THE CUSTOMS AND EXCISE (ANTI-DUMPING AND COUNTERVAILING MEASURES) REGULATIONS, 1999.

Citation 

1.  These Regulations may be cited as the Customs and Excise (Anti-Dumping and Countervailing Measures) Regulations, 1999.

Interpretation

2.  In these Regulations -

- Committee - means the Advisory Committee appointed by the Minister under section 125 of the Act, for the purpose of investigating allegations of injurious dumping or subsidization of the goods exported to Kenya and reporting thereon to the Minister;

- Court - means the High Court of Kenya;

- definitive measure - means any measure the imposition of which leads to the conclusion of an investigation by the Committee;

- domestic investigated product - means goods or products produced in Kenya which are similar or identical to the investigated products;

- dumping margin - means the difference between the export price and the normal price;

- export price - means the price paid or payable for export into Kenya of the investigated product. - government - means the government or any public body within the territory of the country of origin or export of the imported investigated product;

- initiation - means the procedural action by which the committee, upon instruction of the Minister, formally commences an investigation in accordance with these regulations;

- interested parties - means -

1. the importers, exporters, of foreign producers of the investigated products and the trade and business associations the membership of which they constitute the majority;

2. the governments of the exporting countries of origin;

3. the producers of the domestic investigated products and the trade or business associations the membership of which they constitute a majority;

- investigated country - means the country of origin or export of the investigated product;

- investigated product - means the goods or products imported into Kenya which are the subject of an investigation by the Committee;

- normal value - means the price comparable to the export price, in the ordinary course of trade, for the investigated product when destined for consumption in the investigated country;

- provisional measure - means any measure, either in the form of a provisional duty, a security, a duty guaranteed by a cash deposit or a bond equal to the provisionally estimated margin of dumping or amount of subsidization.

Composition of Advisory Committee

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PART II  - THE ADVISORY COMMITTEE

3. (1)  The Advisory Committee shall comprise five members of

(a)    two shall represent the Ministry for the time being responsible for matters relating to finance;

(b)   one shall represent the Ministry for the time being responsible for matters relating to trade;

(c)    one shall represent the Ministry for the time being responsible for matters relating to industrial development; and

(d)   one shall represent the Office of the Attorney- General.

(2)  The Minister shall designate one of the members under subparagraph (a) of paragraph (1) to be chairman of the Committee.

(3)  The Committee may co-opt into its membership such other persons as it may deem necessary for the performance of its functions under these Regulations.

(4)  A member of the Committee shall hold office for a term of three years but shall be eligible for reappointment for one further term of three years.

(5)  The members of the Committee shall be paid such remuneration, during the period of an investigation, as the Minister may approve.

Convening of Committee

4 (1)  The Committee shall be convened by the Minister for purposes of conducting an investigation upon receipt by the Minister of a written application therefore in accordance with these Regulations.

(2)  The Committee shall stand adjourned upon the satisfactory conclusion of an investigation and after a decision on the measures to be taken thereon under these Regulations has been made.

Principle of operation. 

5.  The Committee shall recommend to the Minister the imposition of anti-dumping or countervailing measures on investigated products imported into Kenya when it determines, pursuant to an investigation initiated and conducted in accordance with these regulations, that -

(a)    the imported investigated products are, through the effects of dumping or subsidization, causing injury or threat of material injury to a Kenyan industry; and

(b)   there exists a casual link between the injury to the Kenya industry and the dumping or subsidization of such goods.

Application.

6 (1)  An investigation under these Regulations shall be initiated by the Minister upon receipt by him of an application in writing made by or on behalf of the Kenyan Industry.

(2)  An application under these regulations shall be deemed to be made by or on behalf of the Kenya industry if -

(a)    it is supported by Kenyan producers whose collective output of the investigated product constitutes more than fifty per cent of the total production; or

(b)   the Kenyan producers expressly supporting the application account for not less than twenty-five per cent of the total production of the investigated product produced by the Kenyan industry.

Evidence and information n application.

