Expo-Trade Pty Ltd v Minister of State for Justice and Customs

[2003] FCA 1421

FEDERAL COURT OF AUSTRALIA

Expo-Trade Pty Ltd v Minister of State for Justice & Customs [2003] FCA 1421

CUSTOMS AND EXCISE – anti-dumping – application for review of recommendation of Chief Executive Officer of Customs – application for review of decision of Minister of State for Justice and Customs – where decision was to publish a dumping notice in respect of ammonium nitrate exported to Australia – whether Estonia or Russia was the country of export – country of origin – where no domestic market in alleged country of export – whether ammonium nitrate subject to government price control – whether Minister prevented from considering price of inputs in determining whether a price control situation exists – calculation of “non-injurious price” – relevance of “end-user” or “end user” in determining the unsuppressed selling price – relevance of “level of trade” – relevance of volume.

ADMINISTRATIVE LAW – natural justice – where there is a departure from an earlier stated method of calculation in a customs manual – where applicant denied opportunity to make submissions about method of calculation used.

WORDS AND PHRASES – ‘country of export’, ‘exporter’

Customs Act 1901(Cth) ss 269T, 269TAC, 269TACA, 269TACB, 269TG

Customs Tariff (Anti-Dumping) Act 1975 (Cth) s 8

Century Metals and Mining NL v Yeomans (1989) 40 FCR 564 cited
Companhia Votorantim de Cellulose e Papel v Anti-Dumping Authority (1996) 42 ALD 7 referred to
Companhia Votorantum de Celulose e Papel v Anti-Dumping Authority (1996) 71 FCR 80 referred to
GTE (Aust) Pty Ltd v Brown (1986) 14 FCR 309 cited
Haoucher v Minister for Immigration & Ethnic Affairs (1990) 169 CLR 648 cited
Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189 cited
Nordland Papier AG v Anti‑Dumping Authority (1999) 93 FCR 454 referred to
Pilkington (Australia) Ltd v Minister of State for Justice and Customs (2002) 71 ALD 301 cited
Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 195 ALR 502 cited
Saraswati v The Queen (1991) 172 CLR 1 cited

EXPO-TRADE PTY LTD v MINISTER OF STATE FOR JUSTICE & CUSTOMS & CHIEF EXECUTIVE OFFICER OF CUSTOMS

N 1256 of 2002

MOORE J
5 DECEMBER 2003

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1256 OF 2002

BETWEEN:

EXPO-TRADE PTY LTD
APPLICANT

AND:

MINISTER OF STATE FOR JUSTICE & CUSTOMS
FIRST RESPONDENT

CHIEF EXECUTIVE OFFICER OF CUSTOMS
SECOND RESPONDENT

JUDGE:

MOORE J

DATE OF ORDER:

5 DECEMBER 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The application be dismissed.

2.The applicant pay the respondents’ costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1256 OF 2002

BETWEEN:

EXPO-TRADE PTY LTD
APPLICANT

AND:

MINISTER OF STATE FOR JUSTICE & CUSTOMS
FIRST RESPONDENT

CHIEF EXECUTIVE OFFICER OF CUSTOMS
SECOND RESPONDENT

JUDGE:	MOORE J
DATE:	5 DECEMBER 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Introduction

1. This is an application for judicial review of both a recommendation by the Chief Executive Officer of Customs (“the CEO”) and a decision of the Minister of State for Justice and Customs (“the Minister”) made under the Customs Act 1901 (Cth) (“the Act”). The application is made under the Judiciary Act 1903 (Cth) and as well as the Administrative Decisions (Judicial Review) Act1977 (Cth). The applicant, Expo-Trade Pty Ltd (“Expo-Trade”), exported goods from Eastern Europe which took the form of bagged quantities of ammonium nitrate weighing, in total, 414 tonnes. It was sold to two Australian companies, PK Whitford Nominees Pty Ltd (“Whitford”) and Mirco Bros Pty Ltd (“Mirco”). The Minister’s decision was to accept a recommendation of the CEO (in a report dated 25 July 2002 being Trade Measures Report No. 61 (“the second report”)) to declare under subs 269ZG(3) of the Act that, in effect, an earlier dumping notice (“the initial dumping notice”) applied to the bagged ammonium nitrate.

   The background

2. On 2 May 2000 an application was made by Australian producers of ammonium nitrate for the publication of a dumping duty notice in relation to ammonium nitrate exported to Australia from Russia.  This application resulted in an investigation by the Australian Customs Service (“Customs”) into the allegation of dumping and the publication on 2 March 2001 of Trade Measures Report No. 28 (“the first report”) in which the CEO recommended the publication of a notice.  This led to the publication of the initial dumping notice on 24 May 2001.  The notice, in terms, applied to ammonium nitrate exported from the Russian Federation.  In the first report, the focus of the investigation was on the use of ammonium nitrate in the production of bulk explosives used in the mining industry.  It noted that 95 percent of the ammonium nitrate consumed in Australia was used for that purpose.  The report identified the consumers of the ammonium nitrate in that market as mining companies such as BHP Iron Ore, MIM Holdings Ltd, Rio Tinto and Robe River Mining Co Pty Ltd.  One matter considered by Customs in the first report was whether ammonium nitrate sold in Russia was the subject of government price control.  Customs concluded it was.  This is relevant to one issue addressed later in these reasons.

3. One recommendation of the CEO in the first report was that anti-dumping action be taken in relation to future exports of ammonium nitrate from Russia.  This was reflected in the initial dumping notice with the practical effect that it would apply to ammonium nitrate exported from Russia after the notice was published.  This is why Customs levied interim dumping duty on the exports of ammonium nitrate to which these proceedings relate even though they did not enter Australia until sometime probably in early March 2002.

4. In a letter dated 28 March 2002, Roger D. Simpson & Associates Pty Ltd (“Simpson”) wrote to Customs seeking an accelerated review of the initial dumping notice under Div 6 of Part XVB of the Act. In the letter, Simpson described the application as being on behalf of Expo-Trade which was “a residual exporter of ammonium nitrate from Russia”. The application was later advanced on behalf of NPK Trading Ltd (“NPK”) and the Russian manufacturer, Kemerovo JSC Azot (“Azot”). Late in the period in which Customs was considering the application for an accelerated review, Simpson wrote to Customs (on 12 July 2002) asserting that the country of export of the bagged ammonium nitrate was Estonia and not Russia.

