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Dispute Settlement

U.S. Trade Remedy Law: The Canadian Experience

I  United States Anti-Dumping Duty Law

1. Introduction

2. U.S. Countervailing Duty Law: Procedural Framework

3. Initiation

4. Evidence

5. Determination of Subsidy

6. Normal Value

7. Export Price

8. Calculation of Dumping Margins

9. ITC Injury Analysis

10. Reviews

11. Other Procedural Issues

12. Judicial Review

1. Introduction

Dumping is the sale of goods by foreign producers or exporters in an export market, such as the United States, at prices that are lower than the prices received by the producer or exporter for sales of the same or similar products in their home market or a third market, or prices that are below the cost of producing the products. Under the Anti-Dumping Agreement of the World Trade Organization(WTO) and U.S. law, anti-dumping (AD) duties may be applied if two conditions are met: (1) “less than fair value” (LTFV) or dumped sales must be found to exist; and (2) the LTFV sales must be causing or threatening to cause material injury to the U.S. industry producing like products.

If the two conditions are met, an anti-dumping duty order is issued imposing duties equal to the amount by which the normal value (as determined by sales in the home market or third market, or on a constructed value basis) exceeds the export price, as determined by sales to the United States.

1.1 Legislative History and Authority

The Anti-Dumping Act of 1916 was the first U.S. law to specifically target dumping. It provides for criminal and civil penalties for the sale of imported articles at a price substantially lower than the actual market value or wholesale price, with the intent of destroying or injuring an industry in the United States. The Anti-Dumping Act of 1916 remains in place today although it is used very infrequently.1 Prior to 1980, U.S. dumping measures were also governed by the Anti- Dumping Act of 1921. This act was repealed by the Trade Agreements Act of 1979, which added a new Title VII to the Tariff Act of 1930 to address both antidumping and countervailing duty issues, and transferred the responsibility for administering the anti-dumping law from the Department of the Treasury to the Department of Commerce.2 Title VII was subsequently amended by the Trade and Tariff Act of 1984, the Omnibus Trade and Competitiveness Act of 1988 and, most recently, the Uruguay Round Agreements Act (URAA) in December 1994.3 Title IIof the Uruguay Round Agreements Act implements the provisions of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (GATT) 1994—the Uruguay Round WTO Anti-Dumping Agreement. In addition to amendments required by the Uruguay Round Agreements, the URAA includes several further changes to the anti-dumping law, such as modification of the anti-circumvention provisions. Regulations detailing the practice and procedures used in dumping investigations were subsequently issued.

2. U.S. Countervailing Duty Law: Procedural Framework

The International Trade Administration (ITA) of the U.S. Department of Commerce is the “administering authority” with overall responsibility for enforcing anti-dumping laws, and specific responsibility for determining whether the goods under investigation are being dumped. The International Trade Commission (ITC) , an independent federal agency, determines whether the U.S. domestic industry producing that class of products is either injured or threatened with injury by reason of the subject imports. The two agencies perform their responsibilities simultaneously and notify each other of any determinations. A negative final determination by either party or a negative preliminary injury determination by the ITC will terminate the proceedings. All determinations must be reported in the Federal Register, with a statement of facts and conclusions of law.4 An investigation proceeds as follows:

  • Within 20 days of the filing of a petition, Commerce determines whether there is sufficient evidence of injurious dumping to warrant an investigation. Commerce has found very few petitions to be insufficient at the initiation stage. The deadline may be extended to 40 days if it is necessary for Commerce to determine whether there is sufficient industry support for the petition.
  • If the petition is accepted, the ITC conducts a preliminary investigation to determine whether there is a reasonable indication of material injury. The preliminary determination must normally be issued within 45 days of the date of filing.
  • If the ITC preliminary determination is affirmative, Commerce makes a preliminary determination of whether dumping is occurring. The preliminary determination must be released within 160 days after a filing or 140 days after an investigation is initiated, whichever is later. Extensions may be requested by interested parties. If the determination is affirmative, Commerce establishes preliminary dumping margins, resulting in the application of provisional duties. The ITC then commences its final injury investigation.
  • Commerce issues its final determination 75 days after issuing the preliminary determination (or after 135 days upon the request of an exporter when the preliminary determination was affirmative, or of a petitioner when the preliminary determination was negative).
  • The ITC final injury determination must be released before the 120th day after Commerce makes its affirmative preliminary determination or the 45th day after Commerce makes its affirmative final determination, whichever is later.
  • If both dumping and injury are found, an anti-dumping duty order is issued by Commerce within 7 days of notification by the ITC of its decision.
  • Each year on the anniversary of the issuance of an order, the parties have an opportunity to request an administrative review of the dumping margins for the most recent annual period.

3. Initiation

U.S. anti-dumping investigations are initiated on the basis of a petition requesting an investigation, filed by an interested party or parties. Petitions are filed simultaneously with Commerce and the ITC.5 “Interested parties” may include:

  1. a manufacturer, producer or wholesaler in the United States of a like product;
  2. a certified or recognized union or group of workers that is representative of an industry engaged in the manufacture, production or wholesale in the United States of a like product; or
  3. a trade or business association, a majority of whose members manufacture, produce or wholesale a like product in the United States.6

Commerce is required to initiate an investigation when a petition has been filed “by or on behalf of the domestic industry” and contains the elements necessary for the imposition of an anti-dumping duty, including all information reasonably available to the petitioner.7 Prior to the URAA, U.S. practice was to assume that the petition was filed on behalf of a domestic industry unless a majority of domestic companies affirmatively opposed the petition.8 Commerce would determine the extent of such opposition only after it was expressed.In accordance with the standing requirements of the WTO Anti-Dumping Agreement and the URAA, the application is considered to have been made “by or on behalf of the domestic industry” only if it is supported by those domestic producers or workers who account for:

  1. at least 25% of the total production of the domestic like product; and
  2. more than 50% of the total production of the domestic like product produced by that portion of the domestic industry expressing either support for or opposition to the application.

Where the petition fails to show the support of domestic producers or workers accounting for more than 50% of the total production of the domestic like product, Commerce generally conducts a poll of the industry to determine whether the petitioner has standing. Under U.S. law, labour has a voice equal to management; if a company’s management expresses direct opposition to the views of its workers, the firm’s production will be treated as neither supporting nor opposing the petition.9

The position of U.S. producers that are importers of the goods in question will be disregarded in the determination of support. Similarly, the position of U.S. producers that are related to a foreign producer shall be disregarded, unless they can demonstrate that their interests as domestic producers would be adversely affected by an anti-dumping duty order.10 Both Commerce and the ITC are required by regulation to provide technical assistance to small businesses in the preparation of petitions, if so requested.11 The Trade Remedy Assistance Office (TRAO) of the ITC has been established to provide the public with general information on specific U.S. trade laws, and provides technical assistance to eligible small businesses seeking relief under the trade laws.

4. Evidence

4.1 Questionnaires

The information needed to determine whether dumping exists, and to what degree, is obtained by sending importers and exporters requests for information (RFI) or questionnaires. As business structures have become more complicated and the requirements of the relevant WTO agreements more complex, these questionnaires have over time become more detailed and complex. Questionnaires must normally be answered within 30 days, although short extensions may be granted in certain circumstances. Commerce usually examines sales representing between 60% and 85% of the volume of exports to the United States from the subject country. As a result, small producers or exporters may not receive questionnaires.