7.  An application under these Regulations shall -

(a)    specify the identity of the applicant;

(b)   be supported by evidence of dumping or subsidization, injury and a causal link between the dumped or subsidized imports and the alleged injury; and

(c)    be accompanied by such information as is reasonably available to the applicant on -

i)        the volume and value of the Kenyan production of the domestic investigated product by the applicant;

ii)       the industry on behalf of which the application is made accompanied by a list of all known Kenyan producers or associations of producers of the domestic investigated product;

iii)     a description of the volume and value of the Kenyan production of the investigated product accounted for by such producers;

iv)     a complete description of the alleged dumped or subsidized imported investigated product, the name of the country of origin or export, the identity of each known exporter or foreign producer and a list of known importers of the investigated product;

v)      the normal value of the investigated product;

vi)     the prices at which the product is sold from the investigated country to a third country or countries or the constructed value;

vii)   the export prices or where appropriate, the prices at which the product shall be resold if first resold to an independent buyer in Kenya;

viii)  the growth of the volume of the allegedly dumped or subsidized imports, the effect of these  imports on prices of the domestic investigated product in the Kenyan market, and the consequent impact of the imports on the Kenyan industry.

Notification of interested parties.

.8.  (1) Where the Minister decides to initiate an investigation, the Committee shall notify all interested parties of the intended investigation:

Provided that where the interested party is the government of an exporting country, the Minister shall issue the notification.

(2)  A notification made under paragraph (1) shall indicate -

(a)    the name of the country or countries of export and, if different the country or countries of origin of the investigated products;

(b)   a complete description of the investigated product, including the technical characteristics and uses of the product;

(c)    the current tariff classification number of the investigated product;

(d)   a description of the alleged dumping and the basis for such allegations;

(e)    a summary of the factors on which the allegations of injury and causal link are based;

(f)     the address where information and comments on the application may be submitted;

(g)    the date of initiation of the investigation; and

(h)    the proposed programme of the investigation.

Committee not to publish application.

9.  The Committee shall not make public any application made under these Regulations unless a decision to initiate an investigation has been made.       

Withdrawal of application.

10.  (1)  An applicant may, at any time, apply to the Committee for withdrawal of an application under regulation 6.

(2)  Where the application is withdrawn prior to initiation of an investigation, such application shall be deemed not to have been made in the first instance.

(3)  Where the application for withdrawal is made after initiation of the investigation, the Minister may, upon the advice of the Committee as to whether it is in the interest of Kenya to do so, either continue the investigation or terminate the same.

Period of investigation.

11.  (1)  The investigation conducted by the Committee under these Regulations shall cover a period of one year immediately preceding the date of initiation of the investigations, and shall except in special circumstances, be concluded within a period of not more than eighteen months from the date of initiation thereof.

(2)  An investigation under these Regulations shall not interfere with the procedures of customs clearance of the investigated product.

(3)  After the conclusion of the investigation and adoption of measures under these regulations, no additional penalties, other than those required for the application of those measures, shall be applied.

Confidentiality. 

 12.  Where the committee is satisfied, upon good cause shown, that any information submitted to it in the course of an investigation should not be disclosed on the grounds that -

(i) its disclosure would be of advantage to a competitor of the producer of the investigated product; or

(ii) its disclosure would have an adverse effect upon the person supplying the information or upon such person - s informant; or

(iii) it is provided on a confidential basis by parties to an investigation,

(iv) the committee shall treat such information as confidential during and after the investigation and shall not disclose it without the specific permission of the parties submitting it. 

 Verification of information.

13.  The Committee may carry out such investigations as may be necessary to verify information provided to it or to obtain further details of the same;

consent of the producers of the investigated products and the governments of the respective countries.

Failure etc to provide information.

14.  (1)  Where at any time during an investigation, any interested party refuses or fails to provide necessary information within the period of time prescribed by the Committee or otherwise impedes the investigation, the Committee may reach preliminary or final determination on the basis of the information available:

Provided that the Committee shall take due account of any difficulties experienced by interested parties, particularly small companies, in supplying the information required and may render any assistance or extend the prescribed period for the submission of such information as it may deem appropriate.

