This is a guide for Philippine producers who believe that dumping of imported goods could be injuring their industry.  It provides general information about dumping and the recourse that affected industries can take against it.

This guide has also been designed to assist Philippine domestic industry in preparing a properly documented protest for dumping investigation.

It clarifies issues regarding the effects of dumping on local producers, importers, foreign producers and exporters, consumers, and the public in general.

It also explains the legal background to dumping, procedures in applying for an investigation, the conduct of an investigation and the action that will be taken afterwards.

Legislation

Republic Act No. 8752, otherwise known as the “Anti-Dumping Act of 1999” (the “Act”), provides protection to a Philippine domestic industry which is being materially injured, or is likely to be materially injured by the dumping of articles imported into or sold in the Philippines.

Action under this legislation becomes an international trade issue because it represents an accusation that a trading partner is trading unfairly.  For this reason, any action contemplated must be carefully examined and solid grounds must be established to demonstrate that the action meets the requirements of this Act and our obligations under international trade agreements.

As a member of the World Trade Organization (WTO), the Philippine administration of anti-dumping practices adheres to the rights and obligations set out in the WTO Agreement on Anti-Dumping Practices (the “Agreement”).  This Agreement seeks to ensure that anti-dumping practices should not constitute an unjustifiable impediment to international trade.  Moreover, this Agreement includes detailed procedural and evidentiary requirements and, as a result, all interested parties need to substantiate claims made in an inquiry.

Applicants are strongly advised to familiarize themselves with the provisions of Republic Act No. 8752 and its Implementing Rules and Regulations and Article VI of the WTO Agreement on Anti-Dumping.

What is Dumping?

Articles are dumped if their export price to an importer in the Philippines is less than their normal value in the country of export or origin.  The export price is the price the importer in the Philippines paid for the imported products.  If the export price is less than the normal value (after adjustments have been made to ensure a fair price comparison) then dumping has occurred.

The “normal value” is the selling price (normally ex-factory) of the like product in the domestic market of the country of export or origin.  (Under certain conditions, the normal value could be the comparable price of the like product when it is exported to another country or the total cost of production in the country of export or origin).

Dumping occurs when exporters sell their products to an importer in the Philippines at prices lower than when they sell said product in their own domestic market or to other export markets, or at prices below their total cost of production.

Is Dumping Illegal?

Dumping is not illegal, nor prohibited.  Price discrimination in the form of dumping is a common international practice that can be beneficial to both exporting and importing countries.  It is not uncommon for export prices to be lower than the domestic or home market prices because of the intense competition in the international markets.  However, when it injures Philippine producers, duties can be imposed after a formal investigation.

The following conditions must be met to be considered dumping:

1. there must be a price difference between the export price and the normal value of the allegedly dumped product.
2. the imported product is injuring or threatening to injure or retard the establishment of a domestic industry; and
3. there is a causal link to show that injury to the local industry is due to dumping.

How do you apply for an Investigation?

Any person, whether natural or juridical, representing a domestic industry may file a written application using the Protestant’s Application Form/Questionnaire duly supported by relevant documents which shall include evidence of (a) dumping (b) injury and (c) causal link between the dumped imports and the alleged injury.

The application shall be filed with the Secretary of Trade and Industry in the case of non-agricultural product or with the Secretary of Agriculture in the case of agricultural product.

The Secretary shall require the applicant to post a “surety bond” to answer for damages which the importer may sustain in case of a frivolous petition.  The “surety bond” shall be released immediately after an affirmative preliminary determination has been made.

Properly Documented Application

The application must be complete at the time it is lodged and must contain all relevant information that is reasonably available to the protestant.  Allegations made in the protest should be supported by documentation, data, or other satisfactory evidence.  Additionally, where any estimates have been provided in the complaint, it is important that an explanation be provided to support the basis of the estimates.

With respect to allegations of injury, the applicant is in the best position to assess the nature of the injury.  It is the applicant’s responsibility to document the injury in sufficient detail and to show that it is caused by the alleged dumping.

The protestant must submit evidence of the necessary level of support for the application as follows:

• First, the protest must be supported by a producer or producers whose collective output/ production of the like products represents 25 percent or more of total domestic production of the said product.
• Second, the total production of those domestic manufacturers/producers who express support for the protest, must be more than 50% of the total production of those producers who express either support for or opposition to the application.

In addition to industry support described above, there must be reasonable evidence that there is dumping and that dumping is causing injury or is threatening to cause injury to a major proportion of the domestic production.

