Guidance

Determining dumping and anti-dumping duties

Updated 25 October 2024

Determining dumping and anti-dumping duties

Legal framework

Primary legislation in the Taxation (Cross-border Trade) Act 2018 (the Taxation Act)

See in particular Schedule 4 to the Taxation Act.

Secondary legislation in the Trade Remedies (Dumping and Subsidisation) (EU Exit) Regulations 2019 (the D&S Regs)

See in particular Parts 2, 4 and 5 of the D&S Regs.

Secondary legislation in the Customs (Import Duty) (EU Exit) Regulations 2018 (the Customs Regs)

Regulation 128 of the Customs Regs gives a definition of related persons. We use this to determine association.

World Trade Organization (WTO) – relevant provisions

Article 2 of the Anti-Dumping Agreement (ADA) which includes the rules for calculating dumping at the international law level.

Calculating a dumping margin

Dumping occurs when goods are imported into a country at a price that is below their normal value. A dumping margin is the difference between the export price and the normal value of the goods, described as a percentage of the export price.

When we undertake dumping investigations, we calculate dumping margins for each (sampled) exporter. We then use the dumping margin along with the injury margin to determine anti-dumping duty rates where they are needed.

Calculating an individual dumping margin involves the following stages:

• calculating the normal value of the goods concerned

• determining the export price of the goods concerned

• ensuring a fair comparison between the normal value and the export price

• establishing the price difference to calculate the dumping margins

The calculation process requires data associated with the goods concerned in the investigation. These goods are described fully in the Notice of Initiation we publish at the beginning of an investigation.

We give goods in our investigations Product Control Numbers (PCNs) which are identifiers created on the basis of the main characteristics differentiating the sub-categories of goods within the scope of the investigation. In dumping margin calculations, we use PCNs to allow a more precise comparison between the overseas producers’ exported goods and their domestically sold like goods.

Calculating the normal value

Calculating the normal value based on comparable price

Where possible, we will calculate the normal value of the goods concerned using the comparable price. This is the price of the like goods when sold in the ordinary course of trade in the domestic market of the exporting country.

Like goods are defined as goods which are similar to the goods concerned in the dumping investigation in all respects or, if there are no such goods, goods that have characteristics which closely resemble them. In identifying like goods, we will consider the following non-exhaustive list of criteria:

• physical likeness

• commercial likeness, including competition and distribution channels

• functional likeness, including end-use or substitutability

• similarities in production, including the method of production and inputs used

• other relevant characteristics

Determining when not to use comparable price

We will not use the comparable price to calculate the normal value of the goods concerned if we determine it is not appropriate to do so. This includes where:

• the overseas exporter does not sell like goods in their domestic market

• the sales of the like goods do not permit a proper comparison with the goods concerned because of:

  • a particular market situation, or

  • low volume of sales in the domestic market of the exporting country

  • there are no sales of like goods in the ordinary course of trade in the domestic market of the exporting country.

Sales of like goods in the exporter’s home market

We cannot use a comparable price to calculate the normal value of the goods if the exporter does not sell like goods in its domestic market.

Particular market situation

We will not use the comparable price to calculate the normal value of the goods where, because of a particular market situation in the exporting country, such sales do not allow a proper comparison between the like goods and the goods concerned. This may be, for example, because:

• prices are artificially low

• there is significant barter trade

• prices reflect non-commercial factors

A particular market situation could result from government interventions affecting the sales price of the goods or the upstream or downstream markets.

We will assess whether a particular market situation is present on a case-by-case basis.

Low volume of sales of the like goods

We will not use the comparable price to calculate the normal value of the goods if, due to a low volume of sales in the domestic market, this price does not allow a proper comparison between the like goods and the goods concerned. We consider domestic sales to be in sufficient volume to allow a proper comparison where they constitute at least 5% of the overseas exporter’s UK sales volume. In some cases, however, we may consider the volume of sales is sufficient even where they constitute less than 5% of the exporter’s UK sales volume. We will review this on a case-by-case basis.

We may also make an exception for captive sales (sales made between associated companies for further processing, transformation or assembly). In general, we will not consider these sales as destined for consumption in the domestic market of the exporting country, so we will exclude them from our sales volume analysis. However, if we are satisfied that these sales were in the ordinary course of trade, we will treat them as sales in the domestic market and include them in our sales volume analysis.

Sales that are not in the ordinary course of trade

We will not use the comparable price where there are no sales of the like goods in the ordinary course of trade in the exporting country. The two most common situations where we will consider sales outside the ordinary course of trade are:

• sales at prices below per unit costs of production, including administrative, selling and general (A,S & G) costs

• sales between parties we consider to be associated, unless exporters show us that the association does not affect prices.

