WTO Dispute Preparation: Revising Countervailing Duties for the First Time in 12 Years

Ministry of Economy and Finance Announces Legislative Notice on Amendment to Enforcement Decree (Rules) of Customs Act Related to 'Anti-Dumping and Countervailing Duties'

Procedures for Industry Damage Investigation to Impose Countervailing Duties Regulated to Follow Anti-Dumping Duty Procedures
Strengthening Protection of Procedural Interests of Stakeholders and Supplementing Requirements for Reexamination Applications and Investigation Procedures

(Photo) [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Joo Sang-don] The government has decided to revise related regulations for the first time in 12 years to prepare for international disputes over countervailing duties, one of the representative import regulation measures. Considering that tariff investigation and imposition procedures during dispute resolution by the World Trade Organization (WTO) may be disadvantageous if they differ from WTO regulations, the main point is to amend them to conform to the procedures for anti-dumping duties currently imposed.

On the 13th, the Ministry of Economy and Finance announced that it will publicly notify the amendment to the 'Enforcement Decree (Rules) of the Customs Act' containing these details until November 22. This amendment was prepared in consultation with the Trade Commission of the Ministry of Trade, Industry and Energy, the agency responsible for investigating and determining unfair trade practices.

Import regulation measures are broadly divided into anti-dumping, countervailing duties, and safeguards. Anti-dumping duties are tariffs imposed up to the difference between the normal price and the dumping price when foreign goods are imported below normal prices and cause or threaten to cause substantial damage to domestic industries or significantly delay domestic industry development. Currently, South Korea imposes 20 cases (16 items) on countries including China and Japan.

Safeguards are emergency import restriction measures, while countervailing duties are tariffs imposed up to the amount of subsidies when exporting countries increase price competitiveness by providing subsidies or grants to specific industries. However, South Korea has not yet imposed countervailing duties on foreign goods.

An official from the Ministry of Economy and Finance said, "International disputes related to countervailing duties have been increasing recently, but we have not imposed such duties so far, and the related regulations have not been revised since 2008, unlike anti-dumping duty regulations, so they are insufficient. The purpose is to specifically regulate the investigation period for industry damage and the imposition deadline for countervailing duties to conform to the current anti-dumping duty procedures to avoid difficulties in actual operation."

Accordingly, the government will first enhance the expertise of requests and investigations for imposing countervailing duties. The competent minister will be able to request a review from the Commissioner of the Korea Customs Service before requesting the imposition of countervailing duties, and the Trade Commission will consult and select the classification of goods subject to investigation with the Commissioner of the Korea Customs Service. Matters related to the conclusion of the main investigation and the decision to initiate reexamination will be published in the official gazette, and the imposition deadline will be aligned with anti-dumping duty regulations. In addition, the procedure for imposing duties on new suppliers has been specified by receiving collateral from importers and deferring imposition until the investigation is completed.

At the same time, the Ministry of Economy and Finance revised regulations to protect the procedural interests of stakeholders. It will specify that applicants requesting the imposition of anti-dumping duties, etc., provide key considerations such as the investigation application form and price information that forms the basis of the final determination to suppliers of the goods under investigation and other stakeholders. Also, the requirements for applying for changes (reexamination) to the content such as the subject of imposition and dumping rate for anti-dumping duties currently imposed will be relaxed from "request with attached evidence" to "request with clear information." The amendment also includes extending the main investigation period by an additional two months in cases of special reasons such as the novel coronavirus infection (COVID-19) to enable effective industry damage investigations.

The official added, "It is expected to prevent issues from arising regarding whether the defense rights of stakeholders were guaranteed in the event of WTO disputes," and "This amendment will be implemented after going through related amendment procedures such as public notification and Cabinet and Vice-Ministerial meetings."

This content was produced with the assistance of AI translation services.