LAHORE: The National Tariff Commission (NTC) has launched a `through probe into massive circumvention’ of anti-dumping (AD) duties through imports of two-side Coated Bleached Paper (CBB) from China and other countries after the local paper & board industry approached it, complaining that imports of such products is not only damaging the country’s industry but also causing loss of billions of rupees to the public exchequer through tax evasion.

Since the period of investigation for the anti-circumvention investigation began from Jan 1, 2017 till Dec 31, 2023 to determine whether or not the circumvention is undermining the remedial effects of AD duties, the commission will complete the probe till February next year, Dawn has learnt.

According to the petition of the local industry, there was no import of two-sided bleached board under the Pakistan Custom Tariff Nos. 4810.9200 and 4810.9900 before imposition of AD duties and import suddenly started after duty imposition.

Upon noticing these imports of two-sided CBB, being imported for the same purpose as of and in competition with one- sided CBB, the domestic industry approached the commission to inform it about this circumvention of AD duties.

The domestic industry submitted that import of one-sided CBB has now shifted towards two-sided CBB which is being imported for the same end use just to avoid AD duties. Due to instant circumvention of duties, the domestic industry is not getting the benefit of imposition of AD duties and the government is also losing revenue.

Highlighting background of the instant case, the domestic industry of CBB (hereinafter referred as product concerned or coated bleached board or CBB) stated that it had always been striving hard against the dumped imports in the domestic market since its inception. To seek remedy against dumped imports of CBB from China, the domestic industry filed an application for the imposition of AD duties against such dumped imports on Dec 16, 2015 with the National Tariff Commission of Pakistan.

The commission initiated investigation against dumped imports of CBB on Feb 8, 2016. After detailed investigation, the it issued its final determination on April 10, 2018 wherein it determined that CBB is being dumped from China and such dumping is causing injury to the domestic industry.

As a result of its final determination, the commission imposed AD duty on dumped imports of CBB ranging from 28.74 per cent to 29.02pc for a period of five years. The product described in the notice of final determination was: “Coated Bleached Board/ One-Side Coated Folding Box Board with White Back Manila Pulp or ISC Ivory Board with White Back Manila Pulp (180gsm 400gsm), excluding One- Sided Aseptic Coated Board (Clay Coated) used for liquid food packaging originating in and/or exported from China and is classified under Pakistan Customs Tariff Headings No. 4810.9200 and 4810.9900”.

The product definition provided in the final determination notice implied that the product subject to Ad duties is CBB with one side coated with 20gsm or above of clay, having glossy finish for a better printability and other side is with or without clay coating of less than 20gsm having comparatively rough back in white color.

“Imposition of anti-dumping duties on dumped imports of CBB from China provided relief to the domestic industry. Due to imposition of anti-dumping duties, volume of dumped imports from China reduced significantly However, later in the year 2018, the importers with the collusion of the exporters started taking benefit of the product technicalities and slightly modified their product to be classified as two-side CBB. This modification was slight enough to keep the essential characteristics of the two- side CBB same as one-side CBB/two-side CBB being imported by the importers had minimal coating on the (normally 2 – 5 gsm but in any case, less than 20 gsm) bottom side to keep it so called two side CBB and classify it differently just to avoid anti-dumping duties,” explains the petition.

This circumvention of duties however, have now become very serious concern as the import of two-sided CBB have not only regained the volume but have also started taking over the market and snatching share of the domestic industry.

Currently imports of one-sided CBB have almost vanished from the domestic market and two-sided CBB is dominating the market. “This has compelled the domestic industry to file this application for anti-circumvention under Section 63 of the Act, for initiation of an anti-circumvention investigation and extension of anti-dumping duties on two-side CBB being imported in place of one-side CBB,” it reads.

According to the commission, the product (as per submission of the applicant), for the purpose of this anti-circumvention investigation is a two-sided CBB having clay coating of 20 gsm or above with glossy matt finish for better printability on one side and any other coating of less than 20 gsm of any substance such as starch, clay or calcium carbonate etc on the other side classified under PCT headings Nos 4810.9200 and 4810.9900. The product under investigation is mainly used for folding cartons of numerous superior quality consumer and industrial products like cigarettes, pharmaceuticals, cosmetics, food, spices etc. “Any party as defined interested party in section 20 of the act, if so wishes, send a written request for a hearing in accordance with rule 14,” said the commission in a public notice.

Published in Dawn, June 10th, 2024