Anti-dumping and Countervailing Act on Cards in Nepal

The government of Nepal is soon finalizing the Anti-Dumping and Countervailing Act that will give it the authority to impose additional duty on imports priced unnaturally low -- lower than the exporting countries themselves, in a bid to protect domestic industries.

The Ministry of Commerce and Supplies (MoCS) has already held consultations with concerned stakeholders on the preliminary draft of the Act. "We are giving final touch to the draft so that we can get it endorsed from parliament at the earliest and protect domestic industries from unfair competition from cheaper imports," a source at the MoCS told Republica.

"We can slap additional duty as countervailing duty if export price of goods is lower as compared to their market prices in source countries," the source added.

The proposed Act defines goods as 'dumped' if their export prices to Nepal are cheaper than market prices in the source countries.

Many international companies that get state subsidy and incentives are exporting goods to Nepal at prices lower than the prevailing market prices, inflicting huge loss to the industries in recipient countries. The proposed Act will give the government an authority to impose anti-dumping duty as much as the dumping margin -- difference between export prices and the price set for domestic market of exporting countries, if investigation showed that goods were dumped by the sending counties to capture overseas market.

The proposed Act has a provision that allows domestic industries to file complains against exporters, if they have proofs that exporters are dumping goods in Nepal.

"Investigation officers designated by the government will look into the complaints after notifying exporting countries, exporters and domestic importers," the source added.

Experts say the Act is necessary to prevent dumping and imports of heavily subsidized products. "Though the issue is not severe yet, it is high time we initiated preparation to avert such scenario in the future. This Act can play a crucial role in averting the scenario," said Posh Raj Pandey, executive chairman of South Asia Watch on Trade, Economics and Environment (SAWTEE). Pandey said no country can impose anti-dumping and countervailing duty without enacting such laws in the country.

As per the proposed Act, preliminary investigation must be completed within 180 days from the date of filing complains and complete investigation should be completed within a year. But the investigation can be extended by six months if investigation officers deem it necessary, reads the act.

It has clarified that the anti-dumping duty or countervailing duty can be fixed on the basis of lowest amount among dumping margin, subsidy by the government for the products or loss margin incurred by the imports of the goods. The government can also impose interim anti-dumping or countervailing duty for a maximum period of six months on the recommendation of investigation officers.

But investigation can be dropped if exporters or exporting countries agrees to review export price.