By T.D. Satish
To preserve the supremacy of law and legal procedures, adherence to a time frame prescribed for completion of an investigation becomes important. It is even more essential in those cases, where the fate of an industry segment depends on the finding or the conclusion of the appointed authority. Anti-dumping investigation is one such specie, wherein the interested parties to the investigation look forward to a quick determination. In this regard, Article 5.10 of WTO Agreement on Anti-dumping (ADA) states that except in special circumstances, an investigation shall be concluded within one year of initiation, and in any case not more than 18 months. Upon a plain reading of Article 5.10, following issues emerge:
In this regard, anti-dumping law of European Commission [Article 6(9)] provides that an investigation shall, in all cases, be concluded within 15 months. Proposal for levy of anti-dumping duty is sent by the Commission in EU to Council of Ministers or Council, which is responsible for adoption of final measures. The website of EC as also the practice of EC suggest that the 15 month period for concluding an investigation also includes the stage of levy of anti-dumping duty. On the other hand, in the US, dumping aspect of investigation is taken care by the Department of Commerce (DOC), whereas injury determinations are made by the International Trade Commission (ITC). Only when the final determinations of both DOC and ITC are affirmative, DOC issues an anti-dumping order. Thus, in the US also, an anti-dumping investigation covers investigation as well as levy, which is in the form of issuance of orders by DOC. In India, in stark contrast to procedures adopted by EC and the US, the law provides 18 month period to Directorate General of Anti-Dumping (DGAD) for issuance of final findings/ recommendations and thereafter another 3 months are provided to Ministry of Finance to accept and levy the duties. Considering the procedures of above 2 members as guiding light to interpret Article 5.10 of ADA, it seems India’s anti-dumping law providing total of 21 (18+3) month period is violative of said agreement.
On the flip-side if it is considered that the term ‘investigation’ is only restricted to issuance of final findings/determinations, then also, an anti-dumping investigation should be completed within the stipulated period of one year. It is only under special circumstances that the investigation may be extended for an extra period of 6 months. However, the benchmark remains “special circumstances”. In Argentina - Definitive Anti-Dumping Duties on Poultry from Brazil, the WTO Panel held that “… AD Agreement imposes a deadline for the conclusion of an investigation in Article 5.10. We consider that, if an investigation is to be completed in conformity with the timeframe provided for in Article 5.10, deadlines are indeed necessary…” The finding made in the panel report highlights the relevance of a timeframe in an investigation.
As regards the issuance of final determinations, while the United States provides for detailed time-table for each stage of investigation and EU provides for a 15 month deadline to complete the investigation, the Indian Anti-Dumping Rules under Rule 17(1) provides that the Directorate General of Anti-Dumping (DGAD) shall, within 1 year from the date of initiation, come out with the final finding. However, proviso to Rule 17 creates an exception under “special circumstances” by giving Central Government the discretion to extend the period by another 6 months. But more often than not, investigations exceed the 12 month deadline and the exception provision is used in a generalized manner. Furthermore, since 2010 DGAD has used its entire quota of 18 months in about 13 investigations (reviews included) to issue the final findings. Of these 13 findings, only in one case DGAD demonstrated existence of “special circumstance” by explicitly recording reason for delay and recorded the approval for extension of time granted by the Government. The final findings issued by DGAD, otherwise, neither provide reasons for delay in completion of investigation nor do they have any word about approval for extension granted by Government.
As far as Indian practice is concerned, it is settled by various orders of Appellate Tribunal and Courts that a period of 12 months can be automatically extended to 18 months, irrespective of type of investigation. In the case of Fragrances & Flavours Asscn of India v. Designated Authority [2011 (270) E.L.T. 733 (Tri. - Del.)], the Appellate Tribunal dismissed the plea of DGAD that oral hearing could not be given as investigation was time bound. The Appellate Tribunal concluded that AD Rules provided for extension of time and DGAD was wrong in taking a lame excuse of 12 month limitation. In Grauer & Weil (I) Ltd v. Designated Authority [2011(271) ELT 112 (Tri.-Del.)], Appellate Tribunal held that 6 month extension rule is applicable in case of mid-term reviews also.
