Anti-Dumping Investigation

Prepared for:
Md. Rashik Amin
Lecturer
Department of Finance
University of Dhaka

Prepared by:
Group 5
23rd batch
Section: B
Department of Finance
University of Dhaka

Course code: F-305

July 21, 2019
Group Profile
The report has been prepared by the combined effort of:

Group 5

Serial no Student’s name Id. no Remarks

01 Asif Khan 23-130

02 Md. Nazir Hossain 23-102

03 Md. Ullash Hossain 23-087

04 Mithila Nag 23-051

05 Umme Kulsum Labonno 23-108

Letter of transmittal

July 21, 2019

Md. Rashik Amin

Lecturer,
Department of Finance,
University of Dhaka.

Subject: Submission of a report on “Anti-dumping Investigation”

Dear Sir,

With due respect, we are submitting you the report of International Finance and
Trade F-306 titled “Anti-dumping Investigation”.
Therefore, we are requesting you to accept this report and give us a proper suggestion
to work in the battle of t he field. We shall always be obliged to furnish my
clarification regarding this report if required. If we did any mistakes here, we look
forward to your important advice. Working for this report was a great experience for
us. Thank you for giving this kind of practical assignment.

Sincerely yours,

Md Ullash Hossen
On behalf of
Group no 5
BBA 23rd batch, Section-B,
Department of Finance,
University of Dhaka
Acknowledgement
First of all, we would like to thank the Almighty for keeping us safe and sound, and for
making everything go in a positive direction.
Then, we are respectfully thankful that our course (F-305) instructor, Md. Rashik Amin,
Lecturer, Department of Finance, has given so many instructions for completing this report.
Without his inspiration, we could not make this report.
We would also like to thank all the people who have cooperated with us. Without the efforts
of these people, the report would be difficult to be submitted. With the help of these people, we
have acquired vast knowledge which will help us in the future.

4
Contents
Executive Summary ....................................................................................................................6

Introduction ................................................................................................................................6

Dumping and Anti-dumping act ..................................................................................................7

Backstory of the dumping allegation ...........................................................................................8

Calculation of Normal value......................................................................................................10

Injury Determination .................................................................................................................12

Effects on price .....................................................................................................................12

Effects on sales .....................................................................................................................13

Effects on profit facts ............................................................................................................14

Effects on return on investment .............................................................................................14

Effects on cash flow ..............................................................................................................15

Effects on inventories ............................................................................................................15

Effects on employment, productivity, wages .........................................................................15

Effects on growth ..................................................................................................................16

Causal link between the said injury and dumped import ............................................................17

Inconsistencies in the procedure of investigation and final determination ..................................18

Conclusion ................................................................................................................................21
Executive Summary
There has recently been a flow in anti-dumping cases around the world, and
Bangladesh, unfortunately, is no exception. There are allegations that Bangladesh has been
dumping, meaning exporting some goods at prices lower than that of the domestic market to
the detriment of the importing country. As a result, anti-dumping measures are being taken
against Bangladesh by way of levying additional duties. Recently, Bangladesh has been
facing a number of anti-dumping measures, such as -- on Jute, Hydrogen peroxide, fishing net,
etc. More sectors which are prone to more measures are pharmaceuticals, leather, and textiles.
The following paragraphs will deal with jute. Dumping occurs when a company exports a
product to any country at prices lower than the normal value (the domestic price or the cost
of production) of the product on its domestic market.
According to the World Trade Organization, the importing country can impose anti-dumping
duty on import of the product if it finds proof upon investigation that dumping has
occurred, such dumping has caused or is causing material injury to the domestic industry and
there is a causal link between the dumping and injury found. Anti-dumping duty cannot be
imposed if the conditions are not met. Exporters and trade officials said that hydrogen
peroxide is used in bleaching and sterilizing process in textile and paper and pulp industry.
Pakistan is the second-largest importer of the product from Bangladesh taking item worth more
than $1.2 million.
In July-April, India imported the product worth around $4.5 million from Bangladesh. In
2015, the NTC initiated an investigation following an allegation by a local manufacturer that
HP was being exported to Pakistan at dumped prices from Bangladesh. They continued their
investigation and finally decided dumping has occurred and charged duty on the two major
exporters- Sova and Tova Chemicals Ltd. of HP. We justified the information of the case and
presented the flaws in the investigation and showed the dumping didn’t occur based on the
weakness of the case.
6
 Part 1

