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Itac launches sunset review of antidumping duties on PET imports

12th February 2016

By: Riaan de Lange

  

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On January 29, the International Trade Administration Commission of South Africa (Itac) informed, through a Government Gazette notice, of the initiation of a sunset review of the antidumping duties on polyethylene terephthalate (PET), in primary forms (excluding liquids and pastes), classifiable under tariff subheading 3907.60.9, originating in or imported from Chinese Taipei (Taiwan), South Korea and India. (This is a South Africa-specific tariff subheading, which means that it was specifically created for use in the country and is not in use elsewhere in the world.)

The notice followed a June 19, 2015, notice to interested parties Southern African Customs Union (Sacu) manufacturers (ultimately, only a single company) that, unless a substantiated request was made, indicating that the expiry of the antidumping duties would likely lead to the continuation or recurrence of dumping and material injury, it would expire on March 3.

On September 3, 2015, Hosaf, a division of PG Bison responded on behalf of the South African Customs Union (SACU [sic] – a Freudian slip?) industry. According to the notice, Hosaf submitted sufficient evidence and established a prima facie (this means ‘at first face’ or ‘at first appearance’) case to enable Itac to arrive at a reasonable conclusion that a sunset review investigation should be initiated. Although not referenced in the notice, Hosaf is part of multibillion-rand holding company KAP Manufacturing.

The allegation of continuation and recurrence of dumping is based on the comparison between the normal value in India and the export price information supplied by the Hosaf. In respect of ‘Virgin PET’, Hosaf provided domestic selling prices in India; in the case of South Korea and Chinese Taipei, it obtained the prices from an international publication, PET Monthly Business Report, which is published by PCI, PET Packaging, Resin & Recycle. To calculate the export price for India, South Korea and Chinese Taipei, Hosaf obtained export price information from the ICIS Pricing Publication. In respect of ‘Recycled PET’, Hosaf also provided domestic selling prices for India, South Korea and Chinese Taipei with regard to recycled PET (a like product to virgin PET).

Hosaf stated that PET was competing with recycled PET and the tariff subheading for ‘Virgin PET’ and ‘Recycled PET’ has been split into two since January 1, 2015. Hosaf requested that Itac maintain the anti- dumping duties on both ‘Virgin PET’ and ‘Recycled PET’. Hosaf obtained domestic selling prices and export prices from India, South Korea and Chinese Taipei through an agent. On this basis, Itac found that there was prima facie proof of the likelihood of recurrence of dumping if the antidumping duties expire.

In respect of the allegation of the recurrence of material injury, Hosaf alleged and submitted prima facie evidence to show that, should the antidumping duties expire, it is likely that there would be price undercutting and that imports of PET would depress and suppress its selling prices. Hosaf’s information indicated that it would likely experience a decline in sales, profit margins, production, market share, capacity use and return on investment, and that there would be a negative impact on cash flow if the duties expired. On this basis, Itac found that there was prima facie proof of the likelihood of recurrence of material injury if the antidumping duties expired.

The investigation period for dumping was July 1, 2014, to June 30, 2015, and the material injury investigation involved evaluation of data for the period of July 1, 2012, to June 30, 2015.

The prevailing ‘general’ rate of customs duty for ‘Virgin PET’, classifiable under tariff sub- heading 3907.60.91, is 10% ad valorem and for ‘Other’, classifiable under tariff subheading 3907.60.99, it is 10% ad valorem.

The prevailing antidumping duties are country-specific, which simply means that exporters in the countries did not respond to a previous antidumping application; as a consequence, the rate of antidumping is 75% for Taiwan, 54.1% for India and 19.7% for the Republic of Korea. If history is anything to go by, it is quite possible that the application might continue uncontested.

Comment by Sacu importers and overseas exporters is due by March 7.

Customs and Excise Act
The South African Revenue Service (Sars) informed on January 26 that it had updated the rules of the Customs and Excise Act, 1964, up to and including December 31, 2015. You can access them on the Sars’s website under Legal/Secondary-Legislation/Rule-Amendments/.

Excise Duty Payment Dates
On January 25, Sars released the excise duty submission and payment dates for fuel, wine, vermouth, other fermented beverages, spirits, ad valorem duties and air passenger tax for 2016/17. In the notification, it recommends that you comply timeously to avoid possible penalty and interest payments. Also, that February 2016 and 2017 may require the submission of split accounts requiring separate returns due to Budget proposals tabled during the Finance Minister’s Budget Speech in Parliament. Sars requested that you take due care to confirm whether such requirement applies to your products.

Tobacco Rule – Comment Extended
On January 25, Sars informed of the further extension of the deadline for comments on the draft rules to the Customs and Excise Act, 1964, for anti-illicit-tobacco excise enforcement, which requires that all tobacco manufacturing equipment be fitted with functional sealed counters.
Comment is now due on February 28.

Diesel Fuel Tax Refund – Comment Due
On February 1, Sars published, for comment, interim amendments to the diesel fuel tax refund system for cessions of mining rights, mining rehabilitation, quarrying, and small-scale sugar cane growers. According to Sars, as contractors and joint ventures are currently addressed through dispute resolution, no interim amendments to the present system are included for such beneficiaries. In order to give effect to this proposal, Sars proposes draft amendments to Notes to Schedule No 6 ‘Refunds and Rebates of Excise Duties, Fuel Levy and Environmental Levy’ Part 3 ‘Rebates and Refunds of Fuel Levy and Road Accident Fund Levy’ to the Act, 1964.
Comment is due on February 19.

Draft Customs Control Act Rules
On January 21, Sars published its draft Customs Control Act, 2014, rules, its second draft (clean draft renumbered), the draft Customs Control Act, 2014, rules, its second draft (track changes version, showing changes) and a comment sheet; comment is due by April 1.

According to Sars, the amendments made to the first draft of the rules to the Acts include changes occasioned by external stakeholder comments received after publication of the first draft, internal feedback and Sars operational requirements, changes to give effect to proposed amendments to the Customs Control Act, 2014, (as contained in the Taxation Administration Laws Amendment Bill, 2015), as well as the technical review of the draft as a whole. Technical amendments include the correction of errors, the moving of provisions, the adaptation of wording to ensure consistency of similar provisions throughout the text, the insertion of provisions inadvertently omitted, the insertion of general provisions applicable to all the chapters and the consequential deletion or adaptation of provisions in the various chapters.

Vegetable Oil VAT
On January 21, Sars published its draft ginding general ruling on the value-added tax treatment of the supply or importation of vegetable oil. Comment is due by February 22.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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