Once you have gotten over that hurdle, you will need to show that dumping has indeed occurred. The reason for the dumping is immaterial, and this is a purely mathematical exercise.
If you have managed to establish dumping, then you and the other domestic producers will need to show that the domestic industry has suffered injury as a result of the dumping.
There are many factors that can be considered to establish what causes material injury. These include decline in sales, fall in profit and drop in production – to name a few. As part of the process, in Malaysia, public interest is also something that is considered.
What does an anti-dumping measure entail?
If the Government is satisfied that dumping has occurred, it will impose anti-dumping duties on imports of the products from the particular countries that are the culprits to the dumping. The percentage of the duties will be the difference between the sales price of the products in their home market against the amount of the sales prices of the products in the Malaysian domestic market, in line with the aim to equalise and neutralise the injury caused by the cheap import prices.
Within three to four months from the time the investigation is initiated, the Government may make an affirmative preliminary determination and impose provisional anti-dumping duties on imports of the products from the countries that appear to be dumping their products in Malaysia. These duties are usually collected in the form of a security such as a bank guarantee.
Thereafter, within six to seven months from the time the investigation is initiated, the Government may make an affirmative final determination and impose definitive anti-dumping duties. These duties will be collected in the same manner as customs duties.
In Malaysia, the Ministry of International Trade and Industry (“MITI
”) is tasked with overseeing the investigations and determination of anti-dumping duties under the Act.
Therefore, any application for anti-dumping measures is to be made to MITI.
Once such an application is made, MITI will have one month to evaluate the data provided and to decide whether to launch a full investigation. In situations where MITI has determined that there is prima facie
evidence of dumping and material injury caused by the dumping, MITI would usually initiate such an investigation.
Once the investigation is initiated, all interested parties may submit their views to MITI as part of the investigation process. These interested parties include importers of the products, foreign producers of the products, local domestic producers and trade/ business associations.
From the time of initiation, an anti-dumping investigation may last from around three months to slightly less than one year.
In the event MITI imposes anti-dumping duties, MITI will usually impose individual dumping margins on foreign producers that stepped forward and cooperated as interested parties during the investigation, as well as separate general anti-dumping duties for the non-cooperative or non-participating parties for each country affected.
Anti-dumping duties have a life of five years, and may be extended upon expiry of that period for a further five years if there is evidence that dumping will re-occur should the duties lapse.
Now that you are aware of what anti-dumping is, its requirements and the procedure, you now have a chance to seek remedies to fight against those unfair competing products which have been imported from foreign countries at dumped prices.
It is interesting to note that anti-dumping measures are seldom used in Malaysia in comparison to other jurisdictions such as India, China, South Africa, Turkey and the United States. However, with a little awareness, this could be a boon to Malaysia’s domestic manufacturing businesses to combat unfair trade practices as our economy expands and the manufacturing sector further develops.
Perhaps the gleaming Bentley Flying Spur could still find the pride of place in your garage.
Article by Lim Koon Huan (Partner) and Manshan Singh (Senior Associate) of the Trade Remedies Practice of Skrine.