Spoiler alert: the timeline in Australian trade remedies investigations is very important (although not for the reasons you might think).
This has strategic implications for all parties involved in trade remedies investigations.
This blog entry sets out some of the statutory time limits in trade remedies investigations, their practical relevance and strategic considerations in timing. Although applied here to trade remedies, the strategies also have application in other investigation contexts.
This has strategic implications for all parties involved in trade remedies investigations.
This blog entry sets out some of the statutory time limits in trade remedies investigations, their practical relevance and strategic considerations in timing. Although applied here to trade remedies, the strategies also have application in other investigation contexts.
So, what are the investigation timelines? Are they strict?
Anyone familiar with trade remedy investigations will know that there are express statutory time limits for an investigation and indeed for different parts of the investigation. For example (days are calendar days):
However, these times should not be regarded as strict since there are mechanisms to extend these times. And these mechanisms are frequently used. For example, it is rare that a SEF is actually published within 110 days or that a final report is given to the Minister within 155 days. It is not uncommon for investigations to run for a year or longer (ie more than twice the statutory time limit).
The WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (WTO agreement) provides that investigations "shall, except in special circumstances, be concluded within one year, and in no
case more than 18 months, after their initiation" (Art 5.10). However, these time limits were not adopted in the Australian legislation and so are not legally binding on the ADC. It is not uncommon for Australian anti-dumping investigations to run for more than a year and occasionally for more than 18 months.
Why is the timeline important if the statutory time limits are not strict?
Administrative inertia
The actions of government agencies, "like objects in motion, resist being reversed" (Administrative Inertia after Regents and Department of Commerce, 6 Admin. L. Rev. Accord 101, Mar 2021). This is not theory! I spent more than 10 years working in government agencies and I frequently observed this internal dynamic. When an agency has set a course for a particular decision it becomes increasingly difficult as time passes to change its direction.
In my experience an agency's administrative inertia generally plays out in this way: agency investigators form an initial working hypothesis; that working hypothesis (or perhaps some other view) becomes investigators' preferred case theory; senior staff accept and internally advocate the case theory; the case theory becomes a (more or less) settled view internally; the settled view is presented to the decision maker who makes the decision accordingly. Typically, little or none of this dynamic is seen by parties to the investigation but it is crucial that parties (or their advisers) understand this dynamic in formulating their strategies.
Administrative inertia and Australian trade remedies investigations
Consideration stage: The Australian trade remedies legislation requires the ADC to formally "consider" an application prior to initiating an investigation. The Commissioner may only initiate an investigation if he or she is satisfied that there "appear to be reasonable grounds" for imposing duties (Customs Act 1901 (the Act) at section 269TC(1)). So, in terms of the internal dynamic, investigators at the ADC already have a working hypothesis at the time the investigation is initiated. Consideration is not a public process and so parties being investigated are only told of the investigation at initiation of the investigation. Administrative inertia has already started at initiation of a trade remedies investigation.
Statement of essential facts: The legislation requires the ADC to publish a SEF (110 days after initiation or as extended, see above comments on statutory time limits), stating the facts on which the Commissioner proposes to base a recommendation to the Minister. The SEF will also state the substantive recommendation that the Commissioner proposes to make to the Minister. A SEF is a provisional decision. The ADC will (invariably and properly) state that the provisional decision is subject to submissions received following the SEF. That statement is legally correct however in practical terms there is now enormous administrative inertia in the SEF's provisional decision. Unsurprisingly, the ADC rarely if ever substantively changes its view following the SEF.
An example - go strong and early
In Investigation 548 a responding exporter filed a strongly argued submission shortly after the investigation was initiated. The submission argued that the company who had applied for dumping duties did not produce goods that were "like" to the goods exported to Australia by the exporter (see my earlier blog entry on like goods). Shortly after its submission, the exporter filed expert evidence in support of its "like goods" argument (see my earlier blog entry on expert evidence).
The exporter's argument prevailed in the SEF and the ADC terminated the investigation on the basis that there was no Australian industry that produced like goods. This was the first Australian trade remedies that was terminated on that basis (although it is often argued).
In my view, the exporter's strategy of going strong and early greatly assisted it in prevailing in Investigation 548.
