101694 Federal Register / Vol. 89, No. 241 / Monday, December 16, 2024 / Rules and Regulations 

1This final rule codifies several distinct 

procedures and practices under various sections of 

the Act. As such, Commerce generally intends the 

rule’s provisions to be severable and to operate 

independently from each other. Commerce’s intent 

that the rule’s provisions be severable is 

demonstrated by the number of distinct regulatory 

provisions addressed in this rulemaking and the 

structure of the preamble in addressing them 

independently and supporting each, respectively, 

with Commerce’s statutory interpretation, agency 

practice, and court precedent. Accordingly, 

Commerce intends each portion of this rule to be 

severable from each other but has included all the 

proposed provisions in one rulemaking for 

purposes of enhancing Commerce’s trade remedy 

regulations. 

DEPARTMENT OF COMMERCE 

International Trade Administration 

19 CFR Part 351 

[Docket No. 241206–0317] 

RIN 0625–AB25 

Regulations Enhancing the 

Administration of the Antidumping and 

Countervailing Duty Trade Remedy 

Laws 

AGENCY: Enforcement and Compliance, 

International Trade Administration, 

Department of Commerce. 

ACTION: Final rule. 

SUMMARY: Pursuant to Title VII of the 

Tariff Act of 1930, as amended (the Act), 

the U.S. Department of Commerce 

(Commerce) is amending its trade 

remedy regulations to enhance the 

administration of the antidumping duty 

(AD) and countervailing duty (CVD) 

laws. Specifically, Commerce is 

codifying existing procedures and 

methodologies and creating or revising 

regulatory provisions relating to several 

matters including the collection of cash 

deposits, indicators used in surrogate 

country selection, application of 

antidumping rates in nonmarket 

economy proceedings, calculation of an 

all-others’ rate, selection of examined 

respondents, and attribution of 

subsidies received by cross-owned input 

producers and utility providers to 

producers of subject merchandise. 

DATES: These amendments are effective 

January 15, 2025. 

FOR FURTHER INFORMATION CONTACT: 

Scott D. McBride, Associate Deputy 

Chief Counsel for Trade Enforcement 

and Compliance, at (202) 482–6292, 

Jesus Saenz, Senior Attorney, at (202) 

482–1823, Ashlande Gelin, Attorney, at 

(202) 306–7302, or John Van Dyke, 

Import Policy Analyst, at 

john.vandyke@trade.gov. 

SUPPLEMENTARY INFORMATION: 

General Background 

On July 12, 2024, Commerce proposed 

amendments to its existing regulations, 

19 CFR part 351, to enhance the 

administration of the AD and CVD trade 

remedy laws, in ‘‘Regulations 

Enhancing the Administration of the 

Antidumping and Countervailing Duty 

Trade Remedy Laws,’’ published at 89 

FR 57286 (July 12, 2024) (Proposed 

Rule). This final rule concerns the AD/ 

CVD statutory and regulatory provisions 

in general, as well as those provisions 

pertaining to filing requirements; the 

application of cash deposits; the 

determination of separate rates for 

nonmarket economy entities; the 

calculation of rates for unexamined 

exporters and producers, including the 

all others rate; the selection of voluntary 

respondents; the assessment of AD and 

CVD rates on a per-unit basis; the 

submission of surrogate value, 

benchmark, and rebuttal information; 

the selection of facts otherwise 

available; the sharing with U.S. Customs 

and Border Protection (USCBP) of 

proprietary data for use in negligence 

and gross negligence investigations, in 

addition to investigations involving 

fraud; the collapsing of affiliated 

producers and non-producers, the 

application of the special rule for 

multinational corporations, the 

calculation of amounts for selling 

expenses and for profit for constructed 

value: and a series of CVD-specific 

provisions, which Commerce 

summarizes below. 

Title VII of the Act vests Commerce 

with authority to administer the AD/ 

CVD trade remedy laws. Section 731 of 

the Act directs Commerce to impose an 

AD order on merchandise entering the 

United States when it determines that a 

producer or exporter is selling a class or 

kind of foreign merchandise into the 

United States at less than fair value (i.e., 

dumping), and material injury or threat 

of material injury to that industry in the 

United States is found by the U.S. 

International Trade Commission (ITC). 

In addition, section 701 of the Act 

directs Commerce to impose a CVD 

order when it determines that a 

government of a country or any public 

entity within the territory of a country 

is providing, directly or indirectly, a 

countervailable subsidy with respect to 

the manufacture, production, or export 

of a class or kind of merchandise that 

is imported into the United States, and 

material injury or threat of material 

injury to that industry in the United 

States is found by the ITC. 

Section 771(5)(B) of the Act defines a 

countervailable subsidy as existing 

when ‘‘a government or any public 

entity within the territory of a country 

provides a financial contribution; 

provides any form of income or price 

support; or makes a payment to a 

funding mechanism to provide a 

financial contribution, or entrusts or 

directs a private entity to make a 

financial contribution, if providing the 

contribution would normally be vested 

in the government and the practice does 

not differ in substance from practices 

normally followed by governments; and 

a benefit is thereby conferred.’’ To be 

countervailable, a subsidy must be 

‘‘specific’’ within the meaning of section 

771(5A) of the Act. 

The Act provides numerous 

disciplines which Commerce must 

follow in conducting AD and CVD 

proceedings. For example, sections 

703(d)(1)(B), 705(d), 733(d)(1)(B), 

735(c), and 751 of the Act direct 

Commerce to order USCBP to collect 

cash deposits as security pursuant to 

affirmative determinations in its 

proceedings until Commerce orders the 

assessment of AD or CVD duties. 

Likewise, sections 705(c)(1)(B), 

705(c)(5), 735(c)(1)(B)(i), and 735(c)(5) 

of the Act set forth the means by which 

Commerce determines the AD margin or 

countervailable subsidy rate to be 

applied to imported subject 

merchandise exported or produced by 

entities not selected in an investigation 

for individual examination. In addition, 

sections 777A(c)(2) and 777A(e)(2)(A) of 

the Act allow Commerce to limit the 

number of exporters or producers to be 

individually examined, while section 

782(a) allows Commerce to select 

voluntary respondents. 

In accordance with these and other 

statutory provisions, this final rule 

codifies and enhances the procedures 

and practices applied by Commerce in 

administering and enforcing the AD and 

CVD laws. 

As Commerce explained throughout 

the preamble to the Proposed Rule, the 

purpose of these amendments is to help 

enhance and facilitate the 

administration of the AD and CVD 

regulations found at part 351.1 The 

codification of Commerce practice in 

this final rule, as well as updates to 

certain regulatory provisions to reflect 

modifications made by Congress to the 

Act in 2015, will provide greater clarity 

and transparency to Commerce’s 

procedures and calculations. In 

addition, Commerce has revised its 

methodology in nonmarket economy 

investigations and reviews to more 

effectively address situations in which a 

state-owned entity has less than 

majority state ownership but the state 

continues to control an entity through 

veto power or ‘‘golden shares.’’ It has 

furthermore updated the means by 


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Federal Register / Vol. 89, No. 241 / Monday, December 16, 2024 / Rules and Regulations 101695 

2See Proposed Rule, 89 FR at 57286. 

3See Regulations Improving and Strengthening 

the Enforcement of Trade Remedies Through the 

Administration of the Antidumping and 

Countervailing Duty Laws, Final Rule, 89 FR 20766, 

20768–20773 (March 25, 2024) (RISE Final Rule). 

4 Id. 

5 Id. 

6 Id. 

which it selects economically 

comparable countries for purposes of 

determining normal value in nonmarket 

economy proceedings. Furthermore, 

Commerce has updated many of its CVD 

regulations to provide both clarity and 

transparency to Commerce’s CVD 

methodology and to codify longstanding CVD policies. Finally, for the 

first time, Commerce has promulgated 

CVD regulations to address the 

government purchase of goods for more 

than adequate remuneration (MTAR) 

and the provision of rebates or 

exemptions of indirect taxes and import 

charges to exporters that purchase 

capital goods and equipment. 

Explanation of Modifications From the 

Proposed Rule to the Final Rule and 

Responses to Comments 

In the Proposed Rule, Commerce 

invited the public to submit comments.2

Commerce received 27 submissions 

from interested parties providing 

comments, including domestic 

producers, exporters, importers, foreign 

governments, and foreign entities. The 

majority of commenters supported 

Commerce’s proposed regulations and 

indicated that the new and revised 

regulations would increase transparency 

and enhance and improve the 

administration and enforcement of the 

AD and CVD laws. Some of the 

comments provided suggestions to 

further improve the regulations at issue, 

and Commerce considered the merits of 

each submission and analyzed the legal 

and policy arguments considering both 

past practice and Commerce’s mandate 

to enhance and improve the 

administration of our AD and CVD laws. 

Pursuant to that analysis, Commerce has 

made certain modifications to the 

Proposed Rule in response to those 

submissions. 

The preamble to the Proposed Rule 

provided background, analysis, and 

explanations which are relevant to these 

regulations. With some modifications, 

as noted, this final rule would codify 

regulations proposed on July 12, 2024. 

Accordingly, to the extent that parties 

wish to have a greater understanding of 

these regulations, Commerce encourages 

not only consideration of the preamble 

of these final regulations but also a 

review of the analysis and explanation 

in the preamble to the Proposed Rule. 

In drafting this final rule, Commerce 

carefully considered each of the 

comments received and the following 

sections address the comments received. 

Each section contains a brief discussion 

of the regulatory provision(s), a 

summary of the comments Commerce 

received, and Commerce’s response to 

those comments, including an 

explanation when Commerce modified 

its proposed regulations in response to 

those comments. 

1. Commerce Has Made Small 

Modifications to Proposed 

§ 351.104(a)(7), Which Addresses the 

Citation of Certain New Factual 

Information on the Record 

On March 25, 2024, Commerce issued 

a final rule which provided clarity and 

procedures for interested parties 

submitting documentation to the 

agency, explaining which documents 

from other segments and proceedings 

may be cited without placing such 

documents on the record and which 

documents must be placed on the record 

to be considered by Commerce in its 

analysis and determinations (RISE Final 

Rule).3 Those modifications added 

§ 351.104(a)(7), which states that 

interested parties citing public versions 

of documents issued by Commerce in 

other segments or proceedings before 

the implementation of Commerce’s 

Antidumping Duty and Countervailing 

Duty Centralized Electronic Service 

System (ACCESS) (or that otherwise 

have no assigned ACCESS barcode 

number) must submit copies of those 

documents on the record. 

In the Proposed Rule, Commerce 

stated that it was reconsidering the 

scope of public documents to which 

§ 351.104(a)(7) applies and proposed 

that public preliminary and final issues 

and decision memoranda issued in 

investigations and administrative 

reviews pursuant to §§ 351.205, 

351.210, and 351.213 with no assigned 

ACCESS barcode number need not be 

subject to the requirements of that 

provision.4 Commerce explained that 

citations to these memoranda, like all 

such citations relied upon by interested 

parties in submissions to Commerce, 

would still be required to be cited in full 

(albeit without an ACCESS barcode 

number).5 Commerce also stated that, as 

set forth in § 351.104(a)(6), if Commerce 

determined that a citation was not 

provided in full, Commerce could 

decline to consider and analyze the 

cited decision memoranda in its 

preliminary and final determinations.6

Commerce received five comments in 

response to the Proposed Rule. No 

commenter opposed allowing interested 

parties to cite preliminary and final 

issues and decision memoranda from 

other investigations and administrative 

reviews without ACCESS barcode 

numbers without also submitting those 

documents on the record of a segment 

of the proceeding. Accordingly, this 

final rule continues to allow parties to 

cite public documents that meet that 

description without submitting them on 

the record. 

Two commenters suggested that 

Commerce modify the proposed 

regulation language to clarify that the 

exception being proposed under 

§ 351.104(a)(7) applies to all 

investigation and administrative review 

preliminary and final issues and 

decision memoranda without an 

associated ACCESS barcode number and 

not just those which were issued 

‘‘before the implementation of 

ACCESS.’’ Those commenters noted an 

inconsistency between the first and 

second sentences of the paragraph as 

proposed in that regard. 

One commenter suggested that all 

investigation and administrative review 

preliminary and final determinations 

from other segments or proceedings are 

not ‘‘new factual information,’’ and 

therefore, the Secretary should state in 

the regulation that such memoranda are 

not subject to the timing and filing 

restrictions of the factual information 

regulation, § 351.301. The commenter 

stated that just because an ACCESS 

barcode number is missing does not 

mean that it should be treated as new 

factual information under § 351.301. 

Other commenters took issue, 

fundamentally, with both 

§ 351.104(a)(6) and (7), stating that 

Commerce should expand the list of 

documents that need not be submitted 

on the record, or need not include an 

ACCESS barcode number, to be cited 

without submitting them on the record. 

They stated that Commerce’s allowance 

of an exception for just preliminary and 

final decision memoranda in 

investigations and administrative 

reviews and not similar decision 

memoranda in other segments of a 

proceeding is arbitrary and that there is 

no reason for Commerce to treat 

investigation and administrative review 

documents differently. Furthermore, 

they stated that by requiring that certain 

public Commerce documents, but not 

others, be submitted onto administrative 

records, Commerce would be 

prejudicing interested parties by 

preventing them from citing relevant 

Commerce practice and policies, 

especially once the time for the 

submission of new factual information 

on the administrative record has passed. 

Therefore, they advocated that 


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7See RISE Final Rule, 89 FR at 20772. 

8 Id. 

9 Id. 

10 Id. 

11 Id. 

12 Id., 89 FR at 20771. 

Commerce should either allow all 

public documents originating with 

Commerce from other segments or other 

proceedings to be cited without 

submitting them on the record, or that 

Commerce at minimum expand the list 

of documents which may be cited 

without submitting them on the record 

in § 351.104(a)(6). 

Finally, two commenters stated that if 

Commerce continues to require that 

public Commerce documents listed in 

§ 351.104(a)(6) or public Commerce 

documents without associated ACCESS 

barcode numbers be submitted on the 

record, Commerce should take into 

consideration that interested parties 

frequently wish to cite certain 

Commerce public documents from other 

segments or proceedings in response to 

Commerce’s preliminary 

determinations, which are issued after 

the time for the submission of new 

factual information has passed. They 

stated that if the time for new factual 

information closes before Commerce 

issues its preliminary determination, 

there is no means by which those 

interested parties can adequately defend 

their interests by arguing in a brief or 

rebuttal brief that Commerce acted 

inconsistently in the preliminary 

determination from past cases. They 

stated that under that scenario, parties 

may not have been aware that a 

particular Commerce decision 

memorandum from another segment or 

proceeding was relevant until after the 

preliminary determination was issued. 

Those commenters, therefore, suggested 

that Commerce allow parties to submit 

documents listed in § 351.104(a)(6) or 

those without associated ACCESS 

barcode numbers as attachments in an 

appendix to case briefs and rebuttal 

briefs. 

Response 

Commerce has made two revisions to 

§ 351.104(a)(7), as proposed. First, for 

purposes of § 351.104(a), when 

Commerce is describing documents 

issued by all agency employees, 

Commerce uses the general term ‘‘the 

Department’’ to describe the overall 

originator of those documents. This is 

true for § 351.104(a)(3) through (6) and 

should equally be used in 

§ 351.104(a)(7). The term ‘‘Commerce’’ 

appeared in the proposed regulation 

language, but should say ‘‘the 

Department,’’ and Commerce has 

corrected for that error. 

The second revision is in response to 

those commenters who pointed out that 

Commerce’s first and second sentences 

in the provision were inconsistent. 

Section 351.104(a)(7) applies to all 

documents originating with Commerce 

with no associated ACCESS barcode 

numbers and not just those issued 

before the implementation of ACCESS. 

Accordingly, Commerce has revised the 

second sentence to make that sentence 

consistent with the first sentence, as 

requested by those commenters. 

In response to the statements that 

Commerce’s various decision 

memoranda are not factual information 

and should not be subject to the 

requirements of § 351.301, Commerce 

addressed this claim in the RISE Final 

Rule,7 explaining that collapsing 

determinations under § 351.401(f), for 

example, and calculation memoranda, 

are highly dependent on the casespecific facts that Commerce analyzes.8

Commerce explained that although it 

agreed that ‘‘each collapsing and 

calculation memoranda is a legal 

analysis and decision by the agency, 

each of these memoranda also reflect 

conclusions based on the facts unique to 

the segment of the proceeding in which 

they were issued.’’ 9 Accordingly, each 

such document ‘‘contains factual 

information being introduced on the 

record of the ongoing segment or 

proceeding for the first time.’’ 10 Thus, 

Commerce disagrees with the statement 

that Commerce should state that the 

filing requirements of § 351.301 do not 

apply to Commerce-authored public 

decision memoranda from other 

segments or proceedings because such 

information is not allegedly new factual 

information on the record. In fact, such 

memoranda are unquestionably new 

factual information in the context of a 

separate segment or proceeding, and 

Commerce has not adopted that 

proposed change. 

As Commerce also explained in the 

RISE Final Rule, ‘‘the conduct of an 

administrative proceeding is a timeintensive, resource-intensive, and factintensive endeavor.’’ 11 Commerce 

implemented the ACCESS barcode 

requirement to make it easier, in part, 

for Commerce to retrieve the documents 

and consider them in reaching 

conclusions for preliminary and final 

determinations.12 Therefore, allowing 

parties to cite documents in their 

submissions without those ACCESS 

barcode numbers present defeats the 

purpose of the requirement. 

However, Commerce also recognizes 

that interested parties have cited 

preliminary and final issues and 

decision memoranda in investigations 

and administrative reviews without 

including ACCESS barcode numbers for 

many years, and those four types of 

documents are by far the public 

Commerce decision documents most 

frequently cited by interested parties in 

their case briefs and rebuttal briefs. In 

addition, those documents are relatively 

less difficult for Commerce to find in 

legal resource services than many other 

types of documents listed in 

§ 351.104(a)(6). Accordingly, Commerce 

has determined that despite the 

additional burden on the agency case 

teams to retrieve the cited documents, it 

is both fair and reasonable to allow 

interested parties to cite those four types 

of public documents from other 

segments or proceedings in submissions 

before the agency; especially those 

submissions issued when no ACCESS 

barcode was associated with those 

documents. Commerce has made no 

such determination with respect to 

other documents listed under 

§ 351.104(a)(6) and therefore has not 

codified such a filing exception for 

those additional Commerce-authored 

documents. 

With respect to the suggestion that 

Commerce should permit parties to 

submit documents listed in 

§ 351.104(a)(6) for the first time on the 

record as appendices to case briefs and 

rebuttal briefs, for the reasons described 

below, Commerce does not agree that 

such a change to the agency’s 

procedures and regulations is warranted 

or that failing to allow the submission 

of such documents late in a proceeding 

after the time for new factual 

information has passed unduly 

prejudices interested parties. These 

types of documents, such as collapsing 

memoranda and calculation 

memoranda, typically contain extensive 

case-specific business proprietary 

information. In the public versions of 

such memoranda, the business 

proprietary information can be redacted 

such that the detailed basis of 

Commerce’s decision resulting from the 

underlying business proprietary data 

may not even be publicly discernable. 

Furthermore, to the extent that 

Commerce’s analysis is discernable in 

the public version of the memorandum, 

that same public analysis should be 

reflected in a second location— 

Commerce’s preliminary and final 

issues and decision memoranda. 

Commerce normally includes a public 

summary of its collapsing and 

calculation methodologies, for example, 

in its preliminary decision memoranda 

accompanying preliminary 

determinations or preliminary results 

published in the Federal Register. In 


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13See Proposed Rule, 89 FR at 57290–93. 14 Id., 89 FR at 57301. 

those memoranda, Commerce publicly 

describes its collapsing determinations 

and other major calculation issues 

raised by interested parties in their case 

and rebuttal briefs in all final decision 

memoranda accompanying final 

determinations or final results. It is in 

these public issues and decision 

memoranda that Commerce’s 

methodologies can be clearly discerned 

in a public manner, without relying on 

case-specific business proprietary 

information attached to briefs or rebuttal 

briefs for the first time on the record, 

long after the time for submitting new 

factual information on the record has 

expired. 

Under § 351.104(a)(6) and (7) as 

modified in this final rule, because 

interested parties can cite these public 

issues and decision memoranda from 

other segments or proceedings, 

including such memoranda without an 

associated ACCESS barcode number, to 

support their arguments in their case 

and rebuttal briefs, Commerce disagrees 

that the regulations, as amended, 

unduly prejudice interested parties as 

claimed by certain commenters. Instead, 

Commerce finds that § 351.104(a) 

reflects a reasonable balance that allows 

parties to defend their interests, while 

also allowing Commerce officials the 

ability to analyze and consider 

information on the record without 

forcing the officials to also assume the 

additional burden of (1) independently 

researching the records of other past 

segments and proceedings, (2) analyzing 

as part of that exercise the unique facts 

that were present in those segments or 

proceedings that resulted in the 

application of a particular methodology, 

analysis or calculation, and then (3) 

placing additional information derived 

from those segments or proceedings. on 

the record of the case before the agency. 

These regulations allow interested 

parties to cite many different documents 

and sources, including over 20 types of 

Commerce’s public decision documents, 

without placing those documents on the 

record, but also make clear that 

interested parties have a responsibility 

to make certain that the public versions 

of the factual information which 

support their arguments from other 

segments or proceedings and not listed 

in the relevant provisions of the 

regulation must be timely submitted on 

the record to be considered by 

Commerce in making its determinations. 

Accordingly, Commerce has determined 

to make no further modifications to 

§ 351.104(a)(7), other than the changes 

explained above. 

2. Commerce Has Modified Proposed 

§ 351.107 and Proposed § 351.212(b)(1), 

Which Cover Cash Deposits and 

Assessment of Duties, To Remove the 

Examples of Units Upon Which Cash 

Deposits and Assessment Rates May Be 

Applied 

Commerce significantly revised and 

updated its cash deposit regulation in 

proposed § 351.107 to more accurately 

and holistically reflect Commerce’s 

establishment and application of cash 

deposit rates.13 Specifically, the revised 

regulation: (1) explains that while 

Commerce normally calculates cash 

deposit rates on an ad valorem basis, 

Commerce may calculate cash deposit 

rates on a per-unit basis; (2) describes 

situations in which Commerce applies 

cash deposit rates in a producer/ 

exporter combination and the process 

by which a producer/exporter 

combination may be excluded from 

provisional measures and an AD or CVD 

order as a result of a calculated de 

minimis cash deposit rate following an 

investigation; (3) sets forth an AD cash 

deposit hierarchy for imports from 

market economies, an AD cash deposit 

hierarchy for imports from nonmarket 

economies, and a CVD cash deposit 

hierarchy; and (4) describes the effective 

date for cash deposit rates following the 

correction of ministerial errors in 

investigations and administrative 

reviews. 

In addition, Commerce also revised its 

assessment regulation covering AD 

determinations, § 351.212(b)(1), by 

dividing it into two sections—one 

providing for the assessment of entries 

on an ad valorem basis and another 

providing that if the information 

normally used to calculate an ad 

valorem assessment rate is not available 

or the use of an ad valorem rate is 

otherwise not appropriate, Commerce 

may instruct USCBP to assess duties on 

a per-unit basis.14

Commerce received several comments 

supporting the proposed changes to 

§ 351.107. One commenter supported 

the proposed rule as a welcome 

clarification to Commerce’s cash deposit 

procedures and recognition of its 

authority to establish and tailor cash 

deposit rates to properly effectuate the 

AD/CVD law. That commenter 

specifically identified Commerce’s 

proposed regulation as effectively 

codifying its authority to use 

combination producer/exporter cash 

deposit rates to address circumstances 

such as middleman dumping. 

Another commenter specifically 

expressed support for proposed 

§ 351.107(c)(1), which would codify an 

exception to Commerce’s normal ad 

valorem practice where the calculation 

of cash deposits on a per-unit basis 

might be appropriate if the information 

normally used to calculate an ad 

valorem cash deposit rate is not 

available or the use of an ad valorem 

cash deposit rate is otherwise not 

appropriate. The commenter further 

noted that Commerce’s practice of using 

such alternate methodologies to 

calculate cash deposit rates results in 

more accurate duty calculations and 

codifying that practice would provide 

clear notice of this practice to interested 

parties. 

A third commenter expressed support 

for the proposed regulation and 

suggested additional modifications to 

§ 351.107(c)(1) and § 351.107 generally. 

Regarding § 351.107(c)(1), the 

commenter proposed that, given the 

often technical nature of the products 

subject to review, as well as scope and 

data issues related to the underlying 

calculations and entries, Commerce 

should clarify that draft instructions be 

accompanied by an explanation of (1) 

the basis for Commerce’s conclusion 

that the relevant information to 

calculate an ad valorem rate is ‘‘not 

available’’ or the reason an ad valorem 

rate ‘‘is otherwise not appropriate’’ and 

(2) a detailed description as to how the 

per-unit basis is to be calculated, 

particularly in view of an AD/CVD 

order’s scope. The commenter noted 

that such an explanation would allow 

parties to comment on any errors and 

Commerce to make any appropriate 

modifications before final instructions 

are issued. 

Regarding the § 351.107 cash deposit 

regulation generally, the commenter 

proposed that Commerce explicitly 

require draft Customs instructions 

concerning cash deposit and assessment 

rates be placed on the record for 

comment at or near the time of the 

publication of the preliminary results to 

allow parties an opportunity to 

comment on the proposed calculations 

and rates as part of their administrative 

case briefs or, where Commerce is 

unable to issue draft instructions 

sufficiently in advance of the deadline 

for case briefs, Commerce establish an 

alternative process for submitting such 

comments. The commenter emphasized 

that Commerce should require that draft 

instructions be placed on the record for 

comment sufficiently in advance of the 

final results so parties may comment on 

those instructions and Commerce may 

address or respond to such comments as 

part of the final issues and decision 

memorandum or notice of final results. 


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15 Id., 89 FR at 57323 and 57328. 

One commenter expressed that while 

the proposed rule generally codifies 

Commerce’s existing practice, 

Commerce should clarify its intent 

behind certain provisions. Regarding the 

proposed § 351.107(c)(4), which would 

provide that USCBP may, upon 

receiving instructions from Commerce, 

apply a cash deposit requirement that 

reflects the record information and 

effectuates the administration and 

purpose of a certification, the 

commenter noted that it appeared 

Commerce intended to codify only its 

current practice of instructing USCBP to 

collect cash deposits based on the 

implementation of a certification 

requirement pursuant to a 

circumvention determination and 

expressed that Commerce should 

confirm the scope of this provision. 

That commenter also requested 

clarification regarding proposed 

§ 351.107(d) and (e), which identify the 

hierarchies Commerce utilizes to 

determine the appropriate cash deposit 

rate for entries subject to AD/CVD 

investigations and orders. The 

commenter pointed out that the 

regulation states that Commerce may 

instruct USCBP to use an alternative 

methodology in applying cash deposit 

rates if Commerce determines that a 

cash deposit rate other than that 

resulting from the CVD cash deposit 

hierarchy should be applied based on 

the unique facts in the underlying 

proceeding. The commenter suggested 

that, if Commerce adopts the regulation 

as proposed, it should provide further 

information and examples of the types 

of unique circumstances that would 

warrant a different approach and the 

alternative approaches that could be 

used. The commenter further suggested 

that Commerce confirm that in such a 

circumstance, interested parties would 

be provided an opportunity to comment 

on any such instructions. 

Commerce received only one 

comment on the proposed modifications 

to § 351.212(b)(1). The same commenter 

that proposed that Commerce should 

clarify that draft cash deposit 

instructions be accompanied by an 

explanation of: (1) the basis for 

Commerce’s conclusion that the 

relevant information to calculate an ad 

valorem rate is ‘‘not available’’ or why 

an ad valorem rate ‘‘is otherwise not 

appropriate’’; and (2) a detailed 

description as to how the per-unit basis 

is to be calculated, particularly in view 

of an AD/CVD order’s scope, made the 

same request for assessment 

instructions. The commenter noted that 

just as such an explanation would allow 

parties to comment on any errors in 

Commerce’s cash deposit instructions, 

so too could parties comment on any 

errors in Commerce’s draft assessment 

instructions and allow Commerce to 

make any appropriate modifications 

before the final assessment instructions 

are issued. 

Response 

As noted above, all of the commenters 

on the revised § 351.107 approved of the 

significant modifications which 

Commerce made to the provision. 

Commerce agrees with the commenters 

that the new version of the regulation 

will provide substantially more 

guidance to the public on Commerce’s 

application of cash deposit rates in the 

normal course of its proceedings. 

With respect to additional 

suggestions, one commenter suggested 

that Commerce place draft cash deposit 

instructions to USCBP on the record at 

or near the time of the publication of the 

preliminary results on the record to 

allow interested parties an opportunity 

to comment on those draft instructions. 

Commerce has determined not to place 

this additional requirement in the 

regulation. However, Commerce agrees 

that it is Commerce’s normal practice to 

share draft Customs instructions with 

interested parties and provide an 

opportunity to comment on them in 

most cases. In accordance with that 

practice, when appropriate, Commerce 

places draft Customs instructions on the 

record prior to issuance of the final 

results of a given segment of a 

proceeding with sufficient time for the 

parties to have an opportunity to 

comment on those instructions. 

However, there is no statutory 

obligation for Commerce to place draft 

Customs instructions on the record 

immediately after a preliminary agency 

decision has been issued, and 

sometimes, based on the facts on the 

record, it is either unnecessary for 

Commerce to issue draft instructions, or 

Commerce may be unable to issue draft 

instructions for a month’s time or more 

after the agency’s preliminary decision 

has been issued. Accordingly, 

Commerce has determined not to codify 

the commenter’s suggestion into the 

regulation. 

Nonetheless, Commerce 

acknowledges the importance of 

interested parties having the ability in 

most cases to consider draft Customs 

instructions and to identify any 

potential inaccuracies in a submission 

to Commerce before the final agency 

decision has been issued. Thus, 

Commerce recommends and encourages 

that if interested parties in a proceeding 

find that draft Customs instructions 

have not been placed on the record for 

a significant period of time after 

Commerce has issued its preliminary 

decision, those interested parties should 

request in writing that the agency place 

draft Customs instructions on the record 

while there is still sufficient time for 

parties to comment on them when they 

submit their case and rebuttal briefs on 

the record to Commerce in accordance 

with § 351.309(c) and (d). 

Relatedly, with respect to the 

commenter’s suggestion that Commerce 

provide an explanation and calculation 

when Commerce applies a cash deposit 

rate on a per-unit basis under proposed 

§ 351.107(c)(1), as well as that same 

commenter’s suggestion that Commerce 

provide the same explanation and 

calculation when Commerce determines 

an assessment rate on a per-unit basis 

under proposed § 351.212(b)(1)(ii), it is 

Commerce’s practice to provide 

interested parties with an opportunity to 

comment on the calculation of cash 

deposit and assessment rates in 

disclosure packages uploaded to the 

record, and Commerce normally 

explains its cash deposit requirements 

in its Federal Register notices. 

However, the Act does not require that 

Commerce issue such a detailed 

disclosure in every case, and in fact 

there may be situations in which the 

issuance of such a disclosure is simply 

not necessary. Accordingly, Commerce 

has determined that it will not modify 

§ 351.107(c)(1) or § 351.212(b)(1)(ii) to 

codify the issuance of disclosure 

packages regarding per-unit cash 

deposits in every case. 

Commerce has, however, determined 

to modify those provisions as set forth 

in the Proposed Rule to remove the 

examples of units ‘‘to which a cash 

deposit rate may be applied’’ and ‘‘on 

which duties may be assessed.’’ 15

Commerce proposed those examples to 

provide greater clarity to the issue, but 

has determined that those examples 

may have instead been the source of 

some confusion. Accordingly, 

Commerce will continue to determine 

the appropriate units on which to apply 

cash deposits or assessment rates on a 

case-by-case basis and will forgo listing 

examples in the regulation. 

In response to the comment that 

Commerce provide further information 

and examples of the types of unique 

circumstances that would warrant a 

different approach and the alternative 

approaches that could be used under the 

AD and CVD cash deposit hierarchies 

set forth in § 351.107(d) and (e), in the 

regulation, Commerce must emphasize 

that these exceptions to the cash deposit 

hierarchies will be highly dependent on 

the unique circumstances and facts of a 


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16 Id., 89 FR at 57293. 

17 Id. 

18 Id., 89 FR at 57293. 19 Id. 20 Id. 21See., e.g., Sigma Corp. v. United States, 117 F. 

3d 1401, 1405 (Fed. Cir. 1997) (Sigma v. United 

States); Transcom, Inc. v. United States, 182 F. 3d 

876, 882 (Fed. Cir. 1999) (Transcom v. United 

States); Michaels Stores, Inc. v. United States, 776 

F.3d 1388, 1390 (Fed. Cir. 2014) (Michaels v. United 

States); and Changzhou Wujin Fine Chem. Factory 

Co. v. United States, 701 F.3d 1367, 1370 (Fed. Cir. 

2012) (Changzhou v. United States). 

particular segment of a proceeding. 

Thus, it would be inappropriate for 

Commerce to provide examples in the 

regulation. However, if such a situation 

arises and Commerce is considering 

application of an alternative to the cash 

deposit hierarchy in a segment of the 

proceeding, consistent with its practice, 

Commerce anticipates that it would 

inform the interested parties of that 

possibility and provide interested 

parties with an opportunity to provide 

commentary on such an alternative 

approach. 

Finally, Commerce does not agree 

with the comment that Commerce 

intended for proposed § 351.107(c)(4) to 

apply only to certifications issued 

pursuant to circumvention 

determinations under section 781 of the 

Act. Certifications issued under 

§ 351.228 may be applied pursuant to 

circumvention determinations, of 

course, but Commerce may also instruct 

USCBP to use certifications, for 

example, in enforcing certain scope 

rulings, under § 351.225, and there are 

other situations in which Commerce 

may instruct USCBP to collect cash 

deposits in accordance with an importer 

or interested party certification. 

Accordingly, the language of proposed 

§ 351.107(c)(4) is appropriately broad 

enough to cover all situations in which 

Commerce instructs USCBP to collect 

cash deposits in accordance with a 

certification issued under § 351.228 to 

effectively administer and enforce the 

AD and CVD laws. 

3. Commerce Has Revised Proposed 

§ 351.108, the Separate Rate Regulation, 

To Clarify Various Provisions and To 

Address Third Country Exporters of 

Subject Merchandise From Nonmarket 

Economies 

In the Proposed Rule, Commerce 

proposed to codify its longstanding 

practice of granting a separate rate to 

exporters of merchandise from 

nonmarket economies in new 

§ 351.108.16 Commerce explained that 

its practice was in accordance with 

section 771(18)(A) of the Act, which 

defines a nonmarket economy country 

as a foreign country which Commerce 

determines ‘‘does not operate on market 

principles of cost or pricing structures, 

so that sales of merchandise in such 

country do not reflect the fair value of 

the merchandise.’’ 17 Accordingly, as 

Commerce explained in the Proposed 

Rule, for over three decades, in 

antidumping proceedings involving 

nonmarket economy countries, 

Commerce has repeatedly determined 

that legally distinct entities are in a 

sufficiently close relationship to the 

government to be considered part of a 

single entity (i.e., the government 

controlled entity). In this regard, current 

§ 351.107(d) explicitly provides that in 

an ‘‘antidumping proceeding involving 

imports from a nonmarket economy 

country, ‘rates’ may consist of a single 

dumping margin applicable to all 

exporters and producers.’’ 

Commerce explained in the Proposed 

Rule that it applies a separate rate test 

in antidumping proceedings involving a 

nonmarket economy. Under this test, 

Commerce considers whether an entity 

can demonstrate that the foreign 

nonmarket economy government does 

not have either legal (de jure) control or 

control in fact (de facto) over the 

entity’s export activities.18 Commerce 

explained that over the past decade, 

Commerce has modified its practice to 

conclude that when a government holds 

a majority ownership share, either 

directly or indirectly, in a respondent 

exporting entity located in a nonmarket 

economy, the majority holding in and of 

itself demonstrates that the government 

exercises, or has the potential to 

exercise, control over the entity’s 

operations generally.19 Commerce 

further explained that it was also 

proposing to strengthen its separate rate 

practice to address additional real-world 

factors through which a foreign 

government can control or influence 

production decisions, pricing and sales 

decisions, and export behavior.20

Commerce’s practice in this regard has 

been affirmed in multiple cases by the 

U.S. Court of Appeals for the Federal 

Circuit (Federal Circuit).21

Commerce received several comments 

on proposed § 351.108. Numerous 

commenters indicated their approval for 

Commerce’s separate rate practice and 

its codification of that practice in its 

regulations, including its modification 

of that practice to deny the application 

of a separate rate when a nonmarket 

economy government has less than a 

majority ownership in a company but 

other indicia exist in conjunction with 

that (minority) ownership to indicate 

that the government controls or can 

control relevant decisions of the 

company. 

Certain commenters identified 

concerns involving certain aspects of 

the proposed separate rate regulation. In 

particular, several commenters 

expressed concerns that the regulation 

did not address situations in which a 

company owned in whole or in part by 

the nonmarket economy government but 

located in a market economy other than 

the United States, exports merchandise 

from the non-market economy to the 

United States. One commenter stated 

that if the final regulations did not 

address situations in which a company 

incorporated in a market economy 

country exports merchandise from a 

nonmarket economy to the United 

States, the lack of such guidance could 

have a negative impact on U.S. import 

businesses seeking to comply with U.S. 

trade laws. That commenter stated that 

by remaining silent on those scenarios, 

Commerce’s proposed regulations 

discourage the filing of separate rate 

applications in the first place by thirdcountry exporters of merchandise from 

nonmarket economies. That commenter 

also suggested that Commerce should 

additionally consider addressing 

Commerce’s practice when merchandise 

is substantially transformed in a third 

country before exportation to the United 

States, as well as other situations which 

might arise in a complex supply chain 

in the third country with regard to 

merchandise from the nonmarket 

economy. 

Another commenter recommended 

that Commerce clarify that the separate 

rate test applies to all exporters, 

whether the exporter is located in the 

nonmarket economy or a market 

economy other than the United States, 

because the focus of the statute is on the 

merchandise produced or exported from 

the nonmarket economy and not the 

geographic location of the exporter. That 

commenter stated that regardless of 

whether exporters are located in Hong 

Kong, Toronto, or Shanghai, if the 

merchandise is exported from a 

nonmarket economy to the United 

States, there is no reason to treat any of 

those exporters differently with regard 

to the application of the separate rate 

test, especially if the nonmarket 

economy government has any 

ownership interest in those exporters. 

That commenter stated that under 

Commerce’s proposed regulation there 

is a significant risk that entities 

affiliated with the nonmarket economy 

government exporting merchandise 

from the nonmarket economy and sold 

to the United States could be treated 

differently solely because of whether the 

entities are physically located within or 

outside of the nonmarket economy. 


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22Citing Policy Bulletin 05.1, Separate-Rates 

Practice and Application of Combination Rates in 

Antidumping Investigations Involving Non-Market 

Economy Countries (April 5, 2005), available on 

Commerce’s ACCESS website at https://

access.trade.gov/Resources/policy/bull04-1.html. 23See Proposed Rule, 89 FR at 57296. 

Another commenter acknowledged 

that governments of certain nonmarket 

economies, including the People’s 

Republic of China (China), have recently 

established corporate footholds and 

export platforms in third country market 

economies, resulting in a significant 

increase in circumvention and evasion 

inquiries conducted by Commerce and 

USCBP. The commenter stated that 

Commerce’s proposed regulation 

‘‘contains a significant loophole’’ in not 

addressing exporters of nonmarket 

economy merchandise that are located 

in third countries and stated that 

Commerce ‘‘should not voluntarily limit 

its ability to remedy control over a 

firm’s export activities exercised by the 

government of a nonmarket economy 

solely based on geography.’’ Citing a 

separate rates policy bulletin issued by 

Commerce in 2005, the commenter 

explained that if a company physically 

located in a market economy country is 

owned or otherwise controlled by the 

nonmarket economy government, then 

that government could still be in a 

position to control the export activities 

of the company, which it asserted is the 

precise ‘‘situation that the separate rate 

test is intended to address.’’ 22

In addition, a few commenters 

expressed concerns with Commerce’s 

separate rate exception codified in 

proposed § 351.108(c) for entities 

wholly owned by market economy 

entities and incorporated and 

headquartered in a market economy. 

One commenter stated that Commerce 

failed to take into consideration in the 

proposed regulation that a nonmarket 

economy government might exercise 

control through various ownership 

interests or other means. That 

commenter advocated removing the 

exception from the proposed regulations 

altogether. 

Similarly, another commenter 

identified concerns with the same 

language in proposed § 351.108(c), 

suggesting that Commerce should 

include an ‘‘ultimate ownership’’ 

analysis in the regulation looking 

beyond ‘‘one level of corporate control’’ 

to upstream shareholders and corporate 

owners to determine if the nonmarket 

economy government, including 

through the use of state-owned 

enterprises, might be situated in such a 

way as to evade Commerce’s separate 

rate analysis. 

A third commenter suggested that 

Commerce add language to the 

provision that would allow Commerce 

to deny the application of the exception 

if there was evidence on the record 

suggesting that the company is 

otherwise controlled by the nonmarket 

economy government. 

A fourth commenter expressed 

concerns that the exception might allow 

for ‘‘indirect’’ ownership of an exporter 

of nonmarket economy merchandise, 

which ‘‘could be exploited by 

government-controlled’’ nonmarket 

economy entities ‘‘attempting to obscure 

their status by routing ownership 

through one or more foreign holding 

companies with some operations in a 

market economy country.’’ Therefore, 

that commenter recommended that 

Commerce add the terms ‘‘directly and 

indirectly’’ before the descriptor 

‘‘wholly owned’’ in § 351.108(c). 

Two commenters stated that they 

disagreed with Commerce’s proposed 

requirement in § 351.108(d)(1), (2), and 

(3) that separate rate applications and 

certifications be filed no later than 14 

days following publication in the 

Federal Register of a notice of initiation, 

stating that Commerce’s current practice 

of 30 days was preferrable. In the 

Proposed Rule, Commerce explained 

that ‘‘the thirty-day deadline delays 

Commerce from selecting respondents 

in its nonmarket economy proceedings 

because Commerce cannot select 

respondents for individual examination 

in its nonmarket economy proceedings 

until it first determines the pool of 

exporters who have satisfied the 

separate rate analysis.’’ 23 One 

commenter stated that it disagreed with 

Commerce’s conclusion, stating that the 

thirty-day requirement does not affect 

the selection of mandatory respondents 

because it claimed that Commerce’s 

practice is to choose the largest 

exporters based on quantity and value 

questionnaires and that if a company is 

selected as a mandatory respondent, 

Commerce can gather the information it 

needs for a separate rate analysis from 

the mandatory respondent’s section A 

questionnaire response. In addition, that 

commenter stated that gathering 

necessary information to complete a 

separate rate application, in particular, 

is a difficult task, because many 

exporters may have never participated 

in an antidumping proceeding before, 

many companies have intermediate 

shareholders who may be initially 

unwilling to report their ownership, and 

the proposed regulations suggest that 

new information might be requested of 

exporters in the future which might take 

even more time to collect, report, and 

support with documentation. 

A second commenter that disagreed 

with the fourteen-day deadline focused 

on the hardship which that truncated 

deadline would have on United States 

small businesses and, in particular, 

importers. The commenter explained 

that many United States importers are 

caught by surprise in antidumping 

investigations and have lesssophisticated operations than larger 

importers, and it may take a lengthy 

amount of time after a petition in an 

investigation has been filed to identify 

smaller importers as interested parties. 

In addition, the commenter explained 

that once those smaller importers realize 

that they are interested parties, it can 

take some time for them to retain legal 

counsel, fully understand the impact of 

antidumping and countervailing duties 

on their business, identify relevant 

products covered by an investigation 

being imported, and identify their 

upstream producers and exporters that 

are ultimately responsible for 

completing the separate rate 

application. Even after they identify 

those producers and exporters, the 

commenter explained that 

communicating with those parties and 

inducing them to file a timely separate 

rate application also takes time. That 

commenter stated that this ‘‘significant 

change’’ would be ‘‘likely to 

disproportionately and negatively 

impact small U.S. businesses.’’ 

Therefore, considering the financial 

impact of such a change on U.S. 

importers and numerous steps which 

U.S. importers would have to take under 

the proposed fourteen-day deadline, 

that commenter stated that Commerce 

should retain the thirty-day deadline. 

One commenter indicated its support 

for the fourteen-day deadline, stating 

that it should not create any hardship 

for companies wishing to submit a 

separate rate application or certification. 

That commenter stated that the 

applications and certifications are 

available on Commerce’s website, and 

all importers, producers, and exporters 

should be aware after the petition is 

filed in investigations, (before initiation 

of the investigation), or after a review 

request is filed in reviews, that they are 

subject to an antidumping proceeding. 

That commenter agreed with Commerce 

that the new deadline would help 

prevent delays in nonmarket economy 

investigations or reviews because it 

allows Commerce to select respondents 

for individual examination earlier in the 

proceeding. 

In addition, Commerce received 

several suggestions from commenters for 

smaller modifications to proposed 


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24That commenter cited Jinko Solar Co. v. United 

States, 279 F. Supp. 3d 1253, 1260 (CIT 2017), and 

Echjay Forgings Priv. Ltd. v. United States, 475 F. 

Supp.3d 1350, 1366 (CIT 2020), for cases affirming 

Commerce’s determinations that family members 

can share a common interest with a business. 

25That commenter cited a memorandum drafted 

by Commerce, ‘‘Memorandum on China’s Status as 

a Non-Market Economy,’’ dated October. 26, 2017, 

available at https://enforcement.trade.gov/ 

download/prc-nme-status/prc-nme-review-final103017.pdf. 

26See section 771(18)(B) of the Act. 

27 In 1997, the Federal Circuit in Sigma v. United 

States recognized that the Act ‘‘recognizes a close 

correlation between a nonmarket economy and 

government control of prices, output decisions, and 

the allocation of resources.’’ Sigma v. United States, 

117 F.3d at 1405–1406. 

28See Crystalline Silicon Photovoltaic Cells, 

Whether or Not Assembled Into Modules, From the 

People’s Republic of China: Final Results of 

Antidumping Duty Administrative Review and 

Final Determination of No Shipments; 2012–2013, 

80 FR 40998 (July 14, 2015), and accompanying 

Issues and Decision Memorandum at Comment 42. 

29See., e.g., Sigma v. United States 117 F.3d at 

1405; Transcom v. United States, 182 F. 3d 876, 

882; Michaels Stores v. United States, 776 F.3d 

1388, 1390; and Changzhou v. United States, 701 

F.3d 1367, 1370. 

§ 351.108 to improve the regulations. 

One commenter recommended that 

Commerce make the following 

modifications: Remove the term ‘‘the 

lack of’’ in the header language for 

proposed § 351.108(b)(3) because the 

criteria listed in that section actually 

indicate de facto control; remove the 

word ‘‘no’’ in proposed 

§ 351.108(b)(3)(vi) because, again, that 

provision speaks to evidence of de facto 

control or influence; remove the word 

‘‘must’’ in § 351.108(b)(3)(i) and add the 

term ‘‘or must maintain’’ because the 

described situation covers both existing 

and required maintenance of certain 

government representatives in positions 

of control; include the term ‘‘or 

managers’’ following the term ‘‘officers’’ 

throughout the regulation because both 

officers and managers can influence 

corporate decisions; and when 

addressing situations in which 

representative of the governments may, 

in fact, be placed in positions of 

leadership or power in a company, 

Commerce should include the term ‘‘or 

their family members,’’ because 

Commerce has a long-standing practice 

of recognizing that family members and 

family groupings may share a common 

business interest and authority.24

Another commenter suggested that 

Commerce revise the regulation to better 

clarify that the agency, and not the 

separate rate applicants or certifiers, 

must be satisfied that the applications or 

certifiers have shown that the degree of 

government control or influence is not 

significant and to emphasize that the 

applicants or certifiers have the sole 

responsibility to provide proof of lack of 

government control or influence. That 

commenter also suggested that 

Commerce include ‘‘governmentappointed or controlled labor unions’’ 

in the regulation as types of governing 

authorities through which the 

nonmarket economy government may 

exert control or influence, because 

Commerce has indicated in the past that 

such unions are under the ‘‘control and 

direction of the All-China Federation of 

Trade Unions (ACFTU),’’ which is 

affiliated with the Chinese government 

and an organ of the Communist Party of 

China.25

Finally, one commenter expressed 

concerns with proposed § 351.108(e), 

which states that entities that submit 

separate rate applications or 

certifications and are subsequently 

selected to be an examined respondent 

in an investigation or review must fully 

respond to Commerce’s questionnaires 

to be eligible for separate rate status. 

That commenter stated that Commerce 

should not adopt the proposed 

provision and not ‘‘automatically deem 

companies that failed to respond to all 

questionnaires as part’’ of the 

nonmarket economy entity. The 

commenter stated that a failure to 

respond to all questionnaires would 

justify the application of adverse facts 

available, pursuant to section 776(a) and 

(b) of the Act, but would not necessarily 

justify the refusal of a grant of separate 

rate eligibility. That commenter stated 

that treating individually examined 

respondents differently from nonselected exporters in this manner would 

create an ‘‘arbitrary distinction’’ and 

would result in Commerce not 

considering ‘‘the rate assigned’’ to an 

examined respondent in ‘‘calculating 

the separate rate’’ if the examined 

respondent was ‘‘deemed to be part’’ of 

the nonmarket economy entity. The 

commenter stated that such a practice 

would create a ‘‘significant incentive for 

manipulation by exporters and permit 

separate rate companies to potentially 

benefit from lower rates, 

notwithstanding the selected 

respondent’s deemed representativeness 

of the non-individually examined 

companies.’’ The commenter explained 

that under this situation, parties with no 

intent to fully participate or that 

anticipate substantial dumping margins 

would be incentivized to submit a 

separate rate application or certification 

and, once selected as an examined 

respondent, could withdraw from 

participation as a means of 

manipulating the rate applied to the 

non-selected separate rate companies. 

Response 

Commerce has made certain 

modifications to proposed § 351.108 in 

light of the comments it received on the 

proposed regulation. With respect to the 

concerns expressed by multiple 

commenters as to third country 

exporters, Commerce respectfully 

disagrees with the commenters who 

stated that there is no difference for 

purposes of Commerce’s separate rate 

practice between exporters of subject 

merchandise owned, in whole or in 

part, by a nonmarket economy 

government located in the nonmarket 

economy and those exporters located in 

a third country. 

When an entity is physically located 

in a nonmarket economy, there are 

multiple means by which the nonmarket 

economy government may, directly or 

indirectly, influence and control the 

entity. In the Act, Congress instructed 

Commerce to take into account at least 

six factors in determining if a country is 

a nonmarket economy: (i) the extent to 

which the currency of the foreign 

country is convertible into the currency 

of other countries; (ii) the extent to 

which wage rates in the foreign country 

are determined by free bargaining 

between labor and management; (iii) the 

extent to which joint ventures or other 

investments by firms of other foreign 

countries are permitted in the foreign 

country; (iv) the extent of government 

ownership or control of the means of 

production; (v) the extent of government 

control over the allocation of resources 

and over the price and output decisions; 

and (vi) such other factors as the 

administering authority considers 

appropriate.26 Some of those factors are 

specific to the nonmarket economy 

government’s ownership and control of 

the producers and exporters of the 

subject merchandise, but other factors 

reflect the nature of the nonmarket 

economy itself.27 As Commerce has 

explained, its practice is focused on 

‘‘the government’s use of a variety of 

legal and administrative levers to exert 

influence and control (both direct and 

indirect) over the assembly of economic 

factors across the economy.’’ 28

As noted above, Commerce has 

recognized in multiple cases the ability 

of the nonmarket economy government 

to influence or control production 

decisions, commercial decisions, or 

export activities within the nonmarket 

economy, even when such influence or 

control is applied through multiple 

entities and organizational 

relationships, and the Federal Circuit 

has affirmed such findings.29 The 

nonmarket economy government might 

control one producer directly, through a 

government agency or a state-owned 


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30See Polyester Textured Yarn from the People’s 

Republic of China, Preliminary Affirmative 

Determination of Sales at Less Than Fair Value, 

Postponement of Final Determination and 

Extension of Provisional Measures, 84 FR 31297 

(July 1, 2019), and accompanying Preliminary 

Decision Memorandum at ‘‘Separate Rates.’’ 

31 Id. 

32See Commerce’s Separate Rate Application at 

3, available at https://access.trade.gov/Resources/ 

nme/sep-rate-files/app-20190221/prc-sr-app022119.pdf. 

33See, e.g., Chinese Firms are expanding in 

South-Asia, The Economist, dated April 24, 2024, 

available at https://economist.com/asia/2024/04/ 

25/chinese-firms-are-expanding-in-south-east-asia. 

34See, De Facto Criteria for Establishing a 

Separate Rate in Antidumping Proceedings 

Involving Nonmarket Economy Countries, 78 FR 

40430, 40432 (July 5, 2013) (‘‘We agree that there 

is a legitimate concern that NME producers under 

government control selling through affiliated thirdcountry resellers may, in fact, control that reseller 

and, in such cases, the reseller’s exporting activities 

would also be under government control’’) and (‘‘In 

circumstances when the record indicates there may 

be government control through the NME producer, 

we may require both the NME producer and the ME 

exporter to provide’’ separate rate de jure and de 

facto information). 

enterprise, while indirectly influencing 

another producer through privatelyowned companies over which the 

nonmarket economy has ownership 

interests or governing authority. 