Objectives of the study

The purpose of the report is to present the anti-dumping case of Hydrogen Peroxide
between exporters of Bangladesh and Pakistan and investigates the reasons and inconsistencies
lying in the process of determining the backdrop for dumping.
Origin of the study
This report originated as a requirement of our BBA program under the supervision of
our course teacher, Md. Rashik Amin, Lecturer, from the Department of Finance,
University of Dhaka. For the course ‘International trade and finance, with the course code
course F-305, we were assigned to prepare a report on the case of anti-dumping
between Bangladesh and Pakistan in 2015. We have been given adequate instructions by
our course teacher about the way of preparing the report. We applied our classroom
knowledge to gather information and to make this report.
Methodology
The report has been prepared using based on given information the case provided to us. The
report has been prepared to analyse and to reason the information properly.
Limitations
While preparing the report, we faced some challenges:
 Our lack of experience in preparing the report
 Lack of primary source numerical figures
 Being unable to unravel any fabrication of financial information

7
 Part 2 Dumping and Anti-dumping act

As one of its functions, WTO serves as a forum for trade disputes and it strives to create a
zero-trade barrier between its members and core obligation of WTO is designed to liberalize
trade by opening up the market for its members. The problem that remains with the system is
that trade liberalization may expose industries to unfair trade practice and excessive
competition from imports which consequently injure domestic business operation and
development. Dumping is one of such consequences from dumping. Dumping means the sale of
a product in the foreign market at a price below the normal price in its home market. According
to Anti-dumping Act of Pakistan, dumping means “an investigated product shall be considered
to be dumped if it is introduced into the commerce of P at a price which is less than its normal
value”. Dumping is considered unfair trade practice because dumping adversely affects the
domestic industry as well as other exporters because they cannot compete with the unusual
low prices of the dumped products. Dumping is done usually for the following purposes:
 To capture the major share of the domestic market of the importing
country  To drive away from the competitors from the local market
 To protect the entry of other exporters in the same
market  To earn extra profits in the long run
National Commission of Anti-dumping is responsible to conduct an investigation of Anti-
dumping to ensure fair competition and offset dumping of goods following Anti-dumping
Act 2015 and “Agreement on Antidumping (ADA)” (Article IV) of GATT. Article IV
recognizes the dumping as a material injury to the domestic country but doesn’t contain any
guidelines for determining the injury. The Commission followed a due process during
investigation which consists of receiving, evaluating and examining application, assessing
the standing of the application, collecting applicant’s view, initiating investigation,
gathering and verifying information for preliminar y determination, issue public file and
receive comments and consult with governments of exporting country to determine material
injury and levy the anti-dumping duty. The investigated product was Hydrogen Peroxide (HP)
which is classified under PCT heading No. 2847.0000. It is used as a bleaching agent in the
textile industry, paper & pulp industry, for sterilization of packaging material of milk, fruit
juices (aseptic packaging) industry and general-purpose as an oxidizing, detoxifying and
deodorizing agent. It is also used for wastewater treatment, soil remediation. It was akin to the
domestic product (HP) and sold at a 50% reduced price to Pakistan. The period of investigation
(POI) for determination of dumping was from January 1, 2014, to December 31, 2014, and for
determination of material injury was from January 1, 2012, to December 31, 2014.
8
 Part 3 The backstory of the dumping
allegation

