Practices 
 

Countervailing Duties

PRINT

While the law is extremely complex and practice in the area is changing constantly, the summary below provides a quick reference to the main issues. Because we have one of the largest trade remedies’ practices in the United States, we would be glad to answer any specific questions that you may have on these issues. Call Jeff Neeley or Matt McGrath in the Washington, D.C. office at 202-483-0070 for further information.

1.    How Cases Begin—Cases may be filed by a U.S. industry that can show that (a) imports are subsidized; and (b) the U.S. industry is being injured by these subsidized imports.

2.     Deadlines—Cases have very strict and fast deadlines. The first hearing is three weeks after the filing of a petition. Final determinations are made within one year. Interim relief is generally granted within 160 days of the initial filing.

3.     Agencies involved—Cases are heard at the U.S. Department of Commerce (regarding the level of subsidies) and the U.S. International Trade Commission (regarding whether injury exists).

4. Type of Relief—Relief is in the form of additional duties. U.S. producers that are faced with subsidized imports like these cases because a successful case will effectively offset such subsidies.

5. Risks to Importers—Importers operating under a subsidy order need to be very cautious because the subsidy rates may change and the scope of the order may be modified.

6. What Is A Subsidy?—Subsidies may be such things as export subsidies, special tax zones for exporters, government loans at below market rates, preferential tax benefits for exporters, preferential tax benefits for certain industries, equity infusions in non-equity worthy companies.

7. Retroactive Assessment—Importers deposit duties based on the last completed calculation of rates, but these are only estimates and not final rates. Once each year a review will be conducted for the prior year’s sales to determine what the subsidy margin is for entries during that year.

 For example, a company might deposit 10% subsidy duties for January-December 2011. In January 2012, the DOC begins to review those 2011 sales (review proceeding takes about one year). When a review is completed the actual duties are determined, which can be greater or less than the 10%. Importer gets refund or pays additional duties.

8. ITC Injury Determination—Even if the Commerce Department finds subsidies, the CVD order will not go into effect unless the ITC also finds that the domestic industry is injured by reason of the subsidized imports. 

The essential argument of importers and exporters at the ITC usually is that U.S. industry is not being harmed (or threatened), usually because of a lack of any causal connection between the imports and the condition of the U.S. industry. The substantive argument often is based on an alleged lack of linkage between subsidized imports and condition of the US industry, differences in product segments leading to no real competition, other causes of the problems of the industry. Procedural steps include filing a notice of appearance, completing questionnaires, participating in staff conferences, and filing briefs with legal/factual arguments.

9. The Administrative Review Process—This process only occurs at the Commerce Department.    The retrospective assessment system in the U.S. means that the final liability for subsidies is determined only after the opportunity for a review. The usual time frame for a review is 16-17 months.

Importers may request reviews for their own imported goods. Either domestic parties or foreign manufacturer may request a review for a foreign company.   If a company is to request a review itself, it should prepare in advance and know the risks of such a review, because the CVD paid as a result of the review could be lower, or higher, than the amounts deposited initially.

10. Scope Issues—Only “subject goods” are those that are described in the order.

Sometimes it is possible to “clarify” the order to have imports excluded from the case. If this is done, then the imports are simply not subject to the order.

DOC conducts scope reviews. Any interested party (including an importer) may request a clarification. There is a two tier review process, depending on the case: (1) DOC decides whether the good is clearly outside of scope on face of the order, and (2) if not, then Commerce conducts a further inquiry.

In further inquiry cases, Commerce often examines five factors to assist it in determining if a product is in or out of the scope of the order. The factors are:

  1. Physical characteristics of the product
  2. Expectation of ultimate consumers
  3. Ultimate use of product
  4. Channels of trade of product, and
  5. Manner of advertising and display

 Because BRC is experienced in both customs law and antidumping/CVD practice, it is in a strong position to help clients navigate the complex issues that arise in the scope context.

11. Other Issues—Other issues that arise in CVD cases, which we frequently address, include five year “sunset” reviews determining whether there still would be injury to the U.S. industry if the CVD order were lifted,

12. Circumvention Issues—Circumvention of CVD orders can have administrative effects under the CVD law, as well as penalties from U.S. Customs & Border Protection, and even criminal liability in certain instances. Circumvention issues regarding the CVD order (particularly with regard to Chinese goods) have become increasingly common in recent years. BRC’s expertise with regard to both CBP and the Commerce Department puts us in the position to work through all aspects of the problem for clients and attain a just result.     

August 19, 2014
China Agrees to Negotiate a Suspension Agreement on Solar Panel Cells
July 15, 2014
WTO Finds U.S. Inconsistent with Obligations in India and China CVD Cases
March 10, 2014
White House Releases 2014 Trade Agenda
December 02, 2013
Manufacturing Company Settles Duty Evasion Suit
October 01, 2013
Government Shutdown Impacts International Trade Agencies
September 17, 2013
CBP Announces the 2013 East Coast Trade Symposium
September 13, 2013
CBP Extends CDSOA Comment Period until October 10
July 17, 2013
Commerce Releases New Certification Regulations
May 31, 2013
CBP Releases Notice of Intent to Distribute CDSOA Offsets
May 20, 2013
Cameron Kerry to Serve as Acting Commerce Secretary
April 12, 2013
ITA Updates Submission of Factual Information Regulations
December 20, 2012
House Republicans and Democrats Introduce Differing Customs Reauthorization Proposals
September 21, 2012
Legislative Update: Elections Delay Action on Trade Legislation
September 17, 2012
China Challenges U.S. Antidumping and Countervailing Measures
September 17, 2012
USTR Calls for Comments on WTO Dispute
June 27, 2012
Williamson Named ITC Chairman
June 25, 2012
USTR Calls for Comments on China WTO Case
June 21, 2012
Bryson Resigns as Commerce Secretary
June 1, 2012
CBP to Distribute FY 2012 Byrd Amendment Offsets
May 30, 2012
CAFC Grants Rehearing in CVD NME Case, Remands Constitutionality Issue to CIT
May 30, 2012
China Launches WTO Challenge to U.S. Countervailing Duties
March 13, 2012
President Signs Legislation Applying Countervailing Duties to NMEs
March 6, 2012
CBP Announces FY 2012 Trade Enforcement Priorities
March 6, 2012
Congress Passes Legislation to Maintain CVD Orders
February 28, 2012
President Obama Signs Executive Order Establishing Interagency Trade Enforcement Center
February 14, 2012
Commerce Department to Eliminate Zeroing in AD Reviews
February 7, 2012
U.S. to End Zeroing in AD/CVD Proceedings
January 26, 2012
President Announces New Trade Enforcement Unit
December 19, 2011
Federal Circuit Rules Against Application of CVD Laws to NMEs
October 25, 2011
Bryson Sworn in as Commerce Secretary
October 21, 2011
Senate Approves Bryson as Commerce Secretary
October 12, 2011
China Currency Bill Passes Senate, Faces Opposition from House
October 3, 2011
ITA to Require Cash Deposits in Future AD and CVD Investigations
October 3, 2011
ENFORCE Act Introduced in House

Sign up for Daily Report

Just enter your Email below and sign up to get our Daily reports