PRC Anti-dumping Regulations

(Promulgated by the State Council on November 26 2001 and effective as of January 1 2002.)

PART ONE: GENERAL PROVISIONS

Article 1: These Regulations are formulated in accordance with the relevant provisions of the PRC, Foreign Trade Law to maintain order in foreign trade activities and to safeguard fair competition.

Article 2: Where products imported into the market of the People's Republic of China by way of dumping result in substantial injury or the threat of substantial injury to a related domestic industry that has already been established, or substantially impede the establishment of a related domestic industry, investigations shall be conducted and anti-dumping measures taken in accordance with these Regulations.

PART TWO: DUMPING AND INJURY

Article 3: Dumping means the entrance into the market of the People's Republic of China of an imported product at an export price lower than its normal value in the ordinary course of trade.

The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) shall be responsible for the investigation and determination of dumping.

Article 4: The normal value of an imported product shall be determined in accordance with the following methods:

(1) where there is a comparable price for a product that is the same as the imported product in the market of the country (region) of export in the ordinary course of trade, that comparable price shall be the normal value; or

(2) where there are no sales of the product that is the same as the imported product in the market of the country (region) of export in the ordinary course of trade, or the price or quantity of such product can not be compared with that of the imported product on a fair basis, the comparable price for export of the product to a proper third country (region), or the cost of the same product in the original country (region) of its production plus reasonable expenses and profit, shall be the normal value.

If a product is not imported directly from its country (region) of origin, its normal value shall be determined in accordance with the provisions of the first paragraph of this article; where the imported product is only in transit through the country (region) of export and there is no production of the product, nor a comparable price in the country (region) of export, the price of the same product in its country (region) of origin shall be the normal value.

Article 5: The export price of an imported product shall be determined in accordance with the following methods:

(1) where there is a purchase price that has been paid or a purchase price that is payable for the imported product, that price shall be the export price; or

(2) where there is no export price to be found for the imported product or the export price is not reliable, the price inferred from the price of resale to an independent purchaser for the first time shall be the export price; where the imported product is not resold to an independent purchaser or it is not sold in its original form when it is imported, the price inferred on a reasonable basis by MOFTEC shall be the export price.

Article 6: The margin by which the export price for an imported product is lower than its normal value shall be the dumping margin.

The export price and normal value of an imported product shall be compared on a reasonable and fair basis, taking into account all the comparable factors that may have effects on the price.

In determining the dumping margin, the weighted average normal value shall be compared with the weighted average price of the product in all the export transactions involving the product, or the average value shall be compared with the export price on a transaction-by-transaction basis.

Where the export price varies significantly for different purchasers, in different districts or in different periods and a comparison in accordance with the method specified in the above paragraph is not possible, the weighted average normal value may be compared with the price for individual export transactions.

Article 7: Injury means substantial injury or the threat of substantial injury to a related domestic industry that has already been established caused by dumping or substantial impediment to the establishment of a related domestic industry because of dumping.

The State Economic and Trade Commission (SETC) shall be responsible for the investigation and determination of injury.  Investigations of injury to related domestic industries involving agricultural products shall be conducted by SETC in conjunction with the Ministry of Agriculture.

Article 8: In determining the injury caused by dumping to a related domestic industry, the following items shall be examined:

(1) the volume of the dumped products, including the total volume of the dumped product or the increased volume of the dumped product as compared to the same product produced or consumed in China or the probability of a large increase of imports;

(2) the price of the dumped product, including price decreases of the dumped product or the impact of the price of the dumped product on the price of the same product in China in the form of a significant suppression or lowering of the latter price;

(3) the impact of the dumped product on related economic elements and indexes of the related domestic industry;

(4) the production capacity, export capacity and stockpiles of the dumped product in the country (region) of export and the country (region) of production; and

(5) other factors that cause injury to the related domestic industry.

The determination of a threat of injury shall be made based on facts, but not on the basis of accusations, inferences or very small possibilities.

The determination of injury to a related domestic industry caused by dumping shall be made according to definite evidence; injury not related to dumping shall not be attributed to dumping.