If the response to an information request is inadequate, the respondent must be promptly informed of the nature of the deficiency, and be provided an opportunity to remedy or explain it. Commerce may not disregard information submitted within the set time limits if the respondent “acted to the best of its ability” to provide the requested information.12

The ITC, like Commerce, uses questionnaires as the principal means of obtaining information. Questionnaires are sent to domestic producers, importers, purchasers and exporters. The questionnaires generally cover a three-year period and request information concerning a wide variety of economic indicators, including production, capacity utilization, shipments, exports, sales, employment, capital expenditures and prices.

In a provision added by the URAA in 1994, Commerce and the ITC are required to provide consumer organizations and industrial organizations with an opportunity to submit relevant information for consideration. Both Commerce and the ITC are also required to take account of difficulties experienced by parties, particularly small firms and firms in developing countries, in providing requested information. The two agencies will provide such assistance as they consider practicable to avoid imposing an unreasonable burden on the respondent.

4.2 Facts Available (Best Information Available)

If a respondent is unable or unwilling to provide the information requested by Commerce or the ITC within the set time limits and in the form requested, the agencies may rely on the “facts available” (formerly known as “best information available,” or BIA), including allegations contained in the petition and in previous reviews.13 When a respondent refuses to cooperate, Commerce will generally claim adverse inference and impose the most adverse rate possible. Commerce and the ITC may take into account the circumstances of the party, including (but not limited to) the party’s size, its accounting systems and computer capabilities, as well as the prior success of the same firm, or other similar firms, in providing requested information. In accordance with the Anti-Dumping Agreement, if “facts available” are relied upon, they must be corroborated where practicable using independent sources.14

4.3 Verification

Commerce is required to verify all the information it relies upon in making a final determination in an original investigation or revocation. In an annual review, verification will occur if requested by a domestic interested party and if there has been no verification during the two immediately preceding reviews. Otherwise, verification is discretionary. Commerce must obtain agreement from the foreign persons being verified and must notify the foreign government concerned regarding the verification. If the party being examined or the foreign government objects to the verification, Commerce will not conduct the verification and instead will rely on the facts available to make its determination. Commerce produces a report following the verification process, and offers an opportunity for both the petitioners and respondents to make submissions and offer comments.15

4.4 Treatment of Information

Information submitted to either Commerce or the ITC is treated as public unless designated as “proprietary information.” Parties asserting proprietary status for their submissions must justify to Commerce or the ITC why each piece of information should not be disclosed.16 Non-confidential summaries of proprietary information must be filed concurrently with the submissions. If accepted as proprietary information, the material so designated may be released to certain specified individuals under an administrative protective order (APO). Attorneys or other representatives of interested parties may gain access to proprietary submissions of respondents if they have established a sufficient need for the information and can adequately protect its proprietary status. Violation of APOs may result in sanctions or even disbarment from practice before the agency in question.17

Notices of initiation and suspension decisions, preliminary and final determinations, and reviews (including the facts and conclusions supporting the determinations) must be published in the Federal Register.

4.5 Like Product and Scope Determinations

Issues sometimes arise as to whether a particular product is included within the scope of an anti-dumping investigation. In such cases, Commerce may issue “scope rulings” that clarify the scope of an order with respect to particular goods.

The rulings are intended to ensure that the imported goods are being compared to similar U.S.-produced goods or “like products.” A “like product” is defined by the Tariff Act of 1930 as “a product that is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation.”

Commerce generally examines the following criteria in like product determination: general physical characteristics; the expectations of the ultimate purchasers; the channels of trade in which the product is sold; the manner in which the product is sold and displayed; and the ultimate use of the merchandise. No single factor is determinative and other relevant factors may be examined.18 Where there are no sales of identical merchandise in the home market to compare to U.S. sales, U.S. sales are compared to the next most similar foreign like product on the basis of characteristics listed in the anti-dumping questionnaire and reporting instructions. As discussed below, adjustments may be made to the normal value to compensate for the physical differences between the merchandise being compared.

While the ITC and Commerce commonly employ the same like product determination, the ITC is not bound by Commerce’s determination. The ITC may define the domestic like product more broadly than the class or kind of imported merchandise defined by Commerce, or the ITC may find two or more domestic like products corresponding to the class or kind of imported merchandise. In defining the domestic like product for purposes of injury, the ITC typically considers the following factors: (1) physical appearance; (2) end users; (3) customer perceptions; (4) common manufacturing facilities; (5) production processes and employees; (6) channels of trade; (7) interchangeability of the product; and (8) where appropriate, price. No single factor is determinative and other relevant factors must be examined.19

5. Determination of Subsidy

Commerce determines dumping margins by comparing the price at which the subject goods are sold in the United States (“export price”) with the “normal value” of the goods. “Normal value” is defined as the price, at a time reasonably corresponding to the time of sale used to determine export price or constructed export price, “at which the foreign product is first sold to an unrelated purchaser for consumption in the exporting country, in the usual commercial quantities, in the ordinary course of trade and, to the extent practicable, at the same level of trade as the export price or constructed export price.”

In identifying the date of sale of the subject merchandise or the foreign like product, Commerce will normally use the date of invoice, as recorded in the exporter’s or producer’s records. However, a different date may be used if Commerce is satisfied that it better reflects the date on which the material terms of the contract, including price and quantity, are fixed. Determining the exact date of sale may have a significant impact on currency conversions and price comparisons, particularly in highly inflationary or price-volatile markets. For market-economy investigations, Commerce normally examines pricing information for the four most recently completed fiscal quarters as of the month preceding the month in which the petition is filed (i.e. the period of investigation). Commerce may, however, examine any additional or alternate period deemed appropriate.20

5.1 Preliminary Determinations

In its preliminary determination, Commerce must determine whether there is a reasonable basis to believe or suspect that the merchandise is being sold, or is likely to be sold, at LTFV. If Commerce’s preliminary determination is affirmative, liquidation of the subject merchandise is suspended and provisional duties are applied equal to the dumping margin preliminarily determined. The provisional duties usually take the form of a bonding requirement equal to the estimated duty rate for each subsequent entry of the merchandise to ensure payment if dumping duties are ultimately imposed. These measures may normally be in place for a maximum of 120 days. If the preliminary decision is negative, no suspension of liquidation occurs and the Commerce investigation simply continues. However, in such a circumstance the ITC does not commence its final investigation until after, and if, Commerce issues a final affirmative determination. The ITC’s final determination is then due within 75 days after Commerce issues its final determination, instead of the usual 45 days.

All parties may comment on Commerce’s preliminary determination and on the subsequent verification report (as discussed above). Commerce holds conferences to discuss issues with the parties. Case briefs and rebuttal briefs may be filed before such a conference. All comments received, whether from petitioners or respondents, are addressed in the final determination, and Commerce explains how it has addressed each comment.

