COUNTERVAILING Flashcards
Republic Act No. 8751
“Countervailing Duty Act of
1999 “
LEGISLATION
R.A. 8751 was signed on
August 7, 1999, and took effect on August 31, 1999.
IRR
The Implementing Rules and Regulations
The Implementing Rules and Regulations (IRR) or Joint Administrative
Order no. 2s, 2000 was published on
September 18 2000 and took effect
on September 25, 2000
is a trade countermeasure adopted by the government to offset any bounty or
subsidy given to exporters which is not generally available to
other producers of the exporting country.
Subsidies and countervailing measures
Refers to any specific assistance (e.g. financial contribution, income or price support schemes) provided directly or
indirectly by the government of the country of export or origin in respect of the product imported into the Philippines, which confers a benefit to the foreign exporter
or producer of said product.
Subsidy
Are all subsidies countervailable?
Not all subsidies are countervailable/actionable.
Subsidy, in order to be countervailable, must be
“specific”.
Refers to the subsidy limited to an enterprise or industry, or to a
group of enterprises or industries.
specific subsidy
“__________” or “___________” are those
falling under the definition of “subsidy” which are neither non-actionable nor prohibited subsidies.
Actionable subsidies or yellow subsidies
“______________” or “____________” are those
which are permitted as they are of a general nature, i.e., applied across-the-board to all industries and not limited to a
specific industry or enterprise or group of enterprises or industries.
“Non-actionable subsidies” or “green subsidies”
“_________” or “_________,” on the other hand, include export subsidies, i.e., those that are contingent on export performance, and subsidies that are contingent on the
use of domestic over imported goods
“Prohibited subsidies” or “red subsidies,”
a product is identical or alike in all respects to the article under consideration or, in absence of such product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration.
Comparability
Product
refers to any specific assistance directly or indirectly provided by the government of the country of export or origin in respect of a product imported into the Philippines.
Subsidy
means material ______ to a domestic industry (current ________),
threat of material ________(future ______) or material retardation of the
establishment of a domestic industry.
Injury
refers to a finding that the material injury suffered by the domestic industry is the direct result of the importation of the
subsidized product.
Causal Link
DTI-BIS or DA
Department of Trade and Industry – Bureau of Import Services or Department of Agriculture (DA)
Receives the properly documented application (DTI for industrial
goods and DA for agricultural goods)
Determines whether or not a prima facie case exists to warrant
initiation of investigation
Conducts preliminary investigation to determine whether or not
provisional measure may be imposed.
Department of Trade and Industry – Bureau of Import Services or Department of Agriculture (DA)
Conducts formal investigation and makes the final determination for purposes of the imposition of the definitive countervailing duty.
Conducts countervailing reviews.
Tariff Commission
Collects the countervailing duties.
Bureau of Customs
A _____________may cover any product which is granted, directly or indirectly, by the government in the country of export or origin, any kind or form of specific subsidy upon the exportation or manufacture of such product, and the importation of such subsidized product is causing or threatening to cause material injury to a
domestic industry, or is materially retarding the growth, or preventing the establishment of, a domestic industry.
countervailing protest
Conditionally duty-free importations enumerated under
Section 800 of the Customs Modernization and Tariff Act.
- Refers to the domestic producers of like products as a whole or to those whose collective output of the products constitutes a major proportion of the total domestic production of those products in the industry concerned.
Domestic Industry
the term “__________” may be
interpreted as referring to the rest of the producers.
domestic industry
Stages in a countervailing investigation
- Prima Facie Determination
- Preliminary Determination
- Final Determination
*Issuance of Department Order
The DTI-BIS or DA, upon receipt of the properly documented
petition, has ten (10) days to examine the accuracy and adequacy of the
petition and to determine whether there is sufficient evidence to justify
the initiation of an investigation.
PRIMA FACIE DETERMINATION
Once a prima facie case has been established, DTI-BIS or
DA initiates the investigation and makes a preliminary determination (on whether or not a provisional measure may be imposed) within twenty (20) days from receipt of the answer of the respondents and other interested parties.
PRELIMINARY DETERMINATION
The requirement of the bond shall be made not sooner than sixty (60) days from the date of initiation of the investigation. The date of the initiation of the investigation shall be the date the Secretary publishes such notice in two (2) newspapers of general circulation.
The provisional countervailing duty may be imposed for a period not exceeding four (4) months.
- PRELIMINARY DETERMINATION
The Tariff Commission conducts the formal investigation during which it notifies all interested parties; receives representations and/or other submissions; holds preliminary conference and public consultations; and conducts on site
investigation/data verification (for both foreign and domestic
parties)
*FINAL DETERMINATION
Within 10 days from receipt of an affirmative final determination by the Commission, the DA or DTI Secretary shall
issue a Department Order for the imposition of a definitive countervailing duty, unless the Secretary has earlier accepted an undertaking from the foreign exporter, producer or government of the country of export or origin.
ISSUANCE OF DEPARTMENT ORDER
__________ is an offer by the government of
the exporting country to eliminate or limit the subsidy, or voluntary commitment by the foreign exporter and/or the producer that they will increase their prices or to cease exporting to the Philippines at a subsidized
price.
Voluntary undertaking
In case of negative determination, either Secretary shall issue, through the Secretary of Finance, after the lapse of the period for the petitioner to appeal to the Court of Tax Appeals, an Order for the Commissioner of Customs to immediately release the cash bond to the importer.
*ISSUANCE OF DEPARTMENT ORDER
What are the 3 modalities in determining the price effects of dumped imports?
Price depression
Price suppression
Price undercutting
refers to the extent to which the domestic producer reduces his selling price in order to compete with the allegedly subsidized
product.
- Price depression
refers to the extent by which the allegedly subsidized product prevents the domestic producer from increasing his selling price
to a level that will allow full recovery of his cost of production.
Price suppression
refers to the extent to which the allegedly subsidized product is consistently sold at price below the domestic selling price of
the like product.
Price undercutting
takes the form of security (cash deposit or bond) equal to the amount of the provisionally calculated amount of
subsidy.
It is applied only after the DA or DTI-BIS has made a preliminary affirmative determination no sooner than 60
days from initiation of the case.
Provisional measure
Final countervailing duty imposed, in addition to the regular duty and other charges, on protested product
imported from a specific exporter, following an affirmative final determination
Definitive countervailing duty
Duration of imposition of countervailin
measure Provisional measure
four months
*Definitive countervailing duty – ________ from the date of imposition
five years