Article 9: If a dumped product is imported from two or more countries (regions) and both of the following conditions are true, the impact of that imported product on the related domestic industry may be assessed cumulatively:

(1) the dumping margin of the dumped product from each country (region) is not less than 2% and the quantity of its import is not negligible; and

(2) a cumulative assessment is appropriate in view of the conditions for competition between the dumped product that has been imported and between that imported product and the same product produced in China.

Negligible means that the quantity of the dumped product imported from one country (region) is less than 3% of the total quantity of the product imported, but an exception shall be made if the quantity of the dumped product from one of a group of countries (regions) accounts for less than 3%, but the total quantity of the product from this group is more than 7% of the total quantity of all imports of the product.

Article 10: The impact of a dumped product on a related domestic industry shall be assessed with reference only to the same product produced in China and, if that is not possible, reference shall be made to the narrowest group of products or the narrowest scope of production covering a product of the same kind produced in China.

Article 11: A domestic industry means all producers of the like product within the territory of the People's Republic of China, or producers whose total output of the same product accounts for the majority of output of the same product in China.  However, if a domestic producer is affiliated with the exporter of the dumped product, or itself is an importer of the dumped product, that producer may be excluded.

In special cases, producers for a regional market in which such producers sell all or nearly all their products of the same kind and in which the demand for the same product is not met by a supply from producers in other districts of China may be regarded as a separate industry.

Article 12: Like product means a product that is the same as the dumped product; where there is not a product that is the same as the dumped product, a product very closely resembling the dumped product shall be regarded as the like product.

PART THREE: ANTI-DUMPING INVESTIGATION

Article 13: A domestic industry or a natural person, legal person or relevant organization representing the domestic industry (the Petitioner) may lodge a written application for an anti-dumping investigation with MOFTEC in accordance with the provisions of these Regulations.

Article 14: An application shall include the following items:

(1) the name, address and other relevant information of the Petitioner;

(2) a full description of the imported product regarding that an investigation is sought, including the name of the product, the concerned country(s) (region(s)) of export or the country(s) (region(s)) of origin, the known exporter(s) or producer(s), information on the price at which the concerned product is consumed on the domestic market(s) of the country(s) (region(s)) of export or of the country(s) (region(s)) of production, information on the export price, etc;

(3) the quantity and value of the like product produced in China;

(4) the impact of the quantity and price of the imported product on the related domestic industry; and

(5) other information the Petitioner deems necessary.

Article 15: The following supporting documents shall be attached to the application:

(1) evidence of dumping of the imported product regarding that an investigation is sought;

(2) evidence of injury caused to the domestic industry; and

(3) evidence of causation between the dumping and the injury.

Article 16: Within 60 days after receiving a Petitioner's written application and relevant supporting documents, MOFTEC shall examine the qualifications of the Petitioner as the domestic industry or representative of the domestic industry, the contents of the application and the attached supporting documents and shall, following consultation with SETC, decide whether the case should or should not be filed for investigation.

Prior to the decision to initiate an investigation, the government(s) of the concerned country(s) of export shall be notified thereof.

Article 17: Among the supporters and the opponents to an application, if the output of the supporters accounts for more than 50% of the total output of both the supporters and the opponents, the application shall be deemed to have been lodged by the domestic industry or on behalf of the domestic industry and the investigation shall be activated; if the production of the domestic supporters for the application accounts for less than 25% of the total output of the same product produced in China, an investigation shall not be initiated.

Article 18: In special cases, even if MOFTEC has not received a written application for investigation, it may, following consultation with SETC, decide to initiate an investigation if there is sufficient evidence that dumping and injury have occurred and there is definite causation between the dumping and the injury.

MOFTEC and SETC shall be referred to collectively hereafter as the Investigative Authorities.

Article 19: The decision to initiate an investigation shall be publicly announced by MOFTEC, and the Petitioner, the known exporter(s) and importer(s), the government(s) of the country(s) (region(s)) and other interested organizations and individuals (collectively, the Interested Parties) shall be notified thereof.

Upon announcing the decision to initiate the investigation, MOFTEC shall provide copies of the text of the application to the known exporter(s) and the government(s) of the country(s) (region(s)) of export.

Article 20: The Investigative Authorities may collect information from the Interested Parties and conduct the investigation by means of questionnaires, sample-taking, hearing sessions, on-the-spot verifications and other methods.