However, when an exporting entity is 

physically located outside of the 

nonmarket economy at issue, some of 

those conclusions may not equally 

apply. In other words, the nonmarket 

economy government’s ‘‘legal and 

administrative levers’’ in the nonmarket 

economy that impact certain activities 

may differ from that government’s ‘‘legal 

and administrative levers’’ in a third 

country where that government is not 

the legal authority. At the same time, 

Commerce recognizes that a nonmarket 

economy government can, depending on 

the specific circumstances, continue to 

exert substantial influence over the 

export activities of state-owned firms 

incorporated in third countries. For 

example, direct ownership of an 

exporter by a nonmarket economy 

government or state-owned enterprise 

could imply control over the selection 

of management of the exporter under 

the governing corporate agreements or 

inform the extent to which that exporter 

retains the proceeds of its export sales 

or repatriates them to the nonmarket 

economy parent. 

Accordingly, whether the exporting 

entity is located in a market economy or 

a different nonmarket economy is a 

factor that can be relevant to the 

analysis of whether a third country 

exporter is owned or potentially 

controlled by the nonmarket economy 

government. 

The focus of the separate rate test is 

‘‘if a respondent can demonstrate the 

absence of both de jure and de facto 

government control over its export 

activities.’’ 30 The ultimate question 

under the separate rate test is whether 

the nonmarket economy government has 

influence or control over important 

decisions of the entity, like the 

‘‘selection of management,’’ which 

would be ‘‘key’’ in ‘‘determining 

whether a company has sufficient 

independence in its export activities to 

merit a separate rate.’’ 31

In the case of an entity located in a 

third country that exports merchandise 

subject to an investigation or AD/CVD 

order and originating from the 

nonmarket economy, the subject 

merchandise might be exported directly 

to the United States from the nonmarket 

economy. Alternatively, the subject 

merchandise might be exported to a 

third country, either the one where the 

entity is located or another third 

country, where it is held in a 

warehouse, stored in inventory or 

otherwise retained for a period of time, 

before it is eventually exported to the 

United States at a later date. A third 

option might be that the subject 

merchandise undergoes some minor 

processing in a third country, like the 

painting or marking of a product, 

without changing the country of origin 

of the merchandise. In all of these 

potential situations, unless record 

evidence demonstrates that the 

company is wholly owned by a foreign 

entity and is incorporated and 

headquartered in a market economy, in 

accordance with § 351.108(c), 

Commerce requires a separate rate 

application or certification from that 

entity.32 This is because it is 

Commerce’s experience that entities in 

third countries that export merchandise 

from the nonmarket economy to the 

United States commonly are owned, in 

part or in whole, by the nonmarket 

economy government through the 

government’s agencies or state-owned 

enterprises.33 Additionally, based on 

experience, there is a strong possibility 

that through that ownership 

relationship the nonmarket economy 

government might control or influence 

the entity’s export activities and 

decisions with respect to the 

merchandise being exported from the 

nonmarket economy. Such control 

might arise, for example, through the 

appointment of officers, managers, and 

the board of directors, but could also 

manifest through veto power or the use 

of ‘‘golden shares’’ and outsized voting 

rights within the company. Every 

company is unique, so a state-owned 

enterprise or other governmentcontrolled entity might equally be able 

to direct or influence export-related 

decisions of a third country company 

based on the unique nature of its 

ownership share. 

On the other hand, because the 

nonmarket economy government may 

not have the same legal and 

administrative levers in the third 

country which it has in the subject 

country, the exercise of ownership and 

control of the entity in the third country 

by the nonmarket economy government 

may differ. Accordingly, after 

consideration of the comments, 

Commerce has modified paragraph (a) of 

§ 351.108 to add a paragraph (a)(3) 

which states that if a nonmarket 

economy government has direct 

ownership or control, in whole or in 

part, of an entity located in a third 

country market and that entity exports 

subject merchandise from the 

nonmarket economy to the United 

States, Commerce may determine on the 

basis of record information that such an 

entity is part of the governmentcontrolled entity and assign that entity 

the nonmarket economy entity rate. 

Furthermore, Commerce has modified 

§ 351.108(b) and divided it into two 

provisions. Pursuant to paragraph (b)(1), 

Commerce will apply an updated 

separate rate test and analysis to entities 

located in nonmarket economies, as set 

forth in the Proposed Rule, and 

pursuant to paragraph (b)(2), Commerce 

may analyze an entity directly owned or 

controlled by a nonmarket economy 

government and located in a third 

country and determine based on record 

information if that third country 

exporter should be treated as part of the 

nonmarket economy entity and receive 

the nonmarket economy entity rate or if 

it should be granted a separate 

antidumping duty rate. This language is 

consistent with Commerce’s historical 

analysis and treatment of entities 

located in nonmarket economies and 

allows for Commerce to consider the 

legal and administrative levers present 

in third countries that might allow for 

the control of an entity that exports 

subject merchandise to the United 

States and is owned, in part or in whole, 

by the nonmarket economy 

government.34

In response to the comments on 

proposed § 351.108(c), Commerce has 

clarified the language of the provision to 

explain that, in accordance with our 

current practice, if an entity claims that 

it is wholly owned by a foreign entity 

and headquartered and incorporated in 

a market economy, it must complete and 

submit relevant, designated sections of 

the separate rate application or 


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35See Commerce’s Separate Rate Application at 

3, available at https://access.trade.gov/Resources/ 

nme/nme-separate.html. 

36Commerce has allowed an exception for 

wholly-foreign-owned exporters from the 

application of the separate rate analysis for three 

decades. See Notice of Final Determination of Sales 

at Less Than Fair Value: Bicycles From the People’s 

Republic of China, 61 FR 19026 (April 30, 1996) 

(explaining that ‘‘Four of the responding exporters 

in this investigation are located outside the PRC 

. . . Further, there is no PRC ownership of any of 

these companies. Therefore, we determine that no 

separate rates analysis is required for these 

exporters because they are beyond the jurisdiction 

of the PRC government’’); Certain Steel Threaded 

Rod from the People’s Republic of China: 

Preliminary Results and Partial Rescission of the 

Antidumping Duty Administrative Review; 2014– 

2015, 81 FR 29843 (May 13, 2016), and 

accompanying Issues and Decision Memorandum at 

5, citing Final Results of Antidumping 

Administrative Review: Petroleum Wax Candles 

from the People’s Republic of China, 72 FR 52355 

(September 13, 2011) (stating ‘‘In its Section A 

response, the RMB/IFI Group, reported that it is 

wholly-owned by individuals or companies located 

in a market economy (‘‘ME’’) country. Therefore, 

because it is wholly foreign-owned, and we have no 

evidence indicating that it is under the control of 

the PRC government, a separate rate analysis is not 

necessary to determine whether this company is 

independent from government control. 

Accordingly, we preliminarily grant a separate rate 

to the RMB/IFI Group’’); and Wooden Bedroom 

Furniture From the People’s Republic of China: 

Amended Final Results Pursuant to a Final Court 

Decision, 75 FR 72788 (November 26, 2010) (stating 

‘‘Wanvog provided evidence that during the POR it 

was a wholly foreign-owned company. Therefore, 

consistent with the Department’s practice, further 

analysis is not necessary to determine whether 

Wanvog’s export activities are independent from 

government control, and we have preliminarily 

granted a separate rate to Wanvog’’). 

37See Proposed Rule, 89 FR at 57296. 

38See section 736(a) of the Act. 

39 Id. 

certification explaining as much and 

provide accompanying information on 

the record that supports such a claim.35

Furthermore, Commerce has modified 

the language of § 351.108(d) to explain 

that all exporters of subject merchandise 

to the United States, even those 

claiming the ‘‘wholly owned’’ exception 

applies, must submit a separate rate 

application or certification, with the 

only difference being those claiming 

that the ‘‘wholly owned’’ exception 

need only complete a section of the 

application or certification explicitly 

designated for that purpose by 

Commerce. 

On the other hand, Commerce will 

not modify the regulations to require 

further analysis or investigation under 

the ‘‘wholly owned’’ exception into 

possible ‘‘ultimate owners’’ of the 

foreign owners themselves in every 

proceeding in which the issue arises, as 

suggested by certain commenters. The 

facts of each antidumping proceeding 

are unique, and the application of any 

such requirement to Commerce in every 

case in which this arises, whether the 

foreign-owned entity is located in the 

nonmarket economy or in a third 

country, would be unreasonable and fail 

to take into consideration the time, 

record constraints and overall difficulty 

which Commerce could be faced with in 

pursuing such lines of inquiry in a 

proceeding involving multiple parties or 

complicated facts. Commerce has an 

extensive history of applying the 

foreign-owned exception in its separate 

rate practice,36 and Commerce will 

continue to apply that exception and 

consider the evidence on the record in 

determining on a case-by-case basis 

whether the exception should apply to 

a given exporter. Furthermore, for the 

same reason, Commerce will not expand 

its normal analysis to mandate inquiry 

in the regulation into ‘‘indirect’’ means 

of ownership or control of foreignowned entities by a nonmarket economy 

government through potential holding 

companies or shareholder deception in 

every case, as suggested by some 

commenters. 

With regard to the comments on 

proposed deadlines for the filing of 

separate rate applications and 

certifications under § 351.108(d)(1) and 

(2), Commerce has reconsidered its 

proposed deadline of 14 days from 

publication of initiation in antidumping 

investigations in agreement with the 

commenters who noted that many 

importers or exporters who find 

themselves subject to an investigation 

might be unfamiliar with the 

antidumping laws and procedures and 

may need more than fourteen days after 

initiation to communicate with the 

appropriate lawyers, company 

representatives or government officials 

and gather information to submit 

necessary documentation with 

Commerce. Although one commenter is 

correct that Commerce normally 

determines the potential pool of 

respondents using Quantity and Value 

questionnaires in nonmarket economy 

procedures, Commerce disagrees that 

the receipt of those questionnaires, 

followed by the receipt of separate rate 

applications, does not delay the 

selection of respondents. As Commerce 

explained in the Proposed Rule, the 

longer Commerce must wait for 

questionnaires, applications, and 

certifications, the longer it takes for 

Commerce to select respondents and 

issue full questionnaires to respondents 

selected for examination.37

Investigations, administrative reviews 

and new shipper reviews are all 

conducted under statutory deadlines, 

and the Act does not provide for 

extensions of those deadlines due to 

response times of Quantity and Value 

questionnaires and separate rate 

applications and certifications. 

Commerce, therefore, continues to 

find that 30 days from initiation of an 

investigation is still too lengthy of a 

period in which to wait for separate rate 

applications in an investigation, but also 

agrees with some of the commenters 

that in an investigation 14 days may be 

too short of a time for importers and 

exporters to communicate and gather 

the necessary data. Accordingly, 

Commerce has modified § 351.108(d)(1) 

to allow for a separate rate application 

to be filed an additional seven days 

from that proposed in the Proposed 

Rule. Specifically, in antidumping 

investigations, interested parties will be 

allowed to file separate rate applications 

no later than 21 days following 

publication of initiation of the 

investigation in the Federal Register. 

This means that from the time a petition 

is filed in an investigation, interested 

parties will have notice that an 

investigation might be conducted and 

start gathering necessary information, 

and from the time the investigation 

notice is published in the Federal 

Register, they will have 21 days to 

answer the questions in Commerce’s 

separate rate application, located on 

Commerce’s website, and file the 

application electronically with the 

agency. Commerce has determined that 

this modification to the proposed 

regulation appropriately takes into 

consideration the concerns raised by 

some of the commenters, while also 

helping Commerce to prevent delays of 

its procedures by a few days when 

conducting an AD investigation. 

However, with respect to 

administrative reviews and new shipper 

reviews, Commerce does not agree that 

the same issues exist as were raised by 

the commenters with respect to 

investigations. After an investigation is 

completed, an AD order is issued and 

published in the Federal Register.38

Administrative reviews and new 

shipper reviews are conducted pursuant 

to an existing AD order. U.S. importers 

and foreign exporters alike are on notice 

that when merchandise subject to an AD 

order is imported into the United States, 

cash deposits will be collected on that 

merchandise, and duties will be 

assessed on that merchandise at some 

point.39 Importers and exporters have an 

obligation to be aware of potential 

duties on the merchandise which they 

are importing or exporting, and 

ignorance of the existence of the AD 

order or of their fiduciary duties to pay 

the applicable trade remedies is not a 


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reasonable excuse. On the other hand, 

the fourteen-day deadline will allow 

Commerce the opportunity to avoid 

certain existing delays in its 

proceedings to the benefit of the 

participants who must answer 

questionnaires and to Commerce 

officials in analyzing and considering 

those parties’ questionnaire responses 

and information. Accordingly, 

Commerce has not modified the 

fourteen-day deadline from the 

publication of initiation of an 

administrative review or new shipper 

review set forth in § 351.108(d)(2). 

Commerce agrees with other 

suggestions and has adopted them as 

follows: (1) Commerce has removed the 

term ‘‘the lack of’’ in the header 

language for proposed 

§ 351.108(b)(1)(iii) because the criteria 

listed in that section actually indicate 

de facto control; (2) Commerce has 

removed the word ‘‘no’’ in proposed 

§ 351.108(b)(1)(iii) because, again, that 

provision speaks to evidence of de facto 

control or influence and the inclusion of 

the word ‘‘no’’ spoke to the opposite 

meaning; (3) Commerce has revised 

§ 351.108(b)(1)(iii)(A) to read 

‘‘maintains or must maintain’’ because 

the described situation covers both 

existing and required maintenance of 

certain government representatives in 

positions of control; (4) Commerce has 

included the term ‘‘or managers’’ 

following the term ‘‘officers’’ throughout 

the regulation because both officers and 

managers can influence corporate 

decisions; (5) Commerce has included 

the term ‘‘or their family members’’ 

when addressing situations in which 

representatives of the governments may, 

in fact, be placed in positions of 

leadership or power in a company, in 

accordance with Commerce’s practice of 

recognizing that family members and 

family groupings may share a common 

business interest and authority; and (6) 

Commerce has included ‘‘governmentappointed or controlled labor unions’’ 

in the regulation as types of government 

authorities through which a nonmarket 

economy may exert control or influence. 

In addition to those modifications, 

Commerce has emphasized in 

§ 351.108(a)(2), that its analysis is based 

on record information, clarified 

language throughout the regulation 

when it was referring to a ‘‘government’’ 

that the government at issue is the 

‘‘nonmarket economy government,’’ and 

removed the term ‘‘or control’’ from 

§ 351.108(b)(1)(i)(B)(2) because that 

language is superfluous, as that 

particular provision pertains to the veto 

power of the nonmarket economy 

government giving it control over the 

decisions of the entity. Furthermore, 

Commerce has also modified 

‘‘production and commercial’’ decisions 

throughout the regulation to be 

‘‘production, commercial and export’’ 

decisions because export decisions are 

always under consideration in 

Commerce’s separate rate analysis. 

In addition, in response to a 

commenter’s suggestion that Commerce 

revise the regulation to clarify that 

Commerce, not the separate rate 

applicants or certifiers, must be satisfied 

that the applications or certifiers have 

shown that the degree of government 

control or influence is not significant 

and that applicants or certifiers must 

provide proof of lack of government 

control or influence, Commerce has 

modified the text of § 351.108(b) to 

indicate that Commerce must determine 

‘‘that the exporter has demonstrated that 

it operates certain activities sufficiently 

independent from nonmarket economy 

government control.’’ Commerce has 

also provided further language in 

§ 351.108(d) to explain that if no 

separate rate application or certification 

is timely submitted by an exporter of 

merchandise subject to an investigation 

or AD/CVD order, Commerce may apply 

the nonmarket economy rate to that 

exporter’s merchandise. Also, 

Commerce modified the title language to 

the overall regulation to emphasize that 

Commerce’s separate rate analysis 

applies to entities, whether in the 

nonmarket economy or in a third 

country, that export merchandise from 

the nonmarket economy to the United 

States. 

In response to the comment on 

proposed § 351.108(e) that entities that 

submit separate rate applications or 

certifications and are subsequently 

selected to be an examined respondent 

in an investigation or review by 

Commerce must fully respond to 

Commerce’s questionnaires in order to 

be eligible for separate rate status, 

Commerce has expanded that proposed 

paragraph to not only require full 

responses to questionnaires but also full 

participation in the proceeding, as 

explained below. 

With respect to Commerce’s 

questionnaires, the full ‘‘section A’’ 

questionnaire asks more detailed 

questions specifically about corporate 

structure than the separate rate 

application or certification. It asks for an 

organizational chart on affiliation and 

has more comprehensive questions 

about manufacturing facilities, 

locations, legal structure, third parties, 

narrative history, capital verification 

reports, and other information in 

addition to ownership and affiliation. 

Further, the ‘‘section C’’ questionnaire 

requests information that supports 

claims that a respondent retained the 

proceeds of their export sales and made 

independent decisions regarding the 

disposition of profits or financing of 

losses. In addition to requesting more 

data about the company’s corporate 

structure in the initial questionnaire, 

Commerce frequently will issue 

supplemental questionnaires to learn 

even more details about the affiliations 

and structure of the respondent being 

examined. Much of the ‘‘section A’’ 

questionnaire is akin to a more detailed 

request for information to supplement 

the separate rate application or 

certification and allows Commerce to 

confirm or clarify claims made in a 

separate rate certification or application. 

In addition, full participation in the 

proceeding overall is necessary to allow 

Commerce to be able to verify any 

information relevant to determining 

separate rate eligibility, and it is not 

unusual for Commerce to discover at 

verification that information believed to 

be complete on the record before 

conducting verification was, in fact, 

incomplete after consideration of an 

entity’s complete books and record. 

Accordingly, if a respondent selected for 

individual examination fails to fully 

respond to Commerce’s questionnaires 

or, where applicable, fails to allow 

Commerce to verify information 

submitted in response to Commerce’s 

questionnaires, absent extenuating 

circumstances, Commerce shall 

determine that it also has failed to 

demonstrate its eligibility for a separate 

rate. 

The commenter on § 351.108(e) did 

not seem to take issue with the 

provision itself, but instead indicated 

concerns with what Commerce does 

after it has made a determination that 

the exporter is part of the nonmarket 

economy entity. The commenter 

expressed concerns that non-selected 

entities and examined respondents 

would collude in such a way that if an 

examined respondent realized that 

review of its entries could lead to a high 

dumping margin, which would in turn 

be used to help calculate the rate 

applied to the non-selected exporters, 

the examined respondent might choose 

not to answer questionnaires, thereby 

pulling it into the nonmarket economy 

entity and pulling it out of the nonselected exporters calculation, under 

Commerce’s current practice for 

determining that non-selected exporter 

rate. 

Although Commerce appreciates the 

concerns expressed by the commenter 

on this issue, Commerce disagrees that 

treating an examined respondent 

differently for purposes of its separate 


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40See Proposed Rule, 89 FR at 57296. 

41 Id., 89 FR at 57296–57300. 

42See YC Rubber Co. (North America) LLC v. 

United States, No. 2021–1489, 2022 WL 3711377 at 

3 (Fed. Cir. 2022); see also Schaeffler Italia S.R.L. 

v. United States, 781 F. Supp. 2d 1358, 1363 (CIT 

2011). 

43See Antidumping Proceedings, 78 FR 65963, 

65965 (November 4, 2013) (announcement of 

Continued 

rate analysis from those exporters who 

only submit separate rate applications 

and certifications is ‘‘arbitrary.’’ The 

distinction is in no way arbitrary 

because examined respondents must 

provide a much greater amount of 

information to Commerce to analyze 

and determine an antidumping margin 

covering their merchandise. In addition, 

without full participation by the 

examined respondent, including a 

response to questionnaires, Commerce 

is unable to confirm, clarify, or verify 

claims made in a separate rate 

certification or application. 

Furthermore, although Commerce has 

codified its methodology for 

determining a rate to be applied to nonselected exporters in an antidumping 

proceeding covering a nonmarket 

economy in general at § 351.109(g), 

neither that provision nor § 351.108(e) 

addresses the use, or nonuse, of the 

nonmarket economy entity rate in 

determining a rate to be applied to the 

non-selected exporters in an 

antidumping investigation or 

administrative review. The commenters’ 

concerns seem to speak to that element 

of Commerce’s calculation of a rate to 

apply to non-selected exporters, but 

because Commerce is not codifying that 

practice in this provision, Commerce 

has determined that this concern should 

be addressed on a case-specific basis. 

Accordingly, other than requiring full 

participation in the proceeding, 

Commerce has made no further 

modifications to § 351.108(e). 

Finally, Commerce is not addressing 

in the new regulation or in the preamble 

to the final rule situations in which an 

entity located in a third country 

substantially transforms subject 

merchandise into a different product in 

the third country, completes or 

assembles the subject merchandise into 

a different product in the third country, 

or alters the subject merchandise in 

form or appearance in minor respects in 

the third country, as suggested by one 

of the commenters. All of those 

scenarios are already addressed in scope 

and circumvention proceedings by 

sections 781(b) and (c) of the Act and 

§§ 351.225(j) and 351.226(i) and (j) of 

Commerce’s regulations. 

4. Commerce Has Made a Small 

Modification to Proposed 

§ 351.109(c)(2)(v), Which Applies to the 

Selection of Additional Respondents 

Proposed new § 351.109 addresses 

Commerce’s procedures for selecting 

respondents, calculating the all-others 

rate in investigations, calculating a rate 

for unexamined respondents in various 

proceedings, and the selection of 

voluntary respondents.40

Commerce received several generally 

supportive comments on the proposed 

new § 351.109. With respect to the 

selection of additional respondents, one 

commenter stated that the language 

‘‘soon after filing questionnaire 

response’’ and ‘‘early in the segment of 

a proceeding’’ in proposed 

§ 351.109(c)(2)(v) 41 is open-ended and 

would likely lead to debate over what 

counts as ‘‘soon’’ or ‘‘early.’’ That 

commenter recommended that 

Commerce instead define the cutoff for 

adding new respondents by stating 

Commerce would select a respondent 

only after determining that there is 

sufficient time left before deadlines in 

the proceedings to complete all of its 

procedures without additional 

administrative burden. That commenter 

suggested that by adding language that 

addressed timing and other such 

considerations, Commerce would set 

realistic parameters for parties to 

understand when Commerce may select 

additional respondents. 

That commenter stated that this 

revised language would also establish a 

standard that is consistent with 

Commerce’s approach elsewhere in its 

regulations. For example, § 351.311(b) 

provides that Commerce ‘‘will examine 

the practice, subsidy, or subsidy 

program {discovered in the course of an 

investigation or review} if the Secretary 

concludes that sufficient time remains 

before the scheduled date for the final 

determination or final results of 

review.’’ Similarly, § 351.214(f)(2) states 

that Commerce may rescind a new 

shipper review where ‘‘{a}n expansion 

of the normal period of review to 

include an entry and sale to an 

unaffiliated customer in the United 

States of subject merchandise would be 

likely to prevent the completion of the 

review within the time limits.’’ 

The second commenter stated that it 

generally concurred with Commerce’s 

proposed rule but recommended that 

the regulation define the parameters on 

the timing for the selection of additional 

respondents under § 351.109(c)(2)(v). 

For example, the proposed language 

does not define how soon after the filing 

of questionnaire responses a respondent 

could withdraw from participation and 

Commerce would consider reviewing 

another exporter or producer for 

examination, how early in the segment 

Commerce could determine that a 

selected exporter or producer is no 

longer participating in the investigation 

or administrative review and that there 

is sufficient time to pick another 

respondent, or when in the segment 

Commerce could determine that the 

exporter’s or producer’s sales of 

merchandise subject to an investigation 

or AD/CVD order are not bona fide but 

that there remains time to examine 

another respondent. Without a clear 

definition of what ‘‘early in the 

segment’’ means, the commenter 

explained the uncertainty could result 

in the selection of additional 

respondents and the filing of new 

questionnaire responses very late in a 

proceeding, thereby providing 

insufficient time for domestic producers 

to provide meaningful comment or for 

Commerce to issue supplemental 

questionnaires prior to a preliminary 

determination or preliminary results. 

Therefore, the second commenter 

recommended that Commerce add 

language to state that Commerce will 

select additional respondents only if it 

is within 90 days of initiation, 

consistent with the 90-day deadline for 

parties to withdraw requests for 

administrative reviews under 

§ 351.213(d). 

Two other commenters suggested that 

Commerce codify that a ‘‘reasonable 

number of respondents’’ in an 

investigation or administrative review 

where individual examination of all 

known exporters or producers is not 

practicable must be more than one 

respondent, consistent with recent 

holdings of the Court of International 

Trade (CIT) and Federal Circuit.42

Those two commenters also 

recommended that Commerce modify 

its practice to enable more frequent use 

of sampling as a respondent selection 

methodology. They stated that in many 

cases, selection of the two largest 

producers or exporters results in 

selection of the same respondents in 

proceeding after proceeding and allows 

those respondents to tailor their 

operations or reporting in a manner that 

avoids antidumping or countervailing 

duties without being representative of 

the foreign industry. 

The commenters also expressed 

concern with Commerce’s rejection of 

the use of sampling in most cases. In a 

2013 notice, the agency stated that it 

would not rely on sampling unless it 

‘‘has the resources to examine 

individually at least three companies for 

the segment.’’ 43 One commenter stated 


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change in Commerce practice for respondent 

selection in AD proceedings and conditional review 

of the nonmarket economy entity in AD 

proceedings). 44See Proposed Rule, 89 FR at 57297. 

45See Viet I-Mei Frozen Foods Co. v. United 

States, 83 F. Supp. 3d 1345, 1362 (CIT 2015), aff’d, 

839 F.3d 1099 (Fed. Cir. 2016) (‘‘{T}o the 

prevention of abuse where Commerce expends 

resources to initiate an individual examination— 

and the respondent seeks to withdraw its 

participation when it changes its mind about the 

benefit of such examination and prefers the ‘all 

others’ rate instead—is a reasonable basis on which 

Commerce may decline to abort its examination.’’). 

46See Proposed Rule, 89 FR at 57297. 

that Commerce rarely selects more than 

two respondents, particularly in 

administrative reviews, and claims that 

Commerce has not conducted a single 

proceeding since the issuance of the 

2013 policy announcement in which it 

used sampling to select respondents. 

One commenter also stated that a 

system in which most foreign exporters 

will be excluded from individual 

examination and thus able to ‘‘free ride’’ 

off the largest respondents’ margins 

creates a significant barrier to leveling 

the playing field in the U.S. market. 

Another concern raised by one 

commenter was Commerce’s normal 

reliance on USCBP data to select 

respondents. That commenter stated 

that while USCBP data is generally an 

appropriate starting point for 

respondent selection, these data can 

also be highly problematic for the 

purpose of respondent selection. For 

example, it is possible for quantities to 

be reported in different units that are 

not easily converted into a uniform unit 

of measurement. That commenter also 

suggested that USCBP data may also 

contain errors or appear to be 

incomplete, which can be evident on 

the face of the data or revealed only in 

light of information submitted by 

interested parties. Therefore, one 

commenter recommended that 

Commerce clarify in its regulations that, 

when such problems with USCBP data 

are evident or revealed by information 

placed on the record, Commerce will 

rely on additional information for the 

purpose of respondent selection. That 

commenter suggested that Commerce 

consider requiring all exporters 

requesting an administrative review to 

provide with their request the quantity 

and value of their shipments of subject 

merchandise during the period of 

review in order to have a second set of 

reliable data on the record from which 

to select respondents. 

Lastly, one commenter expressed 

concerns regarding Commerce’s 

proposed regulation for calculating the 

all-others and non-selected rates. That 

commenter referenced several past cases 

where Commerce used either quantity 

or value in calculating the dumping 

margin assigned to exporters and 

producers who were not individually 

reviewed and stated that Commerce’s 

calculations had been inconsistent. That 

commenter stated that Commerce 

should clarify in the regulations the 

circumstances in which it will rely on 

a weighted average of publicly ranged 

U.S. sales values or the circumstances in 

which Commerce would rely on a 

weighted average of sales quantities for 

calculating the all-others rate and the 

non-selected respondents’ rate. 

Response 

Commerce agrees with the commenter 

that suggested Commerce should focus 

on the time remaining and actions 

which need to be taken in a segment of 

a proceeding before selecting a new 

respondent. Accordingly, in the last 

sentence of § 351.109(c)(2)(v) Commerce 

has added language to say that the 

Secretary may select the next 

respondent based on the next largest 

volume or value ‘‘if the Secretary 

determines that such a selection will not 

inhibit or impede the timely completion 

of that segment of the proceeding.’’ 

On the other hand, Commerce does 

not agree with a commenter’s suggestion 

that Commerce should codify a hard 

deadline before which it can select 

additional respondents. There is 

nothing in the Act which would suggest 

such a restriction, and imposing such a 

deadline in the regulation may curtail 

Commerce’s ability to select 

respondents when issues arise during a 

proceeding. As mentioned in the 

Proposed Rule, considerable time and 

resources are necessary for issuing 

questionnaires and analyzing data for 

purposes of respondent selection.44 If 

Commerce were to codify a deadline as 

suggested and then a respondent 

decided not to participate or to 

withdraw its request for administrative 

review, or Commerce determined that 

the U.S. sales reported by a selected 

respondent were not bona fide sales of 

subject merchandise after that deadline, 

yet Commerce also determined that 

there remained sufficient enough time 

for Commerce to select another 

respondent, then such a deadline would 

be a hindrance to the agency. Commerce 

should be able to select another 

respondent for examination in any of 

those scenarios. Accordingly, Commerce 

does not believe the codification of a 

hard deadline is advisable. 

Section 777A(c)(1) and (e)(1) of the 

Act direct Commerce to determine an 

individual weighted-average dumping 

margin or countervailable subsidy rate 

for each known exporter and producer 

of the subject merchandise. If Commerce 

codified a hard deadline and for 

whatever reason one or more 

respondents dropped out after that 

deadline, Commerce might find itself 

with no ability to select additional 

exporters or producers, despite the 

statutory preference to review more 

exporters and producers and the fact 

that Commerce has determined that it 

has the time and resources to examine 

another exporter or producer. Such a 

restriction is illogical and would only 

provide Commerce with fewer 

opportunities to exercise its statutory 

authority to examine a reasonable 

number of respondents.45 Accordingly, 

Commerce has not adopted that 

recommendation in the final rule. 

As mentioned in the Proposed Rule, 

the primary focus of respondent 

selection is whether Commerce can 

effectively examine a reasonable 

number of producers and exporters, as 

Congress intended, to calculate an 

accurate dumping margin or 

countervailable subsidy rate.46 Certain 

commenters requested that Commerce 

codify that when limiting individual 

examination to the largest producers/ 

exporters, Commerce will select more 

than one respondent in every case. 

However, Commerce saw no need to 

codify any such requirement in its 

Proposed Rule and continues to see no 

benefit in codifying such a requirement 

into the regulation. Accordingly, 

Commerce has not placed such a 

restriction in the regulation. 

With respect to the comments on 

sampling, section 777A(c) of the Act 

states that if it is ‘‘not practicable to 

make individual weighted average 

dumping margin determinations’’ 

because of ‘‘the large number of 

exporters or producers involved’’ in an 

investigation or review, Commerce may 

‘‘determine the weighted average 

dumping margins for a reasonable 

number of exporters or producers by 

limiting its examination to (A) a sample 

of exporters, producers or types of 

products that is statistically valid based 

on the information available’’ to 

Commerce at the time of selection or (B) 

the exporters and producers accounting 

for the ‘‘largest volume of the subject 

merchandise from the exporting country 

that can be reasonably examined.’’ The 

Statement of Administrative Action 

(SAA) states that ‘‘the authority to select 

samples rests exclusively with 

Commerce, but, to the greatest extent 

possible, Commerce will consult with 


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47See Statement of Administrative Action 

Accompanying the Uruguay Rounds Agreement 

Act, H. Doc. 316, Vol. 1, 103d Cong. (1994) (SAA) 

at 872. 

48See Antidumping Proceedings: Announcement 

of Change in Department Practice for Respondent 

Selection in Antidumping Duty Proceedings and 

Conditional Review of the Nonmarket Economy 

Entity in NME Antidumping Duty Proceedings, 78 

FR 65963, 65964 (November 4, 2013) (2013 Change 

in Practice Notice). 

49See SAA at 873 (‘‘Commerce will employ a 

sampling methodology designed to give 

representative results based on the facts known at 

the time the sampling method is designed’’). 

50See, e.g., Commerce’s Memorandum, 

‘‘Antidumping Duty Administrative Review of Steel 

Nails from the People’s Republic of China: 

Sampling Pool for Selection of Respondents and 

Selection Methodology,’’ dated April 1, 2019 (‘‘In 

light of the particularly large number of exporters 

that are under review in this segment, as well as 

the history of margins in the prior segments of this 

proceeding, discussed above, we find that using a 

sampling methodology in this review addresses this 

enforcement concern’’). 

51See Proposed Rule, 89 FR at 57297. 

52See, e.g., Certain Frozen Fish Fillets From the 

Socialist Republic of Vietnam: Final Results of 

Antidumping Duty Administrative Review; Final 

Determination of No Shipments; 2020–2021, 87 FR 

55996 (September 13, 2022) (Fish Fillets from 

Vietnam), and accompanying Issues and Decision 

Memorandum (‘‘Although the petitioners assert that 

ship manifest data it placed on the record ‘raises 

questions’ regarding the CBP data, it is wellestablished that mere speculation does not 

constitute substantial evidence, which is the 

standard for Commerce to make a finding.’’). 

53See, e.g., Certain Frozen Warmwater Shrimp 

from India: Final Results and Partial Rescission of 

Antidumping Duty Administrative Review, 74 FR 

33409 (July 13, 2009), and accompanying Issues and 

Decision Memorandum, at Comment 2. 

54See Fish Fillets from Vietnam Issues and 

Decision Memorandum at Comment: Commerce 

Should Ensure that All Subject Merchandise Is 

Subject to the Appropriate Duties. 

55See, e.g., Certain Cut-to-Length Carbon Steel 

Plate from the People’s Republic of China: 

Preliminary Results of Antidumping Administrative 

Review and Preliminary Determination of No 

Shipments, 77 FR 47593 (August 9, 2012). 

56See Memorandum, ‘‘Administrative Review of 

the Countervailing Duty Order on Certain Softwood 

Lumber Products from Canada; 2023: Respondent 

Selection,’’ dated April 19, 2024 (ACCESS Barcode: 

4546196–01). 

57 Id. 

58 Id. 

59 Id. 

60 Id. 

exporters and producers regarding the 

method to be used.’’ 47

In its 2013 Change in Practice Notice, 

Commerce explained that it will 

normally rely on sampling for 

respondent selection purposes in AD 

administrative reviews when (1) there is 

a request by an interested party for the 

use of sampling to select respondents, 

(2) Commerce has the resources to 

examine individually at least three 

companies for the segment, (3) the 

‘‘largest’’ three companies (or more if 

Commerce intends to select more than 

three respondents) by import volume of 

the subject merchandise under review 

account for normally no more than 50 

percent of total volume, and (4) 

information obtained by or provided to 

Commerce provides a reasonable basis 

to believe or suspect that the average 

export prices and/or dumping margins 

for the largest exporters differ from such 

information that would be associated 

with the remaining exporters.48 In the 

rare cases where Commerce relies on 

sampling to select respondents, it is 

typically when there are multiple, and 

often numerous, prior reviews to draw 

upon for evidence of margin 

differentials attributable to size. 

An important part of any 

methodology using sampling to select 

respondents is that the sampling must 

be ‘‘statistically valid’’ under section 

777A(c)(A) of the Act. The commenters 

who expressed concerns with 

Commerce’s respondent selection 

sampling methodology did not explain 

why that methodology is not 

statistically valid, or, in the alternative, 

provide an alternative methodology that 

would meet this statutory 

requirement.49 Therefore, Commerce 

will continue to rely on the criterion 

specified in the 2013 Change in Practice 

Notice and consider sampling when 

Commerce can select a minimum of 

three respondents to examine 

individually in light of resource 

constraints. Despite statements by the 

commenters to the contrary, Commerce 

has in fact completed a statistically 

valid sampling request since the 

issuance of the 2013 Change in Practice 

Notice,50 and statistically valid 

sampling for purposes of respondent 

selection remains a viable option for 

parties to request and consider. 

In the Proposed Rule, Commerce 

stated that it would normally base 

respondent selection on information 

derived from USCBP.51 While one 

commenter expressed concerns 

regarding Commerce’s preference for 

USCBP data, suggesting that USCBP 

data are susceptible to errors, no 

database is perfect. Although the Act 

does not limit Commerce to relying only 

on USCBP data in its reviews, 

Commerce weighs USCBP data more 

heavily because they contain the actual 

entry documentation for the shipments, 

including the CBP 7501 entry summary 

form (or its electronic equivalent), 

invoice, and bill of lading.52 USCBP 

data are based on information required 

by, and provided to, the U.S. 

government authority responsible for 

permitting goods to enter into the 

United States.53 Moreover, significant 

penalties can be imposed on parties that 

report entry information inaccurately.54

Furthermore, Commerce prefers USCBP 

data because they are ‘‘a primary source, 

as opposed to a secondary source, 

which may be prone to errors in the data 

collection and aggregation process.’’ 55

Given the aforementioned reasons, 

Commerce’s treatment of USCBP data 

will remain unchanged when selecting 

that as a data source to determine the 

largest exporters or producers of subject 

merchandise. 

In addition, Commerce will not 

include in the regulation a requirement 

that respondents that request an 

administrative review file a quantity 

and value questionnaire response when 

making a review request, as suggested 

by a domestic industry commenter. 

Such further information submissions 

from foreign exporters would be 

unnecessary and create an additional 

burden on Commerce to consider and 

analyze such submissions, regardless of 

whether such additional information on 

the record actually adds value to the 

case at hand. 

Commerce agrees that for some 

imported products, problems arise in 

relying on certain USCBP volume data 

because different importers will report 

their entries in quantities that are 

denominated in different units of 

measure (UOMs). For example, in the 

2023 CVD administrative review of 

softwood lumber from Canada, 

Commerce acknowledged that certain 

importers reported their imports based 

on cubic meters, others on square 

meters, others on kilograms, and still 

others based on number of pieces.56

Commerce also explained that ‘‘in 

addition to missing volumes, the 

various UOMs are problematic because, 

for example, measurements of weight 

(e.g., kilograms) cannot be converted to 

measurements of volume (e.g., cubic 

meters) without making certain 

assumptions, and ‘number of pieces’ 

simply cannot be converted to a 

measurement of volume.’’ 57 On the 

other hand, the USCBP data in that 

review did contain ‘‘value amounts for 

all entries of subject merchandise in the 

same unit of currency.’’ 58 Therefore, as 

it had in prior review periods, 

Commerce determined to rely ‘‘on the 

value data as a proxy for quantity and 

selecting respondents accounting for the 

largest value.’’ 59 Commerce explained 

that using value as a proxy for quantity 

when there are issues with reported 

UOMs for entry quantities ‘‘is 

transparent and consistent with 

Commerce’s approach in other 

proceedings as well as the prior 

administrative reviews of this order.’’ 60

For this reason, § 351.109(c)(2)(ii) 

specifically provides that if Commerce 

determines that ‘‘volume data are 


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61See Proposed Rule, 89 FR at 57302. 

62See Uruguay Round Agreements Act, Public 

Law 103–465, 108 Stat. 4809 (1994) (URAA). 

63See COALITION v. U.S., 66 F.4th at 977. 

64See Agreement on Subsidies and 

Countervailing Measures (SCM Agreement); 19 

U.S.C. 3511 (Approval and entry into force of 

Uruguay Round Agreements’’) (December 9, 1994). 

65See Proposed Rule, 89 FR at 57302. 

66 Id. 

67 Id. 

unreliable or inconsistent, depending on 

the product at issue,’’ Commerce ‘‘may 

instead select the largest exporter of 

subject merchandise based on the value 

of the imported products instead of the 

volume of the imported products.’’ The 

value data, however, will still normally 

originate from the USCBP. Thus, on this 

basis as well, Commerce sees no reason 

to second-guess its normal preference of 

using data derived from USCBP if 

possible. 

Lastly, one commenter claimed that 

Commerce has been inconsistent on 

whether it relies on a weighted-average 

using publicly ranged U.S. sales values 

or on a weighted-average using U.S. 

sales quantities in calculating all-others 

and non-selected rates. That commenter 

requested that Commerce set a clear test 

in the regulation as to the circumstances 

in which Commerce will base its 

calculations on sales values and when it 

will base its calculations on sales 

quantities. 

Upon consideration of this comment, 

Commerce has determined not to adopt 

this proposed addition to its regulations 

but clarifies here that the agency’s 

practice is to calculate the all-others and 

non-selected rates using a weightedaverage based on publicly ranged U.S. 

sales values. To the extent that 

Commerce chooses to use, instead, a 

weighted average using U.S. sales 

quantities in determining the all-others 

rate or a rate to apply to respondents 

who are not individually examined, 

such an application is an exception to 

Commerce’s practice and would be casespecific and based on the unique facts 

to the record before the agency. If 

Commerce determines to calculate the 

all-others rate or rate for respondents 

who are not individually examined 

based on U.S. quantities instead of U.S. 

sales-values, Commerce will provide an 

explanation in its determination. 

5. Commerce Has Made No 

Modifications to the Proposed Change to 

§ 351.214, Which Covers Expedited CVD 

Reviews 

In the Proposed Rule, Commerce 

proposed modifying the heading of 

§ 351.214, which currently reads ‘‘New 

shipper reviews under section 

751(a)(2)(B) of the Act,’’ by adding the 

phrase ‘‘and expedited reviews in 

countervailing duty proceedings.’’ 61

Commerce proposed such a change 

because section 751(a)(2)(B) of the Act 

provides Commerce the authority to 

determine dumping margins and CVD 

rates for exporters and producers that 

did not export subject merchandise to 

the United States during the period of 

investigation, referred to as ‘‘new 

shipper reviews.’’ However, paragraph 

(l) of § 351.214 does not relate to new 

shipper reviews but instead provides 

procedures for conducting expedited 

reviews of exporters not selected for 

individual examination in CVD 

investigations. Instead, the Federal 

Circuit in Comm. Overseeing Action for 

Lumber Int’l Trade Investigations v. 

United States, 66 F.4th 968, 977 (Fed. 

Cir. 2023) (COALITION v. U.S.) held 

that the ‘‘individualized-determination 

provisions’’ of section 777A(e) of the 

Act, along with the ‘‘regulatoryimplementation authority’’ of section 

103(a) of the URAA,62 explicitly provide 

Commerce with the authority to 

promulgate § 351.214(l).63 Therefore, 

Commerce proposed modifying the 

heading to § 351.214 to make it 

consistent with the holding in 

COALITION v. U.S. 

One party commented on this change, 

stating that the Federal Circuit in 

COALITION v. U.S. held that expedited 

CVD administrative reviews are not 

prescribed by the Act. Accordingly, that 

commenter stated that Commerce 

should remove § 351.214(l) entirely 

from the regulation to conserve agency 

resources, instead of modifying the 

heading to § 351.214 as proposed. 

Response 

Commerce proposed to only revise the 

heading to § 351.214 and not to remove 

an entire provision pursuant to which 

Commerce has conducted expedited 

CVD administrative reviews. As the 

Federal Circuit held in COALITION v. 

U.S., that provision was added 

consistent with language in the WTO 

Agreement on Subsidies and 

Countervailing Measures (the SCM 

Agreement),64 and Commerce does not 

believe it would be reasonable to 

remove that language in this final rule. 

Accordingly, Commerce will not modify 

the regulation as suggested by the 

commenter and will modify the heading 

of § 351.214 as set forth in the Proposed 

Rule. 

6. Commerce Has Made Certain Small 

Modifications to Proposed 

§ 351.301(b)(2), Covering the 

Submission of Rebuttal Information 

Commerce proposed a modification to 

one of its reporting regulations, 

§ 351.301(b)(2), to require greater detail 

from interested parties filing factual 

information to rebut, clarify, or correct 

factual information on the record.65 The 

existing regulatory language does not 

require the submitter of such 

information to explain what information 

on the record the alleged rebuttal/ 

clarification/correction information 

actually rebuts, clarifies, or corrects, and 

the lack of such an explanation has 

created a burden on both Commerce and 

interested parties to understand why the 

information being provided under this 

paragraph is being submitted and how 

it is particularly responsive to the 

information already on the record.66

Accordingly, Commerce proposed 

adding a sentence to the regulation that 

stated that the submitter ‘‘must also 

provide a narrative summary explaining 

how the factual information provided 

under this paragraph rebuts, clarifies, or 

corrects the factual information already 

on the record.’’ 67

Two commenters expressed concerns 

with this proposed modification to the 

regulation, stating that the proposed 

additional requirement would hinder 

the submission of relevant information 

and delay proceedings because 

frequently parties that initially submit 

factual information in response to 

Commerce’s questionnaires do not 

provide the detailed explanation 

required by the proposed language. 

They stated that the difference between 

what is required of those submitting 

initial factual information on the record 

and what would be required of those 

submitting rebuttal factual information 

would be inherently unfair. 

Furthermore, the commenters stated 

that to require submitters rebutting that 

information to prepare a detailed 

narrative before the record is complete 

would require parties to also 

prematurely disclose arguments in an 

ongoing segment of the proceeding, 

basically emboldening parties to 

‘‘litigate their arguments’’ early in a 

segment of the proceeding in the guise 

of objections to the scope of rebuttal 

factual information. They stated that 

those submitting factual information on 

the record for the first time often may 

not provide a specific explanation for 

how the submitted factual information 

supports their questionnaire responses. 

Thus, those filing rebuttal information 

are often forced to submit information 

that they think might be responsive, but 

they may not learn until the time for 

filing new factual information has 

passed the specific capacity for which 

the initial facts on the record were 

actually submitted in the first place. 


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68See Proposed Rule, 89 FR at 57302–57303. 

69 Id. 

70 Id. 

71 Id. 

72 Id. 

73 Id. 

74 Id. 

The commenters also stated that such 

a requirement would push those 

submitting rebuttal information to 

request extensions from Commerce to 

prepare a detailed narrative. The 

commenters stated that placing such a 

requirement in the regulation would 

create a burden for Commerce with no 

real benefit, and, as such, they requested 

that Commerce reject the proposed 

modification to its regulations, or at 

minimum, have the required 

explanation only address how the 

information is ‘‘relevant’’ to the factual 

information already on the record. 

Response 

Commerce retains the view that the 

failure to identify the information being 

rebutted creates a burden on Commerce 

or other interested parties. Under the 

current regulatory language parties may 

submit information with no explanation 

as to what it rebuts, clarifies or corrects, 

thereby permitting the submission of 

information that does not meet those 

requirements despite the restrictions of 

the regulation. Having information on 

the record without an explanation of 

how it ties to the initial facts on record 

complicates Commerce’s ability to 

analyze and enforce the limitations of 

submitting factual information under 

§ 351.301. Accordingly, Commerce will 

continue to include language addressing 

this concern in the regulation. 

With respect to the perceived 

unfairness of the reporting requirements 

of those submitting information in the 

first instance on the record in response 

to questionnaires, Commerce 

emphasizes two points. First, normally, 

when a respondent submits information 

on the record in response to a specific 

Commerce question, the reason that the 

information was submitted on the 

record in the first place is evident. That 

may not be the case, however, with 

rebuttal information submitted on the 

record with no explanation. Therefore, 

by their nature these two types of 

factual information submissions are 

different, and Commerce requires 

specific explanation from those 

submitting rebuttal information to 

identify the information already on the 

record that is being rebutted (or clarified 

or corrected). 

Second, if an interested party 

reviewing the record does not believe 

that factual information submitted on 

the record in the first instance by 

another interested party supports or is 

relevant to the question asked by 

Commerce, the interested party has the 

ability to bring that concern to 

Commerce’s attention in a timely 

fashion. Commerce may reject new 

factual information submitted on the 

record in the first instance if Commerce 

determines that it is not relevant to the 

questions or information request made 

of the respondent. In short, the record 

should be clear as to the reasons new 

factual information is being submitted, 

either through a response to an agency 

questionnaire, or in a rebuttal, 

clarification, or correction explanation. 

Commerce has determined, therefore, 

that the regulation should reflect that 

understanding of new factual 

information and the administrative 

record. 

Commerce has made certain small 

changes, however, to the language set 

forth in the Proposed Rule. The opening 

paragraph of § 351.301(b) requires those 

submitting factual information in the 

first instance to provide a ‘‘written 

explanation identifying the subsection 

of 351.102(b)(21) under which the 

information is being submitted.’’ 

Commerce has revised the new language 

in § 351.301(b)(2) to state that the 

submitter of rebuttal, clarifying or 

correction factual information must 

‘‘provide a written explanation 

describing how the factual information’’ 

rebuts, clarifies, or corrects the factual 

information already on the record. This 

language provides greater symmetry in 

the parties’ obligations in the regulation 

while emphasizing the type of 

information Commerce is seeking from 

those submitting rebuttal factual 

information—not a long narrative 

submission, but rather a concise and 

complete explanation describing 

specifically what factual information on 

the record the new factual information 

rebuts, clarifies or corrects. 

7. Commerce Has Made No Changes to 

the New Deadlines in Proposed 

§ 351.301(c)(3), Covering the 

Submission of Benchmark and 

Surrogate Value Data, But Has Added 

Language Permitting Commerce To 

Issue a Schedule With New Deadlines in 

Unique Circumstances 

Commerce proposed a revision to 

§ 351.301(c)(3) to update deadlines for 

filing certain information on the 

record.68 Current § 351.301(c)(3)(i) and 

(ii) establish a thirty-day time limit 

before the scheduled dates of 

preliminary determinations and results 

of review for interested parties to submit 

factual information to value factors of 

production under § 351.408(c) or to 

measure the adequacy of remuneration 

under § 351.511(a)(2) in AD and CVD 

investigations, administrative reviews, 

new shipper reviews, and changed 

circumstances reviews. 

The Proposed Rule explained that 

those submissions sometimes contain 

hundreds, if not thousands, of pages of 

information that Commerce must 

analyze in a short amount of time prior 

to issuing a preliminary determination 

or preliminary results.69 Because the 

volume of information often contained 

in these submissions can be so large, it 

makes it difficult for Commerce to meet 

its statutory deadlines to determine the 

appropriate surrogate values or 

benchmarks in the preliminary 

determination or preliminary results.70

Commerce also explained that since the 

30-day deadlines were codified, 

Commerce has experienced a large 

increase in AD and CVD proceedings 

and orders which it must administer.71

Accordingly, to effectively administer 

and enforce the AD and CVD laws, 

Commerce proposed modifying these 

time limits to allow Commerce 

additional time to more fully analyze 

these voluminous submissions for 

purposes of its preliminary decisions.72

Specifically, Commerce proposed 

revising § 351.301(c)(3)(i) to create both 

a paragraph (c)(3)(i)(A) and (B) covering 

investigations. Under the proposal, the 

time limit for parties to submit factual 

information to value factors of 

production under § 351.408(c) in AD 

investigations under 

§ 351.301(c)(3)(i)(A) would be no later 

than 60 days before the scheduled date 

of the preliminary determination, and 

the time limit for parties to submit 

factual information to measure the 

adequacy of remuneration under 

§ 351.511(a)(2) in CVD investigations 

would be no later than 45 days before 

the scheduled date of the preliminary 

determination in proposed 

§ 351.301(c)(3)(i)(B).73

Furthermore, for administrative 

reviews, new shipper reviews, and 

changed circumstances reviews, 

proposed § 351.301(c)(3)(ii) would 

require parties to submit factual 

information to value factors of 

production under § 351.408(c) or to 

measure the adequacy of remuneration 

under § 351.511(a)(2) no later than 60 

days before the scheduled date of the 

preliminary results of review.74

Commerce received several comments 

on the proposed change in deadlines. 

One party supported the change, stating 

that the modifications would enhance 

Commerce’s ability to enforce trade laws 

in a timely and efficient manner and 


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would provide interested parties with a 

more complete preliminary 

determination, as the agency would 

have more time to consider and analyze 

its benchmark and surrogate value 

determinations for purposes of the 

preliminary agency decision. That 

commenter agreed with Commerce that 

the agency does not currently have 

sufficient time to review the benchmark 

and surrogate value data provided in 

either submissions or rebuttal 

submissions, and therefore, Commerce 

frequently cannot address those 

submissions in part or in whole in the 

preliminary determination or results, to 

the disservice of the interested parties. 

That commenter stated that it disagrees 

with the claim that the revisions will 

unduly affect the ability of interested 

parties to gather and submit necessary 

factual information on the record and 

emphasized that if Commerce’s 

preliminary determinations contain 

more analysis and information as a 

result of this change in the deadlines, it 

will provide interested parties with an 

opportunity to submit fulsome, better 

comments in anticipation of a final 

determination or results of review. 