(2)  All interested parties and, in the case of countervailing duties investigations, all exporting countries, shall be entitled to appear and be heard before the Committee at all times during an investigation.

Determination of normal value.

15.  (1)  The Committee shall establish the normal value of the investigated product on the basis of the price paid or payable, in the ordinary course of trade, in the country of export:

Provided that the provisions of paragraph (1) shall not apply in cases where the investigated products -

(a)    are not produced in the country of export;

(b)   are merely transhipped through the country of export from the country of origin; or

(c)    where there is no comparable price for them in the country of export.

(2)  Notwithstanding paragraph (1), sales made to related customers shall not be considered as made in the ordinary course of trade unless it is demonstrated to the Committee that such sales are made at arm - s length.

Normal value based on export price to a third country or on constructed value.

16.  (1)  Where -

(a)    there are no sales of the investigated product in the ordinary course of trade in the domestic market of the exporting country; or

(b)   such sales do not permit a proper comparison because of the particular market situation or the low volume of the sales in the domestic market of the exporting country,

 the Committee shall determine the normal value either -

(i) by comparison with a comparable price of the investigated product when exported to an appropriate third country where such price is representative; or

(ii) by comparison with the cost of production in the country of origin plus a reasonable amount for administrative, sale and any other costs for profits:

Provided that the Committee may apply another ratio where the evidence submitted by interested parties or otherwise available to it demonstrates that domestic sales at such lower ratio are nonetheless of sufficient magnitude to provide a proper comparison. 

(2)  A price shall be considered as representative under this regulation when the sales of the investigated product in a third country constitute less than five per cent of the sales of the product into Kenya.

Sales below cost.

17. (1)  The Committee may treat sales of the investigated product in the domestic market of the exporting country or sales to a third country at prices below fixed and variable per unit costs of production plus sale, general and administrative costs as not being in the ordinary course of trade by reason of price and may disregard such sales in determining normal value where the Committee determines that such sales were made -  

(a)    within a period of six months or more; 

(b)   in substantial quantities; and  

(c)    at prices which do not provide for the recovery of all costs within a reasonable period of time, in which case the Committee shall determine in each case what should be considered as a reasonable period of time for the recovery of all costs.  

(2)  For the purposes of this regulation, sales below per unit cost shall be considered as made in substantial quantities where -  

(a)    the weighted average selling price of the transactions under consideration for the determination of the normal value is below the weighted average unit costs; or  

(b)   the volume of sales below per unit costs represents twenty per cent or more of the volume sold in transactions under consideration for the determination of the normal value.

Comparison of export price and normal value adjustments.

18.  (1)  In making a comparison between export price and normal value, the Committee shall make due allowance in each case, on its merits, for differences which affect price comparability, including differences in -  

(a)    conditions and terms of sale;  

(b)   taxation;  

(c)    levels of trade; 

(d)   quantities;  

(e)    physical characteristics; and  

(f)     any other differences which may be demonstrated by interested parties to the satisfaction of the Committee as affecting price comparability.  

(2)  The Committee shall, in cases where the export price is constructed on the basis of the price at which the imported products are first resold to an independent buyer, make allowances for costs, including duties and taxes, incurred between importation and resale, and for profits arising from importation and distribution.

Currency conversion.

19.  (1)  Where the price comparison requires a conversion of currencies, the Committee shall make such conversion using the rate of exchange on the date of sale as available from the exporter or from commercial banks in the country of export.

(2)  The date of sale shall be the date on which the material terms of the sale, inter alia, the nature of the products, quantities and price are established, either in a contract, a purchase order, an order confirmation or an invoice.

Determination of dumping.

20.  Where the Committee upon investigations conducted in accordance with these Regulations finds that the investigated product is introduced into the Kenyan market at a price below its normal value, the Committee shall conclude that such product is dumped into the Kenyan market.