The Investigative Authorities shall provide opportunities for the Interested Parties to state their opinions and arguments.

MOFTEC may, when it considers it necessary, send personnel to a country (region) concerned with an investigation; however, an exception shall be made if the country (region) concerned objects.

Article 21: When the Investigative Authorities conduct an investigation, the Interested Parties shall report the situation accurately and provide relevant information.  If an Interested Party fails to report the situation accurately or to provide relevant information, or adopts other means to impede the investigation, the investigative authorities may make a ruling based on the facts already obtained and the best information available.

Article 22: If an Interested Party believes that any disclosure of the information it has provided will cause serious harm, the party may request the Investigative Authorities to treat such information as confidential.

If the Investigative Authorities deem such request to be well grounded, they shall treat the information provided by the Interested Party as confidential and request the said party to supply a non-confidential abstract of such information.

The information treated as confidential shall not be disclosed without the permission of the party who has provided such information.

Article 23: The Investigative Authorities shall allow the Petitioner and Interested Parties access to the files of the case with the exception of the information treated as confidential.

Article 24: MOFTEC and SETC shall make preliminary findings on dumping and injury respectively based on their investigations and determine preliminarily whether there is any causation between the dumping and the injury.  Such preliminary finding shall be announced publicly by MOFTEC.

Article 25: If the preliminary finding confirms dumping and injury and causation between the two, MOFTEC and SETC shall continue the investigation on the dumping and dumping margin as well as the injury.  They shall make final findings respectively based on their investigations, and the final findings shall be announced publicly by MOFTEC.

Prior to the making of the final findings, MOFTEC shall notify all the known interested parties of the basic facts according to which the final findings are to be made.

Article 26: An anti-dumping investigation shall be completed within 12 months from the date when the decision to investigate the case was announced; under special circumstances, the period may be extended, but the extended period shall not be for more than 6 months.

Article 27: An anti-dumping investigation shall be terminated in any of the following circumstances and a public announcement shall be made by MOFTEC:

(1) where the Petitioner withdraws the application;

(2) where there is insufficient evidence that dumping and injury have occurred or that there is causation between the dumping and the injury;

(3) where the dumping margin is less than 2%;

(4) where the actual or potential quantity of the imported product or the injury caused is negligible; or

(5) where MOFTEC and SETC agree that it is no longer appropriate to continue the anti-dumping investigation.

Where any of (2), (3) or (4) of the above circumstances is applicable to the products of one or some of the countries (regions), the anti-dumping investigations involving those products shall be terminated.

PART FOUR: ANTI-DUMPING MEASURES

Section One:  Provisional Anti-dumping Measures

Article 28: If a preliminary finding determines that injury to a domestic industry as a result of dumping has occurred, the following provisional anti-dumping measures may be applied:

(1) a provisional anti-dumping duty; or

(2) a request for a cash deposit, a letter of guarantee or other type of guarantee.

The amount of the provisional anti-dumping duty and the amount of the cash deposit or other types of guarantee shall not exceed the dumping margin as determined by the preliminary finding.

Article 29: MOFTEC shall give an opinion on, and the State Council Customs Tariff Commission shall, on the basis of MOFTEC's opinion, decide on the imposition of a provisional anti-dumping duty, and the decision shall be publicly announced by MOFTEC.  With regard to a request to be made for a cash deposit, a letter of guarantee, or other type of guarantee, MOFTEC shall make the decision and publicly announce such decision.  Customs shall implement such decisions as of the date specified in the public announcement.

Article 30: The time limit for imposing provisional anti-dumping measures shall not exceed 4 months from the date specified in the public announcement on the provisional anti-dumping measures.  Under special circumstances, the time limit may be extended to nine months.

No provisional anti-dumping measures shall be imposed within 60 days of the public announcement of the anti-dumping investigation.

Section Two:  Price Undertaking

Article 31: During the period of investigation, the exporter of the dumped product may propose to MOFTEC to undertake to change the price or to stop exporting at dumping price levels.

MOFTEC may make price undertaking proposals to the exporter.

The Investigative Authorities shall not force the exporter to make price undertakings.

Article 32: Failure of the exporter to make a price undertaking or to accept a price undertaking proposal shall not affect the anti-dumping investigation and the findings of the investigation.  If the exporter continues to dump the imported product, the Investigative Authorities shall have the right to determine that a threat of injury is increasing.

