Tata Chemicals SA fails to get 40% anti-dumping duty dropped

02 May 2023

02 May 2023
Money web
by Roy Cokayne

The Pretoria High Court has dismissed Tata Chemicals South Africa and Tata Chemicals Soda Ash’s application to review and set aside a residual 40% ‘anti-dumping’ duty imposed on their US imports by the International Trade Administration Commission (Itac). In bringing the review application, Tata claimed:

• The continued imposition of the anti-dumping duty was unlawful;
• No basis was established for the continuation or recurrence of injurious dumping; and
• Itac’s approach in regard to its recommendations was flawed.

Judge Anthony Millar dismissed the application with costs.

The application comes after Itac commenced an investigation, into the dumping of soda ash imported from the US into the Southern African Common Customs Area, on 21 June 2013. Tata cooperated with this investigation, which resulted in provisional duties being imposed from 20 December 2013. In the case of Tata, this was 8% but a residual duty of 40% was imposed on companies that had not cooperated with Itac. Both the company-specific and residual provisional duties were confirmed as definitive anti-dumping duties on 19 June 2014 for a period of five years.

Sunset review

Itac gave notice to interested parties on 25 May 2018 that unless a substantiated request was made indicating the necessity for maintaining the anti-dumping duties on the importation of soda ash, the duties would expire on 18 June 2019. Botswana Ash (Botash) subsequently made a substantiated request and a sunset review was initiated on 26 April 2019.

It did however make written representations to Itac on 14 August 2019 and oral representations at a hearing on 8 October 2019 on why the original dumping duties had already expired before the initiation of the sunset review. Itac made two recommendations on 29 October 2019: that the anti-dumping duties be maintained; and that, since there had been no cooperation from any importers or exporters, specifically Tata, the applicable amount of the duties that was to be retained was the residual duty of 40%. The effect of Tata’s failure to cooperate during the sunset review was that its previous company-specific duty of only 8% was now increased to 40%.

During the review application, Tata:

• Argued that the duties had expired before the initiation of the sunset review;
• Questioned if any factual basis was established for the finding that there would be a continuation or recurrence of injurious dumping and that Itac was required “to provide interested parties with a reasoned conclusion and a “sufficient factual basis” for its determination so it could understand the “gist of the case against it”; and
• Claimed Itac’s approach was fundamentally flawed.
• Tata argued that the sunset review should have been initiated in terms of Regulation 54(1) before 19 December 2018 – and since it was initiated after that date, the obligation to continue to pay any duty after 19 December 2018 lapsed because the duty did not remain in force.
• No ‘inconsistency’
• Millar said he was not persuaded that there is any inconsistency or conflict created with regard to the period for which the duties were to be in existence.
• He said the Anti-Dumping Regulations are clear and unequivocal that anti-dumping duties will remain in place for a period of five years from the date of the publication of Itac’s final recommendation, and not in a composite period.
• He added that since Section 57A(3) of the Customs Act does not contain any reference to the period for which duties are to remain in existence, the interpretation of the regulation does not in any way affect the interpretation of the Customs Act.

‘Itac not at fault’

In regard to Tata’s second ground for its review, Millar said Itac was obliged to set out the “essential facts” or the “gist” of what was before it and was required to afford Tata an opportunity to comment. “This it did. It was also obliged to consider ‘relevant’ comments from ‘cooperating parties’ and here too it did so. “I find that the second ground of review also has no merit and must also fail,” he said.

Approach not ‘fundamentally flawed’

Millar said the third and final ground advanced by Tata for the review was that the approach adopted by Itac was fundamentally flawed. This was based on the decision to withdraw the company-specific duties of 8% that Tata had enjoyed and to subject the company to the residual duties of 40% after 30 March 2020. Millar said Tata took part in the initial investigation phase and was aware of the requirements of the Customs Act and the Anti-Dumping Regulations, as well as certain judgments on this issue.

“Having regard to the way in which it responded to the sunset review once initiated and subsequently, there can be no doubt that there was an advertent decision not to cooperate during the sunset review,” he said. “Regulation 58.2 read together with Regulation 59 makes clear what the consequences of non-cooperation may entail, and it does not now behove Tata to complain that the company-specific duty levied upon it in consequence of its cooperation has now been withdrawn (in consequence of non-cooperation).

“Self-evidently it is also not open to [Tata] to argue for the imposition of any other ‘specific’ duty considering its non-cooperation,” he said. “The third ground of review is without merit and must also fail,” Millar ruled.