1.

Definition and Types of Circumvention Dumping

The term circumvention dumping refers to the act of “evading the imposition of anti-dumping duties by means of acts prescribed by the Presidential Decree, such as slightly changing the physical characteristics or form of the goods subject to anti-dumping duties” (Article 56 (2) of the Customs Act).

In addition, “minor alteration,” a type of circumvention dumping, is defined as the act of changing the physical characteristics or form, packaging methods, or use of goods in the supplying country to the extent that it does not change the essential characteristics of the goods, and includes cases where the HS Code is changed. In determining what constitutes a minor alteration, consideration needs to be given to differences in the physical properties and chemical composition of the goods under investigation, differences in HS Code, usage of the goods under investigation, differences in production facilities, costs of the alterations, and other matters deemed necessary by the Korea Trade Commission (the “KTC”).
 

2.

Procedure for Dumping Investigation

A circumvention dumping investigation can be initiated in the same manner as any other anti-dumping investigation, that is, either through an application or through an ex officio investigation. In the former case, an applicant must file a complaint with the KTC, as well as data and explanatory statements supporting the existence of dumping. The KTC must then review the accuracy and adequacy of the data submitted by the applicant, decide whether to initiate the investigation, and notify the Minister of Economy and Finance of the goods, duration and suppliers subject to the dumping investigation within 30 days starting from the date of the application. The period may be extended by 15 days if necessary.

A circumvention dumping investigation may also be initiated ex officio. In this case, the KTC may request the Commissioner of the Korea Customs Service (the “KCS Commissioner”) to review whether circumvention dumping has taken place. The KCS Commissioner may also voluntarily review whether or not there has been an occurrence of circumvention dumping in the absence of such request and notify the KTC of the results. If the KTC decides to initiate an ex officio investigation, it must notify the Government of the supplier country, the supplier and other stakeholders within ten days from the date of the decision and publish the decision in the Official Gazette.

The investigation of whether or not circumvention dumping has occurred is conducted by the KTC, which may, if necessary, involve officials or experts from relevant administrative agencies.

The KCS Commissioner may seek cooperation from the relevant administrative agencies, domestic producers, importers and domestic stakeholders, including the submission of relevant data, if necessary, in order to determine whether circumvention dumping has occurred. The law stipulates that this procedure is governed by the same provisions for requesting cooperation from interested parties in general dumping investigation proceedings.

The time period provided to respond to the questionnaire is not less than 40 days, and if the interested party fails to submit the data or refuses/obstructs the KTC’s investigation by making it difficult to conduct the investigation or verify the data, the KTC may use available facts and evidence to determine whether circumvention occurred.

The circumvention dumping investigation must be conducted within six months of the date of publication in the Official Gazette, and can be extended by one month if necessary. Based on the results of the investigation, the Minister of Economy and Finance must (i) decide whether to impose anti-dumping duties and which duties should be imposed, and (ii) impose them within eight months of the date of publication in the Official Gazette, or, if there are special reasons, within nine months from the date of publication.
 

3.

Imposition of Anti-Dumping Duties

The imposition of anti-dumping duties for circumvention dumping will be based on the anti-dumping duty rate or the base import value of the supplier or supplying country of the dumped goods. However, as described above, a separate anti-dumping duty may be set for suppliers who have caused difficulties in the investigation or verification of data, within the scope of the existing anti-dumping duty or the base import value of the dumped goods. The Minister of Economy and Finance will publish the decision on whether or not to impose an anti-dumping duty in the Official Gazette and notify relevant stakeholders.