Examination of the volume of dumped imports and their effects on production and prices.

21. (1)  The Committee shall, in ascertaining the volume of dumped imports, consider whether there has been an increase of the imports, either in absolute terms or relative to production or consumption of such imports.  

(2)  In determining the effect of dumped imports on prices in the Kenyan market, the committee shall ascertain -  

(a)    whether there has been a price undercutting of the dumped imports as compared to the price of the domestic investigated product;  

(b)   whether the effect of such imports depresses prices to a significant degree or prevents to a significant degree, price increases which otherwise would have occurred, or adversely impacts on products of the investigated product in Kenya;  

(c)    whether there is an actual and potential decline in sales, profits, output, market share, productivity, return on investments, or utilization of capacity; 

(d)   the factors affecting prices of the investigated product in Kenya;  

(e)    the magnitude of the margin of dumping; and  

(f)     the actual and potential negative effects of cash flow, inventories, employment, wages growth and ability to raise capital on investment.  

(3)  Kenya producers who are related to the exporters or importers of the investigated product or are themselves importers of the investigated product, shall not be considered as part of the Kenyan industry adversely affected by dumping for the purposes of the investigation.

(4)  In this regulation, the expression - related - has the meaning assigned to it under Appendix C of the Seventh Schedule to the Act.

  Threat of material injury.

22. (1) In determining the existence of a threat or material injury, the Committee shall consider -  

(a)    whether there exists a rate of increase of dumped imports into the Kenyan market which indicates the likelihood of a substantial increase in importation;  

(b)   whether there is a large volume of goods disposable at low prices, or  an imminent, substantial increase in the capacity of the exporter, indicating the likelihood of increased dumped exports in Kenya - s market;  

(c)    whether imports are entering the Kenyan market at prices that are likely to have a depressing effect on Kenyan prices and to increase demand for further imports; and  

(2)  Where the conclusion from a consideration of the factors enumerated in paragraph (1) in the positive, the Committee shall make a finding that the dumped imports present a threat of material injury to the Kenyan market and recommend the imposition of protective measures.  

Negligible import volumes and deminimis dumping margin. 

23.  Where the Committee determines, on the basis of the application or of other information available to it, that -  

(a)    imports of the investigated product from the country of export into Kenya represent less than three per cent of the imports of the investigated product into Kenya, unless the countries under investigation which individually account for less than three per cent of the import of the product into Kenya collectively account for more than seven per cent of the imports of that product;  

(b)   the margin of dumping is less than two per cent, expressed as a percentage of the export price; or  

(c)    the injury to the Kenyan industry is negligible; or  

(d)   where the investigation relates to allegations of subsidization -  

i)        that the amount of subsidy is less than one per cent ad valorem; or  

ii)       that the volume of the subsidized imports represents less than three per cent of imports of the investigated product into Kenya, unless the countries under investigation which individually account for less than three per cent of the import of the product into Kenya collectively account for more than seven per cent of the imports of the investigated product into Kenya; or  

iii)     that the injury suffered by the Kenyan industry is negligible;  

iv)     that the volume of the subsidized imports represents less than four per cent of the total imports of the investigated product into Kenya, except where imports from developing countries whose individual share of total imports represents less than four per cent collectively account for more than nine per cent or more of the total imports of the investigated product into Kenya, 

the committee shall not advise the Minister to initiate an investigation under these Regulations.

 Determination of injurious subsidies.

24.  In an investigation under these Regulations into allegations of subsidization, the Committee shall advise the Minister to impose countervailing measures where -

(a)    the allegations relate to imported investigated products which benefit from a subsidy;  

(b)   the alleged subsidy is specific to an enterprise or an industry or a group of enterprises or industries, located within a designated geographical area of the granting government, and countervailable within the meaning of the Act; and  

(c)    the imported investigated products are through the effect of subsidization, likely to cause injury to the Kenyan industry.

Source of subsidy.

25.  a subsidy shall be subject to investigation by the committee where such subsidy is granted by the government of the country of origin of the investigated product or by the Government of an intermediate country from which the product is exported to Kenya.

