The Trade Remedies (Dumping and Subsidisation) (EU Exit) Regulations 2019

Explanatory Note

(This note is not part of the Regulations)

M1 These Regulations are made under and for the purpose of sections 13, 32, 51 and 56 of, and Schedule 4 to, the Taxation (Cross-border Trade) Act 2018 (“the Act”) .

Schedule 4 to the Act establishes a regime under which the Trade Remedies Authority (“the TRA”), when established, will investigate prima facie incidences of dumping (whether goods are imported into the United Kingdom at a price which is less than the normal value of the good in the domestic market of the exporting country or territory) or subsidisation (whether goods that are imported into the United Kingdom benefit from a countervailable subsidy). The TRA itself will be established by the Trade Bill when it receives Royal Assent.

The process of investigation and the circumstances in which such duties may be applied is provided for by agreements under the auspices of the World Trade Organization to which the United Kingdom is a party. Specifically, these agreements are the General Agreement on Tariffs and Trade 1994 (Article VI in particular), the Agreement on Subsidies and Countervailing Measures (“SCMA”) and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“ADA”) in Annex 1A to the Marrakesh Agreement establishing the World Trade Organization (concluded on 15 April 1994, entered into force 1 January 1995). These Regulations are intended to be consistent with the United Kingdom's obligations under those agreements.

The purpose of these investigations by the TRA is to consider whether there is evidence that goods which are dumped or subsidised are imported into the United Kingdom and are causing injury to a UK industry such that it should recommend to the Secretary of State that an additional amount of import duty be applied to the goods in question. The TRA's duty to make recommendations for the imposition of provisional and/or definitive measures is set out in Parts 3 & 4 of Schedule 4 to the Act. Any additional amount of import duty is given effect by the Secretary of State publishing a notice under section 13 of the Act.

Part 1 (Introductory) sets out the introductory provisions of the Regulations and includes the definitions that apply throughout. It also provides that the Regulations will apply as modified by Part 13 until the TRA is established.

M2 Part 2 (Dumping) of the Regulations provides for how the TRA will determine whether or not there is dumping in accordance with paragraph 1 of Schedule 4 to the Act, and broadly reflects Article 2 of the ADA and Article 2 of Regulation (EU) 2016/1036 of 8 June 2016 on protection against dumped imports from countries not members of the European Union . The regulations in this Part set out: how the TRA will determine the normal value (that is, the cost of the goods in the domestic market of the exporting country or territory); how the TRA will determine the export price of the goods; and how the TRA will compare the two fairly in order to determine whether or not goods have been dumped. The regulations contain different methodologies for the calculation of the normal value and provide for the TRA to use the methodology it considers the most appropriate in the circumstances.

M3 Part 3 (Subsidisation) of the Regulations provides for how the TRA will determine whether or not a subsidy exists; whether the subsidy is countervailable, and how the countervailable subsidy is attributed to goods. The regulations in this Part broadly reflect Articles 1, 2 and 14 of and Annexes I to III to the SCMA and Articles 2 to 7 of Regulation (EU) 2016/1037 of 8 June 2016 on protection against subsidised imports from countries not members of the European Union .

Part 4 (Injury and Causation) of the Regulations provides for how the TRA is to determine whether dumped goods or subsidised imports are causing injury to a UK industry. The regulations, in particular, provide: the meaning of “threat of material injury”; for when a producer may be regarded as a producer in the United Kingdom of like goods for the purpose of the definition of UK industry; how the TRA determines whether or not UK industry has been injured, and how the TRA determines whether or not the injury is caused by the dumped goods or subsidised imports. The regulations in this Part broadly reflect Articles 3 and 4.1(i) of the ADA, Articles 15 and 16.1 of the SCMA, Articles 3 and 4 of Regulation (EU) 2016/1036 and Articles 8 and 9 of Regulation (EU) 2016/1037.

Part 5 (Determination of amounts) of the Regulations provides for how the TRA is to determine the level of an anti-dumping amount or a countervailing amount (or in the case of provisional remedies, an estimated amount). In particular, the regulations in this Part provide: for how the TRA is to determine an amount adequate to remove the injury for the purpose of paragraphs 14(4) and 18(7) of Schedule 4 to the Act; and how the non-sampled and residual rates are calculated. The regulations reflect Article 6 of the ADA; Articles 9, 17 and 18 of Regulation (EU) 2016/1036 and Articles 15, 27 and 28 of Regulation (EU) 2016/1037, although some of the regulations are unique to the UK regime and do not have equivalents in the ADA, SCMA, Regulation (EU) 2016/1036 or Regulation (EU) 2016/1037.

Part 6 (Investigations) of the Regulations provides for the TRA to investigate injury caused to UK industry by dumping or subsidisation so as to recommend to the Secretary of State the imposition of provisional and/or final measures. It broadly reflects Articles 5, 6 and 12 of the ADA; Articles 11, 12, 13 and 23 of the SCMA; Articles 5, 6, 16, 19 and 20 of Regulation (EU) 2016/1036 and Articles 10, 11, 26, 29 and 30 of Regulation (EU) 2016/1037. The regulations in this Part set out: the requirements on the content of an application for the initiation of an investigation; how the TRA will assess such an application; how the TRA will treat confidential information; the conduct of verification visits and hearings, and the disclosure of information forming the basis of the TRA's determinations.

