ANTI DUMPING DUTY

A. DEFINITIONS

1. What is dumping?
Dumping occurs when foreign producers sell their products
to an importer in the domestic market at prices lower than
in their own national markets, or at prices below cost of
production, the sale or importation of which injures or
threatens to injure a domestic industry producing like or
comparable products or retards the establishment of a
potential industry. It is a form of price discrimination
between two national markets.
2. What are the elements of dumping?
There are four (4) elements of dumping, namely:
 Like Product - product produced by the domestic
industry which is identical or alike in all
respects to the article under consideration, or in
the absence of such a product, another product
which, although not alike in all respects, has
characteristics closely resembling those of the
product under consideration.
 Price Difference - amount by which the normal
value (the price prevailing in the exporting
country) exceeds the export price (selling price
to an importer in the Philippines).
 Injury - means material injury to a domestic
industry, threat of material injury or material
retardation of the establishment of a domestic
industry. Injury test must be based on positive
evidence and shall involve an objective
examination of both (a) the volume of the
dumped imports and the effect of dumped
imports on prices in the domestic market for
like product, and (b) the consequent impact of
these imports on the domestic producers of
such products.
 Causal Link - refers to a finding that the material
injury suffered by the domestic industry is the
 direct result of the importation of the dumped
product. It must be clear that the injury suffered
is directly attributable to the alleged dumping.
3. What is normal value?
The foreign producer's domestic selling price is referred to
as the "normal value" of the article. It is the comparable
price in the ordinary course of trade for the like product
when destined for consumption in the country of export or
origin.
4. What is export price?
"Export price" refers to (1) the ex-factory price at the point
of sale for export; or (2) the price assessed at the free-on-
board (F.O.B.) level (at the point of shipment) of the
allegedly dumped product.
In cases where (1) or (2) cannot be used, the export price
may be constructed based on such reasonable bases as the
Secretary of Trade and Industry/Agriculture or the
Commission may determine.
The export price of an imported product is the price at
which such product has been purchased or agreed to be
purchased, at "arm’s length transaction," by the person by
whom or for whose account the product is imported,
excluding any post exportation charges such as ocean
freight and overseas insurance.
5. What is an arm’s length transaction?
An "arms length transaction" refers to a transaction where
the price is not affected by any relationship between the
buyer and the seller, of if there is no compensation,
reimbursement, benefit, or other consideration given in
respect of the price.
6. What constitutes a domestic industry?
"Domestic industry" 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. When producers are related to the exporters or
importers or are themselves importers of the alleged
dumped articles, the term "domestic industry" may be
interpreted as referring to the rest of the producers.
7. What is meant by "comparable price"?
"Comparable price" means the domestic price in the
exporting country at the same level of trade which is sold
or offered for sale at wholesale on the date of exportation
to the Philippines.
8. What is a country of export?
A "country of export" is the country from where the
allegedly dumped product was shipped to the Philippines,
regardless of the location of the seller. The country of
export and the country of origin may be the same, but not
in all instances.
9. What is a country of origin?
A "country of origin""" is the country where the allegedly
dumped product either was wholly obtained or where the
last substantial transformation took place. The country of
origin and the country of export may be the same, but not
in all instances. In case of a transshipment where a
product is shipped from a third country that is not the
country where the product was manufactured or processed,
the country of origin would be different from the country of
export.
10. Who is a new foreign exporter?
A new foreign exporter is an exporter who did not export
the allegedly dumped product during the investigation
period.
11. What is meant by "non-selected" foreign exporter or
producer"?
"Non-selected foreign exporter or producer" refers to a
foreign exporter or producer who has not been initially
selected for the purpose of computing the individual
margins of dumping.
12. What is meant by "non-market economy"?
A "non-market economy" refers to the country of export or
origin where the government (1) has a monopoly, or
substantial monopoly, of trade; and (2) determines, or
substantially influences, the domestic prices of the
products in that country.
13. What is price depression?
"Price depression" refers to the extent by which the
 domestic producer reduces its selling price in order to
compete with the allegedly dumped product.
14. What is meant by "price suppression"?
"Price suppression" refers to the extent by which the
allegedly dumped product prevents the domestic producer
from increasing the selling price of its own like product to a
level that will allow full recovery of its cost of production.
15. What is meant by "price undercutting"?
"Price undercutting" is the extent by which the allegedly
dumped product is consistently sold at a price below the
domestic selling price of the like product.
16. When does transshipment occur?
There is transshipment when the allegedly dumped product
is not imported directly from the country of origin but is
physically shipped through a third country without,
however, entering into the commerce thereof.
B. SCOPE AND COVERAGE

