Anti-dumping duty impact on import of duplex board: Senate body seeks detailed report

Senate Standing Committee on Commerce on Thursday sought a detailed report on the circumstance and impact of anti-dumping duty on import of duplex board from China, Indonesia and South Korea being used in domestic matches-making industry and re-exported under DTRE scheme.

The meeting presided over by Senator Mirza Muhammad Afridi, discussed this issue in detail and shared viewpoints of National Tariff Commission (NTC) and the proprietor of M/s Ashraf Industries Peshawar. The meeting was informed that NTC initiated an anti-dumping investigation on January 30, 2016 under section 23 of the Anti-Dumping Duties Act, 2015 after establishing that the application lodged by Century Papers & Board Mills Limited Karachi on behalf of domestic industry producing one-side coated duplex board (grey back) (225-400 gsm) was in accordance with sections 20 and 24 of the Act. The investigation was concerning dumping of duplex board, origination in and/or exported from China, Indonesia and South Korea into Pakistan and material injury caused from there to the domestic industry producing duplex board.

The Commission made final determination in terms of section 39 of the Act on July 29, 2017 and imposed duty of 18.57 percent on China, 16.22 per cent on Indonesia and 14.98 per cent on South Korea for a period of five years. Initially, the anti-dumping duties were not levied on imports that were to be used as inputs in products destined solely for exports in terms of section 51(1) (e) of the Act. However, later on due to amendments of section 51(1) Act where this exemption was removed, all imports of duplex board started attracting anti-dumping duties.

The proprietor of Ashraf industries told the committee that he was not heard prior to imposition of anti-dumping duty on import of duplex board. He stated that out of 15 industries 10 have closed due to different reasons including anti-dumping duty and high energy cost, etc. He contended that in the presence of Weboc system, dumping is not possible. He further stated that the export of this industry has declined from $ 260 million to only $ 60 million per month. However, the officials of NTC argued that the hearing process was completed as per the Act and that the determination can be challenged in any court or even at the WTO.

The Standing Committee directed NTC to hold meetings with the stakeholders and submit a report to it in 30 days. The committee also directed that a list of those factories which have been closed due to anti-dumping duty be compiled.

The issue of M/s Hikmat Traders was discussed which imported miscellaneous goods during the year 2019 and filed Good Declaration in one-customs, in the light of a Sindh High Court judgement.

Collector Port Qasim, Mumtaz Khoso informed the committee that information was received in the Collectorate that the authorized clearing agent has "tampered with" the examination and assessment report by inserting decimal in the figures of quantity of higher value/tariff items so as to understate the actual quantity leading to evasion of duties and taxes.

He said all 28 GDs were also scrutinized and similar mode of "tampering" was observed leading to evasion of Rs 74.37 million in terms of customs duty and taxes. It "transpired" that M/s Hikmat Traders by way of "tampering committed forgery" on examination and assessment reports, willfully "defrauding" the government exchequer from levied duties and taxes. An FIR was lodged against the import and clearing agent and the case is under trial before a special judge customs and taxation, Karachi.

Mumtaz Khoso further stated that during investigation, it was "found" that M/s Hikmat Traders filed another miscellaneous GD in WeBoc system and sought clearance thereof. The Collectorate withheld these consignments to recover the "evaded" amount of Rs 74.37 million under Section 186 of the Customs Act, 1969. In addition, proceedings were initiated under section 32C ibid. The proceedings under Sections 32C, of the Customs Act, 1969 require that without prejudice to any action that may be taken under this Act or any other law of the time being in force, if any person overstates the value of imported goods or understates the value of exported goods or vice versa or using other means including short-shipment, over-shipment with a view to illegally transferring funds into or out of Pakistan, such person shall be served with a notice to show cause within a period of two years from the date of detection of such mis-declaration as to why a penal action shall not be initiated. Section 32 C ibid requires a representative of SBP to proceed further in the case. Accordingly letters have been issued to SBP for nomination of Central Bank's focal person to be included in the team investigating the case under section 32-C of the Customs Act, 1969.

M/s Hikmat Traders filed a petition on September 27, 2019. During the hearing on January 13, 2020, the counsel for the petitioner agitated that goods have been detained without issuance of show cause notice. The High Court of Sindh in another order of January 21, 2020 directed to process GD of the petitioner as per law. Accordingly, show cause notice of January 14 was issued by the Adjudicating Collectorate. On February 13, 2020, the court deferred the hearing for first week of next month.

The representative of M/s Hikmat told the committee that he and his clearing agent have been "mistreated", adding that he is unable to attend office because of "threats". The committee decided that since the case is in the court, to let it decide first.

The committee also discussed trade officers' selection and appointment criteria on a motion of Senator Talha Mehmood. Additional Secretary Commerce informed the committee that selection was made in accordance with the prescribed criteria and merit. Senator Talha Mehmood expressed his concerns on the selection criteria, saying that one of the Al-Qaida members had also applied for this post. At this, Chairman Standing Committee considered expunging this sentence but Senator Talha Mehmood argued that there is no need to expunge it as he has handed over documents to Secretary Commerce.

The committee sought performance report of 54 trade officers of which around 30 were appointed one month ago.

The committee was informed that the government is laying special focus on Africa which is also a big market and recently Pakistan organised a mega function in this regard.

The meeting was attended by Senator Syed Shibli Faraz, Senator Imamuddin Shouqeen, Senator Ghous Khan Niazi, Senator Talha Mehmood and Senator Tahir Bizinjo.