Countries such as Europe, USA have frequently done circumvention cases and have extended ADD/CVD onto imports being reported through third countries or imports of the product under consideration in a stage prior to the stage where the duties were recommended, or the stage subsequent to the stage of the product attracting anti‐dumping duty. There appears lot of challenges in conducting anti‐circumvention enquires such as‐
a. What is “alteration” ‐ The rules provide that where an article subject to duty has been imported from country attracting ADD/CVD after being subjected to any process involving alteration of the description, name or composition of an article, such alteration shall be considered to circumvent the duty in force. The issue is what is the meaning of alteration of the description, name or composition of an article? Whether alteration and modification mean the same? Or, minor alteration towards upstream product or downstream product both can be considered as circumvention of product?
b. Where the circumvention is in the form of upstream products, the goods are exported in the form prior to the form in which it was being earlier exported.
c. Where the circumvention is in the form of downstream products, the goods are exported in the form next to the form in which it was being earlier exported.
d. If the product is re‐labeled and country of origin is changed, how to establish that the duty is being circumvented? Since there would typically be a country of origin certificate from the new country, the data would show that the goods produced in such country are being imported, whereas the fact may be that the goods produced in the country of origin are being re‐routed after such minor processing into new country which would justify issuance of new certificate of origin.
e. Normal value calculation can also become an issue in such an investigation. The exports of the product at intermediary stage as well as the exports of the processed product both may constitute circumvention and are governed by value addition.
For determining whether the action constitute circumvention of anti‐dumping or countervailing duty or not, the investigating Authorities have to take into account the above discussed issues.
Ms Richa Shukla
LAW ASSOCIATE, TPM Consultants