Existence of a subsidy.

26.  In an investigation under these Regulations which relates to the determination of the existence of alleged subsidy, the Committee shall determine that such a subsidy exists where the subsidization measures complained of relate directly or indirectly to the manufacture, production, export or transport of the investigated product imported into Kenya.

27. (1)  A subsidy shall be deemed to be specific to an enterprise or industry or group of enterprises or industries within the jurisdiction of the such government of the investigated country, where such government, or t he legislation governing trade in that country, limits access to the subsidy to certain enterprises.

(2)  Notwithstanding paragraph (1), where -  

(a) the government of an investigated country; or

(b) the legislation of such country which governs trade,

establishes objective criteria or conditions governing the eligibility for, and the amount of subsidy the Committee shall consider that the subsidy is not specific within the meaning of these Regulations, provide that eligibility therefore is open to all interested parties and that such criteria and the conditions thereof are strictly adhered to.  

(3)  For the purposes of this regulation, - objective criteria - and - conditions - means the criteria or conditions provided for under the legislation referred to in paragraph (2) which are of uniform application and economic in nature.  

(4)  If not withstanding any appearance of non-specificity resulting from the application of the principles set out in paragraphs (1) and (2), hereof, there are reasons to believe that the subsidy may in  fact be specific, the Committee may consider other factors in its investigation, including the following -  

(a) whether a subsidy programme is used solely or predominantly by a limited number of certain enterprises;

(b) whether the government grants disproportionately large amount of subsidy to certain enterprises;

(c) the manner in which discretion is exercised by the government in the decision whether to grant a subsidy;

(d) the frequency with which applications for a subsidy are refused or approved and the reasons for such decisions; and

(e) whether the subsidy is limited to certain enterprises located in a designated geographical region within the investigated country.

(5) (a)  Any determination of specificity by the Committee under the provisions of these Regulations, shall be clearly supported by documentary or other evidence.  

Notwithstanding the foregoing, the setting or change of generally applicable tax rats by the government of the investigated country shall not be deemed to be a specific subsidy.

Illustration of specific subsidies.

28.  Notwithstanding any other provisions of these Regulations, the instances of subsidization set out in the Schedule shall be deemed to be specific subsidies against which the Committee shall recommend the imposition of countervailing measures.

Non-countervailable subsidies granted to promote research.

29.  The Committee shall not recommend measures against subsidies which are granted for research activities by institutions of higher learning or research on a contract basis by firms or by the institutions themselves where such subsidies do not cover more than seventy per cent of the costs of the research.

Casual link.

30.  The committee shall base its demonstration of causal relationship between the subsidized imported investigated products and the injury to the Kenyan industry on an examination of all relevant evidence before the committee, including -

(a)    the volume and prices of imported products identical to the investigated products which are not under investigation within the meaning of these Regulations;  

(b)   the changes in demand or patterns of consumption of the investigated product;  

(c)    the existence of trade restrictive practices and competition between the foreign and Kenyan producers of the investigated product;  and

(d)   the development in technology and the export performance and productivity of the Kenyan industry.

Suspension of investigation.

31.  (1)  The Committee may suspend an investigation without the imposition of any measures upon receipt of satisfactory voluntary undertakings -  

(a)    from the exporter to revise its prices or to cease exports at dumped prices, provided that the new prices shall not be higher than is necessary to eliminate the dumping margin, and shall be less than the dumping margin if the Committee is satisfied that such lesser price increases would be adequate to remove injury to the Kenyan market; or  

(b)   from the exporting country, to eliminate or limit the subsidy or take any other measures concerning its effects.

 (2)  The Committee shall suspend an investigation during the implementation of an undertaking given under this regulation.  

(3)  Where an exporter violates an undertaking under this regulation the committee may advise the Minister to impose provisional measures or definitive duties against such importer.

Provisional measures.