National Tariff Commission of Pakistan received written application of SS Peroxide Limited

and DD Oxychem Limited on April 06, 2015 on dumping of Hydrogen Peroxide (HP)
from Bangladesh in their domestic country. The applicants identified three exporters of
HP- Sova Chemical Complex Ltd. and Tova Chemical Complex Ltd. and some other
exporters. The examination of the application showed sufficient evidence of dumping of HP in
accordance with section 20 of the Anti-dumping Act and Article 5.3 on an anti-dumping
agreement which caused injury to the domestic industry. The material injury was done
through an increase in the volume of dumped product, the decline in market share, price
undercutting and price depression, the decline in profitability, negative effect on productivity
and return on investment and some other reasons.
After determining adequacy and accuracy of evidence of alleged dumping
from B, the Commission decided to initiate an investigation and it issued a notice of initiation
in the official gazette and published in two widely circulated newspapers on April 28, 2015,
and copies of the notice of initiation was sent to all exporters/producers of Bangladesh. The
Commission sent a questionnaire to the alleged exporters on April 30, 2015. After analyzing
their response and from the on-spot investigation, The Commission reported a public file on
which it received critical information and comments from other importers and determined the
following consequences from dumping.
It concluded the injury margin was 19.32% which was above the dumping margins ranging
10.67% to 12.14% and in terms of Section 39 of the Act, levied definitive anti-dumping duty
rate 12.14% (on Tova and others) and 10.67% (on Sova).
9
 Part 4 Calculation of Normal value

Normal value refers to the comparable price of the domestic like product to the imported
dumped goods which has been sold in an ordinary course of trade. According to section 5 of the
Act, normal value means “a comparable price paid or payable, in the ordinary course of trade,
for sales of a like product when destined for consumption in an exporting country”. Section
6 urges that comparable price be representative when exported to a third country. The sales
of the domestic like product may be considered to be sufficient for the determination of
normal value if sales constitute 5% or more sales of an investigated product. The section also
refers that the cost of production should include a reasonable amount of administrative,
selling and general costs and profits. Section 7 states ordinary course of trade that the
Commission will treat sales of a like product in domestic market or exporting to the third
country at prices below per unit, variable and fixed, cost of production plus administrative,
selling and other costs. The Commission will disregard normal value in the ordinary course
of the trade if sales are made within an extended period of time, in substantial quantities or at
prices that don’t recover all costs within a reasonable period of time. In sub-clauses of this
section, the Commission establishes that sales below per unit cost will be deemed if
a) Weighted average selling price for determination of normal value is a weighted
average cost
b) The volume of sales represents 20% or more of volume sold in transactions
for determination of normal value
c) If prices below per unit at the time of sale are above weighted average cost at the
period of investigation, the Commission will consider recovery of costs within a
reasonable period of time.
The Commission sent a questionnaire to the three exporters and determined normal value on
the basis of information provided. Tova Ltd negotiates a contract with importer in Pakistan at
price for HP 50 percent and establishes L/C when a purchase order is confirmed. To arrive at ex-
factory price, Tova made the following adjustments with gross value-
Adjustments Value (US$/MT)
Inland freight ***
Ocean freight ***
Bank charges ***
Credit Cost ***
Duty drawback ***

In response to the questionnaire, Tova failed to provide information required for determination
of cost of production. The Commission communicated these deficiencies to Tova on July 10,
2015. Tova responded to the letter on August 30, 2015, but still it was deficient and didn’t
provide all
10
information on their export. During on the spot investigation, the Commission
obtained information on domestic sales and revised cost to make and sell. In order to determine
the normal value for Tova, the Commission has used comparable transactions of the same date
as of the export sales. The weighted average CFR price for HP 50 percent of comparable
transactions of the same date as of the export sales was at a certain amount presented in US
dollar. To arrive at the ex-factory level, Tova has claimed adjustment on account of inland
freight. The Commission has accepted this adjustment and the normal value at ex-factory
level is worked out by deducting values reported for this adjustment.
Sova Ltd. follow the same procedure to procure their purchase order from importers in
Pakistan. To arrive at ex-factory export price, they made the following adjustments with gross
value-
Adjustments Value (US$/MT)
Inland freight ***
Ocean freight ***
Handling cost ***
Bank charges ***
Credit Cost ***
Misc. expense ***
Duty drawback ***

