Measure AC

Summary of Principles of Anti-Circumvention Law

1. What is Circumvention?

          Circumvention refers to practices used by producers, exporters or assemblers to avoid payment of AD/CVD duties imposed by the importing country.

2. Forms of Circumvention

According to the Anti-Dumping and Countervailing Act (No. 2), B.E. 2562 (2019), there are 5 forms of circumvention:

  1. Slight modification - slight modification of product’s form, appearance or packing for the purpose of avoiding AD/CVD duties without changing the product’s essential characteristics.
  2. Transshipment - export of products subject to AD/CVD duties via one or more third countries.
  3. Channelling - reorganisation by exporters/producers of their channels of sales in order to eventually have their products exported to Thailand through producers/exporters benefiting from individual duties lower than that applicable to the products of the manufacturers or through producers/exporters not subject to AD/CVD duties.
  4. Completion - completing unfinished or semi-finished goods into finished goods which are the same goods as that subject to AD/CVD duties in Thailand or in third countries.
  5. Assembly operations – importation of parts from the country subject to AD/CVD duties into Thailand or third countries to assemble into the same goods as that subject to AD/CVD duties.

3. Five factors constituting circumvention

In considering whether or not to impose AC measures, the following 5 conditions must be satisfied:

          1) There is change in pattern of trade: for example, consider whether the quantity of the goods subject to AD/CVD measure has decreased, and whether the import volume of the goods subject to AC investigation has increased.

          2) There is at least one form of circumvention, namely (1) slight modification,(2) Transshipment, (3) Channelling, (4) Completion, or (5) Assembly operation.

          3) There is insufficient due cause or economic justification rather than imposition of AD/CVD duties: consider where the change in pattern of trade comes from; for example, have there been changes in value chain or logistics? Or the practice has been carried out merely to avoid imposition of AD/CVD duties.

          4) The remedial effects of the AD/CVD duties are being undermined in terms of the prices or quantities: consider whether the goods subject to AC investigation are undermining the effects of the AD/CVD duties. In terms of price, consider; for example, whether price undercutting occurs and in terms of quantity, consider; for example, whether there has been a significant increase of the goods subject to AC investigation. Occurrence of price undercutting or increase of import volume of the goods subject to AC investigation is an indication of AD/CVD measure being undermined.

          5) There is evidence of dumping or subsidy

- In case of circumventing AD measure: consider whether the goods subject to AC investigation are dumping the domestic market.

- In case of circumventing CVD measure: consider whether the goods subject to CVDmeasure still benefit from the subsidy.

4.  Investigation Procedures

1) The procedures will begin only when there is an application with supporting evidence requesting to initiate an AC investigation.

2) The Committee of Dumping and Subsidy will decide to initiate an AC investigation if there is sufficient evidence of circumvention.

3) The investigation is targeted only at producer/exporter/assembler who has been accused of one or more of the 5 forms of circumvention indicated in the application form requesting to initiate an AC investigation.

          4) The investigation period is 9 months as from the date of initiation (with the maximum extension period of up to 3 months)

  5) No bond is collected during the investigation. After the initiation of a case, the custom authority will subject imports of the product under investigation to registration. The AD/CVD duties will be collected retroactively from the date of the registration.

    6) Officials conduct verification, on-site visits at companies.

    7) All interested parties can participate in the investigation process as allowed by law in order to protect their own interests and make the views known.

5.  Investigation result

1) If circumvention found, the Committee on Dumping and Subsidy would publish a notice to extend AD/CVD duties to the product under investigation at a rate no higher than the residual rate. Not all products from all countries will be subject to AD/CVD duties at the same rate.

2) If no circumvention found, the case would be terminated.