Royal Decree 20 of 2015 (“RD”), published in the Official Gazette on 24 May 2015, promulgates the GCC Common Law on Anti-Dumping, Countervailing Measures and Safeguards. The RD came into force the day after its publication and it is expected to ensure a “level playing field” between domestic companies and imports into Oman by providing for “anti-dumping” (“AD”) and “countervailing duties” (“CVD”) where dumped or unfairly subsidized imports have injured the domestic industry in Oman.
Dumping occurs when foreign manufacturers sell goods in the local market at less than fair value, causing harm to the local trade. This is normally defined as sales at prices below the home market price for the import in question, or below the cost of production. AD cases are company-specific; duties are calculated as an offset to bring actual prices back to a fair market value. CVD cases target foreign government subsidies that are in some way specific to their recipients and that provide an unfair advantage, such as tax breaks to manufacturers that export goods. CVD duties are calculated based on the difference between what an exporter would normally receive in a market setting and the subsidy in question.
Oman is growing quite familiar with such trade remedy laws, as Omani companies have been the target of AD/CVD actions in other countries, resulting in both successful defenses but also situations in which additional duties have been imposed on Omani exports. This new RD will provide the same tools to Omani companies seeking protection from unfairly priced or subsidized imports.
Specifically, the RD contains important provisions on how Oman shall proceed in AD and CVD matters in the near future. In accordance with the new RD, measures may be taken in the event that it was proven that the products being investigated were sold at dumped prices or were provided with special support and had caused or threatened to cause material damage to any industry in the GCC. Also, so-called “safeguard” measures – whether additional duties or quantitative restraints – may be taken in the event that it is proved that the products being investigated are imported to the GCC market in increasing quantities whether in absolute or relative terms and under circumstances that would cause serious harm to the industry that produces similar or competing products. This latter form of import relief has higher standards before relief may be imposed, as it does not require a showing of either dumping or unfair subsidization. All three modes of import relief – AD, CVD, and safeguards – are subject to international disciplines under the World Trade Organization (“WTO”), of which Oman is a Member.
In accordance with Articles 4 and 6 of the RD, measures may be taken in the event that it was proven that the imports being investigated were sold at very low and unreasonable prices or were provided with special support by the respective countries from which they originated. The imports in question must have also caused or threatened to cause material injury to a specific industry in any one of the countries in the GCC. As noted, “safeguard” measures may also be taken in the event that the products being investigated are imported into the GCC market in increasing quantities and under circumstances that would cause serious harm to an industry in the GCC that produces competing products.
The measures provided for by Article 4 and Article 6 of the RD will be imposed by both a standing committee alongside a technical committee that shall both be formed pursuant to this RD. The technical committee and the standing committee (“the Committees”) will not have the final say as that power belongs to the Ministerial Committee. The Ministerial Committee shall impose the final measures on any entity that may be in breach of this RD. The Committees will have wide-ranging powers to suggest imposition of measures mentioned above as well as the ability to suggest amendments to the laws and regulations that may be applicable. The Committees will also have the power to recommend penalties to any person or entity that breaches a strict rule regarding the confidentiality of information in relation to the investigation of products or companies potentially under the AD umbrella. The Ministerial Committee shall have the authority on imposition of the final procedures on combating dumping. Authorities relating to issuance of the executive regulation of this RD, consideration of the complaints that are related to the final decisions and determination of issues in the application of the provisions of this RD and its regulation are vested with the Ministerial Committee.
