- A mid-term review involves an examination of whether there is a need for continuation of anti-dumping duty, or modification of quantum of anti-dumping duty, during the tenure of the duty.
- For withdrawal or re-quantification of duty, it must be shown that there has been a change in circumstances, which existed at the time of original imposition of duty. Further, it must be shown that the said change in circumstances was of a lasting nature.
- While the requirement that the circumstances be of a lasting nature is not provided for in the law, it is followed as a practice by various investigating authorities, including in India.
- In the Doha Development Round in 2008, appropriate amendment was proposed, to include the phrase "change in circumstances of a lasting nature" to the AntiDumping Agreement. However, these amendments have not yet been incorporated.
- The requirement that changes be of a lasting nature, however, continues to remain necessary to ensure that a mid-term review is not being conducted for each temporary fluctuation, which may lead to a continuous cycle of reviews.
A mid-term review allows for re-examination of an existing anti-dumping duty before its expiry. The scope of a mid-term review is limited to assessing if the reasons for imposing the anti-dumping duty still exists or there has been a change in circumstances warranting removal or modification of the duty. If an investigating authority finds that the continuation of the duty is no longer warranted or there is a need for change in the quantum of duty, the duty may be withdrawn or modified accordingly to keep the anti-dumping measures fair and aligned with the current economic realities.
The provision for mid-term reviews is provided under Article 11.2 of the WTO Anti-Dumping Agreement and Rule 23(1A) of the Anti-Dumping Rules, 1995. The provision provides that a mid-term review can be initiated before the expiry 9 of the duty, either by the Authority on its own motion or pursuant to application filed by any interested party submitting positive evidence that the review is needed. A review may be initiated after a reasonable period of time has elapsed since the imposition of the duty. As per Trade Notice 1/2010, such reasonable period of time has been defined as at least one year since the imposition of duty.
However, a mid-term review cannot be conducted merely at the whim of any party seeking re-quantification or withdrawal of duty. A key requirement that must be demonstrated before a mid-term review can be initiated is that there has been a "change in circumstances" significant enough to justify a withdrawal or modification of duty. Further, it must also be demonstrated that the change in circumstances is of a lasting nature and is not temporary.
The words "change in circumstances" or "lasting nature" are not provided for under any provision but are frequently used in practice. The language of the provisions is clear in that there must be sufficient justification for a review, in terms of the situation that formed the basis of imposition of duty has changed in a manner which is material and enduring. If mid-term reviews are allowed to be initiated based on changes in circumstances that are transient in nature, it would lead to an unsustainable cycle where any temporary change could lead to a request for review. Since markets often naturally keep changing, a review based on temporary fluctuations would lead to a situation where one review would be followed by another, leading to multiple reviews before the original anti-dumping duty even expires. For example, in the case of a product prone to price fluctuations, exporters would seek a review whenever prices rise, while the domestic industry would do the same when the prices fall.
This would weaken the stability of the anti-dumping framework by creating uncertainty and inefficiency. It would also increase the administrative pressures on the investigating authority conducting these reviews.
Practice in various jurisdictions
In 2008, amendments were proposed to the Anti-Dumping Agreement as a part of the Doha Development Round. These amendments were aimed at clarifying and improving disciplines under the Agreement. The Chair of the Negotiating Group, in his draft, proposed that the phrase "change in circumstances of a lasting nature" should be incorporated and added into Article 11.2. Though this draft has not yet been adopted, the intention shows an enduring change in circumstances 10 has been incorporated into domestic anti-dumping rules and practices in several countries, including the United Kingdom and the European Union.
In the United Kingdom, an application requesting initiation of mid-term review must show that since the measures were put in place, there has been a change in circumstances of a lasting and significant nature.
In the Anti-Dumping Basic Regulations of the European Union, Article 11 requires the Commission to consider whether the circumstances have changed "significantly", in a mid-term review. However, the General Court in the case of CHEMK and KF v Council of the European Union held that in a mid-term review, the applicant is required to prove that the circumstances have changed in a lasting manner since the imposition of duty.
Despite the absence of an explicit multilateral obligation, the requirement to establish a change in circumstances of a lasting nature has become an accepted standard for mid-term reviews.
Practice in India
In India, a mid-term review may be conducted, where there has been a change in circumstances of a lasting nature. Though the Anti-dumping Rules do not expressly contain such a requirement, the Manual of Operating Practices for Trade Remedy Investigations issued by DGTR requires that an applicant requesting for initiation of a mid-term review must submit positive evidence showing the need for review due to "lasting nature of changed circumstances."
Further, the practice of the DGTR is also evident from various reviews conducted in India in the past. In the Final Findings issued in the mid-term review of antidumping duty on Décor Paper from China, the Designated Authority held that mere changes in cost and price of the product under consideration cannot be considered as a change in circumstances, warranting modification. Rather, it is pertinent to see whether the changes are of lasting nature and materially impact the determination of anti-dumping duty.
Similarly, the Authority has examined change in circumstances being of lasting nature in other mid-term reviews, including those concerning anti-dumping duty imposed on Chinese imports of Carbon Black, DASDA, Natural Mica-based industrial pigments, and Aniline.
The practice of the Authority found affirmation in the decision of the Hon'ble Supreme Court in case of Rishiroop Polymers Pvt. Ltd. v. Designated Authority and Additional Secretary. The Court held that that scope of the mid-term review is limited and the duty continues ordinarily, unless it is found in the review that there has been a "significant" change in facts and circumstances that makes it necessary to withdraw or modify the duty.
Thus, it is now an established practice in India that the changed circumstances must be of lasting nature and this requirement has been applied through judicial interpretation and consistent practice of the Designated Authority.
The requirement to show a change in circumstances of a lasting nature reflects an effort to balance flexibility with stability in anti-dumping measures. It is an important safeguard that ensures that mid-term reviews are based on meaningful changes, and avoids multiple reviews, pursuant to temporary fluctuations. The requirement for lasting nature has become an established part of the mid-term review process. Its use across different jurisdictions shows its importance in keeping the anti-dumping framework fair, reliable and consistent.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