1. What are the articles covered by an anti-dumping protest?

A dumping protest may cover any specific kind or class of a
foreign product which is being imported, sold or is likely to
be sold, into the Philippines at a price less than its normal
value, the importation or sale of which might injure, or
retard the establishment of, or is likely to injure an industry
producing like products in the Philippines.
2. Are there any importations exempted from anti-dumping
protest?
Yes. The following shipments and/or consignments shall
not be subject to anti-dumping protest:
 Products imported by, or consigned to,
government agencies not organized for profit
and particularly designated by law or proper
authorities to import, directly or through
awardees; such articles as would stabilize
and/or supplement shortages; and
 Conditionally duty-free importations enumerated
under Section 105 of the Tariff and Customs
Code, as amended.
C. THE LEGISLATION
1. What is the Anti-Dumping Act of 1999?
Republic Act No. 8752, otherwise known as the "Anti-
Dumping Act of 1999", which amended Section 301 of the
Tariff and Customs Code of the Philippines, provides
protection to a domestic industry which is being injured, or
is likely to be injured by the dumping of products imported
into or sold in the Philippines.
2. When was R.A. No. 8752 signed? effective?
R.A. 8752 was signed on August 12, 1999 and took effect
on September 4, 1999.
3. What is the rationale for the passage of the new anti-
dumping law?
 To transform the domestic anti-dumping law into
a more workable and simple piece of legislation
providing the safety nets against the inflow of
cheap dumped imports.
 To strengthen the rules governing the
investigation of anti-dumping cases; and
 To align the domestic law with the WTO
Agreement on Anti-Dumping Practices.
4. Have the rules and regulations to implement R.A. 8752
been promulgated?
Yes, the Implementing Rules and Regulations (IRR) were
signed by the concerned Secretaries/ Agency Heads and
published on July 3, 2000. The IRR (Joint Administrative
Order No. 01, s. 2000) took effect on July 10, 2000, i.e.
seven (7) days from its publication.
5. What is Commission Order No. 00-01?
Commission Order No. 00-01 prescribes the internal rules
and regulations governing the conduct of formal
investigation by the Tariff Commission under Section 301 of
the Tariff and Customs Code of the Philippines, as amended
by Republic Act No. 8752. Deposited on June 20, 2000 with
the University of the Philippines Law Center, the Order took
effect on July 5, 2000.
6. What agencies administer the anti-dumping legislation?
The following government agencies are tasked to
administer anti-dumping action:
• Department of Trade and Industry-Bureau of Import
Services (DTI-BIS), in the case of industrial goods
 or Department of Agriculture (DA), in the case of
agricultural products.
 receives written application and determines
whether the application is proper in form and
substance and whether documentary
requirements are complied with;
 determines whether or not a prima facie case
exists to warrant initiation of investigation; and
 conducts preliminary investigation to determine
whether or not provisional measures (dumping
bond) may be imposed.
• Tariff Commission (TC)
 conducts formal investigation and submits
report of findings to either Secretary for the
issuance of a Department Order imposing the
definitive anti-dumping duty (in case of
affirmative findings).
• Bureau of Customs (BOC)
 imposes the dumping bond and/or definitive duty
upon receipt of the Department Order, through
the Secretary of Finance.
D. PROCEDURES
1. Who may file an anti-dumping protest?
A protest may be filed by, or on behalf of, the domestic
industry, in writing and embodied in a notarized form.
2. What is the threshold of support by producers for the
protest (application) to be accepted?

