PAI

Anti-dumping section contents

1. About Anti-Dumping Section
2. Anti-Dumping Importance
3. Important concepts
4. Specialties
5. National industry protection and complaints filing
6. Kuwait Exports Protection
7. International Achievements
8. Our Publications
9. Contact Us

1- About Anti-Dumping Section

As a result of Kuwait's accession to the World Trade Organization (WTO) in 1995, as it is considered one of the first Arab countries to join the organization, it is no longer allowed to impose restrictions on the international and intra-trade movement between WTO member states except through international rules and specific procedures. And in accordance with the consequences of international trade liberalization from exposing the Kuwaiti or Gulf industry to great competition with foreign imports after removing all import restrictions, which led to an increase of imports volume as well as the inability to deal with that increase using same methods prior to accession to the organization (import licenses, quantitative restrictions and tariff restrictions), due to the incompatibility of these methods with the rules of the World Trade Organization, it was necessary to create a specialized body to address harmful and unfair practices in international trade.

Therefore, the Public Authority for Industry established an anti-dumping department in 2003, in compliance with the implementation of the international agreement, as well as to achieve the PAI’s desire to support and protect the industry and not to be harmed by any international procedure that could affect it directly, and to make it one of the most important priorities of the Public Authority for Industry as it is of no use to achieve an industrial renaissance without providing a safe and protective environment for these industries.

The Anti-Dumping Department is affiliated to the licensing and industrial development sector and with the aim of assisting and providing technical support to national factories and companies to face dumped and subsidized imports and imports increase they are exposed to in the national or Gulf market, whereby the work of the department is focused on the following:

Receiving complaints to assist national factories in case these factories are exposed to dishonest competition from dumped and subsidized imports and in case there is a significant increase in imports in the local market that leads to or threatens to cause damage to the national industry, thus preserving local investments and employment and consequently contributing to achieving economical development.
Defending national factories when they are faced with dumping duties or compensatory measures against subsidies or preventive measures against imports increment by foreign investigative entities that impede the flow of national goods in the export markets, and consequently increase Kuwaiti exports.
Procedures activation that are stipulated in the World Trade Organization agreements aiming to protecting the national industry.

In this way, the department contributes in achieving His Highness the Emir vision of the country towards “transforming Kuwait into a financial and commercial center that attracts investment, in which the private sector leads the economic activity, encourages the spirit of competition, raises production efficiency under a supportive institutional state apparatus, consolidates values, preserves social identity and achieves Human development and balanced development, providing adequate infrastructure, advanced legislation and an encouraging business environment.

2- Section importance:

Protecting the national industry requires protecting the national economy, as it is an integral part of Kuwait economy, and therefore works on:

1. Achieving and ensuring fair competition:
The purpose of protecting the national industry is to ensure that imports enter the local market at a fair price, thus achieving fair competition between local and imported product.

2. Reducing unemployment by creating job opportunities:
Although the anti-dumping department does not provide job opportunities, protecting the existing national industry, prevents unemployment increment, as the national industry, if it is exposed to damage from imports, is forced to lay off employment, and protecting the industry enables it to expand and increase investments, and consequently create new job opportunities.

3. Existing investment protection and attracting new investments:
As investments do not grow except in a secure and stable environment, and new investments will not come to the State of Kuwait unless there is protection and growth guarantee.

4. Assistance in achieving industrial development:
Protecting the national industry and the national economy entails increasing investments, resulting in an added value to the industrial output and then to the national product, and then achieving industrial and economic development, reducing unemployment, and consequently combating poverty in line with the Millennium Development Goals (MDGs).

3- Important concepts

There are three types of harmful practices in international trade that fall within the competencies of the Anti-Dumping Department, namely dumping, ad hoc subsidies and increased imports.

Dumping

Dumping is the export of a product to the UAE market at an export price less than the normal value of a similar product when it is destined for consumption in the normal course of trade in the market of the exporting country.

