Introduction
Free trade is a cornerstone of international commerce.
It allows goods to move across borders, expands consumer choice, and encourages businesses to compete on price, quality, and innovation. However, where imports enter the market at dumped prices, benefit from foreign subsidies, or arrive in sharply increased quantities, the harm that domestic producers may suffer from, goes beyond ordinary competition. Unlike prohibited conduct within the local market, which may be addressed through competition law and other commercial regulations, such harm requires a specific legal framework. This is where a ‘trade remedies’ Law becomes essential, as it protects national industry while preserving open and rules-based trade.
Legal Framework in the UAE
Trade remedies form part of the international trading system developed under the World Trade Organization (“WTO”) framework which recognises anti-dumping measures, countervailing measures against subsidised imports, and safeguard measures against injurious import surges.
In the UAE, such framework is reflected in the provisions of Federal Law No. 1 of 2017 on Anti-Dumping, Countervailing and Safeguard Measures (the “Anti-Dumping Law”). Together with its implementing regulations, the Law operates alongside a unified legal framework on anti-dumping, countervailing and safeguard measures adopted by the states of the Gulf Cooperation Council (“GCC”).
The law applies to harmful practices in international trade originating from outside the Gulf Cooperation Council, while taking into account the UAE’s relevant international trade obligations.
Complaint Against Harmful Practices
Considering the above legal background, it is important to note that the UAE’s legal framework was built with the aim of protection of the country’s national industry. In accordance with Article (3) of the Anti-Dumping Law, aggregate producers (defined as “National Industry” within the Law), or their representative, may submit a complaint to the competent department at the Ministry of Economy, either directly or through the relevant government authority in each Emirate. The complaint must be supported by evidence showing the existence of the harmful practice, the damage suffered by the National Industry, and the causal link between the practice and the damage.
However, the submission of such a complaint is only the starting point; the imposition of any measure depends on the outcome of the investigation conducted. This is significant because trade remedies are not intended to protect a single producer from ordinary competition. They are, in fact, designed to protect the National Industry where the statutory requirements are satisfied.
Forms of Harmful Trade Practices
Harmful trade practices may generally be classified into three principal categories:
- Dumping. This occurs where a product is exported to the UAE at a price lower than its normal value in the exporting country under the ordinary course of trade. In simple terms, the issue is not simply that the imported product is sold at a lower price than the locally produced equivalent. Rather, the legal assessment focuses on whether the export price is lower than the comparable normal value of a similar product in the exporting country, and whether such practice causes material injury, threatens to cause material injury, or materially delays the establishment of a National Industry.
- Subsidies and Countervailing Measures. A subsidy may exist where a financial contribution, or any other form of governmental support, is provided by the government of the country of origin or by a public body, and such support confers a benefit upon the recipient through income or prices support. Where the subsidy is specific in nature and results in injury to the National Industry, the Anti-Dumping Law permits the imposition of countervailing measures to neutralise the unfair advantage created by that support. The objective of such measures is not to penalize foreign producers, but rather to restore fair and equitable conditions of competition within the national market.
- Safeguard Measures. Unlike anti-dumping and countervailing measures, safeguards are not necessarily based on unfair pricing practices or foreign governmental support. Rather, they apply where a product is imported in increased quantities, whether in absolute terms or relative to domestic production, under circumstances that cause, or threaten to cause, serious injury to the National Industry. Accordingly, even where the trade practice itself is neither unlawful nor unfair, a sudden or substantial surge in imports may justify the adoption of temporary protective measures where such imports result in significant harm to domestic producers.
Potential Remedies and Temporary Measures
The application of the law may result in different forms of trade remedies being implementing. In cases involving dumping, the competent authority may impose anti-dumping duties. In subsidy-related cases, countervailing duties may be imposed. In situations involving increased imports, safeguard measures may be adopted, including custom duties or quantitative restrictions on imports.
The law further permits the adoption of temporary measures during the course of an investigation, provided that the applicable legal and procedural requirements are met. However, such measures are subject to clear limitations. In particular, anti-dumping duties and countervailing duties may not exceed the dumping margin or the amount of subsidy ultimately determined through the investigation process. This reflects the corrective, rather than punitive, nature of the remedy contemplated under the Anti-Dumping Law.
Final decisions issued under the UAE trade remedies framework are likewise subject to judicial oversight. The Federal Courts of Appeal have jurisdiction to hear challenges against final decisions issued by the Minister, or his delegate, pursuant to the Anti-Dumping Law and its implementing regulations.
Such challenges, however, are subject to strict procedural time limits. In principle, an action must be commenced within three months from the date of publication of the challenged administrative decision, notification to the concerned party, or the date on which proven knowledge of the decision is established, subject always to compliance with the grievance mechanism stipulated under the Anti-Dumping Law.
Conclusion
In conclusion, trade remedies are not intended to shield the National Industry from fair and legitimate competition. Rather, they constitute exceptional legal mechanisms designed to address specific harmful international trade practices where such practices result in injury to domestic producers.
The UAE’s legal framework governing anti-dumping measures, countervailing measures, and safeguards therefore seeks to maintain an important balance between the protection of National Industry and the preservation of free trade principles. It ensures that protective measures are imposed only on the basis of sufficient evidence, proper investigation, and the existence of a clear causal link between the imported products and the injury suffered by the National Industry. In this respect, trade remedies do not undermine free trade; rather, they serve to ensure that free trade operates on fair and equitable terms.
Seek Legal Counsel
For further information or advice in relation to any of the matters addressed above, please feel free to contact our Associate, Mostafa Dawoud.
Disclaimer
The content provided in this article is intended for informational purposes only and does not constitute legal advice. While every effort has been made to ensure the accuracy and completeness of this information, the article does not offer a guarantee or warranty regarding its content. The matters discussed in this article are subject to interpretation, and legal outcomes may vary based on specific facts and circumstances. We recommend that readers seek individual legal counsel before making any decisions based on the information provided. If you require specific legal advice, please contact us directly.