What Are Countervailing Duties?

Anti-subsidy tax is also called "anti-subsidy tax" and "offset tariff". An import surcharge levied on the import of foreign goods receiving export subsidies or subsidies is a form of differential tariff. The amount of tax levied is generally equal to the amount of subsidy received for the product. The countervailing duty was initiated in the UK in the late 19th century. At the time, the UK imposed this tax on European sugar, which received export subsidies, and some countries followed suit. The purpose is to offset the amount of subsidies enjoyed by imported goods, weaken their competitiveness, prevent cheap dumping, and protect domestic production and the domestic market. Direct and indirect subsidies and preferences accepted by imported goods in the process of production, manufacturing, processing and exporting can all constitute the reason for importing countries to impose countervailing duties. ^[1]

Countervailing duty

Use of imported goods over normal

Also known as

According to the agreement, a subsidy refers to financial assistance, measures or any other form of income or

Written request: The subsidy-initiated industry or industry representative should initiate a subsidy in writing

(1) About prohibition

First, according to the Foreign Trade Law, the State Council promulgated the "Anti-dumping and Countervailing Regulations of the People's Republic of China" on March 25, 1997.

First of all, WTO members have two different methods in the practice of collecting anti-dumping duties: one is the "retroactive taxation" approach adopted by the United States, that is, if the final ruling is 28%, the importer only needs to pay 28% The security deposit, but the actual amount to be paid, will be determined after the Ministry of Commerce makes a review one year later. In order to prevent the delay in finalizing the actual payment of taxes, the Anti-Dumping Agreement stipulates that after the proposed amount of the final anti-dumping tax is proposed, a decision will usually be made within a maximum of 18 months within 12 months, and if The amount of retroactive taxation exceeds the dumping margin of the final decision, and the over-taxed portion of the import will be returned within 90 days from the date of the final decision on the anti-dumping tax.

The other is the "advance taxation" approach adopted by the European Union. If the European Union finally decides to levy a 28% anti-dumping duty on a company's product, it will levy a 28% anti-dumping duty on that product within one year from the date of the decision. It doesn't matter whether the export price of the product actually increases or decreases. The amount of this advanced tax that exceeds the actual dumping margin of the imported product shall be determined within 12 months after the party has provided strong evidence and requested a refund, the maximum shall not exceed 18 months, and the refund shall be approved The payment should be completed within 90 days. The anti-dumping tax must not exceed the dumping margin. Once the anti-dumping tax imposed exceeds the dumping margin, a refund issue will occur. The Anti-dumping Agreement clearly stipulates the refund period, which is very necessary to protect the legitimate interests of importers. .

Countervailing duty

Secondly, with regard to countervailing duties, according to Article 6 (3) of the GATT, countervailing duties should be understood as a special tariff levied to offset any incentives or subsidies given directly or indirectly in the manufacture, production or export of goods. . It can be seen that the countervailing tax is not punitive, and the purpose of levying a countervailing tax is only to offset the subsidy. In addition, Articles 6 and 16 of the GATT provide that if a Contracting Party imports products from another Contracting Party, it will receive, directly or indirectly, an award or subsidy from the exporting country and cause substantial damage to an established industry in the importing country. Damage or threat of damage, or substantial impediment to the establishment of an industry in the importing country, the State Party importing the product may impose countervailing duties.

It can be seen that the conditions for levying anti-subsidy taxes are basically the same as those for levying anti-dumping duties, and they must have the following three conditions: (1) the fact that subsidies must be available, that is, the fact that exporting member states subsidize imports directly or indirectly; 2) There must be the result of damage, that is to cause damage or threat of damage to the related industries in the importing country, or seriously hinder the establishment of a related industry in the importing country; (3) There must be a causal relationship, that is, a causal relationship exists between subsidies and damage Only when the above three conditions are met can member states implement countervailing duty measures.

In addition, the WTO Agreement on Subsidies and Countervailing Measures provides corresponding provisions on the collection of countervailing duties. For example, after making reasonable efforts to complete consultations, members make a final ruling on the existence and amount of subsidies, and determine the impact of subsidies, Subsidized imported products are causing damage, the member may levy a countervailing duty in accordance with the provisions of this case, unless this or such subsidies are revoked: if a countervailing tax is imposed on any product, the Such imported products from all sources are charged an appropriate amount of countervailing duty on a non-discriminatory basis on a case-by-case basis to waive any of the subsidies in question or imports from sources that have been accepted under the terms of this Agreement Except, if any exporter whose final countervailing duty is levied on export products has not actually been investigated for reasons other than refusal to cooperate, he is eligible for accelerated review so that the investigation authority can quickly determine a separate countervailing duty rate for it, but The countervailing duty levied on any imported product must not exceed the amount of subsidy found to exist The amount of the subsidy is calculated in units of subsidized exports.