Thus, defining dumping is based on identifying three main elements, which are as follows:

1. Ordinary value: It is the financial amount paid or the price to be paid for the similar product in the normal course of trade when it is directed for consumption in the market of the country of export. Sales of the similar product in the country of export may not be considered in the normal course of trade, if the following appears:

2. Absence of local sales of a similar product destined for consumption in the local market of the exporting country.

3. In case there is an association, partnership agreements, compensation or other relevant agreements between related parties or interest.

4. If the local sales volume of a similar product destined for consumption in the local market of the exporting country is less than five percent (5%) of the sales of exporting this product to the member states.

In cases sales of similar products are not in the normal course of trade in the local market of the exporting country or these sales do not allow a valid comparison due to the special market situation or the low volume of sales in the local market of the exporting country, the normal value is calculated according to the following alternative methods:

The cost of production in the country of origin plus an appropriate amount of selling costs and general and administrative expenses and a suitable profit margin or
The price of exporting similar product in the normal course of trade to an appropriate third country, provided that this price is suitable

1. Export price: The amount paid or the price to be paid for the product under investigation when it is sold from the exporting country to the market of the importing country.

In cases where there is no price available for exporting the product under investigation to the importing country, or if the export price is not reliable due to the existence of a compensatory link or agreement between the exporter and the importer or a third party, the export price may be calculated based on the following alternative methods:

The selling price of the product under investigation to the first independent buyer, or,
If these products are not resold to an independent buyer or if they are not resold in the condition in which they were supplied, the export price shall be determined on any other appropriate basis.

Dumping margin: The difference between the normal value and export price.

The margin of dumping is determined on the basis of a fair comparison between export price and normal value, which takes place at the same commercial level, and is usually done at the factory door compared to sales that took place near the same period of time as possible, taking into account the necessary adjustments for differences that affect prices comparability, including differences in terms and method of sale, material specifications, import fees, taxes, quantities, commercial level, and any other differences requested by interested parties or related parties that prove that they affect prices and the comparability of prices.

Existence of the dumping margin during the investigation period is usually determined based on the following methods:

A comparison of the weighted average of normal value and the weighted average of export price for all exports of the product under investigation to the market of importing country, or

A comparison of normal value and export price based on a trade operation versus another.

A comparison of the normal value determined based on the weighted average of the prices of individual export operations to the market of the importing country in case that it is confirmed there is a model of export prices that differ greatly between different buyers, regions or time periods and that an explanation for the adoption of the methods provided above cannot reflect appropriately exercised total dumping margin.

The dumping margin is determined based on the exceeding amount of the normal value from the export price, and a dumping margin must be calculated for each known exporter or producer of the product under investigation separately.

In case the dumping margin is less than two percent (2%) of the export price, it is considered a small margin that results in the immediate termination of the investigation without imposing anti-dumping duties.

It is not sufficient to prove the practice of dumping to impose an anti-dumping duty against dumped imports, but the investigation must prove that three essential conditions are met:

1. The occurrence of physical damage to the national industry or the threat of its occurrence or a physical delay in establishing a national industry.

2. The existence of a caused relationship between the dumped imports and the physical damage to the national industry.

Support

The support is a financial contribution from the government of the exporting country or a public authority in that country which results in a benefit for the recipient.

Thus, the existence of support is based on the availability of three main elements, which are as follows:

1. The government of the exporting country or a public entity therein: The government means the ruling authority and all public authorities in the country, which is represented by ministries, government departments, government agencies and institutions.

2. Financial Contribution: Financial contribution is represented in several forms, the most important of which are:

Government transfer of funds directly in the form of contributions or loans.
The government's waiver of due government revenues and collection waiver, such as a tax deduction.
Government provision of goods or services other than public infrastructure.
Government purchase of goods.
Provide financial payments by financing or pledging to a private entity.

3. Benefit: It is the benefit achieved for the recipient from the government’s intervention to give support for his benefit. The benefit is the difference between the financial obligations that the recipient of the support would have incurred without government intervention for its benefit, and what he bearded due to government intervention. Consequently, the loans offered by government banks are not considered beneficial, unless the amounts of interest on the loan paid by the loan recipient are less than the amounts paid by the recipient of the loan from non-governmental banks.