Normal value has been determined on the basis of the information provided by Sova on its
verified domestic sales made in response to the questionnaire. These sales were in sufficient
quantities to determine the normal value according to Section 6 because sales were more than
5% of the export sales of the investigated product. Analysis of the information provided by Sova
revealed that some sales of the investigated product were not in the ordinary course of
trade and sales of the investigated product, which were not in the ordinary course of trade
were 54.62% of total sales of the investigated product. The Commission has disregarded sales
to determine normal value in accordance with section 7 of the Act. To arrive at the ex-
factory level, Sova has reported adjustment on account of inland freight and credit cost.
The Commission has accepted these adjustments and the normal value at ex-factory level is
worked out by deducting values reported for these adjustments.
The Commission has also complied with the requirements of Section 11 of the Act to
compare export price and normal value at the same level. The Commission investigated two
exporters and determined individual dumping margin. Anti-dumping duty rate was calculated
on the basis of these dumping margin.
Exporter/Producer Dumping Margin (% of Dumping Margin
the Export price) (% of C&F price)

Tova Chemical Complex Limited 13.55 12.14

Sova Chemical Complex Limited 11.88 10.67
All others 13.55 12.14
11
 Part 5 Injury Determination

Effect of the domestic industry

The market share of the domestic industry was 81.48 percent in 2012, which decreased to
79.38 percent in 2013 and then increased to 87.61 percent in 2014. Whereas, the market share
of dumped imports decreased from 5.29 percent in 2012 to 2.69 percent in 2013 and then
increased to 3.49 percent in 2014. The market share of imports from other sources decreased
from 17.93 percent in 2013 to 8.90 percent in 2014.
The volume of Dumped Imports
Period Dumped Imports of IP % Increase/Decrease
2012 100.00 ----
2013 54.56 (45.44)
2014 70.37 28.97

So, we are seeing that the dumped imports have increased from 2013 to 2014 and the
material suffer caused in Pakistan.
Effects on price
Price undercutting refers the extent to which the price of the imported product is lower than
the product of domestic producers.
Price Undercutting
Period Average ex-factory price Average landed cost of Price undercutting (%)
of domestic like product investigated product percentage

2012 100.00 91.32 8.68

2013 114.93 99.04 13.83
2014 110.63 100.08 9.54

From the price undercutting, we are seeing that there was a huge difference between the
weighted average ex-factory price of domestic like product and average landed cost of the
investigated product (2012 to 2013). But in 2014 the difference has been decreased due to
decreasing average ex-factory price of domestic product and increasing in average landed
cost of the investigated product. So, the domestic industry suffered a material injury on account
of price undercutting due to dumped imports.

12
Price depression means the extent to which the domestic producers experienced a decreased in
its selling price over time.
Price Depression
Period Weighted average ex-factory Price depression percentage
price of domestic like product

2012 100.00 ----

2013 114.93 ----
2014 110.63 3.74%

Though the average ex-factory price of domestic like product is increased in 2013 it is
decreased in 2014 due to dumped imports.
Price suppression is the extent to which increase the cost of production could not be recovered
in selling price by the domestic producers.
Price suppression

Weighted Average Weighted Average Price Suppression

Period* Cost to make & sell Ex-factory price of Increase/ Increase/

of domestic like domestic like (decrease) (decrease)

product product in COP in price

2012 100.00 100.00 --- ---

2013 95.62 114.93 (4.38) 14.93

2014 96.25 110.63 0.63 (4.30)

The cost to make and sell domestic like product decreased in 2013 but it increased in 2014. So,
we can say that the domestic industry suffered price suppression.
Effects on sales

Effect on domestic sales

Period Domestic sales
2012 100.00
2013 104.49

13
 2014 114.76

As the sales of domestic like product have been increased both 2013 and 2014, the
domestic industry did not suffer material injury on account of sales. Based on sales we can say
that there is no dumping occurred.
Effects on profit facts
Profit/loss

Period Net profit(loss)