5. That application resulted in the second report and a dumping duty notice published on 27 September 2002 (“the subsequent dumping notice”) with the practical effect that interim dumping duty was levied on the 414 tonnes by reference to variables which differed from those in the initial dumping notice.  The subsequent dumping notice was based on a decision of the Minister of 18 September 2002 accepting a recommendation of Customs that it be published and approving its publication.

6. It is convenient to refer to other matters of detail and the relevant legislative provisions when considering each of the three issues raised in this application.

   The first issue - country of origin

7. The initial dumping notice applied to ammonium nitrate exported from Russia.  The interim dumping duty was levied on the 414 tonnes of bagged ammonium nitrate on the basis that it had been exported from Russia.  Similarly, the application for accelerated review was sought on the same basis.  Expo-Trade challenges that premise in these proceedings.  It is common ground that Expo-Trade was the owner of the goods at the time of export from Estonia and also that Expo-Trade arranged for the shipment of the goods to Australia and paid for ocean freight and marine insurance.  The bills of lading nominated Expo-Trade as the shipper.  It is also common ground that whether the bagged ammonium nitrate was exported from Russia was a jurisdictional fact upon which the Minister’s decision of 18 September 2002 was based.  The parties agreed that if Expo-Trade establishes in these proceedings, as a matter of fact, that the ammonium nitrate was exported from Estonia then orders should be made nullifying the Minister’s decision and its effect.  The relief sought includes a declaration that the country of export of the ammonium nitrate purchased by Expo-Trade and sold to Whitford and Mirco was not Russia but Estonia, and that Expo-Trade was not a residual exporter of the ammonium nitrate from Russia (similar orders were sought on the footing that NPK was the exporter).

8. In order to understand how the question of whether the ammonium nitrate was exported from Russia or from Estonia arises, it is necessary to refer to the evidence concerning the circumstances in which the ammonium nitrate was bought and sold in Eastern Europe.  There was no real issue about what the primary facts were (to the extent that they were established by the evidence) though there was an issue about what they revealed and what relevant inferences could be drawn.  Oral evidence about the transaction was given by Mrs Larissa Vakulina, a director of Expo-Trade and Mr Gregory Dyner, the export manager of Expo-Trade.  Various documents were tendered.  The evidence was to the following effect.

9. The ammonium nitrate (from which the 414 tonnes were drawn) was manufactured in Russia by Azot.  NPK and Azot had a contract which provided for the purchase and delivery by Azot to NPK of ten thousand metric tonnes of ammonium nitrate in bulk.  Shipment was to be in Azot’s railway carriages.  Supply was to be during the month of February 2002 and delivery in accordance with NPK’s instructions.  Under the contract, NPK was responsible for the return of the carriages to Azot.

10. NPK also had an agreement with a company or entity, Transtrade, to transport ammonium nitrate from Predcombinat railway station (near Azot’s plant) to Pechory Pskovskie railway station (a Russian station on the border of Estonia and Russia). This agreement provided, at least in the English translation, for a specified transport tariff rate for the period 1 February 2001 to 28 February 2002.  The evidence did not establish the number (if any) of shipments from Predcombinat to Pechory Pskovskie in February 2002, the size of any shipment, or how the train carriages of ammonium nitrate got from the border to Port Muuga in Estonia.

11. As part of the contract, Azot undertook to provide NPK with documents, such as duplicate consignment notes, for each carriage of ammonium nitrate purchased from them though none were produced in evidence in these proceedings.  NPK stored ammonium nitrate in three warehouses, one in Tallinn, Estonia, one in St Petersburg, Russia and a third at Port Vostochny, also in Russia.  NPK rented the warehouse in Estonia and did not sell ammonium nitrate into the markets of Estonia or Russia. 

12. NPK and Expo-Trade are related in the following sense.  A Mr Vakulin, who was not called to give evidence, is a shareholder in both NPK and Expo-Trade.  He works for both companies.  In NPK, he is a 51% shareholder and a senior officer and in Expo-Trade he is a 20% shareholder and sales and marketing manager.  Officers of Expo-Trade, in their communications with customers, referred to NPK’s office as ‘our Russian office’ and NPK staff as ‘our people in Russia’.

13. In December 2001, Expo-Trade sent written orders to NPK for 400 tonnes of ammonium nitrate to be packed into 1250 kg bags and delivered to Australia.  On 8 January 2002, NPK contracted to sell and deliver 414 metric tonnes of ammonium nitrate to Expo-Trade in bags of 1150 kg.  On the same day an employee of NPK indicated to an employee of Expo-Trade that the order could be filled within five days “[o]ther time it’s necesary to go for shipping from Muga Tallinn to Australia”.  The delivery terms on the commercial invoice from NPK to Expo-Trade were ‘FOB TALLINN, ESTONIA’ although the word ‘FOB’ has had a line drawn through it and the handwriting ‘FAS’ written beneath it.  The handwriting did not appear on the original.  According to the sale confirmations the terms of ‘delivery/payment’ for both Mirco and Whitford were CIF Fremantle, Western Australia.  Expo-Trade arranged the shipment of the goods to Australia and paid for ocean freight and marine insurance.  The bills of lading also nominated Expo-Trade as the shipper.

14. The sale confirmations from Expo-Trade to Mirco and Whitford contained references to ‘Quantity & Origin’.  Beneath that heading on both documents was recorded the words ‘AZOT PLANT, RUSSIA’.  Also, in the formal contract between Expo-Trade and Whitford, dated 8 February 2002, a clause, titled ‘ORIGIN OF THE PRODUCT’ stipulated ‘[t]he product is Russian origin – AZOT plant at Kemerovo’.  Some of the documentary evidence suggests NPK arranged for ammonium nitrate from the warehouse in Estonia to be bagged sometime after 5 February 2002 and before 8 February 2002.  Bags of ammonium nitrate were subsequently shipped from Tallinn to Fremantle, Australia.

