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This publication is available at https://www.gov.uk/government/publications/the-uk-trade-remedies-investigations-process/how-we-carry-out-transition-reviews-into-eu-measures
Primary legislation in the Taxation (Cross-Border Trade) Act 2018 (the Taxation Act)
Powers to transition EU trade remedy measures into UK law are contained in the Taxation Act, in sections:
Secondary legislation in the Trade Remedies (Dumping and Subsidisation) Regulations
Part 12 of the Trade Remedies (Dumping and Subsidisation) Regulations makes provision for some EU anti-dumping and subsidy trade remedies to take effect as if they were UK-specific when the UK leaves the EU. It also provides for a transition review to be carried out to determine whether each measure is appropriate for the UK.
Introduction to transition reviews on EU measures
When the UK leaves the EU’s Common External Tariff, it will choose to maintain some trade remedy measures. The Department for International Trade (DIT) first identified which measures may be of interest to the UK following a call for evidence. For each of these measures, the Secretary of State will publish a Notice of Determination, giving effect to the corresponding EU trade remedies measure, and allowing us to conduct transition reviews to determine if these measures should be varied or revoked in the UK.
We will then conduct reviews to assess each of these measures and determine whether they should be maintained, varied, or revoked. Our approach will be similar to the process we use in an expiry review and you can find more details on this in our guidance.
What we consider in an anti-dumping transition review
First, we will establish whether the relevant goods are being dumped in the UK market. We will consider whether continuing the existing anti-dumping amount is necessary or sufficient to offset dumping of the relevant goods in the UK. We will also assess whether UK industry would be adversely affected if the anti-dumping amount no longer applied.
What we consider in a subsidy transition review
First, we will establish whether subsidised goods are being imported into the UK. We will consider whether continuing the countervailing amount is necessary or sufficient to offset import of the subsidised goods into the UK. We will also assess whether UK industry would be adversely affected if the countervailing amount no longer applied.
Our transition review process
Transition reviews are not applied for by interested parties. We will initiate transition reviews before the measure is due to expire. We will undertake them in the most appropriate order to ensure that UK industries remain protected from unfair trade practices. When we begin a new transition review, we will publish a Notice of Initiation on our Trade Remedies Service.
However, if a measure is already undergoing an EU Expiry Review when the UK begins operating an independent trade policy, we will begin the transition review within 30 days of the UK’s departure date.
Before we initiate a transition review of a countervailing measure, we will notify the exporting country’s government and the UK Secretary of State.
Establishing a period of investigation
We will analyse industry data relating to a specific time period before the review initiated – this is called the period of investigation. This will usually be the most recent 12-month period for which data is available. We will aim for the end point to be as close as possible to the date of initiation.
Scope of the measure
The Notice of Determination published by the Secretary of State will set out the scope of the EU measure subject to a transition review, including the goods to which the anti-dumping or countervailing amount applies in the EU measure.
Amending the scope of the review
In some cases, we may find the original scope as published in the Notice of Determination is not appropriate for a UK-specific measure.
We may need to amend the description of the goods concerned in the review and the period of investigation. For reviews of countervailing amounts, we may also amend the subsidies described in the scope, for instance, to include subsidies which were not in effect when the EU undertook its analysis.
When we are deciding whether to revise the scope of a transition review, we will consider whether we would have initiated a review with the revised scope if the relevant information had been available. We will also consider whether the proposed revision may prejudice the interests of any interested party or contributor. Finally, we will assess whether making the proposed revision would delay us in completing the review.
We will make any scope change as early as possible in the review process and publish it through a revised Notice of Initiation.
How you can take part in a transition review
Once we publish our Notice of Initiation, interested parties and contributors can contact us within an agreed period to register their interest in the review. They will need to do this through our online Trade Remedies Service.
We may also make visits to premises of UK producers and overseas exporters so that we can familiarise ourselves with the industry and products before the investigation occurs and to verify data submitted during the review process. When we do this, we will contact the organisation we are visiting beforehand to ask permission, explain why the visit is necessary and what it is likely to cover.
Calculating dumping, subsidy and injury amounts
When we are carrying out transition reviews, we will first consider whether applying an anti-dumping or countervailing amount is needed to offset the dumping of the goods or the subsidy that is being applied to them. We will then assess whether there would be injury to UK industry if the anti-dumping or countervailing amount was not present.
We will then calculate the anti-dumping or countervailing amount that is needed to remove the injury being caused to UK industry.
Carrying out likelihood analysis where there is insufficient UK-specific data
The Period of Investigation we are looking at will cover a time period before the UK left the EU’s Common External Tariff and when an EU trade remedy was in place. The existing measure may therefore have reduced or eliminated dumping and injury and there may be insufficient data available to calculate a dumping, countervailing or injury amount. If we do not have sufficient data to calculate dumping, countervailing and injury amounts, we will make a decision based on our assessment of whether the imports are likely to cause injury if the measure is removed.
In making this assessment, we will look for evidence that removing the measure will lead to dumped or subsidised imports that will cause injury to UK industry.
We will carry out this assessment on a case-by-case basis. We may consider a number of factors relating to the goods concerned in the review, including:
whether there is evidence that the goods concerned in the transition review are being dumped or subsidised
the exporter’s current capacity to export the goods
the exporter’s potential capacity to export in future
how attractive the UK market is to exporters
export prices to third countries (and their relationship to export prices to the UK market)
whether there is evidence that exporters have previously or habitually circumvented or absorbed the effects of trade remedy measures and continued to export their goods at the same prices
historic export data
If we cannot calculate a dumping, countervailing or injury amount, we may recommend maintaining the existing measure.
Determining the appropriate action to recommend for the measure
Once we have gathered all the necessary evidence and completed our analysis, we will decide what action to recommend for the measure. This may be to maintain it unchanged, to replace it with another type of measure, vary it or revoke it. Where the measure covers a number of goods we are able to recommend that a different anti-dumping or countervailing amount applies to some of the relevant goods.
Varying a measure
If we recommend varying the measure, we may advise that it should be either reduced or increased. We may also vary a measure to exclude goods in the EU measure where ‘like goods’ are not produced in the UK. We may also recommend extending the period for which it applies, for up to a maximum of an additional five years. This will apply from when the Secretary of State gives effect to our preliminary decision. If the UK does not produce all of the goods subject to the measure we may recommend that a different anti-dumping or countervailing amount applies to some of the goods.
Repayment of excess duty
If we conclude that the level of a measure is too high, it’s possible that importers will have paid too much duty on these goods once the Secretary of State has issued the taxation notice making the measure specific to the UK. In these cases, importers may be able to claim back the extra duty from HMRC providing it was paid in the period after the UK left the Common External Tariff.
How we apply the Economic Interest Test
Any measure which continues (whether varied or unvaried) must be in the economic interest of the UK. We will only make a recommendation to continue an anti-dumping or countervailing amount if it meets the Economic Interest Test.
Reporting our conclusions
Our Statement of Essential Facts
Once we have completed our review, we will publish a Statement of Essential Facts through our Trade Remedies Service. This will set out our intended final determination, a summary of the facts we have considered during our review and how we have used these facts to reach our determination.
We will inform interested parties of this and invite them to comment and provide evidence in relation to the statement within an agreed period. We will then consider these comments before making our final determination.
At this point, we will also contact anyone who has supplied information to us during the review to explain how their information was used. We will include details of the assessment which formed the basis for our final determination.
Making our final determination
We will make a preliminary decision to recommend either varying or revoking the measure. We can also maintain the level of a measure. Our preliminary decision comes in the form of a recommendation to the Secretary of State, who may accept it or reject it if they consider that it is not in the public interest.