The existence of the subsidy is not sufficient to result in imposing compensatory measures against the subsidy, but the subsidy must be in the form of the earmarked subsidy, which is as follows:

Support provided to a specific facility or group of facilities
Support provided to an industrial sector or a specific group of industrial sectors
Support provided to a specific group of facilities located in a specific geographical area
Prohibited support: which takes one of two forms:
- The subsidy that is legally or dependent on export performance level, whether this condition is unaccompanied or within several conditions.
- Support that depends on the use of local goods instead of imported ones, whether this condition is unaccompanied or within several conditions.

To target specific support with compensatory measures, three essential conditions must be met:

The support shall be given from the ad hoc support.
Subsidized imports result in physical damage to the national industry that produces goods similar to the imported products.
The existence of a caused relationship between the subsidized imports and the physical damage to the national industry.

Prevention measurements against increased imports

Preventive measures are imposed when a product is imported into the UAE market in large quantities, whether in absolute or relative terms, in relation to local production, in a way that causes serious damage or damage threatens to national industry that produces similar or directly competitive product.

To Impose preventive measures against the increase in imports, three essential conditions must be met:

That there is an absolute increment and relative increment of imports in relation to national production: The absolute increase in imports is estimated by following up on the imports of the product under investigation over a period of time generally ranging from three to five years preceding the start date of the investigation. The relative increase in imports is also estimated in relation to the national production in the importing country by estimating the percentage of imported product under investigation in relation to the volume of production of similar or directly competing product during a period of time that generally ranges from three to five years, which precedes the start date of the investigation.
The occurrence of serious damage or damage threaten to the national industry. Which is determined through objective research in all economic and financial indicators of the complaining industry, including the actual or potential decrease in sales, profits, production, market share, productivity, return on investment, or consumed energy. exploited and the factors affecting prices in the national market, and the actual and potential negative effects on cash flow, inventory, employment, investment, wages, growth, and the ability to increase capital.
The existence of a causal relationship between the increased imports and the serious damage: represented in proving the existence of a correlation, cause and effect between the increased imports and the serious damage to the national industry, so that imports are the main reason of causing damage to the national industry. This is done to ensure that the damages to the national industry are caused by the increase in imports and not due to other reasons.

There is a fundamental difference between dumping and subsidies on one side, and preventive measures against increased imports on the other side. Where dumping and subsidy are classified as illegal practices when importing, because they are an anti-competitive practice of dumping and subsidy. Therefore, the main objective of imposing anti-dumping duties and countervailing measures against the designated subsidy is to address the element of unfair competition and establish fair competition between imported products and national products.

While the preventive measures against the increase in imports do not include an illegal practice when importing, as they target legitimate imports, but in large quantities that cause damage or threaten to the national industry. Therefore, preventive measures aim to provide opportunity and time for national industry during preventive measures implementation period to restructure its direct competition with imports and later to be more able to compete with imported products.

4- Specialties:

Anti-Dumping Section works within a national and regional legislative framework and an international trade system, which is represented in a set of international agreements related to combating harmful practices in international trade, which are known as anti-dumping, countervailing measures and preventive measures, according to the following:

National legislative framework

In 2015, the Unified Law (the system) for anti-dumping, compensatory measures and preventive measures of the GCC States (amended) and its amended executive regulations were ratified, and it was issued in the Official Gazette in the State of Kuwait in December 2016, which specifies the competent authorities to investigate harmful practices in international trade and in the form and duration of the imposition of anti-dumping duties, countervailing measures against subsidies, and preventive measures against increasing imports.

Download the Official Gazette
Regional legislative framework

Unified Law (the System) for anti-dumping, compensatory measures and preventive measures for the GCC States: This law (the System) aims to enable the GCC countries to take the necessary measures against dumping, subsidy and increase in imports, which result in harm to any gulf industry. The unified law includes (15) articles clarifying its scope, terms of reference, objectives, and the concerned committees, as well as how to appeal against issued decisions.