15. Generally, the question of where goods are exported from (and who is the exporter) is significant in the legislative scheme (as applying to the facts of this case) for the following reason. The original dumping notice reflected a determination by the Minister under s 269TG that, amongst other things, the export price of like goods (to the goods that had been under consideration (see the definition in s 269T), namely the ammonium nitrate exported from Russia considered in the first report) was less than the amount of the normal value of those goods. As is apparent from s 269TAC, the normal value is (subject to possible qualifications which are not presently relevant) the price paid or payable for like goods sold in the ordinary course of trade for home consumption in the country of export in arms length transactions. The determination was based on a normal value of ammonium nitrate exported from Russia. It appeared to be common ground in these proceedings that the Minister’s power, in effect, to issue (by making a declaration published in the Gazette) the subsequent dumping notice of 27 September 2002 under subs 269ZG(3) was enlivened only if the goods to which it related had the same characteristics (including having been exported from the same country) as the goods to which the initial dumping notice (of 24 May 2001 for which the review under Part XVB, Div 6 was sought) related. No point was taken by the respondents, the Minister and the CEO that the application for review could only have been made by Expo-Trade if it was an exporter from Russia (see subs 269ZE(1)). It is relatively clear that the parties wish to have resolved, perhaps somewhat indirectly, the question of whether interim dumping duty was lawfully levied, which appears to depend (having regard to the approach of the parties) on whether the 414 tonnes of ammonium nitrate were exported from Russia.

16. The expressions “country of export” and “country of origin” are defined in s 269T in the following way:

    country of export, in relation to goods exported to Australia, means a country outside Australia from which those goods are exported to Australia, whether or not it is the country where those goods are produced or manufactured.

    country of origin, in relation to goods exported to Australia, means a country, whether the country of export or not, where those goods are produced or manufactured.

    Subsection (2B) of s 269T provides:

    For the purposes of this Part, where, during the exportation of goods to Australia, the goods pass in transit from a country through another country, that other country shall be disregarded in ascertaining the country of export of the goods.

17. This provision reflects an aspect of the scheme established by the General Agreement on Tariffs and Trade (“GATT”) to deal with dumping. It is to be recalled that the purpose of the anti-dumping provisions of the Act is to give effect to Australia’s international obligations under GATT: see Pilkington (Australia) Ltd v Minister of State for Justice and Customs (2002) 71 ALD 301. In particular, the anti-dumping provisions presently under consideration are intended to give effect to Australia’s obligations under Article VI of GATT and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“the Anti-dumping Agreement”): see Nordland Papier AG v Anti‑Dumping Authority (1999) 93 FCR 454 at [28]. That agreement relevantly provides in relation to transhipment:

    2.5In the case where products are not imported directly from the country of origin but are exported to the importing Member from an intermediate country, the price at which the products are sold from the country of export to the importing Member shall normally be compared with the comparable price in the country of export.  However, comparison may be made with the price in the country of origin, if, for example, the products are merely transshipped through the country of export, or such products are not produced in the country of export, or there is no comparable price for them in the country of export.

18. It can be seen that a country through which goods are transhipped should not provide the point of comparison on the basis that it is a country of export for the purpose of determining whether there has been dumping.  This is reflected in the legislative scheme which I now discuss.

19. While there are some exceptions which I refer to shortly, the general scheme of Pt XVB of the Act can, for present purposes, be described in the following way. It establishes a mechanism by which the Minister can determine whether goods exported to Australia are being dumped and, if so, take anti-dumping measures to protect Australian industry which otherwise might be injured. Central to the determination of whether goods are being dumped is an assessment of the normal value of the goods: see s 269TAC. That is because dumping arises when a comparison between export prices and normal value reveals the former is less than the latter: see subs 269TACB(5). If goods are being exported from a country to Australia at a price less than the price for which they are sold in the domestic market of the country of export then they are, at a level of generality, being dumped onto the Australian market.

20. It is instructive to consider the various methods by which normal value can be calculated. In all but one it is assumed there are like goods sold in the country of export or like goods manufactured in the country of export. The assessment of normal value, in the ordinary course, involves consideration of the price of like goods sold in the ordinary course of trade for home consumption in the country of export (by the exporter or other sellers): see subs 269TAC(1). Thus the focus of the inquiry is on domestic transactions in the country of export. The scheme contemplates that the goods are coming from a country (the country of export) and the determination of whether they are being dumped involves an investigation of the domestic market of like goods in that country. It is a consideration of the circumstances of the domestic market of the country of export that is important.

21. There are exceptions to this and normal value can be assessed in other ways. The first arises if there are no sales, few sales or no suitable sales of like goods: see par 269TAC(2)(a) or there are no appropriate sales of like goods in the domestic market by the exporter and it is not practicable to obtain prices in sales by other sellers: par 269TAC(2)(b). In those situations there can be consideration of the cost of production or manufacture of the goods in the country of export (together with assumed costs of sale and profit): see par 269TAC(2)(c), or prices paid when like goods are exported to third countries from the country of export: par 269TAC(2)(d). Thus, there must the production or manufacture of the goods, or export sales of like goods, in the country of export. The second exception arises when the trade of the goods from the country of export is monopolised by the government, substantially influencing the domestic price of the goods. In those circumstances another method of calculating normal value can be used: see subs 269TAC(4). But again the provision seems to assume some domestic trading in goods of the type in question.

1. The third exception is when there has been but no longer is a government monopoly on trading in goods but price control of like goods presently exists (affecting domestic sales of either the exporter or other sellers: see subs 269TAC(5E)). In those circumstances, the Minister can determine the normal value of the goods said to have been dumped: see subs 269TAC(5D). The fourth exception is when there has been (but no longer is) a government monopoly or substantial government influence on the domestic price of goods in the country of export, no relevant price control but there has been the provision of subsidised raw materials by a government agency in the production or manufacture of the goods said to have been dumped. In those circumstances, normal value can be calculated in a particular way: subs 269TAC(5G). Each of these methods of calculating normal value of goods alleged to be dumped assumes either a domestic market in like goods in the country of export or the manufacture of those goods in the country of export.