5.2 Final Determinations

Commerce must normally issue its final determination within 75 days of the preliminary determination. The final determination must include the factual and legal conclusions on which it is based, and the estimated anti-dumping duty rate for each party investigated. Given that Commerce performs an on-site verification of the questionnaire responses provided by the exporters or producers, it is not unusual for the margins found in the final determination to differ from those found in the preliminary determination. If either final determination is negative, the investigation is terminated, including any suspension of liquidation that may be in effect; all estimated anti-dumping duties are refunded with interest, and all bonds or other security are released. Upon issuance of an affirmative final dumping determination by Commerce and an affirmative final injury determination by the ITC, the U.S. Customs Service is instructed to assess definitive antidumping duties and collect cash deposits of estimated anti-dumping duties on future entries, in accordance with rates published in the final determination.

6. Normal Value

6.1 Adjustments to Normal Value

In order to ensure that an appropriate comparison is being made, normal value (NV) and the export price (EP) are compared on a common ex-factory basis, with adjustments made for any differences in the terms or circumstances of sales in the two markets. Respondents are responsible for providing the supporting evidence and argumentation required to support an adjustment. Normal value is based on ex-factory prices to unaffiliated customers and prices to affiliated customers where the sales were made at arm’s length. Where appropriate, the starting price (gross unit price) is reduced by:

  • Home-market (or third-country) packing costs and warehouse expenses. Deductions are made when such costs are included in the price.21
  • Inland freight/delivery costs (movement expenses). If the prices in the country of export are delivered prices or reflect delivery charges, the price is reduced by the amount of the foreign inland freight and insurance.22
  • Indirect taxes (such as value added taxes). Reductions to normal value are made in the amount of the indirect duties and taxes levied on goods for home consumption where the duties or taxes are included in the price of the like goods and are not borne by the goods sold to the importer-that is, where the exports are relieved of the duties or taxes by exemption, remission or refund.
  • Cash/quantity/early-payment/loyalty discounts and rebates. Commerce makes allowance for such discounts and rebates if they are granted and taken in the country of export.

Adjustments to normal value may be made for differences in price that result from:

  • Differences in quantities sold. Where the quantities sold in the home market and in the United States differ in volume, price differences may result. Commerce will grant a quantity adjustment if the respondent can demonstrate that the price differential can be at least partially attributed to the differences in quantities sold.
  • Physical differences in products sold domestically and for export. Commerce will make allowance for differences in physical qualities based upon differences in the variable costs of production. Commerce will not consider differences in cost of production when the compared merchandise has identical physical characteristics.
  • Differences in circumstances of sale. Adjustments are made to account for the differences in selling expenses between the home market and export sales. Of directly related selling expenses for which Commerce will make adjustments to the extent that the costs are assumed by the producer on behalf of the purchaser, examples include: commissions; credit terms; guarantees; warranties; technical assistance; servicing; and product-specific advertising. U.S. direct selling expenses are then added to normal value. Where normal value is compared to constructed export price as opposed to export price, deductions are made for actual home-market indirect selling expenses up to the amount of indirect selling expenses incurred in selling like products in the U.S. market.23
  • Credit terms. Adjustments are often made to account for differences in credit costs between the domestic and U.S. markets. This adjustment is necessary because there is usually a period of time between the shipment of merchandise to a customer and payment for the merchandise. An adjustment for imputed credit expense is made even if the exporter does not actually have to borrow funds to carry its accounts receivable. If actual credit cost information is not available, Commerce imputes the cost of credit by determining the number of days that payment is outstanding and the interest rate that the company paid, or would have paid, if it had borrowed the same money (i.e. the same amount in the same currency) to finance its accounts receivable. Imputed credit costs are calculated by dividing the number of days between shipment and payment by 365, then multiplying by the interest rate and unit price.
  • Differences in the levels of trade (LOT). Commerce compares normal value to the export prices at the same level of trade, where possible. If, for example, a product is sold at two levels in the home market—to distributors and end users—and all U.S. sales are to end users, only sales in the home market to end users are considered for comparison purposes. If there is no equivalent level of trade in the home market, modifications to normal value are normally calculated based on the percentage difference in weighted-average prices at each of the two levels of trade used.24 To claim an adjustment, foreign producers must demonstrate both (a) the performance of different selling activities, and (b) a pattern of consistent price differences in sales of the same goods to different levels of trade in the foreign market.25

In identifying dumping from a non-market economy country, Commerce will normally calculate normal value by valuing the non-market economy producers’ factors of production in a market economy country most like the non-market economy country.

6.2 Sales Below the Cost of Production / Ordinary Course of Trade

Commerce will exclude sales made at prices below the per unit cost of production from the calculation of normal value when they have been made in substantial quantities and do not permit recovery of all costs within a reasonable period of time. Such sales are excluded because they are considered not to be in the “ordinary course of trade.” The interpretation of “substantial quantities” is governed by an 80% rule. If sales below cost of production represent less than 20% of total sales (i.e. above-cost sales represent more than 80% of total sales), all homemarket sales, including those made at below-cost levels, will be included in the calculation of normal value. Where more than 20% of total sales (the pre-Uruguay Round threshold was 10%) are made at below-cost prices (i.e. above-cost sales represent less than 80% of total sales), below-cost sales are excluded and the remaining above-cost sales are used to determine normal value. The relative value of the remaining above-cost sales may be quite low, meaning that normal value could conceivably be solely based on a few unusually high-priced sales. Where there are no sales above the cost of production, normal value will be based on the constructed value of the goods in question.26

While previous U.S. law required that the below-cost sales be made “over” an extended period of time (interpreted by Commerce to mean a minimum of two months) in order to be excluded, the Uruguay Round Agreement stipulates that such sales must occur “within” a 12-month period. Thus below-cost sales may now be excluded even if they occur entirely within a one-month period.27

Commerce will investigate to determine whether home-market sales are below the cost of production if it has reasonable grounds to suspect or believe that such sales have occurred, based on allegations made by the petitioner. The cost of production calculations are based on the exporter’s or producer’s own records, if kept according to generally accepted accounting principles (GAAP) of the country of the exporter or producer. Special adjustments to production costs are made to account for costs associated with start-up operations in cases involving new production facilities or new products requiring substantial additional investment.

Beside sales below the cost of production, other types of sales may be excluded from the calculation of normal value because Commerce deems them not to be in the ordinary course of trade. Examples include sales of samples, off-quality merchandise, close-outs, trial sales and very small quantities.

6.3 Home-Market Viability / Third-Country Sales

Normal value is based upon sales of the like product in the producer’s or exporter’s home market if the sales volume is considered sufficient to provide a “viable” comparison to the export price and the sales are in the “ordinary course of trade.” To be considered viable, the volume of home-market sales must be equivalent to at least 5% of the volume of sales of the subject goods to unaffiliated buyers in the United States.