There is no doubt that both DGAD and Courts try to adhere to the timeline prescribed and try to ensure that investigations are completed within the time limit prescribed. In the last 3 years, there has been only one exceptional case, wherein DGAD issued final finding post 18 month period (R134a Gas from Japan and China). In that case, delay in issuance of final finding was due to pending litigations. But having said that, completion of investigation after 18 months would still be violative of Article 5.10, even though the investigation was marred by domestic judicial proceedings. India, as a member of WTO and as a signatory to GATT, is bound to align its domestic laws and regulations to ensure conformity with ADA. Conformity of domestic anti-dumping laws would necessarily include consideration of other domestic general laws. Thus, even though a pending anti-dumping investigation may get caught in domestic judicial proceedings, yet India as a member of WTO has to ensure that the anti-dumping proceedings are conducted in accordance with provisions of ADA, including Article 5.10. There arises another question with respect to the absoluteness of 18 month time-frame. That is, whether it is permissible for an investigating authority to re-look into the investigation after 18 month deadline once it has made its final determination?
The practice of “remanding” back of investigation to DGAD by the appellate forum poses yet another problem. In a normal case of remand, DGAD is directed by Tribunal to have a fresh look into its findings, issued at fag end of statutory time limit, or consider points, which it previously did not consider. However, where an investigation is void ab-initio due to violation of principles of natural justice, it will be improper for a Tribunal to remand the matter back to DGAD for correcting the violation of rules or law, as remanding back of matter would provide more time than actually permitted by law. Considering the time normally taken by Tribunal to decide a case, remanding back of matter may well result in circumvention of Rule 17(1) of AD Rules and Article 5.10 of ADA.
Conclusion
As per Indian practice, it is now more or less settled that a period of 12 months to complete an anti-dumping investigation is not rigid. It may be extended even without addressing the issue of “special circumstance”. The problems with regard to Article 5.10 and Rule 17(1) are twin-fold. First problem relates to the meaning of the term ‘investigation’ and whether levy of duty also forms part of investigation itself. If levy of duty also forms a part of investigation, then Rule 17(1) read with Rule 18(1) of AD Rules constitute violation of Article 5.10 of ADA. Second issue is with respect to conducting of investigation post 18 month impasse. While DGAD and courts have been careful with maintenance of 18 month period, yet the practice of Appellate Tribunal of “remanding back” the case to DGAD remains a grey area.
[The author is Associate, International Trade, Lakshmikumaran & Sridharan, New Delhi]
To preserve the supremacy of law and legal procedures, adherence to a time frame prescribed for completion of an investigation becomes important. It is even more essential in those cases, where the fate of an industry segment depends on the finding or the conclusion of the appointed authority. Anti-dumping investigation is one such specie, wherein the interested parties to the investigation look forward to a quick determination. In this regard, Article 5.10 of WTO Agreement on Anti-dumping (ADA) states that except in special circumstances, an investigation shall be concluded within one year of initiation, and in any case not more than 18 months. Upon a plain reading of Article 5.10, following issues emerge:
- The meaning of the term “investigation”
- Time period that an anti-dumping investigation should take to reach a conclusion
- The sanctity of 18 month cut-off period
In this regard, anti-dumping law of European Commission [Article 6(9)] provides that an investigation shall, in all cases, be concluded within 15 months. Proposal for levy of anti-dumping duty is sent by the Commission in EU to Council of Ministers or Council, which is responsible for adoption of final measures. The website of EC as also the practice of EC suggest that the 15 month period for concluding an investigation also includes the stage of levy of anti-dumping duty. On the other hand, in the US, dumping aspect of investigation is taken care by the Department of Commerce (DOC), whereas injury determinations are made by the International Trade Commission (ITC). Only when the final determinations of both DOC and ITC are affirmative, DOC issues an anti-dumping order. Thus, in the US also, an anti-dumping investigation covers investigation as well as levy, which is in the form of issuance of orders by DOC. In India, in stark contrast to procedures adopted by EC and the US, the law provides 18 month period to Directorate General of Anti-Dumping (DGAD) for issuance of final findings/ recommendations and thereafter another 3 months are provided to Ministry of Finance to accept and levy the duties. Considering the procedures of above 2 members as guiding light to interpret Article 5.10 of ADA, it seems India’s anti-dumping law providing total of 21 (18+3) month period is violative of said agreement.
On the flip-side if it is considered that the term ‘investigation’ is only restricted to issuance of final findings/determinations, then also, an anti-dumping investigation should be completed within the stipulated period of one year. It is only under special circumstances that the investigation may be extended for an extra period of 6 months. However, the benchmark remains “special circumstances”. In Argentina - Definitive Anti-Dumping Duties on Poultry from Brazil, the WTO Panel held that “… AD Agreement imposes a deadline for the conclusion of an investigation in Article 5.10. We consider that, if an investigation is to be completed in conformity with the timeframe provided for in Article 5.10, deadlines are indeed necessary…” The finding made in the panel report highlights the relevance of a timeframe in an investigation.
