JBF RAK under investigation by US for avoiding dumping duty

UAE-based packaging company allegedly bypassed anti-dumping rules by exporting its goods through Bahrain.

US authorities are investigating a UAE-based packaging company for allegedly bypassing anti-dumping rules by exporting its goods through Bahrain.

JBF RAK, which is based in Ras Al Khaimah, is accused of shipping polyethylene terephthalate (PET) film, sheet and strip from its plant in the emirate and its affiliate in India to its subsidiary facility in Bahrain. From there the goods were exported to the United States, according to a US commerce department report dated July 18.

The US producers Polyplex USA and Flex USA claim the moves are allowing JBF RAK to circumvent an anti-dumping duty of 9.8 per cent slapped on the company’s shipments from the UAE in March last year. The US government imposed the tariff after a previous investigation said JBF RAK was selling its products too cheaply in the country.

The department said it was now starting an “anti-circumvention” inquiry into the accusations JBF was skirting the anti-dumping duty.

Nobody was available to comment yesterday from JBF RAK because of the Eid Al Fitr holiday. Enquiries to the company affiliate JBF Industries in Mumbai were also redirected to JBF RAK.

According to its website, JBF RAK ships polyester film and bottle-grade chips to more than 50 countries. It opened an office in northern Virginia in November 2012 to act as a liaison between US clients and its manufacturing facility.

JBF RAK had appealed to the US court of international trade against the anti-dumping duty, arguing that the department’s investigation had failed to take account of JBF’s pricing practices. But the court affirmed the final results of the order.

Several UAE industrial producers have fallen afoul of anti-dumping rules. Government officials have labelled such action as protectionist and a response to the rapid expansion in the country’s non-oil exports to overseas markets.

In May, Polyplex USA and Flex USA “presented evidence indicating that imports of PET films from Bahrain to the US increased since the imposition of the order and that imports of bright resin chips from the UAE to Bahrain also increased since the order took effect, further supporting initiation of this anti-circumvention inquiry,” according to the department’s report.

In a report released last month, the World Trade Organisation warned that evidence of creeping protectionism globally could hinder efforts to support global growth. The WTO said it had identified 112 trade-restrictive measures introduced by members of the G20 in the six months up to the middle of May, slightly down from the 116 restrictions put in place in the previous six month period.

Since the global financial crisis, several UAE producers have been targeted by governments in the US, Canada, the European Union, Brazil, Pakistan, Egypt and Jordan, often with anti-dumping investigations or tariffs. In 2012, the US department of commerce set tariff rates on steel pipes from the UAE, alleging they were being sold in the country below fair value.

In another international trade row, the department of commerce last week imposed anti-dumping duties as high as 165.05 per cent on solar panels and cells from China. It followed an initial investigation that the products were being sold for too little in the US.

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