UAE introduce anti-dumping duty on GCC imports for the first time

Oct 18, 2017

In brief

Following​ ​a​ ​decision​ ​of​ ​the​ ​GCC​ ​Industrial​ ​Cooperation​ ​Committee​ ​the​ ​UAE​ ​has​ ​imposed​ ​an anti-dumping​ ​duty​ ​on​ ​GCC​ ​imports​ ​of​ ​car​ ​batteries​ ​originated​ ​in​ ​or​ ​exported​ ​from​ ​South​ ​Korea​ ​with effect​ ​25​ ​June​ ​2017.​ ​This​ ​is​ ​the​ ​first​ ​anti-dumping​ ​duty​ ​imposed​ ​by​ ​the​ ​UAE​ ​after​ ​the​ ​issuance​ ​of Federal​ ​Law​ ​(1)​ ​of​ ​2017​ ​on​ ​Anti-Dumping,​ ​Countervailing​ ​and​ ​Safeguards​ ​Measures​ ​on​​ ​21​ ​May​ ​2017. The​ ​UAE​ ​Ministry​ ​of​ ​Economy​ ​announced​ ​earlier​ ​this​ ​year​ ​that​ ​the​ ​new​ ​legal​ ​framework​ ​allows​ ​the UAE​ ​Government​ ​to​ ​protect​ ​national​ ​industries,​ ​businesses​ ​and​ ​markets​ ​from​ ​imports​ ​of​ ​goods​ ​that are​ ​either​ ​“dumped”,​ ​subsidized​ ​or​ ​require​ ​to​ ​be​ ​temporarily​ ​limited.

In detail

Generally,​ ​an​ ​anti-dumping duty​ ​is​ ​a​ ​protectionist​​ ​tariff that​ ​a​ ​domestic​ ​government imposes​ ​on​ ​foreign​ ​imports that​ ​it​ ​believes​ ​are​ ​priced below​ ​fair​ ​market​ ​value. Dumping​ ​is​ ​a​ ​process​ ​where a​ ​company​ ​exports​ ​a product​ ​at​ ​a​ ​price​ ​lower than​ ​the​ ​price​ ​it​ ​normally charges​ ​on​ ​its​ ​own​ ​home market.​ To​ ​protect​ ​local businesses​ ​and​ ​markets, many​ ​countries​ ​impose anti-dumping​ ​duties​ ​on products​ ​they​ ​believe​ ​are being​ ​dumped​ ​in​ ​their national​ ​market.

Anti-Dumping​ ​in​ ​light​ ​of the​ ​World​ ​Trade Organization​ ​(WTO) rules

Part​ ​of​ ​the​ ​WTO​ ​mandate​ ​is the​ ​international​ ​regulation of​ ​anti-dumping​ ​measures. The​ ​WTO​ ​does​ ​not​ ​regulate the​ ​actions​ ​of​ ​companies engaged​ ​in​ ​dumping. Instead,​ ​it​ ​focuses​ ​on​ ​how governments​ ​can​ ​or​ ​cannot react​ ​to​ ​dumping.​ ​In general,​ ​the​ ​WTO agreement​ ​allows governments​ ​to​ ​act​ ​against dumping​ ​where​ ​there​ ​is genuine,​ ​material​ ​injury​ ​to the​ ​competing​ ​domestic industry.​ ​In​ ​other​ ​cases,​ ​the WTO​ ​intervenes​ ​to​ ​prevent anti-dumping​ ​measures. This​ ​intervention​ ​is​ ​justified to​ ​uphold​ ​the​ ​WTO's​ ​free market​ ​principles.

UAE​ ​anti-dumping duties​ ​on​ ​car​ ​batteries originated​ ​in​ ​or exported​ ​from​ ​South Korea

Further​ ​to​ ​the​ ​decision​ ​of the​ ​GCC​ ​Industrial Cooperation​ ​Committee, and​ ​pursuant​ ​to​ ​UAE Federal​ ​Law​ ​(1)​ ​of​ ​2017​ ​on Anti-Dumping, Countervailing​ ​and Safeguards​ ​Measures,​ ​a​ ​final anti-dumping​ ​duty​ ​is​ ​now imposed​ ​on​ ​all​ ​GCC​ ​imports of​ ​car​ ​batteries​ ​originated​ ​in or​ ​exported​ ​from​ ​South Korea​ ​under​ ​HS​ ​code 8507.10.00.​ ​The​ ​rates​ ​vary depending​ ​on​ ​the manufacturer​ ​and​ ​range from​ ​12%​ ​up​ ​to​ ​25%​ ​of​ ​the Cost,​ ​Insurance,​ ​Freight (CIF)​ ​value​ ​of​ ​the​ ​batteries imported​ ​into​ ​the​ ​UAE.

The​ ​mentioned anti-dumping​ ​is​ ​applicable with​ ​effect​ ​25​ ​June​ ​2017​ ​and has​ ​been​ ​recently communicated​ ​by​ ​Dubai Customs​ ​through​ ​the Customs​ ​Notice​ ​5/2017 dated​ ​2​ ​October​ ​2017.​ ​The measure​ ​will​ ​remain effective​ ​for​ ​five​ ​years​ ​as​ ​of the​ ​date​ ​of​ ​implementation.

In​ ​theory,​ ​following​ ​the decision​ ​of​ ​the​ ​GCC Industrial​ ​Cooperation Committee,​ ​this​ ​anti- dumping​ ​duty​ ​(and potentially​ ​others​ ​in​ ​the future)​ ​could​ ​be​ ​applied​ ​by other​ ​GCC​ ​member​ ​states.

The takeaway

UAE​ ​importers​ ​and​ ​manufacturers​ ​are​ ​required​ ​to​ ​monitor​ ​the​ ​potential​ ​introduction​ ​of additional​ ​measures​ ​by​ ​the​ ​UAE​ ​based​ ​on​ ​the​ ​recently​ ​issued​ ​UAE​ ​Federal​ ​Law​ ​(1)​ ​of​ ​2017​ ​on Anti-Dumping,​ ​Countervailing​ ​and​ ​Safeguards​ ​Measures​ ​to​ ​ensure​ ​appropriate​ ​planning​ ​is​ ​put in​ ​place​ ​to​ ​avoid​ ​unexpected​ ​additional​ ​costs​ ​in​ ​their​ ​supply​ ​chain.​ ​Importers​ ​in​ ​other​ ​GCC countries​ ​are​ ​also​ ​advised​ ​to​ ​monitor​ ​these​ ​developments​ ​in​ ​their​ ​respective​ ​territories.

Contact us

Jeanine Daou
Indirect Tax Leader, PwC Middle East
Tel: +971 (0) 4 304 3744

Carlos Garcia
Director, Middle East Customs & International Trade, PwC Middle East
Tel: +971 (0) 4 304 3936

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