Brazilian Government Opens Public Consultation on Procedures Related to Trade Defense Claims

On April 27, 2020, a public consultation notice was published in the Brazilian Official Gazette regarding four drafts of Ordinances to regulate, detail and amend procedures adopted in trade defense claims, especially in anti-dumping proceedings. Some of the provisions in the drafts have already been executed by the Subsecretariat of Trade Defense and Public Interest (“SDCOM”) in practice, however they were not expressly provided for in the applicable rules. In contrast, there are provisions that were not applicable in practice and that, therefore, will bring innovations, including in matters that may change the anti-dumping duties applied.

• The “institutionalization” of the pre-submission for trade defense proceedings: The pre-submission is an optional phase, which is consultative and non-binding in nature, carried out prior to the submission of a request or petition to initiate original investigations, reviews and other dumping and subsidies trade defense procedures. Thus, SDCOM is available to perform non-mandatory and non-binding analysis of the submission, accompanied by observations and queries. The analysis of pre-submissions by fragmented industries will be given preference. The pre-submission phase had already been adopted in practice, but there was no formal rule that regulated it;

•Determination of the likely export price for exporters subject to an anti-dumping measure:In the case that there were no exports from the country to which the anti-dumping measure applies or that the quantity of exports were not representative during the dumping review period , a likely price would be applied. The likely price represents the price set by the exporter in its exports to Brazil if they were to occur. This information is used for the analysis of recurrence of injury during the review. Thus, such Ordinance consolidates the criteria for the presentation of this information by the Petitioner, including the justifications and evidence that supported the choice, as well as the need for information to be provided by the foreign producer and exporter in exports to third countries. The Ordinance also sets out the parameters analyzed by SDCOM, as well as the analysis of the adequacy and applicability of the export data used in each specific case. Depending on the specificities of each case, even if there are exports of the product in representative quantities subject to the anti-dumping measure, the parameters of the proposed Ordinance could be applicable.

• SDCOM’s suspension of anti-dumping duty in reviews: SDCOM may recommend the extension of an anti-dumping duty with the immediate suspension of its application when there are doubts as to the plausible future progression of imports of the product subject to the anti-dumping duty. The Ordinance details the criteria that will be analyzed for the suspension, within the following factors of analysis: (i) the likely price of dumped imports and their likely effect on the prices of like products in the Brazilian domestic market; (ii) the performance of producers or exporters in terms of production, use of installed capacity, inventories, sales volume and exports; (iii) changes in market conditions in both the exporting country and other countries, including changes in supply and demand for the product, in prices and in the participation of the producer or exporter in the exporting country’s market. Furthermore, the Ordinance mentions the possibility of an interested party to present a petition, following which SDCOM can recommend the immediate resumption of the collection of the suspended anti-dumping duty if concluded that the volume increase of the imports may lead to the recurrence of injury.

•Reduction of anti-dumping duty in revision proceedings: This is applicable in the event that there were no exports from the country subject to the anti-dumping measure or that were only exports in non-representative quantities during the period of review. For this purpose, an analysis will be made of (i) the behavior of foreign producers or exporters during the period of investigation of continuation or recurrence of injury; (ii) data on Brazilian imports referring to a period after the investigation period of continuation or recurrence of injury; and (iii) the conclusions reached in other reviews and procedures. According to such draft Ordinance, SDCOM will recommend the extension of the anti-dumping duty in an amount 25% lower than the duty in force. SDCOM may further recommend, depending on the data provided by the foreign producer or exporter, the reduction of the anti-dumping duty by a percentage higher than 25%.

Companies participating in trade defense proceedings and other interested parties will be able to send comments for improvement and transparency of the analyses to SDCOM, within 60 days of the publication of the public consultation notice.

Demarest’s International Trade and Customs team is available for any further information or clarification on this matter.