(a) support by domestic producers whose collective output

constitutes more than fifty percent (50%) of the total
production of the like product produced by the domestic
industry; and

(b) support by producers accounting for at least 25% of the

total domestic production of the product alleged to be
dumped.
3. Who else, aside from the domestic industry, may initiate an
anti-dumping investigation?
In special circumstances, DTI or DA may, on its own
motion, initiate an anti-dumping investigation without
 having received a written application by or on behalf of a
domestic industry. The concerned authorities should have
sufficient evidence of dumping, injury and a causal link to
justify the initiation of the investigation.
4. Is the protestant (petitioner) required to post a bond
together with his protest?
Yes, the protestant shall post a surety bond to answer for
any damages which the importer/ protestee may sustain by
reason of the filing of frivolous petition, to be released only
upon affirmative preliminary determination.
5. What is the de minimis rule?
The protest/application shall be immediately rejected and
the investigation terminated if:

• the margin of dumping is de minimis, i.e. less than 2%,

expressed as a percentage, of the export price; or

DM = NV – EP
EP

• the volume of imports from a particular country is less

than 3% of all imports of like products into the importing
country.

However, this rule does not apply when countries with

individual shares of less than 3% collectively account for
more than 7% of imports of the product under investigation;
or

• the injury is negligible.

6. What is price undertaking?

"Price undertaking" is a voluntary commitment by the
exporter to increase his price or to cease exporting to the
Philippines at a dumped price, thereby eliminating the
material injury to the domestic industry.

Offer of price undertaking shall be made only after a

preliminary affirmative determination of dumping and injury
to the domestic industry.
 An undertaking to increase prices or cease exportation at
dumped prices may not be accepted if its acceptance is
impractical, e.g., if the number of actual or potential foreign
exporters is too large, or other reasons, including reasons
of general policy.
7. What are the stages of an anti-dumping investigation?
• Prima Facie Determination

The DTI-BIS or DA, upon acceptance of the properly

documented protest/application, has five (5) working days
to decide whether the facts would constitute a dumping
case. In its determination, the DTI-BIS or DA undertakes an
in-depth evaluation of the data submitted or provided,
together with any other information obtained
independently.

The following information are to be provided when applying

for the levy of anti-dumping duty:
- volume of the domestic production of the producers
making the application;
- description of the alleged dumped product;
- names of the exporting countries, each known exporter or
foreign producer, and a list of the importers of the
products; and
- information on dumping:
> prices at which the product is sold in the domestic
market of the exporting country, and export prices;
> injury and causality;
> volume of dumped imports; and
> adverse effects of such imports on domestic prices
and on the domestic industries.
• Preliminary Determination

Once a prima facie case has been established, DTI-BIS or

DA initiates the preliminary determination. Before
proceeding to initiate an investigation, the DTI or DA
Secretary notifies the government of the country of export
or origin about the impending dumping investigation.
Within two (2) days from the initiation of the investigation,
the DTI-BIS or DA notifies all known interested parties
about the initiation of the investigation and sends a
proforma respondent’s questionnaire to all the interested
parties.

Not later than thirty (30) working days from receipt of the
answer of the respondents and other interested parties, the
Secretary shall make a preliminary determination of the
need for the imposition of a provisional anti-dumping duty
on the basis of the application, the answer of the
respondents, and the respective supporting documents or
information.

The requirement of the dumping bond (equivalent to the

amount of provisionally calculated dumping margin) shall
be made not sooner than sixty (60) days from the date of
initiation of the investigation and only for a period of four
(4) months.

The Secretary of DTI or DA shall immediately terminate the

anti-dumping investigation upon finding that:
- the margin of dumping is de minimis, i.e., less than two
percent (2%) of the export price; or
- the volume of imports from a particular country is less
than three percent (3%) of all imports of like products.
However, this rule does not apply when countries with
individual shares of less than 3% collectively account for
more than 7% of imports of the product under investigation;
or
- the injury is negligible.