The other commenters indicated that 

they were opposed to the change in 

deadlines for submitting benchmark and 

surrogate value data, and instead 

advocated for Commerce to retain its 

current thirty-day deadlines. There were 

essentially four concerns or suggestions 

which they expressed pursuant to the 

proposed change. First, if Commerce 

needs an additional 15 days for CVD 

investigations and an additional 30 days 

for surrogate values and CVD 

administrative reviews, that is 15 days 

and 30 days, respectively, which 

interested parties will no longer have to 

gather benchmarks and surrogate value 

information and then submit it to 

Commerce. Domestic industries stated 

that Commerce’s proposal was biased 

against them because respondents are 

already familiar with their factors of 

production in an AD case and would be 

able to consider possible surrogate 

values even before they have filed their 

questionnaire responses and 

supplemental questionnaire responses, 

creating a disadvantage for domestic 

industries with a shorter period of time 

to gather information in AD 

proceedings. Likewise, domestic 

industries said they were also 

disadvantaged in CVD cases because 

respondents would have time to 

consider benchmarks while answering 

Commerce’s questionnaires. With 

respect to both types of proceedings, 

domestic industries expressed concerns 

that respondents would have an 

incentive to request extensions and 

thereby run out the clock, making it 

impossible for domestic industries to 

find and submit appropriate 

benchmarks and surrogate values based 

on the questionnaire responses. 

On the other hand, a foreign 

government stated that respondents are 

at a disadvantage in CVD investigations 

with a shorter period of time to gather 

potential benchmark data because 

domestic industries that file a petition 

have already had an opportunity to 

consider benchmarks for a less than 

adequate remuneration (LTAR) 

allegation, and in both CVD 

investigations and reviews, petitioners 

have time before they make new subsidy 

allegations to gather potential 

benchmark information. Further, 

another commenter stated that the 

shortened deadlines would be unfair for 

respondents that spend extensive 

amounts of time answering questions 

and gathering data. That commenter 

stated that that providing such a short 

period in which to file benchmark and 

surrogate value data would add 

unreasonably to respondents’ burden 

and impact the quality of their 

responses. 

In both AD and CVD cases, the 

commenters stated that the ultimate 

submissions would be of lesser quality 

and accuracy because the time period in 

which to gather sufficient data would be 

too short, thereby impeding Commerce’s 

ability to issue supplemental 

questionnaires and the domestic 

industry’s ability to identify deficiencies 

in the respondents’ questionnaire 

responses. They also expressed 

concerns that it would be more difficult 

to analyze foreign government responses 

to Commerce’s questionnaires and 

determine if a tier-one or tier-two 

benchmark under § 351.511 would be 

appropriate, and if supplemental 

questionnaires were issued to 

respondents with respect to their 

reported factors of production in an AD 

case, there may be little to no time for 

domestic parties to consider potential 

surrogate values so late in the 

proceeding within the proposed 

deadlines. 

Some commenters noted that 

Commerce sometimes sets an earlier 

deadline for surrogate value 

submissions and then allows further 

submissions subsequently within the 

30-day deadline. This proposed change, 

they stated, would make that entire 

process more difficult, therefore 

reducing the potential surrogate value 

information on the administrative 

record. The commenters, therefore, 

stated that the proposed shorter 

deadlines would result in less complete 

administrative records, less accurate 

preliminary determinations and results 

of administrative reviews, and more 

extension requests from parties to 

submit necessary information, with no 

clear benefit to Commerce. 

The second expressed concern 

involved the postponement or extension 

of preliminary determinations or results 

of administrative reviews. The 

commenters stated that 60 days and 45 

days before a preliminary determination 

or results of administrative review is 

issued, petitioners may not have yet 

requested postponement or, in 

administrative reviews, Commerce may 

not have yet decided to extend the 

preliminary results. If the preliminary 

determination or results were extended, 

so too would be the benchmark and 

surrogate value submission deadlines. 

They stated that the result might be that 

interested parties work quickly to find 

proposed benchmarks or surrogate 

values, submit them on time, and then 

discover that the preliminary 

determination or results or review have 

been extended. Had the interested 

parties known that an extension was 

forthcoming, the commenters stated that 

parties could have used the additional 

time to find potentially better quality 

and more accurate information. They 

noted that with respect to the extension 

of preliminary results of reviews in 

administrative reviews, Commerce 

normally issues an extension 30 days 

before the preliminary results are set to 

be issued, which would result in the 

described situation if that practice was 

retained. They stated that adding this 

amount of uncertainty to Commerce’s 

procedures is unnecessary and should 

be avoided. Accordingly, the 

commenters requested that if Commerce 

retains the proposed changes, it should 

modify the dates upon which extensions 

to preliminary determinations or results 

would be granted so that parties would 

be aware if the benchmark and surrogate 

value deadlines had been extended as 

well. 

The third comment on this proposed 

change to deadlines was a suggestion for 

Commerce to instead tie deadlines for 

submitting surrogate value information 

or market benchmarks to other points in 

the proceedings, including 

supplemental responses, which would 

allow the record regarding factors of 

production specifications and subsidy 

programs to be fully developed by the 

deadline. The commenter providing this 

suggestion stated that it would both 

achieve the stated goal of giving 

Commerce more time to analyze 

submissions and would avoid creating 

delays or a lack of adequate surrogate 


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value or benchmark information on the 

record. 

The final group of suggestions 

Commerce received on this issue was 

that if Commerce insisted on 

maintaining the changes in deadlines, it 

should make certain other changes to its 

regulations and practice, such as 

allowing for rebuttal benchmark and 

surrogate value submissions to be 

submitted on the record after those 

regulatory deadlines have passed if 

subsidy program information or factors 

of production end up being placed on 

the record on or after those deadlines. 

In addition, the same commenter 

suggested that Commerce also consider 

limiting extension deadlines for 

questionnaire responses so that late 

filings do not chip away at the 

opportunity for the domestic industry to 

file adequate responsive benchmark or 

surrogate value submissions. 

Response 

Although Commerce recognizes the 

concerns expressed by the commenters, 

it continues to find that setting the 

deadline to submit surrogate value 

comments and information 60 days 

prior to the scheduled due date of the 

preliminary determination and 

preliminary results in AD nonmarket 

economy proceedings is reasonable, as 

is setting the deadline for the 

submission of benchmark comments 

and information 45 days before the 

scheduled date of the preliminary 

determination in a CVD investigation, 

and 60 days prior to the scheduled 

preliminary results in a CVD 

administrative review. 

Commerce’s determinations are based 

on the facts on the administrative record 

and they are frequently challenged 

before the CIT, Federal Circuit, and 

various World Trade Organization 

(WTO) and United States-MexicoCanada Agreement (USMCA) dispute 

panels. Accordingly, Commerce must 

have sufficient time to consider and 

analyze the facts on the record when it 

issues preliminary or final 

determinations or results, to be certain 

that its decisions are accurate and based 

on the substantial evidence on the 

record. In short, Commerce needs the 

additional 15 and 30 days which it has 

proposed adding to § 351.301(c)(3). 

While interested parties will have less 

time to gather and submit benchmark 

data and surrogate value information, 

both the domestic industry and 

respondents to the agency’s proceedings 

produce the domestic like product/ 

subject merchandise and therefore have 

an acute understanding of the inputs 

that are required to produce subject 

merchandise in a nonmarket economy 

AD or similar proceeding. 

With respect to surrogate value 

submissions specifically, Commerce 

disagrees that the 60-day deadline will 

result in parties having to submit 

surrogate values and comments prior to 

the submission of a section D 

questionnaire response, specific to 

nonmarket economy cases, containing 

workable factors of production 

information. In the vast majority of 

cases, parties have sufficient time to 

prepare and submit surrogate value 

comments and information well after a 

section D questionnaire response is 

submitted to the respondent. However, 

if there is a timing concern, parties 

should request in writing that the 

agency extend the deadline for the 

submission of surrogate value comments 

and information. 

With respect to the deadlines for 

benchmarks in CVD investigations, most 

of the alleged subsidy programs at issue 

in a CVD investigation are known on the 

date the petition is filed, and Commerce 

indicates the alleged subsidy programs 

that it has determined to investigate in 

the initiation checklist, issued 

concurrently with the date Commerce 

signs the initiation notice. Further, in 

Commerce’s experience a domestic 

industry’s allegation that a product has 

been sold for LTAR includes 

information regarding an appropriate 

benchmark. 

Additionally, in CVD investigations 

where a LTAR subsidy is alleged, 

Commerce’s initial questionnaire 

solicits information as to whether 

market conditions in the subject country 

permit the use of certain benchmarks. 

Thus, parties should be on notice at the 

early stages of the investigation that 

they may need to submit comments and 

information regarding certain 

benchmark information. 

Likewise, with respect to 

administrative reviews, Commerce finds 

that requiring parties to submit 

benchmark and surrogate value 

information 60 days prior to the 

scheduled due date of the preliminary 

results is reasonable given that the 

timeline for CVD and AD reviews is 

substantially longer than the timeline 

for CVD and AD investigations. Under 

section 751(a)(3)(A) of the Act, 

Commerce has 245 days to issue its unextended CVD and AD preliminary 

results of review and 365 days to issue 

fully extended CVD and AD preliminary 

results of review. These schedules 

provide ample time for Commerce to 

solicit, and respondents to provide, 

information on benchmarks and 

surrogate values, thereby permitting 

parties to meaningfully comment on 

such information by the revised 60-day 

deadline. 

Notwithstanding the above, 

Commerce agrees that it will have to 

make adjustments to its practice as a 

result of these changes in some 

instances, as raised by one of the 

commenters. For example, as some of 

the commenters noted, there may be 

instances in AD nonmarket economy 

proceedings in which the initial section 

D questionnaire response has not been 

submitted by the 60-day deadline. In 

such situations, Commerce will adjust 

the comment schedule to allow for 

parties to have sufficient time to submit 

surrogate value comments and 

information. Likewise, in certain CVD 

investigations, it is possible that a 

respondent or foreign government may 

submit its initial response regarding a 

LTAR subsidy allegation on a date that 

occurs on or after the proposed 45-day 

deadline. In such instances, again, 

Commerce may need to adjust the 

comment schedule to allow for parties 

to have sufficient time to submit 

benchmark information for that alleged 

LTAR program. 

Furthermore, with respect to new 

subsidy allegations, under 

§ 351.301(c)(2)(iv)(A), domestic 

industries must make new subsidy 

allegations in CVD investigations no 

later than 40 days before the scheduled 

date of the preliminary determination. 

This results in a second potential 

situation in which Commerce’s proposal 

to require benchmark information to be 

submitted no later than 45 days prior to 

the scheduled date of the preliminary 

determination will not be feasible. 

Accordingly, if the new deadlines for 

benchmark submissions found in 

§ 351.301(c)(3) have already passed or 

are imminent, Commerce will determine 

that they do not apply in that case to 

new subsidy LTAR allegations filed near 

or on the due date specified under 

§ 351.301(c)(2)(iv)(A). In addition, if the 

domestic industry files new subsidy 

allegations at an earlier stage of an 

initiated CVD investigation, it may 

occur that Commerce’s initiation, 

issuance of the new subsidy allegation 

questionnaire, and receipt of the 

respondents’ responses to the new 

subsidy allegation questionnaire are not 

completed in time for interested parties 

to submit benchmark information by the 

forty-five-day deadline. In both of those 

instances, Commerce agrees that it 

would likely need to establish a separate 

schedule for the interested parties to 

provide them with sufficient time to 

submit benchmark information. 

Accordingly, in the final rule, 

Commerce has added 

§ 351.301(c)(3)(i)(C) which states that if 


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Commerce determines that interested 

parties will not have sufficient time to 

submit factual information in 

investigations under the deadlines set 

forth in paragraph (c)(3)(i)(A) or (B) 

because of circumstances unique to the 

segment of the proceeding, Commerce 

may issue a schedule with alternative 

deadlines for parties to submit factual 

information on the record. 

With respect to administrative 

reviews, Commerce acknowledges that 

there may be cases in which it will also 

have to issue a separate schedule for 

interested parties to have sufficient time 

to submit new factual information in 

this regard. For example, in AD 

nonmarket economy administrative 

reviews, if the initial section D 

questionnaire response is submitted on 

or after the revised sixty-day deadline, 

Commerce may need to issue a separate 

schedule for the interested parties to 

submit surrogate value comments and 

information. Likewise, in CVD 

administrative reviews, Commerce may 

also need to issue a separate schedule 

for parties to submit benchmark 

comments and information when the 

domestic industry alleges a LTAR 

subsidy and Commerce has yet to issue 

an initiation decision memorandum or 

questionnaire responses concerning 

such an allegation were not submitted 

until a date on or after the revised sixtyday deadline. 

Accordingly, Commerce has also 

divided § 351.301(c)(3)(ii) into two 

paragraphs, with § 351.301(c)(3)(ii)(A) 

reflecting the previously proposed 

language and § 351.301(c)(3)(ii)(B) to 

add new language similar to that of 

§ 351.301(c)(3)(i)(C), stating that if 

Commerce determines that interested 

parties will not have sufficient time to 

submit factual information in 

administrative reviews, new shipper 

reviews, and changed circumstances 

reviews under the deadlines set forth in 

paragraph (c)(3)(i)(A) because of 

circumstances unique to the segment of 

the proceeding, Commerce may issue a 

schedule with alternative deadlines for 

parties to submit factual information on 

the record. 

Commerce disagrees, however, with 

the concern that these new deadlines 

will disadvantage interested parties 

because it is Commerce’s practice to 

grant postponement or extensions of 

preliminary determinations or results of 

administrative review 30 days before the 

preliminary determination or results, 

which would fall after benchmarks and 

surrogate values are due. The scenario 

that commenters describe already 

occurs under the current 30-day 

comment deadline, and thus, Commerce 

does not find this argument to be a valid 

basis to refrain from the 45- and 60-day 

benchmark and surrogate value 

deadlines in CVD and AD nonmarket 

economy investigations. However, 

Commerce acknowledges that the 

scenario described by parties has the 

potential to occur more frequently in the 

context of CVD and AD nonmarket 

economy administrative reviews. 

Therefore, in CVD and AD nonmarket 

economy administrative reviews in 

which the 60-day deadline to submit 

benchmark and surrogate values 

information is approaching, and 

Commerce has yet to extend the due 

date of the preliminary results, parties 

may file a request for Commerce to 

extend the deadline to file benchmark 

and surrogate value information. 

Commerce also disagrees that basing 

the deadline for parties to submit 

benchmark comments and information 

in CVD investigations on the receipt of 

the last questionnaire response 

pertaining to the LTAR subsidy and 

surrogate value comments, and 

information in AD nonmarket economy 

investigations on the last section D 

questionnaire response would be 

preferable to deadlines for submissions 

being tied to the issuance of preliminary 

determination or results. Commerce 

finds that such an approach would be 

impractical, as it would require 

Commerce and parties to track different 

benchmark and surrogate value 

comment deadlines across cases. Such 

an approach also assumes that 

Commerce would be able to easily 

determine the point in CVD and AD 

nonmarket economy investigations 

when the ‘‘last’’ such questionnaire 

responses were submitted, as an 

insightful deficiency submission from a 

party could lead to Commerce 

determining that that yet another 

supplemental questionnaire is needed. 

Such an approach could also lead to 

outcomes where different respondents 

have a different number of days between 

the date when benchmark and surrogate 

value comments are submitted and the 

preliminary determination due date, 

which means that interested parties 

would not have the same number of 

days across cases to prepare comments 

for consideration in the preliminary 

determination or results that parties 

often submit, and which often address 

benchmark and surrogate value issues. 

Furthermore, Commerce disagrees 

with the suggestion that if it proceeds 

with the revised benchmark and 

surrogate value deadlines, then it 

should allow rebuttal benchmark and 

surrogate value submissions to be 

submitted on the record after those 

regulatory deadlines have passed if 

factors of production or subsidy 

program information is submitted on the 

record on or after those deadlines. As 

noted above, based on the agency’s 

experience with AD nonmarket 

economy investigations and reviews, 

Commerce believes that in most cases it 

will be able to solicit section D 

questionnaire information from 

respondents such that parties will have 

sufficient time with the initial section D 

questionnaire response, first section D 

supplemental questionnaire 

supplemental response, and any 

additional supplemental section D 

questionnaire response to submit 

surrogate value information by the 

revised deadlines. Further, as discussed 

above, because the nature of the good 

alleged to have been provided for LTAR 

and the potential need for tier-one, tiertwo, and tier-three benchmarks is 

known at the outset of CVD 

investigations and reviews, Commerce 

expects interested parties will normally 

be able to submit their LTAR benchmark 

information by the revised deadlines. 

However, as explained above, should 

a respondent submit a supplemental 

questionnaire response containing new 

factual information regarding factors of 

production information or LTAR 

benchmarks on or after the revised 

deadlines, then pursuant to 

§ 351.301(c)(1)(v) Commerce will 

normally allow other interested parties 

a sufficient amount of time to submit 

rebuttal, clarifying, or corrected factual 

information on the record pertaining to 

the benchmark and the factors of 

production information contained in 

those supplemental submissions. 

Finally, the same commenter also 

suggested that Commerce consider 

limiting extension deadlines for 

questionnaire responses in the 

regulation so that late filings do not 

reduce the opportunity for the domestic 

industry to file adequate responsive 

benchmark or surrogate value 

submissions. It is Commerce’s practice 

to respond to respondents’ extension 

requests with consideration of the 

deadlines that Commerce and parties 

face in CVD investigations and reviews 

and AD nonmarket economy 

investigations and reviews, and the 

agency will continue to do so under the 

current regulations. Therefore, 

Commerce has elected not to adopt 

additional language in the regulation to 

limit extension deadlines for 

questionnaire responses as suggested. 

Accordingly, for the reasons described 

above, Commerce determines that 

requiring benchmark and surrogate 

value comments and information to be 

submitted 45 days and 60 days prior to 

the scheduled due date of preliminary 

determinations and administrative 


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75See Proposed Rule, 89 FR at 57303. 

76See Trade Preferences Extension Act (TPEA) of 

2015, Public Law 114–27, 129 Stat. 362, 384 (2015), 

section 502, codified at 19 U.S.C.1677(e) and 

Proposed Rule, 89 FR at 57303–04. 

77See Notice of Final Determination of Sales at 

Less Than Fair Value: Certain Frozen and Canned 

Warmwater Shrimp from Brazil, 69 FR 76910 

(December 23, 2004) (Shrimp from Brazil), and 

accompanying Issues and Decision Memorandum at 

Comment 5; see also Rebar Trade Action Coalition 

v. United States, 398 F. Supp. 3d 1359, 1366–1371 

(CIT 2019) (Rebar Trade Action Coalition); Queen’s 

Flowers de Colombia v. United States, 981 F. Supp. 

617, 622 (CIT 1997) (Queen’s Flowers); and Viraj 

Group. v. United States, 476 F.3d 1349, 1355–58 

(Fed. Cir. 2007). 

78See Rebar Trade Action Coalition, 475 F. Supp. 

at 1368. 

79See Proposed Rule, 89 FR at 57305 (citing, as 

an example, Shrimp from Brazil Issues and Decision 

Memorandum at Comment 5). 

80See NACCO Materials Handling Group, Inc. v. 

United States, 971 F. Supp. 586, 591–92 (CIT 1997) 

(NAACO Materials); Queen’s Flowers, 981 F. Supp. 

at 617–622; and Echjay Forgings, 475 F. Supp. 3d. 

at 1360 (CIT 2020) (citing Hontex Enterprises Inc. 

d/b/a Louisiana Packing Company v. United States 

of America, 248 F. Supp. 2d. 1323 (CIT 2003) 

(Hontex)). 

81See Queen’s Flowers, 981 F. Supp. at 622. 

82See Proposed Rule, 89 FR at 57305 (citing 

United States Steel Corp. v. United States, 179 F. 

Supp. 3d 1114, 1135 (CIT 2016)). 

review results to be a practical and 

necessary modification to the regulation 

to allow Commerce to accurately and 

sufficiently consider the information 

and make its determination on these 

issues. 

8. Commerce Has Made No 

Modifications to Proposed 

§ 351.306(a)(3), Which Covers the 

Sharing of Data With U.S. Customs and 

Border Protection 

As amended in 2015, section 

777(b)(1)(A)(ii) of the Act states that 

Commerce may disclose proprietary 

information ‘‘to an officer or employee 

of the United States Customs Service 

who is directly involved in conducting 

an investigation regarding negligence, 

gross negligence or fraud under this 

title.’’ Current § 351.306(a)(3) states that 

Commerce may disclose business 

proprietary information to ‘‘an 

employee of U.S. Customs and Border 

Protection’’ involved in conducting ‘‘a 

fraud investigation.’’ However, the Act 

now includes ‘‘negligence’’ and ‘‘gross 

negligence’’ investigations. Thus, 

Commerce proposed amending 

§ 351.306(a)(3) to expand the covered 

investigations to negligence and gross 

negligence investigations as well as 

fraud investigations.75

One commenter suggested that 

Commerce add further language to the 

regulation and include the phrase ‘‘or 

any other action specifically 

contemplated in section 777(b)(1)(A)(ii) 

of the Act’’ to, in the words of the 

commenter, ‘‘eliminate the need for 

similar updates in the future should the 

Act be further amended.’’ However, if 

the Act is modified in the future, 

Commerce will be able to revise its 

regulations at that time in accordance 

with any new statutory language and 

obligations. 

9. Commerce Has Made Small Revisions 

to Proposed § 351.308(i), Which Covers 

the Application of Facts Available in 

AD and CVD Proceedings 

In the Proposed Rule Commerce 

updated § 351.308(g) to reflect its 

practice of applying either partial facts 

available or total facts available and 

added § 351.308(h) and (i) to reflect 

changes to section 776 of the Act by 

Congress in 2015.76 Two parties 

commented on this regulation, with one 

expressing its full support as written, 

and the other, although indicating its 

support for the changes, providing 

suggested edits to revise one possible 

inconsistency and to prevent 

redundancy. Specifically, proposed 

§ 351.308(i)(2) states that Commerce 

‘‘may’’ use the highest CVD rate 

available if it determines that such an 

application is warranted, whereas 

§ 351.308(j) states that Commerce ‘‘will 

normally select the highest program rate 

available using a hierarchical analysis.’’ 

Second, the commenter recommended 

various revisions to § 351.308(i)(2) to 

avoid certain perceived redundancies. 

Response 

After consideration of the comments 

on this provision, Commerce agreed that 

certain small changes to § 351.308(i)(2) 

were warranted. First, Commerce has 

replaced the phrase ‘‘The Secretary may 

use the highest countervailing duty rate 

available’’ with ‘‘The Secretary will 

normally apply the highest calculated 

above-de minimis countervailing duty 

rate available’’ to be in accordance with 

the language of the CVD adverse facts 

available hierarchy, found at 

§ 351.308(j). In addition, Commerce has 

moved the phrase ‘‘in accordance with 

the hierarchy set forth in paragraph (j) 

of this section’’ from the second 

sentence in the paragraph to the first 

sentence of the paragraph, because the 

entire paragraph relates to Commerce’s 

CVD adverse facts available hierarchy, 

and not just the second sentence. 

10. Commerce Has Modified Proposed 

§ 351.401(f) To Reflect That It Is 

Concerned About the Significant 

Potential for Manipulation of Prices, 

Production, or Export Decisions, and 

That It Will Not Normally Collapse 

Certain Affiliated Input Suppliers and 

Home Market Resellers of the Domestic 

Like Product 

When affiliated producers share 

ownership or management or have 

intertwined operations, there is a 

significant potential for the 

manipulation of the prices or 

production of the subject merchandise. 

Commerce has a longstanding and 

court-affirmed practice of ‘‘collapsing’’ 

certain affiliated entities and treating 

them as a single entity for purposes of 

its AD calculations.77 As currently 

written, § 351.401(f)(1) codifies 

Commerce’s practice of collapsing 

affiliated producers who ‘‘have 

production facilities for similar or 

identical products that would not 

require substantial retooling of either 

facility in order to restructure 

manufacturing priorities’’ where ‘‘there 

is a significant potential for the 

manipulation of price or production.’’ 

Section 351.401(f)(2) identifies the 

factors Commerce may consider in 

determining whether there is significant 

potential for the manipulation of price 

or production. 

By collapsing affiliated producers and 

calculating a single weighted-average 

dumping margin for the combined 

entity, the current regulation 

discourages producers subject to 

antidumping duties from shifting their 

production or sales to affiliated 

producers to evade those duties.78

However, as Commerce explained in 

the Proposed Rule, affiliated nonproducers such as exporters and 

processors can also manipulate and 

influence prices and production through 

their mutual relationships.79

Accordingly, to prevent manipulation of 

prices and production, and the evasion 

of duties, Commerce has in several AD 

proceedings collapsed non-producers 

with both producers and non-producers, 

and the CIT has affirmed Commerce’s 

authority to do so.80 Although the Act 

does not expressly address collapsing, 

the CIT has held that Commerce’s 

collapsing practice, as applied to both 

affiliated producers and non-producers, 

effectuates the basic purpose of the Act: 

to calculate accurate dumping margins 

and to prevent the evasion of duties.81

Commerce, therefore, proposed 

revising § 351.401(f) to explicitly 

address the ability of the agency to 

collapse producers and non-producers 

when it determines that there is 

significant potential for the 

manipulation of prices or production 

between two or more affiliated parties.82

Commerce received three comments 

on proposed § 351.401(f). Two 

commenters agreed with the decision to 

modify § 351.401(f) to address 

Commerce’s ability to collapse 


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83See, e.g., Shrimp from Brazil Issues and 

Decision Memorandum at Comment 5. 

84See AK Steel Corp. v. United States, 226 F.3d 

1361, 1375–76 (Fed. Cir. 2000) (‘‘once Commerce 

has decided to treat the companies as one ‘person’ 

for purposes of the anti-dumping analysis, it is not 

statutorily required to apply the provisions’’). 

85See, e.g., Light-Walled Rectangular Pipe and 

Tube from Turkey: Notice of Final Determination of 

Sales at Less Than Fair Value, 69 FR 53675 

(September 2, 2004), and accompanying Issues and 

Decision Memorandum at Comment 5; Certain 

Fabricated Structural Steel from Canada: Final 

Determination of Sales at Less Than Fair Value, 85 

FR 5373 (January 30, 2020), and accompanying 

Issues and Decision Memorandum at Comment 6: 

and Notice of Final Determination of Sales at Less 

Than Fair Value: Live Swine from Canada, 70 FR 

12181 (March 11, 2005), and accompanying Issues 

and Decision Memorandum at Comment 41. 

86See Steel Concrete Reinforcing Bar from 

Mexico: Final Results of Antidumping Duty 

Administrative Review; 2021–2022, 89 FR 40467 

(May 10, 2024), and accompanying Issues and 

Decision Memorandum at Comment 5. 

87See Antidumping Duties: Countervailing 

Duties; Final Rule, 62 FR 27296, 27346 (May 19, 

1997). 

producers and non-producers but 

suggested certain additional 

modifications to Commerce’s proposed 

rule. Another commenter expressed 

concerns that Commerce’s decision to 

modify § 351.401(f) may undermine 

Commerce’s ability to apply its 

transactions disregarded rule or major 

input rule, pursuant to sections 773(f)(2) 

and (3) of the Act. 

The first commenter suggested a 

change to § 351.401(f)(3) to expand 

Commerce’s ability to consider the 

extent of necessary retooling in its 

analysis of affiliated parties’ production 

facilities that are used for similar or 

identical products. The commenter 

proposed that Commerce clarify that its 

analysis will go beyond evaluating 

‘‘manufacturing priorities’’ to also 

consider the possibility of a shift in 

production among affiliated facilities or 

any other commercial activities related 

to production. As an example, it 

referred to an administrative review 

where Commerce found that the 

respondent had the potential to 

rearrange selling and producing roles 

between affiliated producers and nonproducers.83

A second commenter agreed that the 

proposed modification reflected 

Commerce’s current practice and 

authorities but expressed concerns that 

the expansion of Commerce’s practice of 

collapsing entities to include nonproducers could unintentionally result 

in less accurate dumping margins. 

Specifically, under section 773(f)(2) and 

(3) of the Act, Commerce may disregard 

direct or indirect transactions between 

affiliated parties that do not fairly 

represent the market costs and the full 

costs of production in such transactions. 

These are commonly called the 

‘‘transactions disregarded’’ and ‘‘major 

input’’ rules. They are frequently 

applied in consideration of transactions 

between affiliated input suppliers and 

producers of subject merchandise. The 

current regulation addresses only 

affiliated entities that both might 

produce the subject merchandise, while 

the proposed revision to the regulation 

would allow for the collapsing of 

affiliated input suppliers and producers 

of subject merchandise. Accordingly, 

the commenter expressed concerns that 

Commerce might elect to collapse such 

affiliated entities rather than apply the 

transactions disregarded or major input 

rules, thereby allowing the respondent 

to manipulate Commerce’s calculations, 

with the result being a less accurate 

dumping margin.84 The commenter 

stated that such an application of the 

collapsing regulation would expand the 

number of non-market prices and 

below-cost affiliated-entity transactions 

that Commerce would not disregard, 

with resulting calculations that include 

more transactions between affiliated 

entities at values not reflective of the 

market prices producers would pay for 

the same transaction with a nonaffiliated entity. It cautioned that this 

proposal could create a situation 

wherein the exception could swallow 

the rule, contrary to sections 773(f)(2) 

and (3) of the Act, and therefore 

suggested that Commerce not codify its 

current collapsing practice with respect 

to non-producers and producers. 

A third commenter praised the 

proposed modification to § 351.401(f) 

and stated that the new language would 

permit Commerce to address the evasion 

and manipulation of duties by affiliated 

parties. That commenter, however, also 

expressed concerns that the proposed 

language could result in the 

manipulation of Commerce’s calculation 

of dumping margins for the same reason 

as the second commenter. That 

commenter stressed that the purpose of 

§ 351.401(f) is to prevent the 

manipulation of dumping margins, and 

thus Commerce should add language in 

the regulation to the effect that if record 

evidence suggested collapsing would 

result in the manipulation of 

Commerce’s calculations, Commerce 

could decline to collapse the affiliated 

entities. Furthermore, the commenter 

recommended that Commerce include a 

non-exhaustive list of entity 

relationships that might result in a 

collapsing decision. 

Response 

After consideration of the comments 

on the regulation, Commerce is adding 

a new paragraph to § 351.401(f) to 

address exceptions to Commerce’s 

collapsing practice and making certain 

other minor edits. Specifically, 

Commerce is amending proposed 

§ 351.401 to add a paragraph (f)(4), titled 

‘‘Exceptions.’’ Commerce has a practice 

of not collapsing affiliated input 

suppliers with other affiliated parties if 

the input suppliers do not produce 

similar or identical products to the 

subject merchandise or export subject 

merchandise to the United States.85

Likewise, Commerce also has a practice 

of not collapsing affiliated sellers of the 

foreign like product in the home market 

with other affiliated parties, if those 

sellers (including resellers) of the 

foreign like product in the home market 

do not produce similar or identical 

products to the subject merchandise or 

export subject merchandise to the 

United States.86 Commerce has 

therefore codified both exceptions to its 

collapsing practice in the regulation as 

§ 351.401(f)(4)(i) and (ii). To be clear, 

although Commerce will normally not 

collapse such entities, Commerce might 

still apply the transactions disregarded 

rule or the major input rule, in 

accordance with sections 773(f)(2) and 

(3) of the Act, if such an application is 

warranted. 

In addition, pursuant to the concerns 

of possible evasion or manipulation, 

Commerce has decided to include a 

third ‘‘catch-all’’ provision at 

§ 351.401(f)(4)(iii), which states that if 

Commerce determines that treating 

certain affiliated entities as a single 

entity would otherwise be inappropriate 

based on record information, Commerce 

may decide not to collapse those 

affiliated entities. Collapsing 

determinations are case-specific, and 

frequently Commerce makes its 

determinations based on proprietary 

information that reflects complex and 

unique relationships between affiliated 

entities. Commerce agrees with the 

commenters that the overarching 

purpose of § 351.401(f) is to prevent 

manipulation of prices, production, or 

export decisions among affiliated 

entities. Further, the factors listed in 

§ 351.401(f)(2) are non-exhaustive and 

Commerce may consider additional 

factors as evidence that there is 

significant potential for manipulation, 

or even determine that not all of the 

factors listed are identified to find 

evidence of significant potential for 

manipulation.87 In examining the 

factors that pertain to significant 

potential for manipulation, Commerce 

considers both actual manipulation in 


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88 Id. at 27345–45. 

89 Id. 

90See Proposed Rule, 89 FR 57329. 

91See, e.g., Hontex, 248 F. Supp. 2d 1323, 1345– 

1350. 

92See Antidumping Duties; Countervailing 

Duties; Proposed Rule, 61 FR 7308, 7381 (February 

27, 1996). 

93See section 773(d) of the Act; see also section 

773(a)(1)(C) of the Act. 

94See section 773(d) of the Act. 

95See Proposed Rule, 89 FR at 57305–06. 

the past and the possibility of future 

manipulation.88 As Commerce stated in 

the preamble to the regulation when it 

was issued in 1997, the standard in 

looking at potential manipulation is 

focused ‘‘on what may transpire in the 

future;’’ thus Commerce may consider 

the record in total, covering past, 

present and future potential 

manipulation of prices, production or 

other commercial activities.89 Given the 

wide array of possible affiliations 

between producers, exporters, and other 

entities in various channels of trade, the 

concerns expressed by the commenters, 

and Commerce’s intention to prevent 

potential manipulation, whether it be 

through collapsing or, in some cases, 

not collapsing affiliated entities, the 

regulation now includes a collapsingexception provision that covers any 

situation in which the collapsing of 

entities would be ‘‘otherwise 

inappropriate based on record 

information.’’ 

In addition to that change, Commerce 

is correcting a typographical error that 

resulted in publishing § 351.401(f)(2)(iii) 

as a second § 351.401(f)(2)(ii).90

Finally, Commerce proposed to 

modify the phrase ‘‘potential 

manipulation of price or production’’ in 

§ 351.401(f)(1) and (2) to encompass 

‘‘potential manipulation of prices, 

production or other commercial 

activities.’’ The reason for this change 

was to address the collapsing of nonproducing affiliated exporters that, 

given the nature of their affiliations, 

might not lead to the manipulation of 

prices or production but might lead to 

the manipulation of various export 

decisions.91 Upon further reflection, 

Commerce has determined that the term 

‘‘other commercial activities’’ is too 

broad a term to describe that scenario 

and might lead to confusion. 

Accordingly, Commerce is modifying 

§ 351.401(f)(1) and (2) to apply to the 

‘‘potential manipulation of prices, 

production, or export decisions.’’ 

Commerce has determined that such 

language more accurately reflects the 

concerns that led to the proposed 

revision. 

With respect to the suggestion that 

Commerce clarify that it can make a 

determination based on more than just 

a restructuring of ‘‘manufacturing 

priorities,’’ including a focus on the 

shifting of production among facilities 

of affiliated entities or a restructuring of 

commercial activities among affiliated 

parties related to production, Commerce 

disagrees that such a change is 

necessary. The term ‘‘restructure 

manufacturing priorities’’ has been in 

the regulation since it was initially 

proposed in 1996.92 In the decades that 

followed, as the commenter explained, 

Commerce has found the term 

‘‘restructure manufacturing priorities’’ 

to cover various factual scenarios, 

including the shifting of production 

between affiliated producers and the 

restructuring of commercial activities 

among affiliated parties related to 

production. ‘‘Manufacturing priorities’’ 

is not a defined term, and may cover 

both production and non-production 

actions, if those potential actions might 

lead to the manipulation of prices, 

production, or other commercial 

activities among affiliated entities. 

Accordingly, Commerce has not 

adopted this proposed modification to 

§ 351.401(f). 

In addition, Commerce will not 

include a non-exhaustive list of entity 

relationships that might result in a 

collapsing decision as suggested by one 

of the commenters. As explained above, 

there are many ways by which entities 

might be affiliated, and likewise there 

are many unique entity relationships 

that can lead to the potential 

manipulation of prices, production or 

export decisions. Collapsing decisions 

are best left analyzed on a case-by-case 

basis and frequently can be far more 

complex than can be summarized in a 

simple list of examples. Accordingly, 

Commerce has determined that a nonexhaustive list of examples in the 

regulation would likely lead to greater 

confusion than provide clarity, and it 

has therefore not included such a list in 

the final rule. 

11. Commerce Has Made Small 

Adjustments to Proposed 

§ 351.404(g)(2), Which Applies to the 

Determination of Normal Value and 

Certain Multinational Corporations 

Section 773(d) of the Act provides a 

special rule for certain multinational 

corporations when Commerce is 

determining the appropriate normal 

value to use in its antidumping 

calculations. The Act states that if, in 

the course of an investigation, 

Commerce determines that three criteria 

exist, Commerce ‘‘shall determine the 

normal value of the subject merchandise 

by reference to the normal value at 

which the foreign like product is sold in 

substantial quantities outside the 

exporting country.’’ 

Those three criteria are: (1) subject 

merchandise exported to the United 

States is being produced in facilities 

which are owned or controlled, directly 

or indirectly, by a person, firm, or 

corporation which also owns or 

controls, directly or indirectly, other 

facilities for the production of the 

foreign like product which are located 

in another country or countries; (2) the 

foreign like product is not sold (or 

offered for sale) for consumption in the 

exporting country or is sold in the 

exporting country for insufficient 

amounts to allow for a proper 

comparison with the United States, and, 

therefore, Commerce should look to 

third country sales to determine normal 

value (or a sales-based particular market 

situation exists); and (3) the normal 

value of the foreign like product 

produced in one or more of the facilities 

outside the exporting country is higher 

than the normal value of the foreign like 

product produced in the facilities 

located in the exporting country.93

Section 773(d) of the Act requires that 

Commerce make adjustments for the 

differences in the costs of production 

between the exporting country and the 

third country where the merchandise is 

also produced. It states that for 

‘‘purposes of this subsection, in 

determining the normal value of the 

foreign like product produced in a 

country outside the exporting country,’’ 

Commerce shall determine its price ‘‘at 

the time of exportation from the 

exporting country’’ and make any 

adjustments ‘‘required by subsection (a) 

for the cost of all containers and 

coverings and all other costs, charges 

and expenses incident to placing the 

merchandise in condition packed ready 

for shipment to the United States by 

reference to such costs in the exporting 

country.’’ 94

Although Commerce has applied the 

special rule for certain multinational 

corporations (‘‘MNC provision’’) in 

determining normal value for many 

years, none of Commerce’s regulations 

address the MNC provision. Commerce 

proposed the addition of § 351.404(g) to 

address the filing requirements for those 

alleging the applicability of the MNC 

provision and to clarify that the MNC 

provision is only applicable when the 

non-exporting country is a market 

economy and not a nonmarket 

economy.95

Specifically, Commerce proposed 

codifying its practice directing parties 

alleging that the MNC provision should 


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96 Id. 

97See Ad Hoc, 596 F.3d at 1373 (J. Prost 

dissenting). The commenter pointed out that in 

1996, Commerce had a different interpretation of 

the Act, stating in Melamine Institutional 

Dinnerware Products from the People’s Republic of 

China, 61 FR 43337, 43340 (August 22, 1996), 

Commerce determined that the Act was silent and 

therefore to both market economy and nonmarket 

economy cases. 

98See section 773(c) of the Act (‘‘Nonmarket 

Economy Countries’’). 

99See Ad Hoc, 596 F. 3d at 1370. 

100 Id. 101 Id. at 1371. The Federal Circuit also affirmed 

Commerce’s interpretation of the legislative history 

of the provision that ‘‘Congress was concerned with 

the practice of discriminatory pricing where a home 

market was not viable and yet a respondent’s lowpriced exports to the United States market were 

supported by higher priced sales of its affiliates in 

a third country market.’’ (citing Senate Committee 

on Finance Report on Trade Reform Act of 1974, 

S. Rep. No. 93–1298, at 175 (November 16, 1974)). 

The Court agreed with Commerce that ‘‘Congress 

was addressing the problem of discriminatory 

pricing practices of multinational corporations, but 

pricing practices are generally irrelevant in 

nonmarket economies.’’ 

102See Utility Scale Wind Towers from Malaysia: 

Final Results of Antidumping Duty Administrative 

Review; 2021–2022, 89 FR 56735 (July 10, 2024), as 

amended 89 FR 65848, at accompanying Issues and 

Decision Memoranda at Comment 8. 

103 Id. 

apply to submit their allegations in 

accordance with the filing requirements 

set forth in § 351.301(c)(2)(i). Moreover, 

Commerce explained that the provision 

does not apply when the non-exporting 

country at issue is a nonmarket 

economy country because, in 

accordance with § 351.408, when the 

non-exporting country is a nonmarket 

economy, Commerce will apply the 

factors of production methodology 

described in section 773(c) of the Act.96

Two parties submitted comments 

regarding the proposed addition of 

§ 351.404(g). The first commenter 

requested not that Commerce modify 

§ 351.404(g), but rather modify 

§ 351.301(c)(2)(i), which provides that 

in general, market viability allegations, 

and through § 351.404(g)(1), allegations 

that the MNC provision applies, should 

be due ‘‘10 days after the respondent 

interested party files the response to the 

relevant section of the questionnaire, 

unless the Secretary alters this time 

limit.’’ The commenter maintained that 

requiring parties to review 

questionnaire responses, research 

independent factual information, and 

prepare allegations within 10 days 

creates a significant burden. 

Accordingly, that commenter requested 

that Commerce increase the dates for 

market viability and MNC provision 

allegations from 10 days to 30 days in 

§ 351.301(c)(2)(i). 

The second commenter requested that 

Commerce revisit its practice of not 

applying the MNC provision to AD 

proceedings in which the non-exporting 

country would be a nonmarket 

economy. The commenter 

acknowledged that the Federal Circuit 

in Ad Hoc Shrimp Trade Action 

Committee v. United States, 596 F. 3d 

1365, 1370 (Fed. Cir. 2010) (Ad Hoc) 

affirmed Commerce’s interpretation of 

the Act to apply to market economies 

only as permissible, but the commenter 

noted that the dissent in that case 

disagreed that Commerce’s 

interpretation was consistent with the 

Act, reasoning that if the Congress had 

intended for the provision to not apply 

to nonmarket economy non-exporters, 

Congress would have clearly stated as 

such in the Act.97 The commenter stated 

that Commerce’s practice, as reflected in 

proposed § 351.404(g)(2), unduly and 

unnecessarily limits Commerce’s ability 

to apply the MNC provision when the 

non-exporter is located in a nonmarket 

economy to the disservice of domestic 

industries seeking trade remedy relief 

from the dumping of merchandise 

produced and exported by a 

multinational corporation. Accordingly, 

the commenter requested that 

Commerce revise § 351.404(g)(2) to 

apply the MNC provision equally to 

multinational corporations and their 

affiliates located in market and 

nonmarket economies. 

Response 

With respect to the first commenter’s 

request, Commerce has determined not 

to modify the ten-day deadline set forth 

in § 351.301(c)(2)(i). Investigations and 

administrative reviews are extremely 

fact intensive and restricted by statutory 

deadlines. Adding 20 days to that 

deadline would take away from the time 

Commerce needs to analyze and 

consider the allegation. Notably, 

§ 351.301(c)(2)(i) states that Commerce 

may ‘‘alter this time limit.’’ 

Accordingly, if a party wishing to allege 

that the MNC provision should be 

applied in a case believes that it needs 

more time to submit an allegation, 

before the 10 days have passed that 

party may request an extension from 

Commerce to do so. In requesting an 

extension, the party should provide 

Commerce with the reason it needs 

additional time to file an allegation and 

specify the actions it will take in the 

extended time to ensure that its MNC 

provision allegation is complete when it 

is submitted to the agency. 

In response to the second commenter, 

the MNC provision includes citations to 

section 773(a) of the Act, which covers 

a determination of normal value based 

on third country sales and makes no 

reference to section 773(c) of the Act, 

which applies to nonmarket 

economies.98 Further, the provision 

explicitly includes adjustments for costs 

of production, but the statutory 

nonmarket economy analysis, which 

incorporates surrogate values and 

factors of production, does not involve 

costs of production. For that reason, 

Commerce has concluded that the MNC 

provision, by its very terms, cannot 

apply if the non-exporting country is a 

nonmarket economy. As the commenter 

notes, the Federal Circuit affirmed that 

determination in Ad Hoc.99

Specifically, the Federal Circuit 

reasoned that the MNC provision was 

‘‘silent regarding nonmarket 

economies,’’ but the Act ‘‘instructs 

Commerce to determine the normal 

value of the subject merchandise by 

reference to the normal value at which 

the foreign like product is ‘sold in 

substantial quantities’ and its ‘price at 

the time of exportation from the 

exporting country,’ ’’ and that ‘‘sold’’ 

and ‘‘price’’ are terms ‘‘not used to 

describe calculating the normal value in 

a nonmarket economy.’’ 100 The majority 

also referred approvingly to Commerce’s 

reasoning that because the case before 

the Court involved a market economy 

(Thailand), to use a nonmarket economy 

as the alternative producer would be the 

same as ‘‘treating a market economy 

country as a nonmarket economy and 

would, therefore, circumvent’’ the Act 

which only provides for a nonmarket 

economy analysis when the country at 

issue is a nonmarket economy.101

As Commerce has stated before in 

analyzing the MNC provision, it is of no 

consequence whether some of a 

respondent’s affiliated parties are 

located in nonmarket economy 

countries and some are located in 

market economy countries, or whether 

all of a respondent’s affiliated parties 

are located in a nonmarket economy 

country.102 The Act, as interpreted in 

relevant case law, requires that the MNC 

provision be applied in cases where 

prices and costs are disregarded in favor 

of the factors of production 

methodology. If Congress had intended 

for the MNC provision to apply equally 

to nonmarket economy and market 

economy countries, it could have 

included language in the MNC 

provision that applied to nonmarket 

economies, but it did not do so.103

Accordingly, Commerce will not modify 

its interpretation of the MNC provision 

in proposed § 351.404(g)(2) or change its 

practice in this regard. 

Commerce has, however, made 

certain small changes to the language to 

provide further clarity that if the 


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104See section 773(e)(2)(A) of the Act. 

105See SAA at 840 (‘‘At the outset, it should be 

emphasized, consistent with the Antidumping 

Agreement, new section 773(e)(2)(B) does not 

establish a hierarchy or preference among these 

alternative methods. Further, no one approach is 

necessarily appropriate for use in all cases’’). 

106See Certain Steel Nails from the Republic of 

Korea: Final Determination of Sales at Less Than 

Fair Value, 80 FR 28955 (May 20, 2015) (Certain 

Steel Nails from Korea), and accompanying Issues 

and Decision Memorandum at Comment 4. 

107See SAA at 841. 

108See Proposed Rule, 89 FR at 57306. 

109 Id., 89 FR at 57306–07. 

110See Proposed Rule, 89 FR at 57288 and 57306. 

111See SAA at 841 (addressing the ‘‘any other 

reasonable method’’ statutory option, as well as the 

profit cap: ‘‘The Administration also recognizes that 

where, due to the absence of data, Commerce 

cannot determine amounts for profit under 

alternatives (1) and (2) or a ‘‘profit cap’’ under 

alternative (3), it might have to apply alternative (3) 

on the basis of ‘facts available.’ This ensures that 

Commerce can use the alternative (3) when it 

cannot calculate the profit normally realized by 

other companies on sales of the same general 

category of products’’). 

Secretary determines that the nonexporting country is a nonmarket 

economy and that normal value would 

be determined using a factors of 

production methodology if the MNC 

provision was applied, Commerce will 

not apply the MNC provision in that 

situation. 

12. Commerce Has Revised Certain 

Language in Proposed § 351.405(b)(3), 

Which Covers the Calculation of 

Constructed Value Profit 

As set forth in proposed § 351.405(a), 

pursuant to section 773(e) and (f) of the 

Act, in certain circumstances Commerce 

may determine normal value by 

constructing a value based on the cost 

of manufacturing; selling, general and 

administrative expenses; and profit. In 

constructing such a value, the Act 

provides that Commerce use the ‘‘actual 

amounts incurred and realized by the 

specific exporter or producer being 

examined in the investigation or review 

for selling, general, and administrative 

expenses, and for profits, in connection 

with the production and sale of a 

foreign like product, in the ordinary 

course of trade, for consumption in the 

foreign country.’’ 104 However, there are 

times when the ‘‘actual data are not 

available with respect’’ to those 

production and sale amounts, and in 

those circumstances, section 

773(e)(2)(B) of the Act establishes three 

alternative methods for calculating 

amounts for selling, general, and 

administrative expenses, and profit, in 

connection with the production and sale 

of a foreign like product, in those 

instances.105 The Act provides 

Commerce with the discretion to select 

from any of the three alternative 

methods, depending on the information 

available on the record.106

One of those three options, described 

in section 773(e)(2)(B)(iii) of the Act, 

allows Commerce to use amounts 

incurred and realized for selling, 

general, and administrative expenses 

and for profit based on ‘‘any other 

reasonable method’’ with one exception. 

The Act provides that ‘‘the amount 

allowed for profit may not exceed the 

amount normally realized by exporters 

or producers’’ other than the 

individually examined exporter or 

producer ‘‘in connection with the sale, 

for consumption in the foreign country, 

of merchandise that is in the same 

general category of productions as the 

subject merchandise.’’ This limitation 

on profit used in constructed value is 

frequently called the ‘‘profit cap.’’ 

The SAA states that in applying ‘‘any 

other reasonable method’’ under the 

Act, ‘‘Commerce will develop this 

alternative through practice,’’ 107 and as 

Commerce explained in the Proposed 

Rule, it has done just that for many 

years.108 It has been Commerce’s 

practice to consider four criteria in 

selecting sources for selling, general, 

and administrative expenses, as well as 

for profits, under ‘‘any other reasonable 

method.’’ In the Proposed Rule, 

Commerce determined to codify that 

criteria in proposed § 351.405(b)(3).109

Accordingly, under the proposed 

regulation, Commerce will ‘‘normally 

consider’’: (A) the similarity of the 

potential surrogate companies’ business 

operations and products to the 

examined producer’s or exporter’s 

business operations and products; (B) 

the extent to which the financial data of 

the surrogate company reflects sales in 

the home market and does not reflect 

sales to the United States; (C) the 

contemporaneity of the surrogate 

company’s data to the period of 

investigation or review; and (D) the 

extent of similarity between the 

customer base of the surrogate company 

and the customer base of the examined 

producer or exporter in selecting such 

sources. 

Upon review of the Proposed Rule, 

however, Commerce has concluded that 

its preamble language may have 

confused two different aspects of its 

analysis under the Act. In the Proposed 

Rule, Commerce described these criteria 

as relating not only to the sources for 

‘‘any other reasonable method’’ for 

selecting selling, general, and 

administrative expenses, as well as 

profit, but also pertaining to ‘‘the 

amount normally realized by exporters 

or producers’’ other than the 

individually examined exporter or 

producer ‘‘in connection with the sale, 

for consumption in the foreign country, 

of merchandise that is in the same 

general category of productions as the 

subject merchandise.’’ 110 In other 

words, Commerce correctly referred to 

the use of these criteria in determining 

what sources to use when relying on 

‘‘any reasonable method,’’ but 

incorrectly also referred to the use of 

this criteria in selecting a ‘‘profit 

cap.’’ 111 That mischaracterization also 

was reflected in proposed 

§ 351.405(b)(3). Commerce is therefore 

modifying the regulation to remove that 

‘‘profit cap’’ language and to clarify that 

the four criteria pertain to the selection 

of sources for determining amounts for 

selling expenses and for profit under 

section 773(e)(2)(B)(iii) of the Act. 

Two commenters expressed their 

support for the new regulation, finding 

it to be timely and useful in achieving 

Commerce’s stated goal of enhancing 

the administration of the AD and CVD 

laws. One of those commenters 

provided a suggestion that Commerce 

state that the list of criteria is not 

exhaustive in the regulation, or in the 

alternative add a fifth criteria that states 

that Commerce might also consider 

other factors and information as 

appropriate in selecting sources for 

selling, general and administrative 

expenses and profit as ‘‘any other 

reasonable method’’ under the Act. 

Response 

Other than the modifications 

Commerce has made to proposed 

§ 351.405(b)(3) described above, 

Commerce has made no further changes 

to the provision. The language states 

that Commerce will ‘‘normally consider 

the following criteria,’’ and thus, by its 

terms the regulation is already clear that 

the list is not exhaustive. Likewise, 

because the list of criteria is not 

exhaustive, it is unnecessary to add a 

fifth ‘‘catch-all’’ criterion to the 

regulatory list. Normally, as the 

regulation states, and consistent with 

Commerce’s long-standing practice, 

Commerce will consider the four listed 

criteria in selecting a profit amount for 

its constructed value calculations, but if 

Commerce determines that there is some 

additional information on the record 

that might be relevant to its analysis, the 

regulation does not prevent or prohibit 

Commerce from considering that 

information as well in its analysis. 


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112See Proposed Rule, 89 FR at 57330. 113See Antidumping Methodologies in 

Proceedings Involving Nonmarket Economy 

Countries: Surrogate Country Selection and 

Separate Rates; Request for Comment, 72 FR 13246, 

13246 n.2 (March 21, 2007). 114See, e.g., Clearon Corp v. United States, 38 CIT 

1122, 1137–1140 (July 24, 2014); see also Tri Union 

Frozen Prods. v. United States, 163 F. Supp. 3d. 

1255, 1268, n. 8 (CIT 2016); and Tianjin Wanhua 

Co. v. United States, 253 F. Supp. 3d. 1318, 1322 

(CIT 2017). 

115See World Bank. (2024). GNI per capita 

(current US$), available at https://

data.worldbank.org/indicator/NY.GNP.PCAP.CD 

(see ‘‘details’’ section in chart); comparable 

definition is in IMF, ‘‘IMF Glossary’’, available at 

https://www.imf.org/en/About/Glossary. 

