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• NZCS Instruction TR800/R/98/3

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• Certain Men's Footwear: China

Non-Confidential

Instruction TR800/R/98/3

Information in these Instructions relating to anti-dumping duties which is considered to be confidential in terms of Sections 9(2)(b)(ii) and 9(2)(ba)(i) of the Official Information Act has been deleted and is indicated by shading and/or underlining. Requests for further information should be made to the Trade Remedies Group. Hard copies of these instructions are available from the Audit Officer in each NZCS office, the Policy Management Division of NZCS Head Office or direct from the Trade Remedies Group of the Ministry of Economic Development (contact details are given below).

INTRODUCTION

Anti-dumping duties were imposed on certain men's footwear from China, Indonesia, Korea, Taiwan and Thailand by the Minister of Commerce on 11 September 1992.  In July 1996 a full review was completed and the rates of anti-dumping duty applicable were reassessed.  The review also resulted in the removal of anti-dumping duties from men's footwear originating in Korea and Taiwan.

A partial review was completed on 16 April 1999 and resulted in the exclusion from the determination of men's sports casual footwear other than leather upper hiker-type boots.

GOODS SUBJECT TO ANTI-DUMPING DUTIES

Description

The goods subject to anti-dumping duty are:

Men’s shoes (including unisex shoes), including sports casual leather upper hiker-type boots but EXCLUDING the following categories:

- Men’s and boys’ shoes, size 4 and below.

- Sports footwear:

(a) footwear which is designed for a sporting activity and has, or has provision for the attachment of spikes, sprigs, stops, clips, bars or the like; and

(b) skating boots, ski boots and cross-country ski footwear, wrestling boots, boxing boots and cycling shoes.

- Sports casual shoes and boots, except leather upper hiker-type boots.

- Sandals and similar open-toed footwear with straps across the instep.

- Slippers.

- Footwear with upper straps or thongs assembled to the sole by means of plugs.

- Footwear incorporating a protective metal toe cap.

- Footwear with outer soles of leather.

- Footwear made on a base or platform of wood.

- Footwear containing woolskin.

- Thong type products.

- Industrial safety toe type.

- Diving boots.

- Waterproof footwear with outer soles and uppers of rubber or of plastics, the uppers of which are neither fixed to the sole nor assembled by means of stitching, riveting, nailing, screwing, plugging or similar processes.

- ‘Kung Fu’ shoes, being flexible shoes with cotton uppers and thin flat plastic soles.

Note: Unless it is apparent from the context or is otherwise specified, the term "shoes" when used generally also includes boots.

See notes below for further comments on subject goods.

Countries of Origin

The countries of origin of the subject goods are China, Indonesia and Thailand

See notes below for further comments on countries of origin

ANTI-DUMPING DUTIES

Description

The anti-dumping duties imposed by the Minister and to which these instructions relate are in the form of Normal Value (Value For Duty Equivalent) amounts (referred to as NV(VFDE) amounts) which have been established for each category of footwear exported by specified suppliers in each country of origin. These amounts are confidential to each supplier.

NV(VFDE) amounts have also been established for suppliers in each country of origin other than those specified.

NV(VFDE) amounts are specified in US$ as this is the currency in which the majority of imports of the subject goods are denominated. The notes section below provides guidance where this is not the case.

Method

In all cases the anti-dumping duty (if any) that is payable is the amount by which the NV(VFDE) amount exceeds the declared VFD of the subject goods at the time of importation.

Specified Suppliers

Where the Chinese, Indonesian or Thai producer or exporter can be identified AND a specific schedule exists for that producer or exporter, AND there is a NV(VFDE) amount listed for the relevant category of footwear, the NV(VFDE) amount listed should be used.

If there is no NV(VFDE) amount listed for the relevant category of footwear, then the NV(VFDE) amount listed for "Other Suppliers" on the relevant country schedule should be used.

Other Suppliers

Where the Chinese, Indonesian or Thai producer or exporter cannot be identified or is not a specified producer or exporter the NV(VFDE) amount listed for "Other suppliers" under the relevant category of footwear on the relevant country schedule should be used.

Where it appears that the overseas supplier on the import entry is not a manufacturer of footwear, the importer should be asked to provide details of the manufacturer(s).

Rates of Duty

The attached schedules detail the NV(VFDE) amounts applicable to these goods.

Examples

Below are examples of the calculation of each type of anti-dumping duty applicable to these goods.

There is a shipment of 10,000 pairs of shoes, made up of the following:

3,000 pairs of leather upper shoes (other than boat shoes or sports shoes), all of model type A, originating from China, manufactured by Grosby China and exported to New Zealand through XY Traders Ltd. in Hong Kong. The FVFD per pair is US$5.00.

4,000 pairs of leather upper hiker-type boots, all of model type B, originating from China, manufactured by AB Shoe Company and exported to New Zealand through XY Traders Ltd. in Hong Kong. The FVFD per pair is US$10.00.

3,000 pairs of canvas shoes, all of model type C, originating from China and exported to New Zealand through XY Traders Ltd. in Hong Kong. The manufacturer is Decapoint China.  The FVFD per pair is US$7.50.

