US Explains Anti-Dumping Investigative Process

As the Department of Commerce (Commerce) is scheduled to release shortly a series of determinations regarding antidumping duties (ADs), when a foreign company sells a product in the United States at less than fair value, and countervailing duties (CVDs) to offset the benefits of foreign government subsidies, it has issued an explanation of how its investigative process works in that regard.

Following US law and regulation, and consistent with international trade rules, Commerce has the authority to conduct investigations of the alleged subsidization or dumping of foreign products sold in the United States. In fact, the US Congress recently passed a bill confirming that CVDs can continue to be applied to non-market economies, such as China.

At the beginning of the process, if a US industry believes that it is being injured by dumped or subsidized imports, it may request the imposition of ADs or CVDs by filing a petition with both Commerce and the US International Trade Commission (ITC). Commerce will then investigate foreign producers and governments to determine whether dumping or subsidization has occurred and calculates the amount of dumping or subsidization.

If Commerce determines that a petition satisfies all requirements under the law to initiate an investigation, it will publish a Notice of Initiation in the Federal Register. That notice will lay out a general history of the proceeding, including dates of official filings as well as the scope of the investigation, explain how Commerce went about making a determination of industry support, and detail how the petitioners went about estimating the existence of dumping or subsidization.

The ITC determines whether the domestic industry is suffering material injury (or the threat thereof) as a result of the imports under investigation. In so doing, the ITC considers all relevant economic factors, including the domestic industry's output, sales, market share, employment and profits.

If both Commerce and the ITC make affirmative findings of dumping and/or subsidization and injury, Commerce instructs the US Customs and Border Protection (CBP) to assess duties against imports of that product into the United States. The duties are normally assessed as a percentage of the value of the imports and are equivalent to the dumping and subsidy margins.

It is emphasized that Commerce conducts its investigations in accordance with statutorily mandated deadlines and in an open and transparent manner with full opportunity for interested parties to provide relevant information and defend their interests. Preliminary and final determinations reflect the parties’ responses to Commerce questionnaires and the on-site verification of such responses in the foreign country. The investigation results are also subject to probing domestic judicial review and must be consistent with World Trade Organization rules.

As an example, and as petitioned by Whirlpool Corporation, Commerce announced on March 19 its final determinations in the AD and CVD investigations of imports of certain types of refrigerators from South Korea and Mexico.

Commerce has determined that producers/exporters from South Korea and Mexico have sold refrigerators in the United States at dumping margins of up to 15.41% and 30.34%, respectively, while it has also decided that producers/exporters from South Korea have received countervailable subsidies ranging from 0.3% to 12.9% by value. The South Korean suppliers include Daewoo, LG and Samsung.

As a result of its final AD determinations, Commerce will instruct CBP to continue to collect cash deposits or bonds equal to the weighted-average dumping margins, while, as a result of the affirmative final CVD determination (which followed a negative preliminary determination), Commerce will now also instruct CBP to collect a cash deposit or bond on imports of refrigerators from South Korea based on the final CVD rates.

Meanwhile, a day later, Commerce announced its affirmative preliminary determination in a CVD investigation over imports of crystalline silicon photovoltaic cells, whether or not assembled into solar cells, from China.

Following a petition from SolarWorld Industries America, Commerce preliminarily determined that Chinese producers/exporters have received countervailable subsidies ranging from 2.9% to 4.73%; and, as a result of this preliminary determination, Commerce will instruct CBP to collect a cash deposit or bond based on these preliminary rates, applicable to all entries of Chinese solar cells made up to 90 days prior to it.

A preliminary determination in the companion AD investigation on solar cells from China is scheduled to be announced on May 17 this year.

Source: Tax News