Part 7 (Reviews) of the Regulations provides for the TRA to review existing anti-dumping amounts or countervailing amounts so as to recommend the maintenance, variation (including extension of duration) or revocation of the relevant measure. It broadly reflects Articles 9.5 and 11 of the ADA; Articles 19.3 and 21 of the SCMA; Articles 11, 12 and 13 of Regulation (EU) 2016/1036 and Articles 18, 19, 20, 22 and 23 of Regulation (EU) 2016/1037. The regulations in this Part set out: the procedure for conducting reviews generally. They also provide for six distinct types of reviews of the application of anti-dumping amounts or countervailing amounts. The first type is an interim review during the life of a measure. The second type is an expiry review at the end of the duration of the measure. The third type is a new exporter review where the exporter was not part of the original investigation. The fourth type is an absorption review into whether the measure has been fully reflected in resale prices. The fifth type is a circumvention review into whether the measures are being avoided. The sixth type is a scope review into whether the precise goods to which the measures apply should be varied.

Part 8 (Undertakings) of the Regulations provides for overseas exporters offering certain undertakings, such that various terms and conditions are applied as an alternative to an anti-dumping amount or a countervailing amount. It broadly reflects Articles 8 and 11 of the ADA; Article 18 and 21 of the SCMA; Articles 8 and 10(5) of Regulation (EU) 2016/1036 and Articles 13 and 16(5) of Regulation (EU) 2016/1037. The regulations in this Part set out: the procedure which the TRA must follow when it receives or requests an undertaking; the circumstances in which the TRA may recommend the acceptance of an undertaking and the Secretary of State may accept or reject such recommendation. This Part also contains provisions relating to the TRA's role in monitoring compliance with the undertaking; the acceptance of new undertakings; the circumstances in which an undertaking ceases to apply; investigations into breaches of undertakings and the consequences of a breach, and reviews of the continuing application of an undertaking.

Part 9 (Suspension) of the Regulations provides for the TRA to consider and recommend temporary suspension of an anti-dumping amount or a countervailing amount. It broadly reflects Article 14(4) of Regulation (EU) 2016/1036 and Article 24(4) of Regulation (EU) 2016/1037. The regulations in this Part set out: the circumstances in which the TRA may recommend temporary suspension; the matters which it may consider in making its determination; how an interested party can apply for temporary suspension; the duration of the temporary suspension, and the circumstances in which the TRA may recommend reinstatement of a measure.

Part 10 (Repayments) of the Regulations provides for investigations into whether HMRC should repay anti-dumping amounts or countervailing amounts to an importer when the TRA determines that, in light of new data, that importer has overpaid. It broadly reflects Article 9.3.2 and 9.3.3 of the ADA; Article 11(8) Regulation (EU) 2016/1036 and Article 21 of Regulation (EU) 2016/1037. The regulations in this Part set out: the procedure which the TRA must follow to investigate whether a repayment should be made; the steps it must take following a determination that a repayment should be made, and how an importer can apply for a repayment.

Part 11 (Miscellaneous) of the Regulations provides for when the period of a provisional remedy should be extended in a dumping investigation. This Part also provides for when an anti-dumping amount or a countervailing amount can be collected from a date which is before the date of the section 13 notice giving effect to the Secretary of State's decision for a measure to be imposed, and the meaning of export subsidisation. These provisions broadly reflect: Articles 7.4 and 10.6 of the ADA; Article 20.6 SCMA; Articles 7(6), 10 and 14(1) of Regulation (EU) 2016/1036 and Article 16 of Regulation (EU) 2016/1037.

Part 12 (Transitional provisions) of the Regulations makes provision for various EU anti-dumping duties and countervailing duties in existence when the United Kingdom leaves the EU to remain in place as new UK duties. Among other things, this Part obliges the TRA to carry out a review of these new duties, with a view to their adjustment to meet the circumstances of the UK market (or, in appropriate cases, their revocation i.e. where it is determined that the duty is no longer needed). This Part provides that, upon the conclusion of these “transition reviews”, the TRA is to make a recommendation to the Secretary of State as to the variation (or, the revocation) of these duties.

Part 13 (Transitional provisions relating to the TRA) temporarily modifies these Regulations and provides for the Secretary of State to conduct investigations and reviews, and make decisions and determinations under Parts 2 to 12 of these Regulations until the TRA is established.

An impact assessment has not been prepared for this instrument as the expected impact of the trade remedies system has already been assessed in the impact assessment accompanying the Taxation (Cross-border Trade) Act 2018.

A copy of the Explanatory Memorandum is published alongside this instrument on www.legislation.gov.uk. Further information is available from the Department for International Trade, 3 Whitehall Place, London SW1A 2AW and on the gov.uk website (www.gov.uk).