Anti-Dumping Laws and Regulations in Japan

GlobaLCompetitionReviewThe international journal of competition policy and regulationThe Handbook of TradeEnforcementA Global Competition Review special report2008Anti-Dumping Laws and Regulations in JapanHiroshige Nakagawa and Motoyasu HiroseAnderson Mori & Tomotsune

japanAnti-Dumping Laws and Regulations in JapanHiroshige Nakagawa and Motoyasu HiroseAnderson Mori & TomotsuneIn Japan, general anti-dumping legislation isprovided by article 8 of the Customs and TariffLaw (Law No. 54 of 1910, kanzei teiritsu hou inJapanese), whereas specific details are providedin Ordinance No. 416 of 1994 and the guidelinesthereunder. All of these laws and regulations arepromulgated in accordance with the rules of theWorld Trade Organization (WTO), which havebeen ratified by the Japanese government.Case precedentsIn Japan, until recently, the government had beenrather passive in dealing with the imposition ofanti-dumping duties (AD duties). The Japanesegovernment has only ever made three finaldeterminations to impose an anti-dumping duty:concerning ferrosilicon manganese from China,South Africa and Norway in 1993; concerningcotton yarns from Pakistan in 1995; and concerningpolyester staple fibres from Korea and ChineseTaipei in 2002. As of March 2008, there is onepending anti-dumping investigation concerningelectronic manganese ore exported from Australia,South Africa, China and Spain.In all of the three cases, the Japanese governmentinvariably established that the investigated productdumped into Japan caused injury to the industry ofJapan, and consequently the AD duties were leviedagainst the importer of the investigated products.Although at least some of the interested partiesanswered to the complaint filed by the applicantsin these cases, they were not always successfulin defending their position. The ferrosiliconmanganese case in 1993 is the only case in historywhere some interested parties successfully executeda price undertaking with the Japanese government.The margin of dumping finally determined by theJapanese government may turn out to be higherthan the margin initially alleged by the applicant,although sincere cooperation with the Japanesegovernment’s investigation will likely lead to morefavourable consequences.General rulesArticle 8 of the Customs and Tariff Law andthe related government ordinance providefor the basic rules on the imposition of ADduties under Japanese law, in accordance withthe WTO rules.AD duties will be imposed against the importerof a product into Japan when the importationof the product would cause its sale price to fallbelow the normal value of the product, and suchimportation causes injury to the industry of Japan.However, the methodology for determination ofthe normal value of a product is not clearlydefined in any of Japan’s anti-dumping laws orregulations. Generally, the domestic sales priceof the investigated product (including similarproducts, if any) destined for consumption in itscountry of origin will be regarded as the normalvalue. However, if there are no domestic sales ofthe product, the constructed value or, alternatively,its export price to a third country shall bereferenced as the normal value.ProceduresThe Ministry of Finance (MoF) and Ministry ofEconomy, Trade and Industry (METI), the twoauthorities in charge of anti-dumping measuresin Japan, give a public notice (kokuji) upontheir determination to initiate an anti-dumpinginvestigation concerning a product imported intoJapan. Then, the MoF and the METI will issuea questionnaire to the interested parties such asexporters, importers and industrial users of theproduct.In this regard, while the anti-dumpingregulations in Japan are consistent with theinternational standards such as the AD Agreement,the specific rules under those regulations are notdefined in detail, possibly due to the lack of caseprecedents.The questionnaire for the exporter consists ofseveral items, including the general and financialinformation of the company, the amount of salesdestined for domestic consumption in the countryof origin and the amount of exports to Japan andto other countries. The respondent will be requiredto provide data on a variety of cost items forspecific, individual purchases and/or sales relatingto the investigated products., which include suchJwww.globalcompetitionreview.com 73

japanJadjustment items as packing, freight, warehousingand technical costs, among others.The difficulties in complying with anti-dumpingregulations in Japan consist of the following: it isnecessary for non-Japanese respondents not onlyto collect information to answer the questionsbut also to translate all Japanese documents intoEnglish (and vice versa) by the deadline set out bythe MoF and the METI, as is the case with otherAsian countries where English is not used as anofficial language. In theory, the interested partiesare entitled to solicit an extension of the deadline;however, as a matter of practice, the Japanesegovernment will not respond to such request ona flexible basis. Furthermore, since the whole ofthe procedure, including the questionnaire andresponse, is all in Japanese, it requires considerabletime and language skills for foreign companies tocommunicate with the Japanese government. Inorder to follow the procedures properly, consideringthe huge volume of translation requiring consistentterminology in a short time, foreign companiesneed the assistance of international attorneys.In this regard, unfortunately, due to the lack ofcase precedents, attorneys who have expertisein anti-dumping cases are rarely found in Japan.Nonetheless, a respondent’s failure to comply withthe deadline may be regarded as non-cooperationwith the investigation by the MoF and the METI,in which case they may resort only to the factsalready available in order to establish the dumpingmargin.Generally, the MoF and the METI will, a fewmonths after their collection of data from interestedparties, visit each interested party’s facility andexamine the authenticity of the original data andmaterials previously filed with the MoF and theMETI in the presence of the person(s) responsiblefor compiling the data within the company. Underthe guidelines, each interested party is entitledto receive a list of investigation items at least 17days prior to the commencement of the on-siteverification.In general, Japanese officers act in strictcompliance with the procedures set forth inthe relevant laws of Japan and are particularlyconscious of the equality between the interestedparties. In addition, the investigation teams of theMoF and the METI jointly and simultaneouslyinvestigate both the facts of the dumping and anyinjury to the industry of Japan.In anti-dumping investigations in Japan, giventhe lack of case precedents and the broad latitudegiven to the Japanese government, it is bestreserved to experienced attorneys to predict notonly the attitude of the Japanese governmentin each individual investigation, but also eachinvestigation’s ultimate outcome. nAnderson Mori & TomotsuneIzumi Garden Tower6-1, Roppongi 1-chomeMinato-ku, Tokyo106-6036JapanTel: +81 3 6888 1000info@amt-law.comAnderson Mori & Tomotsune was formed on 1 January 2005 as a result of themerger of two leading Japanese law firms, Anderson Mori and Tomotsune &Kimura. The firm is one of the largest, full-service corporate law firms in Japan,with approximately 240 Japanese lawyers (bengoshi) and approximately 10lawyers qualified in foreign jurisdictions, including the UK, US, Belgium, Australiaand the People’s Republic of China. Among Japanese international law firmstoday, Anderson Mori & Tomotsune has one of the longest histories of servingthe international business and legal community in Japan.Our main areas of practice are corporate/M&A, banking and finance, capitalmarkets, structured finance, project finance/PFI, intellectual property, antitrust& competition regulation, taxation, labour and employment, bankruptcy andinsolvency, motion picture, music and entertainment, China practice, litigation,arbitration and other dispute resolution.74The Handbook of Trade Enforcement 2008