2012 (100.00)
2013 25.11
2014 (8.17)

The net loss turned into profit in 2013 but in 2014 it converted in the loss. So domestic
industry suffered a material injury due to increasing imported products.
Effects on production and capacity utilization

Period Capacity
2012 82
2013 87
2014 95

According to the information on production and capacity utilization, the level of

capacity utilization increased sequentially from 2012 to 2014. So, the domestic industry did
not suffer a material injury on the account.
Effects on market share
Market share

Period Sales domestic Imports from Total

producers Dumped Other domestic
source sources market
2012 81.48 5.29 13.23 100.00
2013 79.38 2.69 17.93 100.00
2014 87.61 3.49 8.90 100.00

Though domestic industry lost its market share in 2013 and in 2014 the market share of
the domestic industry has been increased. So, it is concluded that the domestic industry did not
suffer material injury.
Effects on return on investment
Return on investment

14
 Period Return on investment
2012 1.45
2013 9.01
2014 4.03

Return on investment has been increased significantly in 2013 but the return on investment
has been decreased in 2014. So, the domestic industry suffered material injury because there
is a dumping issue here.
Effects on cash flow
Cash flow

Period Cash inflow/outflow

2012 100.00
2013 697.49
2014 350.34

Here we are seeing that cash flow increased in 2013 but it decreased significantly in 2014.
The domestic industry suffered material injury. So, we can say information supports the
dumping.

Effects on inventories

Period Opening Productio Sales Closing

Inventory n Inventory

Domestic Export Total

Sales Sales Sales

2012 4.81 100.00 85.57 18.65 104.22 0.59

2013 0.59 107.30 89.41 16.80 106.21 1.68
2014 1.68 115.94 98.20 18.33 116.53 1.09
Because of changing inventories, the sales of domestic product increased sequentially and
closing inventory decreased as well. So, we can say that the domestic industry did not suffer
material injury.
Effects on employment, productivity, wages
Employment, productivity, and wage

Period Number of Salaries and Production Productivity Salaries

employees wages in per worker and wages
Rs.
15
 2012 100 100.00 100.00
2013 102 100.00 113.36 100.00 104.76
2014 113 107.30 105.65
133.44 115.94 102.72 115.11

Here the number of employees, salaries, and wages and production have been
increased sequentially from 2012 to 2014. But productivity per worker decreased from 2013 to
2014. And POI concluded that the domestic industry suffered a material injury on account of
changing of productivity per worker. But our opinion is that the productivity per worker does
not the dumping because the productivity of per worker may be changed by a technical
problem, political unrest, effects of environment and the shifting of labor.
Effects on growth
Total installed capacity = 60,000 MT
Annual demand = 55,000 MT
Here POI concluded that annual demand is less than the total capacity so there is a chance to
occur damping. They thought that demand trend to dumped products so the concluded that the
domestic product suffered material injury. But our opinion is that customer may purchase
the imported products due to quality, price, and effectiveness of products.
16
 Part 6 The causal link between the said
injury and dumped import