2. It is true that subs 269TAC(10) creates an exception which enables, in fairly unconstrained terms, the Minister to treat the country of origin as the country of export which could be used if there was not a nexus of the type just discussed between the goods and the country of export. However the existence of this exception does not detract from what, in my opinion, otherwise emerges from s 269TAC. The notion of the country of export is not an abstract notion determined by looking simply at contractual arrangements between a person who might be thought to be the exporter and an importer and the country in which, physically, the goods were immediately before importation into Australia. The country of export would usually be a country in which like goods were sold in a domestic market or the goods in question were produced or manufactured. This is reinforced by subs 269T(2B) which contemplates allegedly dumped goods entering Australia from another country which is not the country of export but rather a country of transit.

3. The notion of exportation and related concepts was considered by a Full Court in Companhia Votorantum de Celulose e Papel v Anti-Dumping Authority (1996) 71 FCR 80. In that matter, paper had been manufactured in Brazil and imported into Australia. Customs concluded the paper was dumped. One issue was what had been the export price (being the price paid for the goods by the importer) which, incidentally, raised the identity of the exporter for consideration. It was common ground that the country of export was Brazil. In fact, the goods were sold to the importer by a Japanese trading company, DaiEi Papers Ltd (“DaiEi”). The Australian importer ordered the paper from DaiEi who, in turn, then ordered it from the Brazilian manufacturer. The manufacturer shipped the paper directly to Australia but invoiced DaiEi for it on a C & F basis (thus the manufacturer was responsible for the shipping). DaiEi paid the manufacturer for the paper and then invoiced the Australian importer again on a C & F basis who paid for the paper. The primary judge, Finn J, concluded (see Companhia Votorantim de Cellulose e Papel v Anti-Dumping Authority (1996) 42 ALD 7) the exporter was the Brazilian manufacturer even though DaiEi had caused the paper to be sent out of Brazil by giving the manufacturer the direction to ship the paper to the Australian importer.

4. In the appeal, the majority, Wilcox and R D Nicholson JJ, reached the same conclusion.  Northrop J concluded that DaiEi was the exporter essentially because it had contracted to sell the goods to the Australian importer.  In the course of their reasons Wilcox and R D Nicholson JJ considered what was meant by “export” and “exporter” and said (at 91-93):

   Neither the verb “export” nor the noun “exporter” is defined in the Act. The closest the Act gets to a relevant definition is the definition of “country of export” in s 269T, viz “a country outside Australia from which those goods are exported to Australia, whether or not it is the country where those goods are produced or manufactured”. The parties agree that, in the present case, this was Brazil.

   The definition of “country of export” draws a distinction between the country of export and the country where goods are produced or manufactured. The latter is defined by s 269T as “country of origin”. Other definitions in s 269T utilising the concept of exporter are those for “new exporter”, “residential exporter” and “selected exporter” but none assist an understanding of the word “exporter”. Nor does the definition of “importer”, which proceeds on the basis that goods have been exported to Australia and describes the beneficial interest that identifies the “importer” for the purposes of the Act.

   In s 269TAB itself, subs (1)(a) and (b) makes clear that an exporter may also be an importer.  Within those paragraphs it is required there be a purchase by the importer from the exporter; in the case of par (a) at arm’s length, and in the case of par (b) not at arm’s length.

   The use of the concept of purchase does not mean that the identity of the exporter is to be determined by identifying the vendor under the contract of purchase with the importer.  The question is the other way around; it is necessary to identify the “exporter” and then to examine whether that is the party from whom the importer has purchased.  It is not the passing of property which identifies the exporter (although it may be critical to identification of the importer) but rather the identification of which party satisfies the requirements of truly being the exporter.  This view is reinforced by the presence of s 269TAB(1)(c) which contains no description referable to purchase.

   Although “exporter” is not defined in the Act, its meaning has been judicially considered. In Henty v Bainbridge-Hawker (1963) 36 ALJR 354, Owen J of the High Court of Australia was concerned with a prosecution for offences under the Customs Act.  There were 14 charges of exporting prohibited goods and a question arose whether the defendant was the exporter.  Owen J said (at 356):

   “Another general submission was made that neither the defendant nor the companies which he directed and managed could be found to have been the exporter of prohibited exports because whatever goods were in fact exported were sold f.o.b. Sydney to an overseas buyer.  The seller’s obligations therefore ceased when the goods were placed on board the ship at the Port of Sydney and it was the overseas buyer who thereupon became the exporter of them.  For the purposes of this case it is sufficient to say that if, in the case of an f.o.b. contract with an overseas buyer the seller places the goods sold on board a ship bound for foreign parts and engages with the shipowner to carry them to the overseas buyer and the goods are carried overseas, the seller has, in my opinion, exported the goods within the meaning of the Customs Act.”

   In the present case the relevant contracts were C & F contracts.  If anything, that circumstance strengthens the argument that Celpav was the exporter.  Under a C & F contract the seller has to arrange the carriage of the goods to the named foreign port of destination at its expense:  see Schmitthoff’s Export Trade (8th ed), p 48.  It must have been Celpav who engaged the ship, in each case, and delivered the goods for loading.

   In Australian Trade Commission v Goodman Fielder Industries Ltd (1992) 36 FCR 517 a Full Court of this Court considered the meaning of the word “export” in the context of the Export Market Development Grants Act 1974 (Cth). The Court said (at 523):

   “The ordinary meaning of ‘export’ is to send commodities from one country to another using the verb ‘send’ as indicating that which occasioned or brought about the carriage of the commodity from one country to another.”

   There is, perhaps, some ambiguity in the words “that which occasioned or brought about the carriage”.  In one sense, an order from an importer can be said to occasion or bring about the despatch, and therefore the carriage, of goods from one country to another.  However, for the reason indicated, this sense is not relevant to s 269TAB(1)(a) of the Customs Act. 

   It is worth adding that s 269TAC assists the understanding of s 269TAB(1)(a).  Section 269TAC(1) provides that subject to the section, for the purposes of the part,

   “the normal value of any goods exported to Australia is the price paid for like goods sold in the ordinary course of trade for home consumption in the country of export in sales that are arms length transactions by the exporter or, if like goods are not so sold by the exporter, by other sellers of like goods”. 

   Subsections (10) and (11) read as follows:

   “(10)  Where:

   (a)          the actual country of export of goods exported to Australia is not the country of origin of the goods; and

   (b)         the Minister is of the opinion that the normal value of the goods should be ascertained for the purposes of this Part as if the country of origin were the country of export;

   he or she may direct that the normal value of the goods is to be so ascertained.

