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Imports Can Retroactively Qualify for Reduced Anti-dumping Duty Rate, According to Advocate General’s Opinion

Hong Kong traders may like to take note of a recent opinion delivered by the EU Advocate General, in which he considers that importers should be allowed to retrospectively demonstrate to national customs authorities that they qualify for a reduced anti-dumping duty.

The Advocate General delivered his opinion on 15 June 2017, in a case pending before the EU’s highest court concerning imports of ceramic tableware from mainland China (case C-156/16).

It will be recalled that anti-dumping duties ranging from 13.1% to 36.1% were imposed on imports of ceramic tableware from mainland China by Regulation 412/2013, published in the EU’s Official Journal on 15 May 2013. Cooperating companies selected in the sample received duty rates ranging from 13.1% to 23.4%. Other cooperating companies, listed in Annex I of the Regulation, received an individual duty rate of 17.9%. Imports from all other (non-cooperating) companies are subject to the residual duty rate of 36.1%.  

Due to the high difference in the duty rates and in order to minimize the risk of circumvention, it was considered that special measures were needed in this case to ensure the proper application of the anti-dumping duties. These special measures include the presentation to the customs authorities of a valid commercial invoice, in conformity with certain requirements set out in the Regulation imposing measures and including a declaration by the exporter.

Tigers GmbH, a German logistics company, imported goods from a mainland Chinese producer benefiting from an individual duty rate of 17.9%. Nevertheless, at the time of import, the German customs authorities did not accept the invoice from the company which showed that it would be eligible for the reduced duty rate, as the invoice did not meet the necessary requirements. As a result, Tigers was asked to pay the higher ‘residual duty rate’.

Tigers later presented the customs authorities with a new invoice and declaration, and claimed a refund of the duties paid in excess. However, the Customs Office refused the application for a refund on the ground that a valid commercial invoice drawn up or presented retrospectively was unacceptable.

This decision from the German Customs Office was appealed by Tigers before the finance court in Munich, which sent a request for a preliminary ruling to the EU Court of Justice in Luxembourg to clarify the matter. In essence, the question presented to the EU’s highest court is whether, where a regulation imposing definitive anti-dumping duties makes the application of individual duty rates conditional upon presentation of an invoice meeting certain formal requirements, an importer may produce such an invoice after having presented the customs declaration. Or, whether, in order to qualify for an individual anti-dumping duty rate, it is always necessary for such an invoice to be produced in tandem with the presentation of the customs declaration.

In an opinion delivered on 15 June 2017, Advocate General Mengozzi said that EU customs law allows officials to make post-clearance amendments to the duty. In addition, he noted that, while the individual duty rate imposed by Regulation 412/2013 is conditional upon presenting a valid commercial invoice, it is not specified in the Regulation when that invoice must be presented.

Given that there was no doubt that the imported goods were produced by a company that could benefit from an individual duty rate, the Advocate General considered that there is no risk for circumvention in the circumstances at hand. The Advocate General thus found that Tigers should be able to retroactively benefit from the individual anti-dumping duty rate. 

Hong Kong traders with export interests in mainland China will certainly welcome the lenient approach presented by the Advocate General, which would ensure that a formal requirement that is not complied with at the time of import can be remedied retroactively.

Traders should be aware that, when trade defence measures are imposed, there are often formal requirements that need to be met in order to benefit from an individual duty or an exemption to extended duties. While the present case specifically concerns imports of ceramic tableware from mainland China, the reasoning presented by the Advocate General could be applicable in all cases where formal requirements are imposed. If the opinion from the Advocate General is followed by the Court of Justice, all importers of goods subject to trade defence measures could rely on the interpretation provided.

The opinion of the Advocate General is not binding, but it is often followed by the Court. Interestingly, in a 2016 study, researchers measured the influence of the Advocate General on judgments that were eventually delivered by the Court. The study demonstrated that the Court is around 67% more likely to deliver a particular outcome aligned with the opinion of the Advocate General.

The final judgment of the Court in the ceramic tableware case is expected in the coming months.

Content provided by Picture: HKTDC Research
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