When home-market sales are deemed inadequate according to this standard, or are outside the ordinary course of trade, normal value may be based upon sales to a single third-country (“foreign”) market. Commerce is instructed to choose a third country whose market is the most similar in terms of organization and development to the country whose home-market sales are deemed inadequate, and that exports goods most similar to those being exported to the United States. Commerce will match a given U.S. sale to the third-market sales of the most similar foreign like product made in the ordinary course of trade. The volume of sales to the third-country market must also meet the benchmark of 5% of the volume sold to the United States.28

Commerce has the discretion not to apply the 5% threshold in “unusual situations,” or to decline to use home-market or third-country sales if such sales are deemed not to be representative or if a “particular market situation” exists that does not permit proper comparison.29 The Statement of Administrative Action (SAA) to the URAA indicates that such “unusual” or “particular market situations” could include cases where: (1) a single sale in a foreign market constitutes 5% of sales to the United States; (2) there are such extensive government controls over pricing in a foreign market that prices in that market cannot be considered competitively set; and (3) there are differing patterns of demand between the United States and a foreign market.

Furthermore, as discussed below, affiliated party sales may not be useable for normal value calculations in certain situations. If neither home-market nor thirdcountry sales are appropriate, constructed value is used.

6.4 Constructed Value

Where third country sales cannot be used to establish normal value because such sales are outside of the ordinary course of trade or are inadequate in volume to provide a representative comparison, the U.S. price is compared to constructed value. This is calculated as manufacturing costs in the country of origin, plus reasonable amounts for administrative, selling and general costs, and for profits.

In calculating profit, pre-Uruguay Round law required Commerce to include the higher of actual profit or 8% of the total cost of manufacture and general expenses. Selling, general and administrative expenses (SGA) were calculated as a minimum of 10% of the cost of manufacture, or actual expenses, whichever was higher.30 In calculating constructed value, Commerce now uses companies’ actual general expenses and profits based on sales of the like product at above-cost prices.31

When the requisite information is not available to determine actual profit earned on sales of the foreign like product in the ordinary course of trade, Commerce may use one of three alternative means of calculating actual SGA and profit:

  1. the actual amount of SGA and profit incurred by the producer/ exporter on sales of the same general category of products by the same producer; or
  2. the weighted-average, actual amount incurred by other producers/ exporters subject to the investigation or review for SGA and profit on sales of the like product made in the ordinary course of business; or
  3. the actual amount of SGA and profit incurred by any other reasonable method, not to exceed the amount normally realized by other producers/exporters for sales in the same category as the subject merchandise.

7. Export Price

Export price is the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter outside the United States to an unaffiliated purchaser in the United States or an unaffiliated purchaser for exportation to the United States.32

7.1 Adjustments

In order to calculate an accurate ex-factory export price, the starting price (gross unit price) to the first unaffiliated customer in the United States is reduced to account for any:

  • movement expenses incurred in bringing the merchandise from the factory to the point of sale (this includes expenses for foreign inland freight, foreign warehousing, U.S. inland freight, international freight and insurance, and U.S. brokerage and handling charges, where those charges are included in the price);33
  • special packaging for export transactions;
  • import duties and taxes imposed by the country of exportation that have been rebated or not collected because of exportation;
  • countervailing duties imposed by the U.S. government to offset the effect of a subsidy offered by a foreign government; or
  • discounts and rebates (Commerce makes allowance for these if they are granted and taken in the home market).34

7.2 Sampling and Averaging

The Uruguay Round Agreement allows Commerce to use averaging and statistically valid sampling techniques to determine export price, constructed export price or normal value if there is a significant volume of sales or a significant number or types of products. Commerce has the discretion to select the samples and averages to be used, but is directed to consult with exporters and producers. Furthermore, if determining individual weighted-average dumping margins for each company is not practical, Commerce may determine the weighted-average dumping margin for a sample of exporters, producers or types of products that is statistically valid, or for a sample of exporters and producers accounting for the largest volume of the subject merchandise for the exporting country.

7.3 Affiliated Persons

Commerce modifies its methodologies where the transaction examined involves related parties. Commerce presumes that any transaction between related parties is an unreliable basis for establishing export price or normal value because related parties may offer each other preferential pricing, or transfer products on the basis of cost or cost plus a fixed mark-up. Where Commerce finds that a sale between related parties was not made at a price at which the exporter sells “such or similar merchandise” to unrelated purchasers, the sale is disregarded. The respondent carries the burden of demonstrating that a sale to a related party is made at arm’s length. Similarly, Commerce stipulates that the transfer price of a major input between related parties must be greater than the cost of producing the input, and it requires the respondent to report the supplier’s actual production costs. Claimed adjustments may also be disallowed where the transfer price is lower than the market price. Parties are considered to be related if:

  • one directly or indirectly controls the other;
  • a third party directly or indirectly controls both; or
  • both directly or indirectly control a third party, and there is reason to believe that the relationship causes the U.S. producer to act differently from a non-producer.35

A 5% equity ownership is considered sufficient to give rise to a relationship of “affiliated party” although “control” can be found to exist even in the absence of any equity ownership.

7.4 Constructed Export Price

Constructed export price is a term used for the calculation of the export price when sales to the United States are made through a related party. Sales to related parties are discarded and Commerce instead calculates a constructed export price, based on the price charged by the producer or exporter of the merchandise, or by an affiliated seller, before or after importation, to the first unrelated U.S. buyer.36 To calculate the equivalent of an ex-factory price for sales made through an affiliated party, in addition to those adjustments used for the calculation of export price, several other adjustments are made.

Constructed export price is further reduced by:

  • direct selling expenses incurred by or for the account of the seller, that result from, and bear a direct relationship to, the sale (such as credit expenses, guarantees and warranties) and any selling expenses that the seller pays on behalf of the purchaser;
  • other (indirect) selling expenses that relate to economic activity in the United States (such as Canadian and U.S. inventory carrying costs and product liability premiums);
  • cost of any further manufacture or assembly in the United States; and
  • profit allocatable to the selling, distribution and further manufacturing in the United States by the affiliated party (the deduction is calculated by multiplying the total actual profit, both on the U.S. and the home market, by the ratio of total U.S. manufacturing and selling expenses to total manufacturing and selling expenses).37

8. Calculation of Dumping Margins

To determine whether a dumping margin exists, Commerce subtracts the weighted-average export price from the weighted-average normal value for the like merchandise. Any positive difference serves as the basis for a dumping margin, which is then averaged on a weighted basis to find one estimated margin amount for all sales to the United States during the period of investigation.

Under Commerce’s pre-Uruguay Round methodology, average home market prices were usually compared to individual export transaction prices. In accordance with Article 2.4.2 of the Anti-Dumping Agreement, Commerce now normally establishes and measures dumping margins on the basis of a comparison of weighted-average normal value prices and weighted-average export prices (or constructed export prices). Transaction-to-transaction calculations may be used where there are very few sales and the merchandise sold in each market is identical or very similar.38

The difference between the old and current U.S. methodologies can have a substantial impact on dumping margins. For example, if on the same day a Canadian manufacturer sells identical quantities of widgets in the U.S. and Canadian markets for $100 a unit, and a week later sells identical quantities of widgets in both markets for $200 a unit, the normal value would be $150. According to previous U.S. methodology, when the two U.S. sale prices are compared to this normal value of $150, the first sale at $100 would be considered dumping. In contrast, under average-to-average or transaction-to-transaction methodology, no dumping would exist.