• Final Determination

In the conduct of its final determination, the Commission

notifies all interested parties, receives representations
and/or other submissions, and holds preliminary conference
and public consultations. Investigators conduct ocular
plant inspection and examination of books of accounts of
all concerned parties domestically and in the exporting
 countries.

From its receipt of the advice from the Secretary of DTI/DA,

the Commission has 120 days to complete its own inquiry
and submit its report of findings to either Secretary.

• Issuance of Department Order

The DTI or DA Secretary shall, within ten (10) days from

receipt of the affirmative final determination by the
Commission, issue a Department Order imposing an anti-
dumping duty on the dumped product, unless he has earlier
accepted an undertaking from the foreign exporter to
increase prices or cease exportation at dumped prices.

In case of a negative finding by the Commission, 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 anti-dumping bond to
the importer.
8. When may the determination of dumping not be
appropriate?
• when sales in the domestic market of the exporting
country are not made in the ordinary course of trade (e.g.
sales are made below the cost of production); and

• when the volume of sales in the domestic markets is

low.
9. For purposes of determining dumping in the aforementioned
instances, with what is the export price compared as
permitted by the WTO Agreement and the domestic law?
• a comparable price charged for the like product when
exported to a third country; or

• a constructed value, calculated on the basis of the

production costs of the imported product, plus general,
selling and administrative costs, and profits.
10. What are the economic factors to be considered in
determining material injury to the domestic industry? threat
 of material injury?
• actual or potential decline in output, sales, market
share, profits, productivity, return on investments, or
utilization of capacity;

• effects on domestic prices; and

• actual or potential effects on cash flow, inventories,

employment, wages, growth, and ability to raise capital or
investments.
11. What factors are considered by the Commission in
determining the existence of a threat of material injury?
• a significant rate of increase in the importation of the
dumped product into the domestic market indicating the
likelihood of substantially increased importations;

• sufficient freely disposable, or an imminent,

substantial increase in, production capacity of the foreign
exporter indicating the likelihood of substantially increased
dumped exports in the domestic market, taking into
account the availability of other export markets to absorb
any additional exports;

• whether dumped products are entering at prices that

will have a significantly depressing or suppressing effect
on domestic prices, and will likely increase demand for
further importation of the dumped products; and

• inventories of the product being investigated.

12. What factors other than dumped imports may cause

the non-levy of anti-dumping duties?
• contraction in demand or changes in the patterns of
consumption;

• trade restrictive practices of, and competition

between, foreign and domestic producers;

• developments in technology and export performance;

and
 • productivity of the domestic industry.

13. What can the investigating authorities do if the

exporting enterprises, who have been accorded the right to
defend their interests during the investigation, refuse to
cooperate by providing information?
The authorities can decide on the basis of the best
information available (BIA).

14. Comparing the home consumption price with the

export price involves the conversion of the latter into the
exporting country’s currency. What exchange rate should
be used for conversion purposes?
The exchange rate prevailing on the date of sale should be
used for conversion purposes. However, if the transaction
is based on an exchange rate stated in a forward contract,
that rate should be used.

