Two substantial developments in the Australian anti-dumping framework were announced yesterday. The first members of the Anti-Dumping Review Panel have been announced, and three reforms to the anti-dumping legislative framework were introduced in the Commonwealth Parliament.

Developments

The Trade Measures Review Officer (Officer) will be replaced by the Anti-Dumping Review Panel (Panel), commencing on 10 June 2013. The members of the Panel were announced yesterday: The Hon Michael Moore, a former Justice of the Federal Court (Senior Member); Ms Joan Fitzhenry, a specialist anti-dumping lawyer; and Mr Graham McDonald, a former Presidential Member of the Administrative Appeals Tribunal.

The new reforms will make three key changes to Australian anti-dumping legislation. The first alters the lesser duty rule, which limits the amount of duty that can be applied to remedy dumping or subsidisation to the amount necessary to remove injury to the domestic manufacturer of a product. The reform removes the rule as a mandatory consideration by the Minister for Home Affairs where the Australian industry includes at least two small-medium enterprises, and/or, where the normal value of the goods cannot be determined by reference to the exporting country’s market.

The second alters the retrospective duty provisions, allowing the Minister to impose dumping duties for goods already imported to Australia. This reform aligns the legislation more closely with the World Trade Organisation (WTO) Agreements to which Australia is party, and requires the Minister to consult with the relevant importer prior to imposing a retrospective duty.

The third addresses the avoidance by companies of dumping or countervailing duties imposed, including by reducing their profits on sales, such that the duty imposed has no effect on the sales price in substance.

Broader context

Dumping is a practice where imported goods are sold in Australia at prices below their normal value. Currently Part XVB of the Customs Act 1901 (Cth) addresses anti-dumping, and grants the power to investigate dumping to the Minister of Home Affairs, who can impose duties where dumping is found to occur.

These developments come in the wake of substantial reforms to the Australian anti-dumping system, most notably the creation of an Anti-Dumping Commission which will commence operations on 1 July 2013, and be based in Melbourne. The Commission will also receive $24 million in additional funding, to boost its skill set and to speed up its decision making process.

How much difference will these announcements make?

Although working within the restraints of the legal framework, yesterday’s reforms will nonetheless enhance Australia’s ability to combat dumping. The removal of the mandatory consideration of the lesser duty rule in the above circumstances is particularly noteworthy. The lesser duty rule, if implemented, imposes duties upon exporters at a level adequate to remove injury from the domestic manufacturer, but not necessarily as high as the margin of dumping itself. Although the Minister retains discretion to apply the lesser duty rule, removing it as a mandatory consideration, is likely to result in an increase in duties being imposed. This will result in Australia becoming a less attractive dumping destination, being a positive policy decision for Australian manufacturers.

The calibre of members selected for the Panel will increase business confidence in the anti-dumping system, as well as likely leading to a more efficient processing of anti-dumping appeals. This is due to the mixture of judicial experience and anti-dumping expertise amongst the members, as well as the single Officer being replaced with three Panel members. Similarly to the Officer, the Panel is granted the power to review relevant decisions in relation to countervailing or dumping measures made by the Minister or CEO of the Australian Customs and Border Protection Service (soon to be Commissioner of the Anti-Dumping Commission). The creation of the Panel and yesterday’s appointments are an important step forward in bolstering Australia’s anti-dumping reforms.