Kinsman Legal's involvement in formulating strategy in investigations
Kinsman Legal acted for the exporter in Investigation 548. Kinsman Legal is available to assist parties to formulate and deploy strategies in trade remedies and competition law investigations and in associated litigation. Please contact Kinsman Legal if you would like to discuss your matter.
Anyone familiar with trade remedy investigations will know that there are express statutory time limits for an investigation and indeed for different parts of the investigation. For example (days are calendar days):
- Initial consideration of an application for measures to be imposed: 20 days from application
- Statement of essential facts (SEF): 110 days from initiation of the investigation
- Report to the Minister recommending measures: 155 days from initiation of the investigation
However, these times should not be regarded as strict since there are mechanisms to extend these times. And these mechanisms are frequently used. For example, it is rare that a SEF is actually published within 110 days or that a final report is given to the Minister within 155 days. It is not uncommon for investigations to run for a year or longer (ie more than twice the statutory time limit).
The WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (WTO agreement) provides that investigations "shall, except in special circumstances, be concluded within one year, and in no
case more than 18 months, after their initiation" (Art 5.10). However, these time limits were not adopted in the Australian legislation and so are not legally binding on the ADC. It is not uncommon for Australian anti-dumping investigations to run for more than a year and occasionally for more than 18 months.
Why is the timeline important if the statutory time limits are not strict?
Administrative inertia
The actions of government agencies, "like objects in motion, resist being reversed" (Administrative Inertia after Regents and Department of Commerce, 6 Admin. L. Rev. Accord 101, Mar 2021). This is not theory! I spent more than 10 years working in government agencies and I frequently observed this internal dynamic. When an agency has set a course for a particular decision it becomes increasingly difficult as time passes to change its direction.
In my experience an agency's administrative inertia generally plays out in this way: agency investigators form an initial working hypothesis; that working hypothesis (or perhaps some other view) becomes investigators' preferred case theory; senior staff accept and internally advocate the case theory; the case theory becomes a (more or less) settled view internally; the settled view is presented to the decision maker who makes the decision accordingly. Typically, little or none of this dynamic is seen by parties to the investigation but it is crucial that parties (or their advisers) understand this dynamic in formulating their strategies.
Administrative inertia and Australian trade remedies investigations
Consideration stage: The Australian trade remedies legislation requires the ADC to formally "consider" an application prior to initiating an investigation. The Commissioner may only initiate an investigation if he or she is satisfied that there "appear to be reasonable grounds" for imposing duties (Customs Act 1901 (the Act) at section 269TC(1)). So, in terms of the internal dynamic, investigators at the ADC already have a working hypothesis at the time the investigation is initiated. Consideration is not a public process and so parties being investigated are only told of the investigation at initiation of the investigation. Administrative inertia has already started at initiation of a trade remedies investigation.
Statement of essential facts: The legislation requires the ADC to publish a SEF (110 days after initiation or as extended, see above comments on statutory time limits), stating the facts on which the Commissioner proposes to base a recommendation to the Minister. The SEF will also state the substantive recommendation that the Commissioner proposes to make to the Minister. A SEF is a provisional decision. The ADC will (invariably and properly) state that the provisional decision is subject to submissions received following the SEF. That statement is legally correct however in practical terms there is now enormous administrative inertia in the SEF's provisional decision. Unsurprisingly, the ADC rarely if ever substantively changes its view following the SEF.
An example - go strong and early
In Investigation 548 a responding exporter filed a strongly argued submission shortly after the investigation was initiated. The submission argued that the company who had applied for dumping duties did not produce goods that were "like" to the goods exported to Australia by the exporter (see my earlier blog entry on like goods). Shortly after its submission, the exporter filed expert evidence in support of its "like goods" argument (see my earlier blog entry on expert evidence).
The exporter's argument prevailed in the SEF and the ADC terminated the investigation on the basis that there was no Australian industry that produced like goods. This was the first Australian trade remedies that was terminated on that basis (although it is often argued).
In my view, the exporter's strategy of going strong and early greatly assisted it in prevailing in Investigation 548.
Kinsman Legal's involvement in formulating strategy in investigations
Kinsman Legal acted for the exporter in Investigation 548. Kinsman Legal is available to assist parties to formulate and deploy strategies in trade remedies and competition law investigations and in associated litigation. Please contact Kinsman Legal if you would like to discuss your matter.