116See World Bank. (2024). GDP per capita 

(current US$), available at https://

data.worldbank.org/indicator/NY.GDP.PCAP.CD 

(see ‘‘details’’ section in chart); comparable 

definition is in IMF, ‘‘IMF Glossary’’, available at 

https://www.imf.org/en/About/Glossary. 

117See Proposed Rule, 89 FR at 57330. 

118 Id. 

119 Id (emphasis in the comment, not in the 

Proposed Rule). 

120See Enforcement and Compliance’s Policy 

Bulletin No. 04.1, regarding, ‘‘Non-Market Economy 

Surrogate Country Selection Process’’ (March 1, 

2004), available on Commerce’s ACCESS website at 

https://access.trade.gov/Resources/policy/bull04- 

1.html. 

13. Commerce Has Revised Proposed 

§ 351.408(b) To Describe the 

Methodology for Selecting Surrogate 

Countries and the Use of Gross 

Domestic Product To Determine 

Economic Comparability 

In the Proposed Rule, Commerce 

indicated that it was modifying 

§ 351.408(b) to reflect that Commerce 

may consider either per capita gross 

national income (GNI) or per capita 

gross domestic product (GDP) in 

selecting potential surrogate countries 

for purposes of antidumping 

investigations and administrative 

reviews of nonmarket economies.112

Currently, § 351.408(b) states that in 

determining whether a country is at a 

level of economic development 

comparable to the nonmarket economy 

under sections 773(c)(2)(B) and 

773(c)(4)(A) of the Act, Commerce will 

‘‘place primary emphasis on per capita 

GDP as the measure of economic 

comparability.’’ However, Commerce’s 

general practice has been to use per 

capita GNI instead of per capita GDP as 

the measure of economic 

comparability.113 Commerce’s use of 

GNI has been recognized and affirmed 

as reasonable by the U.S. Court of 

International Trade as a measure to 

determine economic comparability in 

multiple holdings.114 Per capita GNI 

measures the total income earned by the 

residents of a country, whether from 

domestic or foreign sources, divided by 

the average population of that 

country.115 Per capita GDP, on the other 

hand, measures the total value of goods 

and services produced within a country 

per person in a given year.116 The 

Proposed Rule explained either per 

capita GNI or per capita GDP can be 

reasonably used to determine 

comparable economies, depending on 

the facts before the agency.117 Proposed 

§ 351.408(b) also provided that 

Commerce could consider additional 

factors in selecting comparable 

economies and explained that 

consideration of these factors would 

assist it in avoiding distortive economic 

comparisons.118

Commerce received several comments 

on the proposed modifications to 

§ 351.408(b). Numerous commenters 

indicated their appreciation of 

Commerce’s codification of its 

established practice and its goal of 

considering additional factors to 

determine which countries may be 

deemed economically comparable to a 

non-market economy. However, 

commenters also expressed concern that 

including the option of using both GNI 

and GDP and identifying the additional 

factors adds uncertainty to the selection 

of surrogate countries. Most commenters 

were not opposed to the use of GDP 

only or GNI only but were very 

concerned about the potential confusion 

and inconsistencies if Commerce were 

able to pick one or the other on a caseby-case basis. Other commenters 

expressed opposition to the 

consideration of additional factors in 

Commerce’s analysis entirely for similar 

reasons. 

One commenter questioned the 

relationship between GNI and GDP and 

the additional factors. The commenter 

pointed out that the Proposed Rule 

stated that it ‘‘will place primary 

emphasis’’ on GNI or GDP, as compared 

to the additional factors it ‘‘may also 

consider’’ pursuant to new 

§ 351.408(b)(1) through (4),119 and 

questioned if Commerce was therefore 

mandated to analyze all of these factors 

in every case, or only GNI and GDP in 

all cases and the other factors in some 

cases. Moreover, that commenter stated 

that implementing the additional factors 

as a mandatory, case-specific, multifactor economic analysis when the 

current methodology is often sufficient 

would unnecessarily increase costs in 

terms of time, human resources, and 

legal fees for both Commerce and 

domestic interested parties. Therefore, 

that commenter recommended that 

Commerce clarify that it may decline to 

consider the proposed additional factors 

absent record evidence that relying on 

GDP or GNI would result in understated 

dumping margins for the subject nonmarket economy entity or entities. 

A second commenter also expressed 

that it was unclear when and why, in 

any given proceeding, Commerce would 

place primary emphasis on GNI over 

GDP and vice versa. That commenter 

recommended that Commerce provide 

clarification regarding how it will take 

GNI and GDP information into 

consideration. In addition, while that 

commenter agreed that Commerce 

should have the flexibility to consider 

information other than GNI and GDP in 

determining economic comparability, it 

also stated that the proposed 

§ 351.408(b)(3) related to the quality of 

the available data should be considered 

a separate and distinct determination 

from whether a country is economically 

comparable. Similarly, that commenter 

stated that by limiting the number of 

countries considered to be economically 

comparable based on factors unrelated 

to economic comparability, Commerce 

risked unnecessarily limiting potential 

surrogate countries and making it more 

difficult to identify the best available 

information for valuing a respondent’s 

factors of production. Accordingly, that 

commenter recommended that 

Commerce confirm that the potential 

quality and accessibility of data are not 

relevant in determining whether a 

country can be considered economically 

comparable to the nonmarket economy 

country at issue. 

The third commenter acknowledged 

that the proposed changes 

commendably address the fact that the 

use of GNI alone may not result in a 

principled or predictable calculation of 

normal value or antidumping margins. 

However, that commenter also stated 

that the proposed changes do not 

address the fact that Commerce’s 

practice continues to elevate economic 

comparability over merchandise 

comparability, adding greater 

uncertainty to the selection of surrogate 

countries and contrary to the intent of 

the statute. That commenter stated that 

because Commerce’s practice is to first 

create a list of six surrogates deemed to 

be equal in terms of economic 

comparability,120 Commerce will select 

a country producing comparable 

merchandise that is ‘‘the same’’ in terms 

of economic development over a 

country that produces identical 

merchandise but is slightly less 

comparable in economic terms. Because 

the statute requires that a surrogate be 

both economically comparable and a 

significant producer of comparable 

merchandise, the third commenter 

stated that both criteria call for a 

comparison that will yield relative 

levels of comparability. Accordingly, 


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121See, e.g., Shanghai Foreign Trade Enterprises 

Co., Ltd. v. United States, 318 F. Supp. 2d 1339, 

1348 (CIT 2004) (Shanghai Foreign Trade). 

122 Id. (citing Certain Cased Pencils from the 

People’s Republic of China; Final Results and 

Partial Rescission of Antidumping Administrative 

Review, 67 FR 48612 (July 25, 2002), and 

accompanying Issues and Decision Memorandum at 

Comment 5). 

123See Proposed Rule, 89 FR at 57330. 

124 Id., 89 FR at 57307, 57330. 

125See, e.g., Certain Activated Carbon From the 

People’s Republic of China: Preliminary Results of 

Antidumping Duty Administrative Review, and 

Preliminary Determination of No Shipments; 2019– 

2020, 86 FR 33,988 (June 28, 2021), and 

accompanying Issues and Decision Memorandum 

(June 21, 2021) at 16–17. 126 Id. 

that commenter recommended that 

Commerce modify the current approach 

to balance economic comparability and 

merchandise comparability to make 

surrogate country determinations more 

predictable and consistent. Particularly 

in the case of products that are only 

produced in a few countries, that 

commenter suggested that Commerce 

place more weight on merchandise 

comparability to allow for the selection 

of a country that is likely to provide 

market-based factor values for the 

subject merchandise, even though its 

overall economy over time may have 

improved or declined relative to a 

nonmarket economy country. To assess 

merchandise comparability, the third 

commenter cited the Shanghai Foreign 

Trade litigation where Commerce 

identified various factors that allow 

parties to analyze, rank, and anticipate 

which merchandise will be considered 

comparable for purposes of section 

773(c)(4)(ii) of the Act.121 The Court in 

Shanghai Foreign Trade recognized that 

Commerce’s established practice in 

selecting surrogate financial statements 

was to apply a three-part test that 

examines ‘‘physical characteristics, end 

uses, and production processes’’ 122 of 

the products produced by a company in 

a surrogate country to see if they were 

comparable. 

In addition, the third commenter also 

recommended that Commerce not 

arbitrarily foreclose the use of the 

country producing identical or more 

comparable merchandise simply 

because it is not one of the countries 

deemed by Commerce to be ‘‘the same’’ 

as the subject nonmarket economy 

country in terms of economic 

comparability in its annual list of 

comparable economies. That commenter 

recommended that both economic 

comparability and merchandise 

comparability factors should be weighed 

such that a country outside the current 

six-country GNI list might still be 

selected as the surrogate country based 

on significant production of identical 

merchandise (or merchandise that is 

more comparable to the subject 

merchandise than any products 

produced in any of the six listed 

countries). 

Lastly, a fourth commenter stated that 

it generally supported Commerce’s 

proposed changes. However, that 

commenter was concerned that placing 

primary emphasis on ‘‘either per capita 

gross domestic product (GDP) or per 

capita gross national income (GNI) 

. . .’’ 123 provides an equivocation that 

incorporates an additional and 

unnecessary element of uncertainty in 

an already complicated process of 

surrogate country selection. That 

commenter stated that given 

Commerce’s long-standing and 

successful utilization of GNI alone, it 

recommended that Commerce codify the 

use of GNI in place of the current 

reference to GDP. With respect to the 

additional factors, the fourth commenter 

stated that it supported Commerce’s 

proposal to incorporate into § 351.408(b) 

the qualitative analysis of the 

availability of potential surrogate 

values, but only in part. 

For the first proposed factor (i.e., 

economic activity), the fourth 

commenter stated that the reference in 

the Proposed Rule, to ‘‘development 

phase and role in the global 

economy,’’ 124 was too ambiguous and 

could be ripe for abuse even if not 

incorporated into the text of the 

regulation. The commenter stated that 

the phrase runs counter to Commerce’s 

longstanding practice that its selection 

of surrogate values, such as surrogate 

companies for financial ratios, does not 

require Commerce to use surrogates that 

exactly replicate the experience of 

respondents. As for the second 

proposed factor (i.e., examination of 

trade patterns), the fourth commenter 

stated that the proposed revision 

inadvertently suggested that the import 

and export analysis may include 

commodities other than identical or 

comparable merchandise. That 

commenter therefore recommended that 

Commerce modify the regulation to 

consider the composition and quantity 

of ‘‘exports of identical or comparable 

merchandise’’ from those countries. 

The commenter supported the third 

proposed factor (i.e., availability, 

accessibility, and quality of data), noting 

that Commerce includes similar 

elements in its deliberation.125

Finally, for the fourth proposed factor 

(i.e., additional economic factors for 

consideration), the fourth commenter 

stated that the introduction of indicators 

in the preamble such as purchasing 

power parity to account for differences 

in spending power between countries 

could largely negate the standard 

analysis of economic comparability 

using either GNI or GDP. The fourth 

commenter also noted that another 

example provided in the preamble— 

‘‘regional indicators that would allow 

Commerce, when reasonable, to select a 

surrogate country or countries that are 

in the same geographic region as the 

nonmarket economy country’’—is so 

broad and subjective that it might 

nullify all other considerations, such as 

GNI or net exports of merchandise 

under consideration. Accordingly, the 

fourth commenter stated that it did not 

support this last factor, and it urged 

Commerce to not include such language 

in § 351.408(b). 

Response 

Upon consideration of the comments 

on Commerce’s proposed revisions to 

§ 351.401(b), it has become clear from 

the questions and concerns raised that 

a regulatory provision that only focuses 

on the ‘‘Economic Comparability’’ 

aspect of Commerce’s analysis is not 

sufficient. Accordingly, Commerce has 

revised the provision, codified each of 

the three steps in selecting surrogate 

countries, and revised the header of the 

provision to read ‘‘Selecting Surrogate 

Countries.’’ 

The first step, now codified in 

§ 351.408(b)(1), explains that Commerce 

is directed by sections 773(c)(2)(B) and 

773(c)(4)(A) of the Act to select 

surrogate countries which are at a level 

of economic development comparable to 

that of the nonmarket economy at issue. 

Furthermore, unlike in the Proposed 

Rule, final § 351.408(b)(1)(i) provides 

that in measuring economic 

comparability, Commerce will place 

primary emphasis solely on GDP. 

Commerce acknowledges the concerns 

expressed by several commenters that if 

Commerce had the option of using 

either GNI or GDP in determining 

economic comparability, it could 

potentially lead to perceived 

inconsistencies and otherwise lead to 

confusion associated with the use of 

either measurement of economic 

comparability. After taking into 

consideration those comments, 

Commerce has determined that the 

agency and the public is best served by 

a single, consistent and predictable 

measurement to determine countries 

economically comparable to a 

nonmarket economy in all cases. 

As Commerce acknowledged in the 

Proposed Rule,126 for several years it 

has used GNI levels to measure 

economic comparability, a practice that 


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127 Id. at n.128. 

128Why Use GNI Per Capita To Classify 

Economies Into Income Groupings?, World Bank, 

available at https://datahelpdesk.worldbank.org/ 

knowledgebase/articles/378831; Neil Fantom and 

Umar Serajuddin, The World Bank’s Classification 

of Countries by Income, World Bank, available at 

https://documents1.worldbank.org. 

129Why Use GNI Per Capita To Classify 

Economies Into Income Groupings?, World Bank, 

available at https://datahelpdesk.worldbank.org/ 

knowledgebase/articles/378831. 

130See National Income Per Capita, OECD 

Factbook: Economic, Environmental and Social 

Statistics (May 6, 2014) (OECD Factbook 2014), 

available at https://oecd-ilibrary.org/economics/ 

oecd-factbook-2014/national-income-per-capita_

factbook-2014-21-en. 

131World Bank, ‘‘GDP Per Capita’’ in Metadata 

Glossary of World Bank’s Databanks, available at 

https://databank.worldbank.org/metadataglossary/ 

world-development-indicators/series/NY.GDP.

PCAP.KN. See also Paul Krugman & Maurice 

Obstfeld, International Economics: Theory and 

Practice (7th ed. 2005), at 281. 

132See OECD Factbook 2014 at 58. 

133See ‘‘GDP Per Capita,’’ OECD National 

Accounts at a Glance 2014 (2014), available at 

https://www.oecd-ilibrary.org/docserver/na_glance2014-6-en.pdf, and Grittayaphong, Peter, Beyond 

GDP: Three Other Ways to Measure Economic 

Health, Federal Reserve Bank of St. Louis (April 19, 

2023), available at https://www.stlouisfed.org/openvault/2023/apr/three-other-ways-to-measureeconomic-health-beyond-gdp. 

134See Tim Callen and Sarwat Jahan, Gross 

Domestic Product: An Economy’s All, International 

Monetary Fund: IMF’s Finance & Development 

-Back to the Basics, available at https://

www.imf.org/en/Publications/fandd/issues/Series/ 

Back-to-Basics/gross-domestic-product-GDP. 

135See Gross Domestic Product as a Measure of 

U.S. Production, Bureau of Economic Analysis: 

Survey of Current Business, available at https://

apps.bea.gov/scb/pdf/national/nipa/1991/ 

0891od.pdf; Kelly Ramey, The Changeover from 

GNP to GDP—A Milestone in BEA History, Bureau 

of Economic Analysis, Volume 101, available at 

https://apps-fd.bea.gov/scb/issues/2021/03-march/ 

pdf/0321-reprint-gnp.pdf. 

136 Id. 

has been upheld by the CIT in multiple 

cases as being in accordance with 

law.127 However, as explained below, 

for purposes of comparing different 

economies for purposes of an AD 

analysis, the use of GDP levels is a more 

appropriate alternative. Accordingly, 

final § 351.408(b) will continue to 

provide that Commerce will use GDP to 

determine countries economically 

comparable to each nonmarket economy 

at issue in cases before it, starting with 

the next list of comparable economies 

issued by Commerce following the 

publication of this final rule. 

Commerce recognizes that there are 

similarities between GNI and GDP, and 

both are acceptable options for 

measuring economic comparability. 

Both indicators are close to one another 

numerically and represent important 

means of measuring a country’s overall 

economic activity. Some authoritative 

institutions, such as the World Bank, 

regularly publish both indicators and 

have found that GNI provides a useful 

indicator that is ‘‘closely correlated with 

other, nonmonetary measures of the 

quality of life, such as life expectancy at 

birth, mortality rates of children, and 

enrollment rates in school.’’ 128

Moreover, the World Bank often relies 

on per capita GNI levels more heavily 

than per capita GDP levels as a means 

of measuring countries’ income, as it 

includes earnings a country’s citizens 

receive either within its borders or from 

its foreign assets.129 Other authoritative 

institutions, such as the Organization 

for Economic Cooperation and 

Development (OECD), also publish both 

indicators on a regular basis, and have 

found that many analysts prefer the 

theoretical construct of GNI over GDP, 

given its ability to isolate income earned 

by all of its citizens regardless of 

geographic boundaries.130 For reasons 

such as this, Commerce has relied upon 

GNI in making economic comparisons 

for several years. 

However, while there are benefits to 

using GNI when investigating relative 

levels of wealth across countries, 

Commerce has determined that the use 

of GDP would be more appropriate for 

this specific function. Primary among 

those reasons is that GDP measures the 

total value of goods and services 

produced within a country’s borders 

during a specific period, while GNI 

measures the total income earned by 

citizens and residents, including money 

received from sources outside the 

country. According to the World Bank, 

the technical definition of GDP is ‘‘the 

sum of gross value added by all resident 

producers in the economy plus any 

product taxes and minus any subsidies 

not included in the value of the 

products,’’ and represents the income 

citizens earn on wealth they hold in the 

domestic economy and in other 

countries less the payments made to 

foreign owners of wealth located in the 

domestic economy.131 Using GDP, 

rather than GNI, avoids the challenges 

associated with measuring international 

salaries of citizens outside of the 

country of measurement associated with 

the GNI calculations. Accordingly, GDP 

is often considered among economic 

institutions and authorities to be the 

more practical of the two indicators.132

Furthermore, because of the 

complexities associated with estimating 

GNI, GDP is widely used by economic 

institutions which compare economies. 

Although each measure of economic 

aggregation has its shortcomings, the 

OECD characterizes GDP as ‘‘a core 

indicator of economic performance and 

is commonly used as a broad measure 

of average living standards or economic 

well-being,’’ while the Federal Reserve 

Bank of St. Louis classifies it as ‘‘one of 

the most common measures.’’ 133

Furthermore, the International Monetary 

Fund (IMF), states that GDP ‘‘has 

become widely used as a reference point 

for the health of national and global 

economies’’ and that it is often cited in 

news sources and in reports by 

governments, central banks, and the 

business community.134 In fact, as the 

primary measure of production in the 

international guidelines for economic 

accounting (System of National 

Accounts), the United States moved to 

the use of GDP to compare countries in 

the 1990s.135 The Bureau of Economic 

Analysis, which is the U.S. government 

agency responsible for reporting 

aggregated economic output for the 

country, explained that this move was 

based in large part by a desire to allow 

‘‘reliability in comparisons of economic 

activity across countries.’’ 136

Finally, while GNI may be a more 

accurate indicator of national wealth, it 

is less aligned with Commerce’s 

objective of finding countries at 

comparable levels of economic 

development for the purposes of 

identifying appropriate surrogate for 

factors of production. GDP focuses 

squarely on a country’s production. 

Reliance on GDP will also ensure that 

country comparisons will not be skewed 

by disproportionally high or low 

incomes of country citizens that lie 

outside the geographic boundaries of the 

comparison countries. 

To the extent that commenters raised 

concerns about the use of GDP, it was 

because Commerce has relied upon GNI 

to measure economic comparability for 

many years and its methodology had 

become transparent and predictable. 

Commerce continues to believe that its 

use of GNI has, historically, been lawful, 

reliable and transparent, and until 

Commerce issues its next list of 

comparable economies, Commerce will 

continue to rely on its current list of 

comparable economies determined 

based on GNI (which can be accessed at 

https://access.trade.gov/Resources/ 

surrogate.aspx) after this final rule is 

issued. When Commerce next issues its 

list of comparable economies, it will be 

based on GDP data from the World 

Bank, consistent with both the current 

and revised regulations. For 

comparability purposes, and for 

consistency with how Commerce used 

GNI, the World Bank’s GDP indicator 

will be US$ denominated nominal GDP 

levels. 

In addition to the switch from relying 

on GNI data to GDP data, under final 

§ 351.408(b)(1)(ii) Commerce may also 


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137See Proposed Rule, 89 FR at 57307. 

138See § 351.408(b)(1)(ii) (codifying that 

Commerce will provide its reasoning as described). 139 Id., 89 FR at 57307. 

140See Proposed Rule, 89 FR at 57330 (at 

proposed § 351.408(b)(4)). 

consider additional factors in 

determining whether countries are at a 

comparable level of economic 

development to the reference nonmarket economy. In the proposed 

regulation, Commerce set forth factors 

such as the ‘‘overall size and 

composition of economic activity in 

those countries’’ and ‘‘the composition 

and quantity of exports from those 

countries.’’ 137 Certain commenters 

questioned how those general terms 

would relate to Commerce’s comparable 

economy analysis. After consideration 

of those concerns Commerce has 

removed the factors from the regulation, 

instead clarifying here in greater detail 

than the Proposed Rule that in certain 

cases Commerce might consider 

additional factors that would be relevant 

to economic comparability, such as if 

the size or structure of certain market 

economies under consideration are 

significantly different from that of the 

nonmarket economy at issue. For 

example, a small island country might 

share a GDP level with a nonmarket 

economy in a particular year, but 

Commerce might determine that the 

uniqueness of the market economy’s 

situation is such that it would be 

inappropriate to consider that small 

island country comparable to the 

nonmarket economy at issue for 

purposes of deriving surrogate values to 

use in Commerce’s antidumping 

calculations. Likewise, Commerce might 

consider that an economy with a similar 

GDP in a certain year to the nonmarket 

economy is primarily agrarian or 

service-oriented, while the nonmarket 

economy might be structured as a 

primarily industrial economy. 

Commerce might therefore consider that 

notwithstanding a similar GDP, other 

countries may serve as better 

comparators given Commerce’s interest 

in finding surrogates for price and costs 

in production. 

Commerce recognizes that there might 

be other factors, unique to a given 

situation, that may also warrant further 

consideration in determining if country 

should be used as a surrogate. To be 

clear, if Commerce determined to omit 

certain countries from its surrogate 

country list based on factors other than 

GDP, Commerce would identify those 

factors and explain its basis and 

reasoning for excluding that country 

from the surrogate country list when it 

issues that list on the Commerce 

website.138

Finally, under the economically 

comparable analysis, Commerce has 

codified its current practice and added 

§ 351.408(b)(1)(iii), which states that on 

an annual basis, Commerce will 

determine market economies 

economically comparable to individual 

nonmarket economies and list those 

market economies on its website. 

In addition to its economically 

comparable analysis, Commerce has 

also codified the second step of its 

surrogate country analysis at 

§ 351.408(b)(2). Sections 773(c)(2)(A) 

and 773(c)(4)(B) of the Act direct 

Commerce to consider countries that are 

significant producers of merchandise 

comparable to the subject merchandise. 

Accordingly, after issuing a list of 

certain countries that are economically 

comparable under § 351.408(b)(1), 

Commerce will next select significant 

producers of comparable merchandise 

under § 351.408(b)(2) from among 

economically comparable countries. 

Lastly, the third step, under 

§ 351.408(b)(3), provides that if there is 

more than one economically comparable 

country that produces comparable 

merchandise in a given case that might 

be considered a potential surrogate 

country, Commerce will consider the 

totality of the information on the record 

in selecting a surrogate country. Such 

criteria include the availability, 

accessibility, and quality of data from 

those countries and the similarity of 

production processes and products 

manufactured in the potential surrogate 

countries in comparison to the subject 

merchandise. 

Commerce introduced the element of 

data quality in the Proposed Rule,139 but 

did so with respect to the first step of 

its surrogate country analysis pertaining 

to economic comparability. As 

explained above, the inclusion of that 

element with respect to economic 

comparability raised concerns among 

commenters. Commerce agrees that in 

practice, although it may find that data 

availability, accessibility, and quality 

can at times be a concern, data quality 

normally does not become a significant 

issue until Commerce must select a 

surrogate country from among a list of 

economically comparable countries 

with significant producers of 

comparable merchandise. Even if 

Commerce has determined that a 

country is economically comparable to 

the nonmarket economy country, if the 

data quality on the record is unusable, 

insufficient data can create serious 

problems for the agency’s normal value 

calculations. For example, incomplete 

data from a potential surrogate country 

may result in distorted surrogate values, 

which in turn can adversely affect 

Commerce’s calculation of AD margins. 

Therefore, the data quality with respect 

to potential surrogate countries plays a 

pivotal role in ensuring the accuracy 

and transparency of the surrogate 

country selection process. Accordingly, 

Commerce has included the availability, 

accessibility, and quality of data 

element in the third step of Commerce’s 

surrogate country selection analysis. 

Commenters raised concerns 

regarding the proposed § 351.408(b)’s 

reliance on general economic 

comparability rather than focusing on 

the export composition of countries that 

produce merchandise identical or 

comparable to the subject merchandise. 

In response, Commerce included all 

three steps of its surrogate country 

analysis in the updated regulation, 

because while export composition is not 

part of the first step of Commerce’s 

surrogate country analysis (which was 

the only part analyzed in the current 

regulation and addressed in the 

Proposed Rule), it is analyzed in the 

second and third parts of its analysis in 

selecting a surrogate country. 

Another concern raised by certain 

commenters was Commerce’s proposed 

inclusion of ‘‘additional factors which 

are appropriate to consider in light of 

unique facts or circumstances’’ with 

respect to its economic comparability 

analysis.140 Commerce has not included 

that language in the final regulation but 

has retained the ‘‘additional 

considerations in determining economic 

comparability’’ at § 351.408(b)(1)(ii) and 

provided examples for when it might 

consider additional unique factors in its 

comparability analysis in this preamble. 

Commerce appreciates the need for 

predictability and consistency in its 

analysis but also recognizes that each 

country, whether a market economy or 

nonmarket economy, is unique, and if a 

factor arises in a given case that 

Commerce determines is significant and 

relevant enough to consider as part of its 

economic comparability analysis, 

Commerce must have the ability to do 

so to comply with its statutory 

responsibilities. 

In addition, certain parties 

commented more specifically on the 

importance of the comparability of 

merchandise from a potential surrogate 

country. One commenter suggested that 

Commerce should at times place greater 

importance on the comparability of 

merchandise over the comparability of 

economies in selecting a surrogate 

country. In accordance with that 

suggestion, the commenter 

recommended that both economic 


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141See sections 773(c)(4)(A) and 773(c)(4)(B) of 

the Act. 

142See JBF RAK LLC v. United States, 790 F.3d 

1358, 1364 (Fed. Cir. 2015). 

143See, e.g., Jiaxing Brother Fastener Co. v. 

United States, 822 F.3d 1289, 1300 (Fed. Cir. 2016) 

(affirming Commerce’s selection of Thailand over 

the Philippines as the surrogate country). 

144See Memorandum, ‘‘List of Surrogate 

Countries for Antidumping Investigations and 

Reviews from the People’s Republic of China 

(‘‘China’’), dated August 27, 2024, available at 

https://access.trade.gov/Resources/surrogate/ 

China_Surrogate_Country-List_Memo.pdf. The 

memorandum specifies that when multiple 

countries meet the criteria of economic 

comparability, the availability and quality of 

publicly available data should guide the selection 

process. Commerce’s surrogate country memo also 

indicates that if no countries on the list produce 

comparable merchandise, Commerce may consider 

countries outside the list in selecting a surrogate 

country. 

145As one commenter pointed out, in Shanghai 

Foreign Trade the CIT recognized that Commerce’s 

practice in selecting surrogate financial statements, 

for example, is to compare not only the physical 

characteristics of the potential surrogate product 

with the subject merchandise, but the end use and 

similarity of production process between the 

products as well. See Shanghai Foreign Trade, 318 

F. Supp. 2d at 1348. Such considerations might also 

be relevant in selecting a surrogate country, but 

only if the information on the record is of 

sufficiently quality and completeness to support 

such an analysis. 

146See, e.g., sections 771(5)(A) and 771(5A)(D) of 

the Act and SAA at 929–930. 

147See Proposed Rule, 89 FR at 57308–10. 

148See, e.g., Countervailing Duties; Final Rule, 63 

FR 65348, 65357 (November 25, 1998) (1998 CVD 

Regulations); see also the Preamble to 

Countervailing Duties: Notice of Proposed 

Rulemaking and Request for Public Comments, 54 

FR 23366, 23368 (May 31, 1989) (1989 Proposed 

Regulations). The 1989 Proposed Regulations were 

never finalized. 

comparability and merchandise 

comparability factors should be weighed 

such that a country outside the current 

six-country GNI list might still be 

selected as the surrogate country based 

on significant production of identical 

merchandise (or merchandise that is 

more comparable to the subject 

merchandise than any products 

produced in any of the six listed 

countries). 

Commerce has not adopted that 

commenter’s suggestion in revising 

§ 351.408(b). The Act states that 

Commerce ‘‘shall utilize, to the extent 

possible, the prices or costs of factors of 

production in one or more market 

economy countries that are—(A) at a 

level of economic development 

comparable to that of the nonmarket 

economy country, and (B) significant 

producers of comparable 

merchandise.’’ 141 While economic 

comparability and comparable 

merchandise production are both 

important considerations in Commerce’s 

surrogate country analysis, it is 

Commerce’s longstanding practice to 

prioritize economic comparability, with 

the similarity of merchandise produced 

in those potential surrogate countries 

serving as a secondary aspect of 

Commerce’s analysis. The Federal 

Circuit has stated that when a statute 

does not mandate a procedure or 

methodology for applying a statutory 

test, ‘‘Commerce may perform its duties 

in the way it believes most suitable’’ 142

and has affirmed Commerce’s selection 

of surrogate countries in several cases 

on the basis of this methodology.143

Indeed, consistent with this practice, 

Commerce’s modified surrogate country 

memo affirms the prioritization of 

‘‘economic comparability’’ in the 

surrogate selection process, while also 

acknowledging the relevance of 

selecting a ‘‘significant producer of 

comparable merchandise.’’ 144 Likewise, 

consistent with that practice, the revised 

regulation also prioritizes economic 

comparability, as reflected in the first, 

second and third steps of Commerce’s 

surrogate selection analysis in 

§ 351.408(b)(1), (2) and (3) of the final 

rule. 

Nonetheless, Commerce agrees with 

that commenter that the similarity of 

merchandise produced by countries that 

are both economically comparable and 

significant producers of subject 

merchandise can be an important 

consideration in the agency’s surrogate 

country analysis, depending on the facts 

on the administrative record. 

Accordingly, in analyzing the 

comparability of merchandise from 

potential surrogate countries with 

subject merchandise, Commerce has 

codified in § 351.408(b)(3) that besides 

the availability, accessibility and quality 

of data, Commerce will also consider 

the similarity of production processes 

and products manufactured in the 

potential surrogate countries to the 

subject merchandise. Consistent with 

Commerce’s normal practice, Commerce 

may consider if the merchandise is 

identical or similar to the subject 

merchandise and may consider other 

factors besides the physical 

characteristics of the products if the 

administrative record contains such 

detailed information.145

14. Commerce Will Remove the Integral 

Linkage Specificity Provision, as Well as 

the Agricultural and Small- and 

Medium-Sized Businesses Exceptions to 

the Specificity Rule (Currently Found at 

§ 351.502(d), (e), and (f)) 

It is axiom that Commerce will only 

countervail a subsidy program that 

provides benefits that are specific as 

that term is contemplated under U.S. 

CVD law; that is, not broadly available 

and widely used but narrowly focused 

and used by discrete segments of an 

economy.146

In the Proposed Rule, Commerce 

proposed removing the integral linkage 

specificity provision, as well as the 

agricultural and small- and mediumsized business exceptions to the 

specificity rule, currently found at 

§ 351.502(d), (e), and (f).147 Commerce 

received comments on these proposed 

changes. After considering those 

comments, Commerce is removing these 

provisions consistent with the Proposed 

Rule. 

Integral Linkage Provision 

Consistent with the proposed changes 

to the regulation, the agency will delete 

the integral linkage provision found at 

current § 351.502(d) pursuant to which 

Commerce, at its discretion, may 

expand its analysis of whether a 

particular investigated subsidy program 

is specific under section 771(5A)(D) of 

the Act by expanding its specificity 

analysis to programs other than that 

particular investigated subsidy program 

if the investigated subsidy program is 

‘‘integrally linked’’ to other subsidy 

programs under investigation. The 

concept of integral linkage contained in 

§ 351.502(d) was a discretionary 

practice at the time of its codification. 

There is not, and has never been, a 

statutory requirement to expand the 

analysis of specificity under section 

771(5A)(D) of the Act beyond the 

particular investigated subsidy program. 

Since 1998, when Commerce added the 

integral linkage provision to the 

regulations, respondents have rarely 

invoked this provision, and Commerce 

has rarely found two or more subsidy 

programs to be integrally linked.148 For 

these reasons, Commerce has 

determined to remove the integral 

linkage provision found at current 

§ 351.502(d). 

Two parties commented in opposition 

to the removal of the integral linkage 

provision. While they acknowledged 

Commerce’s observation that there is no 

express statutory requirement to expand 

the analysis of specificity under section 

771(5A)(D) of the Act, the commenters 

stated that the elimination of the 

regulation diminishes clarity and 

certainty by removing analytical 

standards deemed useful in resolving 

whether a measure satisfies the statute’s 

specificity requirements. Commerce 

finds these arguments unpersuasive. 

While the commenters state that the 

elimination of this regulation 

diminishes clarity with respect to 

Commerce’s analytical standards, these 

parties have cited no cases or instances 

since this regulation was promulgated 


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149See 1998 CVD Regulations, 63 FR at 65357– 

58. 

150See Final Negative Countervailing Duty 

Determination: Fresh Asparagus from Mexico, 48 

FR 21618, 21621 (May 13, 1983) (Asparagus from 

Mexico). 

151See Fresh Cut Roses from Israel: Final Results 

of Administrative Review of Countervailing Duty 

Order, 48 FR 36635, 36636 (August 12, 1983) (Fresh 

Cut Roses from Israel). 

152See Certain Fresh Cut Flowers from Mexico, 49 

FR 15007, 15008 (April 16, 1984) (Certain Fresh Cut 

Flowers from Mexico). 

153See Asparagus from Mexico, 48 FR at 21621. 

154See Fresh Cut Roses from Israel, 48 FR at 

36636. 

155See Certain Fresh Cut Flowers from Mexico, 49 

FR at 15008. 

156See Roses Inc. v. United States, 774 F Supp. 

1376, 1383–84 (CIT 1991). 

157See 1989 Proposed Regulations at 

§ 355.43(b)(7). 

158 1998 CVD Regulations, 63 FR at 65358. 

159See SAA at 930. 

160See, e.g., Sugar from Mexico: Final Affirmative 

Countervailing Duty Determination, 80 FR 57337 

(September 23, 2015), and accompanying Issues and 

Decision Memorandum; Certain Frozen Warmwater 

Shrimp from the Socialist Republic of Vietnam: 

Final Affirmative Countervailing Duty 

Determination, 78 FR 50387 (August 19, 2013), and 

accompanying Issues and Decision Memorandum; 

Final Affirmative Countervailing Duty 

Determinations: Certain Durim Wheat and Hard 

Red Spring Wheat from Canada, 68 FR 52747 

(September 5, 2003), and accompanying Issues and 

Decision Memorandum; and Ripe Olives from 

Spain: Final Affirmative Countervailing Duty 

Determination, 83 FR 28186 (June 18, 2018), and 

accompanying Issues and Decision Memorandum. 

in which the integral linkage provision 

provided useful guidance or clarity to 

Commerce’s analysis of a subsidy 

program’s specificity. Because the 

integral linkage provision is not 

required by the Act and has not 

provided any useful assistance or clarity 

to the agency’s specificity analysis 

conducted under section 771(5A)(D) of 

the Act, Commerce has removed the 

provision from the regulation. 

The Agricultural Exception 

Consistent with the proposed changes 

to the regulation, in this final rule 

Commerce has removed the agricultural 

exception found at current § 351.502(e). 

Current § 351.502(e) provides that 

Commerce will not regard a domestic 

subsidy as being specific under section 

771(5A)(D) of the Act solely because the 

subsidy is limited to the agricultural 

sector. When paragraph (e) was issued, 

Commerce explained that this exception 

for generally available agricultural 

subsidies was consistent with prior 

practice and that Commerce would find 

an agricultural subsidy to be 

countervailable only if it were specific 

within the agricultural sector, e.g., a 

subsidy limited to livestock or livestock 

received disproportionately large 

amounts of the subsidy.149

This regulation was based on 

Commerce’s decisions in several cases 

during the 1980s, including Asparagus 

from Mexico,150 Fresh Cut Roses from 

Israel, 151 and Certain Fresh Cut Flowers 

from Mexico.152 In Asparagus from 

Mexico, Commerce determined that the 

provision of water to agricultural 

producers was not countervailable, 

explaining: ‘‘{p}referential rates are not 

provided to the producers of any one 

agricultural product’’ and ‘‘{w}e do not 

consider the provision of water at a 

uniform rate to all agricultural 

producers in this region to be a benefit, 

which would constitute a bounty or 

grant, because Commerce considers the 

agricultural sector to constitute more 

than a single group of industries within 

the meaning of the Act.’’ 153 Commerce 

cited this finding in support of its 

determination that benefits from 

government-funded agricultural 

extension services were not 

countervailable in Fresh Cut Roses from 

Israel.154 This practice of considering 

the agricultural sector to constitute more 

than a specific industry or group of 

industries was reaffirmed again in 

Certain Fresh Cut Flowers from 

Mexico.155

Commerce’s conclusion in this regard 

on the application of the CVD law was 

upheld by the CIT in Roses Inc. v. 

United States, where the Court held that 

‘‘Commerce’s determination that a 

group composed of all of agriculture, 

that is, whatever is not services or 

manufacturing, is not within the 

meaning of the statutory words 

‘industry or group of industries’ is a 

reasonable interpretation of the 

statute.’’ 156

Commerce first attempted to codify a 

specificity exception for the agricultural 

sector in the 1989 Proposed Regulations, 

which were never finalized.157 When 

Commerce attempted to codify this 

agricultural exception the agency was 

administering the CVD law with limited 

guidance from the Act with respect to 

the analysis of specificity. The CVD law 

did not have an explanation or a 

definition of a ‘‘specificity test’’ which 

is now incorporated under the current 

statute. In addition, the Trade 

Agreements Act of 1979 that governed 

Commerce’s administration of the CVD 

law at that time did not set forth any 

criteria with respect to the analysis of 

specificity. Section 771(5)(B) of the 

Trade Agreements Act of 1979 only 

referenced domestic subsidies 

‘‘provided or required by government to 

a specific enterprise or industry, or 

group of enterprises or industries.’’ 

Indeed, the criteria to be used in any 

specificity analysis undertaken by 

Commerce was not in the Act but only 

in the 1989 Proposed Regulations. 

The agricultural exception that was 

codified in § 351.502(e) in the 1998 CVD 

Regulations was based upon the 1989 

Proposed Regulations. With respect to 

the codification in 1998 of the 

agricultural exception in § 351.502(e), 

one commenter suggested that 

Commerce should abandon the special 

specificity rule for agricultural subsidies 

citing section 771(5B)(F) of the Act and 

Article 13(a) of the WTO Agreement on 

Agriculture referencing the so-called 

‘‘green box’’ category of noncountervailable agricultural subsidies. 

In response to that comment, Commerce 

stated that ‘‘[g]iven the absence of any 

indication that Congress intended the 

‘green box’ rules to change the 

Department’s practice or overturn Roses, 

Commerce is retaining the special 

specificity rule for agricultural 

subsidies.’’ 158

Commerce has now reconsidered its 

exception for agricultural subsidies. A 

blanket specificity exception provided 

to agricultural subsidy programs 

denotes a conclusion by Commerce 

unrelated to any case-related (or casespecific) facts regarding the availability 

and use of a subsidy by any enterprise 

or industry or group thereof and that 

every country that is subject to a CVD 

investigation has an identical 

agricultural sector within its economy. 

The SAA states that Commerce can only 

make a specificity determination on a 

case-by-case basis.159 Accordingly, it is 

more consistent with the SAA to 

eliminate the blanket specificity 

exception for the group of enterprises or 

industries in agriculture. 

The elimination of the agriculture 

exception to specificity should not be 

construed as a change in policy by 

Commerce, nor does it imply a renewed 

emphasis on pursuing any particular 

agricultural subsidies or agricultural 

subsidies in general. Rather, 

Commerce’s analysis of whether an 

agricultural subsidy is specific will be 

conducted on a case-by-case basis, 

consistent with the SAA, based on an 

examination of the specificity criteria 

enacted under section 771(5A)(D) of the 

Act within the framework of the 

specificity test set forth in the SAA. 

Commerce is legally bound by these 

criteria. In practice, the agricultural 

exception has not been a deciding factor 

in Commerce’s analysis of agricultural 

subsidies because, as commenters have 

noted, Commerce has countervailed 

agricultural subsidies consistent with 

the specificity standards set forth within 

section 771(5A)(D) of the Act.160

Comments on the removal of the 

agricultural exception from the 


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161See Proposed Rule, 89 FR at 57308–57309. 

162 Id. 

163 Id. 

164See SAA at 929–30. 

165 Id. at 930. 166See 1998 CVD Regulations, 63 FR at 65358. 

regulation were evenly split between 

those parties that supported the removal 

of the specificity exception and those 

that opposed. 

The commenters that supported the 

removal of the agricultural exception 

stated that there is no basis under 

current law to maintain a regulatory 

exception that conflicts with both the 

statutory language of section 771(5A)(D) 

of the Act and the SAA. Other 

commenters that supported the removal 

of the exception also noted the changing 

economic landscape of the agricultural 

sector since the agricultural exception 

was implemented by Commerce in the 

1980s. 

Those commenters that opposed the 

removal of the agricultural exception 

stated the following general points: (1) 

Commerce did not clearly indicate how 

the Act requires or permits the agency 

to delete the exception from the 

agency’s regulation; (2) the removal of 

the exception would be inconsistent 

with the statute and Congress’ 

affirmation of Commerce’s agricultural 

exception practice; (3) domestic 

agricultural policies and broad-based 

agricultural subsidies are generally 

considered a normal function of 

government and, therefore, should not 

be susceptible to countervailing actions; 

(4) the agricultural exception has not 

prevented Commerce from conducting 

CVD investigations on agricultural 

products; (5) the agricultural sector is 

highly diverse and is composed of more 

than a single group of enterprises or 

industries within the meaning of section 

771(5A)(D) of the Act; and (6) removing 

the exception would send the wrong 

signal to U.S. trading partners. 

Response 

Before addressing these comments, 

Commerce must first address another 

point made by various commenters 

regarding the reference Commerce made 

to the economic criteria and the 

economic importance of the agricultural 

sector in the Proposed Rule. In the 

Proposed Rule, Commerce referenced 

various economic factors of the 

agricultural sector during the early 

1980s when the agency created its 

agricultural exception and then 

explained how those economic factors 

may have changed in the ensuing four 

decades.161 These factors were cited in 

the Proposed Rule to explain, in part, 

how Commerce analyzed the specificity 

of investigated agricultural subsidies in 

the early 1980s when there was, as 

explained above, no statutory criteria 

with respect to analyzing whether a 

subsidy was limited to a specific 

enterprise or industry or group of 

enterprises or industries.162 Commerce 

also referenced these factors in an 

attempt to make the point that a blanket 

and static specificity exception 

provided to any one group of enterprises 

or industries could become de facto 

obsolete over a long period of time.163

Commerce did not intend to suggest that 

any analysis of specificity should or 

could be based solely on this type of 

economic data as that type of restricted 

analysis would be inconsistent with the 

SAA. The SAA is explicit on this point 

as it states that there is no precise 

mathematical formula for determining 

when the number of enterprises or 

industries eligible for a subsidy is 

sufficiently small as to be considered 

specific.164 A proposal to establish such 

quantitative criteria was made during 

the Uruguay Round but was quickly 

rejected by the United States and many 

other participants.165

The comments received by Commerce 

make clear that the discussion of 

various economic criteria in the 

Proposed Rule was confusing to the 

public and could be subject to various 

interpretations, some of which could be 

inconsistent with the agency’s intent 

and with the SAA. Therefore, 

Commerce has not included that 

language in the preamble to this final 

rule. 

As to the remaining submissions, 

concerns that Commerce’s removal of 

the agricultural exception is in violation 

of or inconsistent with the Act are 

without legal foundation. Congress 

incorporated the SAA and the 

specificity test established within the 

SAA into U.S. law; in addition, section 

771(5A)(D) of the Act contains the 

criteria that Commerce must apply in its 

analysis to determine whether a subsidy 

program is specific. Nothing in the Act 

or the SAA prohibits Commerce from 

considering whether agriculture 

provides a basis for specificity. 

Removing the regulation that provided a 

blanket specificity exception for the 

agricultural sector recognizes the caseby-case nature of a specificity analysis 

consistent with the Act. 

The commenters’ statement that 

Congress has affirmed Commerce’s 

agricultural specificity exception is 

incorrect. To support this claim, the 

parties cited the preamble to the 1998 

CVD Regulation where Commerce stated 

that ‘‘[g]iven the absence of any 

indication that Congress intended the 

‘green box’ rules to change the 

Department’s practice or overturn Roses, 

Commerce is retaining the special 

specificity rule for agricultural 

subsidies.’’ 166 However, it is clear from 

the context of the cited language in the 

preamble that it was solely related to an 

argument that Commerce should 

abandon the agricultural exception 

because of the creation of a category of 

‘‘green box’’ agricultural subsidies 

under section 771(5B)(F) of the Act. 

Thus, the statement in the preamble 

referenced by these parties is 

unpersuasive as the issue of ‘‘green box’’ 

subsidies is unrelated to the removal of 

this exception. Commerce also notes 

that the treatment of ‘‘green box’’ 

agricultural subsidies under section 

771(5B)(F) of the Act has long-since 

lapsed and is no longer applicable 

under the CVD law. Thus, the prior 

statutory exception to countervailing 

certain subsidies to the agricultural 

sector is no longer in effect. 

Commenters opposing the removal of 

the agricultural exception also state that 

broad-based agricultural subsidies are a 

normal function of government and, 

therefore, should not be susceptible to 

countervailing actions. Commerce finds 

this argument unavailing as Commerce 

has the authority under the Act to 

countervail support that meets the 

statutory requirements for a 

countervailable subsidy, and these 

Commenters have not pointed to any 

statutory provision that prohibits 

Commerce from considering whether 

subsidies to the agricultural sector are 

countervailable. Congress has not 

exempted agricultural subsidies from 

the CVD law. In fact, to the contrary, a 

specific provision at section 771B of the 

Act addresses subsidies provided to 

processed agricultural products. 

To support the claim that Commerce 

should not remove the agricultural 

exception, commenters stated that the 

exception has not prevented Commerce 

from investigating and countervailing 

agricultural subsidies. Yet the fact that 

the agency has countervailed 

agricultural subsidies under the existing 

regulations highlights the irrelevance of 

this exception and the lack of a need for 

it in the first place. 

The commenters opposing the 

removal of the agricultural exception 

also stated that the agricultural sector is 

highly diverse and is composed of more 

than a single group of enterprises or 

industries within the meaning of section 

771(5A)(D) of the Act. Commerce does 

not disagree that the agricultural sector 

is generally highly diverse and may be 

composed of more than a single group 

of enterprises or industries. At the same 


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167See SAA at 930. 

168See Agreement on Subsidies and 

Countervailing Measures (SCM Agreement); 19 

U.S.C. 3511 (Approval and entry into force of 

Uruguay Round Agreements’’) (December 9, 1994). 

169See Proposed Rule, 89 FR at 57308–310. 

170See, e.g., Aluminum Extrusions from the 

People’s Republic of China: Final Affirmative 

Countervailing Duty Determination, 76 FR 18521 

(April 4, 2011), and accompanying Issues and 

Decision Memorandum discussing the Fund for 

SME Bank-Enterprise Cooperation Projects; and 

Large Diameter Welded Pipe from the Republic of 

Korea: Preliminary Results of Countervailing Duty 

Administrative Review; 2018–2019, 86 FR 42779 

(August 5, 2021), and accompanying Issues and 

Decision Memorandum discussing Smart Factory 

Construction and Advancement Project program. 

171The commenters’ description of the CVD law 

is not a completely accurate statement of U.S. law. 

Section 771(5A)(D)(ii) of the Act is a corollary 

clause to de jure specificity. Under clause (ii), a 

subsidy would not be deemed to be de jure specific 

merely because it was bestowed pursuant to certain 

eligibility criteria. However, the eligibility criteria 

or conditions must be objective, clearly 

documented, capable of verification, and strictly 

followed. In addition, eligibility for the subsidy 

must be automatic where the criteria are satisfied. 

Finally, clause (ii) defines the term ‘‘objective 

criteria or conditions’’ as criteria or conditions that 

are neutral and that do not favor one enterprise or 

industry over another. The quoted language 

referenced by these parties is taken from page 930 

of the SAA and is taken out of context from the full 

definition of ‘‘objective criteria or conditions.’’ The 

SAA states that ‘‘the objective criteria or conditions 

must be neutral, must not favor certain enterprises 

or industries over others, and must be economic in 

nature and horizontal in application, such as the 

number of employees or the size the enterprise.’’ 

Therefore, the SAA sets forth three different legal 

requirements for ‘‘objective criteria or conditions’’ 

and these are (1) must be neutral, (2) must not favor 

certain enterprises or industries over others, and (3) 

must be economic in nature and horizontal in 

application, such as the number of employees or the 

size of the enterprise. 

time, section 771(5A)(D) of the Act 

requires that Commerce determine 

whether a subsidy, including an 

agricultural subsidy, is limited to a 

group of enterprises or industries on a 

case-by-case basis,167 and therefore 

Commerce has removed the agricultural 

exception consistent with the Proposed 

Rule. 

In sum, the statements made by these 

commenters do not support the need to 

have a blanket and static specificity 

exception, especially because 

Commerce will continue to consider the 

issue of specificity based on the 

language in the SAA and section 

771(5A)(D) of the Act. 

Finally, one commenter opposing the 

removal of the agricultural exception 

stated that its removal would disavow 

agriculture’s unique situation and 

would send the wrong signal to U.S. 

trading partners. Commerce disagrees. 

As stated above, the elimination of the 

agriculture exception to specificity 

should not be construed as a change in 

policy by Commerce; indeed, Commerce 

has previously found certain subsidies 

to enterprises or industries in the 

agricultural sector to be countervailable. 

One commenter did not directly 

oppose the removal of the exception but 

emphasized that Commerce’s analysis of 

specificity should be consistent with the 

specificity criteria that are set forth in 

Article 2 of the WTO Agreement on 

Subsidies and Countervailing Measures 

(the SCM Agreement).168 Commerce 

agrees with this commenter, as the 

specificity criteria set forth within 

Article 2 of the SCM Agreement are 

incorporated within section 771(5A)(D) 

of the Act. 

Small- and Medium-Sized Business 

Exception 

Commerce proposed deleting the 

small- and medium-sized business 

exception to the specificity rule 

currently found at § 351.502(f).169 That 

regulation states that Commerce ‘‘will 

not regard a subsidy as being specific 

under section 771(5A)(D) of the Act 

solely because the subsidy is limited to 

small firms or small- or medium-sized 

firms (SMEs).’’ The specificity test 

discussed in the SAA states that 

Commerce will find not specific only 

those subsidy programs ‘‘which truly 

are broadly available and widely used 

throughout an economy.’’ Therefore, 

Commerce has determined in this final 

rule to eliminate the specificity 

exception provided to SMEs under 

§ 351.502(f), consistent with the SAA. 

A blanket specificity exception 

provided to SME subsidy programs 

suggests a conclusion by Commerce that 

every country that is subject to a CVD 

investigation has an identical or similar 

economy with respect to the role played 

by SMEs. The SAA and the language of 

section 771(5A)(D) of the Act require 

that Commerce analyze specificity based 

upon the ‘‘jurisdiction of the authority 

providing the subsidy’’ and makes clear 

that specificity can be found when a 

subsidy is limited to any ‘‘group’’ of 

enterprises or industries. Accordingly, 

Commerce has determined that it is 

appropriate to delete the SME exception 

that was under § 351.502(f), as the 

specificity of SME subsidy programs 

should be determined on a case-by-case 

basis, pursuant to the language of the 

SAA and section 771(5A)(D) of the Act. 

Commerce’s deletion of the SME 

exception, like the deletion of the 

agriculture exception, should not be 

construed as a change in the agency’s 

policy or practice. In fact, the SME 

exception has also not been a deciding 

factor when raised, as Commerce has 

countervailed SME programs meeting 

the specificity standards set forth within 

section 771(5A)(D) of the Act.170 These 

two blanket specificity exceptions have 

been removed from our regulations, 

consistent with both the SAA and 

section 771(5A)(D) of the Act. 

A subsidy allegation that alleges 

specificity solely because a program is 

limited to SMEs, in general, would not 

normally be sufficient to support an 

allegation of de jure specificity. With a 

specificity allegation made under 

section 771(5A)(D)(iii) of the Act, the 

agency would also normally expect that 

the interested party explain why there 

would be a reason to believe or suspect 

than an SME program would be de facto 

specific based upon information 

reasonably available to it. 

