REAL RISKS WITH DUMPING AND COUNTERVAILING MEASURES

Andrew Hudson of Gadens Lawyers has provided timely advice on the risks associated with dumping and countervailing. As the numbers and size of dumping and countervailing measures have increased here and overseas, so has the importance of the expertise to identify and manage the risks associated with those measures. That expertise needs to be held by exporters, importers and their service providers such as freight forwarders and licensed custom brokers as each of them face significant liabilities from transacting with goods subject to the measures. Unfortunately, at the same time as those liabilities and risks increase, so does the pressure to avoid those measures. It needs to be kept in mind that the liabilities can be extreme, including significant financial penalties as well as possible jail time. In the Australian jurisdiction, the issues of dumping and countervailing measures, the increased complexity of the regime, the introduction of anti-circumvention provisions and the incidents of alleged fraudulent action have pushed to the fore. There have been a number of recent media releases from the Australian Customs and Border Protection Services referring to actions taken to address concerns on supply chain integrity. Many of those concerns refer to companies which may be seeking an unfair advantage by avoiding payments of duties and taxes on certain imported goods. Some factors contributing to these problems include:

• measures are often imposed after exporters and/or importers have made a decision to start trading in Australia and after the parties have already entered into agreements for the purchase and subsequent sale of goods subject to the measures;
• It’s a very complicated area in which the law and practice changes rapidly;
• Determining which goods are subject to dumping and countervailing measures can be a difficult task;
• The introduction of circumvention measures makes the task of identifying goods subject to measures more difficult;
• The regulatory regime is subject to significant legislative and practice changes. Not only does this create uncertainty regarding the regime it may also create liability to measures where none had previously existed;
• The risks for service providers handling such goods are significant. In recent times, freight forwarders and licensed customs brokers have received search warrants from Customs regarding their involvement with such goods.

It is in everyone’s interest to ensure that exporters and importers affected by new investigations which could lead to the imposition of measures should seek advice and take all appropriate steps to protect against or minimise the effect of such measures during the investigation. In the event of doubt, exporters, importers and their service providers need to excise extreme caution with goods which could be subject to dumping or countervailing measures to ensure correct declarations are made and correct duties are paid.