A properly documented application shall contain relevant evidence and information reasonably available to the applicant as follows:

1. identity of the applicant or the industry
2. volume and value of domestic production of like product
3. description of the alleged dumped product
4. country of origin or export
5. identity of each known exporter or foreign producer
6. list of known importers
7. information on normal value and export price
8. information on the evolution of the volume of alleged dumped imports
9. effects of alleged dumped imports on domestic prices
10. consequent impact of imports on domestic industry

Assistance with Protestant’s Application Form/Questionnaire

The Protestant’s Application Form/Questionnaire contains the requirements for a properly documented anti-dumping protest.  Accordingly, all the requirements, questions and notes to questions set therein must be satisfied.

The Bureau of Import Services can offer advice in preparing the application for an investigation.  The Bureau will answer any questions relating to dumping.  Official correspondence should be addressed to the Director – Bureau of Import Services.  Contact details can be found at the end of this Guide.

The applicant is requested to sign the application form, prepare and submit four (4) copies of the completed questionnaire (two (2) CONFIDENTIAL and two (2) NON-CONFIDENTIAL versions).  The applicant is strongly recommended to respond to all the questions asked.  The absence of response to the questionnaire will cause the agency to return the application and request the applicant to complete it.

The application form/questionnaire is not designed to be filled in. Thus, all answers and any supplementary materials provided in support of the answers should clearly identify the questions to which they relate (in sequence).  Additional information may be requested from the applicant as necessary.

All information provided to the agency in confidence will be treated accordingly.  The applicant should ensure that the information provided which is confidential, is clearly marked as such, and that there is a non-confidential version (or summary) of that data.  Failure to provide a non-confidential summary may result in the information being disregarded by the DTI-BIS.

Non-Confidential Version of the Complaint

RA 8752 impliedly provides for the disclosure of information to certain parties that may have an interest in the proceedings. The intent is to make as much information available as possible so that all parties can understand the reasons and basis of facts upon which decisions are made, while still guaranteeing the protection of confidential information.  Thus, it is required that information submitted is to be clearly marked either “confidential” or “non-confidential”, and the applicant must provide two (2) copies of a non-confidential summary of any confidential information supplied and/or submitted.

The non-confidential summary must be in sufficient detail to permit a reasonable understanding of the confidential information.  Failure to provide a non-confidential summary may result on the information being disregarded.  The non-confidential version of the submission is placed on a public file and made available to interested parties.  This allows claims to be considered by the other parties who have a right to see the information relevant to the presentations of their case.  Similar arrangements apply to submissions made by other interested parties.

The recommended method of satisfying the requirement for confidential and non-confidential copies is to keep the body of the application non-confidential and to place confidential data in appendices.

How is the Investigation Carried Out?

1. Initiation/Preliminary Determination

The Bureau of Import Services (BIS) of the Department of Trade and Industry (DTI) initiates the preliminary determination of the anti-dumping protest involving non-agricultural products within five (5) days from acceptance of the properly documented application and upon receipt of the certification that the applicant has posted the applicable surety bond.  The BIS evaluates the accuracy and adequacy of the evidence presented to justify initiation of investigation.  During this period, the applicant maybe asked to clarify the information they have provided or to submit additional evidence/documents.  The Bureau may also take into account other information available to it in order to check the accuracy and adequacy of the information provided.  The investigation will not be initiated if (a) there was insufficient support from domestic producers; (b) insufficient evidence of injury; (c) volume of dumped imports is less than 3% of total Philippine imports; and (d) dumping margin is less than 2% of export price.

Before initiating an investigation, the BIS notifies the government of the exporting country concerned.  After a decision to initiate an investigation has been  made, the BIS advises the applicant of its decision.

The notice of initiation is also published in two (2) newspapers of general circulation.  The agency also notifies all the interested parties i.e. the importer/s,   exporter/s and foreign producer/s and requires them to answer and submit, within thirty (30) days from receipt of such notice, the response to the questionnaire and other submissions.  If the respondents fail to cooperate or did not provide the necessary information within the prescribed period, a decision may be based on the available pertinent data.  The BIS conducts a thorough evaluation of all the data submitted or provided by the applicant, importer/s, exporter/s and foreign producer/s and, together with the information obtained independently, conducts an investigation to determine whether or not a case exists as to warrant a formal investigation.

The investigation can be terminated at any time if it is concluded that the evidence does not disclose a reasonable indication that dumping has caused injury to domestic producers of like articles, such that:

• If the provisionally estimated margin of dumping is less than two percent (2%) of export price; or
• The volume of dumped imports accounts for less than three percent (3%) of the total imports of the like articles in the Philippines (unless countries which collectively account for less than three percent (3%) of the dumped imports of the like articles in the Philippines collectively account for more than seven percent (7%) of total imports of that article); or
• If injury is negligible.

