumping margins.  Customs determined dumping margins for Ton Yi exports to Australia through a comparison of normal values and export prices on a weighted average basis over the investigation period.
  3. The Review Officer affirms Customs’ assessment under s.269TACB of the Act using a weighted-average dumping margin over the period.  The Review Officer also affirms Customs’ determination of a weighted-average dumping margin of 19percent for both coil and sheet.

Material injury

The applicant’s claims are: 

‘The ‘volume effect’ material injury and consequent impact on BHP’s profitability could not be identified by reference to dumping from Taiwan as BHP’s production shortfall necessitated imports by AMCOR.  This together with BHP’s decision to desist with its dumping application against European suppliers and its failure to encompass other imports clearly showed its intention to take discriminatory action against Ton Yi.  Failure to have regard to non-injurious third country imports was also clearly reflected in the decision to determine NIP’s based on BHP’s costs which were unfairly affected by the start-up costs of its new mill and the high level of abnormal expenses associated with the disruption naturally caused by such events.  Not only is the magnitude of BHP’s material injury seriously questioned but so is the causal connection to the alleged dumping from Taiwan in the absence of any proper consideration being given to third country imports and export prices.’

Review Officer’s assessment in relation to material injury

  1. The applicant’s claims as detailed above relate more to the questions of causal link and NIP’s (these issues are addressed later in this report) than to the actual question of whether or not BHPP suffered material injury over the period investigated by Customs.  Nonetheless it remains the responsibility of the Review Officer to determine whether, in the first instance, material injury has been suffered by the Australian industry over the period reviewed.

  2.  Customs was satisfied that, on balance, the Australian industry had suffered material injury from some cause or causes in 1998 and 1999 and that the material injury increased in the first half of 2000.

  3.  The Review Officer has examined all the available evidence in this regard (including submissions received in the course of this review) and has investigated BHPP’s claims of injury emanating from:

    • price undercutting;

    • price depression;

    • price suppression;

    • loss of market share and sales volume; and

    • loss of profit and profitability.

  4.  The Review Officer is of the opinion that BHPP showed sporadic signs of injury in 1998 and 1999 but that, in the first six months of 2000, the company’s economic condition deteriorated significantly. 

  5. This was evidenced by:

    • price undercutting by all imports from Taiwan and France and almost 40 per cent of imports from the UK;

    • price depression from the December quarter of 1999 onwards;

    • price suppression to the extent that BHPP incurred a loss in the December quarter of 1999 and a substantially larger loss in the June quarter of 2000;

    • a decline in sales by BHPP of around one third and a loss of market share of almost 25 percentage points in the first half of 2000; and

    • significant loss of profit and profitability in the first six months of 2000.

Accordingly, the Review Officer affirms Customs’ finding that the Australian industry suffered material injury over the period examined and that that injury increased significantly in the first half of 2000.

Causal link

The applicant’s claims are: 

‘The material injury claimed by the applicant could not be attributed to dumping because of its inability to supply during and immediately preceding the nominated investigation period.  We understand BHP’s offer to import product for AMCOR was not accepted by AMCOR thus prompting trials with TON YI.  This situation indicates the need for special care in such circumstances.

TON YI does not believe that a reasonable person could be satisfied that the applicant for dumping duties has suffered or was faced with the threat of material injury.  Had the correct normal value and export price been established for each quarter then it would have been apparent that there was no dumping, particularly in the latter quarters, and that in the period immediately following the nominated investigation period, the export price had increased so as to remove any remaining threat of dumping.’

Review Officer’s assessment in relation to casual link

  1. Customs found that imports of tinplate from Taiwan had been dumped over the investigation period and that the weighted average dumping margin was about 19 per cent over the period.  Customs also found that the Australian industry suffered material injury during the period examined and that the material injury increased in the first half of 2000.  Customs also investigated claims of BHPP’s inability to supply tinplate during the investigation period due to plant refurbishment and a decision by BHP (subsequently reversed) to sell its tinplate mill.  Customs concluded that these supply difficulties had been virtually eliminated by the start of 2000.  Customs also noted that imports from Taiwan had commenced in 1997.

  2. Customs was unable to conclusively discern whether the cause of material injury to BHPP in the last half of 1999 was due to the supply shortages associated with BHPP’s tin mill refurbishment or due to the increased volume of imports to meet the supply shortfall (as noted above, Customs considered that BHPP’s supply shortfall was largely eliminated by the end of 1999).  

  3. However Customs found that the substantial increase in the volume of dumped imports of tinplate from Taiwan in the first half of 2000 had directly and adversely affected the market share of BHPP in a significant way and led to a substantial decline in the company’s profit in the same period.  Customs accordingly concluded that dumped exports of tinplate from Taiwan had caused material injury to the Australian industry in the first half of 2000.

  4. The Review Officer has examined all the available evidence and concurs with Customs’ assessment that BHPP’s supply difficulties had all but disappeared by the beginning of 2000.  As discussed above, the Review Officer has also found that imports of tinplate from Taiwan were dumped over the investigation period and that the Australian industry suffered material injury which increased substantially in the first half of 2000.

