Brush up on your PRC anti-dumping laws
May 13, 2010 | BY
clpstaff &clp articles &oreign companies need to adequately familiarise themselves with PRC anti-dumping laws to avoid high tariffs and to prepare for possible investigations…
oreign companies need to adequately familiarise themselves with PRC anti-dumping laws to avoid high tariffs and to prepare for possible investigations from Chinese authorities.
Recently, the China Daily reported that China may be impacted in the growing wave of trade protectionism from the US and EU countries. Globally, anti-dumping cases have been on the rise in the past year, up 20% in 2009 from 2008 according to World Trade Organisation statistics.
Problems may crop up for foreign companies if they are not properly aware of PRC regulations governing and enforcing anti-dumping trade disputes.
“Too often companies think they understand the rules, and they do not, and the results are disastrous,” said Matthew McConkey, a Beijing-based consultant at JSM. He believes that understanding the practices and obligations of anti-dumping are important to all companies, foreign and Chinese alike.
He always tells his clients: “You cannot fight an enemy unless you know who the enemy is and what the rules of the game are.”
Peng Jiang, a Hylands Law Firm trade disputes partner agrees that foreign investors need to be more aware of PRC law. “They are very often judging the issue from a purely subjective ground. They assume the legal environment here is similar to their home country,” he said.
Compared to its most significant trade partner, the US, China has much stricter regulations on the 'registration' process with the Ministry of Commerce of the People's Republic of China (Mofcom), the enforcement authority in anti-dumping matters. The process is formal and the timeframes strict and short. Registration refers to the formal response made by the foreign party in reaction to the launch of an anti-dumping investigation against it.
When a Chinese manufacturer files a complaint to Mofcom against a US rival's exported goods, Mofcom will then initiate an investigation process. Foreign investors have to respond to the investigation by way of registration with Mofcom. This has to be done through completing a formal submission, which must include information such as production quantity, export volume, value and the company's name both in English and Chinese within 20 days.
“Failure to do so will result in the loss of right to defend and consequently, a high dumping duty will be imposed on the exported goods,” said Jiang.
In stark contrast, the US does not impose a deadline with the registration and the targeted party may respond through an informal notification.
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