SANDLER , TRAVIS & ROSENBERG, P.A.An International Trade & Business Practice

CCBFA Seminar Program

The Impact of Antidumping and The Impact of Antidumping and Countervailing Duties Countervailing Duties

(AD/CVD) (AD/CVD) Monday, June 9, 2008Monday, June 9, 2008

Donna L. Bade, EsqDonna L. Bade, Esq..

Upon completion, participants will be able to:

Discuss AD/CVD regulations

Describe the impact of antidumping and countervailing duties

Learning Objectives

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What is dumping?

When a foreign company makes sales to the U.S. at “less than normal value,” which is generally considered to be at a price lower than what it is sold at

within the exporting country or to third countries.

Why do companies dump?

To make inroads into a new market and/or to force local companies out of business. Lost profits on the new sales are made up on the domestic or 3rd country sales.

Trade Remedies - What does the ITC/ITA do?

Review the details of the transactions, determine if a US industry is harmed and assess special antidumping duties equal to the difference between the export price and their “normal value” in the exporting country.

Antidumping

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Antidumping Process

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Three Phases – Preliminary, Final, Administrative Review

Petitioner (U.S. Company) files petition with the International Trade Commission (ITC) and the International Trade Administration (ITA), Department of Commerce simultaneously alleging that they are being harmed by foreign manufacturers dumping on the US. ITA may also initiate on its own. [Tariff Act of 1930 - 19 CFR §§ 207-208 (ITC); 19 CFR §§ 351-354 (ITA)]

Both agencies are involved in the review.

The ITC determines if there is a material injury or a threat of a material injury or material retardation to the U.S. industry.

The ITA performs the economic and statistical analysis to determine whether the foreign company is dumping in the US and, if so, what the margin is between the sales price to the US and the ‘normal value’ (home market price).

Content

ITA/ITC Timetable

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Scope

Scope – who defines?http://web.ita.doc.gov/ia/CaseM.nsf/136bb350f9b3efba852570d9004ce782?OpenView.

Description vs. Tariff Numbers

Scope Rulings –CBP determinations http://ia.ita.doc.gov/scope/scope-ruling-fr-notices.html.

Cash Deposit vs. Bonding

Administrative Reviews

New Shipper Reviews

Liquidation Instructions from ITA to CBP – 6 months to liquidate.

Antidumping Reimbursement Certificate

Exporter/Reseller Rule – Effective Admin. Review after May 1, 2003

Cash Deposit Rates vs. Final Rates since Reseller Rule

Critical Circumstances

Court Cases – Appeal to CIT/CAFC

Antidumping Issues

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Countervailing Duties

When foreign country subsidizes the manufacture of products for export which harms the domestic manufacturers because the subsidies allow for an economic advantage. [Tariff Act of 1930]

Review Process is the same as Antidumping - Same time frames

WCO – Agreement on Subsidies and Countervailing MeasuresA subsidy shall be deemed to exist if:

(a)(1) there is a financial contribution by a government or any public body within the territory of a Member (referred to in this Agreement as "government"), i.e. where:

(i) a government practice involves a direct transfer of funds (e.g. grants, loans, and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees);

(ii) government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits);

(iii) a government provides goods or services other than general infrastructure, or purchases goods;

(iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments; or

(a)(2) there is any form of income or price support in the sense of Article XVI of GATT 1994; and(b) a benefit is thereby conferred. [Accenting added]

What is a Subsidy?

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Tax Subsidy – Grant a tax benefit to all exporters. (e.g. U.S. Foreign Sales Corporation Program)

Labor Subsidy – Grant a tax relief for certain workers.

Accelerated Depreciation of Manufacturing Equipment

Direct Subsidies – Payment of Cash

Energy Relief – non-payment of certain utilities such as electricity.

Examples

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ITA – http://trade.gov/ia/index.asp.

ITC - http://www.usitc.gov/trade_remedy/731_ad_701_cvd/index.htm

Orders currently in effect:http://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/antidump_countervailing/index.htm

STR contact information:www.strtrade.comdbade@strtrade.com

Helpful Web Sites

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Thank You!Thank You!

www.ccbfa.orgwww.ccbfa.org12