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Notice on China’s Anti-dumping Investigation and Possible Countervailing Duty Investigation on Australian Wines

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On 18 August 2020, the Ministry of Commerce of China ("MOFCOM") initiated an anti-dumping ("AD") investigation on imports of certain wines originating in Australia, upon the request from China Alcoholic Drinks Association ("CADA" or "Petitioner").

On 31 August 2020, MOFCOM released a further statement announcing a countervailing duty ("CVD") investigation on Australian wines.

If, after investigation, MOFCOM determines that AD or CVD duties on Australian wine imports to China are applicable, there is potential for significantly higher rates of duty to apply to exports.

With respect to the on-going investigations, there is a very short time frame for Australian wine exporters or producers to file a registration with MOFCOM in order to participate in the investigations, with both registration periods concluding 20 days after the issue of the investigation notice:

  • AD investigation – 7 September 2020;
  • CVD investigation – 21 September 2020,

This note is intended to provide background information to Australian wine producers and exporters to assist them in determining whether they should register, and if so, the procedures that are required.

Frequently Asked Questions

Who are the antidumping authorities in China?

In China, the Ministry of Commerce ("MOFCOM") is responsible for antidumping investigations.  Specifically, the Trade Remedy and Investigation Bureau ("TRIB") of MOFCOM determines whether there is Dumping and how much the Dumping Margin is, and whether the import of the Subject Product has caused Injury to the Chinese domestic industry.

Pursuant to the determinations of MOFCOM, the State Council Tariff Commission ("Tariff Commission") will decide whether to apply antidumping measures and the form of such antidumping measures (normally, in the form of antidumping duties levied on the imports of the Subject Product to China).

The Customs of China will implement the antidumping measures as decided by the Tariff Commission.

What is Subject Product?

The Subject Product in this anti-dumping investigation refers to certain wines (i.e. wines in containers holding 2 liters or less) originating in Australia.

What is Dumping Margin?

The basic concept about dumping is that a product is exported at a price lower than its Normal Value.  Dumping Margin is determined through comparison between Normal Value and Export Price for the Subject Product.  Accordingly, Dumping Margin is the percentage rate by which the Export Price is below the Normal Value.

The antidumping duties are normally levied based on the Dumping Margin established for the exporters/producers.

What is Normal Value?

In most cases, Normal Value for the Subject Product is the price at which the exporter/producer sells a product identical or similar to the Subject Product in the ordinary course of business in the home market of the exporter/producer's country.

What is Export Price?

In most cases, Export Price for the Subject Product is the actual price paid or payable for the Subject Product exported to China.

Who may participate in an antidumping investigation as a respondent?

Pursuant to the Chinese regulations, any foreign producer or exporter who has exported the Subject Product to China during the Period of Investigation (as indicated in the Notice of Initiation) may participate in the relevant antidumping investigation as a respondent.

How can a foreign producer or exporter participate in an antidumping investigation as a respondent?

Registration.  Within 20 days after the official announcement of the initiation of the antidumping investigation, a foreign producer or exporter should submit registration documents to MOFCOM in order to register as a respondent.  In the registration form, the producer/exporter is required to provide overall data of its export volume and value to China.

Submission of the Questionnaire Responses.  After registration, MOFCOM will issue a comprehensive questionnaire that requires necessary information for dumping and injury.  The submission deadline for the questionnaire responses is the 37th day after the issuance dates of the questionnaire.

In cases where the number of respondents is so large as to make such a determination impracticable, MOFCOM may limit their examination by using sampling approach (normally according to the export volume).  If any respondents not selected as mandatory respondents, do not need to submit the questionnaire responses to MOFCOM.  The non-selected respondent will obtain a weighted average Dumping Margin based on those established for the selected mandatory respondents.

What is the consequence if a foreign producer or exporter does not participate in an antidumping investigation?

If a foreign producer or exporter does not register with MOFCOM as a respondent or otherwise fails to cooperate with the investigation, MOFCOM may make a determination based on adverse facts available, which means that such producer or exporter will obtain a punitive Dumping Margin in the antidumping investigation.

If you are considering registering in the AD investigation, or have further questions, KWM's trade team (based in Beijing and Australia) is available to assist, including in the initial registration process.

For more information please contact Meredith Paynter in the first instance. [email protected]

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