Four commenters submitted 

comments in support of the removal of 

the SME exception and two commenters 

opposed the deletion of the SME 

exception. The parties that opposed the 

removal of the SME exception stated 

that there is no conflict between the 

SME exception and the SAA. They 

submit that both the SCM Agreement 

and U.S. law provide that a subsidy 

program is not de jure specific if it sets 

forth objective criteria that are 

‘‘economic in nature and horizontal in 

application, such as the number of 

employees or the size of the 

enterprise.’’ 171

The parties submit that the SAA states 

that there are ‘‘many instances in which 

U.S. law or administrative practice will 

remain unchanged under the Uruguay 

Round Agreements’’ and that the de jure 

specificity prong of the statute ‘‘is 

consistent with existing Commerce 

practice.’’ The parties also submit that 

finding programs for SMEs not specific 

is consistent with the original purpose 

of the specificity test that is set forth in 

the SAA. 

Response 

While the first two statements are 

indeed accurate reflections of the 

language within the SAA and that a 

finding that an SME program is not 

specific, based on the facts on the 

record, may be consistent with the 

SAA’s specificity test; however, these 

statements do not directly address the 

current regulatory provision for a 

blanket and static specificity exemption 

for SME programs. Commerce also notes 

that with respect to the cited SAA 

statement that the de jure specificity 

prong of the statute ‘‘is consistent with 

existing Commerce practice,’’ the SME 

exception cited to section 771(5A)(D) of 

the Act which covers both de jure as 

well as de facto specificity. Ultimately, 

Commerce is of the view that a decision 

of whether a subsidy is limited to an 

enterprise or industry or group of 

enterprises or industries within the 


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172See Proposed Rule, 89 FR at 57310. 

173 Id. 

174See, e.g., Certain Steel Nails from Korea the 

Republic of Korea: Final Negative Countervailing 

Duty Determination, 80 FR 289966 (May 20, 2015), 

and accompanying Issues and Decision 

Memorandum at 13. 

175See, e.g., Notice of Proposed Rulemaking and 

Request for Public Comments, 54 FR 23366, 23367 

(May 31, 1989); see Final Affirmative 

Countervailing Duty Determination: Certain Steel 

Products from Austria, 58 FR 37261 at General 

Issues Appendix (July 9, 1993); Final Negative 

Countervailing Duty Determination; Carbon Steel 

Wire Rod from Czechoslovakia, 49 FR 19370 (May 

7, 1984); Final Negative Countervailing Duty 

Determination; Carbon Stel Wire Rod from Poland. 

49 FR 19274 (May 7, 1984), affirmed by the Federal 

Circuit in Georgetown Steel Corp v. United States, 

801 F.2d 1308 (Fed. Cir. 1986). 

meaning of section 771(5A)(D) of the 

Act must be made on a case-by-case 

basis based upon record evidence. 

Accordingly, after careful 

consideration of the comments received 

on this issue, Commerce has removed 

the SME exception from the regulations 

for the reasons set forth above. 

15. Commerce Will Revise and Move the 

Disaster Relief Exception to the 

Specificity Rule and Create an 

Employment Assistance Program 

Exception to the Specificity Rule, in 

§ 351.502(d) and (e), as Proposed, With 

Slight Modifications 

As stated above, for Commerce to find 

benefits provided by a particular 

program to be countervailable, the 

program must provide benefits that are 

specific as that term is contemplated 

under U.S. CVD law; that is, not broadly 

available and widely used but narrowly 

focused and used by discrete segments 

of an economy. In the Proposed Rule, 

Commerce proposed updating the 

disaster relief exception to the 

specificity rule and moving it from 

§ 351.502(g) to § 351.502(d).172

Commerce is now codifying that 

proposed move and updating the 

regulation in this final rule. The current 

disaster relief regulation states that 

Commerce will not regard disaster relief 

as being specific under section 

771(5A)(D) of the Act if such relief 

constitutes general assistance available 

to anyone in the area affected by the 

disaster. With the onset of the global 

COVID–19 pandemic, Commerce 

encountered certain government 

programs that provided COVID–19 relief 

to individuals and enterprises affected 

by the pandemic. Where the assistance 

was generally available to any 

individual or enterprise in the area 

affected by the pandemic, Commerce 

found the assistance to be not specific. 

It was unclear under the current 

disaster relief specificity exception 

whether the definition of ‘‘disaster 

relief’’ included relief provided during a 

pandemic. Commerce’s practice of 

finding pandemic relief (if available to 

any individual or enterprise in the 

affected area) to not be countervailable 

because the relief was determined to be 

not specific under section 771(5A)(D) of 

the Act has been uncontroversial. 

However, Commerce has modified the 

regulatory language to specify that 

Commerce will not regard disaster 

relief, including pandemic relief, as 

being specific under section 771(5A)(D) 

of the Act if such relief constitutes 

general assistance available to any 

individual or enterprise in the area 

affected by the disaster. This exception 

to specificity provided to disaster relief, 

including pandemic relief, would not 

apply when this relief is limited on an 

industry or enterprise basis because the 

relief would not be available to all 

individuals or enterprises in the area 

affected by the disaster. 

Similar to the exception provided for 

disaster relief assistance, Commerce 

proposed a new employment assistance 

program exception to the specificity rule 

at § 351.502(e) in the Proposed Rule.173

As with the disaster relief assistance 

provision, Commerce is now codifying 

that proposed regulation in this final 

rule. Under Commerce’s current 

practice, the agency does not generally 

find employment assistance programs 

that are created to promote the 

employment of certain classes or 

categories of workers or individuals to 

be specific.174 Under this new rule at 

§ 351.502(e), Commerce will regard 

employment assistance programs as 

being not specific under section 

771(5A)(D) of the Act if such assistance 

is provided solely with respect to 

employment of general categories of 

workers, such as those based on age, 

gender, disability, veteran, and 

unemployment status, and is available 

to any individual with one or more of 

these characteristics without any 

industry restrictions. 

In examining the specificity of these 

types of employment assistance 

programs, similar to unemployment 

programs, programs that focus on the 

general employment of certain classes of 

individuals without industry- and 

enterprise-based restrictions would not 

be specific within the meaning of 

section 771(5A)(D) of the Act. 

However, job creation or retention 

programs that provide incentives to 

certain enterprises or industries, such as 

those implemented to attract new firms 

or industries or to provide incentives for 

firms to expand, would not fall within 

this exception. Similarly, any 

employment program related to the 

hiring of employees with specific job 

skills such as high-tech or engineering 

skills would also not fall within this 

exception. Rather, the specificity of 

such programs will continue to be 

determined on a case-by-case basis 

pursuant to the language of the SAA and 

section 771(5A)(D) of the Act. 

Two commenters submitted 

comments with respect to disaster relief 

and general employment exceptions. 

One party commented that Commerce 

failed to explain why it is appropriate 

to codify the agency’s practice of not 

finding programs that are created to 

promote the employment of certain 

classes or categories of individuals to be 

specific. That commenter stated that 

while disaster relief—the other sole 

remaining exception—can be seen as a 

unique situation, it is unclear why 

employment assistance merits a 

regulatory exception. However, this 

party stated that if Commerce wanted to 

codify this practice it should ensure that 

the regulatory language is consistent 

with the explanation of the regulation 

provided by the agency in the preamble 

to the proposed rule. Therefore, this 

party recommended two changes to the 

text of this regulation that are 

highlighted: (1) assistance is provided 

solely with respect to general categories 

of workers; and (2) the assistance is 

available to everyone hired within those 

categories without any industry or 

enterprise restrictions. Commerce finds 

these suggestions improve the 

regulation and has made these changes 

in these Final Rules. 

Another commenter stated that with 

respect to both the disaster relief and 

general employment exceptions, 

Commerce should clarify whether these 

types of programs may be de facto 

specific or regionally specific if the facts 

of the case would normally support 

such a finding. 

With the removal of the exceptions for 

agricultural and small- and mediumsized businesses, Commerce has only 

codified two specificity exceptions for 

disaster relief and the general 

employment of categories of workers. 

The purpose and focus of the CVD law 

and specificity as set forth within the 

statute is based upon whether, on a de 

jure or de facto basis, a government has 

created a subsidy program that may 

distort the market allocation of 

resources by limiting that subsidy 

program, and the benefits from that 

subsidy program, to an enterprise or 

industry or a group of enterprises or 

industries.175 The remaining exceptions 

for disaster relief and general 

employment of categories of workers are 

unrelated to the enterprise or industry 


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176See Proposed Rule, 89 FR at 57310. 

177See, e.g., Certain Hot-Rolled Carbon Steel Flat 

Products from India: Final Results of Countervailing 

Duty Administrative Review, 73 FR 40295 (July 14, 

2008), and accompanying Issues and Decision 

Memorandum at Comment 42 (discussing the 

Export Promotion Capital Goods Scheme (EPCGS)). 

178See, e.g., Corrosion-Resistant Carbon Steel Flat 

Products from the Republic of Korea: Final Results 

of Countervailing Duty Administrative Review, 76 

FR 3613 (January 20, 2011), and accompanying IDM 

at 2–3 (discussing the Act on Special Measures for 

the Promotion of Specialized Enterprises for Parts 

and Materials). 179See Proposed Rule, 89 FR at 57311–312. 

specificity criteria set forth within 

section 771(5A)(D) of the Act. The 

disaster relief exception is based on the 

occurrence of natural disasters that are 

outside the control of a government, and 

the exception for general categories of 

workers is focused on individual 

qualities or characteristics that are 

unrelated to specific enterprises or 

industries. 

The proposal by the commenter that 

general disaster relief programs may be 

found to be regionally specific would 

invalidate disaster relief programs 

because most natural disasters such as 

earthquakes, hurricanes, tornadoes, 

wildfires, and flooding normally do not 

impact, at any one time, an entire 

country but only specific regions within 

a country. Therefore, under Commerce’s 

practice and this regulation, disaster 

relief programs will not be found to be 

regionally specific if the relief 

constitutes general assistance available 

to anyone in the area affected by the 

disaster. Similarly, Commerce does not 

find employment assistance programs 

provided to the general category of 

workers listed in the employment 

assistant regulation to be specific to 

industries or enterprises based on the 

conditions set forth in that regulation. 

However, employment programs related 

to the hiring of employees with specific 

job skills, and job creation or retention 

programs that provide incentives to 

certain enterprises or industries, such as 

those implemented to attract new firms 

or industries or to provide incentives for 

firms to expand, may be either de jure 

or de facto specific within the meaning 

of the Act based upon the facts of the 

case. While general employment 

assistance programs for general 

categories of rural or urban unemployed 

individuals would not normally be 

found to be regionally specific, a 

government worker assistance program 

that is implemented and legally 

restricted to only designated regions 

within the authority’s jurisdiction 

would normally be found to be 

regionally specific within the meaning 

of section 771(5A)(D)(iv). 

16. Commerce Has Made Some Small 

Changes to Proposed § 351.503(b)(3), the 

Benefit Regulation 

In the Proposed Rule, Commerce 

proposed to add a new paragraph to the 

benefit regulation at § 351.503(b)(3) to 

provide rules for the general treatment 

of contingent liabilities and assets that 

are not otherwise addressed in the 

regulations.176 Under current 

§ 351.505(d), in the case of an interestfree loan for which the repayment 

obligation is contingent upon the 

company taking some future action or 

achieving some goal in fulfillment of the 

terms of the loan, Commerce normally 

treats the outstanding balance of the 

loan as an interest-free short-term loan. 

However, other types of contingencies 

exist which are not explicitly referenced 

in that loan regulation. Commerce has 

encountered hybrid programs which 

have elements of two or more types of 

financial contributions, and, thus, two 

or more types of benefits. For example, 

in India, a program provides for import 

duty waivers contingent upon future 

export performance of the recipient.177

With respect to Korea, Commerce has 

investigated a research and 

development (R&D) grant program in 

which participating companies are 

required to repay 40 percent of the R&D 

grant if the R&D project is deemed by 

the government to be successful.178 In 

these cases, Commerce treated the 

outstanding contingent liability of the 

import duty exemptions in India and 

the R&D grant in Korea as contingent 

liability interest-free loans within the 

meaning of § 351.505(d). In addition, 

under § 351.510, which covers direct 

and indirect taxes and import charges, 

the benefit from the deferral of indirect 

taxes and import charges when the final 

waiver of such taxes and charges is 

contingent on fulfillment of other 

criteria such as realizing an amount of 

export earnings is also calculated using 

the methodology described under 

§ 351.505(d). 

While the treatment of these 

contingent import duty exemptions and 

R&D grants under § 351.505(d) has never 

been a source of controversy, for 

purposes of clarity and flexibility the 

agency proposed and in this final rule 

codifies a separate paragraph under the 

benefit regulation to specifically provide 

for the treatment of contingent liabilities 

and assets that are not otherwise 

addressed in the regulations in this final 

rule. As Commerce encounters ever 

more complicated government 

programs, the goal is to have a 

regulation that provides for the specific 

treatment of contingent liabilities to 

ensure that there is no question that any 

government program that incorporates a 

contingent element falls within the 

purview of the CVD law and 

Commerce’s regulations. 

Commerce has also incorporated the 

element of contingent assets into this 

regulatory addition to ensure that a 

contingent asset that is provided by a 

government and that has not been 

measured under the other rules within 

our CVD regulations can be addressed 

within this benefit section of the CVD 

regulations. Therefore, for either the 

provision of a contingent liability or 

asset, under this change to the 

regulation the agency will treat the 

balance or value of the contingent 

liability or asset as an interest-free 

provision of funds and would calculate 

the benefit using, where appropriate, 

either a short-term or long-term 

commercial interest rate. 

Every comment Commerce received 

on this regulation was in support of the 

change. However, one of the 

commenters proposed a small change to 

the regulation. This commenter stated 

that the proposed regulation specifies 

that Commerce will treat the balance or 

value of the contingent liability or asset 

as an interest-free provision of funds 

and will calculate the benefit using a 

short-term commercial interest rate. The 

commenter noted that this approach 

may not be appropriate for all 

contingent liabilities and assets; for 

example, if the period between the 

provision and the closing of the 

contingency is greater than one year, the 

use of a short-term interest rate would 

not be appropriate. This commenter 

suggested that Commerce replace the 

proposed language with ‘‘will calculate 

the benefit using a short-term 

commercial interest rate or a long-term 

commercial interest rate based on the 

time period between the provision and 

the closing of the contingency.’’ Since 

the agency agrees that the regulation 

should reflect that, where appropriate, 

Commerce will use either a short-term 

or long-term interest rate to determine 

the benefit from a contingent liability or 

asset, Commerce has made that 

modification to § 351.503(b)(3). 

17. Commerce Has Made Some Small 

Changes to Proposed § 351.505(c)(2) and 

505(e)(2), the Loan Regulation 

Section 351.505 applies to the 

procedures and policies pertaining to 

loans under the CVD law. In the 

Proposed Rule, Commerce proposed to 

make modifications to § 351.505(b), (c), 

and (e) and add new 

§ 351.505(a)(6)(iii).179 After 

consideration of the comments on these 

changes, Commerce is implementing 


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180See, e.g., Shleifer, A., State versus Private 

Ownership, National Bureau of Economic Research 

Working Paper 6665 at 19 (1998), available at 

https://www.nber.org/papers/w6665; Iannotta, G., 

Nocera, G., et al., The Impact of Government 

Ownership on Bank Risk, J. Fin. Intermediation 

(2013), available at https://papers.ssrn.com/sol3/ 

papers.cfm?abstract_id=2233564; Gonzalez-Garcia, 

J. and Grigoli, F., State-Owned Banks and Fiscal 

Discipline, IMF Working Paper (2013), available at 

https://www.imf.org/en/Publications/WP/Issues/ 

2016/12/31/State-Owned-Banks-and-FiscalDiscipline-40982; Sapienza, P., The Effects of 

Government Ownership on Bank Lending, J. of Fin. 

Economics (2004); La Porta, R., Lopez-De-Silanes, 

F., et al., Government Ownership of Banks, J. 

Finance (2002); Levy Yeyati, E., Micco, A, et al., 

Should the Government Be in The Banking 

Business? The Role of State-Owned and 

Development Banks, Inter-American Development 

Bank Working Paper, available at https://

publications.iadb.org/en/publication/shouldgovernment-be-banking-business-role-state-ownedand-development-banks; Ijaz Khwaja, A., and Mian, 

A., Do Lenders Favor Politically Connected Firms? 

Rent Provision in an Emerging Financial Market, Q. 

J. Economics (2005), ; Serdar Dinc, I., Politicians 

and Banks: Political Influences on Governmentowned Banks in Emerging Markets, J. Fin. 

Economics (2005), ; Carvalho, D., The Real Effects 

of Government-Owned Banks: Evidence from an 

Emerging Market, J. Finance (2012); and Claessens, 

S., Feijen, E., et al., Political Connections and 

Preferential Access to Finance: The Role of 

Campaign Contributions, J. Fin. Economics (2008). 

181See 1989 Proposed Regulations, 54 FR 23366, 

23367 (May 31, 1989). 182See Proposed Rule, 89 FR at 57331. 

those modifications with some small 

changes. 

Section 351.505(a)(6)(ii) pertains to 

loans provided by government-owned 

banks. Commerce proposed to add a 

paragraph (a)(6)(iii) to address the 

initiation standard for specificity 

allegations for loans provided by 

government-owned policy banks, which 

are special purpose banks established by 

governments. Under the new language 

in paragraph (a)(6)(iii), an interested 

party would meet the initiation 

threshold for specificity under 

paragraph (a)(6)(ii)(A) of Commerce’s 

current CVD regulations with respect to 

section 771(5A)(D) of the Act if the 

party could sufficiently allege that loan 

distribution information is not 

reasonably available and that the bank 

provides loans pursuant to government 

policies or directives. 

Commerce has found that information 

on the distribution of loans and data on 

the enterprises and industries that 

receive loans from government-owned 

policy banks is usually not published 

and, therefore, not reasonably available 

to U.S. petitioning industries. Thus, 

these interested parties are hindered in 

their ability to make a specificity 

allegation under section 771(5A)(D)(iii) 

of the Act due to lack of transparency 

of these government-owned entities. It 

has been our experience that 

government-owned policy banks are 

normally established by laws and 

regulations which discuss the purposes 

of the policy banks; these laws and 

regulations are usually publicly 

available and, thus, would be available 

to U.S. petitioning industries. 

The provision of, and access to, 

capital is a critical component to the 

growth and development of firms and 

industries. The control of the 

distribution or allocation of capital by 

the government has been shown to lead 

to a misallocation and distortion of 

resources within an economy.180

Fundamentally, a subsidy is a distortion 

of the market process for allocating an 

economy’s resources and this principal 

is an underlying foundation of 

Commerce’s entire CVD 

methodology.181

Therefore, based on the lack of 

publicly available data with respect to 

the distribution of loans for most of the 

state-owned policy banks that have been 

the subject of subsidy allegations in the 

past, Commerce’s addition of 

§ 351.505(a)(6)(iii) addresses the 

initiation standard for an allegation of 

specificity for state-owned policy banks. 

Where loan distribution information for 

the state-owned policy bank is not 

reasonably available, under the new 

language in § 351.505(a)(6)(iii) an 

interested party would normally meet 

the initiation threshold for specificity 

under the Act if the party sufficiently 

alleges that the bank provides loans 

pursuant to government policies or 

directives. 

Commerce is also modifying 

§ 351.505(b) and (c) to establish a 

uniform standard with respect to the 

treatment of long-term loans. Commerce 

currently calculates the benefit for longterm loans using different 

methodologies depending on whether 

the long-term loan has a fixed interest 

rate, a variable interest rate, or a 

different repayment schedule. These 

modifications would now ensure 

consistency in the benefit calculation of 

long-term loans by focusing on the key 

aspect that the benefit in any given year 

is the difference between the amount of 

interest the firm paid on the 

investigated loan and the amount of 

interest that the firm would have paid 

on a comparable commercial loan. In 

addition, the use of a comparable 

commercial loan as defined under 

§ 351.505(a) already appropriately 

adjusts for any differences in the 

government-provided loan based on 

whether the loan is fixed rate, variable 

rate, or with a term based on a different 

payment schedule. 

Therefore, consistent with the 

Proposed Rule Commerce has modified 

and deleted parts of current 

§ 351.505(c), specifically both 

§ 351.505(c)(3) and (4). Current sections 

351.505(c)(3) and (4) separately address 

long-term loans with different 

repayment schedules and long-term 

loans with variable interest rates. 

Commerce is deleting those provisions 

and adding a provision that indicates 

that, instead, Commerce will calculate 

the benefit conferred by any type of 

long-term loan in the same manner by 

taking the difference between what the 

recipient of the government loan would 

have paid on a comparable commercial 

loan and the actual amount the recipient 

paid on the government-provided loan 

during the period of investigation (POI)/ 

period of review (POR) and allocating 

that benefit amount to the relevant sales 

during the POI/POR. Therefore, all longterm loans will be addressed solely 

under § 351.505(c)(2). 

One commenter suggested a change to 

the proposed § 351.505(c)(2) language, 

stating that the subsidy benefit 

conferred from a long-term loan would 

be based on ‘‘the difference between the 

interest paid by the firm in that year on 

the government-provided loan and the 

interest the firm would have paid on the 

comparison loan.’’ 182 This commenter 

recommended that to ensure clarity, 

Commerce replace the term 

‘‘comparison loan’’ with ‘‘comparable 

commercial loan,’’ the term used to 

describe the loan benchmark in 

§ 351.505(a). Commerce agrees and has 

made this change in the final version of 

§ 351.505(c)(2). 

In addition, consistent with the 

Proposed Rule Commerce has deleted 

sentences in current § 351.505(c)(1) and 

(2) that state that in no event may the 

present value of the calculated benefit 

in the year of receipt of the loan exceed 

the principal of the loan. Commerce is 

also deleting the same sentence with 

respect to the provision of contingent 

liability interest-free loans at 

§ 351.505(e)(1). Section 771(5)(E) of the 

Act does not provide a cap on the 

benefit a loan may confer, so Commerce 

is therefore removing that regulatory 

restriction. The deleted language of the 

regulation was a holdover from the 

1980s when Commerce would calculate 

a benefit from a loan by calculating a 

grant equivalent for the loan and then 

allocate that amount over the Average 

Useful Life (AUL) of a firm’s renewable 

physical assets, a methodology that has 

long since been abandoned by 

Commerce. 

One commenter objected to the 

deletion of the language that in no event 

may the present value of the calculated 

benefit in the year of loan receipt exceed 


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183See, Appendix 2 to the Final Affirmative 

Countervailing Duty Determinations on Certain 

Steel Products from Belgium; 47 FR 39304; 39316 

(September 7, 1982). 184See Proposed Rule, 89 FR at 57311. 

185 Id., 89 FR at 57312. 

186See Circular Welded Carbon-Quality Steel 

Pipe from the Socialist Republic of Vietnam: Final 

Negative Countervailing Duty Determination, 77 FR 

64471 (October 22, 2012), and accompanying Issues 

and Decision Memorandum at Comment 3. 

187 Id. 

188 Id. 

the principle of the loan. That 

commenter stated that there should be 

a limit on the amount of the benefit 

based on reasonable presumptions of 

what a loan market would actually bear 

and stated that the Act directs 

Commerce to determine a loan benefit 

based on ‘‘a comparable commercial 

loan that the recipient could actually 

obtain on the market.’’ That commenter 

stated that a benchmark such as the one 

used when a company is determined to 

be uncreditworthy is susceptible to 

overestimation. 

As noted above, the ‘‘benefit cap’’ 

language that Commerce is deleting 

from the current regulation was based 

upon a loan methodology that 

Commerce ceased using over 30 years 

ago. When Commerce became the 

administering authority of the CVD (and 

AD) law in 1980, to determine the 

subsidy benefit conferred by a 

government loan, Commerce, after 

calculating the interest payment 

differential for the entire term of the 

government loan, would then calculate 

the present value of the stream of 

benefits to the year in which the loan 

was made. In other words, Commerce 

determined the subsidy value of the 

government loan as if the benefits had 

been bestowed as a lump-sum grant in 

the year in which the loan was given. 

This grant equivalent was then allocated 

evenly over the life of the loan to yield 

annual subsidy amounts. When the loan 

was provided for the purchase of capital 

equipment, this grant equivalent was 

allocated over the average useful life of 

the capital equivalent.183 Because 

Commerce was in essence treating the 

loan benefit as a grant, it employed this 

grant benefit cap. This grant equivalent 

loan methodology was abandoned by 

Commerce over 30 years ago and thus, 

the grant ‘‘benefit cap’’ language is 

obsolete and has been stricken from our 

loan regulations. 

More importantly, as the commenter 

pointed out, section 771(5)(E)(ii) of the 

Act states that in the case of a loan, a 

subsidy benefit is conferred if there is a 

difference between the amount the 

recipient of the loan pays on the 

government loan and the amount it 

would have paid on a comparable 

commercial loan that it could actually 

obtain on the market. Commerce’s 

§ 351.505 loan regulation implements 

this statutory requirement, and the Act 

does not provide any benefit cap on the 

loan subsidy calculated under section 

771(5)(E)(ii) of the Act. 

Finally, while not germane to the 

broader statutory issue and to the 

modifications that have been made to 

§ 351.505, Commerce disagrees with the 

commenter’s statement that an 

uncreditworthy benchmark is 

susceptible to overestimation. The fact 

that an uncreditworthy benchmark 

under § 351.505(a)(3)(iii) will yield a 

loan benefit greater than a benchmark 

from ‘‘a comparable commercial loan 

that the recipient could actually obtain 

on the market’’ does not mean that the 

subsidy loan benefit is overestimated. 

The higher calculated subsidy benefit 

results from the government providing a 

loan to a firm that could not receive 

lending from a commercial bank 

because the firm is uncreditworthy. 

Commerce’s uncreditworthy benchmark 

merely accounts for the fact that an 

uncreditworthy firm cannot obtain a 

commercial loan. 

In addition, Commerce proposed to 

modify current § 351.505(e), which 

addresses the treatment of a contingent 

liability interest-free loan.184 Under 

current § 351.505(e)(2), Commerce treats 

a contingent liability interest-free loan 

as a grant if at any point in time the 

agency determines that the event upon 

which repayment depends is not a 

viable contingency. However, the 

current regulation does not address the 

situation where the recipient firm has 

either taken the required action or 

achieved the contingent goal and the 

government has waived repayment of 

the contingent loan. Therefore, 

Commerce is modifying this regulation 

to state that it will also treat the 

contingent loan as a grant when the loan 

recipient has met the contingent action 

or goal and the government has not 

taken any action to collect repayment. 

Commerce received no comments 

objecting to the revision in 

§ 351.505(e)(2) under which Commerce 

will treat a contingent loan as a grant if 

‘‘the government has not taken action to 

collect repayment.’’ However, one party 

recommended a minor change to the 

text to state that ‘‘the government has 

not taken meaningful action to collect 

repayment.’’ Commerce agrees with this 

recommended edit and has made this 

change to § 351.505(e)(2) in this final 

rule. 

18. Commerce Has Modified Certain 

Language in Proposed § 351.509(b)(1), 

the Direct Taxes Regulation 

Commerce proposed modifying 

§§ 351.509 and 351.510, the regulations 

covering direct taxes and indirect taxes 

and import charges (other than export 

programs).185 Commerce is codifying 

those proposed changes in this final 

rule. The modification to both 

provisions clarifies Commerce’s 

treatment of the exemption of taxes and 

import charges in zones designated as 

being outside the customs territory of 

the country, and in response to 

comments Commerce has made a 

change to § 351.509(b)(1) as proposed. 

In the 2012 CVD investigation of Steel 

Pipe from Vietnam, Commerce 

determined that the exemption of 

import charges on capital assets into an 

export processing zone was not 

countervailable.186 Commerce stated 

that the Government of Vietnam 

designated the respondent company as 

an export processing enterprise, and 

based upon that designation the 

company’s facilities are a ‘‘non-tariff 

zone’’ and thus the operations of the 

company were outside the customs 

territory of the country.187 Therefore, 

Commerce concluded that because the 

company was outside the customs 

territory of Vietnam, the exemption of 

import duties on capital goods did not 

provide a financial contribution in the 

form of revenue forgone.188 However, 

upon further consideration of our 

decision in Steel Pipe from Vietnam, 

Commerce has concluded that its 

treatment of firms or zones that are 

designated as being ‘‘outside the 

customs territory’’ of a country in that 

case to be at odds with our long 

established practice, our regulations, 

and the purpose of the CVD statute. 

Under § 351.102(a)(25), ‘‘governmentprovided’’ is a shorthand expression for 

any act or practice being analyzed as a 

possible countervailable subsidy. 

Critical to Commerce’s analysis of 

whether a government act or practice 

constitutes a countervailable subsidy is 

a determination of what the situation of 

the firm would be in the absence of the 

government program. For example, 

§ 351.509(a), which addresses direct 

taxes, states that a benefit exists to the 

extent that the tax paid by the firm is 

less than the tax the firm would have 

paid in the absence of the program; 

under § 351.510(a) regarding indirect 

taxes and import charges, a benefit 

exists to the extent that the taxes or an 

import charge paid by a firm as a result 

of the program are less than the taxes or 

import charges the firm would have 

paid in the absence of the program. 


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189See Zenith Radio Corp. v. United States, 437 

U.S. 443, 455–56 (1978). 

190See Proposed Rule, 89 FR at 57313–57315. 

191See 1998 CVD Regulations, 63 FR at 65377. 

Similarly, under the benefit regulation 

at § 351.503(b), Commerce will consider 

a benefit to be conferred by government 

programs when a firm pays less for its 

inputs (e.g., money, a good or service) 

than it otherwise would pay or receives 

more revenue than it otherwise would 

earn in the absence of the government 

program. 

The government designation of either 

a firm or a zone as being outside the 

customs territory constitutes a 

government act or program is consistent 

with the definition of ‘‘governmentprovided’’ under § 351.102(a)(25). By 

establishing areas in which it will not 

collect taxes or import charges on 

capital goods, the government has taken 

an explicit action to provide both a 

financial contribution and a benefit to a 

firm that is operating within the 

designated area. Absent the government 

action, the firm otherwise would have 

paid either direct taxes or import 

charges to the government. These 

government actions provide incentives 

to exporters, and, as the Supreme Court 

explained in Zenith, a purpose of the 

countervailing duty law and the 

imposition of countervailing duties is 

‘‘to offset the unfair competitive 

advantage that foreign producers would 

otherwise enjoy from export subsidies 

paid by their governments.’’ 189

Thus, to ensure the appropriate 

application of the CVD statute, 

Commerce is amending both 

§§ 351.509(a)(1) and 351.510(a)(1) to 

close a potential loophole through 

which foreign governments might 

provide a countervailable subsidy 

including a prohibited export subsidy. 

Commerce has included the additional 

language within § 351.509(a)(1): ‘‘a 

benefit exists to the extent that the tax 

paid by a firm as a result of the program 

is less than the tax the firm would have 

paid in the absence of the program, 

including as a result of being located in 

an area designated by the government 

as being outside the customs territory of 

the country’’ (emphasis added). For 

§ 351.510(a), the amended language 

reads: ‘‘a benefit exists to the extent that 

the taxes or import charges paid by a 

firm as a result of the program are less 

than the taxes the firm would have paid 

in the absence of the program, including 

as a result of being located in an area 

designated by the government as being 

outside the customs territory of the 

country’’ (emphasis added). This new 

language is also included in 

Commerce’s new § 351.521(a)(1), 

discussed further below, that addresses 

indirect taxes and import charges on 

capital goods and equipment (export 

programs). 

Commerce has not added this 

language to §§ 351.518 and 351.519, 

which address the exemption, 

remission, or deferral upon export of 

prior-stage cumulative indirect taxes 

and the remission or drawback of 

import charges upon export for inputs 

consumed in the production of an 

exported product. The treatment of 

inputs consumed in the production of 

an exported product codified under 

these sections of our regulations 

addresses long-established rules of 

global trade adopted by the United 

States that were first established under 

the General Agreement on Tariffs and 

Trade (GATT) and later incorporated 

into the SCM Agreement. For the same 

reason, Commerce has not incorporated 

this language into § 351.517, which 

addresses the exemption or remission 

upon export of indirect taxes. 

Commerce received only supportive 

comments for these changes. Commerce 

has also made a clarifying change to 

§ 351.509. The agency is removing the 

word ‘‘normally’’ from § 351.509(b)(1) to 

codify Commerce’s long-standing 

practice of always using the date that a 

firm filed its tax return to determine the 

receipt of an income tax benefit and 

stating that ‘‘[f]or all exemptions or 

remissions related to income taxes, this 

date will be the date on which the firm 

filed its tax return.’’ 

19. Commerce Has Moved the Proposed 

Language in the Provision of Goods or 

Services Regulation From 

§ 351.511(a)(2)(i) to 351.511(a)(2)(iii) 

and Made a Small Revision to Proposed 

351.511(a)(2)(iii)(C) 

Section 351.511 regulates how 

Commerce examines and determines if 

goods or services are being sold for less 

than adequate remuneration (LTAR) in 

accordance with section 771(5)(E)(iv) of 

the Act. Section 351.511(a)(2) defines 

‘‘adequate remuneration’’ and describes 

the use of a market-determined 

benchmark price resulting from actual 

transactions in the country subject to 

the CVD proceeding for purposes of 

evaluating the adequacy of 

remuneration. Pursuant to the language 

of the current provision, under certain 

circumstances, an in-country, marketdetermined price could also include 

‘‘actual sales from competitively run 

government auctions.’’ 

In the Proposed Rule, Commerce 

proposed a modification to the 

regulation which would list the 

circumstances under which such 

auction prices may serve as a usable 

tier-one benchmark.190 Upon 

consideration of the comments on this 

issue, Commerce has determined to 

codify that modification in this final 

rule, although it has moved the 

provision from tier 1 to tier 3. Under the 

new language in the regulations, 

§ 351.511(a)(2)(iii), Commerce states 

that for a government run auction to be 

‘‘competitively run,’’ the government 

auction must use ‘‘competitive bid 

procedures that are open without 

restriction on the use of the good or 

service;’’ it must be ‘‘open without 

restrictions to all bidders, including 

foreign enterprises, and protect the 

confidentiality of the bidders;’’ it must 

account ‘‘for the substantial majority of 

the actual government provision of the 

good or service in the jurisdiction in 

question;’’ and the winner of the 

government auction must be ‘‘based 

solely on price.’’ 

While the preamble to the 1998 CVD 

Regulations provides some guidance on 

when Commerce would use actual sales 

from a government-run auction to 

evaluate adequate remuneration,191 the 

codification of a more defined set of 

auction criteria in § 351.511(a)(2)(iii) 

ensures consistency and clarity in the 

application of this regulation and better 

informs the public of the criteria that 

will be used by Commerce in evaluating 

whether prices from a government-run 

auction can be used for purposes of 

evaluating the adequacy of 

remuneration. 

Commerce received various 

comments on this regulation with some 

parties supporting and others opposing 

the auction criteria within the proposed 

§ 351.511(a)(2)(i). The commenters that 

opposed the criteria stated that (1) a 

May 2024 decision by a North American 

Free Trade Agreement (NAFTA) 

Binational Panel in Softwood Lumber 

from Canada stated that Commerce 

should use Quebec government auction 

prices; (2) the criteria are not based on 

statistical and economic data; (3) the 

auction criteria are different than the 

criteria listed in the Proposed Policies 

Regarding the Conduct of Changed 

Circumstances Reviews of the 

Countervailing Duty on Softwood 

Lumber from Canada, 68 FR 37456, 

37457 (June 24, 2003) (Proposed 

Policies); (4) the criterion that the 

auction be open to all bidders including 

foreign enterprises ignores a number of 

sound policy reasons why eligibility 

criteria might exist for an auction; and 

(5) it is common practice for prices for 

a minority of the transactions within a 

larger market to be used in determining 


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192See section 771(5)(B)(ii) of the Trade 

Agreements Act of 1979. 

193See, e.g., § 355.44(f)(1) of the 1989 Proposed 

Rules, 54 FR 23366 and 23381. 

194See, e.g., SAA at 927. 

195See, Preamble to 1998 CVD Regulations, 63 FR 

at 65377. 

196 Id. 

197 Id. 

prices in that larger market, such as 

wholesale dealers auctions for used cars 

that are used as a basis for determining 

other prices for used cars and prices for 

aluminum sold on the London Metal 

Exchange which are used as a barometer 

for prices of aluminum in the world 

market. 

Some commenters opposing the 

auction criteria stated that instead of 

these auction criteria, Commerce should 

evaluate auction-based benchmarks on a 

case-by-case basis and give due regard 

for expert opinions submitted by 

interested parties. In addition, one 

commenter stated that Commerce 

should modify this regulation to state 

that the agency may use actual sales 

from competitively run government 

auctions if the government auction 

conforms to market-economy principles 

and the agency determines that such an 

auction is fair and emulates the 

characteristics of a private auction 

without adding distortions. That 

commenter further suggested that 

Commerce should not elaborate in the 

regulation or in the preamble to the final 

rule on how a government run auction 

would constitute a fair tier 1 benchmark 

because it may be very difficult for the 

agency to obtain all information 

associated with a particular auction. 

Commerce has carefully considered 

all the concerns raised by the 

commenters on this matter, as well as 

the proposed alternatives to the 

regulation. Commerce disagrees that 

those concerns merit a rejection of the 

proposed regulation language and does 

not agree with the suggested 

alternatives. Indeed, the suggested 

alternative language is inconsistent with 

the changes to the analysis of the 

provision of a good or service by the 

government provided in the Act by the 

URAA. 

Before the enactment of the URAA, 

under the Trade Agreements Act of 

1979, the government provision of a 

good or service would constitute a 

countervailable subsidy if the 

government provided that good or 

service ‘‘at preferential rates.’’ 192 Under 

the analysis of whether the government 

provision of a good or service was 

provided at a preferential rate, 

Commerce would compare the price 

charged by the government for that good 

or service to the companies that were 

subject to a CVD investigation to the 

price that the government received from 

other users of that good or service.193

The parameter of Commerce’s analysis 

was not based upon market prices (i.e., 

transaction prices of that good or service 

between private parties) but was, 

instead, based upon the prices that the 

government charged and received for 

that good or service from different 

parties within its jurisdiction. 

Therefore, the analysis focused on 

government actions and behavior, not 

on the market actions between private, 

commercial parties. Commerce’s 

analysis for the provision of a good or 

service, including the benchmark used 

to determine the countervailable benefit, 

was based upon the government prices 

for that good or service. 

The URAA, enacted in December 

1994, changed the standard for 

determining whether the provision of a 

government good or service provided a 

countervailable benefit from one based 

on preferentiality and the difference in 

prices charged by the government to 

different parties for that good or service, 

to a standard based upon private, 

commercial market prices. Thus, the 

URAA rejected the preferentiality 

standard using government prices as a 

benchmark in determining whether 

there is a countervailable benefit 

conferred by the government provision 

of a good or service.194

When Commerce issued its 

regulations in 1998 for the provision of 

a good of service under § 351.511, the 

agency stated that in the 1997 proposed 

regulations it held this provision as 

‘‘reserved’’ because Commerce had 

limited experience with the new benefit 

standard under section 771(5)(E)(iv).195

Nevertheless, Commerce included 

criteria in the final 1998 CVD 

Regulations, because while commenters 

recognized Commerce’s lack of 

experience with the new statutory 

standard for a government provision of 

a good or service made it difficult to 

promulgate a regulation, these 

commenters requested guidance as to 

how Commerce intended to identify and 

measure adequate remuneration.196

Even with this admitted lack of 

experience in 1998, when Commerce 

issued its CVD regulation on the 

provision of a good or service, the 

agency created rules that have generally 

served it well in addressing the 

provision of a good or service by the 

government.197 However, it is clear 

now, after many years of experience 

administering this area of law, that 

when Commerce included the 

discretion to rely on prices from 

competitively run government auctions, 

the agency lacked sufficient experience 

to adequately address the issue in its 

regulations. While Commerce provided 

some guidance in the Preamble to the 

1998 CVD Regulations, the agency did 

not provide any useful regulatory 

criteria for the use of government 

auction prices within § 351.511. 

Accordingly, Commerce is modifying 

the regulation now to correct for that 

problem. 

In addition, in 1998, Commerce, 

based on this lack of experience in 

administering the new statutory 

provision for a government provision of 

a good or service, did not fully consider 

and address the use of government 

auction prices in the regulation within 

the change of the statutory context that 

rejected the use of government prices as 

a benchmark to determine whether the 

government provision of a good or 

service confers a countervailable 

subsidy. All the benchmark prices that 

Commerce may use under 

§ 351.511(a)(2)(i) and (ii), other than 

government auction prices, are prices 

that are derived from transactions 

between private, commercial parties. 

The use of a government auction price 

as a benchmark to determine whether 

the government price of a good or 

service confers a countervailable benefit 

uses one government price to measure 

the subsidy benefit of another 

government price. The use of this type 

of government price as a benchmark is 

a type of benchmark that would have 

been used under the preferentiality 

methodology that was rejected by 

Congress in the URAA. Essentially, the 

reference to the use of a government 

auction price is based on the old 

preferentiality standard because it is 

based on measuring a government 

provision of a good or service by using 

another government provision of a good 

or service as a benchmark. 

Commerce’s practice in administering 

this area of law, however, makes clear 

that Commerce has maintained a 

concern regarding the use of 

government prices, including the use of 

government auction prices, for many 

years, because since the 1998 CVD 

Regulations were issued, Commerce has 

never relied upon a government auction 

price to measure the adequacy of 

remuneration of the government 

provision of a good or service. 

Commerce has used all the other 

benchmarks set forth within 

§ 351.511(a)(2)(i), (ii), and (iii), but not 

government auctions. 

This normal rejection of the use of 

government auction prices is based, in 

part, on the statutory standard enacted 

under the URAA that moved from the 


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198See, e.g., SAA at 927. 

199See 1998 CVD Regulations, 63 FR at 65378. 

200 Id. 

201 Id. 

202See SAA at 926. 

203 Id. at 927. 

204See, e.g., Certain Softwood Lumber Products 

from Canada: Final Affirmative Countervailing Duty 

Determination, and Final Negative Determination of 

Critical Circumstances, 82 FR 51814 (November 8, 

2017), and accompanying Issues and Decision 

Memorandum at 104 (‘‘The Policy Bulletin was a 

preliminary document, through which comments 

were solicited from the public pertaining to 

use of government prices to the use of 

prices derived from transactions 

between private parties.198 Furthermore, 

the Preamble of the 1998 CVD 

Regulations states that Commerce will 

not use prices within a market that is 

distorted, because the government 

provider constitutes either a majority or 

substantial portion of the market. The 

rejection of the use of auction prices is 

based on that reasoning as well. 

Accordingly, based on both the language 

of the Act and the language within the 

Preamble of the 1998 CVD Regulations, 

in determining to modify this 

regulation, Commerce considered 

whether it would be more appropriate to 

just remove the provision within the 

regulation that allows the agency to use 

government auction prices or instead 

provide a set of more defined criteria as 

to when government auction prices may 

be used to determine the adequacy of 

remuneration. In consideration of the 

comments and administrative concerns, 

Commerce determined that it is best to 

maintain this discretionary option, but 

to codify criteria for the use of 

government auction prices. 

While the use of a government price 

for the good or service, such as a 

government auction price, would be 

appropriate under the old 

‘‘preferentiality’’ standard for the 

provision of a good or service, 

Commerce recognizes that the preamble 

to § 351.511(a)(2)(iii) provides for the 

use of possible government price 

discrimination.199 While Commerce 

expressed concerns that the possible use 

of government prices may continue the 

use of the preferentiality standard, the 

agency stated that there may be 

situations where there may be no better 

alternative than the use of a government 

price. However, Commerce stated that it 

would only rely on a government price 

as a benchmark if the government good 

or service is provided to more than a 

specific enterprise or industry or group 

thereof.200 The use of a government 

price (i.e., price discrimination) under 

§ 351.511(a)(2)(iii) is a ‘‘last resort’’ 

when there are no other available 

benchmark options under 

§ 351.511(a)(2)(i), (ii), and (iii). Similarly 

to government auction prices, 

Commerce has never used government 

price discrimination as a benchmark to 

measure the adequacy of remuneration 

since the enactment of the URAA. 

Because a government auction price is 

akin to the use of a preferentiality 

benchmark and government price 

discrimination is referenced as a type of 

assessment that Commerce may make 

under a § 351.511(a)(2)(iii) market 

principles benchmark analysis, 

Commerce has determined that it is 

more appropriate to consider the use of 

government auction prices within 

§ 351.511(a)(2)(iii) instead of 

§ 351.511(a)(2)(i). In addition, the 

Preamble to the 1998 CVD Regulations 

states that Commerce will assess 

whether a government price was set in 

accordance with market principles 

through an analysis of such factors as 

the government’s price settingphilosophy, costs (including rates of 

return sufficient to ensure future 

operations), or possible price 

discrimination.201 Because Commerce is 

moving the use of government auction 

prices into a § 351.511(a)(2)(iii) market 

principles analysis, the agency is also 

codifying the types of assessment that 

were addressed in the Preamble to the 

1998 CVD Regulations. Since 1998, 

Commerce has found that an assessment 

of costs (including rates of return) and 

whether the government’s price setting 

philosophy (methodology) is consistent 

with market principles has been 

effective in our analysis of the 

government provision of goods and 

services like electricity, natural gas, 

water, and the provision or leasing of 

natural resources such as land, mining 

rights and stumpage. 

While Commerce has maintained its 

discretion to use government prices 

from a government-run auction, 

Commerce will normally only use 

government auction prices when the 

agency determines that there is no other 

benchmark available under 

§ 351.511(a)(2)(i) and (ii). Before 

Commerce would even consider the use 

of government auction prices in that 

situation, the government-run auction 

must meet all the criteria established 

under § 351.511(a)(2)(iii). 

While Commerce has explained above 

the reason the claims made by the 

commenters opposing the regulation are 

unpersuasive and inconsistent with the 

analysis of the provision of good by the 

government required by the Act and the 

1998 CVD Regulations, Commerce will 

also further address each of the 

arguments raised by the commenters. 

First, a NAFTA Binational Panel in 

Softwood Lumber from Canada 

regarding the use of Quebec government 

auction prices is not binding on 

Commerce’s development, creation or 

modification of Commerce’s CVD 

regulations.202

Second, the argument that the 

regulatory criteria are not based on 

statistical and economic data is equally 

without merit. The criteria established 

within this regulation are derived from 

the legal standards enacted by Congress 

under the URAA that changed the 

analysis of a government good or service 

based on government price 

discrimination (i.e., government prices) 

to a standard based upon transaction 

prices between private parties.203 The 

two studies that were commissioned by 

the parties to defend their arguments in 

a CVD case and which were referenced 

in the parties’ comments to our 

Proposed Rules have no bearing on the 

statutory provision addressing the 

government provision of a good or 

service enacted by Congress in the 

URAA. 

While Commerce is not questioning 

the academic credentials of the two 

individuals commissioned to produce 

the submitted studies, there are various 

schools of economic thought within this 

discipline. Nonetheless, even if there 

are different schools of economic 

thought on the matter, a general 

accepted principle of economics is that 

price is a function of demand and 

supply. Thus, changes to either the 

demand or the supply of a good would 

normally have an impact on the price of 

the good. In the instances where an 

interested party has argued that 

Commerce use a government auction 

price as a benchmark, both the supply 

of the good as well as administrative 

controls relating to the demand of the 

good have all been in the hands of a 

government authority. Thus, even 

ignoring the change in the statutory 

criteria that moved away from using a 

government price as a benchmark, as 

explained above from pre-URAA to 

post-URAA, there is a clear element of 

distortion within jurisdictions in which 

the government has an overwhelming 

presence in the market. Moreover, 

through its administrative and policy 

preferences, the government can impact 

and change both the demand and 

supply of goods. 

Certain commenters also pointed out 

that the criteria in this regulation for a 

competitive run government auction are 

different than the criteria listed in the 

Proposed Policies. Commerce ultimately 

found those Proposed Policies to be not 

constructive and thus never adopted 

and implemented them.204 Instead, 


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proposed policies for Canadian provinces to move 

to market-based systems of timber sales. Those 

proposed policies, however, were never adopted by 

the Department. The Department’s analysis of a 

provincial stumpage system is not bound by 

proposed ideas that were never finalized, and 

which neither incorporated nor addressed the 

solicited comments’’). 

Commerce is codifying its existing 

criteria now, within § 351.511(a)(2)(iii). 

Some commenters also suggested that 

the requirement that the auction be 

open to all bidders, including foreign 

enterprises, ignores a number of sound 

policy reasons why eligibility criteria 

might exist for an auction. Regardless of 

the government’s policy reasons for 

placing restrictions on who may 

participate in the government run 

auction or on restricting how the good 

may be used, these governmental 

restrictive policies and administrative 

practices implement governmentcreated restrictions on the demand for 

the good. One of the parties claimed that 

the bidding restrictions that it places on 

its administrative auctions have no 

impact on demand of the government 

provided good. However, that statement 

raises the question as to why this 

authority maintains these bidding 

restrictions, if as the commenter stated, 

these restrictions have no impact on 

demand and price. Again, this argument 

is unpersuasive. However, Commerce 

does agree that legitimate bidding 

requirements that consist of deposit 

requirements that are applied equally to 

all bidders or the exclusion of 

government employees from 

participating in a government-run 

auction would not necessarily 

invalidate a government-run auction 

that otherwise met all the criteria set 

forth in the regulation. 

Some commenters stated that it is 

common practice that prices for a 

minority of the transactions within a 

larger market serve as market-referenced 

prices, citing to instances where 

wholesale auto dealer auction prices for 

used cars can serve as the basis for 

determining the sales price for other 

used cars and that prices for aluminum 

sold on the London Metal Exchange are 

used as a barometer for prices of 

aluminum in the world market. 

Although that might be true, for 

purposes of Commerce’s regulations and 

practice, Commerce does not find those 

situations to support a change to the 

proposed regulation modifications. Both 

the Act and Commerce’s regulation state 

that a benchmark should be based on 

transaction prices between private 

parties. The London Metal Exchange is 

a private company and auto dealers are 

also private parties. Thus, auction prices 

on the London Metal Exchange and 

auctions conducted by auto dealers are 

auctions conducted by private parties. 

Therefore, regardless of the percentage 

of the market accounted for by these 

auctions, these referenced auction 

prices are transaction prices between 

private parties and not government 

transactions from a government run 

auction. 

One commenter stated that Commerce 

should not elaborate on how a 

government run auction would 

constitute a fair tier 1 benchmark 

because it may be very difficult for the 

agency to obtain all information 

associated with a particular auction. 

However, that commenter 

misinterpreted the language originally 

proposed within § 351.511(a)(2)(i). In 

order for an interested party to argue 

that prices from a government run 

auction should be used as a benchmark 

to measure whether a government 

provision of a good or service is for 

adequate remuneration in a CVD 

investigation or administrative review, 

that interested party must, at a 

minimum, provide documented 

evidence to demonstrate that the 

government run auction meets each of 

the criterion originally proposed under 

§ 351.511(a)(2)(i). It is not Commerce’s 

responsibility to demonstrate that these 

criteria are not met before discarding the 

use of a proposed benchmark based on 

government auction prices. 

Accordingly, Commerce does not find 

this statement supports a change to 

Commerce’s proposed modification of 

the regulation. 

For the reasons explained above, 

Commerce is not adopting the 

commenters’ proposal to evaluate 

government auction-based benchmarks 

on a case-by-case basis and to give due 

regard for what these parties reference 

as ‘‘expert opinions’’ submitted by 

interested parties. However, Commerce 

will evaluate whether an interested 

party’s proposed use of government 

auction prices as a benchmark meets the 

criteria under § 351.511(a)(2)(iii) based 

on the evidence on the case record. 

Commerce has also addressed above 

the use of third-party opinions 

submitted by interested parties. 

Commerce is very cautious about the 

relevance it places on the use of thirdparty opinions or reports that are 

commissioned by interested parties in a 

case. As noted above, equally qualified 

economists may examine an identical 

issue and derive different conclusions. 

Commerce is also concerned that undue 

reliance on third-party reports and 

opinions commissioned in our CVD 

cases would reward the interested party 

that has the larger budget, which would 

raise a fairness issue in the 

administration of our cases. 

In addition, with respect to an issue 

like the use of prices from a government 

auction, much of the data required for 

a complete statistical or economic 

analysis by third parties may not be 

publicly available, and access to that 

data will also be in the control of the 

government, an interested party in a 

CVD case. Therefore, as an interested 

party, a foreign government is in the 

position to control access to that data 

and may decide to only grant access to 

a third party that will work in the 

interest of the government and deny 

access to a third party that is working 

on behalf of other interested parties in 

a CVD case. In the alternative, an 

interested party foreign government may 

only release data to the public that 

advances its cause or position in a CVD 

case while withholding data from the 

public that would result in an outcome 

that would contradict or undermine the 

arguments and positions it is espousing 

in its comments made before Commerce 

in a CVD proceeding. 