15. Where the volume of domestic sales is "low," the

consumption price in the exporting country may not provide
a proper basis for price comparison. In such case, a
constructed value instead of the domestic consumption
price is used. How is the constructed value calculated?
The constructed value is calculated on the basis of cost to
the exporting industry producing the product. The WTO
Agreement on Anti-Dumping Practices lays down the
following guidelines for calculating constructed values:
• Costs should normally be calculated on the basis of
records kept by the exporter or producer under
investigation, provided that such records are in accordance
with the generally accepted accounting principles of the
exporting country.
• The amounts for administrative, sales and general
costs and profits should be based on actual data pertaining
to production and sales, in the ordinary course of trade of
the like product, by the exporter or producer under
investigation.
However, when it is not possible to determine such
amounts on the above basis, the Agreement provides that
 they can be determined based on any of the following:
• actual data from other exporters or producers of
products in the same general category;
• the weighted average of the costs and profits of other
exporters of the same product; and
• any other reasonable method, as long as the amount
does not exceed that of the exporters or producers of the
same general category of product.
S
16. What is meant by "disclosure of essential facts"?
Before making the final determination, the Commission is
required to disclose to the interested parties (e.g.
exporters or producers under investigation, their
governments, and importers) the essential facts on which
the decision to apply the duty is made. The parties are
given five (5) days from the date of receipt of the essential
facts to defend their interests in writing.
E. MEASURES
1. What are the remedies/measures imposed against
dumping?
• Provisional Measure - takes the form of a provisional
duty - cash or documentary security - equal to the
estimated difference between the normal value and the
export price of the protested article. It is applied only after
the DTI-BIS or DA has made a preliminary affirmative
determination no sooner than 60 days from the initiation of
the case.
• Definitive Duty - final anti-dumping duty imposed, in
addition to the regular duty and other charges, on a
protested product imported from a specific country. It may
be the full margin of dumping or a lesser amount adequate
to remove the injury to the domestic industry.
2. What is the lesser duty rule?
Even after it is established that dumped imports are
causing injury to the domestic industry, the decision on
whether the amount of duty should be the full margin of
dumping or less should be made by the authorities. If a
lesser duty is adequate to remove the injury to the
domestic industry, the lesser duty should be levied.
F. DURATION OF MEASURES
 1. What is the lifetime of the anti-dumping
measures? Provisional anti-dumping duty – four (4) months,
extendible to six (6) months Definitive anti-dumping duty –
effective for five (5) years from imposition
2. What is meant by "sunset review"? It is a review that may
be initiated by any interested party or upon own motion of
the Commission before the "sunset date," (i.e., the 5th
year) to determine whether the expiry of the anti-dumping
duty would likely lead to a continuation or recurrence of
dumping and injury.
3. What is an interim review?
It is a review conducted by the Commission, motu proprio
or upon the direction of the Secretary or upon petition of
any interested party to determine whether:
• the need for the continued imposition of the anti-
dumping duty is no longer necessary to offset dumping
taking into consideration the need to protect the existing
domestic industry; or
• the existing duty is not sufficient to counteract the
dumping which is causing injury.

At least one (1) year should have elapsed since the

imposition of the anti-dumping duty before an interim
review can be made.
4. What is a newcomer review?
It is a review carried out on an accelerated basis for the
purpose of determining individual margins of dumping for
new exporters ("new shippers") in the exporting country in
question which have not exported the product during the
period of investigation on which the measures were based.

The new foreign exporters may request for such review

provided they are not related to any foreign exporter who is
subject to the anti-dumping duty. The application must be
submitted to the Commission in writing and must contain :
i. a description of the foreign exporter’s products;
and
ii. the basis of the request.
G. JUDICIAL REVIEW
 1. What are the actions available to the aggrieved and/or
interested party?
appeal - within thirty (30) days from receipt of notice of the
final ruling, a petition for review of such ruling may be filed
with the Court of Tax Appeals by any party in an anti-
dumping investigation who is adversely affected by the
final ruling in connection with the imposition of an anti-
dumping duty

