[co-author: Nicole Hager]
On Monday, September 20, 2021, the Ministry of Commerce (Commerce) published its final rule amending regulations affecting certain anti-dumping (AD) and countervailing duty (CVD) proceedings. The Department of Commerce proposed these changes “to strengthen and improve the administration and enforcement of anti-dumping / countervailing laws,” which are “intended to relieve domestic industries. . . the detrimental effects of unfairly traded imports. The final rule makes certain changes to the proposed Commerce Department rule of August 13, 2020.
The Commerce Department modified the proposed rule to incorporate the views of the domestic industry, foreign governments, foreign producers / exporters and other interested parties in order to arrive at a final rule with important implications for parties participating in anti-dumping / countervailing duty investigations, reviews and other proceedings. . Some parts of the final rule will come into effect on October 20, 2021 while others will come into effect on November 4, 2021.
The most important changes to the Trade Final Rule include:
Scope decisions: The Department of Commerce has made several changes to its scoping procedures. Perhaps more importantly, Commerce standardizes the application of a scope ruling request and eliminates the distinction between its formal scope investigations and informal scope rulings. Under the new regulations, if the Department does not respond to a request for a scoping decision within 31 days, the request will automatically be initiated. As part of a change from existing practice, the Department of Commerce also sets strict deadlines for scoping decisions. Under the final rule, Commerce must issue a final scoping decision within 120 days of initiation of the investigation. However, the Commerce Department can extend the deadline up to 180 days for a total of up to 300 days after opening based on valid justification.
With regard to the suspension of the liquidation of imports subject to a scope decision, the final rule made changes both to the current practice and to the proposed regulation. Unlike the original Commerce Department’s proposal and consistent with existing practice, upon a preliminary or final determination of an affirmative scoping decision, the Department will direct the Customs and Border Protection (CBP) suspend liquidation and collect cash deposits for all unliquidated entries entered on or after the Department of Commerce initiated the scoping investigation. However, compared to existing regulations, the Department will also normally now suspend liquidation of unliquidated imports imported prior to the commencement of the first suspension date under the order, unless it determines, either in the ‘exercise of its discretion, either at the request of an interested party, that another date is appropriate.
Additionally, the Department of Commerce codifies the agency’s practice with respect to country of origin, linguistic interpretation of scope, and “mixed media” products (that is to say, products incorporating the good in issue), making minor changes to its proposed regulations.
Circumvention: Final rule moves circumvention investigations to a new regulatory section to better distinguish them from scope investigations. Commerce is also clarifying its discretion to initiate circumvention investigations itself and to apply any circumvention determinations to all producers in a country based on the possibility of subsequent circumvention attempts. The final rule requires the Department to decide whether to initiate a circumvention investigation within 30 days, which can be extended up to a maximum of 45 days. The Final Rule also sets a time limit for preliminary determinations of 150 days after opening and for final determinations of 300 days after opening (although this time limit may be extended by an additional 65 days). In addition, Commerce has made changes to its practices regarding imports subject to circumvention rulings that broadly mirror those made in the scope section discussed above. Specifically, CBP will suspend liquidation and collect cash deposits for all unliquidated entries that have been seized since the initiation of the investigation by Commerce; however, the Department of Commerce now has the discretion to order unilaterally or at the request of an interested party the direct suspension of the liquidation of all unliquidated entries until the first date of suspension under the order. underlying.
New shippers notice: Commerce’s Final Rule implements several changes to the new shipper review procedures that specify what information is required for applicants to receive a separate margin of dumping. The most significant change to Commerce’s examination of new shippers is the inclusion of listed factors to determine authentic Sales. Companies which did not export during an investigation or which are not related to any company which exported during an investigation may subsequently claim an individually calculated margin of dumping in the context of a review of a new one. sender. However, the requesting company must demonstrate that any sale has been authentic, and not manufactured to get the lower rate. The Commerce Department has traditionally looked at various factors in determining whether a sale is authentic, which it now partially integrates into the final rule. In the draft rule, the Commerce Department listed six factors in determining whether a sale is authentic including (1) if the applicant has been established for the purpose of sale after the implementation of AD / CVD orders, (2) if the applicant has business lines unrelated to the subject merchandise, (3) if a business has an established history of tax evasion, (4) whether there is a history of fraud or evasion of rights in the same or similar industry, (5) the quantity of the sale, and (6) any other factor considered relevant in determining whether the sale was commercially viable. In the final rule, the Commerce Department decided to retain an analysis of an applicant’s other lines of business, while striking out factors related to a company’s fraud history and an industry’s fraud history. Commerce considers that these factors may still be conclusive in some cases, but would rather consider them only under the general subsection “all other factors”, if necessary.
Commerce has also made other minor changes affecting the review process for new shippers and the information applicants must provide. First, an application must provide documentation regarding the surrounding relevant sales circumstances, including (1) the price of the sales, (2) the expenses arising from the sales, (3) whether the subject merchandise involved in the sales has been resold in the United States at a profit, and (4) whether the sales were made at arm’s length. When requesting a review, the party must also provide additional documentation on offers for sale of the good, identification of the circumstances surrounding the sale, an explanation of the relationship of a non-producing exporter with the producer / supplier and a discussion of the relationship between the producer / exporter and its first unaffiliated US buyer. Second, Commerce clarifies that parties requesting a review for a new shipper must provide information on the volume of shipments, whether the shipments were made in commercial quantities, and the date of sales to an unaffiliated customer. Finally, the final rule requires applicants to provide an attestation that they will provide the necessary information about an unaffiliated customer, and either an attestation from an unaffiliated customer of their willingness to participate in the review, or an explanation from the producer. / exporter of the reasons why such a certification cannot be provided.
Importer certifications: The final rule codifies the growing practice of the Department of Commerce to require importers and other interested parties to certify whether merchandise is subject to an anti-dumping or countervailing order. The Department of Commerce added 19 CFR § 351.228 to establish “procedures for complying with certification requirements that the Department may impose on interested parties” and “the consequences of a party’s failure to meet certification requirements”. Importer certifications are particularly important and increasingly used to ensure that parties comply with circumvention determinations. The final rule gives the Department the flexibility to require importers to require that a party maintain full certification and provide certification at the time of entry of the goods. The new regulation also gives Commerce the flexibility to tailor the precise terms of the certification on a case-by-case basis, rather than issuing general language for all qualifications.
Industry support deadline: Commerce’s final rule sets a firm deadline for making comments on whether the domestic industry has the required percentage of industry support to bring an anti-dumping or countervailing action. When a domestic industry files an anti-dumping and / or countervailing petition, the Commerce Department must determine whether it should initiate the investigation within 20 days (or 40 days in certain circumstances). Previously, parties could file last-minute challenges against industry support, which could undermine the accuracy of the Commerce Department’s opening decision. The final rule implements 19 CFR § 351.203 (g), requiring all parties to submit comments on industry support “no later than five business days” before the opening and rebuttal comments ” no later than two calendar days thereafter ”. The Commerce Department explained that this “procedural improvement is necessary” to ensure that the agency has “sufficient time to make an informed opening decision.”