Safeguards, Anti-Dumping and Countervailing Act, 2019

The Safeguards, Anti-Dumping and Countervailing Act, 2019 (“Act”) includes the legal provisions for anti-dumping, countervailing or safeguard measures for contingency trade remedies for the first time in Nepal. The Act provides an authority to the government to impose safeguards measures, anti-dumping and countervailing duty on imported goods that have been affecting the domestic market of Nepal.

This article briefly explains the provisions of safeguards, anti-dumping and countervailing incorporated under the Act.

A. Provisions Related to Safeguard Measures

1. Safeguard Measures

The increase in import of any products in an unexpected way which is causing or threatening to cause injury to the identical goods of the domestic industry, the Government of Nepal can impose the safeguards measures after the investigation conducted by the Ministry of Industries, Commerce and Supplies (“Ministry”).

The following safeguards measures can be formulated:

  • to impose additional duties in addition to custom duties levied as per prevailing laws;
  • to impose additional tariffs rate on the top of the additional duty stated above based on tariff quota in the event goods are imported in a larger quantity than those determined by the Government of Nepal;
  • to impose a partial or complete restriction on the import of such goods; and
  • to apply any other measures as specified.

 

Note: The safeguard measures cannot be implemented to the identical imported goods of developing countries if it is less than 3% of the total import of products.

2. Time period

The safeguard measures will be implemented for 4 (four) years and it can be extended to the next 4 (four) years by the Government of Nepal under the recommendation of investigating authority.

3. Removal of safeguard Measures

The Government of Nepal can remove the safeguard measures on the basis of the review of the investigating authority or adoption of the alternative measures through the negotiation with the government of exporter country or autonomous custom territories.

B. Provisions Related to Anti-Dumping

1. Prohibition for the dumping of goods

The importers are not allowed to dump the identical articles in the price less than the normal value of autonomous custom territories, which cause or is likely to cause threats to domestic industries.

2. Imposition of Anti-dumping duty

The imposition of anti-dumping under the Act are as follows:

  • The measures of anti-dumping duty can be imposed after the report submitted by investigating authority; and
  • The identical articles which have been dumped in less than 2% of dumping margin by the countries or autonomous custom territory below 3% of the total import of Nepal cannot impose anti-dumping measures. (However, if the share of similar goods imported from more than one country or autonomous custom territories is more than 7% of total import, the anti-dumping duty can be imposed even if the import of such country or autonomous custom territory represents less than 3% of total import)

3. Time Period

The anti-dumping duty will be effective for 5 (five) years and can be extended for the next 5 (five) years by the Government of Nepal under the recommendation of investigating authority.

4. Removal of Anti-dumping duty

The Government of Nepal can eliminate anti-dumping duty on the basis of the report submitted by the investigating authority or any other measures that prove the anti-dumping duty shall not be further implemented.

C. Provisions related to Countervailing Duty

1. Prohibition of the import of subsidized goods

The importers are not allowed to import the products that has been granted subsidy in indirect or direct form, which affects the domestic industry.

2. Imposition of Countervailing duty

The Government of Nepal can impose the countervailing duty to the subsidized goods of the export country except in the following case:

  1. If the subsidized goods have been imported in less than 2% of the export value from developing country or less than 1% of the export value of goods from the autonomous custom territory;
  2. The import of subsidized identical products from the developing country in less than 4% of the total import of the country (It shall not be applicable if the import exceeds 9% of the total import of similar goods even if the import form developing country is below 4%); and
  3. Any goods received by the Government of Nepal in the form of the kind or cash subsidy under Bilateral or Multilateral Agreement.

3. Time

The countervailing duty will be effective for five (5) years and can be extended for the next 5 (five) years by the Government of Nepal on the recommendation of investigating authority.

D. Procedures for Investigation

E. Appeal

A person aggrieved by the decision of the Customs Office imposing safeguard measures, anti-dumping or countervailing duties, whether provisional or final, may file an appeal before the concerned High Court within 35 (thirty-five) days from the date of the decision.

Disclaimer: This article is for informational purposes only and shall not be construed as legal advice, advertisement, personal communication, solicitation or inducement of any sort from the firm or any of its members. The firm shall not be liable for consequences arising out of any action undertaken by any person relying on the information provided herein.

Frequently Asked Questions

SACA 2076, based on WTO Agreements, has provisioned for Safeguarding Measures for Goods, prohibition of Dumping Identical Goods, and not importing Subsidized Goods. 

Anti-Dumping and Safeguard Duties are tariffs that are imposed on imported Goods that are to be sold in the Nepalese Domestic Market at prices lower than Market Value. They are imposed to protect the Domestic Industries. 

Anti-Dumping Countervailing and Safeguard Measures are needed in Nepal to protect the Business of Domestic Industries and make sure that Import complies with International Trade Agreements. 

Anti-Dumping, Countervailing, and Safeguard Measures are three distinct regulations in Nepal. The First counters the unfair trade practice of Dumping. The Second counters the subsidies by the Foreign Government. The Third deals with the Rise in Domestic Industry threatening Imports. 

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