Importing into the United States - Indo-American Chamber Of ...

25. ANTIDUMPING AND
COUNTERVAILING DUTIES
Antidumping and countervailing duties
are types of additional duties used to offset the
effects of two unfair trade practices that give
imports an unfair advantage over competing
U.S. goods. Antidumping duties are assessed
on imported merchandise that is sold, or is
likely to be sold, in the United States at less
than its fair value, that is, less than the foreign
market value of the merchandise. The foreign
market value may be based on the price at
which the merchandise is sold in the home
market or to third countries or on a constructed
value (based on cost) of the merchandise.
Countervailing duties are assessed to counter
subsidies provided to merchandise that is
exported to the United States. In addition to
being subsidized or sold at less than fair value,
the imported merchandise must also injure a
U.S. industry (except for subsidized products
from certain countries that are not entitled to
an injury determination).
The Department of Commerce, the International
Trade Commission (ITC), and the U.S.
Customs Service all play a part in enforcing
antidumping (AD) and countervailing duty
(CVD) laws. The Commerce Department is also
responsible for their general administration; it
determines whether the merchandise is sold at
less than fair value or is subsidized. It also
determines the amount of duties that must be
assessed. The ITC makes the injury determinations.
The Customs Service assesses the duties
once Commerce and the ITC have made the
necessary determinations.
Establishing and assessing both kinds of
duties occurs during the following processes:
Investigation. Although they may be initiated
by the Commerce Department, AD and CVD
investigations are usually initiated as the result
of a petition from a domestic industry or other
interested party such as a trade union or
industry association. The party must simultaneously
(that is, on the same day) file the petition
with the Commerce Department and the
ITC (the latter if an injury test is required).
If the necessary elements are present in the
petition, the Commerce Department and the
ITC will initiate separate investigations. The
investigations then continue with a series of
preliminary and final determinations that, if
appropriate, result in an “order” and the eventual
assessment of AD and CVD duties. The
following discussion is based upon the
assumption that the injury test is required. If
not, the outcome of the considerations is based
solely upon the Commerce Department determinations.
The ITC makes the first preliminary determination
concerning the likelihood of injury. If
that determination is negative, the investigations
are terminated. If it is affirmative, the
Commerce Department then issues a preliminary
determination with respect to the sales
and/or subsidy issues. Later, based upon further
review and comments received in the case,
the Commerce Department issues a final determination.
If either of these Commerce Department
determinations is affirmative, Commerce
will direct Customs to suspend liquidation of
entries for merchandise subject to investigation
and to require cash deposits or bonds equal to
the amount of estimated dumping margin (the
differential between the fair market value and
the U.S. price) or the net subsidy.
After a final affirmative determination by
the Commerce Department, the ITC then follows
with its final injury determination. If the
ITC’s final determination is also affirmative,
the Commerce Department issues an AD or
CVD order. At that time, Commerce directs
Customs to require, with a very limited exception
for new shippers, cash deposits of estimated
duties. A negative final determination
either by Commerce or the ITC would terminate
the investigations. Both agencies announce
their determinations, including orders and the
results of the administration reviews described
below, in the Federal Register.
Administration Review/Liquidation. Each
year, in the anniversary month of the order,
52 U.S. CUSTOMS SERVICE