EXPLANATORY STATEMENT
Issued by the authority of the Minister for Industry and Science
Customs Act 1901
Customs (Definition of “compliance period”) Determination 2023
Purpose and Operation
The Customs (Definition of “compliance period”) Determination 2023 (the Determination) prescribes the method by which a “compliance period” in subsection 269T(1) of the Customs Act 1901 (the Act) is to be calculated.
The purpose of the Determination is to allow the Minister to define the term “compliance period” for the purposes of determining if the Minister is not required to have regard to the lesser duty rule.
The lesser duty rule as prescribed by subsections 8(5B), 8(5BA), 9(5AA), 10(3C), 10(3D), 11(5) of the Customs Tariff (Anti-Dumping) Act 1975 requires the Minister to consider the desirability of fixing a lesser amount of duty than the dumping (and/or subsidy) margin where the imposition of that lesser amount is adequate to remove injury to Australian industry caused by the dumping and/or subsidy.
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 Act. 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 Act allows the Minister to make a legislative instrument for the purposes of defining “compliance period”.
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.
Further details of the Determination are outlined in Attachment A.
Background
The level of duty for an exporter may be determined by the dumping margin of that exporter (i.e. the margin between the export price and the normal value for that exporter) and/or the subsidy margin of that exporter.
When implementing anti-dumping duties, or reviewing those duties, the Minister is required to have regard to whether a lesser amount of duty would be sufficient to remove injury to the Australian industry from dumping/subsidisation. The Minister does this by reference to a non-injurious price, which is the minimum price necessary to remove injury.
The Minister does not need to consider if a lesser amount of duty would be sufficient to remove injury if the Minister is satisfied that one or more of the following circumstances exist:
- in the case of a dumping duty notice, normal value was not able to be ascertained under section 269TAC(1) because of a situation in the market of the country of export
- the Australian industry consists of at least 2 small-medium enterprises
- in the case of a countervailing duty notice, the country concerned has not provided appropriate notification of subsidies within the compliance period.
Defining a “compliance period” provides clarity on one of the circumstances where the Minister does not need to consider a lesser amount of duty.
Authority
Subsection 269T(1A) of the Act provides that the Minister may, by legislative instrument, prescribe the definition of “compliance period” in subsection (1).
Consultation
The Commonwealth undertook targeted consultation on this legislative instrument with the Anti-Dumping Commission and the Department of Foreign Affairs and Trade. As part of the development of the original legislative instrument providing the definition of “compliance period”, and which this legislative instrument continues, consultation with relevant Government agencies and the International Trade Remedies Forum (ITRF) was undertaken. The ITRF brings together representatives from Australian manufacturers and producers, importers, industry bodies, unions, and relevant Government agencies. The ITRF advises the Minister on the operation of, and improvements to, Australia’s anti‑dumping system.
Regulatory Impact
A Preliminary Assessment of regulatory impact was provided to the Office of Impact Analysis (OIA) (OIA23-04488 refers).
Based on this, OIA advised that the proposal will have no regulatory impact. As such, the preparation of an Impact Analysis is not required.
Statement of Compatibility with Human Rights
A Statement of Compatibility with Human Rights is set out in Attachment B.
Attachment A
Details of the Customs (Definition of “compliance period”) Determination 2023
Section 1 – Name of Instrument
This section specifies the name of the Determination is the Customs (Definition of “compliance period”) Determination 2023.
Section 2 – Commencement
This section provides that the Determination will commence on the day after it is registered on the Federal Register of Legislation
Section 3 – Authority
This section provides that the Determination is made under the Customs Act 1901.
Section 4 – Definitions
This section provides for definitions of terms used in the Determination.
Section 5 – Schedules
This section is a machinery provision that gives effect to the Schedule according to its terms.
Section 6 – Definition of Compliance Period
This section provides for the definition of “compliance period” as authorised under subsection 269T(1A) of the Act.
The definition, as provided by the Determination, is intended to define a compliance period based on the World Trade Organisation (WTO) subsidy reporting periods. Specifically, a compliance period is the two most recent biennial reporting periods prior to the date of initiation of a countervailing investigation.
Article 25 of the WTO Agreement on Subsidies and Countervailing Measures requires WTO Members to provide notification of 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 WTO Committee on Subsidies and Countervailing Measures agreed that new and full notifications should be submitted every two years.
As such, if a countervailing investigation is initiated in February 2022, the compliance period would be from 1 January 2017 to 31 December 2020. This covers the two biennial reporting periods most recently concluded prior to the initiation of the investigation, for the subsidy notifications due on 30 June 2019 (which covers the period 1 January 2017 to 31 December 2018 inclusive) and 30 June 2021 (which covers the period 1 January 2019 to 31 December 2020 inclusive).
If the country has provided at least one of either the 2021 or 2019 new and full subsidy notifications, the Minister is required to have regard to the lesser duty rule. If neither the 2021 nor the 2019 new and full subsidy notification has been provided, and the country is subject to an obligation to make subsidy notifications to the WTO, the Minister is not required to have regard to the lesser duty rule.
The assessment of whether relevant notifications have been submitted is based on 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.
Schedule 1 – Repeals
This section revokes the following determination made with respect to the definition of “compliance period”:
- Customs (Definition of “compliance period”) Determination 2013 – 18 December 2013 (F2013L02172)
This determination is repealed and replaced by section 6 of the Determination. This determination is repealed because it is due to sunset on 1 April 2024 and is replaced by the Determination.
Attachment B
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 2023
This Determination 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 of the Legislative Instrument
The Customs (Definition of “compliance period”) Determination 2023 (the Determination) prescribes the method by which a “compliance period” in subsection 269T(1) of the Customs Act 1901 (the Act) is to be calculated.
The Determination defines the term, “compliance period” for the purposes of the subsection 269T(1) of the Act. This definition is used to determine the circumstances in which the Minister is not required to have regard to the desirability of fixing a lesser amount of duty under the Act.
The level of duty for an exporter may be determined by the dumping margin of that exporter (i.e. the margin between the export price and the normal value for that exporter) and/or the subsidy margin of that exporter.
When implementing anti-dumping duties, or reviewing those duties, the Minister is required to have regard to whether a lesser amount of duty would be sufficient to remove injury to the Australian industry from dumping/subsidisation. The Minister does this by reference to a non-injurious price, which is the minimum price necessary to remove injury.
Where the country in which a subsidy has been provided has not complied with Article 25 of the Agreement on Subsidies and Countervailing Measures for the “compliance period”, the Minister is not required to consider whether a lesser amount of duty is sufficient to remove the injury to the Australian industry from dumped and/or subsidised imports of a particular good.
Human rights implication
This Determination does not engage any of the applicable rights or freedoms.
Conclusion
The Determination is compatible with human rights as it does not raise any human rights issues.
The Hon Ed Husic MP
Minister for Industry and Science