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Imports Can Retroactively Qualify for Reduced Anti-dumping Duty Rate, According to EU’s Highest Court

Hong Kong traders may like to take note of a recent judgment of the European Court of Justice, in which it considered that importers should be allowed to retroactively demonstrate to national customs authorities that they qualify for a reduced anti-dumping duty rate. The Court of Justice reached this conclusion on 12 October 2017 in a case concerning imports of ceramic tableware from mainland China (case C-156/16).

It will be recalled that, pursuant to Implementing Regulation 412/2013, definitive anti-dumping duties ranging from 13.1% to 36.1% were imposed on imports of ceramic tableware from mainland China as of 16 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 to ensure the proper application of the anti-dumping duties. These special measures were imposed through Article 1(3) of Implementing Regulation 412/2013, which provides that the application of the individual anti-dumping duty rates “shall be conditional upon presentation to the customs authorities of the Member States of a valid commercial invoice, which shall be [in conformity with] the requirements set out in Annex II. If no such invoice is presented, the duty applicable to ‘All other companies’ shall apply.” Amongst other requirements, the commercial invoice has to include 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 presented by Tigers which showed that it would be eligible for the reduced duty rate, as the invoice was not accompanied by a declaration and thus did not meet the necessary requirements. As a result, Tigers was obliged to pay the higher residual duty rate of 36.1%.

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 grounds 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’s Court of Justice to clarify the matter. In essence, the question presented to the Court of Justice 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 the customs declaration has been made. Or, whether, in order to qualify for an individual anti-dumping duty rate, it is always necessary for such an invoice to be presented simultaneously with the customs declaration.

Based on the wording of Article 1(3) of Implementing Regulation 412/2013, the Court of Justice held that while the presentation to the customs authorities of a valid commercial invoice conforming to all requirements is an indispensable condition for the application of an individual anti-dumping duty rate, the wording provides no information whatsoever as to when that invoice must be presented. As no other provision of Implementing Regulation 412/2013 specifies the point in time at which a valid commercial invoice must be presented to the customs authorities, Article 1(3) must be interpreted as not precluding the importers concerned from presenting such an invoice after the customs declaration has been made.

In addition, the Court of Justice held that the EU Customs Code does not expressly state when a commercial invoice must be presented, and that Article 78 of the Customs Code as a whole demonstrates that it is permissible to present new material which may be taken into consideration by the customs authorities after the customs declaration has been made. According to the Court of Justice, there is nothing to indicate that a valid invoice is excluded from such material.

Taking into account all these elements, the Court of Justice concluded that Article 1(3) of Implementing Regulation No 412/2013 “must be interpreted as meaning that it allows the presentation, after the customs declaration has been made, of a valid commercial invoice, for the purposes of fixing a definitive anti-dumping duty, in the case where all the other preconditions necessary for obtaining a company-specific anti-dumping duty rate are satisfied and compliance with the proper application of the anti-dumping duties is ensured”.

In other words, the Court of Justice ruled that the EU customs rules allow importers to retrospectively submit refund claims for anti-dumping duties provided that certain conditions are met, even after a rejection by the national customs authorities. A formal requirement that is not complied with at the time of import can thus be remedied retroactively, and importers can present new material to enable customs officials to re-examine previous customs declarations.

Given that there was no doubt that the imported goods were produced by a company that could benefit from an individual duty rate, the Court of Justice considered that there does not appear to be any risk of circumvention linked to the high difference between the duty rates in the case at hand. This is, however, a matter for the referring court to verify.

If the finance court in Munich confirms that there is, in the present case, no risk of circumvention linked to the high difference between the anti-dumping duties, the German customs authorities will have to reimburse Tigers for the duties paid in excess.

Hong Kong 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 of the Court of Justice could be applicable in all cases concerning trade defence measures where formal requirements are imposed.

Content provided by Picture: HKTDC Research
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