We will only consider sales made at prices below cost as not in the ordinary course of trade where these are made:

• within an extended period of time (normally one year, but at least six months),

• in substantial quantities, and

• at prices which do not include the recovery of all costs within a reasonable period of time (usually where prices are below per unit costs at the time of sale but are above the weighted average per unit costs for the POI).

We consider sales below cost to be in substantial quantities where:

• the weighted average selling price per PCN is below the weighted average unit cost per PCN; or

• the volume of sales below cost represents 20% or more of the volume sold in the relevant transactions

If we conclude that an exporter’s below cost sales fit either of these descriptions, we may disregard all or some of these sales when we are calculating normal value for the goods in the investigation.

In general, we will consider sales to associated parties as not being in the ordinary course of trade. However, if parties provide sufficient evidence that the association does not affect prices and we accept this, we may then include these sales within our comparable price assessment.

We consider parties to be ‘associated’ when they meet the definition of ‘related persons’ in regulation 128 of the Customs Regs.

Alternative methods to determine the normal value

When it is not appropriate to use the comparable price, we will use alternative methods to determine the normal value of the goods concerned.

In general, we will either construct the normal value or use representative export sales prices to an appropriate third country.

We may also determine the normal value based on other exporters’ domestic sales if the exporter does not sell like goods domestically. This is sometimes known as the ‘exporter next door’ method.

Finally, further alternative methods for determining normal value are available for imports from particular foreign countries.

Using a constructed normal value

We will construct the normal value by adding together:

• the costs of production (COP) of the relevant goods

• a reasonable amount for A,S & G costs and profits

We will normally determine the COP using the exporter’s records. We will normally do this if those records:

• are in accordance with the generally accepted accounting principles of the exporter’s country

• reasonably reflect the costs associated with the production and sale of the like goods in the exporter’s country.

If an exporter’s records do not meet either of these conditions, we may determine the COP on another reasonable basis.

When we determine the COP, we will consider all the evidence we have access to about the proper allocation of costs. We will consider allocations that have been used historically by the exporter and we will establish appropriate amortisation and depreciation periods. We will also establish allowances for capital expenditures and other development costs. If appropriate, we will adjust costs for non-recurring items or costs which benefit future and/or current production. We will also adjust costs affected by start-up operations and any other factors we consider relevant.

Once we have determined a COP for the goods, we will calculate A,S & G costs and profit. We normally do this based on actual data relating to the production and sale of the goods by the exporter(s) in the ordinary course of trade in the domestic market of the exporting country.

Where this is not possible, we may calculate AS&G costs and profit based on:

• actual costs incurred by the overseas exporter for producing and selling the same general category of goods in their domestic market

• the weighted average of AS&G costs incurred by other overseas exporters that we are investigating for production and sales of the like goods in their domestic market

• any other reasonable method, as long as the amount we determine for profit is not more than the profit normally realised by other overseas exporters for sales of the same general category of goods in their domestic market.

When determining the COP and A, S & G costs for the purpose of constructing normal values, we may adjust certain costs or profit if they are unrepresentative because they do not reasonably reflect what they would be if they were substantially determined by market forces.

We may make such adjustments using data from an appropriate third country or international prices, costs or benchmarks. When choosing an appropriate third country to source data from (if appropriate), we will consider which countries have a similar level of economic development to the exporting country. We will also take into account whether and to what extent there are producers/exporters in those countries that can provide reliable information to us or any other factors we consider relevant. Where appropriate, we will adjust third country data or benchmarks to reflect circumstances in the exporting country. For example, it may be necessary to make an adjustment for differing transport costs between the third country and the exporting country.

Determining normal value based on export prices to an appropriate third country

In some cases, we may determine the normal value based on the price of the exporter’s goods when they are exported to an appropriate third country. We will only do this if the price is representative. We may consider for these purposes whether the exporter’s volumes of exports to the third country and the UK are sufficiently similar, whether these sales are made in the ordinary course of trade and any other factors we consider relevant.

Determining normal value based on domestic sales of other exporters (exporter next door)

We can only determine the normal value based on other exporters’ domestic sales in the exporting country where the exporter of the goods in question does not sell like goods domestically.

Establishing normal value for imports from particular foreign countries/territories

For some exporting countries, there are further methods we may use to determine normal value. These countries include:

• non-WTO members

• WTO members whose memberships have specific provisions relating to the calculation of normal value

• countries where there is a complete or substantially complete trade monopoly and all or substantially all domestic prices are fixed by the government.

Where an exporting country falls into one of the above categories, we may determine normal value using any method we consider reasonable. This includes using a constructed normal value drawing on data from an appropriate third country.