2. Application of Provisional Measures

Provisional measures may take the form of a cash bond equal to the estimated difference between the normal value and export price of the allegedly dumped product.  This may only be imposed sixty (60) days after the initiation of the investigation and after a preliminary affirmative determination of the existence of dumping and injury is reached, i.e. it is established that the dumped products have caused, or threatened material injury to the domestic industry producing like products.  The provisional measure is a temporary relief to the affected domestic industry to prevent or deter further injury during the formal investigation.  Shipments will only be released after the importer puts up or deposits an anti-dumping bond.  The provisional measure will only be imposed for a four (4) month period or in case of a lower duty (less than the difference between the normal value and export price) for a period of six (6) months.

3. Formal/Final Determination

Within three (3) working days from the receipt of the advice that a PRELIMINARY DETERMINATION of dumping was found to exist and together with the pertinent records from the Secretary that the protest merits formal inquiry to determine dumping, the Tariff Commission fully investigates the alleged dumping, material injury and causal link, and make a FINAL DETERMINATION within one hundred twenty (120) days from receipt of the case records.

During the investigation, the Commission visits the protestant in order to verify information provided in the application and in any subsequent submission.  Protestant should, therefore, retain worksheets supporting all data submitted for Commission’s consideration.  In addition, the Commission will send questionnaires to the other interested parties, domestic and foreign.  The Commission may also conduct an onsite investigation of the exporter/foreign producer.  Detailed information will be requested from the domestic manufacturers supporting the protest as well as from other interested parties.

The Commission also receives representations and holds consultations.  It is important to note that during the consultations conducted by the Commission, it is the responsibility of the protestant(s) to prove its injury allegations.  For this purpose, Protestants usually retain the services of counsel with expertise in anti-dumping.

Before making its final determination, the Commission informs all the interested parties in writing of the essential facts under consideration which form the basis for the decision.  The parties are given sufficient time to comment and defend their interest.

The Commission shall submit its finding to the DTI/DA Secretary.  It shall also give notice to interested parties of such findings submitted to the Secretary.

4. Imposition of the Duty

Within ten (10) days after receipt of the final determination by the Commission, the Secretary of DTI/DA shall issue a Department Order imposing an anti-dumping duty, if the finding is affirmative.  He shall furnish the Secretary of Finance with the copy of the Order and request the latter to direct the Commissioner of Customs to cause the dumping duty to be levied in addition to any other duties on such products and on like products subsequently imported from the specific exporter from the country of export.  The rate of the duty cannot be more than the difference between the normal value and the export price of the goods under consideration.  The duties apply for five (5) years unless a review establishes a need to continue them so that injury does not recur.

The Order of the Secretary shall be published in two (2) newspapers of general circulation.  The parties litigants, the Tariff Commission, the Bureau of Customs and other proper government agencies shall be furnished with a copy of the decision.

In the event, however, of a negative final determination by the Commission, the Secretary shall issue, after the lapse of the appeal period, through the Secretary of Finance; an Order for the Commissioner of Customs for the immediate release of the cash bond to the importer.  In addition, all the parties concerned shall also be properly notified of the dismissal of the case.

WHERE IS THE APPLICATION FOR AN INVESTIGATION INVOLVING NON-AGRICULTURAL PRODUCTS SENT

(Chapters 25-96 of the Philippine Tariff and Customs Code)

THE DIRECTOR

Bureau of Import Services
Department of Trade and Industry
3F Tara Building
389 Sen. Gil J. Puyat Ave., Makati City

or

Contact telephone nos.
(+632) 8896-4430/  (+632) 8403-1418

Fax no.
(+632) 8896-4431

Email address:

BIS@dti.gov.ph
bis_irmd@dti.gov.ph

WELCOME TO THE ANTI-DUMPING QUESTIONNAIRE

This questionnaire will help you effectively apply for a dumping investigation.

A recommendation by the Department of Trade and Industry’s Bureau of Import Services to initiate investigation on an allegation of dumping requires adequate and accurate information about the allegedly dumped products and the effects on Philippine industry producing like products.

Please retain the worksheet after your application is lodged as it provides a valuable record of your sources if further evidence is required during a subsequent dumping investigation.

Note: For initial evaluation, petitioner can submit their accomplished questionnaire through this email: BIS@dti.gov.ph.