EXPLANATORY STATEMENT

Issued by the authority of the Minister for Industry

Subject: - Customs Act 1901

 Customs (Definition of “compliance period”) Determination 2013

Authority

Subsection 269T(1A) of the Customs Act 1901 provides that the Minister may, by legislative instrument,  prescribe the definition of compliance period in subsection (1).

Purpose and operation

This determination sets out the method by which compliance period in subsection 269T(1) of the Customs Act 1901 is to be calculated.

Background

Thus Determination defines the term “compliance period” for the purposes of determining if the Minister is not required to have regard to the lesser duty rule.

Subsections 8(5B), 8(5BA), 9(5AA), 10(3C), 10(3D), 11(5) of the Customs Tariff (Anti-Dumping)  Act 1975 require the Minister to consider the desirability of fixing a lesser amount of duty than the dumping (or subsidy) margin where the imposition of that lesser amount is adequate to remove injury. This is referred to as the “lesser duty” rule.

The Minister is not required to have regard to the lesser duty rule where the Minister is satisfied that certain circumstances exist, as prescribed in subsections 8(5BAA), 8(5BAAA), 9(5AAA), 10(3CA), 10(3DA), 11(5A) of the Customs Tariff (Anti-Dumping) Act 1975 and subsections 269TG(5A), 269TJ(3BA) of the Customs Act 1901.  The removal of the requirement for the mandatory consideration of the lesser duty rule in particular circumstances was introduced by the Customs Amendment (Anti-dumping Measures) Act 2013 and the Customs Tariff (Anti‑Dumping) Amendment Act 2013.

The finding of these circumstances does not prevent the Minister from considering and applying the lesser duty rule where those specified circumstances exist and where the Minister considers it would be appropriate to do so.

One of the prescribed circumstances in which the Minister is not required to have regard to the lesser duty rule is where the country in relation to which the subsidy has been provided has not complied with Article 25 of the Agreement on Subsidies and Countervailing Measures for the “compliance period”.   Subsection 269T(1A) of the Customs Act 1901 allows the Minister to make a legislative instrument for the purposes of defining “compliance period”.

Article 25 of the World Trade Organization Agreement on Subsidies and Countervailing Measures requires World Trade Organization Members to notify subsidies.  Article 25.1 requires notifications to be provided no later than 30 June of each year (in respect of the previous calendar year).  Notwithstanding that Article 25.1 specifies an annual notification, the World Trade Organization Committee on Subsidies and Countervailing Measures agreed, in 2005, to extend for an indefinite period its prior (2001 and 2003) decisions that new and full notifications should be submitted every two years, and that annual updating notifications should be de-emphasised.

For the purposes of establishing whether the Minister is not required to have regard to the lesser duty rule, consideration will be given to whether the country in which the subsidy has been provided has made one or more full and new subsidy notifications within the “compliance period”.  The “compliance period”, for the purpose of this assessment, comprises the two most recent biennial reporting periods ending prior to the initiation of the investigation.

For example, if a countervailing investigation is initiated in February 2014, consideration will be given to whether the country in which the subsidy has been provided has submitted a notification within the “compliance period”.  The “compliance period” would encompass the two biennial reporting periods most recently concluded prior to the initiation of the investigation.  This would comprise the new and full subsidy notifications due on 30 June 2013 (which covers the period 1 January 2011 to 31 December 2012 inclusive) and 30 June 2011 (which covers the period 1 January 2009 to 31 December 2010 inclusive).  If the country has provided at least one of either the 2013 or 2011 new and full subsidy notifications, the Minister is required to have regard to the lesser duty rule.  If neither the 2013 nor the 2011 new and full subsidy notification has been provided, the Minister is not required to have regard to the lesser duty rule.

When assessing whether relevant notifications have been submitted, consideration will be given to the latest Report of the Committee on Subsidies and Countervailing Measures (published in October or November of each year).  The Committee’s annual reports include annexures that set out the status of notifications by Members for relevant reporting periods on a biennial basis (reflecting the earlier decisions of the Committee that new and full notifications should be submitted every two years). 

This assessment will apply only where the country is subject to an obligation to make subsidy notifications to the World Trade Organization.

Commencement

This Determination commences on commencement of the Customs Amendment (Anti-dumping Measures) Act 2013.

Consultation

The Commonwealth undertook targeted consultation on the implementation of the reforms that are given effect by the Customs Amendment (Anti-dumping Measures) Act 2013 and the Customs Tariff (Anti-Dumping) Amendment Act 2013.  On 25 March 2013 the International Trade Remedies Forum, whose members consist of anti‑dumping stakeholders, was consulted on the implementation of the reforms included in the Customs Amendment (Anti-dumping Measures) Act 2013.  Following this, on 24 May 2013 members of the International Trade Remedies Forum were provided with an exposure draft of the Customs Amendment (Anti-dumping Measures) Act 2013 and the Customs Tariff (Anti‑Dumping) Amendment Act 2013.

The International Trade Remedies Forum brings together representatives from Australian manufacturers and producers, importers, downstream industry, industry associations, unions, and relevant Government agencies.  The International Trade Remedies Forum provides high-level strategic advice and feedback to the Government on the implementation and monitoring of reforms to Australia’s anti‑dumping system. 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 Customs (Definition of “compliance period”) Determination 2013

This Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 Overview

The purpose of the Determination is to define the term “compliance period” to clarify the operation of relevant provisions of the Customs Act 1901 that allow, in certain circumstances, for the Minister to not have regard to the lesser duty rule.

One of the prescribed circumstances in which the Minister is not required to have regard to the lesser duty rule is where the country in which the subsidy has been provided has not complied with Article 25 of the Agreement on Subsidies and Countervailing Measures for the “compliance period”.

For the purposes of determining whether the Minister is not required to have regard to the lesser duty rule, the “compliance period” comprises the two most recently concluded biennial reporting periods in which a World Trade Organization member is obliged to provide new and full subsidy notifications. 

Human rights implication

This Instrument does not engage any of the applicable rights or freedoms.

Conclusion

The Instrument is compatible with human rights as it does not raise any human rights issues.

The Minister for Industry, the Honourable Ian Macfarlane MP