In addition, one commenter suggested 

that Commerce should modify this 

regulation to state that sales from 

competitively run government auctions 

will only be used if the government 

auction conforms to market-economy 

principles. Commerce has not adopted 

this suggestion because a general 

statement with respect to the 

government auction being consistent 

with ‘‘market-economy principles’’ 

provides less clarity and guidance as to 

the standard to be applied by the agency 

in its analysis of whether to consider 

using a government run auction as a 

benchmark. While current 

§ 351.511(a)(2)(iii) states that where 

there were no in-country or world 

market benchmarks available, 

Commerce will assess whether the 

government price is consistent with 

market principles, the preamble to the 

1998 CVD Regulations provided a 

discussion to the methodologies that the 

agency would use to assess market 

principles. Based on the experience that 

Commerce has gained since 1998 in our 

analysis of the provision of a good or 

service under section 771(5)(E)(iv) of the 

Act, Commerce has determined that it is 

more appropriate to provide greater 

detail in the regulation and provide the 

criteria that Commerce will use in 

assessing a government run auction 

within the regulation itself. 

Finally, one commenter stated that 

Commerce should modify criterion (C) 

within § 351.511(a)(2)(iii). That 

commenter stated that in some cases the 

provision of the good or service is not 

done by a national government 


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205See, 1998 CVD Regulations at 65412. 

206 Id., 63 FR at 65379. 

207See Proposed Rule, 89 FR at 57313–57314 

208 In Aluminum Extrusions from the People’s 

Republic of China: Preliminary Affirmative 

Countervailing Duty Determination, 75 FR 54302 

(September 7, 2010), Commerce found that the 

Procurement Law provided an incentive to 

domestic producers in that the government will 

purchase a good from a domestic producer as long 

as the price does not exceed the lowest offered price 

for that good from foreign producers by more than 

20 percent. In the Final Determination Commerce 

found the program not used. 

209See Uranium Enrichment, World Nuclear 

Association (2022), available at https://worldnuclear.org/information-library/nuclear-fuel-cycle/ 

conversion-enrichment-and-fabrication/uraniumenrichment.aspx. 

authority but by a subnational authority; 

thus, the use of the term ‘‘country’’ may 

be interpreted to mean that when the 

provision of the good or service is made 

by a subnational level government that 

the comparison addressed in (C) will be 

made based on country-wide data basis. 

To clarify this point as concerns 

competitively run government auctions, 

Commerce has changed the term 

‘‘country’’ in the proposed regulation to 

‘‘jurisdiction’’ in this final rule. 

20. Commerce Has Added a New 

Provision to Proposed § 351.512, the 

Provision Covering the Purchase of 

Goods To Address the Exclusion of 

Certain Prices From Consideration as a 

Benchmark in Determining the Potential 

Benefit of a Subsidy 

When Commerce issued its current 

CVD regulations in 1998, it designated 

§ 351.512 as reserved.205 Commerce 

explained that it did not have sufficient 

experience with respect to the 

government purchase of a good for 

MTAR at the time; thus, it concluded 

that it was not appropriate then to set 

forth a standard with respect to its 

treatment of these types of financial 

contributions.206 More than 25 years 

later, the issue of a subsidy in the form 

of the government purchase for MTAR 

has come before Commerce in only a 

limited number of cases. Nonetheless, in 

these cases, Commerce has developed 

certain methodologies with respect to 

this type of financial contribution, 

especially where the government is both 

a provider and a purchaser of the good 

at issue. In addition, Commerce has 

observed differences between the 

treatment of an MTAR and an LTAR 

relating to the basis for the applicable 

price comparison. Accordingly, in the 

Proposed Rule, Commerce proposed a 

regulation providing guidance 

specifically on subsidies covering the 

purchase of a good for MTAR.207 Upon 

consideration of the comments on this 

proposed regulation, Commerce has 

both codified the provision in this final 

rule and added certain language with 

respect to prices that might be excluded 

as potential benchmarks from 

Commerce’s analysis in determining the 

benefit of a MTAR subsidy. 

First, § 351.512(a)(1) addresses the 

benefit conferred from the government 

purchase of a good, which is derived 

from the standard in section 

771(5)(E)(iv) of the Act. Under this 

provision, where a government or a 

public body purchases goods, a benefit 

exists to the extent that such goods were 

purchased for MTAR. 

Next, § 351.512(a)(2) defines 

‘‘adequate remuneration’’ within the 

context of an analysis of a government’s 

purchase of a good. This standard for 

adequate remuneration for the purchase 

of a good is not as detailed as the 

definition for the provision of a good or 

service by a government under 

§ 351.511(a)(2) because Commerce has 

had a much longer history and more 

experience in addressing LTAR claims. 

While Commerce offers parties a general 

standard in this final rule, it anticipates 

that its MTAR practice will continue to 

evolve with additional cases. 

Under § 351.512(a)(2)(i), Commerce 

will measure the adequacy of 

remuneration by comparing the price 

paid to the firm for the good by the 

government to a market-determined 

price for that good based on actual 

transactions between private parties in 

the country in question or, if such 

transactions are not available, then to a 

world market price or prices for that 

good. In applying this standard, 

consistent with the Act, Commerce’s 

preference will be to use actual 

transactions between private parties 

within the country in question. 

Actual transactions in the country in 

question must be market-based and, 

therefore, would ordinarily consist of 

the sale of the investigated goods 

between private parties. In-country 

market-determined prices would also 

include import prices. Similar to the 

treatment of actual transactions in 

§ 351.511, Commerce does not intend to 

adjust in-country prices to account for 

government distortion of the market. 

While Commerce recognizes that 

government involvement in a market 

may have some impact on the prices of 

the good, such distortion will normally 

be minimal unless the government 

constitutes a substantial portion of the 

market. 

Where sufficient evidence indicates 

that the government’s involvement in 

the market has significantly distorted 

actual transaction prices or that marketdetermined in-country prices are 

otherwise not available, 

§ 351.512(a)(2)(i) states that Commerce 

will consider the use of world market 

prices as the comparison price for 

measuring the adequacy of 

remuneration. If there is useable 

information on the record for more than 

one world market price, Commerce will 

average the world market prices that are 

on the record absent record evidence 

that one or more of those world market 

prices are otherwise distorted. 

This regulation differs from 

Commerce’s treatment of world market 

prices under the LTAR regulation, 

§ 351.511(a)(2)(ii), pursuant to which 

Commerce uses world market prices in 

analyzing the provision of goods or 

services for LTAR only when it is 

reasonable to conclude that the good in 

question is commercially available to 

the firm. Commerce has not adopted 

that standard for the government 

purchase of a good because section 

771(5)(E) of the Act requires Commerce 

to assess benefit based upon the ‘‘benefit 

to the recipient.’’ The benefit analysis 

for the government purchase of a good 

is unrelated to whether the recipient of 

the benefit could purchase the good that 

it sold to the government. 

Under § 351.512(a)(2)(ii), if there are 

no market-determined domestic prices 

or world market prices available, then 

Commerce could measure the adequacy 

of remuneration by examining any 

premium provided to domestic 

suppliers of the goods based on the 

government’s procurement regulations 

and policies, those that are established 

in any bidding documents,208 or any 

other methodology. This assessment 

could include comparing the costs of 

production of the producer obtaining 

the benefit, including a reasonable profit 

margin to the price that is paid by the 

government for the purchased goods. 

Commerce recognizes that for certain 

products, such as enriched uranium, the 

primary purchasers in both the domestic 

and the world market are normally 

governments, government-owned 

entities, or government-controlled 

entities, or the purchase of such goods 

is highly controlled and regulated by the 

government.209 In such markets 

Commerce will closely examine the 

bidding and purchase conditions in 

assessing whether the purchase price 

paid by the government is consistent 

with market principles, which may 

include an analysis of the costs of 

producing or processing that good. 

Commerce received no objections to 

the benchmark methodology established 

within § 351.512(a)(1) and (a)(2)(i) and 

(ii) of the MTAR regulation. However, 

Commerce did receive comments 

requesting that Commerce (1) further 


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210See Proposed Rule, 89 FR at 57313, 57314. 

211See Aluminum Extrusions from the People’s 

Republic of China: Preliminary Affirmative 

Countervailing Duty Determination, 75 FR 54302 

(September 7, 2010) (Aluminum Extrusions). 

212See Notice of Final Affirmative Countervailing 

Duty Determination: Low Enriched Uranium from 

France; 66 FR 65901 (December 21, 2001), and 

accompanying Issues and Decision Memorandum at 

Purchase at Prices that Constitute ‘‘More Than 

Adequate Remuneration’’. 

213See Supercalendered Paper from Canada: 

Final Affirmative Countervailing Duty 

Determination; 80 FR 63535 (October 20, 2015), and 

accompanying Issues and Decision Memorandum at 

GNS Purchase of Land for More than Adequate 

Remuneration (MTAR). 

214See Utility Scale Wind Towers from Canada: 

Final Affirmative Countervailing Duty 

Determinations and Final Negative Determination 

of Critical Circumstances, 85 FR 40245 (July 6, 

2020), and accompanying Issues and Decision 

Memorandum at Comment 4 and Comment 5. 215See Proposed Rule, 89 FR at 57313. 

illuminate the ‘‘other methodologies’’ it 

may use to assess whether the price 

paid by the government is consistent 

with market principles; (2) provide a 

non-exhaustive, illustrative list of 

examples of countervailable MTAR 

programs; (3) provide additional 

guidance on the type of information 

needed to support an MTAR allegation; 

(4) consider a provision for local content 

requirements (LCRs) and provide 

illustrative examples in the final 

regulations; (5) add language to 

§ 351.512(a)(2)(ii) to capture instances of 

distortion not specifically contemplated 

in the Proposed Rule that disrupt the 

proposed benchmark hierarchy by 

adding the term ‘‘or the Secretary deems 

such prices to be distorted,’’ and (6) 

clarify situations in which a price will 

not be considered a market-determined 

price, such as when a price may be 

impacted due to government 

involvement or other distortive activity 

in the market. 

With respect to the comment 

requesting Commerce to elaborate on 

the other methodologies it may use to 

determine whether a government price 

is consistent with market principles, as 

Commerce explained in the Proposed 

Rule, one methodology could be the 

comparison of the producer’s costs of 

production, including a reasonable 

profit margin, to the price that is paid 

by the government for the purchased 

good.210 Commerce does not believe it 

is necessary at this stage to explain 

additional methodologies for making 

this assessment. This analysis will be 

conducted on a case-by-case basis, and, 

as Commerce has explained, to date 

there have not been a large number of 

MTAR cases to cite as examples in this 

regard. Likewise, Commerce has 

determined that it would not be helpful 

to codify a complete list of examples of 

a countervailable MTAR in this 

regulation because both the Act and this 

regulation set forth the criteria that will 

be used to analyze whether a 

government purchase of a good would 

confer a countervailable benefit. 

Nonetheless, because there have been 

so few cases involving MTAR 

allegations before Commerce, Commerce 

has concluded that it might be of 

assistance to highlight three cases for 

general guidance in understanding 

MTAR determinations which Commerce 

has made to date. First, in Aluminum 

Extrusions, Commerce determined that 

a government purchase of a good 

provided a countervailable benefit 

because the investigated country’s 

procurement law provided a price 

incentive of up to 20 percent for 

domestic manufactures over the prices 

offered by foreign manufacturers.211

Second, in Low Enriched Uranium from 

France, Commerce found a 

countervailable benefit based on the 

difference in the price the government 

paid for the purchase of LEU (low 

enriched uranium) from the respondent 

to import prices of LEU.212 Finally, in 

SC Paper from Canada, Commerce used 

private land transactions to determine 

whether a government’s purchase of 

land was for MTAR.213

With respect to local content 

requirements (LCRs), Commerce has 

declined to address LCRs in this 

regulation because subsidies that 

include LCRs can take the form of not 

only MTARs but also subsidies 

provided in the form of loans, grants, 

and tax incentives. Therefore, if LCRs 

were solely addressed under the MTAR 

regulation, it would suggest that 

Commerce could not address LCRs 

provided within the context of loans, 

grants or tax incentives. For an example 

of an LCR raised in an MTAR allegation, 

see the Wind Towers from Canada 

investigation.214

With respect to the suggestion that 

Commerce add language to 

§ 351.512(a)(2)(ii) to capture instances of 

distortion not specifically contemplated 

in the Proposed Rule, the commenter 

raising this issue suggested that 

Commerce include language that it will 

measure the adequacy of remuneration 

by analyzing any premium in the 

request for bid or government 

procurement regulations provided to 

domestic suppliers of the good if 

Commerce determines that there are no 

market-determined domestic or world 

market prices available, ‘‘or the 

Secretary deems such prices to be 

distorted.’’ 

Commerce has not modified 

§ 351.512(a)(2)(ii) to add the additional 

suggested step to Commerce’s 

benchmark hierarchy. Commerce does 

not believe that it has ever determined 

in the context of an MTAR examination 

that when there were no non-distorted 

market-determined domestic or world 

market prices available, outstanding 

potential benchmarks on the record 

were otherwise distorted, and the 

commenter did not provide any citation 

to Commerce’s making such a 

determination in past cases. 

Furthermore, Commerce sees no benefit 

in adding such a requirement to its 

normal analysis at this point. Indeed, 

adding such language would likely 

complicate Commerce’s analysis in 

every case in which it determines that 

the potential benchmark domestic and 

world market prices are distorted by 

certain actions. One of the reasons 

Commerce is issuing these regulations is 

to make its process and procedures 

more transparent and less complicated 

to apply and enforce. Commerce has 

therefore not adopted that suggestion in 

the final rule. 

Finally, Commerce has agreed to 

clarify some situations in which it might 

reject a benchmark price for an MTAR 

allegation. In determining if a 

government has purchased a good for 

MTAR, § 351.512(a)(2) states that 

Commerce will normally seek to 

measure the adequacy of remuneration 

by comparing the price paid to the firm 

for the good by the government with a 

market-determined price based on 

actual transactions, including imports, 

between private parties in the country 

in question. However, it also states that 

if market-determined prices for the good 

based on actual transactions in the 

country in question are unavailable, 

Commerce may measure the adequacy 

of remuneration using a world market 

price or prices for the good. As 

Commerce explained in the preamble to 

the Proposed Rule, ‘‘If there is useable 

information on the record for more than 

one world market price, Commerce 

would average the world market prices 

that are on the record absent record 

evidence that one or more of those 

world market prices are otherwise 

distorted.’’ 215

In response to the Proposed Rule, 

certain commenters suggested that 

Commerce should expressly identify 

factors that would result in finding that 

a potential benchmark price derived 

from private market prices in the 

country or world market prices is 

distorted. One commenter went further 

and suggested that Commerce should 

indicate that even when a potential 

benchmark price is not distorted 

directly by government interference but 

instead through private market actions, 


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that price might also be unsuitable for 

consideration as a benchmark price for 

a MTAR analysis. Specifically, the 

commenter explained that there might 

be evidence of a limited number of 

private sellers of the goods or service in 

question in a particular country, such as 

in a monopoly or oligopoly; as a result, 

the prices derived from that country 

might be considered artificially too high 

or too low as a result of being set in a 

captive market. Further, the commenter 

suggested that if two or more 

competitors might establish price setting 

arrangements, or a foreign government 

has found that companies are guilty of 

collusion or other non-competitive 

behavior, such actions could result in 

setting prices for particular goods or 

services on nonmarket terms. 

Upon consideration of the comments, 

Commerce has determined to revise 

proposed § 351.512(a)(2) to indicate that 

certain prices may be excluded from 

consideration as potential benchmark 

prices for purposes of an MTAR analysis 

under this provision. Commerce has 

numbered this new paragraph 

§ 351.512(a)(2)(iii) and moved the 

paragraph covering use of ex-factory or 

ex-works prices to § 351.512(a)(2)(iv). 

This new paragraph, titled ‘‘Exclusion of 

certain prices,’’ states that in measuring 

the adequacy of remuneration, 

Commerce may exclude certain prices 

from its analysis if it determines that 

interested parties have demonstrated, 

with sufficient information, that prices 

from a country are likely impacted 

because of particular actions, including 

government laws or policies. Commerce 

is aware that many governments have 

mandatory domestic-content 

requirements, price controls, production 

mandates, or other policies that can 

impact potential benchmark prices. If 

interested parties place information on 

the record which Commerce determines 

shows that prices have likely been 

impacted by such actions, then 

Commerce may look to other potential 

benchmarks on the record in measuring 

the adequacy of remuneration. 

In response to the suggestion that 

Commerce should consider potential 

price distortions from monopolies, 

oligopolies, price setting arrangements 

between private companies, collusion, 

and other anticompetitive actions, we 

note that, as a general matter, the 

countervailing duty law is focused on 

the actions of government entities and 

not on private-party behavior. 

Accordingly, Commerce has determined 

not to codify such a consideration, 

although Commerce may consider on a 

case-by-case basis whether parties have 

sufficiently demonstrated that such 

anticompetitive actions among private 

firms would likely impact benchmark 

prices for the purposes of an MTAR 

analysis. Commerce will not codify an 

analysis that it might later discover 

limits its authority or flexibility to 

consider whether certain potential 

benchmark prices are based on market 

principles or are otherwise impacted by 

anticompetitive behavior. 

Anticompetitive market conditions, 

including weak, ineffective or 

nonexistent enforcement of competition 

laws, could conceivably impact the 

appropriateness of a potential 

benchmark price, but in some countries 

a decision by a government or 

competition authority that certain 

private entities are engaged in 

anticompetitive conduct could be based 

on political or other considerations and 

not concerns about price distortion. 

Accordingly, Commerce has not 

codified in the regulation a requirement 

that Commerce conduct an analysis of 

anticompetitive private actions that 

might impact potential benchmark 

prices. At the same time, the regulation 

does not prohibit parties from 

submitting information in that regard 

and arguing that a particular potential 

benchmark price has been impacted by 

such anticompetitive conduct. While 

not dispositive, if interested parties 

provide sufficient information on the 

record demonstrating that a foreign 

government, multilateral organization or 

other governing authority has concluded 

that prices in a particular country are 

distorted as a result of the abovesuggested anticompetitive behavior and 

actions, Commerce may consider such 

evidence in the context of the totality of 

the information placed on the record, 

(including, for example, any evidence 

that such prices were, in fact, impacted 

by the alleged anticompetitive 

behavior), in determining if the 

potential benchmark or benchmarks are 

useable for purposes of its MTAR 

analysis. 

With respect to § 351.512(a)(2)(iv), in 

measuring adequate remuneration under 

paragraph (a)(2)(i) or (ii) of this section, 

Commerce will use an ex-factory or exworks comparison price and the price 

paid to the firm for the good by the 

government in order to measure the 

benefit conferred to the recipient within 

the meaning of section 771(5)(E) of the 

Act. Therefore, if necessary, Commerce 

will adjust the comparison price and the 

price paid to the firm by the government 

to remove all delivery charges, import 

duties, and taxes to derive an ex-factory 

or ex-works price. This is another 

important difference from Commerce’s 

LTAR methodology, which uses 

delivered prices pursuant to 

§ 351.511(a)(2)(iv). Under section 

771(5)(E) of the Act, Commerce is 

required to determine the benefit of a 

subsidy based on the benefit conferred 

to the recipient. In an LTAR analysis 

under § 351.511, Commerce determines 

the price that the recipient would have 

paid for the good or service from a 

private party and that good must be 

available to the recipient. Therefore, for 

the good to be available to the recipient, 

the recipient must incur delivery 

charges and any taxes or import changes 

to take possession of the good. 

However, in an MTAR analysis under 

section 771(5)(E) of the Act, Commerce’s 

sole focus is the benefit that is provided 

to the recipient from the government 

purchase of the good. Any delivery 

charges or taxes are expenses that are 

ultimately incurred by the government 

as the purchaser of the goods and are 

not relevant to the revenue and benefit 

received by the MTAR subsidy 

recipient. Thus, the subsidy benefit 

conferred to the recipient in a MTAR 

analysis is solely the additional revenue 

(funds) received from the government, 

beyond what the market would have 

provided, for the purchase of that good. 

This is an important distinction 

between LTAR and MTAR benefit 

analyses under §§ 351.511 and 351.512. 

Delivery charges could be considered 

the provision of a service; however, 

purchases of services by the government 

are not financial contributions under 

section 771(5)(D) of the Act. Thus, with 

respect to an MTAR analysis, delivery 

charges are also not countervailable 

subsidies under the CVD law. Including 

delivery charges within an MTAR 

analysis would potentially place 

Commerce in the position of finding 

countervailable the government 

purchase of services. Accordingly, for 

this reason as well, it is important that 

Commerce adjust the comparison price 

and the price paid to the firm by the 

government to remove all delivery 

charges in its MTAR analysis under 

§ 351.512. 

One commenter expressed concern 

about the use of ex-factory or ex-works 

prices in the regulation. That 

commenter stated that it was worried 

that foreign governments could 

manipulate the price paid for the 

purchase of the good by shifting some 

of the payment for the good into the 

payment of freight to a respondent. 

Therefore, that commenter suggested 

that Commerce include a provision 

stating that Commerce would evaluate 

delivery charges on government 

purchases to determine whether 

delivery charges are consistent with 

prevailing market conditions and that 

the agency would accordingly adjust the 

government and benchmark prices. 


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216 Id., 89 FR at 57314. 217See, e.g., Countervailing Duty Investigation of 

Certain Hot-Rolled Steel Flat Products from the 

Republic of Korea: Final Affirmative Determination, 

81 FR 53439 (August 4, 2016), and accompanying 

Issues and Decision Memorandum at 35–36; Certain 

Softwood Lumber Products from Canada: Final 

Affirmative Countervailing Duty Determination, and 

Final Negative Determination of Critical 

Circumstances, 82 FR 51814 (November 8, 2017), 

and accompanying Issues and Decision 

Memorandum at 159–74; and Certain Uncoated 

Groundwood Paper from Canada: Final Affirmative 

Countervailing Duty Determination, 83 FR 39414 

(August 9, 2018), and accompanying Issues and 

Decision Memorandum at 149–83. 

218See SAA at 927. 

219Article 1904 Binational Panel Decision, 

Certain Softwood Lumber Products from Canada: 

Final Affirmative Countervailing Duty 

Determination, USA–CAN–2017–1904–02 (May 6, 

2024); Appellate Body Report, Canada—Feed-InTariff Program, WT/DS426/AB/R, adopted May 24, 

2013. 

220For example, similar to these parties’ 

statements with respect to electricity, there may be 

a situation in which within a government’s 

jurisdiction a steel mill is producing a steel product 

using an inefficient and more costly production 

process compared to its competitors. Because the 

product this mill produces is identical to the 

product produced by its competitors, the company 

cannot sell the product at a price that would cover 

its production costs. The government, however, 

may want to keep this company producing steel 

products because it is the largest employer in the 

area. Therefore, the government might enact a law 

and regulation whereby the government will 

purchase a share of the company’s production at a 

high price so that the company can remain in 

operation producing this product. Under an 

argument similar to the statements made by the 

commenters on this issue, the government might 

claim that there is not a subsidy because it has 

created an artificial ‘‘market’’ for a product that is 

inefficiently and costly produced, and that product 

otherwise would not have been produced because 

there is no private market party that would 

purchase this product at a price that would allow 

the producer to cover its costs of production. Under 

that scenario, the government might allege that that 

there is no subsidy because these are the 

‘‘prevailing market conditions’’ for that type of 

inefficiently produced product. Again, that is not a 

correct assessment of the CVD laws and trade 

remedies. 

Commerce has not adopted this 

suggestion because the suggested 

language appears to be inconsistent with 

the express language of the Act. 

Sections 771(5)(D)(iv) and (E)(iv) of the 

Act provide explicitly that a government 

purchase for MTAR only relates to the 

government purchase of a good and not 

the government purchase of a service. 

Nonetheless, if Commerce, while 

investigating the government purchase 

of a good for MTAR, finds evidence on 

the record that a government may be 

engaging in possible price manipulation 

by switching funds from the payment of 

the good to other payments to a 

respondent, Commerce will conduct 

further analysis of the price the 

government paid for the good. 

In the Proposed Rule, Commerce also 

proposed including in the regulation its 

treatment of how it calculates a benefit 

when the government is both a provider 

and purchaser of the good, such as with 

electricity in § 351.512(a)(3).216 In that 

situation, Commerce would normally 

measure the benefit to the recipient firm 

by comparing the price at which the 

government provided the good to the 

price at which the government 

purchased the same good from the firm. 

Commerce has determined to codify that 

provision in the final rule. While 

Commerce has not had a large number 

of cases in which it determined the 

existence of subsidies in the form of the 

government purchasing a good for 

MTAR, it has had numerous cases 

where the government is both the 

provider and purchaser of a good, e.g., 

the government both provided and 

purchased electricity from a respondent, 

in our investigations and administrative 

reviews.217

Section 771(5)(E) of the Act states that 

a benefit will normally be treated as 

conferred when there is a ‘‘benefit to the 

recipient.’’ In other words, section 

771(5)(E) of the Act provides the 

standard for determining the existence 

and amount of a benefit conferred 

through the provision of a subsidy and 

reflects the ‘‘benefit-to-the-recipient’’ 

standard which ‘‘long has been a 

fundamental basis for identifying and 

measuring subsidies under U.S. CVD 

practice.’’ 218 Therefore, in situations 

where the government is acting on both 

sides of the transactions—both selling a 

good to, and purchasing that good from, 

a respondent—under § 351.512(a)(3), 

Commerce will measure the benefit to 

the respondent by determining the 

difference between the price at which 

the government is selling the good to the 

company and the price at which the 

government is purchasing that good 

from the company. In other words, 

under the ‘‘benefit-to-the-recipient’’ 

standard set forth within section 

771(5)(E) of the Act, if a government 

provided a good to a company for three 

dollars and then purchased the identical 

good from the company for ten dollars, 

logic dictates that the benefit provided 

to the company by the government 

would be seven dollars. 

Commenters both supported and 

opposed this regulatory provision. The 

commenters that opposed 

§ 351.512(a)(3) expressed concerns that 

this regulation (1) is inconsistent with 

the ‘‘prevailing market conditions’’ 

standard under section 771(5)(E)(iv) of 

the Act; (2) is not based on the ‘‘benefitto-recipient’’ standard established under 

section 771(5)(E) of the Act; (3) is 

inconsistent with a 2024 Softwood 

Lumber Binational Panel decision and 

the WTO Appellate Body Report— 

Canada—Feed-In Tariff Program; 219 and 

(4) compares a wholesale price 

(government purchase of electricity) to a 

retail price (government provision of 

electricity). After careful consideration 

of those comments, Commerce finalizes 

§ 351.512(a)(3) with no changes. 

There is, however, no support for the 

claim that the regulation is inconsistent 

with prevailing market conditions. The 

commenters that make that claim, focus 

specifically on the purchase of 

electricity. In the referenced cases, 

authorities are purchasing electricity 

from firms that are producing electricity 

from renewable resources such as 

biomass, and thus, given the increased 

production costs of producing 

electricity from renewable sources, the 

government needs to pay more for that 

electricity. However, the prevailing 

market condition in those cases is that 

there is no private, commercial market 

for this type of generated electricity 

because such a private market does not 

exist because of the market domination 

of cheaper electricity generated using 

cheaper methods of generation of 

electricity. The lack of a comparable 

private market is further confirmed by 

the fact that those firms that are 

generating electricity from renewable 

sources such as biomass are not 

choosing to displace their purchases of 

electricity with their own generated 

electricity but are selling this electricity 

to the government for a higher price 

than the price that they pay to purchase 

electricity. Electricity is a generic 

product in that it is an identical product 

regardless of how it is generated. Thus, 

this type of environment can only exist 

due to the presence of government 

subsidies or government mandates. 

What Commerce understands these 

commenters to be suggesting is that a 

government can create its own artificial 

‘‘market’’ environment based upon a 

government’s ability to create laws and 

regulations and its ability to provide 

subsidies, and these types of actions and 

government subsidies can escape the 

remedies provided under the CVD law 

because this type of unnatural 

environment would not be created by 

private, commercial parties that are 

driven by market principles.220

Commerce disagrees that such a 

conclusion of that situation is a correct 

understanding of the CVD law. Nothing 

in the Act or regulations anticipate that 

governments can avoid the disciplines 

of the CVD law through such artificial 

markets. Accordingly, the methodology 

established within § 351.512(a)(3) exists, 

in part, because the situations in which 

the type of ‘‘actual market-determined 

prices’’ exist addressed in 


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221See § 351.503(b) and the Preamble to the 1998 

CVD Regulations, 63 FR at 65339. 

222See Proposed Rule, 89 FR at 57314. 

223See SAA at 926. 

224See section 123 of the Uruguay Round 

Agreements Act (‘‘Dispute settlement panels and 

procedures’’) (19 U.S.C. 3533) and section 129 of 

the Uruguay Round Agreements Act 

(‘‘Administrative action following WTO panel 

reports’’) (19 U.S.C. 3538). See also Corus Staal BV 

v. Department of Commerce, 395 F.3d 1343 (Fed. 

Cir. 2005). 

§ 351.512(a)(2) are not present in the 

artificial environment created by foreign 

governments. 

Commerce also disagrees that a 

benefit in such an artificial environment 

would be treated as ‘‘conferred’’ where 

there is a benefit to the recipient as set 

forth within section 771(5)(E) of the Act. 

The benefit to the recipient standard is 

whether a firm (i.e., recipient) pays less 

for its inputs (e.g., money, a good, or 

service) than it otherwise would pay in 

the absence of the government program, 

or receives more revenues than it 

otherwise would earn.221 The 

methodology established within 

§ 351.512(a)(3) is based on the revenue 

that a firm receives from the government 

purchase of a good that it otherwise 

would not have received absent the 

government action and program. As 

Commerce explained in the Proposed 

Rule,222 if a government provided a 

good to a company for three dollars 

while also purchasing that identical 

good from the company for ten dollars, 

both logic and the benefit-to-recipient 

standard dictates that the benefit 

provided to the company by the 

government is seven dollars. 

Furthermore, Commerce rejects the 

argument that the administering 

authority is required to create, modify, 

and codify rules based upon a decision 

from a NAFTA Panel or the WTO 

Appellate Body. A chapter 19 NAFTA 

Panel decision is not precedential and 

not binding on any case but the one 

before it,223 while WTO Panel and 

Appellate Body decisions are not 

binding on U.S. law, other than through 

the procedures set forth in sections 123 

and 129 of the Uruguay Round 

Agreements Act.224

Certain commenters stated that the 

proposed methodology is faulty because 

it compares a wholesale price (price 

paid by government) to a retail price 

(price charged by the government). They 

posit that the price of electricity in the 

retail market will provide no useful 

information as to whether the purchase 

of electricity generated in the wholesale 

market has been made for MTAR. 

Further they argue that this 

methodology is not expressly 

conditioned on the consideration of 

‘‘product similarity, quantities sold, 

imported or auctioned; and other factors 

affecting comparability,’’ as it would be 

under the criteria set forth in the LTAR 

regulation, § 351.511(a)(2)(i), for 

measuring adequacy of remuneration. 

Asserting that the price that electricity 

is sold for in the retail market will 

provide no useful information in 

determining whether the purchase of 

electricity generated in the wholesale 

market has been made for MTAR is 

illogical. As part of their claims, the 

commenters state that the price paid to 

the recipient by the government for 

generated electricity is a ‘‘wholesale 

price,’’ while the price the recipient 

pays to the government for generated 

electricity is a ‘‘retail price.’’ In a 

functioning commercial market, a 

wholesale price is normally lower than 

a retail price. Thus, if the government 

purchase of the good is a ‘‘wholesale 

price,’’ while the price the government 

charges the recipient is a ‘‘retail price,’’ 

as claimed by these commenters, then 

the price paid by the government should 

logically be lower than the price the 

government charges the recipient for 

electricity. Therefore, if the ‘‘wholesale 

price’’ for electricity that is paid to the 

recipient by the government is higher 

than the ‘‘retail price’’ charged to the 

recipient for electricity, this fact would 

provide useful information to 

Commerce that the government 

purchase is for MTAR. 

Furthermore, these parties’ reliance 

on the language within the LTAR 

regulation at § 351.511(a)(2)(i) is 

misplaced. With respect to the language 

within that regulation regarding product 

‘‘similarity’’ and ‘‘comparability,’’ the 

characteristics and properties of 

electricity do not change based upon 

how that electricity is generated. 

Moreover, Commerce has addressed 

above these ‘‘similarity’’ and 

‘‘comparability’’ comments with respect 

to the issue of ‘‘wholesale’’ prices and 

‘‘retail’’ prices. In addition, to the extent 

that the cited LTAR regulation relates to 

‘‘prevailing market conditions’’ for 

electricity, Commerce has already 

addressed that concern above. 

In addition, two more commenters 

suggested further modifications to the 

regulation. One commenter stated that 

the methodology set forth in 

§ 351.512(a)(3) is too rigid and fails to 

account for adjustments that may be 

necessary to ensure a fair and accurate 

price comparison. That commenter 

stated that the provision should be 

revised to allow for the removal of 

selling, distribution, and other 

operational expenses incurred between 

the government’s purchase and resale of 

the goods in question from any 

government sales price used as 

benchmark. 

The other commenter stated that 

Commerce’s methodology under this 

provision rests upon the assumption 

that the government sells goods at 

market-based prices and claimed that 

the fact that the price paid by the 

government is higher than the price it 

sells the good may, in fact, reflect the 

provision of a good for LTAR. Therefore, 

that commenter stated that Commerce 

should clarify that the exception 

provided under § 351.512(a)(3) will not 

apply in situations where the same 

input is investigated for both LTAR and 

MTAR purposes. 

After consideration of these suggested 

modifications, Commerce has 

determined that these proposed 

modifications to § 351.512(a)(3) are not 

warranted. 

Adjustments to benchmark prices for 

selling, distribution and operational 

expenses are adjustments that can be 

valid in an antidumping analysis, but 

are irrelevant for CVD purposes, and the 

commenter has not explained how such 

an adjustment would be consistent with 

Commerce’s CVD practice or the CVD 

law in general. Furthermore, Commerce 

disagrees that the modifications to the 

regulation suggested by the second 

commenter are appropriate because the 

government provision of a good for 

LTAR and the government purchase of 

a good for MTAR are two different types 

of financial contributions under section 

771(5A)(D) of the Act, and Commerce 

analyzes benefits separately for each 

type of financial contribution. If there is 

a benefit from the government provision 

of a good for LTAR, the benefit from that 

financial contribution will be quantified 

using the methodology set forth within 

Commerce’s LTAR regulation at 

§ 351.511; and if there is a benefit from 

a government purchase of a good then 

Commerce will quantify the benefit 

from that separate financial contribution 

using the methodology set forth within 

our MTAR regulation at § 351.512. In 

addition, adjusting the benchmarks as 

suggested by this party would be 

inconsistent with section 771(5A)(E) of 

the Act that requires the benefit from a 

government financial contribution be 

determined based upon the benefit to 

the recipient. Furthermore, the 

suggested adjustment would also be 

inconsistent with Commerce’s general 

definition of a ‘‘benefit’’ that is set forth 

under § 351.503 of the CVD regulations. 

Finally, § 351.512(b) addresses the 

timing of the receipt of the benefit from 

the government purchase of goods. 

Under § 351.512(b), Commerce will 

normally consider a benefit as having 

been received on the date on which the 


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225See 1998 CVD Regulations, 63 FR at 65414. 

226See Proposed Rule, 89 FR at 57314–57315. 

227See, e.g., Certain Frozen Warmwater Shrimp 

from Thailand: Final Negative Countervailing Duty 

Determination, 78 FR 50379 (August 19, 2013), and 

accompanying Issues and Decision Memorandum at 

9. 228See Proposed Rule, 89 FR at 57314–57315. 

229See § 351.524(c)(2)(iii). 

230See Proposed Rule, 89 FR at 57315. 

firm receives payment from the 

government for the good. Under 

§ 351.512(c), Commerce will normally 

allocate (expense) the benefit to the year 

in which the benefit is considered to 

have been received under paragraph (b) 

of this section. However, if the purchase 

is for, or tied to, capital assets such as 

land, buildings, or capital equipment, 

the benefit will be allocated over time 

as provided in § 351.524(d)(2). 

21. Commerce Made No Revisions to 

Proposed § 351.521, the Regulation 

Addressing Indirect Taxes and Import 

Charges on Capital Goods and 

Equipment (Export Programs) 

Import substitution subsidies are 

defined as subsidies that are 

‘‘contingent upon the use of domestic 

goods over imported goods, alone or as 

1 of 2 or more conditions,’’ in section 

771(5A)(C) of the Act. When Commerce 

published its current CVD regulations in 

1998, Commerce held in reserve 

§ 351.521 for import substitution 

subsidies.225 However, in the years in 

which that term has been defined in the 

Act, Commerce has had no issues with 

addressing and quantifying import 

substitution subsidies without an 

applicable regulation. Accordingly, 

Commerce is deleting that reserved 

regulation as unnecessary in this final 

rule. 

Instead, Commerce proposed new 

§ 351.521, which would address Indirect 

Taxes and Import Charges on Capital 

Goods and Equipment (Export 

Programs).226 Commerce has found that 

programs that provide for an exemption 

from or reduction of indirect taxes and 

import charges on capital goods and 

equipment to be countervailable export 

subsidies and has had to address such 

subsidies under existing regulations on 

the treatment of direct taxes (§ 351.509); 

treatment of indirect taxes and import 

charges (other than export programs) 

(§ 351.510); and remission or drawback 

of import charges upon export 

(§ 351.519).227 However, none of these 

current regulations directly addresses 

programs that provide an exemption 

from indirect taxes and import charges 

for exporters that purchase capital goods 

or equipment. 

A program that provides an 

exemption from indirect taxes and/or 

import duties for exporters that 

purchase capital equipment would not 

be addressed under the regulation for 

direct taxes (§ 351.509); nor would that 

program be addressed under § 351.510, 

which is only applicable to domestic 

subsidies. In addition, § 351.519 

addresses duty drawback on inputs of 

raw materials that are consumed in the 

production of an exported product and 

thus would not be applicable to the 

exemption of indirect taxes and import 

charges provided on purchases of 

capital goods and equipment. Therefore, 

Commerce proposed this new regulation 

to explicitly address the exemption of 

indirect taxes and import charges on 

capital goods and equipment that are 

export-specific in the Proposed Rule.228

In consideration of the comments on 

this regulation, Commerce has 

determined that no further modification 

is necessary to it, so Commerce is 

codifying that regulation as proposed in 

this final rule. 

New § 351.521(a)(1) and (2) addresses 

the exemption or remission of indirect 

taxes and import charges and the 

deferral of indirect taxes and import 

charges. In the case of export subsidies 

which provide full or partial 

exemptions from or remissions of an 

indirect tax or an import charge on the 

purchase or import of capital goods and 

equipment, § 351.521(a)(1) provides that 

a benefit exists to the extent that the 

indirect taxes or import charges paid by 

a firm are less than they would have 

been but for the existence of the 

program (including firms located in 

customs territories designated as outside 

of the customs territory of the country). 

For the deferral of indirect taxes or 

import charges, the regulation provides 

that a benefit exists to the extent that 

appropriate interest charges are not 

collected. Under § 351.521(a)(2), a 

deferral of indirect taxes or import 

charges will normally be treated as a 

government-provided loan in the 

amount of the taxes or charges deferred, 

consistent with the methodology set 

forth in § 351.505; Commerce will use a 

short-term interest rate as the 

benchmark for deferrals that are a year 

in length or shorter; and for deferrals of 

more than one year, Commerce will use 

a long-term interest rate as the 

benchmark. 

Under § 351.521(b), the timing of 

receipt of benefits for the recipient for 

the exemption from or remission of 

indirect taxes or import charges will be 

when the recipient firm would 

otherwise be required to pay the 

indirect tax or import charge, the date 

on which the deferred tax becomes due 

for deferral of taxes for one year or 

shorter, or the anniversary date of a 

deferral lasting for more than one year. 

Finally, § 351.521(c) states that 

Commerce will allocate the benefit of a 

full or partial exemption, remission, or 

deferral of payment of import taxes or 

import charges to the year in which the 

benefit was considered received under 

§ 351.521(b). 

Commenters on this provision were 

all supportive of the new regulation, but 

one stated that Commerce should clarify 

in this regulation that export programs 

regarding indirect taxes and import 

charges on capital goods and equipment 

would normally be considered nonrecurring subsidies, and the benefit from 

these subsidies would be allocated over 

time instead of expensed in the year of 

receipt. 

Commerce understands the concerns 

of the commenter but finds no reason to 

make this type of clarification within 

this regulation because the regulation 

addressing the allocation of benefit to a 

particular time period, § 351.524, 

already explicitly states that Commerce 

will consider a subsidy to be nonrecurring if the subsidy was provided 

for, or tied to, capital assets of a 

company.229

22. Commerce Is Removing the 

Regulation Regarding Green Light and 

Green Box Subsidies, § 351.522 

In the Proposed Rule, Commerce 

proposed deleting the Green Light and 

Green Box subsidies provision found at 

current § 351.522 because the provisions 

are no longer relevant under U.S. 

law.230 Commerce received no 

objections from the commenters to this 

change, and therefore is removing the 

regulation in this final rule. Under 

section 771(5B)(G)(i) of the Act, the 

Green Light provisions under 

subparagraphs (B), (C), (D) and (E) 

lapsed 66 months after the WTO 

Agreement entered into force, circa 

2000 and 2001, as these provisions were 

not extended pursuant to section 282(c) 

of the URAA. Under section 

771(5B)(G)(ii) of the Act, the provision 

for Green Box subsidies no longer 

applied at the end of the nine-year 

period beginning on January 1, 1995. 

Because the statutory authority to 

consider Green Light and Green Box 

subsidies ended over 20 years ago, 

Commerce has eliminated these obsolete 

provisions. 


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231See Final Affirmative Countervailing Duty 

Determination: Certain Steel Products from Austria, 

58 FR 37217, 37218 (July 9, 1993). 

232Under § 351.525(b)(6)(vi), cross-ownership 

exists between two or more corporations where one 

corporation can use or direct the individual assets 

of the other corporation(s) in essentially the same 

ways it can use its own assets. 

233See Final Affirmative Countervailing Duty 

Determination: Certain Steel Products from Austria, 

58 FR 37217, 37218 (July 9, 1993). 

234See Proposed Rule, 89 FR at 57315–57320. 

235Commerce notes that the standard set forth in 

the regulation is that cross-ownership will normally 

be met when there is a majority voting ownership 

interest between two corporations or through 

common ownership of two (or more) corporations. 

While the regulatory standard of control will 

normally be met by a majority ownership, crossownership is defined based on whether one 

company exercises control of another company to 

a degree where one corporation can use or direct 

the assets of another corporation in essentially the 

same ways it can use its own assets. Crossownership may also be based on a large minority 

voting interest, a ‘‘golden share,’’ and other 

corporate relationships such as common 

interlocking board members and corporate officers 

that administer the daily operations of a 

corporation. In addition, Commerce’s experience 

since the promulgation of the cross-ownership 

standard in 1998 has shown that other factors, such 

as certain familial relationships, may, in particular 

circumstances, warrant a finding of crossownership, with or without a majority voting 

ownership interest. See Coated Free Sheet Paper 

from Indonesia: Final Affirmative Countervailing 

Duty Determination, 72 FR 60642 (October 25, 

2007). Commerce has also found the absence of 

cross-ownership even when one corporation held 

the majority ownership interest in another 

corporation because that corporation, even with 

majority voting rights was precluded by a creditors’ 

agreement from exercising control over certain 

critical corporate decisions within the second 

corporation. A finding of cross-ownership is an 

entity-specific determination. 

236See 1998 CVD Regulations, 63 FR at 65401 

(providing examples of when it may be appropriate 

to attribute the subsidies received by an input 

supplier to the production of cross-owned 

corporations producing the downstream product— 

situations where the purpose of the subsidy 

provided to the input producers is to benefit both 

the input and downstream product.). 

237See, e.g., Kaptan Demir Celik Endustrisi Ve 

A.S. v. United States, Court No. 21–00565, Slip-Op 

23–62 (CIT April 26, 2023) (Kaptan v. United 

States) at 13–16; Nucor Corporation v. United 

States, Court No. 21–00182, Slip Op. 22–116 (CIT 

October 5, 2022) (Nucor Corp. v. United States) at 

23–24; and Gujarat Fluorochemicals Ltd. v. United 

States, 617 F. Supp. 3d 1328, 1330 (CIT 2023) 

(Gujarat v. United States). 

23. Commerce Is Making Some Small 

Revisions to Proposed § 351.525, the 

Regulation Covering the Calculation of 

Ad Valorem Subsidy Rates and 

Attribution of Subsidies to a Product 

Under section 701(a) of the Act, 

Commerce is required to investigate and 

quantify countervailable subsidies that 

are provided either directly or indirectly 

with respect to the manufacture, 

production, or export of merchandise 

subject to a CVD investigation or 

administrative review. The calculation 

and attribution rules that are set forth 

under § 351.525 are the primary tools 

used to quantify the subsidies that are 

being provided either directly or 

indirectly to the manufacture, 

production, and exportation of subject 

merchandise. 

When Commerce developed the 

current attribution rules for cross-owned 

companies 25 years ago, it had limited 

experience with the attribution of 

subsidies between affiliated companies. 

The practice of requiring information 

from cross-owned companies involved 

in the supply of an input product, a 

holding or parent company, or the 

production of subject merchandise 

evolved slowly for Commerce, and this 

practice led to the development of some 

of the attribution rules that are currently 

codified under § 351.525. It was 

essentially not until 1993 when 

Commerce had investigations on steel 

products from various countries 231 that 

the agency began to attribute to a 

respondent the subsidies that were 

provided to companies that were related 

to the respondent through crossownership.232 In those investigations, 

Commerce required ‘‘complete 

responses for all related companies that 

conducted either of the following types 

of financial transactions: (a) Any 

transfer of funds (e.g., grants, financial 

assets) or physical assets to the 

respondent, the benefits of which were 

still employed by the producer of the 

subject merchandise during the POI; or 

(b) Any assumption of debt or other 

financial obligation of the respondent 

(e.g., loan payments, dividend 

payments, wage compensation) that the 

respondent would have had to pay 

during the POI.’’ 233 Therefore, 

collecting subsidy information from 

parent companies and affiliated input 

suppliers was a relatively recent 

practice in 1998 when Commerce first 

attempted to develop and codify a set of 

attribution rules. 

In the ensuing years, Commerce has 

developed a detailed practice with 

respect to the treatment of cross-owned 

companies and the attribution to 

respondents of subsidies received by 

cross-owned companies. Based on this 

experience, Commerce proposed 

revising its attribution rules that are 

currently codified under § 351.525(b)(6) 

in the Proposed Rule.234 After 

consideration of the comments on this 

issue, Commerce is codifying the 

revisions as proposed, with some small 

modifications, in this final rule. 

As an initial matter, cross-ownership 

is defined under current 

§ 351.525(b)(6)(vi), and Commerce has 

not modified that paragraph in this final 

rule, except for moving it to 

§ 351.525(b)(6)(vii) in light of changes to 

other provisions.235

Next, § 351.525(b)(6)(iii) addresses 

holding or parent companies. Commerce 

has deleted the section that states that 

if a holding company merely serves as 

a conduit for the transfer of the subsidy 

from a government to a subsidiary, 

Commerce will attribute the subsidy 

solely to the products sold by the 

subsidiary. This language became 

redundant in light of revisions to the 

attribution section on the transfer of 

subsidies between corporations with 

cross-ownership, as described below. 

Notably, no commenter objected to this 

modification of the holding company or 

parent company attribution rule. 

The Cross-Owned Input Producer 

Attribution Rule 

With respect to the cross-ownership 

attribution rule for input suppliers, 

§ 351.525(b)(6)(iv), Commerce made 

several changes to provide greater 

clarity with respect to the analysis of 

when an input is ‘‘primarily dedicated’’ 

to the production of a downstream 

product. In addition, Commerce has 

found that the examples provided in the 

preamble of the 1998 CVD Regulations 

(semolina to pasta; trees to lumber; and 

plastic for automobiles) 236 have not 

provided much guidance with respect to 

many of the input products that 

Commerce has encountered in its CVD 

cases. Moreover, the analysis of whether 

an input is primarily dedicated has been 

an issue in recent CIT holdings.237

Therefore, Commerce has codified 

several factors that it will consider in its 

analysis of whether an input is 

primarily dedicated. 

In § 351.525(b)(6)(iv)(A), Commerce 

added language to explicitly state that 

the attribution rule applies only to 

cross-owned corporations that produce 

the input, as opposed to cross-owned 

companies that procure the input from 

non-cross-owned companies and then 

provide that input to the respondent. To 

provide further clarity, Commerce has 

changed the title of this attribution 

regulation from ‘‘input supplier’’ to 

‘‘input producer.’’ The definition of an 

‘‘input’’ under this attribution 

regulation covers the creation or 

generation of by-products resulting from 

the production operations of the crossowned input producer. With these 

changes to the regulation, Commerce is 

not intending to change its current 

practice that a primarily dedicated input 

does not have to be used directly in the 

production of subject merchandise but 

may be used as an input at earlier stages 

of production. 

One commenter opposed the 

modification of ‘‘input supplier’’ to 


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238See, e.g., Kaptan v. United States, Slip-Op 23– 

62 at 13–16; Nucor Corp. v. United States, Slip Op. 

22–116 at 23–24; and Gujarat v. United States, 617 

F. Supp. 3d at 1330. 

‘‘input producer’’ in the regulation. That 

commenter stated that the modifications 

to this cross-owned attribution rule for 

input producers could create a loophole 

to avoid the attribution of subsidies 

whereby a cross-owned input supplier 

can first provide the input to a crossowned supplier that then will provide 

the input to the cross-owned 

respondent/producer. While this type of 

cross-owned transaction is covered by 

the input producer rule, Commerce has 

made a small modification to proposed 

§ 351.525(b)(6)(iv)(A) to clarify that 

transactions involving a cross-owned 

input producer that provides the input 

to a cross-owned supplier that then 

provides the input to the cross-owned 

producer fall within the cross-owned 

input producer regulation. The final 

language in § 351.525(b)(6)(iv)(A) now 

states: ‘‘If there is cross-ownership 

between an input producer that 

supplies, either directly or indirectly, a 

downstream producer and the 

production of the input product is 

primarily dedicated . . . .’’ 

On the other hand, a commenter that 

supported the revisions to 

§ 351.525(b)(6)(iv)(A) recommended that 

Commerce consider including subsidies 

to upstream input suppliers even if 

those suppliers are not cross-owned 

with the subject merchandise producer. 

This commenter stated that in the 

stainless-steel industry, for example, 

many producers in foreign countries are 

receiving subsidized nickel for stainless 

steel production which distorts the 

market and provides those foreign 

producers with an unfair competitive 

advantage. 

While Commerce agrees with the 

commenter that the described stainlesssteel industry situation described is 

concerning, that type of subsidization is 

more properly addressed under other 

provisions of the regulations and the 

Act, such as the upstream subsidies 

provision at § 351.523 and sections 

701(e) and 771A of the Act; where the 

supplier is a state-owned enterprise, 

under sections 771(5)(D)(iii) and (E)(iv) 

of the Act that address the government 

provision of a good or service; or under 

the ‘‘entrusts or directs a private party’’ 

provision at 771(5)(B)(iii) of the Act. 

The Primarily Dedicated Input 

Provision 

Section 351.525(b)(6)(iv)(B) sets forth 

several criteria or factors that Commerce 

will review when determining whether 

an input is primarily dedicated to the 

production of downstream products. 

First, Commerce will determine whether 

the input could be used in the 

production of a downstream product, 

including the production of subject 

merchandise. Then, under the 

additional criteria, in no particular 

hierarchy, Commerce may consider (1) 

whether the input is a link in the overall 

production chain; (2) whether the input 

provider’s business activities are 

focused on providing the input to the 

downstream producer; (3) whether the 

input is a common input used in the 

production of a wide variety of products 

and industries; (4) whether the 

downstream producers in the overall 

production chain are the primary users 

of the inputs produced by the input 

producer; (5) whether the inputs 

produced by the input producer are 

primarily reserved for use by the 

downstream producer until the 

downstream producer’s needs are met; 

(6) whether the input producer is 

dependent on the downstream 

producers for the purchases of the input 

product; (7) whether the downstream 

producers are dependent on the input 

producer for their supply of the input; 

(8) the coordination, nature, and extent 

of business activities between the input 

producer and the downstream 

producers whether directly between the 

input producer and the downstream 

producers or indirectly through other 

cross-owned corporations; and (9) other 

factors deemed relevant by Commerce 

based upon the case-specific facts. The 

analysis of the facts on the record of 

whether an input is primarily dedicated 

is always guided by the statutory 

mandate of addressing and including 

countervailable subsidies provided 

either directly or indirectly to the 

manufacture or production of subject 

merchandise as required under section 

701(a) of the Act. 

Whether an input product is primarily 

dedicated is a highly fact-intensive 

analysis of all the information on the 

record; such information is usually 

business proprietary and thus cannot be 

discussed in Commerce’s public 

determinations. The fact that the data, 

and Commerce’s analysis, usually rely 

on business proprietary information 

makes it a complicated process with 

respect to distinguishing specific 

determinations of ‘‘primarily dedicated’’ 

from one another. For some complicated 

input issues, just a few small differences 

in the facts on the record may be the 

deciding factor that render an input 

primarily dedicated or not. However, 

Commerce has concluded that the 

criteria set forth within 

§ 351.525(b)(6)(iv)(B) will provide 

additional clarity to the public and the 

courts with respect to Commerce’s 

analysis of whether an input product is 

primarily dedicated to a downstream 

product. 

Commerce received comments both in 

support and in opposition of the criteria 

within § 351.525(b)(6)(iv)(B). 

