Industry News

Proposed Modification AD/CVD Regulations

May 16, 2023
By: Ashley J. Bodden

On May 9, 2023 the U.S. Department of Commerce (“Commerce”) published a notice in the Federal Register proposing amendments to the antidumping and countervailing duty regulations to “enhance, improve and strengthen its enforcement of trade remedies.” Written comments must be received no later than July 10, 2023.

In this proposed rule, Commerce would revise 22 different areas related to antidumping and countervailing duty regulations. The proposed changes are to clarify and bring the regulations into conformity with practice and procedures, as well as to “enhance and strengthen other regulatory provisions to enforce the trade remedy laws more effectively.” A few key proposed modifications include:

· Foreign Government Inactions: The proposed rule would codify Commerce's practice of determining that countervailable subsidies are conferred by certain unpaid or deferred fees, fines, and penalties. It also would address the consideration of evidence on the record of weak, ineffective, or nonexistent property, intellectual property, human rights, labor, and environmental protections and the impact that the lack of such protections has on the prices and costs of products in selecting surrogate values and benchmarks.

· Particular Market Situation: The proposed new rule would address a determination of the existence of a particular market situation (“PMS”), including a PMS such that the cost of materials and fabrication or other processing of any kind does not accurately reflect the cost of production in the ordinary course of trade. It would also address the elements that Commerce may consider in determining if a market situation exists that likely distorts the cost of production and if the market situation is “particular.” Third, the proposed rule would provide 12 examples in which Commerce might determine the existence of a PMS which distorts the cost of production.

· Cost-Based PMS Practice: Commerce proposes four exemptions in cost-based PMS analysis:

1.      not requiring consideration of four specific types of information and associated arguments,

2.      not needing to consider speculative costs or prices,

3.      not mandating consideration of actions by governments or public entities in other market economy countries compared to the subject country, and

4.      not requiring references to historical policies and actions by the subject country's government concerning subject merchandise or significant production input

· Transnational Subsidies: Commerce proposed eliminating the current transnational subsidies regulation, which prevented consideration of allegations of transnational subsidies, and instead reserves the provision for future consideration. If eliminated, Commerce would be able to countervail transnational subsidy programs that could benefit recipients located outside of the subsidizing country.

· Commerce seeks to incorporate long-standing practices into the regulations, providing guidance on topics such as subsidies, loans, equity infusions, and export insurance.

· Modification of Section 301 would allow Commerce to place previous analysis and calculation memoranda on the record without requiring additional factual information from other parties.

Interested parties should review the proposed rule modification and submit comments on it. For further information or clarification on the proposed rule modification do not hesitate to contact an attorney at Barnes, Richardson & Colburn LLP.