Federal Circuit Rules Against Application of CVD Laws to NMEs
December 19, 2011
On December 19, 2011, the U.S. Court of Appeals for the Federal Circuit issued its opinion in GPX International Tire Corporation v. United States holding that the U.S. Department of Commerce (“Commerce”) could not apply U.S. countervailing duty laws to non-market economy (“NME”) countries, including China. The U.S. Court of International Trade had previously held that Commerce could not impose countervailing duties on NME countries, holding that the imposition of both antidumping duties, calculated using the NME methodology, and countervailing duties could result in a double remedy. The Federal Circuit affirmed the CIT’s conclusion but on different grounds. The Federal Circuit held that the application of the countervailing duty laws to non-market economy countries, including China, was contrary to Congressional intent. The Court held that when Congress amended and reenacted the countervailing duty laws in 1988 and 1994, it legislatively ratified administrative practice and judicial interpretations that had held that the countervailing duty law could not be applied to NME countries. As a result, the Court held that a change to the statute would be required in order for Commerce to apply U.S. countervailing duty laws to NME countries. Commerce now has the option of seeking a rehearing en banc at the Federal Circuit or filing a writ of certiorari with the U.S. Supreme Court.
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