However, U.S. law retained the use of comparison of individual export prices to the averaged normal value for all administrative reviews until January 1, 2000. This methodology may also be used where there is evidence of a pattern of export prices “that differ significantly among purchasers, regions, or periods of time”—a practice generally known as “targeted dumping.” 39

8.1 All-Others Rate

Commerce normally calculates individual weighted-average dumping margins for the largest foreign exporters and producers, while all other producers or exporters from the same country are subject to an “all-others” rate set in the original investigation or the latest annual review. The all-others rate is calculated as the weighted average of the individually determined dumping margins, excluding zero or de minimis margins, and margins based entirely on facts available. Commerce must establish individual duty rates when an exporter or producer not selected for individual examination voluntarily submits the information requested of the other respondents within the date specified for individually examined exporters or producers. If the number of exporters or producers who have submitted such information is so large that individual examinations would be unduly burdensome, Commerce is exempted from this requirement.40

8.2 De Minimis Margins

In accordance with Article 5.8 of the Anti-Dumping Agreement, the Tariff Act of 1930 has been amended to provide that a dumping margin found to be less than 2% ad valorem will be considered to be de minimis and will be disregarded. Commerce, however, has interpreted Article 5.8 as applying only to original investigations. For reviews, until January 1, 2000, Commerce retained the practice of considering a margin to be de minimis only if it is below 0.5% ad valorem.41

9. ITC Injury Analysis

As noted above, the role of the ITC in anti-dumping investigations is to determine whether the U.S. domestic industry producing like products is materially injured or threatened with material injury, or whether the establishment of an industry in the United States is materially retarded by reason of the subject imports. The ITC is composed of six members appointed by the President, no more than three of whom can be from the same political party. Determinations are made on the basis of a majority vote. If the members split evenly in a vote on material injury or threat of injury, the ITC will be deemed to have made an affirmative determination.

The ITC determination of injury involves a two-pronged inquiry: first, with respect to the fact of material injury; and second, with respect to whether the dumping is a cause of material injury or threat thereof.

Material injury is defined as “harm which is not inconsequential, immaterial, or unimportant.” In determining whether the domestic industry is materially injured by reason of the investigated imports, the ITC is directed by statute to consider:

  1. the volume of imports and, more specifically, whether the volume of subject imports (either in absolute or relative terms) is significant;
  2. the effect of imports on U.S. prices of like merchandise, including evidence of price underselling or price depression attributable to the imports; and
  3. the effects that imports have on the U.S. facilities of domestic producers of like products, including but not limited to:
    • actual and potential declines in output sales, market share, profits, productivity, return on investment or utilization of capital;
    • factors affecting domestic prices;
    • actual and potential negative effects on cash flow, inventories, employment, wages, growth or ability to raise capital;
    • actual and potential negative effects on the existing development and production efforts of the domestic industry to develop more advanced versions of the domestic like product; and
    • the magnitude of the margin of dumping.42

The ITC is not restricted to these factors, however, and in past cases has considered other economic indices.

In determining whether an industry is threatened with material injury by reason of the subject imports, the ITC considers whether “on the basis of evidence . . . the threat of material injury is real and . . . actual harm is imminent.” Such a determination “may not be made on the basis of mere conjecture or supposition.”43

The ITC considers, among other relevant economic factors:

  1. any existing or imminent increase in production capacity, which would be likely to result in increased imports to the United States;
  2. a significant rate of increase in the volume or market penetration of imports of the subject goods;
  3. whether imports are likely to have a significant depressing or suppressing effect on U.S. prices;
  4. inventories of the subject merchandise;
  5. the potential for product shifting if foreign production facilities currently producing non-subject merchandise can be used to produce subject merchandise;
  6. the likelihood of increased imports, by reason of product shifting, of either raw or processed agricultural products already subject to investigation;
  7. the actual and potential negative effects on existing U.S. industry efforts to develop a derivative or more advanced version of the product under investigation; and
  8. any other demonstrable trends indicating the probability that the subject merchandise will cause material injury.

Petitioners may also allege that the establishment of an industry in the United States is materially retarded by reason of imports (or the likelihood of imports) of the subject merchandise. Such allegations have been uncommon.

With respect to the issue of causation, it is important to note that according to the ITC’s interpretation of its statute, the dumping need not be the only cause of injury, nor need it be more significant than any other cause of injury.

9.1 Preliminary Determination

In its preliminary determination, the ITC must determine, based on the best information available at the time, whether there is a “reasonable indication” that a domestic industry is materially injured, or threatened with material injury, by reason of the allegedly dumped imports. While a negative preliminary determination results in termination of the investigation, such a finding is relatively infrequent. The ITC is usually inclined to give the petitioners the benefit of the full process unless the complaint is unsubstantiated.44 The petitioner bears the burden of proof with respect to the injury issue.

9.2 Final Determination

A higher standard of evidence is required in the final determination. The ITC must determine whether a U.S. industry is materially injured or threatened with material injury “by reason” of the subject imports. As part of the determination process, a public hearing is held, usually lasting one day. Parties to an ITC proceeding may file substantial pre-hearing submissions, and have an opportunity to analyze and comment upon the data and analysis compiled by the ITC investigating staff. The hearing process is investigatory rather than adjudicatory in nature, provides no opportunity to offer new evidence, and is limited to crossexamination and argumentation. Following the hearing and deliberations by the Commissioners, the ITC issues a report containing its decision.

9.3 Industry Determination

The ITC is responsible for defining the domestic industry engaged in production of the like product. According to the Tariff Act of 1930, the domestic industry is “the domestic producers as a whole of a like product, or those producers whose collective output of the like products constitutes a major proportion of the total domestic production of that product.”45 U.S. producers of the like product who are related to the exporters or importers, or who are themselves importers of the allegedly dumped goods, may be excluded from the consideration of the domestic industry “in appropriate circumstances.” Parties are considered to be related if one party exercises direct or indirect control over the other party. The ITC’s concern in a related-party situation is whether the relation of the producers to the exporters or importers of dumped goods gives them an unusual or sheltered position in the market as compared to other producers.

9.4 Captive Production

The Uruguay Round Agreements Act of 1994 introduced the concept of “captive production” into U.S. methodology for determining material injury in antidumping and countervailing duty investigations. The concept was based on the fact that some products subject to trade remedy investigations may be sold both as end products (“the merchant market”) or for use in further manufacturing processes. For example, in the flat-rolled steel sector, hot-rolled coils may be sold and used as end products or may be further processed into cold-rolled or corrosion- resistant steel. The issue arises as to whether injury should be assessed on the basis of total production of the product in question or only that portion sold in the “merchant market.” In the former case, dumped or subsidized imports would represent a lesser share of total consumption than they would if captive production was included. Accordingly, it could be more difficult for domestic industry to demonstrate injury by dumped or subsidized imports if captive production is included.

The URAA set out criteria46 for determination of the existence and treatment of captive production. The ITC will normally examine the condition of the U.S. producers of the domestic like product as a whole when determining whether material injury resulted from unfairly traded imports. The ITC will consider the effect that subsidized or dumped imports have had on the total production of the domestic like product. However, if certain conditions are determined to exist, the ITC will focus primarily on the merchant market in determining injury.

