Subsidy Investigation Guide
[ Last Updated 30 January 2008 ]
Contents
Introduction
This is a guide for New Zealand producers who believe that subsidisation of imported goods could be injuring their industry.
It provides general information about subsidisation and the recourse that affected industries can take against it.
It explains the legal background to subsidies, how to apply for an investigation, the conduct of an investigation, and what action will be taken afterward.
The Subsidy Investigation Application Form is located under the heading below "How do you apply for an investigation".
The Subsidy Investigation Application Form takes you through the practical steps of applying for a subsidy investigation.
What Are Subsidies?
Subsidies involve the provision of specific assistance, directly or indirectly, by a government, in respect of goods exported to New Zealand. A subsidy can be an export subsidy, aimed at assisting exports, or it can be a domestic subsidy, which provides assistance irrespective of whether the goods are exported or not.
Is Subsidisation Illegal?
No, subsidisation is not illegal.
But where it injures New Zealand producers, duties can be imposed to remedy the situation.
These duties can only be imposed after a formal investigation.
Procedures for carrying out an investigation are set down in the Dumping and Countervailing Duties Act 1988.
The Act meets New Zealand's obligations under the WTO Agreement on Subsidies and Countervailing Measures. It is administered by the Trade Rules, Remedies and Tariffs Group of the Ministry.
The Act is designed to maintain fair competition for New Zealand producers when the subsidisation of imported goods injures or threatens to injure their industry.
How Do You Apply for an Investigation?
An application is made in writing following the guidelines in the Ministry's Application Form (see link below). The application document assists the Ministry to establish whether a case exists for a full investigation.
The Ministry requires sufficient evidence that subsidisation is occurring, and that the domestic industry is being injured or threatended with injury.
The Ministry also requires evidence that the application has the necessary level of support from the New Zealand industry.
Subsidy Application Form [72 KB]
What Might Prevent the Initiation of an Investigation?
An investigation may not be initiated if:
- there is insufficient evidence of subsidies
- there is insufficient evidence of injury to the New Zealand industry caused by subsidies
- import volumes are too small
- the amount of subsidy is too small.
Also, an investigation would not be initiated if there was insufficient support from domestic producers.
For any of the same reasons an investigation could be halted after it has been initiated.
Is Help Available to Prepare the Application Document?
The Trade Rules, Remedies and Tariffs Group of the Ministry can offer advice on preparing the application for an investigation. They will answer any questions relating to subsidies. Contact details can be found at the end of this Guide.
How Is Confidential Information Handled?
A successful application to investigate subsidies requires specific information from New Zealand producers.
Some producers may have concerns about sharing this information with competitors in the industry.
There are two solutions for this situation. The material can be combined in confidence by a third party, or the Ministry can combine the information.
The Dumping and Countervailing Duties Act 1988 also requires parties who submit confidential information to submit a non-confidential version or summary of it.
Interested parties to the investigation are allowed access to any non-confidential information used in the investigation and that is relevant to the presentation of their case.
The Trade Rules, Remedies and Tariffs Group operates a Public File for each investigation which is available for viewing and copying.
Who Will Consider the Application?
The application will be processed and considered by the Trade Rules, Remedies and Tariffs Group at the Ministry of Economic Development in Wellington.
Official correspondence about the application and any subsequent investigation should be addressed to "The Manager, Trade Rules, Remedies and Tariffs Group" using the contact details shown at the end of this guide.
The Minister of Commerce is responsible for final decisions and the imposing of remedial duties (where found necessary).
What Can Be Done if Subsidisation Is Causing Injury?
Provisional duties can be imposed from 60 days after initiation if the necessary conditions are met. A countervailing duty can be imposed on the imported goods following a final determination, at which point any provisional duties cease to take effect.
The rate of the duty cannot be more than the amount of subsidy.
The Minister may decide that the amount of countervailing duty can be less than the level of subsidisation if that is all that is needed to remove the injury.
The final duties may apply from the date of the application of provisional measures or from the day after the date of the Minister's final determination.
In special circumstances there is also provision for countervailing duties to be applied back as far as the date of initiation.
The countervailing duties apply for five years unless a review establishes a need to continue them so that injury does not recur.
How Is the Investigation Carried Out?
1. Initiation
When an application is received by the Ministry it is immediately checked to ensure it is a properly documented application.
You will normally be advised within 5 days of the Ministry's receipt of the application whether it does meet these requirements.
If it is accepted as a properly documented application, the Ministry must notify the Government of the exporting country and provide a reasonable opportunity for consultations with the aim of clarifying the situation and arriving at a mutually agreed solution. The period required for consultation will vary according to the nature of the particular case.
The evidence in the application is then checked to establish if there is sufficient evidence to justify initiation of an investigation.
During this checking you may be asked to clarify the information you have provided.
The Ministry may also take into account other information available to it in order to check the accuracy and adequacy of the information you have provided.
Following this process you will be advised whether the Ministry will initiate an investigation.
The investigation is then notified in the New Zealand Gazette, and to the applicant industry, to representatives of the countries of export and known exporters and importers.
2. Investigation
The full investigation involves thorough checking of the evidence in the application document, extensive gathering of industry and trade data, and information from the Governments of the exporting countries on the subsidy programmes, to establish whether subsidisation is causing injury.
3. Actions
If there is reasonable evidence of injury caused by subsidised imports, provisional measures can be imposed by the Minister as little as 60 days from the date an investigation was started. These measures are used to prevent further injury from occurring during the remaining period of the investigation.
Within 150 days of starting an investigation, the Chief Executive of the Ministry is required to inform all interested parties of the facts and conclusions likely to form the basis for any final determination.
This gives interested parties an opportunity to comment.
Within 180 days of the start of an investigation, the Minister must make a final determination of whether or not the subsidisation of imports is causing injury to the domestic industry.
Where to Send Your Application
Postal Address
The Manager
Trade Rules, Remedies and Tariffs Group
Competition, Trade and Investment Branch
Ministry of Economic Development
PO Box 1473
WELLINGTON
Delivery Address
The Manager
Trade Rules, Remedies and Tariffs Group
Competition, Trade and Investment Branch
Level 8
Ministry of Economic Development
33 Bowen St
WELLINGTON
Contact Information
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