To circumvent the high - hanging Chinese enterprises head of trade barriers sword

In recent years, anti-circumvention investigations against Chinese enterprises have become more and more frequent, which has become another important weapon for some countries and regions to prevent Chinese enterprises from entering the international market. Some industry insiders even believe that more than 90% of the anti-circumvention investigations in the world are targeted at China-related products.

So-called avoidance, refers to a kind of export products in another country under the condition of implementation of anti-dumping or countervailing measures, exporters to avoid "double reverse" measures for the purpose, in the absence of reasonable economic reason, by changing the ways to reduce or avoid export products by "double reverse" tariffs or by anti-dumping measures apply to other forms of behavior.

According to incomplete statistics, in the past September, the United States, the European Union, India and other countries and regions issued two final affirmative anti-circumvention rulings against China-related products and launched three new anti-circumvention investigations against China-related products.

"This is closely related to the frequent anti-dumping and countervailing investigations that China has encountered since its accession to the WTO. The more 'double anti-china' measures are taken against China, the more anti-circumvention investigations will follow." Jin city law firms, senior partner at Li Ye in China trade news reporter interview analysis said that the "double reverse" high tax rate will be a lot of SBC block to some countries and regional markets, some companies to adopt certain behaviors to avoid, such as making slight changes to products, semi-finished products or parts can be shipped to a third country or importer before assembly, invest in a third country, adopt the entrepot trade and so on.

In fact, whether anti-circumvention measures are legal has been a big controversy. At present, WTO anti-dumping agreement has not given formal provisions against circumvention. The WTO Anti-dumping Agreement emphasizes that the authorities should take effective measures to prevent the occurrence of circumvention, but it does not clearly define circumvention.

"Many countries have anti-circumvention rules based on their own circumstances and will intensify their investigations." Li Ye said.

On August 13, the US Department of Commerce issued the Administrative and Enforcement Rules for Improving Anti-dumping and Countervailing Duty Laws, proposing to clearly distinguish between product-scope inquiries and the legal basis for anti-circumvention investigations, and authorizing THE DEPARTMENT of Commerce to initiate anti-circumvention investigations on its own and make anti-circumvention decisions on all products imported from a particular country.

"In addition to the United States, many countries and regions are also improving anti-circumvention laws and regulations, strengthening law enforcement and ensuring the effectiveness of the 'dual anti-circumvention' measures." Li ye told reporters that in the anti-circumvention rules, the Eu, India and other countries and regions have a clear ratio standard. For example, the EU requires that the value of components/raw materials used for assembly/production in a third country, originating in the country involved, should be more than 60% of the total value of all components/raw materials of the product assembled/produced, and the value added in a third country should not exceed 25% of the production cost (excluding SG&A and profits). However, there are no relevant standards in the anti-circumvention rules of the United States and other countries, resulting in the uncertainty of the rules. Therefore, people cannot follow the rules in practice. In addition, anti-circumvention investigations are much easier to launch than anti-dumping investigations. Some competitors can launch investigations by collecting preliminary evidence to combat Chinese companies, which is one reason why anti-circumvention investigations have been on the rise in recent years.

'This is a big blow for Chinese companies,' Mr. Li said. Us customs, for example, can not only reverse nearly three years of corporate data, but can also hold individuals accountable, perhaps even up to criminal responsibility.

"Anti-circumvention investigations are highly lethal." Beijing poly wei, senior partner at law firm Liu Xinze, said by anti-circumvention investigation, the investigation organ may will be the implementation of anti-dumping, countervailing measures expanded to a third country, upper parts of the manufacturer and the new development and change of products, etc., usually for applying the top rate directly, can also lead to payment of taxes, fines and confiscation of the goods, and even criminal penalties.

According to Liu Xinze's investigation, 93% of the anti-circumvention investigation cases against Chinese enterprises finally made positive decisions and implemented anti-circumvention measures. "This shows that the enthusiasm and response of Chinese enterprises to the anti-circumvention investigation is still insufficient." "Liu Said.

Many enterprises believe that if they invest and set up factories overseas, they will have the status of local origin as long as they comply with local rules of origin, so as to avoid "double anti-China" measures and export their products to overseas markets at will.

"This view is one-sided and very dangerous." Liu Suggested that Chinese enterprises planning to invest in factories or export products overseas must do due diligence related to anti-circumvention before investment, make supply chain and origin planning in accordance with the rules on origin of anti-circumvention, and consult professional lawyers when necessary. Enterprises involved in the case must actively respond to the complaint, do a good job in answering papers, on-site management, employee training and so on.

Anti-circumvention originated from the screwdriver case in the late 1980s. At the time, Japan and South Korea were big victims of anti-circumvention investigations. In the new century, there are fewer and fewer anti-dumping, anti-subsidy and anti-circumvention investigations against Japan and South Korea.

"This is because Japanese and South Korean companies are becoming more and more international. They have truly globalized procurement and production, and fundamentally got rid of the trouble of trade remedy investigations." Li Ye suggested that, unlike Japan and South Korea are large enterprises, China has a lot of small and medium-sized enterprises, in contrast to the internationalization of the road to go more difficult. But in any case, internationalization is the inevitable path for Chinese companies in the coming decades.