   (11)  For the purposes of subs (10), the country of origin of goods is:

   (a)          in the case of unmanufactured raw products – the country of which they are products; or

   (b)         in any other case – the country in which the last significant process in the manufacture or production of the goods was performed.”

   It will be observed that these subsections draw a distinction between “the country of origin of the goods” and “the actual country of export of goods”. However, the distinction does not support the view that DaiEi should be regarded as the “exporter” for the purposes of s 269TAB(1)(a). Under those subsections it is still necessary to determine the identity of the country of export of goods – that country is the true place of export. The provisions would apply in the circumstances of the present proceeding if, for example, the goods had originated in a country other than Brazil and had then been exported from Brazil. It is the place of export, and hence the identity of the exporter, that are fundamental to the achieving of the purpose of the anti‑dumping provisions of the Act.

5. These observations, in one sense, are of limited assistance in resolving the issue arising in these proceedings.  That is because both the parties and the Court accepted that Brazil was the country of export.  It was not a matter in issue.  Indeed, on the facts, there was probably no room for any other conclusion.  The issue in those proceedings was who was the exporter of the goods.  It may be thought, as counsel for Expo-Trade submitted, that their Honours’ observations about the relevance of the C & F contract and the Brazilian manufacturer’s role in the carriage of the goods from Brazil support a conclusion that, in this matter, NPK was the exporter.  However the anterior question (and this characterisation of the question is suggested by the observations of Wilcox and R D Nicholson JJ in the final paragraph) is what is the country of export.  When that question is answered then the identity of the exporter can be addressed.

6. In the present case, it would be open, on the facts, to view Estonia as a country of transit and not the country of export.  The ammonium nitrate in question was not manufactured in Estonia.  There is nothing to suggest that there is a domestic market in ammonium nitrate in Estonia and it is clear that neither Expo-Trade nor NPK sell in that market even if it does exist.  There is nothing to suggest that any part of the bulk quantity of ammonium nitrate from which the 414 tonnes was taken was sent to Estonia for any purpose other than on-sale to purchasers in other countries.  I would have thought this was the hallmark of goods in transit.  The only dealings with ammonium nitrate in Estonia was to transport that into that country (as an alternative to shipping it from a Russian port) to be stored in a bond store prior to shipping.

7. I am not affirmatively satisfied that the country of export was Estonia and accordingly I am not satisfied that the applicant has made good the proposition that the impugned decisions were invalid for the reasons earlier discussed.

   The second issue-was there a price control situation in Russia?

8. The calculations of normal value of the goods exported from Russia were on the basis that the sale of ammonium nitrate was the subject of price regulation in Russia.  Expo-Trade contends that this conclusion is infected by legal error.  The following was said in the second report about price control:

   On the evidence available to it, Customs is of the view that the Minister can be satisfied that a price control situation applies due to a combination of the following factors.

   ·    Government enactments operating to exert control or substantial control over the selling prices of ammonium nitrate in Russia.

   ·    Government regulation resulting in natural gas and electricity being available at prices significantly below market prices.  The control over these significant production inputs exerts control or substantial control over the selling price of some or all of the sellers of ammonium nitrate in Russia.

   Customs recommends that, under subsection 269TAC(5D) of the Act, the Minister be satisfied that a price control situation applies.

9. The legislative provisions of the immediate relevance are subss (5D), (5E) and (5G) of s 269TAC. That section generally deals with the manner in which normal value is ascertained. Those subsections provide:

   (5D)     If goods are exported to Australia and the Minister is satisfied that:

   (a)in the past the Government of the country of export had a monopoly, or a substantial monopoly, of the trade of that country and determined, or substantially influenced, the domestic price of goods in that country; and

   (b)the circumstance described in paragraph (a) no longer applies in relation to the country of export; and

   (c)a price control situation applies, within the meaning of subsection (5E), in relation to like goods to those first-mentioned goods;

   the normal value of those first-mentioned goods is such amount as is determined by the Minister having regard to all relevant information.

   (5E)     A price control situation applies in relation to the domestic selling price of like goods to the goods first referred to in subsection (5D):

   (a)if the exporter of the goods so referred to sells like goods in the country of export and the domestic selling price of those like goods is controlled, or substantially controlled, by a government (at whatever level) of that country; or

   (b)if the exporter does not sell like goods in the country of export but there are other sellers in that country of like goods and the domestic selling price of like goods sold by some or all of those other sellers is so controlled or substantially so controlled.

   (5F)Without limiting the generality of subsection (5D), for the purpose of working out, under that subsection, the amount that is to be the normal value of goods exported to Australia, the Minister may determine that amount in a manner that would be open to the Minister under paragraph (4)(c), (d), (e) or (f) if subsection (4) were applicable.

   (5G)     If goods (exported goods) are exported to Australia and the Minister is satisfied that:

   (a)in the past the government of the country of export had a monopoly, or a substantial monopoly, of the trade of that country and determined, or substantially influenced, the domestic price of goods in that country; and

   (b)the circumstance described in paragraph (a) no longer applies in relation to that country; and

   (c)subsection (5D) does not apply in relation to the exported goods; and

   (d)a particular raw material used in producing or manufacturing the exported goods was, in whole or in part, supplied directly to the producer or manufacturer by an enterprise that is wholly owned by the national government, or by a provincial government, of that country; and

   (e)the cost actually incurred by the producer or manufacturer in procuring the raw material so supplied exceeds 10% of the costs actually incurred by the producer or manufacturer in producing or manufacturing the exported goods;

   the normal value of the exported goods for the purposes of this Part is the sum of:

   (f)an amount determined by the Minister, having regard to all relevant information, to be the value of the raw material so supplied, irrespective of the cost actually incurred by the producer or manufacturer in procuring the raw material so supplied; and

   (g)the amount of the cost actually incurred by the producer or manufacturer in producing or manufacturing the exported goods, other than the cost actually incurred by the producer or manufacturer in procuring the raw material so supplied; and

   (h)on the assumption that the exported goods, instead of being exported, had been sold for home consumption in the ordinary course of trade in the country of export—an amount determined by the Minister to be the sum of the administrative, selling and general costs associated with the sale of the exported goods and of the profit on that sale.