- the filing of such petition for review shall not in any way
stop or suspend the imposition and collection of the anti-
dumping duty.
H. PHILIPPINE COMMITMENTS VIS-À-VIS THE WTO AGREEMENT ON
ANTI-DUMPING PRACTICES
1. What previously WTO-inconsistent provisions in the old
dumping law (Section 301) have been amended/revised by
the new law to align it with the WTO Agreement?
• withholding of the release of questioned importation
pending the determination of a prima facie case of
dumping;
• imposition of provisional measure immediately upon
finding of a prima facie case, effective up to the final
determination of dumping;
• inclusion of substitutes in the definition of like
products;
• country-specific application of anti-dumping duty;
• period of submission of replies to questionnaire limited
to 10 days; and
• retroactive application of definitive anti-dumping duty
on all importations within 150 days immediately preceding
the filing of the protest.
I. STRENGTHENING OF THE ANTI-DUMPING MECHANISM
1. What provisions in the new anti-dumping law strengthen
the mechanism against dumped imports?
• proactive implementation by concerned authorities,
including commercial and agricultural attaches;
• penalty clause prescribing sanctions on (a) concerned
government authorities in addition to those provided in the
Revised Penal Code and the Anti-Graft and Corrupt
Practices Act - for the failure of implementing authorities to
 initiate, investigate and prosecute anti-dumping cases; (b)
importers who are found guilty of dumping;
• elimination of the “Special Committee on Anti-
Dumping” as the deciding authority and, in lieu thereof, the
Tariff Commission;
• shortening of the statutory investigative timetable
from 150 days to 120 days for the Commission to complete
its formal investigation and submit its report of findings to
the Secretary of DTI/DA;
• creation of a Special Unit within the implementing
agencies to undertake the tasks mandated under the Anti-
Dumping Duty Act of 1999; and
• earmarking of the anti-dumping duty collected for the
capacity building/strengthening of the implementing
agencies.
J. CONTENTIOUS PROVISIONS IN THE ANTI-DUMPING ACT OF 1999

1. What provisions in the new law drew strong negative

reactions from certain concerned sectors?
• The discretion of the Tariff Commission to require or
not the imposition of anti-dumping duty even in cases
where all the elements of dumping have been established
• The penalty clause prescribing the following punitive
damages to be imposed on any importer who knowingly
engages in importation of dumped products:
- revocation of the importer’s license or charter to
do business;
- disqualification of responsible officers from holding
official position in other business entities in the Philippines;
and
- fine equal to twice the definitive anti-dumping duty
imposed.
• The requirement for the posting of surety bond by the
petitioner/protestant upon filing of an anti-dumping protest
to answer for any damages which the importer/protestee
may sustain by reason of the filing of a frivolous petition.
K. EFFECTIVENESS OF THE ANTI-DUMPING LAW

1. How effective is the implementation of the new anti-

dumping law perceived?
 Strengthened might be the anti-dumping duty law, it can
only be as effective as the implementing authorities are.
Trade, agriculture or finance attaches and other consular
officials need to be more proactive and vigilant in
detecting/monitoring normal values in foreign countries.
The Tariff Commission has endeavoured to be faster and
more efficient in the conduct of formal investigation of
dumping cases without prejudice to the right of all
concerned parties to due process of law.

Further improvements have been introduced in the

procedural aspects of dumping investigation to expedite
the resolution of dumping cases. Accordingly, the
Commission has adopted the following procedures:
• verification/ocular inspection is immediately
conducted upon receipt of the case from DTI or DA;
• preparation of the staff report within fifty (50) days
from receipt of the case;
• designation of an alternate counsel so that in the
event that the lead counsel is not available, motion for
resetting of hearings will no longer be necessary;
• summary proceedings, similar to the regular court
procedures. Rather than hearing the testimony of
witnesses, their affidavits will be submitted to the opposing
party at least three (3) days before the scheduled hearing
to afford the opposing party time to study the testimony of
the witnesses and to formulate clarificatory questions to be
asked during the hearing;
• conduct of 5-day marathon hearings; and
• no dilatory tactics, unnecessary or unjustified delays,
are allowed.

L. IMPLICATIONS OF THE NEW ANTI-DUMPING LAW FOR BUSINESS

For business persons, knowledge of the complex rules on the levy of
anti-dumping duty is essential in their capacities as producers and
exporters whose interests may be adversely affected by the unfair
price practices of producers in other countries.

Since the enactment of the Anti-Dumping Act of 1999, a number of

petitions for anti-dumping duty action have been filed by domestic
producers. While some petitions were found to be frivolous, i.e.,
without basis, most complaints about unfair pricing by foreign
suppliers were found to be valid. A better understanding of the anti-
dumping law would enable the affected producing enterprises to make
appropriate use of their right to petition for the levy of anti-dumping
duty.