Article 33: When MOFTEC determines that a price undertaking is acceptable, it may, following consultations with SETC, decide to suspend or terminate the anti-dumping investigation and not to adopt provisional anti-dumping measures or impose a provisional anti-dumping duty.  The decision on the suspension or termination of the anti-dumping investigation shall be publicly announced by MOFTEC.

If MOFTEC rejects the price undertaking, it shall give reasons to the concerned exporter.

The Investigative Authorities shall not seek or accept price undertakings prior to making a preliminary finding that dumping and injury resulting from dumping has actually occurred.

Article 34: After suspension or termination of the anti-dumping investigation in accordance with the provisions of Paragraph One of Article 33 hereof, the Investigative Authorities may, at the request of the exporter or, if the Investigative Authorities deem it necessary, resume the investigation of the dumping and the injury.

The price undertaking shall automatically cease to be effective if the finding on the dumping and the injury based on the investigation is negative, while the price undertaking shall continue to be effective if the finding is positive.

Article 35: MOFTEC may request the exporter to regularly provide information and data on its performance of its price undertaking and MOFTEC shall verify such information and data.

Article 36: If the exporter has breached its price undertaking, MOFTEC may, following consultations with SETC, decide to resume the anti-dumping investigation immediately in accordance with the provisions hereof.  It may, on the basis of the best information available, adopt provisional anti-dumping measures and, in addition, impose an anti-dumping duty on the product imported within 90 days prior to the adoption of the provisional anti-dumping measures, excluding the products imported before the breach of the price undertaking.

Section Three: Anti-dumping Duty

Article 37: If the final finding determines that injury has occurred to a domestic industry as a result of dumping, an anti-dumping duty may be imposed.

Article 38: In imposing an anti-dumping duty, MOFTEC shall make a suggestion and the State Council Customs Tariff Commission shall, on the basis of the suggestion, make a decision and the decision, shall be publicly announced by MOFTEC.  Customs shall implement the decision as of the date specified in the announcement.

Article 39: The anti-dumping duty is applicable to products imported after the final finding is publicly announced, except in cases specified in Articles 36, 43, and 44 hereof.

Article 40: The anti-dumping duty shall be paid by the importer of the dumped product.

Article 41: The rate of the anti-dumping duty shall be determined separately according to the dumping margin of each exporter.  If anti-dumping duty needs to be imposed on products of which the exporters are not included in the anti-dumping investigation, the rate of the anti-dumping duty shall be determined on a reasonable and fair basis.

Article 42: The amount of the anti-dumping duty shall not exceed the dumping margin determined by the final finding.

Article 43: If the final finding determines that substantial injury has occurred and previous provisional anti-dumping measures have been applied, the anti-dumping duty may be retroactively imposed for the period in which provisional anti-dumping measures have been implemented.

If the final finding determines that there exists a threat of substantial injury and previous provisional anti-dumping measures have been applied under circumstances where, if preemptive provisional anti-dumping measures were not adopted, it would lead to a final finding that substantial injury would occur, the anti-dumping duty may be retroactively imposed for the period in which provisional anti-dumping measures have been implemented.

If the anti-dumping duty determined in the final finding is higher than the interim anti-dumping duty that has been paid or is payable or than the estimated amount for the guarantee, the difference shall not be paid; if the anti-dumping duty determined by the final finding is lower than the interim anti-dumping duty that has been paid or is payable or than the estimated amount for the guarantee, the difference shall be refunded on the basis of the actual conditions or the amount of the duty shall be re-calculated.

Article 44: If the following two circumstances exist concurrently, the anti-dumping duty may be imposed retroactively on the dumped product imported within 90 days before the date on which the provisional anti-dumping measures began to be implemented excluding products imported before the anti-dumping investigation began:

(1) the dumping of the dumped product has previously caused injury to a domestic industry or the importer of that dumped product knows or should have known that the exporter of that product is dumping that product and that the dumping will cause injury to a domestic industry; and

(2) a large quantity of the dumped product has been imported within a short period of time and the remedial effect of the anti-dumping duty to be adopted may possibly be seriously undermined.

