QuestionsQuestions (Republic Act No. 11916)
RA 8751 strengthens the mechanisms for imposing countervailing duties on subsidized imports to protect domestic industries from unfair trade competition.
When (1) a product is granted a subsidy (directly or indirectly) by the government in the country of origin/exportation upon production/manufacture/exportation, and (2) the importation causes or threatens to cause material injury to a domestic industry, or materially retards the growth/prevents the establishment of a domestic industry, as determined under the process in the law.
A duty equal to the ascertained amount of the subsidy, imposed in addition to ordinary duties, taxes, and charges.
(1) By any interested person (natural/juridical) filing a verified petition on behalf of the domestic industry, or (2) by the Secretary (DTI or DA as the case may be) in special circumstances with sufficient evidence of subsidy, injury, and causal link.
Supported by domestic producers whose collective output is more than 50% of total production of the like product by that portion expressing support/opposition; and an investigation is initiated only when supporting producers account for at least 25% of total production of the like product by the domestic industry.
A petition must state, among others: the domestic industry and particular like product/class; employment, capital, production/sales volume, capacity; known importer/exporter/producer, country of origin, estimated quantities, port/date of arrival, import entry declaration; nature/extent/estimated amount of the subsidy; and other necessary particulars/facts/allegations.
Within 10 days from receipt, the Secretary reviews accuracy/adequacy of information/evidence to determine whether there is sufficient basis to initiate an investigation; if insufficient, the Secretary dismisses the petition and notifies relevant parties.
Upon receipt of the petition, the Secretary furnishes the Secretary of Finance a summary and requests immediate action to instruct the Commissioner of Customs to gather and secure import entries without liquidation, preventing premature settlement while the case is pending.
If prima facie case exists, the Secretary instructs the Commissioner of Customs to collect a cash bond equal to the provisionally estimated amount of subsidy (in addition to ordinary duties/taxes/charges), collectible only not earlier than 60 days from initiation, held in trust for the respondent importer, with application not exceeding four months.
At any stage if the subsidy is de minimis as defined in existing international trade agreements, or where the volume of subsidized imports (actual or potential) or the injury is negligible.
(1) Nature and amount of the specific subsidy; (2) presence and extent of material injury/threat or material retardation/prevention of establishment; and (3) causal relationship between subsidized imports and the injury/threat/retardation/prevention.
A subsidy exists when government/public body provides financial contribution such as direct transfers (grants/loans/equity infusion), potential transfers/assumption of liabilities (loan guarantees), foregone government revenue, provision of goods/services other than general infrastructure, purchases of goods, payments to funding mechanisms, support to private bodies for listed activities, or income/price support; benefit conferred is also considered.
Specificity exists where access is explicitly limited to certain enterprises; or where eligibility is governed by objective criteria strictly adhered to (then it is not specific); or if seemingly non-specific but there are reasons to believe it is specific (limited number of enterprises, disproportionately large amounts, wide/unwarranted discretion); or where limited to certain enterprises located in a designated geographical region.
By positive evidence and objective examination of: (1) volume of subsidized imports; (2) effect on domestic prices (undercutting, depression, suppression/preventing increases); (3) effect on domestic producers (output/sales/market share/profits/productivity, utilization, cash flow, employment/wages, growth, ability to raise capital/investments; and in agriculture, burden on support programs); and (4) other factors simultaneously injuring the industry (non-subsidized import effects, demand contraction/consumption changes, trade restrictive practices/competition, technology/export performance of domestic industry).
An adversely affected interested party may file a petition for review with the Court of Tax Appeals within 30 days from receipt of notice; filing does not stop/suspend/toll imposition and collection of the countervailing duty.
Generally, countervailing duty remains in force only as long as and to the extent necessary to counteract subsidization causing/threatening material injury; it is subject to review. As a hard cap, it must be terminated not later than five years from imposition (or from most recent review covering subsidization/injury), unless a review initiated at least six months prior finds continuation/recurrence is likely.