9.5 Regional Markets

For purposes of injury determination, the domestic industry may be limited to producers of like products in isolated or regional markets within U.S. territory, even if the domestic industry producing like products as a whole is not suffering injury. In order to establish that a regional market exists, it must be demonstrated that:

  • the producers within the regional market sell all or almost all of their production in that market; and
  • the demand in the regional market is not supplied to any substantial degree by producers located elsewhere in the national territory.

Once a regional market is found to exist, several additional criteria are examined to determine whether the U.S. industry has suffered injury. Before an affirmative determination may be issued, it must be established that:

  • there is a concentration of dumped imports into the regional market; and
  • the dumped imports are the cause of injury to the producers of all or almost all of the production within that regional market.

9.6 Cumulation

FThe ITC is directed to cumulatively assess the volume and effect of imports of like products from two or more countries if such imports compete with each other and the domestic like product. Only imports with respect to petitions filed on the same day and for which Commerce has made an affirmative preliminary determination may be cumulatively assessed. For injury determinations, the ITC must cumulate imports if: (1) the anti-dumping duty margin for each country is more than de minimis; (2) the volume of imports from each country is not negligible; and (3) all such imports compete with each other and with the domestic like products on the U.S. market. With respect to determinations of threat of material injury, the ITC retains the discretion to cumulate imports.47 U.S. law is silent with respect to the ITC’s practice of “cross-cumulation,” in which the ITC cumulates the effects of dumped and subsidized imports.

9.7 Negligible Imports

If the ITC finds that imports from a country under investigation are negligible, the investigation is terminated. Consistent with the Anti-Dumping Agreement, imports are considered negligible if they account for less than 3% of the volume of all subject merchandise imported into the United States in the most recent 12-month period prior to the filing of the petition. However, where the aggregate volume of subject imports from all countries with negligible volumes exceeds 7% of the volume of all subject imports, these imports will not be considered negligible.

10. Reviews

10.1 Administrative Reviews

Administrative reviews of anti-dumping orders and suspension agreements are normally conducted by Commerce once during each 12-month period beginning on the anniversary of the date of the order, if requested by an interested party. The administrative reviews determine actual duty owing for the period under review, and establish an estimated duty deposit rate for future entries. If duty deposits collected during the period of review (based on the previously estimated duty deposit rate) exceed the actual duty payable for that period as determined by the administrative review, the overpayment is refunded with interest. If the reverse occurs, the U.S. Customs Service will collect any money owing with interest. Procedurally, reviews are conducted in a manner similar to original investigations.

Under pre-Uruguay Round law, Commerce had an obligation to publish the final results of administrative reviews no later than 365 days after the date of their initiation, but this requirement was infrequently met, causing manufacturers and exporters considerable inconvenience and expense.48 In accordance with Article 9.3.1 of the Anti-Dumping Agreement, Commerce must now complete its preliminary administrative review determination within 245 days after the last day of the anniversary month of the order (or suspension agreement) under review. The final determination must be released within 120 days after the date of publication of the preliminary determination. The deadlines may be extended by Commerce in certain circumstances.49

10.2 New Shipper Reviews

As under pre-Uruguay Round U.S. practice, anti-dumping duty orders are applied on a nationwide basis. New shippers are shippers who did not export subject merchandise, or did not export it in sufficient quantities during the period of investigation, or were not specifically investigated. Such shippers are subject to the “all others” rate. As required by Article 9.5 of the Anti-Dumping Agreement, after the original investigation Commerce would conduct an “accelerated” review of new shippers unaffiliated with producers subject to a dumping order, in order to establish individual dumping margins. Such accelerated new shipper reviews are initiated only at the end of the month following the completion of six months from the date of the order, or at the end of the month of the anniversary of the date of the order, whichever is earlier.50

10.3 Revocation

Commerce has the discretion to revoke an order as it applies to a specific exporter or producer if certain conditions are satisfied. To grant an applicant the requested revocation in part, Commerce must conclude that:

  1. the exporter or producer has sold the merchandise at not less than normal value for a period of three consecutive years;
  2. it is not likely that the person will in the future sell the merchandise at less than normal value;51 and
  3. the person agrees in writing to the immediate reinstatement of the order if the Secretary of Commerce concludes that dumping has resumed.52

If all exporters and producers covered meet these conditions, the order as a whole may be revoked. These factors are not determinative, and Commerce may request and consider additional relevant evidence in making its revocation decision. In the past, in addition to the respondent’s prices and margins in the preceding periods, Commerce has considered such other factors as: conditions and trends in the domestic and home market industries; currency movements; and the ability of the foreign entity to compete in the U.S. marketplace without sales at less than normal value. The petitioner, respondent and other interested parties are offered an opportunity to submit factual information and argumentation pertaining to the issue of likelihood of future dumping.

10.4 Changed Circumstances Reviews

A party subject to a final anti-dumping duty order or suspension agreement can seek its removal by establishing that there are changed circumstances in the U.S. industry sufficient to warrant the revocation of the anti-dumping order or suspension agreement. The ITC must determine whether the revocation of the order or termination of the suspended investigation is likely to lead to the continuation or recurrence of material injury. The party seeking the revocation has a burden of persuasion and must convince the ITC and Commerce that revocation is appropriate.

Section 751(b)(1) of the Tariff Act of 1930 requires a changed circumstances administrative review to be conducted upon receipt of a request containing sufficient information concerning changed circumstances. Commerce’s regulations permit the ITC to conduct a changed circumstances administrative review based upon an affirmative statement of no interest from the petitioner in the proceedings. Commerce may also revoke an order, or revoke an order in part, if it determines that the order under review is no longer of interest to interested parties.

10.5 Five-Year “Sunset” Reviews

As required by the WTO Anti-Dumping Agreement, U.S. law stipulates that antidumping duty orders must be reviewed by Commerce and the ITC every five years, and revoked unless it is demonstrated that dumping and material injury would be likely to continue or recur within a reasonably foreseeable time.53 Determinations will normally be made on an order-wide, as opposed to a company-specific, basis, although there is a firm-specific revocation process as previously discussed. Under the pre-Uruguay Round U.S. law, there was no sunset provision and anti-dumping orders sometimes stayed in place for over 20 years. Special transition sunset review provisions for current orders allow for the grouping and consolidation of reviews in order to achieve efficiency and consider similar products together. These transition orders were reviewed in a staggered fashion beginning July 1, 1998, with the last review initiated on December 1, 1999.

10.5.1 Commerce

Commerce must inform interested domestic parties of their right to participate in the review. If there is no response, the order will be revoked (or the suspended investigation terminated) within 90 days of the initiation of the review. If, in Commerce’s discretion, there is an inadequate level of response from interested domestic parties, Commerce will conduct an expedited review based on the facts available. Full reviews are conducted if there is sufficient willingness to participate and adequate indication that parties will submit the requested information.

