Industry News

CAFC Grants Rehearing in CVD NME Case, Remands Constitutionality Issue to CIT

May 30, 2012


Earlier this month, in the case of GPX International Tire Corp. v. United States, the Court of Appeals for the Federal Circuit (CAFC) granted petitions for rehearing and remanded the case to the CIT for a determination on the constitutionality of a recently passed law regarding the application of countervailing duties (CVDs) to non-market economy (NME) countries. In December 2011, the CAFC ruled that U.S. CVD laws do not apply to NME countries, as applying CVD laws to NME countries would be contrary to Congressional intent. Congress responded on March 13, 2012, by enacting legislation to apply CVD laws to NME countries. The legislation also addressed the issue of double-counting in antidumping and countervailing duty cases.

According to the CAFC, the argument that the new legislation is unconstitutional because it attempts to prescribe a rule of decision after the CAFC rendered its decision is without merit, as the case remained pending on appeal. With regard to the argument that the new legislation is unconstitutional because it improperly creates a special rule applicable only to this case (or perhaps a few others) due to the different effective dates of two of its provisions, the CAFC remanded the issue for consideration by the Court of International Trade (CIT). The CAFC also found that the provision for applying countervailing duties to NMEs is retroactive to proceedings initiated on or after November 20, 2006, while the provisions addressing double-counting are applicable only to proceedings initiated after March 13, 2012.

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