Download the law

The executive regulations (the System) of the unified anti-dumping, compensatory measures and preventive measures for the GCC States: It specifies the various stages of investigation from the stage of receiving the complaint to the stage of imposing anti-dumping duties, compensatory measures against subsidies and preventive measures against increasing imports, reviews of these fees and their termination, and details of how the amount of subsidies is calculated, the margin of dumping, and forms of preventive measures against the increased imports.

Download the list
International trade framework

Anti-dumping agreement of the World Trade Organization: It represents the international legislative framework for anti-dumping investigations and comes as an application of Article VI of the GATT 1994, which contains 18 articles and two appendices. This agreement organize the way of determining existence of dumping, damage and identifying local industry, procedures of initiating investigation, temporary and final procedures, imposition and collection of anti-dumping duties, the retroactive effect of these fees, the duration of fees for interim and final procedures, price undertakings and their revision, public notification, explanation of limitations, judicial review, anti-dumping actions on behalf of a third country, differential treatment of developing countries and the Committee on Anti-dumping at the level The World Trade Organization and consultations and settlement of disputes among the member states of the World Trade Organization.

Download the Anti-Dumping Agreement

The WTO Preventive Agreement and Article 19 of the GATT 1994: This agreement contains 14 articles and one appendix that includes general provisions and conditions for imposing preventive measures, investigation procedures, determining serious damage and it’s threaten, how to apply provisional and final measures, the duration of provisional and final measures, and reconsidering it, the level of concessions and other commitments, the definition of developing countries, the prohibition and repeal of automatic export restriction measures, notifications, consultations, and dispute settlement among WTO members.

Download the prevention agreement.

Definition of prevention: The preventive agreement is applied in the event of a sudden increase in imports, which results in causing serious damage to the national industry that may be irremediable, and then a preventive measure is applied against imports from all countries, except the countries whose exports are less than 3% to the GCC countries.

Agreement of support and compensatory measures: Compensatory measures against subsidies are not applied except in the circumstances stipulated in this agreement, and they come as an application of Article VI of the GATT 1994 agreement. This agreement contains 32 articles and 7 appendices that define support, cases of ad hoc support, prohibited support, and determining damage, define the local industry, procedures for initiating investigations, provisional and final procedures, commitments, imposing compensatory measures against subsidies and their collection, the retroactive effect of these fees, the period for imposing provisional and final measures, commitments, reviewing them, public notification, explaining limitations, judicial review, treatment of developing countries and the concerned committee of support and compensatory measures at the level of the World Trade Organization, consultations and dispute settlement among the member states of the World Trade Organization.

Download the support agreement and compensatory measures.

5- Protecting the national industry and submitting complaints

Each national industry or its representative may file a complaint against any harmful practices in international trade (dumping, subsidies, increased imports) to the Anti-Dumping Department, which performs its role in accordance with studying the complaint and verifying the availability of legal requirements in cooperation with the Technical Secretariat office to combat harmful practices in International trade in the General Secretariat of the GCC (the investigation authority) by imposing an anti-dumping fee or a compensatory measure against subsidies or a preventive measure against the increase in imports according to the complaint.

Investigation of complaints of harmful practices in international trade includes evidence examination, studying and analyzing of all data provided by all parties involved in the investigation, in the various stages of the investigation that its going through, taking into account the specificity of the procedures of each type of investigation into harmful practices in international trade, where investigation procedures vary according to the complaint, whether they relate to anti-dumping, against allocated subsidies, or to prevent the increase in imports.

During the complaint stage, anti-Dumping department provides technical support to the national industry that intends to submit the complaint to help it fill out the complaint form prepared by the Technical Secretariat office to combat harmful practices in International trade in accordance with the legal requirements of the World Trade Organization, anti-dumping agreements, the agreement on support and compensatory measures and the agreement on measures preventive and unified gulf law.