There are some issues which prove that there is a link between the said injury and dumped
import and here is some evidence which says against this.
❖ Price undercutting which is a part of dumping also said that the price of the domestic
country decreased due to dumped imports. If the price of the domestic country like products
decreases, the ultimate growth of the domestic industry will suffer material injury.
❖ Price depression has to compel an industry of a country to reduce the selling price. So,
the ultimate revenue, as well as profit, will be reduced and the industry will suffer material
injury. ❖ Price suppression is a price effect that cannot recover the cost of production by
sales. So, the
industry faces a financial crisis for a lower amount of revenue.
❖ T he volume of dumped imports increased in 2014 from 2013, as a result, the selling price
of the domestic product decreased over time.
❖ Because of increasing cost and decreasing selling price, net profit fall down drastically. So,
the domestic industry suffered material injury.
❖ Return on investment decreased due to decreasing selling price so domestic investors
and industries have suffered material injury.
❖ T he cash flow of companies decreased in 2014 as net profit and sales price decreased
because customers of HP might involve in import. So, it may be a cause to suffering a
material injury of the domestic industry.
Part 7 Inconsistencies in the procedure of the
investigation and the final determination
Anti-dumping duty is generally imposed after proper investigation and determination of
material injury from the alleged dumping of product from one country to another. Such an
investigation is conducted to determine the effect of dumped imports on the sales price of
domestic producers. Throughout the investigation, the price of domestic products is assessed
whether there has been significant price undercutting, price depression or price suppression.
However, Pakistan imposed anti-dumping duty on Hydrogen Peroxide and conducted their
investigation in line with their Anti-dumping Act, 2015. The investigation authority, as per
Article 3.2 of the GATT, with regard to the volume of dumped imports shall consider
whether there has been a significant increase in dumped imports, in terms of relative
production or consumption of Pakistan.
Several areas of their procedure of final determination have been flawed and inconsistent. All
of them are presented below-
➢ P r ice consideration: The investigation considered the price of 2012 as a base price and
also considered the prices of 2013 and 2014 and drew a conclusion that price depression has
been done at 3.74%, which seems insignificant. The year 2014 was taken as a period of
investigation (POI). Such comparison ranging only two years was not sufficient to prove
depression. The price depression for the year 2013 was not done on the basis of the base
year 2012 and the reason was not explained in the report.
➢ Weighted average ex-factory price: The weighted average ex-factory price of
Pakistan's domestic product marked rise in 2013. However, it decreased in 2014 due to
dumped imports. It was concluded that domestic industry experienced price depression
during the period of investigation (POI) for dumping. The industry, therefore, was affected
materially due to price depression. It was not considered that such change in ex-factory price
was also reflected in the export price that came closer to 9.54 percent difference in the year
2014.
➢ Do m e stic industry’s sales: The report evaluated the applicants' sales of domestic
products, which were made during the period of investigation (POI), and observed that
the domestic industry's sales of domestic-like products increased from 2012 to 2013 and it
marked further increase in 2014. A conclusion was, however, drawn that the country's
domestic industry did not go through such a dump due to sales.
➢ P r of i t and loss: The applicants faced net loss on domestic sales in 2012 that turned into
profits in 2013 but again incurred loss in 2014. The profit and loss are not reflecting
the reasons behind allegations of dumping of HP from Bangladesh.
➢ Uti l i zed of production capacity: The data on production capacity utilized by domestic
industry during the period of investigation (POI) revealed that the installed capacity of the
applicants remained constant throughout the POI. Moreover, the production of the
applicants increased over the three years and the level of capacity utilization increased from
82 percent in 2012 to 87 percent in 2013, which further increased to 95 percent in 2014. On
the basis of the above information and analysis, Pakistani Commission concluded that the
domestic industry was not affected due to production and capacity utilization during the POI.

