Transition reviews (anti-dumping and countervailing measures)
How the TRA conducts transition reviews of anti-dumping and countervailing measures.
Businesses wanting to understand trade remedies should read trade remedies: investigating dumped or subsidised goods for information on the investigations process and the actions they need to take.
This guidance uses shortened names when referring to legislation:
- ‘dumping and subsidisation regulations’ refers to the Trade Remedies (Dumping and Subsidisation) (EU Exit) Regulations 2019
- ‘TCBT Act’ refers to the Taxation (Cross-border Trade) Act 2018
This legislation is amended, including by:
- schedule 19 of the Finance (No.2) Act 2023
Transition reviews are conducted by the TRA based on UK market data to consider if a transitioned UK measure should be maintained, adjusted, or discontinued.
A transition review will consider whether:
- the continuing application of an anti-dumping or countervailing duty is necessary or sufficient to offset the dumping or the importation of the relevant subsidised goods into the United Kingdom
- there would be injury to the relevant UK industry (essentially all or a major proportion of the producers in the United Kingdom of the same or similar goods) if an anti-dumping or a countervailing duty were no longer to apply to those goods.
This is an accordance with regulation 99A(1) of the dumping and subsidisation regulations.
Preparing to initiate a transition review
The TRA should undertake the following tasks before initiating a transition review:
- identify and define the UK industry, noting that some producers have been identified by the call for evidence conducted by the Department for International Trade. The TRA should consider meeting with interested parties, most likely to be UK industry. on a familiarisation visit, if appropriate
- identify whether UK industry, exporters and importers will need to be sampled
- identify the product control number (PCN) from the original EU case and review the case, where possible
- prepare producer pre-sampling questionnaires in preparation for initiating the case
- identify importers and exporters to be contacted on the initiation of the review, where possible. Useful data sources include:
- HMRC import data for the relevant goods
- public information from the measure under the European Commission
- any further information shared by the European Commission
- identify interested parties and contributors relevant to the Economic Interest Test (EIT)
- prepare the notice of initiation
- prepare correspondence for initiation, including the notification to foreign governments
- prepare internal/external case timeline
- prepare case webpage and public file
- prepare to notify interested parties of the decision to initiate a review
In accordance with regulation 98(1) of the dumping and subsidisation regulations, the TRA must initiate all transition reviews (relating to anti-dumping and countervailing measures) before the date the transitioned UK measure is due to expire.
If a review has not started before the measure’s expiry date, then the measure will expire. This measure cannot then be reinstated. Normally, the expiry date of the UK measure will be the same as the expiry date of the relevant EU measure.
Transition reviews should generally be initiated in the order the transitioned measures are due to expire – with those due to expire first reviewed first. The TRA may, at its discretion, initiate a transition review earlier if it believes there is good reason to do so and that doing so does not affect its ability to conduct all reviews in a timely way.
The publication of a notice of initiation by the TRA will formally initiate the transition review.
Under the relevant WTO agreements, interested parties can apply for certain types of reviews of anti-dumping and countervailing duties – for instance, interim reviews and expiry reviews. The domestic legislation relating to these reviews continues to apply to duties which are being transitioned and the TRA will want to consider whether there is sufficient evidence to initiate such a review if an application is made. However, it is possible that the issues raised in an application for such a review will be considered anyway in an upcoming transition review of the relevant duty and, where this is likely to be the case, the TRA should advise would-be applicants accordingly.
For example, if the TRA receives a request for an interim review on a transitioned measure, based on the change of circumstances brought about by the UK’s exit from the European Union, the TRA should carefully consider whether to accept this request, and point to the upcoming transition review as the most appropriate review mechanism.
Transition reviews will examine whether there would be injury to the UK industry in those goods if the transitioned measures no longer applied.
The TRA should publish a Statement of Essential Facts before making a recommendation in a transition review.
Before making a recommendation, the TRA should allow interested parties sufficient time to comment on the contents of the Statement of Essential Facts.
According to regulation 100 of the dumping and subsidisation regulations:
The TRA must, upon concluding a transition review, make a recommendation covering all of the goods that were subject to the review. A recommendation must be either that the application of a duty to goods should be varied or revoked.
A recommendation that the application of a duty to goods should be varied may take the form of a recommendation where the expiry date of a measure is extended whilst the duty level is maintained at its current level.
The TRA can make a recommendation that a measure applies for up to 5 years as a result of a transition review, in accordance with regulation 100A(3)(d) of the dumping and subsidisation regulations.
According to regulation 100A(2)(a) of the dumping and subsidisation regulations:
The TRA must apply the EIT before making a recommendation that a transitioned measure should be varied (this could include extending the duration of the measure whilst maintaining the same level of duty). If the TRA determines that a measure should be revoked, the EIT is not relevant.
When applying the EIT, there is a presumption that anti-dumping and countervailing measures are in the economic interest of the UK. This is in accordance with paragraph 25(3) of schedule 4 to the TCBT Act,
Unless the TRA is satisfied that the EIT is met, the TRA’s recommendation must be that the duty is revoked.
The Secretary of State must decide whether or not to give effect to the recommendation following the conclusion of the transition review. This is in accordance with regulation 101 of the dumping and subsidisation regulations.
Review period of analysis
The review period of analysis should, where possible, be the most recent 12 months for which data is available. A longer or shorter or different period may however be appropriate in specific circumstances. This will be determined by the TRA on a case-by-case basis.
All assessments are forward-looking exercises and should be based on robust evidence, with the conclusions drawn reasonably from the evidence (e.g. see regulation 99A(1)(b)).