Commenters that opposed the list of 

primarily dedicated criteria stated that 

the list of factors was ‘‘too long,’’ and 

they took issue with it not being 

hierarchical and including a ‘‘catch-all’’ 

provision, which they stated made the 

other factors irrelevant. One of the 

commenters stated that the list has 

factors that are redundant and place too 

much emphasis on the relationship 

between the input producer and the 

producer of subject merchandise instead 

of the nature of the input. Another 

commenter suggested that Commerce 

condense these factors into one factor 

such as ‘‘the share of the input 

producer’s sale of the input that are 

supplied to the downstream producer.’’ 

Finally, another commenter stated that 

Commerce should continue to analyze 

the primarily dedicated issue on a caseby-case basis. 

After consideration of the comments 

on this regulatory provision, Commerce 

disagrees that the list of factors within 

§ 351.525(b)(6)(iv)(B) is too long. The 

list of factors set forth in that regulation 

is based upon criteria that Commerce 

provided to the court in recent litigation 

of the issue of primarily dedicated 

inputs.238 In addition, Commerce has 

not put these factors in hierarchical 

order because whether inputs are 

primarily dedicated can, in many 

instances, be a complicated issue in 

which evidence on the record will 

indicate that certain of the factors may 

be more relevant than others, which 

may change based on case-specific facts. 

Moreover, given the wide array of 

inputs and corporate and business 

relationships between cross-owned 

companies, a strict hierarchy of criteria 

or factors could prevent Commerce from 

adequately addressing subsidies 

conferred directly or indirectly on the 

production or manufacture of subject 

merchandise as required under section 

701(a) of the Act. Because of the 

complicated nature of the primarily 

dedicated issue, Commerce has also 

included within § 351.525(b)(6)(iv)(B) 

the ability to review other factors 

deemed relevant based upon casespecific facts. 

Commerce disagrees that the list of 

factors in the regulation places too great 

an emphasis on the relationship 

between the cross-owned input 

producer and the producer of subject 

merchandise. The attribution rule for 


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input products was developed because 

Commerce was concerned that a 

government would both directly provide 

subsidies to the downstream producer 

and provide production assistance to 

that downstream producer by 

subsidizing cross-owned companies that 

produce inputs required by that 

downstream producer. Therefore, while 

the nature of the input is important in 

the agency’s primarily dedicated 

analysis, it is also important to analyze 

the nature of the relationship between 

the cross-owned input producer and the 

cross-owned downstream producer 

because it is that relationship that 

dictates the provision of that input. 

Commerce has also determined that 

condensing the factors within 

§ 351.525(b)(6)(iv)(B) into the single 

factor of ‘‘the share of the input 

producer’s sales of the input that are 

supplied to the downstream producer’’ 

is too limited and could obfuscate the 

purpose of the input producer 

attribution regulation. For example, one 

might observe that an input producer 

provides a critical input to the 

production of the downstream product 

and that the cross-owned input provider 

is the sole supplier of that input to the 

cross-owned downstream producer. 

However, the sales of that input to the 

downstream producer might account for 

only a small share of the input 

producers’ total sales of the input. 

Under the lone factor consideration 

proposed by this commenter, Commerce 

would find this critical input not to be 

primarily dedicated, while under a more 

comprehensive consideration of 

multiple factors, Commerce might find 

the reverse. Therefore, consideration of 

the proposed one lone factor would not 

be sufficiently informative, either with 

respect to the purpose of the input 

producer regulation or to the issues of 

whether an input product is primarily 

dedicated. 

Likewise, Commerce, will continue to 

consider the factors set forth in 

§ 351.525(b)(6)(iv)(B) and will not go 

back to deciding whether an input is 

primarily dedicated to the production of 

the downstream product on a case-bycase basis, without consideration of 

those factors, as suggested by one 

commenter. A major impetus behind the 

agency’s codification of the factors for 

analyzing primarily dedicated inputs 

within § 351.525(b)(6)(iv)(B) is recent 

court decisions that have taken umbrage 

with Commerce’s case-by-case approach 

for our analysis of whether an input is 

primarily dedicated. To go back to a 

case-by-case approach would fail to 

address some of the criticism raised by 

the courts with respect to Commerce’s 

primarily dedicated analysis. 

In addition, under the strict CVD 

deadlines in the Act, Commerce has 

limited time in which to make its initial 

decisions as to whether an input is 

primarily dedicated. Indeed, Commerce 

must make these complicated decisions 

in an investigation or administrative 

review within days of receipt of the 

information on cross-owned companies 

because the agency must provide foreign 

respondents with explicit instructions 

as to which cross-owned input 

producers will be required to provide 

full questionnaire responses. Delays in 

making these cross-owned input 

producer decisions adversely impact 

Commerce’ ability to remain in 

compliance with the statutory deadlines 

established by Congress. Therefore, 

having criteria in the regulation 

provides clarity to the interested parties 

regarding Commerce’s preliminarily 

dedicated analysis and assists the 

agency in its decision-making process, 

which will help to ensure that all 

statutory deadlines are met in a more 

efficient manner. 

Thus, Commerce continues to believe 

that the codification of these criteria or 

factors in § 351.525(b)(6)(iv)(B) is 

appropriate and ensures consistency in 

the agency’s analysis of whether an 

input is primarily dedicated. In 

addition, Commerce has determined 

that the codification of these criteria or 

factors provides clarity to both the 

interested parties and the courts with 

respect to the issue and analysis of 

whether an input is primarily dedicated. 

In addition, one commenter expressed 

its concerns about the revised language 

in § 351.525(b)(6)(iv)(B), stating that 

Commerce expanded the input provider 

rule by providing a more extensive 

definition of ‘‘primarily dedicated’’ to 

include within the definition inputs that 

merely ‘‘could be used in the 

production of a downstream product 

including subject merchandise, 

regardless of whether the input is 

actually used for the production of 

subject merchandise.’’ This commenter 

stated that this modification, in effect, 

addresses upstream subsidies without 

complying with the statutory provisions 

for upstream subsidies set forth within 

the Act. The party suggested that 

Commerce should incorporate a more 

definitive limiting principle based not 

on whether the input product ‘‘could’’ 

be used to produce a downstream 

product including the subject 

merchandise but that the input product 

must actually be used to produce the 

downstream product. 

Commerce finds that this description 

of the regulation misconstrues the 

original, non-modified language within 

§ 351.525(b)(6)(iv). The original 

language of the regulation only 

referenced ‘‘cross-ownership between 

an input supplier and a downstream 

producer, and the production of the 

input product is primarily dedicated to 

production of the downstream product.’’ 

The original language in the regulation 

did not require that the input product be 

related to the production of downstream 

products that include subject 

merchandise, only that the input has to 

be used to produce downstream 

products. While Commerce has 

effectively administered the regulation 

to ensure that the subject merchandise 

was included as one of the downstream 

products, the original language could be 

interpreted otherwise. Therefore, to 

remove the ambiguity in the original 

regulation, Commerce has modified it to 

state that the input is one that could be 

used in the production of subject 

merchandise. Thus, the new language 

has been inserted into the regulation to 

restrict the application of this 

attribution rule, not to expand the scope 

of this attribution regulation. In the 

Proposed Rules, we used the phrase 

‘‘could be used in the production of a 

downstream product including subject 

merchandise, regardless of whether the 

input is actually used for the production 

of subject merchandise.’’ For clarity in 

the final rule we have shortened the 

language to simply state ‘‘could be used 

in the production of a downstream 

product including subject 

merchandise.’’ 

Commerce notes that it has continued 

to include the term ‘‘could be used’’ 

rather than the commenter’s suggested 

term ‘‘actually used,’’ because in 

Commerce’s examination of a 

‘‘primarily dedicated’’ input, Commerce 

will examine whether the input is one 

that is normally used to produce subject 

merchandise. If the input is not an input 

that is normally used to produce subject 

merchandise, then the input would not 

be ‘‘primarily dedicated.’’ Commerce 

has retained the phrase ‘‘could be used’’ 

specifically instead of ‘‘actually used’’ 

because of the agency’s long-standing 

practice that it does not trace the use of 

a subsidy. It has also retained that 

phrase, more importantly, because of 

concerns of potential manipulation to 

avoid countervailing duties. 

For example, one can imagine a 

situation in which a respondent 

purchased an input from both a crossowned producer and from a noncrossed-owned company, and yet claims 

in its reporting to Commerce that it only 

‘‘actually uses’’ the inputs purchased 

from the non-cross-owned company to 

produce subject merchandise that is 

exported to the United States. It might 

be true, but it also might not be true, 


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239See 1998 CVD Regulations, 63 FR at 65401. 

240See Proposed Rule, 89 FR at 57317. 

and in either case it might be difficult, 

if not impossible, to verify. Using the 

term ‘‘could be used,’’ rather than 

‘‘actually used’’ therefore addresses that 

potential for manipulation. 

In addition, the modifications made to 

the input producer regulation do not 

relate to the provision of upstream 

subsidies. As the preamble of the 1998 

CVD Regulations states, input products 

provided by a cross-owned producer 

that are not primarily dedicated to the 

downstream products would not fall 

within the cross-owned attribution rule 

but would be addressed under the 

upstream subsidies provision of the 

statute.239 The modifications to this 

regulation do not change that policy. 

Finally, one commenter suggested 

that Commerce should add clarifying 

language to the regulation to define the 

production of an input as including the 

generation or creation of an input as a 

by-product. The agency does not see a 

need to include this type of clarification 

within the regulatory language, as the 

regulatory language is expansive enough 

to include by-products and this 

preamble sufficiently and explicitly 

explains that the production of an input 

would also include inputs that are byproducts of the cross-owned company’s 

production process. 

Cross-Owned Providers of Utility 

Products 

Since the publication of the original 

attribution rules in 1998, Commerce has 

increasingly faced more complex crossownership issues and corporate 

structures. Moreover, the transactions 

between these cross-owned corporate 

entities and their provision of ‘‘inputs’’ 

as defined and addressed within the 

CVD regulations have multiplied with 

increased complexities. Therefore, with 

over 25 years of experience in 

addressing transactions between crossowned companies since the publication 

of the 1998 attribution rules, Commerce 

has concluded that it is appropriate now 

to codify an additional attribution rule 

to cover the provision of certain inputs 

that are more than just input products 

used in the manufacture or production 

of downstream products; specifically 

cross-owned providers of electricity, 

natural gas or similar utility goods. 

Commerce proposed this addition to the 

regulation in the Proposed Rule,240 and, 

after consideration of comments on this 

provision, Commerce is now codifying 

it as part of the final rule. 

Under § 351.525(b)(6)(v), titled 

‘‘Providers of utility products,’’ if there 

is cross-ownership between a company 

providing electricity, natural gas or 

other similar utility product and a 

producer of subject merchandise, 

Commerce will attribute subsidies 

received by that provider to the 

combined sales of that provider and the 

sales of products sold by the producer 

of subject merchandise if at least one of 

the following two conditions is met: a 

substantial percentage, normally 

defined as 25 percent or more, of the 

production of the electricity, natural 

gas, or other similar utility product by 

the cross-owned utility provider is 

provided to the producer of subject 

merchandise; or the producer of subject 

merchandise purchases 25 percent or 

more of its electricity, natural gas, or 

other similar utility product from the 

cross-owned provider. Commerce has 

concluded that the criteria for 

determining whether an input product 

is primarily dedicated to the production 

of downstream products is not 

particularly useful for utility products 

such as electricity and natural gas. 

Among other considerations, electricity 

and natural gas are not physical inputs 

into the production of downstream 

products but have emerged as goods or 

services that can effectively subsidize 

the production or manufacture of 

certain products. Therefore, a consistent 

standard of analysis for the attribution 

of utility products provided by a crossowned corporation will assist the 

agency in effectuating the requirements 

of section 701(a) of the Act. 

This regulation focuses on the 

provision of utility products between 

cross-owned companies to provide both 

clarity to the public and consistency of 

treatment among Commerce’s cases. 

With the codification of this standard, 

Commerce recognizes that in most 

economies, providers of goods such as 

electricity and natural gas are 

government-regulated public utilities, 

and manufacturers require utility goods 

and services to conduct their operations. 

In Commerce’s view, a utility company 

providing 25 percent of its output to one 

company indicates a significant level of 

dependency and dedication to one 

customer, and a company that 

purchases 25 percent of its energy needs 

from one supplier has also become 

engaged in a significant supplier 

relationship. Therefore, Commerce has 

established a 25 percent threshold for 

attributing subsidies received by the 

cross-owned utility company and the 

producer of subject merchandise. 

However, if the cross-owned utility 

company is an authority and there is an 

allegation that the government is 

providing the electricity or natural gas 

for LTAR or that the private crossowned utility company is entrusted or 

directed to provide electricity or natural 

gas for LTAR, Commerce will normally 

analyze these types of allegations under 

§ 351.511, its regulation on the 

provision of a good or service. 

In response to the Proposed Rule, 

Commenters both supported and 

opposed the attribution of subsidies 

provided to cross-owned providers of 

utility products in the regulation. 

One of the commenters opposing the 

provision stated that Commerce should 

not implement this rule and should 

instead apply the primarily dedicated 

standard used for inputs used in the 

production of a downstream product. 

Commerce disagrees with the 

application of the primarily dedicated 

standard to utility products and services 

because that standard is neither relevant 

nor informative to the agency’s analysis 

of a cross-owned utility provider. The 

criteria used for an input producer 

address a physical input that is 

incorporated into a downstream 

product. Normally, utility goods such as 

electricity, while necessary for the 

manufacturing or production process of 

a manufactured good, are not physical 

inputs into that merchandise. Therefore, 

the factors set forth within 

§ 351.525(b)(6)(v) for a primarily 

dedicated analysis are not instructive 

for the analysis as to whether subsidies 

provided to a cross-owned utility 

provider should be attributed to 

producers of the subject merchandise. 

Other commenters opposing the 

provision stated that the 25 percent 

threshold will limit Commerce’s 

flexibility, and they suggested that 

Commerce should address cross-owned 

utility providers instead on a case-bycase basis. 

Commerce disagrees with this 

suggestion. The purpose of this new 

attribution regulation for cross-owned 

utility providers is to provide both 

clarity to the public with respect to the 

agency’s treatment of cross-owned 

utility providers and to provide more 

consistency in Commerce’s treatment of 

cross-owned utility providers. Going 

back to analyzing cross-owned utility 

providers on a case-by-case basis would 

undermine both of those policy and 

administrative goals. In addition, the 25 

percent threshold for a utility good 

provides useful regulatory guidance that 

will assist Commerce in determining 

which cross-owned companies need to 

provide full questionnaire responses, a 

decision that needs to be made in mere 

days given the strict CVD deadlines in 

the Act. Moreover, the new attribution 

rule for cross-owned utility providers 

will effectively and efficiently 

implement the statutory mandate under 

section 701(a) of the Act that Commerce 


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241See Proposed Rule, 89 FR at 57317–57318. 

242See 1998 CVD Regulations, 63 FR at 65402. 

243See, e.g., Bottom Mount Combination 

Refrigerator-Freezers from the Republic of Korea: 

Final Affirmative Countervailing Duty 

Determination, 77 FR 17410 (March 26, 2012), and 

accompanying Issues and Decision Memorandum at 

Comment 22. 

244For the purposes here, Commerce is using the 

term ‘‘input’’ as defined in § 351.503(b) and the 

1998 CVD Regulations, 63 FR at 65359, where the 

term ‘‘input’’ is defined as money, a good, or a 

service. 

245See Certain Fabricated Structural Steel from 

Canada: Preliminary Negative Countervailing Duty 

Determination and Alignment of Final 

Determination with Final Antidumping Duty 

Determination, 84 FR 33232 (July 12, 2019), and 

accompanying preliminary decision memorandum 

at section VI. Subsidies Valuation. 

246 Id. 

investigate the subsidies that are 

conferred, directly or indirectly, on the 

production and manufacture of subject 

merchandise. 

In response to concerns which some 

commenters expressed, Commerce 

recognizes that it is possible that after a 

CVD order has been put in place a 

respondent may attempt to avoid the 

application of this regulation by 

attempting to reduce the amount of 

electricity provided or purchased to a 

level below the 25 percent threshold. 

Accordingly, to prevent this type of 

potential avoidance of the application of 

this attribution regulation, in reviewing 

record documents in its proceedings, 

Commerce will be sensitive to these 

potential types of provision and 

consumption changes after the issuance 

of a CVD order, and it also recommends 

that other interested parties in its 

proceedings be sensitive to those 

potential concerns as well. 

One of the commenters supporting the 

regulation suggested that Commerce 

codify the language in the preamble that 

if the cross-owned utility provider is an 

authority and there is an allegation that 

the utility good or service is provided 

for LTAR or there is an allegation of 

entrustment or direction, Commerce 

will analyze the provision of the utility 

good or service under § 351.511, the 

regulation on the provision of a good or 

service. 

Commerce sees no need to make this 

an additional regulatory provision 

under our attribution regulations as this 

standard is already explicitly addressed 

under Commerce’s LTAR regulation at 

§ 351.511, the government provision of 

a good or service. 

Finally, one of the commenters 

supporting the regulation for providers 

of utility products recommended that 

Commerce create a separate regulatory 

provision for cross-owned freight 

service providers using the same 25 

percent threshold used for cross-owned 

providers of utility products. 

Commerce has not adopted this 

recommendation. Since the 

implementation of the 1998 CVD 

Regulations that included the 

attribution rules for cross-owned 

companies, while Commerce has 

investigated hundreds of different 

subsidies related to the production or 

manufacture of merchandise that is 

covered in a CVD investigation, the 

agency has rarely, if ever, had 

allegations related to the subsidization 

of freight services other than those 

covered under the statutory provision of 

a government good or service. 

Therefore, Commerce does not see a 

need to promulgate an attribution rule 

to cover the provision of freight services 

from cross-owned companies. However, 

Commerce does recognize that if a crossowned freight service provider 

transferred a subsidy to the cross-owned 

producer/respondent, the transfer of 

that subsidy could fall under 

§ 351.525(b)(6)(vi), the attribution rule 

for the transfer of a subsidy between 

companies with cross-ownership. 

Other Service Providers 

While the proposed, and now final, 

regulation addressed only the 

attribution of subsidies for cross-owned 

utility product providers, in the 

Proposed Rule Commerce 

acknowledged that it retains the 

authority to include subsidies received 

by certain cross-owned companies that 

are not utility product providers when 

it concludes the specific facts on the 

record warrant such inclusion.241

For example, Commerce has at times 

had to determine whether to include 

subsidies received by cross-owned 

companies that provide land, 

employees, and manufacturing facilities, 

including plants and equipment, to the 

producer of subject merchandise. In that 

situation, if the record reflects that in 

order to manufacture or produce 

merchandise that is subject to an 

investigation or administrative review 

the cross-owned company requires a 

manufacturing facility and equipment, 

land upon which to place its 

manufacturing facilities, and/or 

employees, Commerce may find that 

government subsidies provided to those 

cross-owned companies are providing, 

directly or indirectly, subsidies to the 

manufacture and production of subject 

merchandise as set forth within section 

701(a) of the Act. In that case, 

Commerce might determine it 

appropriate to attribute the subsidies 

received by that provider to the 

combined sales of that provider and the 

sales of products sold by the producer 

of subject merchandise. 

Likewise, there may be situations in 

which Commerce determines that it is 

appropriate to include subsidies 

received by certain cross-owned service 

providers in its calculations. The 

preamble to the 1998 CVD Regulations 

refers to the situation in which a 

government provides a subsidy to a nonproducing subsidiary such as a financial 

subsidiary and notes that consistent 

with Commerce’s treatment of holding 

companies, the agency would attribute a 

subsidy to a non-producing subsidiary 

to the consolidated sales of the 

corporate group.242 Commerce normally 

does not include cross-owned general 

service providers in the attribution of 

subsidies.243 Where cross-owned service 

providers provide critical inputs into 

the manufacture and production of 

subject merchandise,244 Commerce may 

include cross-owned service providers 

in the attribution of subsidies. In all 

cases, whether to include subsidies 

provided by cross-owned service 

providers in the attribution of subsidies 

is a case-specific determination. 

For example, if there is crossownership with a company providing 

R&D, tolling, or engineering services 

directly related to the production or 

assembly of subject merchandise, 

Commerce may determine that it is 

appropriate to attribute subsidies 

received by the service provider to the 

combined sales of that provider and the 

producer of subject merchandise. In the 

case of a cross-owned company 

performing R&D for the respondent 

company, Commerce might determine 

to include the subsidies provided by the 

government to that cross-owned R&D 

service provider. Similarly, if the 

respondent company has a cross-owned 

toller that assembles or manufactures 

the subject merchandise which is 

subsequently sold or exported by the 

respondent, Commerce might include 

subsidies provided by the government 

to that cross-owned toller.245 With 

respect to engineering services, while 

Commerce will not include subsidies to 

companies that provide only general 

engineering services to a respondent, 

the agency might include subsidies to 

those service providers if the services 

are directly related to the manufacture, 

production or export of subject 

merchandise. For example, in 

Fabricated Structural Steel from 

Canada, Commerce included crossowned companies that provided 

engineering drafting services because 

these services were critical to the 

production and manufacture of subject 

merchandise.246 While the revisions to 

§ 351.525(b)(6) do not include subsidies 

to cross-owned providers of services or 


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247See Proposed Rule, 89 FR at 57318. 248 Id., 89 FR at 57318–57319. 

249See 1998 CVD Regulations, 63 FR at 65404. 

250See Final Affirmative Countervailing Duty 

Determinations; Certain Steel Products from 

Belgium, 47 FR 39304, 39316–17 (September 7, 

1982). 

subsidies to cross-owned providers of 

land, employees, and manufacturing 

facilities, the agency may attribute such 

subsidies in its CVD calculations where 

supported by the record. 

Transfer of a Subsidy 

Under the language for the transfer of 

subsidies (formerly § 351.525(b)(6)(v), 

now § 351.525(b)(6)(vi)), if a crossowned corporation receives a subsidy 

and transfers it to a producer of subject 

merchandise, Commerce will attribute 

the subsidy only to products produced 

by the recipient of the transferred 

subsidy. Moreover, when the crossowned corporation that transferred the 

subsidy could fall under two or more of 

the attribution rules under 

§ 351.525(b)(6), the transferred subsidy 

will be attributed solely to the recipient 

of the transferred subsidy as set forth 

under § 351.525(b)(6)(vi). With these 

revisions to the transfer attribution rule, 

as proposed in the Proposed Rule 247

and codified in this final rule, 

Commerce clarifies that when a crossowned corporation transfers a subsidy, 

that subsidy will be attributed only to 

the recipient of the subsidy. 

In addition, the agency amended the 

title of § 351.525 in the Proposed Rule 

from ‘‘Transfer of subsidy between 

corporations with cross-ownership 

producing different products’’ to 

‘‘Transfer of subsidy between 

corporations with cross-ownership’’ to 

indicate that the transfer of a subsidy 

can be from any cross-owned 

corporation, not just from a cross-owned 

corporation that is a manufacturer. 

General Questionnaire Reporting 

Requirements 

In the preamble to the Proposed 

Rules, Commerce set forth our normal 

practice for general questionnaire 

reporting requirements for cross-owned 

corporations. We are making no changes 

to the reporting requirements. We are 

providing these instructive guidelines to 

provide clarity to the public and to 

ensure consistency across our cases. For 

cross-owned corporations covered by 

§ 351.525(b)(6)(iv), Commerce will 

normally only request information or a 

questionnaire response for input 

producers that provide the input to the 

producer of subject merchandise during 

the POI or POR. Similarly, for crossowned corporations that covered by 

§ 351.525(b)(6)(v), Commerce will 

normally only request information or a 

questionnaire response for cross-owned 

utility companies that provided 

electricity, natural gas or other utility 

products to the producer of subject 

merchandise during the POI or POR. In 

addition, for corporations producing 

subject merchandise under 

§ 351.525(b)(6)(ii) that were cross owned 

during the POI and POR, they must 

provide information and a questionnaire 

response covering the AUL of a firm’s 

renewable physical assets even if one or 

more did not export subject 

merchandise to the United States during 

the POI or POR. Due to the ease of 

switching export shipments of subject 

merchandise between cross-owned 

corporations producing the subject 

merchandise and the potential for 

evasion of a CVD order, Commerce will 

analyze subsidies conferred to all crossowned corporations producing subject 

merchandise and will calculate one 

CVD rate for these cross-owned entities. 

Commerce will also attribute subsidies 

provided during the AUL to all holding 

or parent companies that are cross 

owned with the producer of subject 

merchandise during the POI or POR. 

Finally, information on the transfer of 

non-recurring subsidies from a crossowned company during the AUL must 

be reported, even if the company that 

transferred the subsidy to the producer 

of subject merchandise is no longer 

cross-owned during the POI or POR or 

has ceased operations. 

Non-Attribution of Subsidies to Plants 

or Factories and General Standing for 

Finding Subsidies Tied 

In the Proposed Rule, Commerce 

proposed two additions to the 

attribution rules under § 351.525(b) to 

codify two longstanding Commerce 

practices with respect to the attribution 

of subsidies to plants and factories and 

the tying of a subsidy.248 Commerce is 

now finalizing those changes as 

proposed. Under § 351.525(b)(8), 

Commerce will not tie or attribute a 

subsidy on a plant- or factory-specific 

basis. Under § 351.525(b)(9), a subsidy 

will normally be determined to be tied 

to a product or market when the 

authority providing the subsidy (1) was 

made aware of, or otherwise had 

knowledge of, the intended use of the 

subsidy and (2) acknowledged that 

intended use of the subsidy prior to, or 

current with, the bestowal of the 

subsidy. Commerce is also modifying 

§ 351.525(b)(1) to reflect references to 

the above additions of paragraphs (8) 

and (9) to the regulation. 

In the preamble to the 1998 CVD 

Regulations, Commerce rejected 

comments proposing a regulation to 

allow the agency to tie or attribute 

subsidies on a plant- or factory-specific 

basis.249 Commerce’s practice from at 

least the publication of the 1998 CVD 

Regulations, over 25 years ago, has been 

consistent—subsidies will not be 

attributed or tied on a plant- or factoryspecific basis. Commerce is now 

codifying that practice in its regulations. 

Commerce’s approach to tying goes 

back to 1982. In Certain Steel Products 

from Belgium, Commerce stated that it 

determines that a grant is ‘‘tied when 

the intended use is known to the 

subsidy giver and so acknowledged 

prior to or concurrent with the bestowal 

of the subsidy.’’ 250 When Commerce 

examines whether a subsidy is tied to a 

product or market, it has consistently 

used this test that will now be codified 

in § 351.525(b)(9). 

Under this regulatory provision, 

Commerce will continue to carefully 

examine all claims that a subsidy is tied 

to a product or market, based on the 

case-specific facts on the record. To 

support a claim that a subsidy is tied, 

the documents on the record must 

demonstrate, in accordance with 

§ 351.525(b)(9), that the authority 

providing the subsidy explicitly 

acknowledged the intended purpose of 

the subsidy prior to, or concurrent with, 

the bestowal of the subsidy. Because the 

authority and the respondent company 

have access to all the program-specific 

documentation related to the bestowal 

of a subsidy, the authority and the 

respondent company will be required to 

submit these documents to support any 

claim that a subsidy is tied. In general, 

these documents include all application 

documents submitted by the respondent 

company to the authority providing the 

subsidy and all the subsidy approval 

documents from that authority. A mere 

claim that a subsidy is tied to a product 

or market, absent the submission of 

supporting documents, will not be 

sufficient. 

Because interested parties other than 

the respondent government and 

company may not have access to 

documents related to the application 

and approval of the subsidy, such 

interested parties may make arguments 

that a subsidy is tied to a product or 

market based on information that is 

reasonably available to them. The tying 

of R&D subsidies raises a number of 

difficult and challenging issues due to 

the complex and highly technical nature 

of certain R&D projects. Therefore, in 

general, the documents submitted to 

support a tying claim for R&D subsidies 


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251See 1998 CVD Regulations, 63 FR at 65400. 

252Richard Herring & Brien Stonebreaker, 

Evolution of Countervailing Duties (CVD) 

Regulations and Methodology in the United States, 

30 Int’l Trade L. & Reg. 1 (2024) (CVD Evolution). 

253The 1982 Subsidies Appendix was published 

as Appendix 2—Methodology attached to the Final 

Affirmative Countervailing Duty Determinations; 

Certain Steel Products from Belgium, 47 FR 39304, 

39317 (September 7, 1982). 

254See CVD Evolution at 5–9. The 1998 CVD 

Regulations, 63 FR at 65402–03, subsequently 

provided further discussion of the fungibility of 

money and the attribution and tying of subsidies. 

255CVD Evolution at 5 and 9. As explained in 

CVD Evolution, the Steel Issues Group considered 

several sources in determining the correct approach 

to the tying of subsidies, including then section 

771(5) of the Act defining a subsidy as being 

provided ‘‘directly or indirectly’’ on the 

manufacture, production and exportation of 

merchandise imported into the United States and 

the legislative history to the Trade Agreements Act 

of 1979 (Public Law 96–39, 93 Stat. 144, 96th 

Congress (July 26, 1979)), including the Senate 

Report (Senate Report of the Committee on Finance, 

Trade Agreements Act of 1979, S. Rep. No. 96–249 

(July 17, 1979), at 85–86) and the House Report 

(House of Representatives Report of the Committee 

on Ways and Means, Trade Agreements Act of 1979, 

H.R. Rep. No. 96–317 (July 3, 1979) at 74–75). It 

also considered Viscose Rayon Stable Fiber from 

Sweden, in which Commerce determined that 

government grants were provided specifically to 

develop the production of modal fiber, and, 

therefore, the benefits were allocated to the 

production of modal fiber and not to all products 

produced by the respondent as the fungibility of 

money would have supported. See Viscose Rayon 

Stable Fiber from Sweden; Final Results of 

Administrative Review of Countervailing Duty 

Order, 46 FR 60486 (December 10, 1981) (Viscose 

Rayon Stable Fiber from Sweden)). 

256See 1998 CVD Regulations, 63 FR at 65404. 

257See current § 351.525(b)(4) and (5). 

258See Proposed Rule, 89 FR 57318–57319. 

259 Id., 89 FR at 57319. 

must clearly set forth the products that 

are the focus of the R&D project. 

Finally, as Commerce noted in the 

preamble to the 1998 CVD Regulations, 

if subsidies that are allegedly tied to a 

particular product are in fact provided 

to the overall operations of a company, 

Commerce will continue to attribute the 

subsidy to all products produced by the 

company.251

The tying standard finalized in these 

regulations was initially developed in 

1982 based on the conclusions of the 

Steel Issues Group, an interagency 

group whose deliberations were based 

on governing legislation and related 

administrative proceedings.252 In the 

1982 Subsidies Appendix 253 Commerce 

explained that a subsidy is ‘‘tied’’ when 

the intended use is known to the 

subsidy giver and so acknowledged 

prior to or concurrent with the bestowal 

of the subsidy. Commerce has applied 

this standard ever since and is codifying 

it in these final regulations.254 In 

reaching this conclusion, the Steel 

Issues Group considered multiple 

sources to determine that the definition 

or identification of the intended 

purpose of a subsidy should be the 

primary consideration in determining if 

a subsidy is tied and how that subsidy 

should be allocated.255

With respect to the codification of 

these regulations, one commenter 

expressed concerns as to the attribution 

regulation regarding subsidies to plants 

and factories and suggested that 

Commerce tie subsidies to plants and 

factories when an authority provides a 

subsidy to a specific plant or factory 

that does not produce subject 

merchandise. 

In 1998, Commerce expressed concern 

that if subsidies were to be tied to a 

particular plant or factory, interested 

parties could use that methodology in 

an attempt to escape the payment of 

appropriate countervailing duties by 

selling the production of a subsidized 

plant or factory domestically, while 

exporting from an unsubsidized 

factory.256 This commenter did not 

address this long-standing concern 

regarding manipulation of payment of 

countervailing duties through the use of 

tying subsidies to a firm’s individual 

plants or factories. In addition, 

Commerce has had a consistent longstanding practice codified in 1998 that 

it will only tie subsidies on a productor market-specific basis.257 Notably, the 

commenter did not claim that 

Commerce should tie a subsidy to a 

specific plant or factory when that plant 

or factory produces only subject 

merchandise, nor did the commenter 

provide statutory or regulatory support 

for its request that Commerce change its 

long-standing position on this issue. 

Accordingly, Commerce has made no 

modifications to its regulation in this 

regard and will not expand the concept 

of typing subsidies on a plant- or 

factory-specific basis. 

Another commenter suggested that 

Commerce should add a second tying 

standard in the regulation that would 

apply to the government provision of a 

good or service. Under this proposed 

second tying standard, the government 

provision of a good or service would be 

tied to a particular market or product if 

the authority providing the subsidy 

could have reasonably been expected to 

know the intended use of the subsidy. 

This party stated that it was proposing 

this special tying standard for the 

provision of a good or service because 

it was concerned that government 

authorities could exploit a loophole, 

wherein they would choose not to 

specify their knowledge of the use of the 

subsidy in order to avoid tying in a CVD 

proceeding. 

Commerce has not adopted this 

proposal for the following reasons. First, 

since Commerce developed its tying 

standard in 1982, the agency has only 

found subsidies to be tied based upon 

actual documentation that a subsidy is 

tied to a particular product or market. 

The documentation normally relied 

upon by Commerce were applications 

and approval documents for the 

conferred subsidy. Actual 

documentation for tying was required 

because Commerce wanted documented 

evidence that a subsidy is tied to help 

alleviate concerns that a respondent 

party was attempting to avoid the 

application of countervailing duties by 

making unsupported and ad hoc claims 

that a subsidy was tied to non-subject 

merchandise. In addition, Commerce 

required documented evidence because 

the agency did not want to be in a 

position of having to guess the intent of 

the authority providing the subsidy. 

Second, Commerce believes that 

creating a second standard for tying that 

does not require actual documentation 

creates a much larger loophole in our 

practice than the loophole the party is 

suggesting that Commerce close. 

Finally, the commenter provided no 

legal justification for creating two 

different and potentially conflicting 

standards for tying a subsidy to a 

particular product or market, especially 

where one standard is solely based upon 

the type of financial contribution. 

Limiting the Number of Examined 

Cross-Owned Companies 

In addition to the other changes 

Commerce made to § 351.525(b), 

Commerce also proposed to add text 

that would stipulate that when record 

information and resource availability 

supported limiting the number of crossowned corporations examined, 

Commerce could do so before 

conducting a subsidy attribution 

analysis under any subsidy attribution 

provisions.258 Specifically, proposed 

§ 351.525(b)(1) stated that the Secretary 

‘‘may determine to limit the number of 

cross-owned corporations examined 

under this section based on record 

information and resource availability.’’ 

Commerce explained in the preamble 

to the Proposed Rule that it has 

determined in past cases that a 

limitation of examination was 

warranted when a respondent had a 

large number of cross-owned input 

suppliers and examination of each of 

those input suppliers would have been 

unduly burdensome based on the record 

information and available resources.259

Commerce received several comments 

on this addition to the regulation from 

domestic industries and law firms 

asserting that Commerce’s limitation of 


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260See, e.g., 4th Tier Cigarettes from the Republic 

of Korea: Preliminary Affirmative Determination of 

Sales at Less Than Fair Value and Preliminary 

Negative Determination of Critical Circumstances, 

85 FR 44281 (July 22, 2020), and accompanying 

issues and decision memorandum at 1 (explaining 

that ‘‘Commerce limited home market sales 

reporting requirements to two sales channels’’). 

261See, e.g., Countervailing Duty Investigation of 

Certain Cold-Rolled Steel Flat Products from the 

Russian Federation: Preliminary Affirmative 

Countervailing Duty Determination, Preliminary 

Negative Critical Circumstances Determination, and 

Alignment of Final Determination with Final 

Antidumping Determination, 80 FR 79564 

(December 22, 2015), and accompanying 

preliminary decision memorandum at 2 (stating that 

‘‘given the large number of NLMK’s cross-owned 

affiliated input suppliers of scrap, it was not 

practicable to examine each of them. As such we 

determined to limit our examination to NLMK’s two 

largest suppliers of scrap during the period of 

investigation’’). 

examination cross-owned companies 

was unnecessary, overly broad, and 

would likely result in inaccurate overall 

ad valorem subsidy rates because 

Commerce could not account for all 

countervailable benefits received by 

cross-owned companies if it limited the 

companies examined. Two commenters 

expressed concerns that respondents 

could avoid countervailable duties by 

separately incorporating dozens of 

affiliates and cross-owned entities 

assuming Commerce will excuse many 

of them on resource constraint grounds. 

Another commenter stated that such a 

limitation would be tantamount to 

allowing certain subsidies to go 

unremedied. That commenter asserted 

that Commerce could now consider 

transnational subsidy allegations after 

changes made to its regulations in 

March 2024, so it is even more 

important for Commerce to ensure that 

subsidies granted to all possible crossowned entities are reflected in 

Commerce’s CVD calculations. Yet 

another commenter claimed that the 

proposed change was not necessary 

because there are already restrictions on 

what entities Commerce considers to be 

cross-owned companies, and section 

777A(c)(2) of the Act allows Commerce 

to limit the number of respondents it 

reviews in the first place. 

In addition, several of the domestic 

industries commenting on this issue 

claimed that limiting the number of 

cross-owned entities examined would 

be inconsistent with the Act. One 

commenter noted that sections 701 and 

775 of the Act instruct Commerce to 

countervail specific subsidies provided 

‘‘directly or indirectly’’ to subject 

merchandise, including subsidies 

discovered during a proceeding, and not 

examining all of the cross-owned input 

suppliers would violate these 

provisions. Another commenter stated 

that section 777A(c)(2) of the Act may 

allow Commerce to limit respondents 

selected but does not further limit the 

cross-owned affiliates of a producer who 

may have subsidies which can be 

attributed to the producer. 

Three commenters argued that if 

Commerce kept the limitation language 

they would prefer to be deleted in the 

regulation, the agency should also 

codify criteria on how it would select 

cross-owned companies for 

examination. They pointed to 

Commerce’s current respondent 

selection methodology, which is now 

being codified at § 351.109(c), as an 

example, and stated that Commerce 

should add additional clarification 

about the factors that Commerce will 

consider when determining which 

cross-owned corporations to examine. In 

that regard, one commenter requested 

that Commerce permit parties to submit 

public information regarding subsidies 

to each cross-owned company in 

question to ensure large subsidies 

provided to certain cross-owned entities 

are not left unexamined and take into 

consideration how significant an input 

is to the production of the subject 

merchandise when selecting crossowned input suppliers or utility 

suppliers to examine. 

Finally, one commenter suggested 

that if Commerce continues to retain 

this limitation language in the 

regulation, it should adopt a rebuttable 

presumption that unexamined crossowned entities receive subsidies at a 

rate attributable to subject merchandise 

that is an average of the rates calculated 

with respect to examined cross-owned 

entities. 

Response 

After consideration of the comments 

on this issue, Commerce has determined 

to make no change to the proposed 

regulation. Some commenters 

downplayed Commerce’s resource 

constraints, but in some cases 

Commerce lacks the resources to review 

every cross-owned entity in a given 

segment or proceeding. In fact, 

Commerce is sometimes faced with 

dozens of cross-owned entities to 

examine in CVD proceedings, but the 

public may be unaware of that fact if the 

names and number of cross-owned 

input suppliers, for example, are 

proprietary. For this reason, Commerce 

presumes that those commenters 

downplaying Commerce’s resource 

constraints were unaware of such 

factual scenarios. 

Commerce is tasked by Congress to be 

the administrator of the CVD law. 

Commerce disagrees with certain 

commenters that because the Act 

expressly allows Commerce to select 

respondents when the number of 

potential respondents is too large to 

examine, the Act does not also permit 

Commerce to limit examination of 

certain transactions or entities when 

resource constraints and the record 

supported such a limitation. Indeed, it 

is common for Commerce to limit the 

number of transactions 260 or affiliated 

parties reviewed in a case when the 

facts on the record warrant such 

limitation.261 This should not be 

surprising to anyone who practices 

before Commerce—it is the normal 

authority given to a Federal agency in 

charge of administering an 

administrative proceeding. 

Furthermore, the Act reflects that 

Commerce anticipated that Commerce 

could limit the number of cross-owned 

companies examined. By recognizing in 

section 777A(c)(2) of the Act that it may 

not be ‘‘practicable’’ for Commerce to 

examine every potential respondent 

‘‘because of the large number of 

exporters or producers involved in an 

investigation or review,’’ Congress 

clearly appreciated that Commerce has 

limited resources and therefore some 

restrictions must be necessary at times 

when the burden is too large for the task 

at hand. In certain, but not all, cases, 

this becomes an issue when Commerce 

is faced with a large number of crossowned entities. 

When Commerce examines crossowned entities, such as cross-owned 

input suppliers, it must essentially 

conduct an additional, complete, 

investigation of the cross-owned entity 

or entities, including issuing 

questionnaires and supplemental 

questionnaires to examine the subsidies 

received by the cross-owned entities for 

purposes of attributing the subsidies 

received by the cross-owned entities to 

the respondent company. When 

Commerce has fully developed the 

record in this regard, it must then 

analyze the information and consider 

which of the attribution methodologies 

is appropriate for effectuating the 

purpose of identifying the subsidies to 

the production and exportation of the 

subject merchandise. Moreover, the 

inclusion of cross-owned entities in 

Commerce’s analysis expands 

Commerce’s verification obligations, 

increasing the resources that Commerce 

must devote to fulfilling its statutory 

obligations regarding verification. 

Commerce acknowledges that a 

general statement in the regulation that 

Commerce may limit the number of 

cross-owned corporations based on 

record information and resource 

availability does not provide guidance 


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101748 Federal Register / Vol. 89, No. 241 / Monday, December 16, 2024 / Rules and Regulations 

262See Proposed Rule, 89 FR at 57319. 

263Commerce’s practice of cumulating subsidies 

provided to trading companies with the subsidies 

provided to the producer of subject merchandise 

began in 1984 with the Final Affirmative 

Countervailing Duty Determination; Oil Country 

Tubular Goods from Korea, 49 FR 46776, 46777 

(November 28, 1984). When Commerce codified 

this practice in Commerce’s current CVD 

regulations in 1998, Commerce did not set forth a 

detailed methodology but stated that the subsidy 

benefits provided to trading companies would be 

cumulated with the subsidy benefits provided to 

the producer of the subject merchandise. See 1998 

CVD Regulations, 63 FR at 65404. The preamble to 

the trading company regulation did not provide 

guidance as to how these subsidy benefits were to 

be cumulated. Id. While this approach provided 

Commerce with some flexibility as to how the 

subsidy benefits provided to trading companies 

were to be cumulated with the subsidy benefits 

conferred to the producer of subject merchandise, 

this lack of clarity in the language of the regulation 

also led to inconsistencies in the application of the 

methodology. 

264See, e.g., Certain Cold-Rolled Steel Flat 

Products from the Republic of Korea: Final Results 

of Countervailing Duty Administrative Review, 

2019, 87 FR 20821 (April 8, 2022), and 

accompanying Issues and Decision Memorandum at 

Comment 6. 

on how Commerce will select those 

entities. Commerce agrees that it should 

take into consideration how significant 

an input is to the production of the 

subject merchandise when identifying 

cross-owned input suppliers or other 

cross-owned entities that meet the 

criteria for attribution of subsidies (i.e., 

parent companies, producers of subject 

merchandise) and also agrees that as a 

normal practice, similar to its 

respondent selection methodology, 

Commerce should try to identify the 

biggest and most relevant cross-owned 

entities as part of that process. However, 

every case is factually different, as is 

every product, and in some cases the 

cross-owned input suppliers that 

provide the most important input might 

not also be the largest cross-owned 

input suppliers. Accordingly, 

Commerce disagrees that at this time 

Commerce should codify the process by 

which it will identify cross-owned 

entities in every case or provide a list 

of criteria that would either be too 

general to be useful or omit material 

criteria. Instead, the agency will explain 

its methodology on the record of each 

unique case in which it determines that 

the information before it and resource 

limitations will prevent Commerce from 

examining every cross-owned entity. 

In response to the comment that 

Commerce should allow domestic 

industries in every case the opportunity 

to place public information on the 

administrative record regarding the 

subsidization of each cross-owned 

company in question to ensure that 

large subsidies are not left unexamined, 

that suggestion presumes that all of the 

cross-owned companies are publicly 

identified and that there is a reasonable 

number of cross-owned companies to 

allow for such an analysis. If, for 

example, there are 30 or 40 cross-owned 

companies, one can expect that the 

domestic industry would request that 

Commerce allow them an extensive 

amount of time to gather subsidy 

information. Commerce’s investigations 

and reviews are restricted by statutory 

deadlines that cannot be met if 

Commerce sets forth procedures in the 

regulations that would lead to lengthy 

extensions. Accordingly, Commerce has 

determined not to codify a requirement 

in the regulation that allows interested 

parties to submit publicly available 

subsidy information on the cross-owned 

entities in every case. Instead, 

Commerce will determine whether to 

allow such a procedure on a case-bycase basis, and when it does, will likely 

need to convey to the interested parties 

that they only have a limited amount of 

time in which to submit such 

information. 

Finally, Commerce has determined 

not to adopt a rebuttable presumption 

suggested by one commenter that 

unexamined cross-owned entities 

receive subsidies at a rate attributable to 

subject merchandise that is an average 

of the rates calculated with respect to 

examined cross-owned entities. 

Although Commerce has limited the 

number of cross-owned entities that it 

has reviewed in past cases, it has not 

done so with frequency, and thus lacks 

enough experience in limiting review of 

such entities to serve as the basis for 

such a presumption. 

Trading Companies 

Commerce is finalizing § 351.525(c), 

which pertains to trading companies, as 

proposed.262 When Commerce first 

codified its trading company practice in 

1998, trading companies were not 

selected as respondents in Commerce’s 

investigations or administrative reviews. 

However, when Commerce started using 

CBP import data to identify the largest 

producers/exporters of subject 

merchandise for purposes of selecting 

respondents, Commerce discovered that 

in many cases, the largest exporters 

were trading companies. Commerce 

used the 1998 trading company 

regulation to cumulate the subsidies 

provided to the trading company with 

those provided to the producers from 

which the trading company has sourced 

the subject merchandise that it exported 

to the United States but did not set forth 

a detailed methodology.263 To provide 

consistency and clarity with respect to 

its cumulation methodology when a 

trading company is selected as a 

respondent, Commerce is now adding 

this methodology to the trading 

company regulation as proposed. 

In § 351.525(c)(i) through (iii), 

Commerce has included language 

stating that when the producer of 

subject merchandise exports through a 

trading company, Commerce will prorate the subsidy rate calculated for the 

trading company by using the ratio of 

the producer’s total exports of subject 

merchandise to the United States sold 

through the trading company to the 

producer’s total exports of subject 

merchandise to the United States and 

add the resultant rate to the producer’s 

calculated subsidy rate. If the producer 

exports subject merchandise to the 

United States through more than one 

trading company, this calculation would 

be performed for each trading company 

and added, or cumulated, to the 

producer’s calculated subsidy rate. This 

modification to the regulation provides 

consistency in the application of the 

trading company regulation and 

provides clarity to the public with 

respect to this practice.264

Commerce received a comment 

requesting that we modify the proposed 

language for this provision. The 

commenter suggested that in situations 

where the trading company is crossowned with the producer of the subject 

merchandise, the Secretary should use a 

trading company ratio of one to 

cumulate the subsidies provided to the 

trading company instead of pro-rating 

the subsidy rate calculated for the 

trading company by using the ratio of 

the producer’s total exports of subject 

merchandise to the United States sold 

through the trading company divided by 

the producer’s total exports of subject 

merchandise to the United States. The 

commenter stated that the use of a 

trading company ratio of one would be 

consistent with Commerce’s obligation 

pursuant to section 701(a) of the Act to 

establish an ad valorem rate equal to the 

countervailable subsidies conferred on 

the subject merchandise. 

Commerce has not adopted this 

suggestion because the use of a trading 

company ratio of one would, in fact, be 

inconsistent with Commerce’s 

obligation pursuant to section 701(a) of 

the Act to establish an ad valorem rate 

equal to the countervailable subsidies 

conferred on the manufacture, 

production, and export of subject 

merchandise because the full amount of 

the calculated subsidies conferred upon 

the trading company would be 

cumulated or added onto the subsidy 


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265See, e.g., 1998 CVD Regulations, at 63 FR 

65401. 

266See Final Affirmative Countervailing Duty 

Determination: Oil Country Tubular Goods from 

Korea, 49 FR 46776 (November 28, 1984). 

267See Certain Cut-to-Length Carbon Steel Plate 

from Mexico: Final Results of Administrative 

Review, 65 FR 13368 (March 13, 2000) (CTL Plate 

from Mexico 2000), and accompanying Issues and 

Decision Memorandum at 3–4; see also Certain Cutto-Length Carbon Steel Plate from Mexico: Final 

Results of Administrative Review, 66 FR 14549 

(March 13, 2001) (CTL Plate from Mexico 2001), and 

accompanying Issues and Decision Memorandum at 

5–6; and Certain Cut-to-Length Carbon Steel Plate 

from Mexico: Final Results of Administrative 

Review, 69 FR 1972 (January 13, 2004) (CTL Plate 

from Mexico 2004) (CTL Plate from Mexico 2004), 

and accompanying Issues and Decision 

Memorandum at 4. 

268See Certain Pasta from Turkey: Final Results 

of Countervailing Duty Administrative Review, 66 

Continued 

rate calculated for the producer/ 

respondent. 

For example, assume that a producer/ 

respondent exports all its subject 

merchandise to the United States 

through four cross-owned trading 

companies, one-fourth (25 percent) of its 

exports go through each of the four 

cross-owned trading companies, and 

each of the four trading companies has 

a calculated subsidy rate of two percent. 

Therefore, because each cross-owned 

trading company has a calculated 

subsidy rate of two percent, every 

export of subject merchandise to the 

United States by the producer/exporter 

through any of these trading companies 

would be subsidized by two percent at 

the trading company level. 

Under the methodology that 

Commerce is codifying under this 

regulation, the agency in determining 

the trading company subsidy rate that 

will be cumulated (added onto) the 

producer’s rate will be determined by 

pro-rating the subsidy rate calculated for 

the trading company by using the ratio 

of the producer’s total exports of subject 

merchandise to the United States sold 

through the trading company divided by 

the producer’s total exports of subject 

merchandise to the United States. Thus, 

in the example above, because 25 

percent of the producer’s exports of 

subject merchandise to the United 

States is exported through each of the 

four cross-owned trading companies, 

Commerce will calculate 0.25 of the two 

percent subsidy rate calculated for each 

of the four trading companies (2.00 × 

0.25 = 0.50). It will then take this prorated subsidy amount of 0.50 calculate 

for each of the four trading companies 

and add each of the amounts onto the 

producer’s CVD rate. Adding the 

calculated 0.50 subsidy rate four times 

to account for each of the trading 

companies will derive a total of two 

percent that will be cumulated (added) 

onto the producer’s calculated subsidy 

rate to reflect the additional subsidies 

conferred on the exports of subject 

merchandise to the United States at the 

trading company level. This calculation 

methodology that Commerce is 

codifying in this regulation accurately 

calculates the level of trading company 

subsidies. 

Under the proposal to use a ratio of 

one for this calculation, the full amount 

of the calculated subsidy rate for each 

of the four cross-owned trading 

companies would be cumulated and 

added onto the subsidy rate even though 

each of the four cross-owned trading 

company only exported 25 percent of 

the producer’s total exports of subject 

merchandise to the United States. 

Instead of the correct ratio used by 

Commerce under this regulation, which 

is 0.25 percent, the proposal by this 

commenter to use a ratio of one assumes 

that each of the four trading companies 

exported 100 percent of the producer’s 

exports of subject merchandise to the 

United States. This ratio would result in 

the full two percent subsidy rate 

calculated for each of the four trading 

companies to be separately added onto 

the producer’s subsidy rate. Thus, the 

calculation proposed by this commenter 

would be: two multiplied by one, plus 

two multiplied by one, plus two 

multiplied by one, plus two multiplied 

by one, equals eight, (2 × 1 + 2 × 1 + 

2 × 1 + 2 × 1 = 8). Therefore, under this 

party’s proposed methodology, 

Commerce would add an additional 

subsidy rate of eight percent onto the 

producer/respondent’s subsidy rate 

instead of the accurate two percent 

because each of the four cross-owned 

trading companies had an individual 

subsidy rate that was calculated at two 

percent. In other words, although the 

CVD rate determined for each entity was 

two percent, in the end under the 

proposed calculation, Commerce would 

have to cumulate those rates four times 

because there were four trading 

companies and would thus apply an 

additional eight percent subsidy rate 

onto the calculated producer’s subsidy 

instead of the accurately calculated two 

percent rate. Such a calculation is 

inconsistent with the directive of 

section 701(a) of the Act to establish an 

ad valorem rate equal to the 

countervailable subsidies conferred on 

the subject merchandise. Accordingly, 

Commerce has not adopted this 

proposal in the final rule. 