  5. In the absence of any other significant contributing factors, the Review Officer affirms Customs’ decision that dumped exports of tinplate from Taiwan caused material injury to the Australian industry in the first half of 2000.

Threat of future material injury

The applicant’s claims are: 

‘The threat of further material injury has clearly dissipated by the time Customs had completed its inquiry and the Minister was aware that AMCOR had clearly committed its future purchase requirements to BHP under a long term supply arrangement thus minimising future purchases from Ton Yi.

Not only had the threat of lost volume been removed but also the level of export prices had substantially increased well beyond the level identified during the investigation period or at the conclusion of the nominated investigation period.  Customs failed to acknowledge this in its deliberations and chose to ignore it.

The Minister’s decision to favourably respond to Ton Yi’s price undertaking failed to indicate that the undertaking would only apply prospectively.  In failing to advise Ton Yi that despite the acceptance of a price undertaking, retrospective measures were to be applied and that an undertaking would only serve to suspend consideration of a subsection 269TG(2) notice, was denial of natural justice and is inconsistent with the provisions of the WTO Anti-Dumping Agreement governing price undertakings.  Acceptance of the undertaking should have precluded consideration being given to the publication of either TG(1) or TG(2) notices.

Ton Yi first advised Customs of its preparedness to offer an undertaking prior to Customs commencing its normal value verification inquiry in Taiwan.  At no time during the investigation period was Ton Yi advised the Minister would or would be advised by Customs to publish a retrospective dumping notice and only accept the price undertaking in respect of future shipments.  This action is considered to be misleading and is a denial of natural justice in that Ton Yi was not given the opportunity to comment or consider its position in these circumstances.  The initial dumping report prepared by the overseas investigation team made a number of findings favourable to Ton Yi but the Director responsible for this inquiry has at all times found against Ton Yi even in matters involving questions of fact. 

 
This is reflected in each crucial decision underlying the penultimate decision and the decision-making process is seriously flawed by this lack of objectivity and impartiality.’

Review Officer’s assessment in relation to threat of future material injury

  1. Customs found no evidence that exports of tinplate from Taiwan were likely to cease in the foreseeable future and was satisfied that future exports from Taiwan may be at dumped prices.  Customs concluded that there was little – if any – prospect of a decline in the volume of tinplate exports at dumped prices from Taiwan in the immediate and foreseeable future.  As mentioned earlier, Customs found that dumped exports of tinplate from Taiwan had caused material injury to the Australian industry in the first half of 2000.
  2. Although Ton Yi did offer to enter into a price undertaking in respect of its future exports to Australia during the course of Customs’ inquiry, it should be noted that Customs recommended to the Minister that the offer of a price undertaking not be accepted and that the Minister impose dumping duties on future exports from Taiwan.  It was not until AMCOR and BHPP subsequently negotiated a sole supplier agreement (in respect of tinplate specifications that BHPP was able to supply) that BHPP withdrew its objection to a price undertaking and the Minister agreed to accept the undertaking.
  3. The Review Officer has considered all the available evidence in respect of this issue and agrees with Customs that, at the time Customs reported to the Minister on this matter, there was no evidence to suggest that exports of tinplate from Taiwan were likely to cease in the foreseeable future nor was there any evidence to indicate that future exports from Taiwan would not continue to be at dumped prices.  The Review Officer therefore considers that there were sufficient grounds to conclude that dumped imports of tinplate from Taiwan threatened to continue to cause material injury to the Australian industry.

Non-injurious price

The applicant’s claims are: 

‘Customs failed to have proper regard to the non-injurious export prices from third countries when assessing NIP in accordance with the requirements of section 269TACA and similarly ignored the fact that the export price from Taiwan had substantially increased thus reducing the amount of interim dumping duty required.  If Customs view of ‘like good’ is correct, then exports from third countries are directly substitutable and inter-changeable and their price should have been taken into account as the basis of determining NIP and not a notional constructed selling price which is well in excess of the price agreed to between AMCOR and BHP under their long term supply arrangement.

It should also be borne in mind that the Australia industry is not capable of supplying certain thickness of material and despite now meeting the majority of AMCOR’s requirements, the Australian industry has not been able to meet all of AMCOR’s requirements.

We appreciate some of these issues overlap and are directed to the questions of causation and injury as well as NIP and ‘like goods’.  What is clear however, is that it is unrealistic to establish a NIP on the basis of BHP’s costs when it is incapable of producing product having the particular specifications.’

Review Officer’s assessment in relation to Non-injurious price

  1. On 23 August 2000, Customs made a preliminary affirmative determination that sufficient grounds had been established for publication of a dumping duty notice on exports of certain tinplate from Taiwan.  As a result securities were imposed on certain tinplate exports from Taiwan under s.42 of the Act with effect from 7September 2000.

  2. The Minister’s subsequent decision to publish a notice under s.269TG(1) of the Act converted these securities to interim dumping duties over the period 7September2000 to 10 January 2001.  At the same time the Minister accepted a price undertaking in respect of the Taiwanese exporter’s future exports to Australia.