Dumping assessment (for anti-dumping measures)
Determination of dumping and dumping margin
The TRA should first assess dumping during the review period and then calculate dumping margins where possible.
Dumping margins are calculated by comparing the export price of the goods concerned and the normal value.
The default measure of normal value is the price at which the goods are sold domestically in the exporting country or territory.
Similar to what would happen in an expiry review, a finding that there is no dumping is not sufficient to terminate measures, until the TRA has assessed the likelihood of future dumping.
Depending on the dumping margins calculated (along with the injury margins), it may be necessary to consider varying the level of duties as part of the dumping assessment.
Determination as to whether a measure is needed to counteract dumping
According to regulation 99A(1)(a) of the dumping and subsidisation regulations, the TRA must consider whether the dumping of the goods subject to review would be likely to continue or recur if the anti-dumping amount was no longer applied to those goods.
A range of evidence relating to exporters, exporters’ home and third markets, and the domestic market, is likely to be relevant to this assessment.
The factors that may be considered include:
Continued dumping
Whether overseas exporters have continued dumping whilst measures have been in place. The period of dumping, volume of dumped imports, and the margin of dumping should be considered.
Production capacity
Substantial spare capacity, or plans to increase capacity, among overseas exporters may indicate that they would be able to continue or resume dumping if measures were removed.
Inventories
High inventory levels of oversea exporters may indicate that exporters would be able to continue or resume dumping if measures were removed.
Production levels
High production levels of overseas exporters may indicate that exporters would be able to continue or resume dumping if measures were removed.
Ability to shift production to the goods concerned
Even if overseas exporters are not currently producing the goods concerned, if production can easily shift it may be more likely that dumping would occur if the measures were removed.
Normal value in comparison to UK prices
If overseas exporters have a normal value higher than the price level in the UK domestic market, this may indicate that they would need to dump if they were to continue or resume exporting.
Exports to third markets
The characteristics of any exports to third markets should be considered. If these are being dumped, or are already subject to anti-dumping measures, this may indicate that it is likely dumping into the UK would continue or occur if measures were removed.
Conditions in the exporter’s home market
Factors including low demand and low prices may indicate that it is more likely that overseas exporters would continue or resume dumping if measures were removed.
Other factors
Any other factors that may be relevant in determining the likelihood that dumping will continue or recur if measures were removed.
If the outcome of this assessment is that it is not likely that dumping would continue or recur if measures were removed, then the TRA should make a recommendation that the anti-dumping measure should be revoked.
Subsidy Assessment (for countervailing measures)
Determination of subsidy and the amount of subsidy
The TRA should first assess the subsidy during the review period of analysis and calculate the amount of subsidy where possible.
A finding that there are no subsidised imports is not sufficient to terminate measures, until the TRA has assessed the likelihood of future subsidised imports.
Depending on the amount of subsidy calculated (along with the injury margins), it may be necessary to consider varying the level of duties as part of the subsidy assessment.
Determination as to whether a measure is needed to counteract the subsidisation
The TRA must then consider whether the importation of the subsidised goods subject to review would be likely to continue or recur if the countervailing amount was no longer applied to those goods.
This is in accordance with regulation 99A(1)(a) of the dumping and subsidisation regulations.
Factors that may be considered include:
- whether subsidised imports have continued to be imported whilst measures have been in place
- whether subsidy programmes are still in place or are likely to be put in place, even if there are no longer imports
- characteristics of any exports to third markets should be considered. If these are being subsidised, or are already subject to countervailing measures, this may indicate that it is likely subsidised imports into the UK would continue or occur if measures were removed
- any other factors that may be relevant in determining the likelihood that subsidised imports would continue or occur if measures were removed
If the outcome of this assessment is that it is not likely that subsidised imports would continue or recur if the countervailing measures were removed, then the TRA should make a recommendation that the countervailing measures be revoked.
Injury assessment
The TRA must assess whether there would be injury to UK industry if an anti-dumping or a countervailing measure were no longer to apply to those goods (i.e. injury would continue or recur if the duty was removed).
This is according to regulation 99A(1)(b) of the dumping and subsidisation regulations.
Developments over a longer period than the review period of analysis may be considered.
In assessing whether injury is likely to continue or recur, the factors that may be considered include:
Current state of UK industry
Whether UK industry is currently experiencing material injury or is in a vulnerable state.
Other causes of injury
Other factors that could be responsible for the injury should be considered, so that the injury is not wrongly attributed to the possible dumped or subsidised imports.
Undercutting or underselling of UK industry
UK industry prices can be compared to the prices of dumped or subsidised imports to determine if there is undercutting or underselling. If there are no dumped imports, then prices can be compared to normal values (this is only relevant in anti-dumping cases) to determine if dumping would lead to undercutting or underselling.
Market conditions domestically and internationally
Current and projected conditions in the UK market for the goods concerned may be considered where appropriate. This may include consideration of demand, supply, prices, consumer preferences, changes in technology and good types.
Other factors
Any other factors that may be relevant in determining the likelihood that injury would continue or recur if measures were removed.
If the outcome of this assessment is that there would not be injury to UK industry if an anti-dumping or a countervailing measure were no longer to apply to those goods (in other words if it is not likely that injury would continue or recur if measures were removed), then the TRA should make a recommendation that the measures should be revoked.
Injury margin
When possible, the TRA should calculate the price that might be expected in the UK for sales of like goods by UK industry in the absence of dumped or subsidised imports, and subsequent injury margins.
Depending on the injury margins calculated (along with the dumping or subsidy margins), it may be necessary to consider varying the level of duties.