32. (1)  Where within a period of sixty days from the date of initiation of an investigation, the Committee makes a preliminary affirmative determination of dumping or subsidization and injury as a result thereof to the domestic market, the Committee may recommend to the Minister the imposition of such temporary measures as may be necessary to prevent further injury during the course of the investigation.  

(2)  The provisional measures recommended under paragraph (1) shall take the form of a security by cash deposits or bond, not being greater than the preliminary determination.  

Notice of imposition of provisional measures.

33.  (1)  Provisional measures shall take effect on the date of publication in the Gazette by the Committee of a notice imposing such measures.

 (2)  The notice published under paragraph(1) shall be forwarded to the country or countries exporting the investigated products.  

Duration of application of provisional measures.

34.  Provisional measures shall be applied for a period not exceeding six months or for such longer period, not exceeding fifteen months, as the Minister may upon the advice of the Committee determine.

Public notice of conclusion of an investigation.

35. (1)  Upon conclusion of an investigation under these Regulations, the committee shall cause to be published a notice to that effect in the Gazette and by advertisement in one or more daily newspapers of national circulation.

 (2)  A notice published under paragraph (1) shall, due regard being paid to the requirement of the protection of confidential information, set fourth in sufficient detail the findings and conclusions reached on all issues of fact and law considered material by the committee, including the matters of fact and law which have led to arguments being accepted or rejected.

 (3)  Where in any case the committee recommends the imposition of definitive duties, such decision shall take effect on the date of the publication of the notice under paragraph (1).

Suspension of duties.

36.  The Committee may advise the Minister to suspend provisional or definitive duties where market conditions temporarily change, to an extent that injury would be unlikely to resume as a result of the suspension.

Retroactive collection of duties. 

37. (1)  Where the Committee makes a final determination of injury or threat of injury and considers that the effect of the dumped or subsidized imports would, in the absence of the provisional measures imposed under these Regulations have led to a determination of injury, anti-dumping or countervailing duties may be levied retroactively for the period for which provisional measures, if any, have been applied.

(2)  Except as provided in paragraph (1), where the Committee makes a determination of threat of injury or material retardation, a definitive anti-dumping or countervailing duty may be imposed only from the date of such determination and any cash deposit made during the period of the application of provisional measures imposed under these Regulations shall be refunded.

(3)  Where the Committee makes a negative final determination, any bond secured for purposes of the provisional measures shall be refunded to the exporter, any anti-dumping duty collected prior to the date of application of the final determination shall be reimbursed together with legal interest rates accumulated from the date of such collection.

Definitive duties.

38. (1)  The Committee may advise the Minister to levy a definitive anti-dumping or countervailing duty on investigated products which were entered for consumption in Kenya not more than ninety days prior to the date of application of provisional measures under these Regulations.

(2)  No duties shall be levied retroactively pursuant to paragraph (1) on products entered for consumption prior to the date of initiation of an investigation.

Duration of definitive duties.

39.  (1)  Any definitive anti-dumping or countervailing measure shall lapse after five years from the date of imposition.

(2)  The Committee shall, not later than ninety days prior to the date of expiry of the measure, publish a Gazette notice of such impending expiry.

(3)  Notwithstanding paragraphs (1), definitive measures may not expire if the committee determines, after a review made under regulation 44 that the expiry of the duty would be likely to lead to the continuation or recurrence of dumping or subsidization and injury to the Kenyan industry.

Review for change of circumstances.

40.  (1)  The Committee may on its own motion review the need for continued imposition of anti-dumping or countervailing duties.

(2)  IN conducting a review under this regulation, the Committee shall, upon request from any interested party, examine -

(a)    whether the continued imposition of the duty is necessary to offset dumping or subsidization; and

(b)   whether the injury would be likely to continue or recur if the duty were removed or varied.

where the Committee determines, upon review, that such duty is no longer required, such duty shall cease forthwith.

Appeals.

41. Any person aggrieved by a decision of the Committee under these Regulations may appeal to the High Court for a review of such decision.

International obligations.

42.    These regulations shall apply in conformity with the obligations of Kenya under the international agreements to which it is party.