Customs (Definition of “small-medium enterprise”) Determination 2023

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Industry and Science

Customs Act 1901

Purpose and Operation

The Customs (Definition of “small-medium enterprise”) Determination 2023 (the Determination) prescribes the kinds of enterprises which fall within the definition of a “small-medium enterprise” in subsection 269T(1) of the Customs Act 1901 (the Act).

The purpose of the Determination is to allow the Minister to define “small-medium enterprise” 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 injury 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 subsection 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 Australian industry in respect of like goods consists of at least two small-medium enterprises.

This does not prevent the Minister from considering and applying the lesser duty rule 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 measures, or reviewing those measures, 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 “small-medium enterprise” provides clarity on one of the circumstances where the Minister does not need to consider a lesser amount of duty.

Authority

Subsection 269T(1B) of the Act provides that the Minister may, by legislative instrument, prescribe kinds of enterprises for the purposes of the definition of “small-medium enterprise” in subsection (1) of the Act.

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 a “small‑medium enterprise”, 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 “small-medium enterprise”) Determination 2023

Section 1 – Name of Instrument

This section specifies the name of the Determination is the Customs (Definition of “small-medium enterprise”) 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 small-medium enterprise

This section sets out the definition for a “small-medium enterprise” under this determination as authorised under section 269T(1B).

The definition, as provided by the Determination, is intended to classify small-medium enterprises based on staffing level (200 or fewer full-time staff).

The definition is also intended to exclude producers or manufacturers that are related to, or that are not at arms‑length from, other producers or manufacturers. For example, where two entities are subsidiaries of the same enterprise, those two entities would be excluded from the definition of a “small-medium enterprise”. Further, an enterprise would not fall within the definition where it is not independent from another enterprise.

Schedule 1 – Repeals

This section revokes the following determination made with respect to the definition of “small-medium enterprise”:

Customs (Definition of “small-medium enterprise”) Determination 2013 – 18 December 2013 (F2013L02171)

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 “small-medium enterprise”) 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 Determination defines the term, “small-medium enterprise” for the purposes of the subsection 269T(1) of the Customs Act 1901. 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 Customs Act 1901.

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. The Minister does this by reference to a non-injurious price, which is the minimum price necessary to remove injury.

Where the Australian industry consists of at least 2 small-medium enterprises, 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 implications

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

Conclusion

This 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

Administered by Department of Industry, Science and Resources

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