10. Counsel for Expo-Trade submitted that the second factor identified by Customs as indicating price control, the price of natural gas and electricity, was not a matter raised for consideration by subs 269TAC(5E) (as a matter of construction), and if Customs erred in having regard to that matter, it is clear from the way the conclusion was expressed (“due to a combination of the following factors”), it was not an immaterial error. Both these propositions were put in issue. I apprehend it was common ground that at least natural gas was a raw material used in the production of ammonium nitrate.

11. The question of construction arises this way. There is no express reference in subs 269TAC(5E) to the cost of raw materials, though there is in subs 269TAC(5G). That latter provision provides a means of calculating normal value when there is not a price control situation (see par 269TAC(5G)(c)) but nonetheless the market for the goods had been (but no longer was) monopolised or substantially monopolised by the government. Apparently on the basis that subs (5D)(together with subs (5E)) and subs (5G) each confer a power on the Minister, counsel for Expo-Trade relied on the principle discussed in Saraswati v The Queen (1991) 172 CLR 1 (particularly at 23-24) (although disavowing reliance on any notion, rule or principle of expressio unius).  That principle provides that if a statute confers both a general power not subject to limitations and qualifications and a special power subject to limitations and qualifications, the general power cannot be exercised to do that which is the subject of the special power.

12. I have some difficulty understanding how that principle has any application in the present case.  Even assuming that subs (5D) (together with subs (5E)) should be viewed as conferring a power to work out normal value only in particular circumstances (though subs (5D), even when read with subs (5F), does not appear to limit the manner in which the normal value can be worked out in those particular circumstances) and that subs (5G) should be viewed as conferring a power to work out normal value in another and different circumstance by the method identified in that subsection (together with subs (5H) but subject to subs (6)), it is clear there is no area of overlap concerning the circumstances in which the two powers can be exercised.  Because of par (5G)(c), the latter power cannot be exercised if the former can.  The former can only be exercised if the Minister is satisfied that a price control situation applies: see subs (5D).  What the Minister should consider when ascertaining whether a price control situation applies is found in subs (5E).  The Minister must consider whether the domestic selling price of those like goods is controlled or substantially controlled by the Government.  The provision does not, in terms, circumscribe the matters that might be considered by the Minister in considering whether the selling price is controlled.  In my opinion, the Minister is not precluded from considering whether the price is controlled (or substantially controlled) by considering whether the price of inputs is so controlled by the Government (either considered in isolation or together with other matters) as to warrant a conclusion that the sale price is, by that means, controlled or substantially controlled by the Government.  Unless the language of subs (5D) clearly indicated that it was concerned only with direct price control resulting from some form of legislative or analogous prescription (which it does not) it was a matter for the Minister to determine how to assess whether the domestic selling price of like goods was controlled or substantially controlled by the Russian Government and for the Minister to be satisfied or not satisfied that the price was so controlled.  The applicant has not made good its second ground challenging the impugned decisions.

    Third issue-calculation of non-injurious price

1. The last issue raised in the application concerns the way Customs calculated the non-injurious price to apply to the importation of the ammonium nitrate. What is the non-injurious price is established by s 269TACA of the Act which relevantly provides:

   The non-injurious price of goods exported to Australia is the minimum price necessary:

   (a)      if the goods are the subject of, or of an application for, a dumping duty notice under subsection 269TG(1) or (2)–to prevent the injury, or a recurrence of the injury, or to remove the hindrance, referred to in paragraph 269TG(1)(b) or (2)(b); or

   (b)      …

   Also relevant is s 8 of the Customs Tariff (Anti-Dumping) Act 1975 (Cth) (“the Anti-Dumping Act”) which provides:

   (1)      …

   (2)There is imposed, and there must be collected and paid, on goods to which this section applies by virtue of a notice under subsection 269TG(1) or (2) of the Customs Act, a special duty of Customs, to be known as dumping duty calculated in accordance with subsection (6).

   (3)Pending final assessment of the dumping duty payable on goods the subject of a notice under subsection 269TG(1) or (2) of the Customs Act, an interim dumping duty is payable on those goods.

   (4)Subject to subsection (5), the interim dumping duty payable on goods the subject of a notice under subsection 269TG(1) or (2) of the Customs Act is an amount equal to the sum of:

   (a)the difference between the export price of goods of that kind as ascertained, or last ascertained, by the Minister for the purpose of the notice and the normal value of goods of that kind as so ascertained, or last so ascertained; and

   (b)if the export price of those particular goods is lower than the export price of goods of that kind as ascertained, or last ascertained, by the Minister for the purpose of the notice—the amount by which the latter export price exceeds the former.

   (5)The Minister must, by signed notice, direct that the element of interim dumping duty referred to in paragraph (4)(a) in respect of particular goods be ascertained:

   (a)as a proportion of the export price of those particular goods or of the export price of goods of that kind as ascertained, or last ascertained, by the Minister for the purpose of the dumping duty notice, whichever is the greater; or

   (b)       by reference to a measure of the quantity of those particular goods; or

   (c)by reference to a combination of a proportion of the kind referred to in paragraph (a) and a measure of the quantity of those particular goods;

   and the notice has effect accordingly.

   (5A)The Minister must, in exercising his or her powers under subsection (5) in respect of particular goods the subject of a notice under subsection 269TG(1) or (2) of the Customs Act, if the non-injurious price of goods of that kind as ascertained or last ascertained by the Minister for the purposes of the notice is less than the normal value of goods of that kind as so ascertained, or last so ascertained, have regard to the desirability of fixing a lesser amount of duty such that the sum of:

   (a)   the export price of goods of that kind as so ascertained or last so ascertained; and

   (b)    that lesser duty;

   does not exceed that non-injurious price.

2. The relevance of non-injurious price (and how it might be used) is addressed in the following passage from a Customs Manual which is in evidence:

   NON INJURIOUS PRICE (NIP) CALCULATION

   (1) The difference between the normal value and export price (or the amount of countervailable subsidy) sets the maximum amount of duty payable. However, in accordance with ss. 8(5A), 9(5A) 10(3C), and 11(5) of the Dumping Duty Act, the minister must have regard to the desirability of fixing a lesser amount of duty such that the sum of the export price and the lesser amount of duty does not exceed the non-injurious price; ie. a price sufficient to remove the injury caused by the dumping and/or countervailing. The NIP is defined at s. 269TACA of the Customs Act.

