The Anti-Dumping Commission (Commission) has recently completed an investigation into the dumping of utility scale wind turbine towers resulting in the imposition of an additional ‘dumping duty’ on certain wind towers imported from China and Korea to Australia since 6 December 2013.

The Commission is also currently investigating the alleged dumping of certain crystalline silicon (solar) photovoltaic modules or panels. The results of this investigation are expected in October 2014.

What is ‘dumping’?

Dumping is a form of predatory pricing. It occurs when the amount of the export price of goods exported to Australia is less than the amount of the ‘normal’ value of those goods in the country of export and because of that:

  • material injury to an Australian industry producing like goods has been caused,
  • is threatened to be caused, or
  • the establishment of an Australian industry producing like goods has been or may be materially hindered.1

Where the Australian Minister for Industry (the Minister) is satisfied that dumping has occurred, the Minister may impose a duty on the dumped goods.2 Such a duty may apply retrospectively to:

  • goods imported by an importer who the Minister considers knew, or ought to have known, that the amount of the export price of the goods was less than the normal value of the goods and by reason of that, material injury would be caused to an Australian industry, or
  • goods of a kind the exportation of which to Australia on a number of occasions has caused, or, would have caused, material injury to an Australian industry by reason of the amount of the export price of the goods exported being less than the normal value of the goods exported.3

The Commission investigates alleged cases of dumping and subsidisation of goods imported into Australia and may recommend, to the Minister, the imposition of a duty or duties to address material injury to an Australian industry that manufactures similar or the same goods. Such duties are applied to the goods at the time of importation.

Recent investigations by the Commission of dumping in the renewable energy sector

Investigation into the dumping of wind towers

The Commission launched an investigation into the dumping of wind towers exported to Australia from the People’s Republic of China by Shanghai Taisheng Wind Power Equipment Co. Ltd, and the Republic of Korea by Win&P Ltd between 1 January 2012 and 30 June 2013 (the Goods4), in response to an application made by A.C.N. 009 483 694 Pty Ltd and Keppel Prince Engineering Pty Ltd.5

The application alleged that the Goods were exported to Australia at prices less than their normal value and that the dumping has caused material injury to the Australian industry because of:

  • loss of sales volume,
  • loss of market share,
  • price depression,
  • price suppression,
  • reduced profits, and
  • reduced profitability.

Findings

In Anti-Dumping Commission Report Number 221 dated 21 March 2014 (Report),6 the Commission found that:

  • the Goods were dumped with margins ranging from 15% to 17.2%,
  • the dumped Goods caused material injury to the Australian industry producing like goods,7 and
  • continued dumping may cause further material injury to the Australian industry.8

Declarations

The Minister, through the Parliamentary Secretary to the Minister, accepted all of the Commission’s findings and recommendations contained in the Report.

The Minister declared that a dumping duty, applied in accordance with the ad valorem duty method, under section 8 of the Customs Tariff (Anti-Dumping) Act 1975 (Cth), applies to:

  • the Goods and like goods that were exported to Australia after 6 December 2013 (being the date of the preliminary affirmative determination of the Commission) but before 16 April 2014, pursuant to section 269TG(1) of the Customs Act 1901 (Cth) (Customs Act), and
  • like goods that are exported to Australia after 16 April 2014, pursuant to section 269TG(2) of the Customs Act.9

The Minister’s declaration applies to all exporters of the Goods and like goods from China and Korea to Australia, as set out in the tables below. The dumping duties will apply for a period of 5 years from the date of the Minister’s declaration (ie until 16 April 2019), unless revoked earlier by the Minister.10

The dumping duties applied to Chinese manufacturers at the time of importation is as follows:

Click here to view table.

The dumping duties applied to Korean manufacturers at the time of importation is as follows:

Click here to view table.

Shanghai Taisheng Wind Power Equipment Co. Ltd and Win&P Ltd have smaller dumping duties compared to other manufacturers generally. This is because the Commission is able to make a more specific assessment of the appropriate dumping duty to be applied to each company as each has provided specific information to the Commission about its operations and business. The Commission takes into account certain 'favourable adjustments'11 when making this assessment which reduces the dumping duty. The Commission does not have this information for all other manufacturers and therefore cannot apply such ‘favourable adjustments’ generally, resulting in a slightly higher dumping duty for all other manufacturers.

The Report does not disclose what favourable adjustments were applied in this case for confidentiality reasons. However, an example of a favourable adjustment may be the specific terms of which the manufacturer exports the goods.

Investigation into the dumping of certain crystalline silicon photovoltaic modules or panels

On 14 May 2014, the Commission initiated an investigation into the dumping of certain crystalline silicon photovoltaic modules or panels exported to Australia from China between 1 July 2012 and 31 December 2013 (PV Panels), following an application from an Australian manufacturer, Tindo Manufacturing Pty Ltd.12

The application alleged that the PV Panels were exported to Australia at prices less than their normal value and that the dumping has caused material injury to the Australian industry because of:

  • loss of sales volume,
  • price depression,
  • price suppression,
  • loss of profit, and
  • reduced profitability.

Interested parties concerned with this investigation may lodge a submission with the Commission by 23 June 2014. Further information about lodging a submission is available at the Commission’s website at http://www.adcommission.gov.au/.

The Commission expects to release its report on or before 16 October 2014 (unless the Parliamentary Secretary to the Minister allows for an extension).

Implications for the renewable energy sector in Australia

Wind towers

The investigation into the dumping of wind towers may have financial implications for certain wind farm projects in Australia. If a wind farm project has acquired a wind tower from a Chinese or Korean manufacturer since 6 December 2013, or expects to do so before April 2019, the cost of those wind towers may be increased by the additional duty imposed by the Minister.

Purchasers and project proponents should review their purchase agreements and other relevant contractual arrangements to determine who may be liable for payment of the dumping duty and whether such costs are allocated in a particular way under those contracts.

PV Panels

The outcome of the investigation into the dumping of certain crystalline silicon photovoltaic modules or panels is not expected to be known until October 2014.

As mentioned above, interested or affected parties may make a submission to the Commission until 23 June 2014. Parties who have ordered, purchased or procured any relevant PV Panels may wish to review their existing contracts or allocate the potential risk of the imposition of an additional duty in an appropriate manner in contracts currently under negotiation.