Determining export price

Basing the export price on the selling price of the goods concerned

Unless it is not appropriate, we consider the export price to be the selling price of the goods concerned. This could be from sales to a UK importer or a third party for export to the UK.

Determining the export price using an alternative basis

In some cases, we will construct the export price. This includes where:

• there is no export price

• we determine that the actual price of the goods concerned is unreliable due to an association or compensatory arrangement between the exporter and UK importer or third party

In general, we will construct the export price based on the price at which the goods concerned were first sold to a UK independent buyer. We will use any other reasonable basis where there are no sales to UK independent buyers or where they are not resold in the condition in which they were imported.

Where we construct the export price, we may make adjustments to account for actual costs incurred by the importer or exporter and for profits that would usually be accrued by an importer of the goods in the UK that is not an associate of or does not have a compensatory arrangement with the overseas exporter. These adjustments may include:

• transport costs

• insurance

• handling, loading and ancillary costs

• import duties

• any taxes payable in the UK due to importing or reselling the goods in the UK

• a reasonable margin for profit as determined by the TRA

• selling, general and administrative costs

• any other costs incurred in the importation and resale of the goods

Making a fair comparison

To allow for a fair comparison between the export price and normal value we ensure that these are:

• at the same level of trade, normally on an ex-factory level

• based on sales made at as near as possible the same time

To achieve this fair comparison, we may need to make adjustments to the normal value and/or the export price to account for any differences which affect price comparability. This includes those relating to:

• conditions and terms of sale, including after sales costs, commissions, credit, discounts, rebates and transport costs

• import charges and indirect taxes

• levels of trade

• quantities

• physical characteristics

• packing costs

• currency conversions

When we make such adjustments, we will ask the relevant parties for data on each factor, including what adjustments they would propose. We will explain what information we need to ensure a fair comparison. When we receive this data, we will assess any differences identified to determine whether the adjustment is justified.

We will make adjustments if there is evidence that a particular difference between the normal value and the export price affects our ability to make a fair comparison. Exporters may request that a particular adjustment is needed, but they must provide supporting evidence as promptly as possible. This lets us assess the circumstances and confirm the supporting accounting information.

Physical characteristics

We may adjust for differences in physical characteristics of goods where these affect price. These may include:

• quality

• chemical composition

• structure

• design

For example, if exported goods include extra features, we may adjust to reflect the cost of these extra features.

If parties provide different selling prices for products with different physical characteristics or quality, we may base any adjustment on the price difference. If we cannot do this, we will use another reasonable method.

Import charges and indirect taxes

We may adjust normal value to account for import charges and indirect taxes. An import charge includes taxes collected on imports and some exports by customs authorities. Indirect taxes include duties imposed on goods and services rather than on income or profits.

Discounts and rebates

We may adjust the normal value and/or export price to account for discounts and rebates granted to customers when certain conditions are met, for example a certain quantity of goods is purchased. Rebates are where some of the price paid is reimbursed. Discounts are a reduction of the price to be paid.

Level of trade

We may adjust normal value if there are differences in the level of trade between the exporter’s domestic and UK export sales. We will consider the different levels of trade of the buying parties the exporter sells to, both domestically and on exports and, where appropriate, we will make proportional adjustments to domestic sales to match export sales.

We will only adjust for level of trade where differences affect our ability to compare prices.

Transport, insurance and handling

We may make adjustments to account for price differences in transport, insurance and handling costs.

Handling costs may include:

• wharfage and other port charges

• container taxes

• document, customs brokers and clearance fees

• bank and other charges

Packing

We may adjust for differences in packing costs where there are different packaging types, and we may adjust either export price or normal value to address this. Adjustments for packing may be applied to the cost of the direct labour and materials. Where the exporter allocates these in their production or general costs, they must show that the allocation is reasonable and consistent with their historical cost allocation methods.

Credit

Credit is a means of deferring payment for goods received. Parties agree credit terms when they enter into a contract. These are normally referred to as the ‘terms of payment’ and they affect the overall price of the goods – for example, through the interest rates applied. We will generally express the normal value and export price for the relevant goods in an investigation on a cash basis in order to make a comparison. Therefore, when credit terms for export sales and domestic sales differ from each other, we may adjust these sales to bring both prices to a cash basis.

In general, we will use the credit period agreed at the time of sale. Normally, this will be shown on the sales invoice or contract. If an interested party asks for some other credit period to be taken into account in our investigation, they must show that prices were set to credit terms not shown on the invoice.

In some cases, we may calculate an average credit term for adjustment purposes. This applies where no fixed credit period has been added to the invoice or sales contract, there are various credit terms, or the credit terms on the invoice were not applied.

