The European Court of Justice (ECJ) has ruled that furniture retailer IKEA has a right to repayment from UK customs authorities for invalid antidumping duties levied on imports of bed linen from India and Pakistan. The ECJ stated that the duties were invalid as “zeroing” methodology was used to calculate the dumping margins. “Zeroing” does not take into account “negative dumping margins,” i.e. when a product’s export price exceeds the domestic price, and thereby leads to inflated duties.
In 2001, the Appellate Body (AB) of the World Trade Organization ruled that the EC’s “zeroing” practice violated the norms of the WTO Anti-dumping Agreement. As a result of the AB’s decision, IKEA brought an action before the UK courts to obtain repayment of £300,000 for antidumping duties paid on imports of bed linen calculated according to the zeroing method. Responding to the request by the UK High Court for a preliminary ruling, the ECJ concluded that any importer who has brought an action before a national court against the duties levied on imports of bed linen is entitled to repayment. The ECJ’s decision has left open the possibility of similar claims for refunds where import duties were calculated using the “zeroing” method.