➢ M a r k e t share: The data shows that the market share of the domestic industry was 81.48%
in 2012, which decreased to 79.38% in 2013 and then increased to 87.61% in 2014. Whereas,
the market share of dumped imports decreased from 5.29% in 2012 to 2.69% in 2013 and
 then increased to 3.49% in 2014. The market share of imports from other sources decreased
from 17.93% in 2013 to 8.90% in 2014. The data do not reflect the allegation of dumping
of HP from Bangladesh. The report observed that the domestic industry did not lose
market share during the POI due to increased imports of the investigated product from
Bangladesh. It can, therefore, be concluded that the domestic industry did not suffer due to
imports from dumped sources.
➢ Re t u rn on investment: The report shows that the return on investment (ROI) of the
domestic industry increased from 1.45% in 2012 to in 9.01% in 2013 and then decreased
to 4.03% in 2014. Their conclusion was that the domestic industry suffered due to the
reduction in ROI, which affected its ability to invest.
➢ C a s h flow: The report shows that the cash generated by the domestic industry improved
in 2013, which later slumped in 2014. The report concluded that as a result, the applicant
suffered on account of cash flow during the POI for dumping. The observation seems to be
confusing with the sales and production of local industries.
➢ P roduction of domestic industry: The production of the domestic industry increased over
the POI, whereas the sales also show a positive trend. The inventory level of the
domestic-like product increased in 2013 and then decreased in 2014. On the basis of the
above analysis, the Commission concluded that the domestic industry did not suffer on
account of changes in inventories level during the POI. The domestic industry in Pakistan
also exports and the export proceeds of the domestic industry remained stagnant at around
9,000 MT during the POI. Hence, the domestic industry did not suffer due to the export
performance of the industry during the POI.
➢ Em plo ym ent data: The employment data of local industries show that the number
of employees increased from 2012 in 2013, which further increased in 2014. During the
same period, salaries and wages increased both in 2013 and 2014. The productivity per
worker increased from 2012 to 2013, but marked a fall in 2014 Based on the facts
mentioned above, it can be concluded that the domestic industry in Pakistan suffered on
account of productivity, salaries, and wages during the POI.
➢ L ocal installed production: The local installed production capacity of the domestic
industry was 60,000 MT, which is more than the domestic demand of around 55,000 MT.
However, the domestic demand of HP marked an increase of 7.0% from 2012 to 2014. If
the growth in domestic demand increases by 7.0% in the coming years, then the domestic
industry needs to invest to increase the production capacity in the coming years. Based on
the above facts and analysis, the Commission concluded that the domestic industry suffered
on account of growth and investment. This is an assumption made in the report regarding
the possible suffering of the domestic industry.
➢ Ex-f actory price of exported products: The most important flaw of the investigation is
the determination of the ex-factory price of exported products at the exporting country
and standard sales price. The investigators visited Bangladesh to find out whether the
domestic market of an exporting country or sales to a third country at prices below per unit,
fixed and variable, cost of production plus administrative, selling and other costs are in the
normal course of trade with regard to fair pricing. The report observed that one exporter
failed to provide information on all domestic sales, audited reports for the year 2012, 2013
and 2014, and vital

19
 requisite information about the required cost of production. They gave further chance, but
the reply from the Bangladeshi exporter was not convincing enough. During the on-
the-spot investigation, the Commission obtained information about domestic sales from the
sales ledger and revised cost to make and sell from the books of accounts. One exporter
could make available only three transactions done in the months of January, May and
October of the investigated time. The spot investigation was marked by a deficiency in
information and the determination of ex-factory price was questionable.
➢ Weighted average landed cost: The investigation observed that the weighted average
landed cost of the investigated product was lower than the weighted average ex-factory
price of the domestic-like product during the POI. On the basis of the above, Pakistani
authorities have concluded that the prices of the investigated product undercut the prices of
the domestic-like product during the POI. Pakistan's domestic industry suffered on account
of price undercutting due to dumped imports. The price difference with domestic HP was
8.68% to 13.83% during the year 2012 and 2013, but the authority did not take note
that the price of imported Bangladeshi HP came down to 9.54% higher than the local HP.

20
 Part 8 Conclusion

Based on the backdrop and legitimacy and reasonability of information of the case, it can be
stated that the exporters of HP from Bangladesh didn’t take the course of dumping. The
calculated dumping margin ranges from 10.67% to 12.14% and anti-dumping duty was imposed
on HP from Bangladesh to Pakistan market despite the fact that the investigation report could
not establish such a case on the basis of relevant data and figures. Section 41(3) of Pakistan's
Anti-dumping Law regarding the volume of dumped import stipulates that the volume of
such imports shall normally be regarded as negligible if dumped import volume of an
investigated product is found to account for less than 3.0% of total imports of a similar
product. The investigation report confirmed that the POI shows that the volume of dumped
imports of HP from Bangladesh was above the negligible threshold set out in Section 41(3) of
the Act. Taking into consideration such an allegation, Bangladeshi exporters should collect
information from Pakistan about production, sales price and financial position provided by
those filing complaint and turn out to WTO that the margin of dumping was not significant to
influence the price of domestic producers of Pakistan and didn’t cause any material injury to
the domestic industry
21