As regards the issuance of final determinations, while the United States provides for detailed time-table for each stage of investigation and EU provides for a 15 month deadline to complete the investigation, the Indian Anti-Dumping Rules under Rule 17(1) provides that the Directorate General of Anti-Dumping (DGAD) shall, within 1 year from the date of initiation, come out with the final finding. However, proviso to Rule 17 creates an exception under “special circumstances” by giving Central Government the discretion to extend the period by another 6 months. But more often than not, investigations exceed the 12 month deadline and the exception provision is used in a generalized manner. Furthermore, since 2010 DGAD has used its entire quota of 18 months in about 13 investigations (reviews included) to issue the final findings. Of these 13 findings, only in one case DGAD demonstrated existence of “special circumstance” by explicitly recording reason for delay and recorded the approval for extension of time granted by the Government. The final findings issued by DGAD, otherwise, neither provide reasons for delay in completion of investigation nor do they have any word about approval for extension granted by Government.
As far as Indian practice is concerned, it is settled by various orders of Appellate Tribunal and Courts that a period of 12 months can be automatically extended to 18 months, irrespective of type of investigation. In the case of Fragrances & Flavours Asscn of India v. Designated Authority [2011 (270) E.L.T. 733 (Tri. - Del.)], the Appellate Tribunal dismissed the plea of DGAD that oral hearing could not be given as investigation was time bound. The Appellate Tribunal concluded that AD Rules provided for extension of time and DGAD was wrong in taking a lame excuse of 12 month limitation. In Grauer & Weil (I) Ltd v. Designated Authority [2011(271) ELT 112 (Tri.-Del.)], Appellate Tribunal held that 6 month extension rule is applicable in case of mid-term reviews also.
There is no doubt that both DGAD and Courts try to adhere to the timeline prescribed and try to ensure that investigations are completed within the time limit prescribed. In the last 3 years, there has been only one exceptional case, wherein DGAD issued final finding post 18 month period (R134a Gas from Japan and China). In that case, delay in issuance of final finding was due to pending litigations. But having said that, completion of investigation after 18 months would still be violative of Article 5.10, even though the investigation was marred by domestic judicial proceedings. India, as a member of WTO and as a signatory to GATT, is bound to align its domestic laws and regulations to ensure conformity with ADA. Conformity of domestic anti-dumping laws would necessarily include consideration of other domestic general laws. Thus, even though a pending anti-dumping investigation may get caught in domestic judicial proceedings, yet India as a member of WTO has to ensure that the anti-dumping proceedings are conducted in accordance with provisions of ADA, including Article 5.10. There arises another question with respect to the absoluteness of 18 month time-frame. That is, whether it is permissible for an investigating authority to re-look into the investigation after 18 month deadline once it has made its final determination?
The practice of “remanding” back of investigation to DGAD by the appellate forum poses yet another problem. In a normal case of remand, DGAD is directed by Tribunal to have a fresh look into its findings, issued at fag end of statutory time limit, or consider points, which it previously did not consider. However, where an investigation is void ab-initio due to violation of principles of natural justice, it will be improper for a Tribunal to remand the matter back to DGAD for correcting the violation of rules or law, as remanding back of matter would provide more time than actually permitted by law. Considering the time normally taken by Tribunal to decide a case, remanding back of matter may well result in circumvention of Rule 17(1) of AD Rules and Article 5.10 of ADA.
Conclusion
As per Indian practice, it is now more or less settled that a period of 12 months to complete an anti-dumping investigation is not rigid. It may be extended even without addressing the issue of “special circumstance”. The problems with regard to Article 5.10 and Rule 17(1) are twin-fold. First problem relates to the meaning of the term ‘investigation’ and whether levy of duty also forms part of investigation itself. If levy of duty also forms a part of investigation, then Rule 17(1) read with Rule 18(1) of AD Rules constitute violation of Article 5.10 of ADA. Second issue is with respect to conducting of investigation post 18 month impasse. While DGAD and courts have been careful with maintenance of 18 month period, yet the practice of Appellate Tribunal of “remanding back” the case to DGAD remains a grey area.
[The author is Associate, International Trade, Lakshmikumaran & Sridharan, New Delhi]