  3. At the time Customs imposed securities on exports of tinplate from Taiwan, the level of the securities were based on ascertained normal values and ascertained export prices as determined at the time – no calculation of a NIP was undertaken at the time in respect of the level of securities to be imposed.  It should be borne in mind that this review is concerned only with the Minister’s decision to publish a notice under s.269TG(1) of the Act which had the effect of converting securities collected during that period to interim dumping duties.  In this respect, the NIP is not relevant as it had no bearing on the Minister’s reviewable decision.

  4. Had the Minister not decided to accept the price undertaking offered by the Taiwanese exporter and instead decided to impose dumping measures under s.269TG(2) of the Act, the NIP would have been a consideration.  This was not the case and, in any event, the Review Officer notes that Customs, in recommending that the Minister not accept a price undertaking but impose measures, found that ascertained normal values for tinplate from Taiwan were lower than the recommended NIP’s so again the NIP’s would not have been a consideration.

  5. Accordingly, the Review Officer considers that there is insufficient justification for the claim in respect of NIP’s.

TG(1) Notice

  1. The applicant’s claims are: 

‘The amount of security required is intended to be that which is sufficient to protect the customs revenue however the amount of interim dumping duty, apart from it being tainted by the issues and errors identified above, was knowingly set at a level in excess of that which was necessary for the protection of the customs revenue.  The TG(1) notice reflects an export price which Customs knew had been substantially increased by virtue of the exporter continuing to increase its US$ price and by virtue of the currency devaluation of the A$ relative to the US$.  These factors were evident in the later part of Customs’ nominated investigation period and Customs was aware that such price trends had taken effect and were continuing to ignore them.  This was unreasonable in the Wednesbury sense.  The amount of interim dumping duty is therefore in excess of that necessary for the protection of the Customs’ revenue and relies on flawed decisions pertaining to the determination of normal value and export price and fails to have proper regard to an appropriately determined NIP.’

 

Review Officer’s assessment in relation to TG(1) Notice

  1. Section 269TD of the Act proscribes the conditions under which Customs may make a preliminary affirmative determination in respect of goods the subject of the application and impose securities under section 42 of the Act if Customs is satisfied that it is necessary to do so to prevent material injury to an Australian industry occurring while the investigation continues.  As already mentioned, Customs made a preliminary affirmative determination in respect of tinplate exported from Taiwan to Australia and imposed securities with effect from 7 September 2000.  The level of securities imposed were based on ascertained normal values and ascertained export prices as determined at the time.  As already discussed no calculation of a NIP was undertaken at the time in respect of the level of securities to be imposed.  The notice subsequently published by the Minister under s.269TG(1) of the Act converted these securities to interim dumping duties.
  2. The Review Officer is of the opinion that Customs acted lawfully in this matter in imposing securities on the basis of the available evidence at the time and based the level of securities on the best information available at the time.
  3. The Review Officer notes yet again that the reviewable decision in question in this particular case is the Minister’s decision to publish a notice under s.269TG(1) of the Act to convert securities collected at the time to interim dumping duties.  The reviewable decision does not pertain to the level of securities imposed – this matter does not fall within the purview of the Review Officer in this particular review and there are other avenues for the applicant to pursue this matter within the provisions of the Act.

Review Officer’s Recommendations and Conclusions

  1. In undertaking this review, the Review Officer has taken account of all the evidence available to Customs during the course of its inquiry as well as arguments contained in submissions presented to the Review Officer during the review.
  2. The reviewable decision by the Minister in this particular case is the decision by the Minister to publish a notice under s.269TG(1) of the Act which converted securities collected by Customs on imports of tinplate from Taiwan in the period 7 September 2000 to 10 January 2001 to interim dumping duties.
  3. The foregoing analysis shows that, in the opinion of the Review Officer, Customs was lawfully entitled to impose securities on imports of tinplate from Taiwan at the time that it did so and based the level of those securities on the best information available at the time (although, as already mentioned, the level of securities collected is not germane to the reviewable decision as such).
  4. Despite the fact that the Taiwanese exporter of tinplate offered a price undertaking in respect of its future exports of tinplate to Australia – and this undertaking was subsequently accepted by the Minister – the Minister decided to publish a notice under s.269TG(1) of the Act to convert securities previously collected to interim dumping duties.  This, in the opinion of the Review Officer, the Minister was lawfully entitled to do in the apparent absence of any compelling reason(s) to choose not to do so.
  1. Under s.269TG(1) of the Act, in essence, where the Minister is satisfied that goods that have already been exported to Australia have been dumped and because of that material injury to an Australian industry producing like goods has been or is being caused or threatened, or, in a case where security has been taken in respect of any interim duty that may become payable on the goods, material injury to an Australian industry producing like goods would or might have been caused if the security had not been taken, the Minister may by public notice give effect to action that imposes and collects interim duties on those goods that have already been exported to Australia.
  2. In the opinion of the Review Officer, the pre-conditions mentioned above in respect of s.269TG(1) of the Act were met and both Customs and the Minister were lawfully entitled to respectively impose securities on imports of tinplate from Taiwan and subsequently convert those securities to interim dumping duties.
  3. Accordingly, the Review Officer recommends that the Minister’s original decision in this matter be affirmed.
Geoff Hine
Trade Measures Review Office