Investigation Procedures for Anti-dumping Complaint

There are several procedural stages that the anti-dumping investigation goes through, starting from the stage of filing a complaint to imposing an anti-dumping fee if legal requirements are met. These procedural stages can be summarized as follows:

Submitting an anti-dumping complaint: The national industry or its representative submits a written complaint to the anti-dumping department according to template, and then we send it to the Technical Secretariat office to combat harmful practices in international trade.
Study of the complaint: The complaint is studied to ensure that it meets the legal requirements.
Investigation Announcement: If the complaint meets the legal requirements, the announcement of starting the anti-dumping investigation is published in the Official Gazette.
Investigation: Within a period of one year from the date of starting the investigation, all concerned parties from inside and outside the GCC states, such as exporters, producers, importers, and other relevant authorities, are invited to provide their opinions and support during listening sessions, questionnaires, field visits, and preparing preliminary and final reports, which include the results of the investigation.
Final decision Issuance: If all legal requirements are met, anti-dumping fees may be imposed on the imports of the relevant product from the countries concerned with the complaint.

Investigation procedures in subsidy complaint:

There are several procedural stages that the Subsidy investigation goes through, starting from the stage of filing a complaint to imposing an anti-dumping fee if legal requirements are met. These procedural stages can be summarized as follows:

Submitting a complaint against subsidy: The national industry or its representative submits a written complaint to the anti-dumping department according to a ready template, and then we send it to the Technical Secretariat office to combat harmful practices in international trade.
Study of the complaint: The complaint is studied to ensure that it meets the legal requirements.
Going through consultations with exporting countries: It is possible to go through consultations with exporting countries that grant support to their exporters, aiming to agree on an acceptable solution.
Investigation announcement: In case the consultations failed, the announcement starting an anti-subsidy investigation is published in the Official Gazette.
Investigation: Within a period of one year from the date of starting the investigation, all concerned parties from inside and outside the GCC states, such as exporters, producers, importers, and other relevant authorities, are invited to provide their opinions and support during listening sessions, questionnaires, field visits, and preparing preliminary and final reports, which include the results of the investigation.
Final decision issuance: If all legal requirements are met, anti-dumping fees may be imposed on the imports of the relevant product from the countries concerned with the complaint.

Investigation procedures in complaint against increased imports:

There are several procedural stages that the investigation from increased imports goes through, starting from the stage of filing a complaint to imposing an anti-dumping fee if legal requirements are met. These procedural stages can be summarized as follows:

Submitting a complaint against increased imports: The national industry or its representative submits a written complaint to the anti-dumping department according to a ready template, and then we send it to the Technical Secretariat office to combat harmful practices in international trade.
Study of the complaint: The complaint is studied to ensure that it meets the legal requirements.
Investigation Announcement: If the complaint meets the legal requirements, the announcement of starting the anti-dumping investigation is published in the Official Gazette.
Investigation: Within a period of one year from the date of starting the investigation, all concerned parties from inside and outside the GCC states, such as exporters, producers, importers, and other relevant authorities, are invited to provide their opinions and support during listening sessions, questionnaires, field visits, and preparing preliminary and final reports, which include the results of the investigation.
Final decision issuance of imposing preventions measures against increased imports: If all legal requirements are met, preventive measures may be imposed on the imports of the relevant product regardless of the exporting country.

6- Protection of Kuwaiti exports

Anti-Dumping department is keen to make great efforts to address:

Anti-dumping measures taken by the member states of the World Trade Organization
Support countermeasures
Preventive measures

Above procedures raised by countries and include exports of Kuwait, aiming to end working with these fees and investigations that affect the export performance of the targeted industries in the State of Kuwait.

Anti-dumping department provides all kinds of support to factories that are concerned with these investigations to help them move against them at the various stages of the investigation to end it without imposing any protection fee on exports of Kuwait.

Stages of procedures carried out by anti-dumping department against investigations filed against the State of Kuwait

Anti-Dumping department takes immediate actions against these investigations and fees through the bilateral action with the foreign investigation agencies in parallel with the multilateral action at the level of the World Trade Organization.