In making its determination as to whether revocation of the anti-dumping order would be likely to lead to continuation or recurrence of dumping, Commerce is required to consider the weighted-average dumping margins determined in the investigation and subsequent reviews, and the volume of imports of the subject merchandise for the period before and the period after the issuance of the antidumping order.54 More specific guidance on methodological and analytical issues is contained in the Sunset Policy Bulletin of April 16, 1998. Commerce indicated that it would normally determine that revocation of an anti-dumping order is likely to lead to continuation or recurrence of dumping when: (a) dumping continued at any level above de minimis after the issuance of the order; (b) imports of the subject merchandise ceased after the issuance of the order; or (c) dumping was eliminated after the issuance of the order, and import volumes for the subject merchandise declined significantly. In addition, Commerce shall determine that revocation of an order is likely to lead to continuation or recurrence of dumping when a respondent interested party waives its participation in the sunset review. Commerce must complete its review within 240 days of initiation. There are provisions for extension of time in extraordinarily complicated cases.55

10.5.2 International Trade Commission (ITC)

In five-year reviews, the ITC first determines whether to conduct a full review (which includes a public hearing, the issuance of questionnaires, and other procedures) or an expedited review (where a determination is made based on the facts available, with no hearing or further investigative activity). Specifically, the ITC determines whether individual responses to the notice of institution are adequate and, based on these individually adequate responses, whether the collective responses submitted by two groups of interested parties—domestic interested parties (such as producers, unions, trade associations or worker groups) and respondent interested parties (such as importers, exporters, foreign producers, trade associations or subject country governments)—show a sufficient willingness to participate and provide the requested information, and, if not, whether other circumstances warrant a full review.

The legislation states that, in a five-year review, the ITC shall determine whether revocation of an order or termination of a suspended investigation would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. The URAA Statement of Administrative Action indicates that under the likelihood standard, the ITC will engage in a counter-factual analysis: it must decide the likely impact in the reasonably foreseeable future of an important change in the status quo—the revocation of the order “and the elimination of its restraining effects on volumes and prices of imports.”56 Thus the likelihood standard is prospective in nature.

Although the standard in five-year reviews is not the same as that applied in the original anti-dumping investigations, it contains some of the same elements. The ITC is directed to consider the likely volume, price effect and impact of imports of the subject merchandise on the industry if the order is revoked. The ITC must take into account its prior injury determination, whether any improvement in the state of the industry is related to the order under review, and whether the industry is vulnerable to material injury if the order is revoked. The ITC must complete its review within 360 days of initiation. There are provisions for extension of time in extraordinarily complicated cases.57

Of the 15 anti-dumping and countervailing duty orders in place on imports from Canada subject to sunset review as of January 1, 1995, five orders were continued (iron construction castings, brass sheet and strip, steel rails, magnesium and corrosion-resistant steel) while the other 10 were revoked.

11. Other Procedural Issues

11.1 Suspension of Investigations

Commerce may suspend an investigation prior to a final determination by accepting a suspension agreement. In a suspension agreement, the exporters and producers agree to modify their behaviour so as to eliminate dumping or the injury caused thereby. A suspension agreement must include the exporters or producers who account for “substantially all of the merchandise” (interpreted by Commerce to mean at least 85%) under investigation, who agree to eliminate the dumping or cease exports to the United States within six months after suspension of the investigation.58

A copy of the proposed agreement must be made available to the petitioner and interested parties, who may then submit their comments. However, Commerce may proceed over the petitioner’s objections if the agency deems that the agreement is in the public interest and can be effectively monitored.59

The ITC determines whether the injurious effect of the imports is eliminated completely by the proposed agreement. If the injurious effects are not completely eliminated, the investigation is resumed. If Commerce determines that an agreement that resulted in the suspension of an investigation is being violated, the investigation is resumed and an anti-dumping order may be issued after a full investigation is concluded. Few such agreements have been concluded, although one example is Potassium Chloride from Canada.60 More recently, despite the opposition of domestic petitioners, Commerce has suspended investigations involving steel imports from Russia, determining such agreements to be in the public interest.

11.2 Critical Circumstances

At any point at least 20 days prior to Commerce’s final determination, the petitioner may allege that “critical circumstances” exist that warrant the retroactive suspension of the liquidation of entries of the subject merchandise either entered or withdrawn from warehouse during the 90 days prior to the preliminary determination. To ascertain whether critical circumstances exist, Commerce determines whether:

  1. there is both a history of dumping and material injury by reason of dumped imports in the United States or elsewhere, or whether the importer knew or should have known that the exporter was selling the subject merchandise at less than fair value and that there was likely to be material injury by reason of such sales; and
  2. there have been massive imports of the subject merchandise over a relatively short period of time (judged by comparing the periods immediately before and immediately after the filing date of the petition).

In its final injury determination, the ITC may also consider whether critical circumstances exist, without making a separate material injury determination regarding the surge in imports. Further, the ITC must determine whether the surge in imports prior to the suspension or liquidation would be likely to seriously undermine the remedial effect of any order that may be issued.

11.3 Termination of Investigations

Commerce may terminate an investigation at any point upon the withdrawal of the petition on which it was based and after notification of all interested parties. If the termination is based on an agreement by the foreign government to limit the volume of imports entering the United States, Commerce must determine whether such a termination is in the public interest by taking into account:

  1. whether the agreement would adversely affect U.S. consumers more than would the imposition of anti-dumping duties;
  2. the relative impact on U.S. international trade interests; and
  3. the relative impact on the competitiveness of the U.S. domestic industry.

The ITC may also terminate an investigation upon withdrawal of a petition.61

11.4 Anti-Circumvention

Circumvention issues normally arise when finished products from a country are subject to an anti-dumping order. In order to avoid paying the required duties, an exporter located in the country subject to the order may send its component parts to a third country or to the United States for final assembly. Circumvention may also arise where merchandise has been altered in form or appearance to evade duties. Anti-circumvention provisions were first enacted by the United States in 1988 as part of the Omnibus Trade and Competitiveness Act, and were amended in 1994.

Under the U.S. anti-circumvention provisions, the finished product exported from the third country or the component parts shipped to the United States for assembly may also be subject to the anti-dumping order if certain conditions are met.62 To be included under the order: (1) the parts or components must be produced in a country subject to an anti-dumping order; (2) the process of assembly or completion in the United States (or a third country) must be minor or insignificant; and (3) the value of the parts imported into the United States (or a third country) from the country subject to the order is a significant proportion of the total value of the finished product.63

In determining whether the process of assembly or completion is minor or insignificant, Commerce will consider:

  • the level of investment in the United States;
  • the level of R&D in the United States;
  • the nature of the production process in the United States;
  • the extent of the production process in the United States; and
  • whether the value of processing in the United States (or the third country) represents a small proportion of the total value of the merchandise sold in the United States.

No factor is controlling and the provisions are not intended to create rigid numerical standards. In determining whether to include parts or components within the scope of the order, Commerce will consider:

  • the pattern of trade, including sourcing patterns;
  • whether the manufacturer or exporter of the parts or components is affiliated with the person who assembles or completes the merchandise sold in the United States (or the third country); and
  • whether imports of those parts or components have increased since initiation of the investigation resulting in the relevant order.

