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ITAC to ask High Court for clarification on anti dumping duties

During May 1999 South Africa, on the recommendation of the International Trade Administration Commission of South Africa (ITAC), imposed anti-dumping duties on white A4 paper originating from Indonesia.

As is the practice in terms of the WTO's Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade (GATT) 1994, also referred to as the WTO's Anti-dumping Agreement, all anti-dumping duties must be lifted or abolished after 5 years from imposition.

The anti-dumping duties may only be imposed for a further period exceeding the original 5 year period in the event that a sunset review proceeding has been initiated and the outcome of that sunset review application, in simple terms, reveals that dumping and the resultant injury to the domestic industry will return as soon as the anti-dumping duties are lifted.

ITAC did initiate such a sunset review proceedings on anti-dumping duties imposed on the Indonesia A4 paper, however paper importer Progress Office Machines brought a court action against ITAC's interpretation of the 5 year period after which the anti-dumping duties will expire. In essence, the matter revolved around the question of whether or not a provisional payment constituted an anti-dumping duty. The court found that it was, indeed, a duty. As a consequence of ITAC's past treatment, instead of initiating the sunset reviews prior the lapse of the provisional payment, it only did so prior to the lapse of the final antidumping duty. This meant that the antidumping duty expired before a sunset review investigation was initiated.

Based on this court order, Indonesia commenced a WTO complaint against South Africa due to the fact that the anti-dumping duties should have been removed after the expiration of the 5 year period. Upon Indonesia's initiation of the complaint South Africa, removed the anti-dumping duties on Indonesia paper. The rest of the duties on the products listed below still remain in force. One can only speculate as to the likelihood of other WTO Members initiating complaints against South Africa at the WTO. For the related story on the Indonesia Paper dispute on this site click here.

In compliance with the court order handed down in the case known as Progress Office Machines v South African Revenue Service (SARS), ITAC gave notice in December 2007 that ITAC has the intention (thus it has taken a preliminary decision) to terminate the anti-dumping duties on a whole host of products with effect from 26 September 2007. The products and countries involved are set out in the table below:

Brazil, Poland Uncoated woodfree paper
Brazil, France, UK, USA Suspension PVC
China Aluminium Hollowware
China, Turkey Blankets
China, Chinese Taipei Bolts and nuts of iron or steel
China, India Float glass
China, India Flat glass
China Garlic
Chinese Taipei, Korea, Malaysia Welded stainless steel tubes and pipes
Egypt Aluminium hollowware
France, USA Acetaminophenol
France, Italy Automatic circuit breakers
India, Thailand Carbon black
India Garden picks
India Paper insulated lead covered electric cable
USA Chicken meat portions

However ITAC has recently decided that it will not continue with its preliminary decision to terminate the anti-dumping duties on the goods mentioned above. Instead, ITAC will approach the High Court for clarification regarding the effect of the findings of the Supreme Court of Appeal in the Progress Office Machines case. During September 2008, ITAC was still in the process of drafting the court papers and requested affected businesses to provide ITAC with information on what effect of the removal of the anti-dumping duty will have on them. The High Court's clarification will be watched with great anticipation as it will not only have an effect on the industries affected by current anti-dumping duties in place, but will also be a consideration to be taken into account for future anti-dumping applications.


Rian Geldenhuys


© Trade Law Chambers 2008



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