Bilateral movement with foreign investigation agencies

Anti-Dumping department communicates directly with the foreign investigation agency during the investigation phase, which lasts 12 months from the date of opening the investigation, to prevent the foreign investigation agency from imposing protective fees.

During this phase, Anti-dumping department provides all data that support national factories position in the investigation, especially regarding the following aspects:

Submit a request to join the investigation as a stakeholder, in order to participate in the various phases of the investigation.
Submit legal and technical defenses against each of the allegations of the foreign factories submitting the complaint included in the non-confidential version of the complaint and the decision of the foreign investigation agency to open the investigation.
Participate in the public listening session organized by the foreign investigation entity to present the pleas orally, which is attended by all concerned parties of the investigation.
Submit legal and technical defenses on the initial report of the investigation issued by the foreign investigation agency.
Possibility of requesting a bilateral listening session with the foreign investigation agency to present any additional evidence.
Submit technical defenses on the final report of the investigation issued by the foreign investigation agency.
The possibility of requesting a bilateral listening session with the foreign investigation agency to discuss what was stated in the final report of the investigation.

Multilateral action

Anti-Dumping section may raise observations and reservations on some investigations filed against Kuwaiti exports in an arbitrary manner at the level of the specialized committees of the World Trade Organization, which are mainly:

Anti-dumping Committee
Subsidy and countervailing measures
Safeguards Committee

Anti-Dumping section seeks to raise the reservations and observations to the Public Authority for Industry regarding the investigations opened currently on the country during the periodic meetings of these committees while discussing the notifications of countries that are currently imposing protectionist fees on the country's industrial exports.

This move aims to record the country's position rejecting these fees in the official minutes of the meeting of the World Trade Organization and to push the representatives of these countries in the organization to provide all the required clarifications and indirectly influence the foreign investigation apparatus to close these investigations.

7- International achievements:

Over the past period, the department has accomplished international achievements to protect Industry and exports of Kuwait, which had a good impact on preserving our export share outside the State of Kuwait, and the local industry was not affected by any losses, as the following sectors were protected:

Anti-dumping case imposed by the Republic of Turkey on the State of Kuwait's exported product (Mono Ethylene Glycol)

Through the important role of Anti-dumping Department in protecting exports of Kuwait from any international measures taken by any member state of the World Trade Organization, the department defended the industry of Kuwait, submitted all technical and economic reports, and attended all meetings in this regard with the Turkish side, contributed to the reduction of Anti-dumping fees from 22% to 6%, then stopping anti-dumping fees and closing the case, thus protecting the national industry from losing its share in global exports and hence saving approximately $47 million from the state budget and avoiding losing approximately $880-230 million annually.

Preventive measures imposed by the Arab Republic of Egypt on the State of Kuwait's exports of product named (Polypropylene)

Contribution in stopping preventive fees was made through:

Provide technical support to the Petrochemical Industry Company
Presenting legal defenses to the Egyptian investigation authorities on behalf of the State of Kuwait and attend the listening session with the Egyptian investigation authority.

Hence, PIC maintained its export share in the global market.

Temporary suspension of preventive measures fees from the Republic of Taiwan on exports of (High Density Polyethylene) to the State of Kuwait until the completion of the investigation.

As soon as the department learned that Taiwan had taken protective measures for the aforementioned product, the department notified concerned authorities in Taiwan that the State of Kuwait is a concerned party with the investigation and the preservation of all our international rights by following up and reviewing all procedures and reports related to the investigation and the public listening sessions, and after submitting the technical defense notes and other follow-ups to the issued reports On behalf of the Taiwanese investigation authority, the investigation has been suspended pending any further developments in the future.

8- Our publication:

Our publication is available in the Industrial Laws and Regulations section of the main page PAI's website

9- Contact us:

Public Authority for Industry
P.O.Box 4690 Safat
Kuwait
E-mail:
antidumping@pai.gov.kw
anti_dumping@hotmail.com
Department phone: +965 25302399
Secretariat phone: +965 25302406
International expert in WTO and anti-dumping policies: +965 98808074

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