On 22 May 2019, the amendment to the Anti-Dumping and Countervailing Act, B.E. 2542 (1999) (AD Act) was published in the Royal Gazette. It will become effective after 180 days from the date of publication and will start to apply on 18 November 2019.
The amendment introduces “anti-circumvention” measures which is a completely new concept in Thai law. The main purpose of the anti-circumvention provisions is to enhance the efficiency of anti-dumping and countervailing measures under the AD Act to ensure that domestic industries are protected against imports that are found to circumvent existing anti-dumping or countervailing measures.
The amendment was driven by numerous complaints received by the Ministry of Commerce from domestic industries, mostly in the steel industry, that foreign manufacturers and exporters have found various ways to export their goods to Thailand by circumventing the duties imposed under the AD Act, ultimately causing injury to their operations.
The amendment provides that if the Anti-dumping and Subsidy Committee has determined that there is circumvention of an existing anti-dumping or countervailing measure, the duties under those measures will be extended to the imports of the circumvented goods. The rate will not exceed the highest anti-dumping or countervailing duty rate imposed on the goods from the exporter’s country.
Anti-circumvention investigations can be initiated upon the request of (i) the Department of Foreign Trade or (ii) a party or a group of parties acting on behalf of domestic manufacturers of subject goods which is supported by manufacturers producing not less than one-quarter of total domestic production quantity. The overall investigation process must be completed within nine months; however, it can be extended up to three months where necessary.
Definition of circumvention
The three elements of “circumvention” are provided as follows:
- There is a change of pattern of trade which stems from an operation relating to manufacturing or business for which there is insufficient due cause or economic justification other than to avoid the imposition of the anti-dumping or countervailing duties.
- As a result of such change of pattern of trade, the remedial effects of the anti-dumping or countervailing measures are being undermined in terms of the prices or quantity.
- There is evidence of dumping when comparing the normal values previously established for the like product and the export price of the goods under consideration or the price of the like product of the party alleged for circumvention.
To elaborate, slight modification of the goods, exports of goods to Thailand through one or more third countries, and imports of semi-finished or parts for assembly in Thailand or third countries, could be considered as operations relating to manufacturing or business that may be deemed as a change of pattern of trade.
It is important that interested parties including exporters, importers, manufacturers, and assemblers are aware of such restrictions and understand its impact on their business operations.