Brexit: dumping’s coming home

10/11/23

In an important reminder of the changed legal landscape post-Brexit, the First Tier Tribunal (Tax Chamber) in London gave its ruling this week on an application brought by W M Morrison Supermarket Ltd. [“Morrisons”] in an anti-dumping dispute with HMRC.  Prior to Brexit, such matters fell within the exclusive competence of the EU.

In these proceedings, HMRC seeks substantial sums from Morrisons in relation to its imports of kitchen foil from Thailand between March 2018 and November 2020.  During that period, the EU had imposed anti-dumping duties on kitchen foil from China, but not from Thailand.  Post-Brexit, the responsibility for such matters passed to HMRC and the English courts.  The aluminium raw product was sourced from China and then processed into kitchen foil in Thailand.  One of the issues at large in the proceedings is whether the processing in Thailand was sufficiently substantial and economically justified under Article 60 of the Union Customs Code to give the finished product Thai as opposed to Chinese origin, with the effect that anti-dumping duties could not be levied on the imports.   HMRC allege inter alia that the processing is not sufficiently substantial and economically justified; Morrisons dispute that.

In order to assist the Tribunal on this issue, the parties agreed to adduce expert evidence.  They were mainly agreed as to the questions for those experts, save that HMRC did not agree that foil samples should be collected and examined by the experts in order to assist their work.  It was in that context that Morrisons brought its application.

The Tribunal granted the application, finding that the foil samples were potentially relevant to the determination of the origin issue.  In coming to that decision, the Tribunal noted the substantial amount of money at stake, the fact that the burden of proof was on Morrisons as appellant in the proceedings and that fairness supported the conclusion that the company should be able to adduce the full range of evidence on which it sought to rely.

The Tribunal made clear that in granting the application, it should not be taken to have reached any decision on whether there had been any changes to the manufacturing processes in Thailand – something argued by HMRC – nor on whether there were any grounds for concluding that the Thai company had not been co-operative with the relevant authorities, such that there was or could be reason to doubt that the samples to be obtained were representative of the period under appeal or at all – again something argued by HMRC.  Those were matters for determination at the hearing of the substantive appeal.