   (2)      The NIP calculation is included in the recommendation to the Minister.

   (3)      Although the method of calculating a NIP is not given in the legislation, it is generally derived from the Australian industry’s unsuppressed selling price.  To determine the USP for the sale of like  goods in Australia, the case manager will examine the market to assess the price that can realistically be achieved in the absence of dumping or subsidisation.

   (4)      The market may not always, however, allow a reliable measure of the USP.  The prevailing market price may not be a reliable measure because it is affected by dumping.  Further, if dumping has been occurring for some time it may not be possible to use a price before the dumping occurred as the price is dated.  The industry may have undergone significant structural changes since the time it was unaffected by dumping or subsidisation.  In these circumstances it may be necessary to calculate the USP, normally from the local producer’s current cost to make and sell plus a profit.   This raises the question of what profit mark-up will be used in the calculation.  Profit on sales by closely related industries may be examined using published profit surveys (eg. from stock exchange information, business publications or the ABS); or the industry may provide details of the margin on sales they normally would have achieved.

   (5)      Having calculated the USP of the Australian goods, deductions from the USP are made using information relating to the most efficient representative importer (ie. usually the importer with the lowest on-costs, at the chosen level of customer).  Deductions will include all costs incurred in getting the goods from the export FOB point (or another point if appropriate) to the chosen level of customer in Australia, including all into store costs and duties.  These costs may have already been determined during inquiries with importers.  If not, they are obtained from Customs documentation or by revisiting the importers.

3. Counsel for Expo-Trade submitted that the CEO made two errors in calculating the non-injurious price for the purposes of the second report which had various legal consequences.  The first error was that the unsuppressed selling price (used in both the first and second reports) was based on the price in a sale by an Australian manufacturer to a customer who was an end-user (a mining company who would use the ammonium nitrate as an explosive).  In contrast, Whitford and Mirco were not end-users of the ammonium nitrate but would on-sell it to customers (such as farmers who would use it as fertiliser).  None of those factual matters appeared to be in dispute.

4. This first error, it was submitted, had three legal consequences. The first was that the CEO failed to take into account a relevant consideration in calculating the non-injurious price (to be applied in relation to the Mirco and Whitford importation) namely that the calculation of the non-injurious price and the unsuppressed selling price for the purposes of the initial dumping notice was based on the same level of trade which was a level of trade different to that of the sale from Expo-Trade to Mirco and Whitford. The second was that the recommendation of the CEO in relation to the calculation of the non-injurious price was so unreasonable that no reasonable person could have exercised the power given by the Act in that way. The third was that there had been a denial of natural justice because the CEO departed from the procedure in the Manual without notice to Expo-Trade.

5. The second error was that in calculating the non-injurious price, the CEO made no deductions for the importer’s costs and profits and only the landing, bagging, ocean freight and marine insurance costs were deducted from the unsuppressed selling price (again these factual matters were not in issue). That error had, it was submitted, two legal consequences. The first was that the decisions made under s 269ZG (the CEO’s recommendation in the second report and the decision to publish the subsequent dumping notice) were not authorised by the Act because the specified non-injurious price was not a price which was the minimum required to prevent the injury as required by s 269TACA. The second was that there had been a breach of the rules of natural justice for substantially the same reasons advanced in relation to the first alleged error.

6. I turn now to consider these contentions.  The notion of “level of trade” can be used when ascertaining whether dumping has occurred, for example in ascertaining an appropriate normal value to compare with an export price: see GTE (Aust) Pty Ltd v Brown (1986) 14 FCR 309 at 333-335. It is a notion found in the Anti-dumping Agreement. Paragraph 2.4 of Article 2 of that Code provides that the domestic price in the exporting country and the export price should be compared at the same level of trade in order to effect a fair comparison. As noted earlier, the anti-dumping provisions presently under consideration are intended to give effect to Australia’s obligations under Article VI and the Anti-dumping Agreement: see Nordland Papier AG v Anti‑Dumping Authority (1999) 93 FCR 454 at [28].

7. I accept that the notion of “level of trade” is a notion which might also be used in determining the amount of duty payable. That is because by operation of, relevantly, s 269TG and s 269TACA of the Act and subs 8(5A) of the Anti-Dumping Act, duty is ascertained by determining first whether there has been dumping causing material injury (which might occur when the price of the dumped goods is less than the domestic selling price of like goods produced in Australia) and secondly by notionally adjusting the price of the dumped goods upwards to a price which approximates the domestic selling price of the Australian produced goods. The adjustment, in monetary terms, provides a measure of the duty which should be levied.

8. If some allowance might, in appropriate circumstances, be made having regard to levels of trade in determining whether there was dumping (by comparing normal value with export price) it may well be appropriate, in certain circumstances, similarly to make some allowance for levels of trade for the last comparison in the process, namely the comparison between the domestic selling price of the Australian produced goods and the price of the dumped goods if the sales of each are at different levels.  But ultimately any such adjustment is designed only to ensure that the comparison involved in determining the duty payable is a fair and appropriate one.

9. But has Expo-Trade demonstrated that on the facts of this case Customs was obliged to make an adjustment for level of trade or that the comparison actually made was not a fair and appropriate one resulting in an unreasonable decision in the Wednesbury sense?  It is true that, in the assessment made by Customs in this matter, the sales of the Australian produced goods used to determine a non-injurious price and used in the comparison, were, in one sense, at a different level of trade to the sales which revealed the dumping.  It might be thought that the levels of trade were different because, on the one hand, Whitford and Mirco as traders would on-sell the ammonium nitrate to consumers, whereas the sales of the Australian produced goods were to a consumer (in the sense of end-user).

10. In the first report, Customs discussed how it might go about determining a non-injurious price and what might be an appropriate unsuppressed selling price.  It explained, in effect, that it could use as an unsuppressed selling price, a price (ex-works) struck between an Australian producer of ammonium nitrate and an end-user (a mining company) apparently because it considered volumes were a greater determinant of price than level of trade.  This was in a context where the sales used to determine export price (as part of determining whether goods had been dumped) were not to an importer in Australia who was an end-user (at least in one sense) but rather were sales to an explosives manufacturer who blended or otherwise treated the ammonium nitrate to create explosives which were then sold to end-users, principally in the mining industry.  Customs said that it accepted that a closer match in volume (a match between the transaction in which the goods had been dumped (and in which the normal value and export price had been considered and a notional ex-works price created by adjustments) and any transaction used to establish unsuppressed selling price) would ultimately reflect a level of pricing which appears to be more dependent upon volumes than level of trade.

