Among many significant changes being introduced by the Directorate General of Anti-dumping & Allied Duties (DGAD) off late, there are some new requirements applicable to user industry in India going forward in investigations initiated from 1st of March 2018.
By Trade Notice No. 04/2018, dated 28th of February 2018, the DGAD has introduced a questionnaire format for user industry in India. This format is applicable if a user industry is not related to a producer/exporter of the product under consideration in the country under investigation. This format is also applicable to an unrelated importer that is using the product under consideration to manufacture value-added products in India.
The format has several questions in five parts and requires information on the following parameters among others:
1. General information such as name of the company, address, legal status, shareholding pattern, related companies, list of products sold, manufactured and the relative value of the product under consideration in the finished products.
2. Financial information such as profit-loss statements, balance sheets and other financial information.
3. Cost information such as detailed production process for products manufactured that incorporate the product under consideration, purchases and sales of the product under consideration, quantity and value of sales that incorporate the product under consideration, discounts, raw material cost and information on any factors other than imports that may have caused injury to the Indian producers.
4. Information on product comparison and market that includes the type of products manufactured by Indian producers and how those are technically different from the product under consideration, names of major labs that could test such technical differences, products that could substitute the product under consideration and the possibility for users to switch to alternate sources of supply, whether or not anti-dumping duty should be imposed, and effects on interested parties if the duty comes into force.
5. Information on imports and resale of product under consideration which is to be provided in MS Excel formats appended with the questionnaire format.
The DGAD will be using such financial and statistical information of a user industry to understand and better appreciate the impact of levy of anti-dumping duty on the user industry. This effectively will take care of the public interest related concerns that interested parties so often express in anti-dumping investigations. In anti-dumping investigations prior to this development, a user industry’s participation was limited only to the extent of making legal submissions and representations in public hearings. Many times, user industry would come to know about an investigation when such investigation would be in the last stages. Participation at such last stages were hardly effective. Many importers also faced similar situations.
Pursuant to this development, it would be the responsibility of a user industry to participate in an investigation at the early stages, i.e. registration within 15 days and filing of response to the questionnaire within 40 days of the initiation of an investigation. Going forward, this is the only manner a user industry can secure its right to be treated as an interested party in an anti-dumping investigation.
This means not only a user industry is required to file legal submissions but also a proper response to the questionnaire. If a user industry does not file a response to the questionnaire, any legal representation before the DGAD and at the appellate stages before the Hon’ble Customs, Excise and Service Tax Appellate Tribunal (CESTAT) may get disregarded. This is because in 2015, CESTAT in Merino Panel Products Ltd. v. Designated Authority, 2016 (334) E.L.T. 552 (Tri. - Del.) has held that if a party does not file a questionnaire response, it cannot be treated as an interested party. Though this observation was with respect to an importer, it may squarely apply in the case of a user industry as well and especially a user industry that imports the product under consideration.
It is thus imperative that a user industry secures its right to be treated as an interested party by filing a response to the questionnaire.
User industry may feel that requirements under the new questionnaire format are onerous, and this may deter them from complying with the same. But as said before, without filing a response to the questionnaire, any legal representation may not be considered by the DGAD.
Some concerns may also arise because the questionnaire format requires sensitive information related to cost structure, extent of value-addition that product under consideration imparts to the finished product, purchase and sale prices and profitability related information. But a user industry has a right to claim confidentiality on any commercially sensitive information that if disclosed to any other party may give commercial advantage to a third party or be detrimental to a user industry.
The Indian anti-dumping Rules as well as the new questionnaire format allows a user industry to file the questionnaire response in two versions – confidential and non-confidential. All commercially sensitive information can be removed from the non-confidential version of the questionnaire response giving due reasons on why such information should be treated confidential.
Also, the non-confidential version of the questionnaire response should have a non-confidential summary of the confidential information. This would allow an opposing party to understand the information/data filed by a user industry and make effective representations to address any concerns expressed by a user industry.
This is a good reform brought out by the DGAD and user industry should use this avenue to make effective representations in all anti-dumping investigations. Effective participation by user industry will give the DGAD and other stakeholders involved a holistic view on the requirement of protection to the Indian industry.