As a result, aluminum tape from Azerbaijan when imported into the EAEU will only be 16.18% more expensive (originally the applicant demanded to introduce a duty of 61.8%).Such result was achieved despite the fact that the Arzinger team was involved when the investigation was already ongoing.In the article we are explaining why it is crucial to involve lawyers at an early stage.
First, it would be a good idea to dispel some prejudices about the fairness and “fairness” of anti-dumping investigations in the EAEU.
There is a general perception that the Department for Internal Market Defense of the Eurasian Economic Commission (“Department”) renders decisions in favor of businesses from Russia or other countries of the Union by default.
Let us address the statistics. It turns out such a rule doesn’t work. In investigations that we are aware of, the mechanism for protecting the internal market was introduced 40 times. In 5 cases no duties were imposed at all, and 3 more applications to initiate an investigation were withdrawn. The Russian “blue chips” also had to lose.
Investigations were initiated not only against the residents of the People's Republic of China. They were on a par with the businesses of Ukraine, India, the European Union, and Belarus.
This does not give us the opportunity to convince you of either zero prospects for protection, or 100% chances of success for applicants.
Where is my money?
We explained the logic of the investigation earlier. As a rule, these are 6 stages: registration as a participant in an investigation, filling out questionnaires, preparing a legal position, holding consultations with the Department and meeting with stakeholders, public hearings and providing comments on the preliminary report on the results of the investigation. Read more about them on the website.
There is money involved at every stage. You don't have to register as a participant at all. Let them impose a duty in the amount that they want...
Top-top managers
Starting from the second stage of the investigation, the stage of filling out the questionnaires, there are many chances for making a mistake.
As you know, risks can be delegated. It is the lawyers who will bother and run errands for you (sometimes literally run).
For example, did you fill out the questionnaire with its confidential part incompletely and / or incorrectly? Didn't keep the accounting department, economists and in-house lawyers up? There is a risk of becoming a “non-cooperating party” in the eyes of the Department.
With such a reputation, the credibility of your position is noticeably reduced. This is exactly what happened in the case of an aluminum tape manufacturer from Azerbaijan.
One of the arguments of our client's position in terms of calculating the dumping margin was that more than 95% of the supplies fell on distribution companies, while the supply of goods to the domestic market of Azerbaijan was carried out to end consumers.
All over the world, a product is usually being sold to distributors at a price lower than the price at which the product can be sold to the final consumer, because the distributor is guaranteed to purchase large volumes. We asked the Department to revise the export price of a producer from Azerbaijan upwards for the correct calculation of the margin. But the argument was not accepted because before we stepped up in the investigation process, the Department recognized our client as a “non-cooperating party”. The reason for this was trivial: when filling out the anti-dumping questionnaire, the manufacturer did not fill out the sections on the costs of goods for sale in the EAEU and third countries. The department considered that this information was at the disposal of our client, but since he did not provide it he refused to cooperate and all his subsequent arguments and information can be disregarded.
We assure that it took some effort to convince the Department of the opposite, namely that the manufacturer from Azerbaijan is really interested in the results of the investigation.
It is vital to respond to all inquiries from the Department and do it in proper time.
Whoever has the truth is stronger
The first that should not be forgotten (but should not be counted on) is that mistakes can be also made by the opposing party - the applicants. Possible reasons for this are incompetence, inattention or ignorance of the basic facts.
In this case, the latter played its role. The investigation analyzed the period from January 1, 2015 to January 1, 2018, while the first contract for the supply of aluminum tape by the defendant from Azerbaijan to the EAEU market only occurred in 2019. Before that another company was the manufacturer and exporter of this product from the territory of Azerbaijan and they were not affiliated with each other.
The second, the help of the relevant ministries in their jurisdiction may and should be used as it plays its role.
In our case, the Ministry of Economy of the Republic of Azerbaijan stood up for the manufacturer. The ministry sent comments on the preliminary report on the results of the investigation regarding the absence of possible damage to the economy of the EAEU member states from the activities of the Azerbaijani manufacturer.
Protect yourself!
As representatives of the manufacturer, we tried to convince the Department that the introduction of anti-dumping duties will primarily affect our consumers, as for them, the price of aluminum tape will increase due to the fact that a reduction in the amount of sellers outside the EAEU may lead to market monopolization by applicants and factories that supported the imposition of duties (the opposite side was the Aluminum Association) and the establishment of higher prices compared to the current.
We also stated that anti-dumping duties will cause serious damage to the Azerbaijani manufacturer, which began work only in 2019, while an increase in the price, depending on the amount of the anti-dumping duty, will make it economically inexpedient for Azerbaijani products to be present in the EAEU market.
We also indicated that according to the Agreement of the CIS countries dated 04.15.1994 “On the creation of a free trade zone”, consultations should be held between the interested states of the EAEU prior to the introduction of an anti-dumping measure in order to find a mutually acceptable solution (which was not done).
In conclusion, we tried to prove that there was no damage to the economy of the EAEU member states or, at least, there was no damage from our client. The EEC came to a different conclusion, but listened to our client and introduced a fee which was almost 4 times less than the applicants requested.
Conclusions to be drawn
even if the anti-dumping duty is introduced, it can be reduced several times;
the anti-dumping questionnaire should be filled out as soon as possible and not a few days before the deadline. The information contained therein will form the basis for the understanding of all subsequent arguments by the Department and the EEC;
it is necessary to provide information at the request of the Department in full and on time;
it is preferable to enlist the authoritative support of the state and your consumers.