11.5 Anti-Dumping Investigations on Behalf of a Third Country

In accordance with Article 14 of the Anti-Dumping Agreement, a WTO member may file a petition with the United States Trade Representative (USTR) alleging that imports into the United States from a third country are being dumped, causing material injury in the petitioning country. The United States may, at its discretion, enact anti-dumping measures directed against the third country if Commerce and the ITC make affirmative findings according to their normal methodologies. The USTR must obtain approval from the WTO Council for Trade in Goods before initiating such an investigation.64 Thus far, Canada has been the only country to make such a request to the USTR. Canada later withdrew the request after an investigation, further to a domestic petition, was concluded against the same third country.

12 Judicial Review

12.1 U.S. Domestic Court

An interested party who is dissatisfied with a Commerce or ITC final determination may file an action with the U.S. Court of International Trade (CIT) for judicial review. To obtain judicial review of an administrative action, a summons and a complaint must be filed concurrently within 30 days of publication of the final determination. The standard of review used by the CIT is whether the determination is supported by “substantial evidence on the record” or is “otherwise not in accordance with law.” Decisions of the CIT are subject to appeal to the U.S. Court of Appeals for the Federal Circuit.

12.2 NAFTA Panel Review

Under the provisions of Chapter 19 of the North American Free Trade Agreement (NAFTA), final determinations by Commerce or the ITC concerning products from NAFTA countries may be appealed to five-member binational panels as an alternative to domestic judicial review. Binational panels determine whether a final determination is in accordance with anti-dumping laws of the NAFTA country in which the decision is made. If a panel finds that the determination was in accordance with the domestic law, the determination is affirmed. Otherwise, the panel remands the case with instructions to the investigating authority for further action. NAFTA Article 1904 stipulates that a panel must be requested within 30 days of the date of appeal of the administrative action. The panel must reach a decision within 315 days of the date of the request.

Annex 1904.13 of the NAFTA provides for an “extraordinary challenge procedure” if either NAFTA party involved in the panel alleges, within a reasonable time, that the integrity of the review process is threatened and that the decision was affected by panellist misconduct, procedural violations, or action manifestly exceeding the power, authority or jurisdiction of the panel. The panel’s decision is appealed to a three-member committee of judges or former judges. Within 15 days of the request, the committee must convene and make a prompt decision to affirm, vacate or remand the panel’s decision.

NAFTA Article 1903 allows a NAFTA party to request that an amendment to another party’s anti-dumping statute be referred to a panel for a declaratory opinion on whether the amendment is consistent with the WTO and the NAFTA. In order for changes in a NAFTA country’s anti-dumping or countervailing duty statutes to apply to the other NAFTA countries, the other parties must be identified in the amending statute.

1The European Communities successfully invoked WTO dispute settlement procedures in response to two separate attempts by certain U.S. steel producers to use the 1916 law.

219 U.S.C. § 1671-1677g.

3Pub. L. 103-465, 108 Stat. 4809,Dec. 8, 1994.

4See 19 U.S.C. §§ 1330-13341 for the general organization and powers of the Commission.

5While Commerce may initiate anti-dumping investigations itself, it rarely does so. See 19 U.S.C. § 1573a (a) (1).

619 U.S.C. § 1677 (9).

719 U.S.C. § 1673a (b) (1).

8See 3.5”Microdisks from Japan, U.S. 54 Fed. Reg., 6435 (February 10, 1989).

919 U.S.C. § 1673a (c) (4) (A) (1994).

1010 19 U.S.C. § 732 (c) (4)-(C), (B) (ii), (B) (i).

1119 CFR § 353.12.

1219 U.S.C. § 1677m (e) (4) (1994).

1319 U.S.C. § 1677e (1994).

1419 U.S.C. § 1677c (c) (1994).

159 U.S.C. § 1677e (b) (1994).

1619 U.S.C. § 1677f (b) (1994).

1719 U.S.C. § 1677f (c) (B) (1994).

1819 U.S.C. § 1677 (10).

1919 U.S.C. § 1677 (4) (A).

2019 CFR 351.204 (b).

2119 U.S.C. § 1673 (a) (6) (A), B (i).

2219 U.S.C. § 1673 (a) (6) (B) (ii).

2319 U.S.C. § 1673 (a) (6) (C) (iii) and 19 CFR 351.410.

2419 U.S.C. § 1677b (a) (7) (A) (1994).

2519 U.S.C. § 1677b (a) (7) (A) (i), (ii) (1994).

2619 U.S.C. § 1677b (a) (1) (1994).

2719 U.S.C. § 1677b (b).

2819 U.S.C. §§ 1677b (a) (1) (B) (ii) (II), (a) (1) (C) (1994).

2919 U.S.C. § 1677b (a) (1) (B) (ii) (III), (C) (iii).

3019 U.S.C. § 1677b (c) (1) (B).

3119 U.S.C. § 1677b (c) (2) (A) (1994).

32 19 U.S.C. § 1672 (a).

3319 U.S.C. § 1672 (c) (2) (A).

3419 U.S.C. § 1672 (b).

3519 U.S.C. § 1677 (33) (1994).

3619 U.S.C. § 1672 (b).

3719 U.S.C. § 1672 (c) and (d),1677a (d) (3).

3819 U.S.C. § 1677f-1 (d) (1) (A) (1994); SAA at 172.

3919 U.S.C. § 1677f-1 (d) (1) (B) (1994).

4019 U.S.C. § 1673d (c) (5) (B) (1994).

4119 U.S.C. § 1673b (b) (3), SAA at 174-75.

4219 U.S.C. § 1677 (7) (B) (i).

4319 U.S.C. § 1673d (b) and 1677 (7) (F) (i).

4419 U.S.C. § 1673b (a). ITC procedures are contained in 19 CFR 207.

4519 U.S.C. § 1677 (4) (A).

4619 U.S.C. § 1671 (c) (iv).

4719 U.S.C. § 1677 (7) (G) (ii) (I)-(II).

4819 U.S.C. § 1675 (a) (2) (1994).

4919 U.S.C. § 1675 (a) (3) (1994).

5019 U.S.C. § 1675 (a) (2) (B) (1994).

51On January 29, 1999, a WTO dispute settlement panel determined that the “not likely” to dump standard was inconsistent with the United States’ obligations under Article 11.2 of the WTO Anti-Dumping Agreement.Therefore, Commerce proposed to amend the not likely” standard to whether “the continued application of the anti-dumping duty order is no longer necessary to offset dumping.”

5219 CFR 351.222 (b) (1998).

5319 U.S.C. § 1675 (c) (1) (1994).

54U.S.C. § 1652 (c) (1).

5519 U.S.C. § 1675 (c) (1) (1994).

56URAA SAA, H.R. Rep. No. 316, 103d Cong., 2d Sess., vol. I at 883-84.

5719 U.S.C. § 1675 (c) (1) (1994).

5819 U.S.C. § 1673c (b) (1994).

5919 U.S.C. § 1673c (e) (1994).

6053 F.R.1393 (1988).

6119 U.S.C. 1671c, 19 CFR 355.17.

6219 U.S.C. §§ 1677j (a) (1) (c) and (b) (1) (c).

6319 U.S.C. §§ 1677j (a) (1) (a)- (D) (1994).

6419 U.S.C. § 1677n (b) (1994).

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