Anti-dumping duty, 'countervailing' and other trade defence measures
World Trade Organization rules prevent artificially cheap imports from damaging markets. This guide explains how anti-dumping duties and 'countervailing' measures work
Anti-dumping duty is imposed on imports ‘dumped’ in the EU - ie sold at a price substantially below their normal value, usually their domestic market price. Anti-subsidies and ‘countervailing’ measures apply duties or other actions, such as import quantity restrictions, to imports that benefit from specific subsidies in their country of origin. Safeguards are actions temporarily imposed on imports expected or likely to cause serious damage to a domestic industry competing with the imported goods.
This guide provides an overview of the 3 measures and explains how to check when they apply. It also covers investigations, defences and other practices. For detailed information, see the guide on using trade preferences.
Anti-dumping duty measures
The Anti-dumping Agreement is one of 3 World Trade Organization (WTO) principal trade defence agreements. The UK and the European Community (EC) are party to the agreements, which are applied across all EU member states.
Anti-dumping duty (ADD) is imposed in addition to any normal customs duty for which the goods being imported are liable. It enables the EC to take action against goods sold at considerably less than their ‘normal value’. This is defined as a price that is lower than the price of similar goods in the country from which they originate.
Any member state can unilaterally apply anti-dumping measures after an investigation shows that the imported goods infringe the ADD agreement and that the dumped imports are causing material injury to a domestic industry producing a similar product.
ADD measures usually take the form of additional duties.
Anti-dumping investigations are resolved by the exporters of the product agreeing not to sell that product below a certain price.
If you have observed dumping that has caused - or threatened to cause - material injury to your domestic industry, you should report it to the EC.
If you believe that a member state has not complied with all the requirements before imposing ADD measures, you can take your case to the WTO’s Dispute Settlement Body.
Anti-subsidies and countervailing measures
The Agreement on Subsidies and Countervailing Measures (ASCM) is one of 3 WTO principal trade defence agreements. The UK and the EC are party to all the agreements, which are and can be applied across all EU member states.
ASCM covers 2 separate but closely related topics:
- Anti-subsidy measures allow importing countries to take banning action against certain kinds of subsidised imports. ‘Subsidies’ are defined as financial assistance from the government of a third country to a company or group of companies in that country.
- Other types of subsidy that are ‘actionable’. This means that the importing country must investigate and be able to demonstrate how the subsidised imports have caused damage to domestic industry before it imposes any countervailing duties on the subsidised products.
The issue of subsidies is complex and is handled at government level with disputes being settled by the WTO. A system of notification and reviews of measures allows for transparency.
The agreement does not apply to trade in agricultural products, where export subsidies are common in some countries.
There are also special rules for developing countries to provide some scope for maintaining export subsidies under certain conditions.
The Safeguards Agreement is one of 3 WTO principal trade defence agreements. The UK and the EC are party to all the agreements, which are and can be applied across all EU member states.
This agreement differs from the other 2 as countries are entitled to take action in cases of unfair foreign competition arising from either anti-dumping, anti-subsidy, or both. The EC uses an independent mediator to guarantee fairness and the right of defence in trade proceedings.
Safeguards do not cover traders’ allegations that the competition is unfair. They allow a WTO member to temporarily restrict imports of a product to protect a specific domestic industry. This could occur because unforeseen surges in imports cause or threaten to cause serious damage to that particular industry.
Measures can be applied under the Safeguards Agreement providing that all the following conditions prevail and apply during the term of the measures:
- they only apply for a temporary period
- they are only imposed when the imports are found to cause or threaten serious injury to a competing domestic industry
- they are applied to imports from all sources on a non-selective basis
- the measures are progressively liberalised while in effect; the member imposing the safeguards may be required to compensate the members whose trade is affected
Check whether goods are liable to anti-dumping or countervailing duties
Goods imported from outside the EU may be subject to import duty, depending on the type of goods and their country of origin. Details are given in the UK Trade Tariff, where traders can find the specific classification for imports. The classification also explains whether duty is payable, but traders should also check for updates.
Find commodity codes and other measures applying to imports and exports by accessing the online UK Trade Tariff tool.
Imports of some types of goods from particular countries may be subject to the following additional customs duties:
- ADD may be imposed if the goods are being dumped in the EU at below their normal commercial value
- countervailing duties can apply to imports that have been subsidised by the authorities of the exporting country from which they originate; note that this isn’t the same as countervailing charges, which can apply to agricultural products subject to the Common Agricultural Policy
- if the EC suspect dumping is taking place, traders may have to pay provisional duty while an investigation is being carried out
Checking updated information
Details of anti-dumping and countervailing duties are updated daily. The easiest way to check for updates is to find commodity codes and other measures applying to imports and exports by accessing the free online UK Trade Tariff. For other ways to check updated information you can:
- find recent ADD measures
- read the anti-dumping and countervailing duty guide
- contact the Export Helpdesk run by the EC - find out about the Export Helpdesk on the Export Helpdesk website.
When to pay anti-dumping or countervailing duties
Once goods imported from outside the EU clear customs, they are normally in free circulation within the EU. This means they can then be traded within the EU without any further duty (except for excise goods such as tobacco, which are subject to excise duty). This page explains when any anti-dumping or countervailing charges must be paid, and includes notes on special cases such as duty suspension schemes and registration.
Any import, anti-dumping and countervailing duties are payable when the goods are put into free circulation in the EU.
Duty suspension schemes
Special rules apply in some cases. The point of free circulation may be deferred when placing goods under customs warehousing, Inward Processing, and other duty relief procedures that may benefit traders. For more detailed information, see the guide on importing your goods from outside the EU.