Anti-dumping duty is applied as follows:

	Normal Value (VFD Equivalent) US$	FVFD US$	Anti-Dumping Duty Per Pair US$
Model Type A	CONFIDENTIAL	5.00	CONFIDENTIALL
Model Type B	13.41	10.00	3.41
Model Type C	CONFIDENTIAL	7.50	No Duty
Total duty is therefore:
Model Type A	3,000 x _____ =	CONFIDENTIAL
Model Type B	4,000 x 3.41 =	13,640
Total Payable	US$	CONFIDENTIAL

The US$ amount resulting from the above calculation is then converted to NZ$ at the current Customs exchange rate. There may be instances where the FVFD is not shown in US dollars. In such cases the NZ VFD should therefore be converted back into US dollars and the dumping duty calculated as above.

Note: For model type B, no specific Normal Value (VFD Equivalent) has been set for leather upper hiker-type boots for AB Shoe Company, therefore the Normal Value (VFD Equivalent) for "Other Suppliers" is used.

For model type C, there is no anti-dumping payable because the FVFD per pair is more than the Normal Value (VFD Equivalent).

Again, if a producer or exporter of the shipment of men's shoes cannot be identified, then the Normal Value (VFD Equivalent) amount used will be that for "Other Suppliers".

NOTES

General

An ALERT is in place for the following tariff items and statistical keys under which the men's footwear subject to anti-dumping duties is classified.

Not all footwear imported under these tariff items is subject to anti-dumping duty.

The tariff items and statistical keys are provided for convenience and Customs purposes only, the written description being dispositive.

The above table also provides links to specific instructions relating to each tariff item which include details of footwear types to which these instructions relate. These specific instructions should be read in conjunction with the general instruction.

An ALERT is also in place against tariff items and statistical keys relating to unisex footwear, details of the tariff items and statistical keys concerned is included in the discussion of this matter below.

Goods Description

Sizing

As noted in the list of exclusions above, shoes of size 4 and below are excluded from the goods subject to anti-dumping duty.

Size 4 refers to English (UK) size 4 which is equivalent to USA size 5½ or Continental (French) size 37.

Many imports into New Zealand have been sized to English sizes to fit market conditions in New Zealand.

Where there is any doubt as to whether goods are included in the above description, a sample of the footwear together with all documentation available (including invoices, import entry, catalogues etc) should be forwarded to the Trade Remedies Group.

Country of Origin

Goods are considered to have originated in the country in which they are manufactured. This is the country that importers are required to specify in the country of origin field of the import entry.

Particular care should be taken when country of origin is shown as Hong Kong to ensure that the goods have actually been manufactured in Hong Kong, that is the final process of manufacture has occurred in Hong Kong, and that the goods are not goods of Chinese origin being sold through Hong Kong.

Anti-dumping duties are to be assessed for the subject goods when country of origin is China, Indonesia or Thailand, regardless of whether or not it is shown as Q (Qualifying) or NQ (Non-Qualifying) at the time of importation.

Unisex Footwear

Because of the operation of Rule 3 of the General Rules for Interpretation of the Tariff, some unisex footwear is classifiable as women's footwear.   The above definition of certain men's footwear for purposes of anti-dumping duties includes unisex footwear and, therefore, the goods may also be entered under the following tariff items as women's footwear:

In considering whether goods are unisex for purposes of assessing anti-dumping duty, regard should be had as to whether there is any indication that the goods are intended for use by one gender in preference to the other. For example, a catalogue detailing shoes as women's indicates that those shoes are designed and marketed for women and should be treated as women's shoes.

Where catalogues/technical literature or other information submitted by importers does not provide a clear indication, a judgement must be made based on the facts presented. The following points may be of assistance:

• Where a catalogue or manufacturer's/exporter's technical literature describes the footwear by gender, those genders would normally be accepted.

• An indication that a shoe is not unisex may be taken from the evidence provided that a manufacturer also produces an equivalent shoe model for the other gender.
  
  Thus, shoes that appear to be unisex may be claimed to be women's and the test would be the extent to which there are differences from the men's equivalent model to cater for differences between the sexes (e.g. differing size ranges (lower size range for women), differences in lasts used affecting for example the breadth of shoe, or fashion features (pastel colours, embroidered flowers etc).
  
  The judgement to be made is whether there is an equivalent model made for the other sex with reasons given by the importer/manufacturer that are reasonably justifiable.

It should be noted that currently the ALERT applying to unisex shoes covers four tariff items. This number may change from time to time as the result of monitoring exercises conducted on goods imported under these tariff items.

Waterproof Footwear

Regarding tariff item 6401.99.19.01B, this tariff item was added following a classification exercise by the New Zealand Customs Service on "waterproof footwear". NZCS has decided that this particular type of footwear should enter under this tariff item, while the Ministry of Economic Development position is that regardless of classification the goods are not waterproof and are therefore subject to anti-dumping duties.

Currency

There may be instances where the FVFD is not shown in US dollars. In such cases the NZ VFD should therefore be converted back into US dollars and the dumping duty calculated.

F.A.Q. PAGE

A Frequently Asked Questions page has been established as an ongoing point of reference for decisions made by the Ministry in respect of particular goods subject to anti-dumping and countervailing duties. Additional guidance regarding the applicability or otherwise of the duties described in these instructions may be found on that page.

FURTHER INFORMATION

Should you have any queries regarding the operation of the anti-dumping duties described in these instructions please contact the Trade Remedies Group as shown below.