Commerce Department to Eliminate Zeroing in AD Reviews

February 14, 2012

On February 14, 2012, the Department of Commerce (DOC) published a final rule in the Federal Register (77 FR 8101) modifying its methodology for calculating the weighted-average dumping margins and antidumping duty assessment rate in administrative reviews, new shipper reviews, and sunset reviews in order to eliminate “zeroing”. The DOC’s modification to its dumping margin calculation comes in light of several World Trade Organization (WTO) dispute settlement body reports which have found the United States’ application of such “zeroing” methodologies inconsistent with its WTO obligations. In administrative reviews and new shipper reviews, the DOC currently makes comparisons between transaction-specific export prices and average normal values without offsetting the amount of dumping that is found with the results of comparisons for which the transaction-specific export price, or constructed export price, exceeds normal value. This practice, known as “zeroing,” can result in the application of higher antidumping rates than would occur using a methodology which includes sales above normal value. According to the DOC’s final rule, the DOC will begin using a methodology in administrative reviews that parallels the methodology it uses in original investigations. This will result in the DOC calculating weighted-average margins of dumping and antidumping duty assessment rates in a manner which provides offsets for non-dumped comparisons while using monthly average-to-average comparisons. The DOC will also modify its practice in sunset reviews in order to avoid relying on WTO-inconsistent calculation methodologies. This final rule will go into effect April 16, 2012, and will apply to preliminary determinations issued after the effective date.

For further information, please contact a Barnes/Richardson attorney.