Sometimes, as the result of a European Commission regulation, HMRC officers may suspect that goods may be subject to anti-dumping or countervailing duty, but need to investigate further.
In these circumstances, the imports may be registered before being released by Customs. Traders may be required to pay additional duty later if it is confirmed that the goods in question are being dumped.
What to do if you think goods are being dumped
Dumping goods in the EU damages domestic producers. If you think goods are being dumped, it is in your interest to see whether an investigation can be started. This page explains the action you can take and the organisations that can help you.
Anti-dumping and countervailing duties are applied at an EU-wide level, rather than just in the UK. Complaints of unfair trade practices are investigated either by the Trade Defence Section of the EC or in more serious cases by OLAF, the European Anti-Fraud Office.
Investigations are only undertaken if there is sufficient evidence of a negative impact on EU producers. Specifically, you need to show that:
- imports from a particular country (outside the EU) are being dumped or subsidised for sale in the EU
- import volumes are significant, and producers representing at least 25 per cent of total EU production of the particular goods are being affected
This means that complaints are usually started by UK or European trade associations, rather than single companies.
For more information on starting a complaint, call the EC Trade Defence Helpdesk on Telephone: 00 32 22 98 78 73.
If you are trading in a third country outside the EU, and there are unrealistic or illegal trade barriers which make trading difficult in your customer’s country, you can appeal to the Complaint Register service. This is a single-entry point where you can request clarification on third-country tariffs, import formalities, documentation and other measures. You can also make complaints if you think trade barriers are imposed unfairly.
Claiming refunds of anti-dumping duty
Provisional anti-dumping or countervailing duty may be charged while suspected dumping is investigated. If definitive duty is not imposed at the end of the investigation, any provisional duty paid is refunded automatically. For specific information you can read about anti-dumping and countervailing duties.
In some circumstances, a full or partial refund can be claimed on any additional duty that has been paid. A full refund can be claimed if it can be shown that the goods on which duty was charged were not in fact dumped. If it can be shown that too much duty was charged, a partial refund can be claimed.
For example, anti-dumping duty might be based on the difference between the price charged in the EU and the price charged in the exporter’s home market. If it can be shown that the home market price is in fact higher than suggested, the duty could be reduced.
Repayment claims are dealt with by the BIS (Department for Business, Innovation and Skills) Trade Defence Unit. Claims must normally be made within 6 months of the regulation coming into force.
Appeals against duty decisions
Traders have the right to appeal against decisions to impose anti-dumping duty made by HMRC. For example, a trader might appeal if they feel the amount of duty charged has been incorrectly calculated. Normally the duty must be paid before an appeal can proceed.
Undertakings and circumvention
When it is suspected that goods are being dumped in the EU at an unfairly low price, an investigation can be started.
Once the EC decides to investigate, an investigation typically lasts a maximum of 15 months. The EC can impose provisional duties up to a maximum time of 9 months after the investigation has commenced if this is justified. A final decision is made in terms of whether to make the measures definitive within a further 6 months. If the investigations show that dumping is not occurring, no additional duties are imposed. Any provisional duties that have already been paid are refunded.
Definitive duties can then be imposed for a period of up to 5 years. After this period has expired, this regulation will normally be reviewed to see if any extension is warranted.
Provisional anti-dumping or countervailing duty may be imposed while the investigation is being carried out. If the investigation shows that the goods are being dumped, definitive duty is then imposed.
More serious cases and investigations, known as missions, are usually carried out by the anti-fraud office of the EC, OLAF, sometimes with a delegate from HMRC in attendance. Usually it is exporters that are investigated, although manufacturers and agents can be subject to investigation too.
An investigation can be stopped if a particular exporter of the suspect goods gives a satisfactory undertaking to stop the suspected dumping. For example, the exporter can increase the price to a fair level, or stop exporting the goods to the areas where they were being dumped. The exporter must also provide evidence of doing this, and allow customs to carry out any required checks.
Anti-dumping and countervailing duties are imposed on goods from a particular country. Sometimes traders try to avoid the duties by diverting goods so that they seem to come from somewhere else, eg goods could be sent to another country, repackaged, and then exported to the EU.
If customs detect circumvention like this, all imports of the goods in question may be investigated by the EC’s authorities.
If the goods are later proven to have originated in the country that is subject to anti-dumping duty, then the EC is likely to extend any regulations to cover such imports - regardless of where they originate. This means that all imports of the affected goods from the ‘transit’ country could have anti-dumping duty imposed - regardless of their origin.
Where to get help and advice on anti-dumping and countervailing duties
BIS is responsible for trade policy and legislation, including trade defence measures such as anti-dumping and countervailing duties.
HMRC is responsible for collecting anti-dumping and countervailing duties, read the anti-dumping and countervailing duty guide.
The EU is a single market. Trade defence measures are co-ordinated across the EU, rather than separate measures being applied by each individual EU country. The EC takes responsibility for investigating complaints and agreeing trade defence measures which are then put in place by each EU country. You can read about trade defence measures on the Europa website. You can also contact the European Commission Trade Defence Helpdesk on Telephone: 00 32 22 98 78 73.
More broadly, trade defence measures are part of the international system of world trade overseen by the WTO. Read about anti-dumping and subsidies on the WTO website.
EC Trade Defence Helpdesk
Telephone: 00 32 22 98 78 73
HMRC Anti-Dumping Regime Section
Telephone: 01702 361930
Published: 2 August 2012
Updated: 13 June 2013
- Fixing references to specialist guides
- First published.
From: HM Revenue & Customs
Part of: Import and export controls
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