The Handbook of Trade Enforcement 2009

Lin Yang

2009 

 

The State Council of China promulgated China's first anti-dumping regulation (Regulations of the People's Republic of China on Anti-dumping and Countervailing) on 25 March 1997. In December of the same year the Ministry of Foreign Trade and Economic Cooperation of China (the predecessor of Ministry of Commerce (MOFCOM)) initiated its first anti-dumping investigation against imported newsprint. On 26 November 2001, just before China became a formal member of the WTO, the State Council split the original regulation to Regulations of the People's Republic of

 

China on Anti-dumping (Anti-dumping Regulations) and Regulations of the People's Republic of China on Countervailing Measures, and made some amendments to assure those regulations' consistency with WTO agreements. The latest amendments to the Antidumping Regulations were made on 31 March 2004.

Competent authorities

According to the Anti-dumping Regulations, MOFCOM is the competent authority for an anti-dumping investigation against imported products. Within MOFCOM, the Bureau of Fair Trade for Imports and Exports (BOFT) is responsible for the dumping investigation, the examination of the product exclusion request and the negotiation of price undertakings with foreign respondents, while the Bureau of Industry Injury Investigation (BIII) is responsible for the industry injury investigation and the examination on causal link and public interest. The two bureaus conduct separate investigations, but their reports and conclusions are merged into a single official finding under MOFCOM.

 

After the conclusion of its finding, MOFCOM make a proposal to the State Council Tariff Commission (SCTC) regarding the implementation of specific anti-dumping measures. The SCTC makes its decision based on MOFCOM's proposal, which is then be published by MOFCOM in the form of an official notification together with its own finding. In previous cases, the SCTC has approved all MOFCOM's proposals.

Customs implements the specific anti-dumping measures from the date set forth in MOFCOM's notification.

Investigation procedures

Initiation

If MOFCOM is satisfied with the complaint filed by the Chinese domestic industry, it must formally initiate the investigation by publishing a notice of initiation within 60 days of receipt of the complaint. As standard practice, MOFCOM informs the relevant exporting countries approximately one week 

 

before publishing the notice of initiation (initiation date).

The notice of initiation is available on MOFCOM's website.

Appearance registration

Any interested party, such as a domestic industry, foreign exporter and producer, importer, end user, association or governmental agency, who is willing to participate in the investigation, is required to file an appearance registration with BOFT and BIII within 20 days from the initiation date.

The interested party is required to submit to MOFCOM its preliminary comments on product scope, complainant's standing, subject country and other relevant matters as stated in the notice of initiation within 20 days from the initiation date.

Issuance of questionnaires BOFT and BIII have two 

 

separate questionnaires for dumping and industry injury investigations. The questionnaires shall be issued to the interested parties within 10 working days of the end of appearance registration (usually immediately after the end of appearance registration).

MOFCOM normally grants 37 days to foreign respondents to reply to the questionnaires. This period can be extended by not more than 14 days upon due application.

MOFCOM requires all submissions, including replies to the questionnaires made by foreign respondents, to be in Chinese and submitted through a Chinese-licensed practising lawyer.

Request of product exclusion The interested party can file the request of product exclusion either within 20 days from the initiation date or within 20 days from the publishing date of the preliminary finding. BOFT is responsible for examining the request of product exclusion.

 

Preliminary finding

Unlike its US and Canada counterparts, MOFCOM does not establish the investigation schedule for specific cases. In recent years, MOFCOM has usually made the preliminary finding within six to eight months of the initiation date.

In the preliminary finding, MOFCOM normally grants 20 days to all interested parties to present their comments on the preliminary finding.

Price undertakings

Foreign respondents can offer price undertakings to MOFCOM up to 45 days after the publication of the preliminary finding. BOFT is responsible for examining the price undertakings proposal and often consults with domestic industry. Although the relevant regulation requires MOFCOM to take public interest into consideration when examining price undertaking proposals from foreign respondents, in practice the opinions from domestic industry are given more weight in MOFCOM's determination 

 

than those of other interested parties, such as downstream users.

Hearing on industry injury

Any interested party can apply for a public hearing on industry injury before BIII. Such hearing request shall be submitted in written form. BIII normally schedules the public hearing after the preliminary finding.

After the introduction of 'public interest' into Anti-dumping 

 

Regulations in 2004, BIII is putting more weight on the claims of downstream users. In recent years, as well as the public hearing, BIII also holds a hearing attended by both the petitioners and downstream users with the purpose of achieving balance between Chinese upstream and downstream industries.

On-the-spot verification

After the preliminary finding, BOFT case handlers will visit foreign respondents' offices and factories to verify the accuracy and completeness of reported information and to collect further information and materials needed for the investigation. BOFT carries out on-the-spot verification only on those foreign respondents who have been fully cooperative in the investigation.

Theoretically speaking, the working language in verification is still Chinese; however, in most of MOFCOM's cases, MOFCOM does not engage the 

 

independent interpreter to assist the verification, and the case handlers carry out the verification in English directly or ask the foreign respondent's Chinese lawyer to assist the translation.

Final finding

Consistent with the WTO Anti-dumping Agreement, MOFCOM usually announces the final finding within 12 months of the initiation date. This period may be extended under special circumstances, but in no case can the extension be 

 

more than 6 months.

Improvement of transparency

On 9 January 2006, MOFCOM announced the withdrawal of its final finding on Kraft Liner Board, issued on 30 September 2005, which became the first (and only) time that MOFCOM withdrew its published final finding through administrative reconsideration. Although some interested parities criticized that the withdrawal was due to political pressure, the reason given was that BIII did not make sufficient disclosure to the interested parties before the final finding.

Due to this case, and other criticism from WTO members, MOFCOM has made gradual but not insignificant progress in improving the transparency of its investigations, including: ? On 4 August 2006, MOFCOM promulgated Rules on Information Access and Disclosure in Industry Injury Investigations. The new rules enable the interested party to access the non-confidential version of various case materials during the 

 

investigation more conveniently. The new rules also impose more specific and detailed requirements on BIII's disclosure before the final finding.

CHINA

MOFCOM's data room, where non-confidential versions of case material are stored, is better organized and more efficient. Public case material is open to the public to view, and the catalogue of non-confidential versions of each case is also available on MOFCOM's website.

Various case information is available on BIII's website, such as notice of initiation, registration list of interested parties, various questionnaires 

 

relating to industry injury investigation, appointment of the case handlers, notice and news of hearing and notice of verification. Such case information is usually published promptly.

RayYin is a leading law firm in the field of international trade law. Our International Trade & WTO Practice offers legal services to both domestic companies and multinational enterprises, including anti-dumping, countervailing duty, and safeguard investigations initiated by Chinese authorities against imported products; as well as to foreign governmental authorities and industrial associations that participate in trade barrier investigations initiated by Chinese authorities. For more information or to find out how we can help your company or organization, please contact at Lin Yang atyanglin@rayyinlawyer.com