The government is mulling over imposing quota restriction or additional customs duty on imported goods in case it found overseas exporters of supplying those goods at unjustifiably low prices, thereby hurting the Nepali industries unfairly.
The government has even incorporated such provision in a draft of new law - Safeguards, Anti Dumping and Countervailing (SADC) Act - which the Ministry of Commerce and Supplies (MoCS) finalized recently.
“The draft of the SADC Act has been finalized and we have forwarded it to Ministry of Law and Justice (MoLJ), among others, for approval,” said the source.
Once MoLJ approves it, the MoCS plans to forward it to the cabinet for its enactment.
MoCS has been drafting the SADC Act since a couple of years in a bid to safeguard the domestic industries from possible loss that they might incur in sales as well as market share due to inflow of excessively cheaper foreign goods. The draft Act also incorporates a provision whereby any industry facing losses due to ´dumping´ by overseas exporters can formally file a case against it, seeking compensation for the loss.
“However, the industry filing the case should have production amounting equal to or more than 25 percent of the total import of that particular product,” said the source.
Apart from responding to the case filed by any industry, the government too can impose additional customs duty on the imported goods in case it found them of being harmful to the domestic industries.
“However, the government has to produce sufficient proofs before imposing additional customs duty,” the draft reads.
Under the safeguard measure, the government can also impose higher customs duty or quota restriction on the import of any good if it finds such import of affecting the balance of payment of the country and foreign exchange reserve.
The draft Act envisages two types of safeguard measures -- interim and permanent. The interim safeguards can be lifted after certain span, while permanent will last for longer period.
Moreover, SADC Act puts the responsibility of showing proof on the shoulder of the overseas exporter. This means any overseas firms facing a case will need to prove that it is not dumping the product in Nepal.
“The government will remove the additional customs duty and safeguards measures if the firm provides sufficient documents which demonstrate that the prices of goods were fair - not subsidized or kept lower than what it is priced in the exporting country,” said the source.