We will generally apply the same interest rate in calculating both domestic and export credit terms adjustments. We may follow a different approach where the exporter can show that different interest rates apply to domestic and export sales.

After-sales costs

After-sales costs are costs incurred after a sale has been completed. This includes guarantees, technical assistance and services. These costs are generally detailed in the sales contract or other legal document.

A party claiming this sort of adjustment must show that the after-sales cost is included in the price. This allows us to identify and allocate this cost and adjust where appropriate.

Commissions

A commission is a sum, usually a set percentage of the value of the goods sold, which is paid to an agent in a commercial transaction. We may adjust for commissions charged by an independent trader or agent performing certain selling functions for the exporter.

We may adjust normal value or export price to account for commissions paid. For commissions paid in both markets, we may adjust the domestic sales price to reflect the difference in those commissions.

If a commission is paid in only one of the markets we are looking at, we may also adjust to account for relevant selling expenses incurred in the market where the commission had not been paid.

Currency conversion

As export sales and domestic sales take place in different markets, transactions are often made in different currencies. We will normally make dumping calculations in the exporting country’s currency. If a price comparison requires a currency conversion, we may adjust prices using the rate of exchange on the date of sale.

We will generally use the rate of exchange used by the exporter for the sales in question. The date of sale is normally the date of contract or invoice – whichever determines the material terms of sale. When a sale of foreign currency on forward markets is used in direct relation to an export sale, we will use the rate of exchange in the forward sale for all related transactions.

We will disregard short-term fluctuations in exchange rates. We may consider sustained movements in exchange rates during the period of investigation. If we do, we will allow exporters at least 60 days to adjust their export prices to reflect this.

Establishing the dumping margin

Once we have made sure that the export price and the normal value can be compared fairly (including any necessary adjustments), we will calculate the dumping margin.

Methods for calculating dumping margins

There are two main methods we may use to calculate dumping margins:

1. Comparing a weighted average normal value with a weighted average of all comparable export transactions.

2. Comparing normal value and export prices on a transaction-by-transaction basis.

We will generally use the weighted average to weighted average method.

In rare cases, we may compare the export price on an individual transaction basis, with the weighted average normal value. We may do this where a pattern of export prices which differ significantly among different importers or purchasers in the United Kingdom, parts of the United Kingdom or time periods exists, and it is not possible to appropriately account for such differences using the other two methods set out above.

Closing an investigation when we find minimal dumping margins

We will terminate a dumping investigation relating to an individual exporter if we find that exporter’s dumping margin is minimal. We consider the dumping margin minimal if it is less than 2% of the export price.

Calculating anti-dumping duties for exporters

After we have calculated dumping margins, we compare these to the injury margins to determine what anti-dumping duties to recommend. Where appropriate, we will calculate an individual anti-dumping duty for each cooperating overseas exporter in an investigation. However, in most cases, investigations involve a large number of exporters, and we cannot calculate individual dumping and injury margins for each exporter. In this situation, we will therefore use sampling. For more information about this process, see the [TRA’s investigation process TROG] (www.gov.uk/government/publications/the-uk-trade-remedies-investigations-process/14beae1f-517f-4a57-9f66-c10a4a4d0d86#sampling-and-limited-examination).

When we sample exporters in a dumping investigation, we will determine different duty rates for sampled and non-sampled parties. First, we will calculate an individual duty rate for each sampled exporter and then we will calculate a single duty rate for all non-sampled, cooperating exporters. Finally, we will calculate a single duty rate for all other exporters. This is known as the ‘residual rate.’

Applying the lesser duty rule

When we recommend the duty rates, we will apply the lesser duty rule. Under this rule, we are required to recommend the anti-dumping duty at the lower of the dumping margin or injury margin. In some cases, this will mean the duties will be at a level lower than the margin of dumping, but which is enough to remove injury.

Calculating an anti-dumping duty for sampled exporters

We will calculate individual anti-dumping duty rates for each sampled exporter. Following the lesser duty rule, this will be the lower of their individual injury margin and their individual dumping margin.

Calculating an anti-dumping duty for non-sampled cooperating exporters

Cooperating exporters who are not sampled will receive a single anti-dumping duty that is no higher than the weighted average of the anti-dumping duties calculated for the sampled exporters. We will not include in this weighted average any margins that are minimal or based on facts available.

Any cooperating exporter who was not chosen for the sample can ask us to calculate an individual anti-dumping duty for them. This is done by submitting the necessary information at the appropriate period of the investigation. Where appropriate, we will then calculate an individual duty rate for them, though note that this may be refused where it would be overly burdensome and prevent timely completion of the investigation.

Calculating an anti-dumping amount for all other exporters (residual amount)

We will set this amount on a case-by-case basis, and we can use any reasonable means to do so.