11. One can conceive of situations where the price for the sale of goods likely to be struck between two parties will depend not on the point in a trading chain where the two parties are to be found but rather on the volumes involved.  In any event, it is not apparent to me that the approach taken by Customs in the first report involved a failure to take into account a consideration it was obliged to take into account or that its decision in this respect was manifestly unreasonable.  I appreciate, of course, that Expo-Trade challenges the repetition of this process in the second report and not the exercise undertaken in the first report.  Customs repeated the process described above in the second report in the sense that it used the unsuppressed selling price revealed in the transaction between the Australian manufacturer and the mining company to establish an unsuppressed selling price as a step in determining a non-injurious price.  The rationale for doing so in the second report was apparently the same as for doing so in the first.  It is not apparent to me that Customs erred in the first way (apart from questions of procedural fairness which I will deal with compendiously at the conclusion of this section of my reasons) contended by Expo-Trade in using the unsuppressed selling price from the first report in determining a non-injurious price in the second report.

12. I turn to consider the second alleged error and the contention that because no deductions were made (from the unsuppressed selling price) for the importer’s costs and profits when the non-injurious price was determined, the decisions made under s 269ZG were not authorised by the Act. The method adopted to calculate a non-injurious price (ex Tallinn) was to identify an unsuppressed selling price in Australian dollars per kilogram and then deduct amounts (all in Australian dollars per kilogram) for landing costs, overseas freight and overseas insurance and add an amount for bagging. Subtractions and additions of this type are made to ensure that the unsuppressed selling price is transformed into a comparable landed, duty paid price so that the duty imposed (to be added notionally to the export price) truly reflects a minimum amount necessary to protect Australian industry. The unsuppressed selling price used in the present case (of the goods sold (I infer in bulk) in Australia) had to be reduced (and was) to allow for the fact that those goods had not been transported from Europe with attendant freight insurance and landing costs because the goods sold in the transaction founding the unsuppressed selling price were not bagged, whereas the dumped goods were.

13. It is true that in a glossary forming part of the second report an explanation and illustration is given for calculating the non-injurious price.  In that explanation it is said that all post exportation costs, plus an amount for the importer’s profits, are deducted from the unsuppressed selling price to determine the injurious price.  In the illustration, a deduction is also made for the selling, administration and distribution costs of, I infer, the importer.  It should be noted, however, that in a similar glossary in the first report, it is not suggested that allowance should be made for the importer’s profits and any selling, administration and distribution costs, nor is that suggested in the section of the first report where the method of establishing a non-injurious price is discussed.

14. I do not see why, at least in this case, adjustments should have been made to allow for profits of the importer or, putting it more precisely, why the failure to make such an allowance results in the decisions not being authorised by the Act. The task being undertaken was to create a price which the importer (in this case Whitford and Mirco) would have to pay if the goods were sourced from an Australian producer. This was done by adding the costs of importation to a notional price for the ammonium nitrate (created by adjustments) imported from Russia (payable at the point of exportation).

15. This process was undertaken, as a mathematical exercise, by taking the unsuppressed selling price and deducting the costs associated with transporting the ammonium nitrate to Australia.  The difference between the notional price and the actual price (the export price) became the duty payable.  Having regard to the objective being sought to be achieved, this approach is, in my opinion, unexceptionable. 

16. I lastly deal with the alleged denial of natural justice in relation to the calculation of the non-injurious price as concerns both the level of trade and deductions for the importer’s costs and profits.  The gist of the contention advanced by Expo-Trade was that the methods of calculation actually adopted did not accord with the stated method of calculation in the Customs Manual referred to earlier.  Expo-Trade was entitled to be told that there was to be a departure from the earlier stated method and, in the result, Expo-Trade was denied the opportunity of making submissions about the adoption of that method of calculation and how the calculation might be made.

17. Counsel for Expo-Trade relied on the judgment of the Full Court in Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189. In that matter the Administrative Appeals Tribunal (“the Tribunal”) had affirmed a decision of a delegate of the Minister to deport Mr Gray under what might be described as the criminal deportation provisions of the Migration Act 1958 (Cth). One provision, s 55, authorised the deportation of a person who had, relevantly, been in Australia as a permanent resident for a period of less than 10 years and had committed an offence of the prescribed type. The Minister had promulgated policy guidelines dealing with the manner in which the discretionary power to deport might be exercised. The Tribunal had regard to those guidelines in making its decision. However both the primary judge and a majority of the Full Court concluded that the Tribunal had misconstrued and selectively applied the guidelines. In the course of their reasons, the majority (French and Drummond JJ) observed that a departure from an announced policy may not be open unless procedural fairness requirements have been observed. In support of that proposition, their Honours referred to Century Metals and Mining NL v Yeomans (1989) 40 FCR 564. Counsel for Expo-Trade also referred to the observations of McHugh J in Haoucher v Minister for Immigration & Ethnic Affairs (1990) 169 CLR 648 at 680-682.

18. Even making a number of assumptions in Expo-Trade’s favour about the status of the Manual and statements in it about the way particular matters might be approached, the contention that it was denied procedural fairness fails because there is no evidence to suggest that Expo-Trade acted on the basis that what was said in the Manual would be given effect to and refrained from advancing material (which it can now point to) or making submissions because of an erroneous assumption about how Customs would go about considering relevant matters.  To adopt the expression used by Gleeson CJ in Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 195 ALR 502 at [38], no practical injustice has been shown.

19. The application should be dismissed with costs.

I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

Associate:

Dated:             5 December 2003

Counsel for the Applicant:	S J Gageler SC with K Richardson
Solicitor for the Applicant:	Baker & McKenzie
Counsel for the Respondent:	A Robertson SC with S Lloyd
Solicitor for the Respondent:	Clayton Utz
Date of Hearing:	29-30 July 2003
Date of Judgment:	5 December 2003