Article 45: If the final finding determines that no anti-dumping duties shall be imposed or the finding does not provide for a retroactive imposition of the anti-dumping duty, the interim anti-dumping duty and cash deposit already collected shall be refunded and the letter of guarantee and other types of guarantee shall be released.

Article 46: An importer of the dumped product who has definite evidence that the amount of the anti-dumping duty already paid exceeds the dumping margin may apply to MOFTEC for a refund.  MOFTEC shall verify the application and, after confirmation, make a suggestion, and the State Council Customs Tariff Commission may, on the basis of the suggestion, make a decision for the refund.  The decision shall be implemented by Customs.

Article 47: After the anti-dumping duty is imposed on the dumped product, if a new exporter of the product who did not export that product to the People's Republic of China during the period of investigation is able to prove that it is not associated with any of the exporters on whom anti-dumping duties have been imposed, it may apply to MOFTEC for a separate determination for its dumping margin.  MOFTEC shall immediately make an examination and then a final finding.  In the process of the examination, the measures specified in (2) of Paragraph One of Article 28 hereof may be applied, but no anti-dumping duties shall be imposed on that product.

PART FIVE: TIME LIMIT FOR ANTI-DUMPING DUTY AND PRICE UNDERTAKING AND REVIEW

Article 48: The time limit for the imposition of anti-dumping duty and the performance of the price undertaking shall not exceed five years.  If a review determines that the termination of the anti-dumping duty may result in the continuation or recurrence of the dumping and injury, the time limit for the imposition of the anti-dumping duty may reasonably be extended.

Article 49: After the anti-dumping duty is imposed, MOFTEC may, with good reasons and after consultations with SETC, decide to make a review of the necessity to continue the imposition of the anti-dumping duty.  After a reasonable period of time, MOFTEC may also decide to make a review of such necessity at the request of an interested party after examination of the relevant supporting documents provided by that interested party.

After the price undertaking comes into effect, MOFTEC may, with good reasons, decide to make a review of the necessity to continue the performance of the price undertaking.  After a reasonable period of time, MOFTEC may also decide to make a review of such necessity at the request of an interested party after examination of the relevant supporting documents provided by that interested party.

Article 50: MOFTEC may, on the basis of findings of the review, propose to retain, modify or revoke the anti-dumping duty in accordance with the provisions hereof and the State Council Customs Tariff Commission shall, on the basis of the proposal, make a decision.  The decision shall be publicly announced by MOFTEC.  MOFTEC may also, following consultations with SETC, make a decision to retain, modify or revoke the price undertaking in accordance with the provisions hereof and publicly announce the decision.

Article 51: For the procedure of a review, reference shall be made to the relevant provisions relating to anti-dumping investigations hereunder.

The time limit for the review shall not exceed 12 months from the date when the decision for the review was made.

Article 52: In the process of the review, the review procedure shall not affect the implementation of the anti-dumping measures.

PART SIX: SUPPLEMENTARY PROVISIONS

Article 53: Any party who objects to the final finding made under the provisions of Article 25 hereof, or to the decision on the imposition of the anti-dumping duty and the decision made under the provisions of Part Four hereof on the retroactive imposition of duties, duty refund or the imposition of duties on new exporters, or to the decision for a review under the provisions of Part Five hereof may apply for an administrative review according to law and may also bring an action in the people's court.

Article 54: A public announcement made under the provisions hereof shall state important situations, facts, reasons, evidence, results and conclusions.

Article 55: MOFTEC and SETC may take proper measures to prevent activities for evading the anti-dumping measures.

Article 56: If any country (region) has applied discriminatory anti-dumping measures to goods exported from the People's Republic of China, the People's Republic of China may, depending on actual circumstances, adopt corresponding measures to be applied to that country (region).

Article 57: MOFTEC shall be responsible for consultations with foreign parties, notices, and dispute settlements relating to anti-dumping matters.

Article 58: MOFTEC and SETC may formulate detailed measures in accordance with these Regulations.

Article 59: These Regulations shall take effect as of January 1 2002 and the provisions relating to anti-dumping in the PRC, Anti-dumping and Anti-subsidy Regulations promulgated on March 25 1997 shall be repealed at the same time.

Endnote:

1. Translation provided by O'Melveny & Myers.