That commenter also claims that prorated ratios for attribution under this 

regulation are contrary to the wellestablished concept of control of 

corporate decisions between crossowned companies, as the trading 

company (exporter) and producer 

should be considered the same 

corporate entity. However, the comment 

appears to be based on a 

misinterpretation of the attribution rules 

set forth in § 351.525. The paragraph of 

that regulation addressing corporations 

with cross-ownership, § 351.525(b)(6), 

specifies specific criteria for the types of 

cross-owned companies that would fall 

within this cross-ownership subsection 

of our attribution regulation; and the 

attribution regulations are clear that not 

all cross-owned companies, even crossowned input producers, would fall 

within § 351.525(b)(6).265

More importantly, Commerce’s 

trading company regulation and 

methodology is not part of the crossowned attribution rules found at 

§ 351.525(b)(6) because the attribution 

of subsidies conferred upon trading 

companies is not based upon crossownership; instead, it is based upon the 

requirements set forth within section 

701(a) of the Act that Commerce must 

determine the amount of 

countervailable subsidies conferred 

upon the manufacture, the production, 

and the exportation of subject 

merchandise. Therefore, Commerce’s 

trading company regulation is derived 

from the statutory requirement to 

determine the amount of 

countervailable subsidies on the 

exportation of subject merchandise and 

was not derived from the concept of 

cross-ownership. Indeed, Commerce 

first implemented its trading company 

methodology in 1984,266 a full decade 

before contemplating the attribution of 

subsidies from affiliated or cross-owned 

companies. 

Ad Valorem Subsidy Rate in Countries 

With High Inflation 

With respect to § 351.525(d), 

Commerce has observed instances 

where the country whose imports were 

the subject of investigation or review 

was experiencing high inflation during 

either the POI or POR or had 

experienced levels of high inflation 

during the AUL period of the firm’s 

renewable physical assets when the 

government had provided large nonrecurring subsidies such as equity 

infusions to the respondent company. In 

those cases, Commerce addressed the 

high inflation rate to prevent distortions 

in the calculated ad valorem subsidy 

rate. However, the agency’s treatment of 

high inflation has been inconsistent. For 

example, in cases on CTL Plate from 

Mexico in 2000, 2001, and 2004,267

Turkish Pasta 268 in 2001, Steel Wire 


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FR 64398 (December 13, 2001), and accompanying 

Issues and Decision Memorandum at 3. 

269See Final Negative Countervailing Duty 

Determination: Carbon and Certain Alloy Steel Wire 

Rod from Turkey, 67 FR 55815 (August 30, 2002), 

and accompanying Issues and Decision 

Memorandum at 3 (Steel Wire Rod from Turkey). 

270See Final Affirmative Countervailing Duty 

Determination: Certain Cold-Rolled Carbon Steel 

Flat Products from Brazil, 67 FR 621128 (October 

3, 2002), and accompanying Issues and Decision 

Memorandum (Cold-Rolled Carbon Steel Flat 

Products from Brazil) at 7. 

271See CTL Plate from Mexico 2000 Issues and 

Decision Memorandum at 3–4; see also CTL Plate 

from Mexico 2001 Issues and Decision 

Memorandum at 5–6; and CTL Plate from Mexico 

2004 Issues and Decision Memorandum at 4. 

272See Honey from Argentina: Final Results of 

Countervailing Duty Administrative Review, 69 FR 

29518 (May 24, 2004) (Honey from Argentina), and 

accompanying Issues and Decision Memorandum 

(making no adjustments to account for high 

inflation). 

273See Biodiesel from the Republic of Argentina: 

Final Affirmative Countervailing Duty 

Determination, 82 FR 53477 (November 16, 2017) 

(Biodiesel from Argentina), and accompanying 

Issues and Decision Memorandum (making no 

adjustments to account for high inflation). 

274Neither Honey from Argentina nor Biodiesel 

from Argentina reference high inflation in 

Argentina, although the companion antidumping 

cases completed at the same time made adjustments 

to account for high inflation. See Honey from 

Argentina: Final Results of Antidumping Duty 

Administrative Review, 69 FR 30283 (May 27, 

2004), and accompanying Issues and Decision 

Memorandum at Comment 4; see also Biodiesel 

from Argentina: Final Determination of Sales at 

Less Than Fair Value and Final Affirmative 

Determination of Critical Circumstances, in Part, 83 

FR 8837 (March 1, 2018), and accompanying Issues 

and Decision Memorandum at Comment 6. 

275See Proposed Rule, 89 FR at 57319–57320. 

276See, e.g., Final Affirmative Countervailing 

Determination; Steel Wheels from Brazil, 54 FR 

15523, 15526 (April 18, 1989). 277See, e.g., Cold-Rolled Carbon Steel Flat 

Products from Brazil at 7. 278 Id. 279 Id. 

280 Id. 281 Id. 282See CTL Plate from Mexico 2000 Issues and 

Decision Memorandum at 3–4; see also CTL Plate 

from Mexico 2001 Issues and Decision 

Memorandum at 5–6; and CTL Plate from Mexico 

2004 Issues and Decision Memorandum at 4. 283See CTL Plate from Mexico 2000 Issues and 

Decision Memorandum at 3–4; see also CTL Plate 

from Mexico 2001 Issues and Decision 

Memorandum at 5–6; and CTL Plate from Mexico 

2004 Issues and Decision Memorandum at 4. 284See CTL Plate from Mexico 2000 Issues and 

Decision Memorandum at 3–4; see also CTL Plate 

from Mexico 2001 Issues and Decision 

Memorandum at 5–6; and CTL Plate from Mexico 

2004 Issues and Decision Memorandum at 4. 

Rod from Turkey 269 in 2002, ColdRolled Steel from Brazil 270 in 2002, and 

CTL Plate from Mexico Reviews 271 in 

2004, Commerce made adjustments to 

its subsidy calculations to account for 

periods of high inflation but did not do 

so in Honey from Argentina 272 in 2004 

and Biodiesel from Argentina 273 in 

2017.274 Therefore, to clarify its practice 

and to improve consistency as to when 

the agency will adjust its subsidy 

calculations for high inflation, 

Commerce proposed new paragraph 

§ 351.525(d) in the Proposed Rule to 

provide that Commerce would normally 

adjust its subsidy calculations for when 

inflation is higher than 25 percent per 

annum during the relevant period.275

Commerce received only comments in 

support of this provision, so is now 

codifying it in this final rule. Commerce 

has used a variety of methodologies to 

account for high inflation and 

§ 351.525(d) will allow for any of them 

to be used in the appropriate context. 

Consistent with Steel Wire Rod from 

Turkey, Commerce is defining ‘‘high 

inflation’’ as an annual inflation rate 

above 25 percent. 

In Steel Wire Rod from Turkey, the 

annual inflation rate in Turkey 

exceeded 25 percent during the POI. 

Therefore, to prevent any distortions in 

its calculated subsidy rate due to the 

high level of inflation, Commerce 

adopted a methodology to adjust for 

inflation during the POI. Adjusting the 

subsidy benefits and the sales figures for 

inflation neutralizes any potential 

distortion in Commerce’s subsidy 

calculations caused by high inflation 

and the timing of the receipt of the 

subsidy. To calculate the ad valorem 

subsidy rates for each program 

Commerce indexed the benefits received 

in each month and the sales made in 

each month to the last year of the POI/ 

POR to calculate inflation-adjusted 

values for benefits and the relevant sales 

denominators. In these high inflation 

calculation adjustments, Commerce 

used the changes in the Wholesale Price 

Index for Turkey as reported in the 

IMF’s International Financial Statistics. 

In other cases where a country was 

experiencing high inflation, the agency 

used government-published indexes 

that are used by companies to adjust 

their accounting records on a monthly 

basis in its analysis.276

Commerce has also investigated nonrecurring subsidies, normally the 

provision of equity, where the provision 

of the subsidy occurred during a period 

within the AUL in which the country 

experienced high inflation. The issue 

before Commerce in those cases was 

how to account for the periods of high 

inflation to accurately calculate the 

benefit. In Cold-Rolled Steel from Brazil, 

Commerce found that from 1984 

through 1994, Brazil experienced 

persistent high inflation.277 There were 

no long-term fixed-rate commercial 

loans made in domestic currencies 

during those years with interest rates 

that could be used as discount rates. 

Commerce determined that the most 

reasonable way to account for the high 

inflation in the Brazilian economy 

through 1994, given the lack of an 

appropriate Brazilian currency discount 

rate, was to convert values of the equity 

infusions provided in Brazilian 

currency into U.S. dollars.278 If the date 

of receipt of the equity infusion was 

provided, Commerce applied the 

exchange rate applicable on the day the 

subsidies were received or, if that date 

was unavailable, the average exchange 

rate in the month the subsidies were 

received.279 Then Commerce applied as 

the discount rate a contemporaneous 

long-term dollar lending rate in 

Brazil.280 Therefore, for Commerce’s 

discount rate, it used data for U.S. dollar 

loans in Brazil for long-term, nonguaranteed loans from private lenders, 

as published in the World Bank Debt 

Tables: External Finance for Developing 

Countries.281

In three reviews of CTL Plate from 

Mexico, Commerce determined, based 

on information from the Government of 

Mexico (GOM), that Mexico experienced 

significant inflation from 1983 through 

1988 and significant, intermittent 

inflation during the period 1991 through 

1997.282 In accordance with past 

practice, because Commerce found 

significant inflation in Mexico and 

because the respondent AHMSA 

adjusted for inflation in its financial 

statements, Commerce made 

adjustments, where necessary, in each 

of those reviews to account for inflation 

in the benefit calculations.283 Because 

Mexico experienced significant inflation 

during only a portion of the 15-year 

allocation period, had Commerce either 

indexed for the entire period or 

converted the non-recurring benefits 

into U.S. dollars at the time of receipt 

(i.e., dollarization) for use in 

Commerce’s calculations, such actions 

would have inflated the benefit from 

these infusions by adjusting for 

inflationary as well as non-inflationary 

periods. Thus, in the CTL Plate from 

Mexico 284 reviews, Commerce used a 

loan-based methodology instead to 

reflect the effects of intermittent high 

inflation. 

The methodology Commerce used in 

the CTL Plate from Mexico reviews 

assumed that, in lieu of a government 

equity infusion/grant, a company would 

have had to take out a 15-year loan that 

was rolled over each year at the 

prevailing nominal interest rate. The 

benefit in each year of the 15-year 

period equaled the principal plus 

interest payments associated with the 

loan at the nominal interest rate 

prevailing in that year. Because 

Commerce assumed that an equity 

infusion/grant given was equivalent to a 


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285British Steel plc v. United States, 127 F.3d 

1471 (Fed. Cir. 1997) (British Steel III). 

286See Drawn Stainless Steel Sinks from the 

People’s Republic of China: Final Results of the 

Expedited First Sunset Review of the Countervailing 

Duty Order, 83 FR 35212 (July 25, 2018), and 

accompanying Issues and Decision Memorandum at 

‘‘Likelihood of Continuation or Recurrence of a 

Countervailable Subsidy’’ (‘‘[I]n order to determine 

whether a program has been terminated, we will 

consider the legal method by which the government 

eliminated the program and whether the 

government is likely to reinstate the program. 

Commerce normally expects a program to be 

terminated by means of the same legal mechanism 

used to institute it. Where a subsidy is not bestowed 

pursuant to a statute, regulation or decree, 

Commerce may find no likelihood of continued or 

recurring subsidization if the subsidy in question 

was a one-time, company-specific occurrence that 

was not part of a broader government program.’’). 

287See Proposed Rule, 89 FR at 5732–57322. 

288See SAA at 258. 

289 Id. (‘‘While it is the Administration’s intent 

that Commerce retain the discretion to determine 

whether, and to what extent, the privatization of a 

government-owned firm eliminates any previously 

conferred countervailable subsidies, Commerce 

must exercise this discretion carefully through its 

consideration of the facts of each case and its 

determination of the appropriate methodology to be 

applied.’’). 

290See Notice of Final Modification of Agency 

Practice Under Section 123 of the Uruguay Round 

Agreements Act, 68 FR 37125 (June 23, 2003) (CIO 

Modification Notice). 

291See Certain Pasta from Italy: Final Results of 

the Seventh Countervailing Duty Administrative 

Review, 69 FR 70657 (December 7, 2004) (Pasta 

from Italy), and accompanying Issues and Decision 

Memorandum at 2–5. 

292See § 351.524. 

15-year loan at the current rate in the 

first year, a 14-year loan at current rates 

in the second year and so on, the benefit 

after the 15-year period would be zero, 

just as with Commerce’s grant 

amortization methodology. Because 

nominal interest rates were used, the 

effects of inflation were already 

incorporated into the benefit. The use of 

this methodology had been upheld by 

the Federal Circuit in British Steel III.285

Commerce used the loan-based 

methodology in the CTL Plate from 

Mexico reviews, described above, for all 

non-recurring, peso-denominated grants 

received since 1987. 

It is Commerce’s intent that 

§ 351.525(d) will provide enhanced 

consistency in the treatment of 

economies experiencing high inflation. 

To implement this methodology for 

countries experiencing high inflation 

during the POI or POR, Commerce 

normally will follow the methodology 

used in Steel Wire Rod from Turkey. For 

cases where the high inflation occurred 

during the AUL period at the time of a 

provision of equity or other 

nonrecurring subsidies, Commerce may 

rely on the methodology employed in 

CTL Plate from Mexico or Cold-Rolled 

Steel from Brazil. 

24. Commerce has Made Certain 

Revisions to Proposed § 351.526, the 

Regulation Covering Subsidy 

Extinguishment From Changes in 

Ownership 

Under current § 351.526, Commerce 

may consider a program-wide change to 

lower the cash deposit rate from the 

subsidy rate that was calculated for the 

firm during the POI or POR in 

establishing an estimated countervailing 

duty cash deposit rate if certain 

conditions are met. While program-wide 

changes that result in the adjustment of 

the cash deposit rate are extremely rare, 

Commerce has eliminated the programwide change regulation because it treats 

differently the interests of the interested 

parties by providing an avenue only for 

respondent-interested parties to lower 

the cash deposit rate but no comparable 

avenue for the U.S. industry, a situation 

that Commerce has concluded is 

fundamentally unfair and at odds with 

the neutral application of the 

countervailing duty law. Moreover, 

nothing in the Act requires the practice 

of recognizing a program-wide change 

for this purpose. Indeed, section 

705(c)(1)(B)(ii) of the Act indicates that 

the cash deposit rate shall be based on 

the estimated countervailable subsidy 

rate and makes no reference to 

exceptions for changes of any sort to 

such subsidy programs. 

The only comments Commerce 

received on this change supported the 

elimination of the program-wide change 

regulation. Furthermore, in deleting the 

program-wide changes regulation, 

Commerce is not seeking to change its 

practice with respect to determining 

when an investigated program is 

terminated. Commerce will maintain its 

long-standing practice to find a program 

to be terminated only if the termination 

is effectuated by an official act, such as 

the enactment of a statute, regulation, or 

decree, or the termination date of the 

program is explicitly set forth in the 

statute, regulation, or decree that 

established the program.286

Moreover, Commerce will continue its 

practice of investigating terminated 

programs that potentially provided a 

benefit during the POI or POR. For 

example, if Commerce was reviewing a 

company during a POR with a calendar 

year of 2023, but during the underlying 

CVD investigation Commerce found that 

a program providing grants for the 

purchase of capital equipment was 

terminated in 2016, Commerce might 

still include this terminated program in 

the 2023 administrative review if the 

AUL, and therefore the benefit stream of 

the grant, lasted to or beyond the review 

period. Depending on the AUL, under 

this practice Commerce would continue 

to include that program in all future 

administrative reviews until the nonrecurring benefit was fully allocated. 

In the place of the removed § 351.526, 

Commerce proposed adding a new 

regulation that would address subsidy 

extinguishment from changes in 

ownership.287 After considering 

comments on this regulation, Commerce 

has determined to finalize it with some 

revisions. Section 771(5)(f) of the Act 

provides that a change in ownership of 

all or part of a foreign enterprise or the 

productive assets of a foreign enterprise 

does not, by itself, require a 

determination that a past 

countervailable subsidy received by the 

enterprise no longer continues to be 

countervailable, even if the change in 

ownership is accomplished through an 

arm’s length transaction. The SAA 

explains that ‘‘the term ‘arm’s-length 

transaction’ means a transaction 

negotiated between unrelated parties, 

each acting in its own interest, or 

between related parties such that the 

terms of the transaction are those that 

would exist if the transaction had been 

negotiated between unrelated 

parties.’’ 288 In addition, the SAA states 

that ‘‘[s]ection 771(5)(F) is being added 

to clarify that the sale of a firm at arm’s 

length does not automatically, and in all 

cases, extinguish any prior subsidies 

conferred’’ because the ‘‘issue of the 

privatization of a state-owned firm can 

be extremely complex and 

multifaceted.’’ 289

Consistent with the Act and SAA, and 

against a broader background of 

domestic litigation and WTO dispute 

settlement findings, in 2003 Commerce 

published a modification to its changein-ownership methodology (CIO 

Modification Notice) for sales by a 

government to private buyers (i.e., 

privatizations).290 In a subsequent CVD 

proceeding in 2004 involving pasta from 

Italy, Commerce extended that 

methodology to address sales by a 

private seller to a private buyer (privateto-private sales).291 The agency has 

implemented the methodology set forth 

in Pasta From Italy in numerous CVD 

proceedings since. 

Commerce is now codifying that 

methodology in § 351.526(a), which 

establishes the presumption that nonrecurring subsidies continue to benefit a 

recipient in full over an allocation 

period determined consistent with 

Commerce’s regulations,292

notwithstanding an intervening change 

in ownership. However, under 

§ 351.526(b), the recipient is able to 

rebut the presumption of the existence 


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of the subsidy by demonstrating with 

sufficient evidence that a change in 

ownership occurred in which the seller 

sold all (or substantially all) of its 

company assets, retained no control of 

the company and its assets, and, in the 

case of government-to-private sales, that 

the sale was either at an arm’s length 

transaction for fair market value, or, in 

the case of a private-to-private sale, was 

an arm’s-length transaction and no one 

demonstrated that the sale was not for 

fair market value. 

Section 351.526(b)(2) and (3) set forth 

the factors Commerce considers in 

determining whether the transactions at 

issue were conducted at arm’s-length 

and for fair market value. In 

determining if the transactions were for 

fair market value, proposed 

§ 351.526(b)(3)(ii) sets forth a nonexhaustive list of considerations 

including (1) whether the seller 

performed or obtained an objective 

analysis in determining the appropriate 

sales price and implemented 

recommendations pursuant to an 

objective analysis for maximizing its 

return on the sale; (2) whether the seller 

imposed restrictions on foreign 

purchasers or purchasers from other 

industries, overly burdensome or 

unreasonable bidder qualification 

requirements, or any other restrictions 

that artificially suppressed the demand 

for or the purchase price of the 

company; (3) whether the seller 

accepted the highest bid reflecting the 

full amount that the company or its 

assets were actually worth under the 

prevailing market conditions and 

whether the final purchase price was 

paid through monetary or close 

equivalent compensation; and (4) 

whether there were price discounts or 

other inducements in exchange for 

promises of additional future 

investment that private, commercial 

sellers would not normally seek and, if 

so, whether such committed investment 

requirements were a barrier to entry or 

in any way distorted the value that 

bidders were willing to pay. 

Section 351.526(b)(4) states that 

Commerce will not find the 

presumption of continued benefits 

during the POR to be rebutted if an 

interested party has demonstrated that, 

at the time of the change in ownership, 

the broader market conditions necessary 

for the transaction price to accurately 

reflect the subsidy benefit were not 

present or were severely distorted by 

government action or inaction such that 

the transaction price was meaningfully 

different from what it would have been 

absent the distortive government action 

or inaction. Section 351.526(b)(i) and 

(ii) provide that Commerce may 

consider certain fundamental conditions 

and legal and fiscal incentives provided 

by the government in reaching this 

determination. 

Finally, § 351.526(c) addresses the 

situation in which an interested party 

has rebutted the presumption of 

continued benefits during the POR. In 

that case, the full amount of pretransaction subsidy benefits, including 

the benefits of any concurrent subsidy 

meeting certain criteria, would be found 

to be extinguished and therefore not 

countervailable. Under § 351.526(c)(2), 

concurrent subsidies would be defined 

as ‘‘subsidies given to facilitate, 

encourage, or that are otherwise 

bestowed concurrent with a change in 

ownership.’’ The same provision 

provides three criteria that Commerce 

normally will consider in determining if 

the value of a concurrent subsidy has 

been fully reflected in the fair market 

value prices of an arm’s-length change 

in ownership and is therefore fully 

extinguished. 

Commerce received multiple 

comments on this regulation, including 

those that agreed with codifying 

Commerce’s existing practice in this 

area in full, as proposed. One 

commenter noted that establishing a 

rebuttable presumption that nonrecurring subsidies continue to provide 

a benefit over the allocation period 

notwithstanding changes in ownership 

through government-to-private or 

private-to-private sales is an effective 

way to address the issue, since 

respondents are in the best position to 

provide the information needed to show 

whether or not recipients continue to 

benefit from a subsidy after a change in 

ownership. 

Another commenter suggested that 

Commerce should clarify certain 

procedural requirements for parties 

seeking to challenge Commerce’s 

baseline presumption. Noting concerns 

regarding respondents’ questionnaire 

responses, the commenter suggested 

that Commerce should clarify that the 

agency will not consider 

extinguishment arguments in the 

absence of timely disclosure in the 

initial questionnaire of a relevant 

change in ownership and an intent to 

challenge the baseline presumption, 

followed by complete responses to the 

change-in-ownership appendix from 

both the respondent and the foreign 

government. The commenter stated that 

this denial of consideration of 

extinguishment arguments should apply 

in that situation whether or not 

Commerce has found any non-recurring 

subsidies in previous segments of the 

proceeding. 

This commenter also suggested that to 

address situations in which the foreign 

government undertakes a program of 

debt forgiveness in order to make 

otherwise non-viable assets viable and 

thereby enable the acquisition and 

continued operation of production 

capacity that would otherwise have 

been forced to exit the market, 

Commerce should add a fourth 

enumerated incentive, as 

§ 351.526(b)(4)(ii)(D), for ‘‘the 

forgiveness or modification of debts or 

other liabilities by government-owned 

or directed financial institutions.’’ 

A third commenter stated that 

Commerce should modify 

§ 351.526(c)(1) to clarify that finding 

that a program has been extinguished 

does not affect whether a program is 

countervailable prior to the change in 

ownership and therefore the program 

should still be countervailed and 

attributed to sales made prior to the 

change in ownership. 

For concurrent subsidies, another 

commenter stated that Commerce 

should modify the identified criteria 

regarding extinguishment to address 

subsidies bestowed prior to initiation of 

the bidding process instead of prior to 

a sale because basing a determination 

for concurrent subsidies on whether the 

subsidy was bestowed prior to sale 

would allow parties to manipulate the 

analysis based on when the sale 

occurred. 

A fifth commenter stated that the 

rebuttal presumption, articulated in 

§ 351.526(a)(1) that Commerce will 

presume that non-recurring subsidies 

continue to benefit a recipient in full 

over an allocation period . . . 

notwithstanding an intervening change 

in ownership—is not required by Act 

and should be more specifically 

restricted by distinguishing between 

transactions involving a government-toprivate sale or a private-to-private sale. 

That commenter stated that private-toprivate sales do not require the same 

scrutiny, since those transactions are 

more than likely to be at arm’s length. 

Thus, when a party has demonstrated 

that it has satisfied § 351.526(b)(1), by 

showing that (i) the seller retains no 

control of the company or assets, and 

(ii) the sale was at arm’s length, the 

commenter stated that Commerce’s 

inquiry should end. According to the 

commenter, this approach is consistent 

with § 351.526(b)(1)(ii), which states 

that the burden should be on the 

petitioning party with sufficient 

evidence that the sale was not for fair 

market value. The commenter stated 

that this approach should be reflected in 

Commerce’s ‘‘Change-in-ownership 


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293See CIO Modification Notice, 68 FR at 37125. 

appendix’’ and any other practice that 

addresses change in ownership. 

Finally, a sixth commenter expressed 

concerns that the non-exhaustive factors 

Commerce may consider in analyzing 

market distortion’s effect on the 

presumption of continued benefits 

articulated in § 351.526(b)(4), are overly 

broad and ill-defined. That commenter 

suggested that Commerce should 

promulgate a more detailed standard to 

define the level of ‘‘severely distorted’’ 

and what constitutes a ‘‘properly 

functioning market.’’ Further, that 

commenter expressed concerns about 

any arbitrary interpretation of distortion 

from country to country based on each 

country’s regulatory environment. 

Response 

As an initial matter, some of the 

comments Commerce received on this 

regulation were similar to the comments 

Commerce received when promulgating 

its CIO Modification Notice, and 

therefore Commerce refers the public to 

that notice, as well, for an in-depth 

discussion of this methodology.293

With respect to the specific comments 

on the regulation as proposed, 

Commerce agrees in part with the 

comment that the agency should clarify 

that it will not consider extinguishment 

arguments in the absence of timely 

disclosure in the initial questionnaire of 

a relevant change in ownership and an 

intent to challenge the baseline 

presumption followed by complete 

responses to the change-in-ownership 

appendix from both the respondent and 

the foreign government and should 

apply this denial of consideration of 

extinguishment arguments whether or 

not Commerce has found any nonrecurring subsidies in previous 

segments of the proceeding. 

Specifically, Commerce agrees with the 

general principle that it is important 

that other interested parties in a case 

have adequate time to evaluate the 

information and claims in such a 

rebuttal to defend their interests, 

including demonstrating under 

§ 351.526(b)(5) that certain market 

distortions exist. Accordingly, 

Commerce has added a provision to 

§ 351.526(b)(4) that makes clear that the 

agency will normally require that such 

rebuttals be included in a respondent’s 

initial questionnaire response. 

Commerce emphasizes, however, that 

there may be instances where such a 

requirement is not appropriate, in 

recognition of the fact that the provision 

of complete information regarding 

complex changes in ownership, 

including a full response to the changein-ownership appendix that forms part 

of Commerce’s current standard 

questionnaire, can be a very resourceintensive exercise. Consider the 

hypothetical example of an 

investigation where none of the subsidy 

programs under investigation at the time 

of the initial questionnaire responses 

were non-recurring subsidies provided 

prior to a change in ownership and, 

therefore, a change in ownership during 

the AUL would normally be irrelevant 

to Commerce’s analysis of subsidy 

benefits during the POI. If Commerce 

were to subsequently initiate on and 

include new subsidy allegations 

involving non-recurring subsidies in 

that investigation after the deadline for 

the respondent’s initial questionnaire 

response, it would normally be 

appropriate to allow the respondent 

additional time to provide its rebuttal in 

light of the new potential relevance of 

a change in ownership. Similar 

situations may arise involving 

administrative reviews. Under those and 

similar circumstances, Commerce 

would consider what alternative 

deadlines for such a rebuttal are 

appropriate with a view to ensuring that 

all interested parties have an 

opportunity to present relevant 

evidence and fully defend their 

interests. Finally, to accommodate the 

addition of this new deadline to the 

regulations at § 351.526(b)(4), we have 

moved the market distortions that 

appeared at § 351.526(b)(4) in the 

proposed regulations to a new 

paragraph at § 351.526(b)(5). 

Commerce disagrees that adding 

§ 351.526(b)(4)(ii) to explicitly address 

situations in which the government 

undertakes a program of debt 

forgiveness in order to make otherwise 

non-viable assets viable and thereby 

enables the acquisition and continued 

operation of production capacity that 

would otherwise have been forced to 

exit the market is necessary. First, the 

regulation already makes clear that the 

factors noted in § 351.526(b)(4)(i) and 

(ii) are not exhaustive, and, as such, 

parties are free to include other 

considerations in their arguments that 

they can demonstrate are relevant under 

this provision. Second, the relevance of 

the types of debt forgiveness to which 

this commenter refers may be more 

appropriately considered as a 

concurrent subsidy under 

§ 351.526(c)(2) depending on the 

particular facts and circumstances of the 

change in ownership.6 Finally, for over 

20 years Commerce has applied the 

basic methodology set forth in the 

Proposed Rule, and that experience has 

not suggested that commenter’s 

expressed concerns are a significant or 

recurring problem. Accordingly, 

Commerce has determined that such a 

change to the regulation is neither 

necessary nor appropriate. 

With respect to the comment that 

Commerce should modify proposed 

§ 351.526(c)(1) to clarify that a finding 

that a program has been extinguished 

does not affect whether a program is 

countervailable prior to the change in 

ownership, Commerce has concluded 

that the regulation is sufficiently clear 

in this regard. However, for the sake of 

additional certainty, Commerce notes 

here that, if a subsidy program was 

countervailable prior to the change in 

ownership, that benefit (i.e., the benefit 

generated prior to the change in 

ownership) would still be countervailed 

and attributable to sales made prior to 

the change in ownership under the 

language of § 351.526(c)(1). 

One commenter raised a concern that 

basing a determination on whether a 

concurrent subsidy was bestowed ‘‘prior 

to sale’’ would allow parties to 

manipulate this analysis based on its 

consideration of when the sale occurred 

and that this could also permit the 

provision of a subsidy after the 

completion of the bidding process but 

before the finalized sale has occurred. 

Commerce disagrees and concludes that 

the language of § 351.526(c)(2) is 

sufficiently flexible and robust to 

address the scenarios of concern that 

this commenter raises. In particular, the 

provisions in § 351.526(c)(2)(i) and (iii) 

ensure that all concurrent subsidies are 

reflected in the transaction price. 

Moreover, Commerce’s experience does 

not suggest that the commenter’s 

concern here is a significant or recurring 

problem. 

Moreover, Commerce disagrees with 

the commenter that stated that privateto-private sales should not require the 

same scrutiny as government-to-private 

sales, since the former transactions are 

more than likely to be at arm’s length. 

According to this commenter, when a 

party has demonstrated that it has 

satisfied § 351.526(b)(1) by showing that 

(i) the seller retains no control of the 

company or assets, and (ii) the sale was 

at arm’s length, Commerce’s inquiry 

should end, or at least that the burden 

should be on the petitioning party to 

provide sufficient evidence that the sale 

was not for fair market value. In 

practice, according to this commenter, 

this should mean that the respondent 

company or government should not be 

required to provide information which 

speaks to whether a private-to-private 

transaction was at fair market value. 

Commerce does not agree with the 

commenter’s conclusions in this regard. 


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294 Id., 68 FR at 37129. 

295 Id. at 37135. 

296 Id. 

297 Id. 

298 Id. 

299 Id. 

300See E.O. 12866, ‘‘Regulatory Planning and 

Review,’’ 58 FR 51735 (1993); and E.O. 14094, 

‘‘Modernizing Regulatory Review,’’ 88 FR 21879 

(2023). 

301See Congressional Review Act, 5 U.S.C. 801 

(1996). 

As Commerce explained in response to 

similar comments in the CIO 

Modification Notice,294 in the normal 

course of an investigation or review, 

Commerce will usually issue a 

questionnaire that solicits basic 

information about a change in 

ownership, as well as the broader 

market conditions in which that 

transaction took place. In instances 

where a party (normally the respondent 

company) wishes to rebut the baseline 

presumption that non-recurring 

subsidies continue to benefit a recipient 

in full over an allocation period in light 

of an intervening change in ownership, 

that party will need to provide a 

response to Commerce’s change in 

ownership questionnaire. Accordingly, 

as much of the necessary information to 

analyze such a fact-intensive transaction 

(regardless of whether it is governmentto-private or a private-to-private) is in 

the possession of the respondent 

company and/or government, that 

company or government will necessarily 

bear the burden of providing the 

necessary information, as is the case 

with most factual questions that 

Commerce must consider in the course 

of a countervailing duty proceeding. 

Commerce’s methodology does make 

an importance distinction between 

government-to-private sales and privateto-private sales, however, in that for the 

latter type of transaction, where a party 

has demonstrated the seller sold its 

ownership of all or substantially all of 

a company or its assets, retaining no 

control of the company or its assets, and 

the sale was an arm’s-length transaction, 

the onus is on the petitioner to 

demonstrate based on the information 

provided by the respondent and 

government, in addition to information 

the petitioner might otherwise place on 

the record, that the transaction was not 

for fair market value. 

Commerce also disagrees that the 

standards articulated in § 351.526(b)(4), 

which includes the non-exhaustive 

factors Commerce may consider in 

analyzing market distortion’s effect on 

the presumption of continued benefits, 

are overly broad and ill-defined and 

require a more detailed standard to 

define the level of ‘‘severely distorted’’ 

and what constitutes a ‘‘properly 

functioning market.’’ Commerce 

responded to similar concerns 20 years 

ago in the CIO Modification Notice, 

stating that ‘‘[w]ith regard to the 

comment that the facts we have listed as 

potentially relevant are too broad, we 

disagree,’’ because Commerce believed 

that it was ‘‘important to leave room for 

flexibility in this analysis and not to 

circumscribe artificially or prematurely 

the nature of the factors that could be 

found to distort a market.’’ 295

Commerce explained that ‘‘such 

distortions can be specific to the unique 

circumstances of particular countries or 

markets, and it is especially difficult for 

the Department to foresee at this time all 

of the factors that may be relevant to 

this analysis, particularly without 

obtaining more experience in this 

area.’’ 296 Therefore, Commerce stated 

that it intended ‘‘that this analysis will 

be conducted on a case-by-case basis, 

and that we will be able to refine such 

analysis over time building on our 

accumulated experience.’’ 297

Commerce acknowledged in the CIO 

Modification Notice that there are no 

perfect markets, and therefore 

Commerce must, on a case-by-case 

basis, focus only on distortions that 

might make a meaningful impact. 

Commerce explained that it recognized 

‘‘that perfect markets seldom exist 

outside of economics textbooks,’’ and 

that it did not ‘‘intend to ‘fail’ a 

privatization merely because the 

broader environment in which it took 

place did not perfectly conform to some 

market paradigm.’’ 298 Instead, it 

explained that it would ‘‘be balanced 

and realistic’’ in its analysis, ‘‘focusing 

on those severe distortions that would 

have a meaningful impact on the 

transaction in question.’’ 299

Based on the 20 years of experience 

which Commerce has had in applying 

the factors set forth in the CIO 

Modification Notice, including the 

factors that can inform a market 

distortions analysis, Commerce finds 

that the analysis and stated expectations 

it set forth then remain sound and still 

applicable today. While the number of 

proceedings in which parties have 

attempted to make a market distortions 

claim during the intervening period 

have been relatively few, they have 

shown that the level of detail and 

particularity characterizing Commerce’s 

list of broader market distortion factors 

continue to strike the appropriate 

balance between being too narrow (such 

that the factors are largely in applicable 

to the circumstances in a given country 

across the more than 20 countries for 

which Commerce currently maintains a 

CVD order) and too broad (such that 

parties are confused about the type of 

evidence that might be relevant in a 

given case). Accordingly, Commerce has 

concluded no further narrowing or 

broadening of the criteria in the 

regulation is necessary or appropriate at 

this time. 

25. The Elimination of § 351.502(e) is 

Not Economically Significant or Major 

One commenter to Commerce’s 

Proposed Rule stated that while the 

proposed regulations were deemed 

significant for the purposes of E.O. 

12866, the elimination of § 351.502(e) 

should also be considered economically 

significant because it is likely to result 

in ‘‘an annual effect on the economy of 

$200 million or more (adjusted every 3 

years by the Administrator of [the Office 

of Information and Regulatory Affairs 

(OIRA)] for changes in gross domestic 

product),’’ the standard established in 

Executive Orders 12866 and 14094.300

In addition, that commenter also 

expressed a concern that Commerce did 

not address whether it regards the 

elimination of § 351.502(e) as major for 

purposes of the Congressional Review 

Act (CRA),301 and asserted that it would 

be major because many farms and 

businesses could be impacted in 

substantial and predictable ways. 

Response 

Commerce does not determine 

whether rules are significant under E.O. 

12866 or major for purposes of the CRA. 

Such decisions are made by the Office 

of Management and Budget’s (OMB) 

OIRA. 

OIRA determined that the Proposed 

Rule was significant but did not 

determine that it was either 

economically significant or major. 

Because OIRA determined that the 

Proposed Rule was significant, it went 

through interagency review pursuant to 

E.O. 12866, but because it was not 

determined to be economically 

significant no regulatory impact analysis 

was required and OMB’s Circular A–4 

was not implicated. 

To date, no party has provided any 

information to Commerce that would 

call into question these determinations. 

In particular, Commerce has been 

provided with no data that suggests that 

the elimination of § 351.502(e) would 

cause any significant economic impact 

to American farmers and small business. 

This comports with OIRA’s 

determinations in two of our recent 

regulatory packages which also 

addressed the calculation and 

application of AD and CVD duties to 

producers, exporters, and importers; the 


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302Regulations To Improve Administration and 

Enforcement of Antidumping and Countervailing 

Duty Laws, 85 FR 49472, 49492–49493 (2020) 

(Scope and Circumvention Regulations). 

303See RISE Final Rule, 89 at 29870–71. 

304See Regulatory Flexibility Act, 5 U.S.C 601 

(1980). 

same entities impacted by the Proposed 

Rule. In the Scope and Circumvention 

Regulations 302 and more recently in the 

RISE Regulations,303 OIRA determined 

that both regulatory packages were 

significant but did not determine that 

they were economically significant or 

major. 

25. Commerce Was Not Required to do 

an Analysis of Indirect Costs Under the 

RFA With Respect to the Elimination of 

§ 351.502(e) 

A commenter expressed concerns that 

Commerce did not engage in a more 

thorough Regulatory Flexibility Act 

(RFA) analysis, particularly involving 

indirect costs to small business entities, 

in its removal of § 351.502(e).304 The 

commenter asserted that Commerce 

must quantify and consider indirect 

impacts on American small businesses 

and that the removal of the provision 

was not procedural in nature and would 

not lead to ‘‘streamlined procedures,’’ as 

asserted by Commerce, because certain 

procedures involving agricultural 

subsidies might now become more 

complex as a result of the proposed 

change. 

Response 

The RFA does not require an analysis 

of indirect costs. Commerce has 

certified to the Small Business 

Administration that the proposed 

regulations will not have a significant 

economic impact on a substantial 

number of small entities. As discussed 

above, the removal of the agricultural 

exception does not present a policy 

change with respect to the analysis of 

specificity for foreign government 

subsidy programs that are provided to 

the foreign agricultural sector. 

Commerce’s treatment and the standard 

for both de jure and de facto specificity 

for foreign government subsidy 

programs within the agricultural sector 

remain identical before and after the 

removal of this provision. Thus, the 

specificity analysis of agriculturalrelated subsidy allegations will continue 

to be assessed within the statutory 

standard enacted under section 

771(5)(D) of the Act and the change is 

procedural in nature. Even if the change 

were not technically procedural, in 

practice Commerce’s analysis of 

agricultural subsidies has not changed 

since the regulation was issued, and 

therefore removing the provision would 

have no impact on any entity, large or 

small. 

Summary of Changes From the 

Proposed to Final Rule 

Commerce has made the following 

changes to the proposed regulatory text: 

Commerce revised § 351.104(a)(7) 

with two changes. First, Commerce 

replaced ‘‘Commerce’’ with ‘‘the 

Department.’’ Second, in response to 

comments regarding consistency within 

the regulation, Commerce is modifying 

the language to reflect that preliminary 

and final issues and decision 

memoranda issued in investigations and 

administrative reviews before the 

implementation of ACCESS may be 

cited in full in submissions before 

Commerce without placing the 

memoranda on the record. 

Commerce removed references to 

examples of units to which a cash 

deposit rate or assessment rate may be 

applied under §§ 351.107(c)(1) and 

351.212(b)(ii). 

Commerce made several revisions to 

proposed 351.108. First, Commerce 

revised the title of § 351.108 to clarify 

that the section applies to entities 

exporting merchandise from nonmarket 

economies in antidumping proceedings. 

Second, Commerce made substantive 

changes to § 351.108(a) by adding 

paragraphs (a)(1), (2), and (3). The 

regulation at § 351.108(a)(1) defines the 

nonmarket economy entity, paragraph 

(a)(2) defines the nonmarket economy 

entity rate, and paragraph (a)(3) details 

that if Commerce determines that an 

entity in a third country is owned or 

controlled by the non-market economy 

government and that entity exports 

subject merchandise from the 

nonmarket economy (directly or 

indirectly) to the United States, 

Commerce may determine to assign that 

entity the nonmarket economy entity 

rate. Third, Commerce added 

§ 351.108(b)(2) to detail Commerce’s 

analysis when it determines that a 

nonmarket economy government 

controls an entity located in a third 

country that exports subject 

merchandise from the nonmarket 

economy to the United States. Fourth, 

Commerce clarified under § 351.108(c) 

that it will rely on information provided 

in a separate rate application or 

certification when determining whether 

an entity is wholly owned by foreign 

entities incorporated and headquartered 

in a market economy. Fifth, Commerce 

added language to § 351.108(d) to clarify 

that if no separate rate or certification is 

submitted timely, Commerce may apply 

the nonmarket economy entity rate to an 

entity’s merchandise subject to the AD 

order. Commerce also made several 

smaller revisions to the language of 

proposed § 351.108 to further clarify the 

terminology of the regulations. Lastly, as 

a result of these revisions, Commerce 

renumbered the paragraphs of 

§ 351.108(b)(1). 

Commerce added language to 

proposed § 351.109(c)(v) to further 

clarify that it may select an additional 

respondent for examination if such a 

selection will not inhibit or impede the 

timely completion of that segment of the 

proceeding. 

Commerce modified proposed 

§ 351.301(b)(2) to further clarify that the 

submitter must provide a written 

explanation describing how the 

provided factual information rebuts, 

clarifies, or corrects the factual 

information on the record. 

Commerce also added language to 

proposed § 351.301(c)(3) to clarify that 

in investigations, administrative 

reviews, new shipper reviews and 

changed circumstances reviews, 

Commerce may issue a schedule with 

alternative deadlines if it determines 

that parties do not have sufficient time 

to submit factual information on the 

record. 

Commerce made smaller revisions to 

§ 351.308(i)(2) to clarify that the 

Secretary will normally apply the 

highest calculated above de-minimis 

countervailing duty rate if it finds that 

the application of an adverse inference 

is warranted. 

Commerce added paragraph (f)(4) to 

proposed § 351.401. The regulation at 

§ 351.401(f)(4) provides exceptions to 

Commerce’s treatment of affiliated 

parties as a single entity in AD 

proceedings. Commerce will normally 

not treat the parties as a single entity if 

the affiliated parties in question do not 

produce merchandise similar or 

identical to subject merchandise and are 

input suppliers, sellers of the foreign 

like product in the home market, or 

affiliated entities for which Commerce 

determines that treating those parties as 

a single entity would be otherwise 

inappropriate based on record 

information. 

Commerce modified proposed 

§ 351.404(g)(2) to clarify that the 

paragraph is applicable when the 

special rule for certain multinational 

corporations is applied. 

Commerce modified proposed 

§ 351.405(b)(3) to clarify that Commerce 

considers the criteria under paragraphs 

(b)(3)(i) through (iv) when selecting 

sources for selling, general and 

administrative expenses as well profit in 

calculating construct value. 

Commerce revised proposed 

§ 351.408(b). First, Commerce created a 

new paragraph (b)(1)(i) to clarify that it 


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will measure economic comparability to 

determine whether countries are at a 

level of economic development 

comparable to the nonmarket economy 

at issue by placing a primary emphasis 

on per capita GDP. Second, Commerce 

added paragraph (b)(1)(ii) to provide 

that, where such additional analysis is 

needed, Commerce will consider 

additional factors in determining 

whether countries are at a level of 

economic development comparable to 

the nonmarket economy at issue. 

Commerce will provide its reasonings 

for relying on additional factors, where 

such analysis is needed. Third, 

Commerce also created a new paragraph 

(b)(1)(iii) to notify parties that an annual 

listing of comparable economies will be 

available on Commerce’s website. 

Fourth, Commerce further clarified at 

§ 351.408(b)(2) that it will consider 

whether countries are a significant 

producer of merchandise comparable to 

subject merchandise consistent with the 

statutory directive under sections 

773(c)(2)(A) and 773(c)(4)(B) of the Act. 

Lastly, Commerce included new 

language under § 351.408(b)(3) to 

explain that Commerce will consider 

the totality of the information on the 

record in selecting a surrogate country 

if more than one economically 

comparable country produces 

comparable merchandise. That new 

paragraph provides that the additional 

criteria for consideration includes the 

availability, accessibility, and quality of 

data from those countries and the 

similarity of products manufactured in 

the potential surrogate countries in 

comparison to the subject merchandise. 

Commerce revised proposed 

§ 351.511(a)(2). Commerce removed 

references to competitively run 

government auctions from 

§ 351.511(a)(2)(i) and placed those 

references instead in § 351.511(a)(2)(iii), 

as well as the proposed criteria for 

determining if auction prices are 

consistent with market principles. 

Commerce added a new 

§ 351.512(a)(2)(iii) that provides that 

Commerce may exclude certain prices 

from a particular country if Commerce 

finds that certain actions, including 

government laws or policies, likely 

impact such prices, and moved 

proposed § 351.512(a)(2)(iii) to a new 

§ 351.512(a)(2)(iv). 

Commerce also modified proposed 

§ 351.525(b)(iv)(A) and (B). With respect 

to § 351.525(b)(iv)(A), Commerce added 

language to its attribution analysis to 

clarify that an input producer can 

supply, either directly or indirectly, a 

downstream producer. Under 

§ 351.525(b)(iv)(B), Commerce deleted 

certain language under its primarily 

dedicated analysis. Specifically, 

Commerce deleted the phrase 

‘‘regardless of whether the input is 

actually used for the production of 

subject merchandise.’’ 

Commerce also added language to 

proposed § 351.526(b)(4) to provide a 

deadline to rebut the presumption of 

subsidy continuation notwithstanding a 

change in ownership. The regulation 

provides that information to rebut the 

presumption of subsidy continuation 

must be timely filed as part of the 

respondent’s or government’s initial 

questionnaire response. 

Lastly, Commerce also made minor 

modifications to §§ 351.502(e), 

351.503(b)(3), 351.505(c)(2) and (e)(2), 

351.509(b)(1), and 351.511(a)(2)(iii)(C). 

Classifications 

Executive Order 12866 

The Office of Management and Budget 

has determined that this final rule is 

significant for purposes of Executive 

Order 12866. 

Executive Order 13132 

This final rule does not contain 

policies with federalism implications as 

that term is defined in section 1(a) of 

Executive Order 13132 of August 4, 

1999, 64 FR 43255 (August 10, 1999)). 

Paperwork Reduction Act 

This final rule does not contain a 

collection of information subject to the 

Paperwork Reduction Act of 1995, 44 

U.S.C. Chapter 35. 

Regulatory Flexibility Act 

The Chief Counsel for Regulation has 

certified to the Chief Counsel for 

Advocacy of the Small Business 

Administration under the provisions of 

the Regulatory Flexibility Act, 5 U.S.C. 

605(b), that the rule would not have a 

significant economic impact on a 

substantial number of small business 

entities. A summary of the need for, 

objectives of, and legal basis for this rule 

is provided in the preamble of both the 

proposed rule and this final rule and is 

not repeated here. Comments received 

regarding this certification did not 

provide information that undermines 

the certification. Thus, a Final 

Regulatory Flexibility Analysis is not 

required and has not been prepared. 

Congressional Review Act 

Pursuant to 5 U.S.C. 804(2), the 

Administrator of the Office of 

Information and Regulatory Affairs at 

the Office of Management and Budget 

has determined that this rule is not 

major. 

List of Subjects in 19 CFR Part 351 

Administrative practice and 

procedure, Antidumping, Business and 

industry, Confidential business 

information, Countervailing duties, 

Freedom of information, Investigations, 

Reporting and recordkeeping 

requirements. 

Dated: December 9, 2024. 

Ryan Majerus, 

Deputy Assistant Secretary for Policy and 

Negotiations, performing the non-exclusive 

functions and duties of the Assistant 

Secretary for Enforcement and Compliance. 

For the reasons stated in the 

preamble, the U.S. Department of 

Commerce amends 19 CFR part 351 as 

follows: 

PART 351—ANTIDUMPING AND 

COUNTERVAILING DUTIES 

■ 1. The authority citation for 19 CFR 

part 351 continues to read as follows: 

Authority: 5 U.S.C. 301; 19 U.S.C. 1202 

note; 19 U.S.C. 1303 note; 19 U.S.C. 1671 et 

seq. 

■ 2. Revise the heading to subpart A to 

read as follows: 

Subpart A—Scope, Definitions, the 

Record of Proceedings, Cash 

Deposits, Nonmarket Economy 

Antidumping Rates, All-Others Rate, 

and Respondent Selection 

* * * * * 

■ 3. In § 351.104, revise paragraphs 

(a)(2)(iii) and (a)(7) to read as follows: 

§ 351.104 Record of proceedings. 

(a) * * * 

(2) * * * 

(iii) In no case will the official record 

include any document that the Secretary 

rejects as untimely filed or any 

unsolicited questionnaire response 

unless the response is a voluntary 

response accepted under § 351.109(h) 

(see § 351.302(d)). 

* * * * * 

(7) Special rules for public versions of 

documents originating with the 

Department with no associated ACCESS 

barcode numbers. Public versions of 

documents originating with the 

Department in other segments or 

proceedings under paragraph (a)(6)(iii) 

through (xii) of this section but not 

associated with an ACCESS barcode 

number, including documents issued 

before the implementation of ACCESS, 

must be submitted on the record in their 

entirety to be considered by the 

Secretary in its analysis and 

determinations and are subject to the 

timing and filing restrictions of 

§ 351.301. Preliminary and final issues 


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and decision memoranda issued by the 

Secretary in investigations and 

administrative reviews and not 

associated with an ACCESS barcode 

number, including those issued before 

the implementation of ACCESS, 

pursuant to §§ 351.205, 210 and 213 

may be cited in full without placing the 

memoranda on the record. 

* * * * * 

■ 4. Revise § 351.107 to read as follows: 

§ 351.107 Cash deposit rates; producer/ 

exporter combination rates 

(a) Introduction. Sections 

703(d)(1)(B), 705(d), 733(d)(1)(B), and 

735(c) of the Act direct the Secretary to 

order the posting of cash deposits, as 

determined in preliminary and final 

determinations of antidumping and 

countervailing duty investigations, and 

additional provisions of the Act, 

including section 751, direct the 

Secretary to establish a cash deposit rate 

in accordance with various reviews. 

This section covers the establishment of 

cash deposit rates and the instructions 

which the Secretary issues to U.S. 

Customs and Border Protection to 

collect those cash deposits. 

(b) In general. The Secretary will 

instruct U.S. Customs and Border 

Protection to suspend liquidation of 

merchandise subject to an antidumping 

duty or countervailing duty proceeding 

and apply cash deposit rates determined 

in that proceeding to all imported 

merchandise for which a cash deposit 

rate was determined by the Secretary in 

proportion to the estimated value of the 

merchandise as reported to U.S. 

Customs and Border Protection on an ad 

valorem basis. 

(c) Exceptions—(1) Application of 

cash deposit rates on a per-unit basis. 

If the Secretary determines that the 

information normally used to calculate 

an ad valorem cash deposit rate is not 

available or the use of an ad valorem 

cash deposit rate is otherwise not 

appropriate, the Secretary may instruct 

U.S. Customs and Border Protection to 

apply the cash deposit rate on a per-unit 

basis. 

(2) Application of cash deposit rates 

to producer/exporter combinations. The 

Secretary may instruct U.S. Customs 

and Border Protection to apply a 

determined cash deposit rate only to 

imported merchandise both produced 

by an identified producer and exported 

by an identified exporter if the Secretary 

determines that such an application is 

appropriate. Such an application is 

called a producer/exporter combination. 

(i) Example. Exporter A exports to the 

United States subject merchandise 

produced by Producers W, X, and Y. In 

such a situation, the Secretary may 

establish a cash deposit rate applied to 

Exporter A that is limited to 

merchandise produced by Producers W, 

X, and Y. If Exporter A begins to export 

subject merchandise produced by 

Producer Z, that cash deposit rate would 

not apply to subject merchandise 

produced by Producer Z. 

(ii) In general. The Secretary will 

instruct U.S. Customs and Border 

Protection to apply a cash deposit rate 

to a producer/exporter combination or 

combinations when the cash deposit 

rate is determined as follows: 

(A) Pursuant to a new shipper review, 

in accordance with section 751(a)(2)(B) 

of the Act and § 351.214; 

(B) Pursuant to an antidumping 

investigation of merchandise from a 

nonmarket economy country, in 

accordance with sections 733 and 735 of 

the Act and §§ 351.205 and 210, for 

merchandise exported by an examined 

exporter; 

(C) Pursuant to scope, circumvention, 

and covered merchandise segments of 

the proceeding, in accordance with 

§§ 351.225(m), 351.226(m) and 

351.227(m), when the Secretary makes a 

segment-specific determination on the 

basis of a producer/exporter 

combination; and 

(D) Pursuant to additional segments of 

a proceeding in which the Secretary 

determines that the application of a cash 

deposit rate to a producer/exporter 

combination is warranted based on facts 

on the record. 

(3) Exclusion from an antidumping or 

countervailing duty order—(i) 

Preliminary determinations. In general, 

in accordance with sections 703(b) and 

733(b) of the Act, if the Secretary makes 

an affirmative preliminary antidumping 

or countervailing duty determination 

and the Secretary preliminarily 

determines an individual weightedaverage dumping margin or individual 

net countervailable subsidy rate of zero 

or de minimis for an investigated 

exporter or producer, the exporter or 

producer will not be excluded from the 

preliminary determination or the 

investigation. However, the Secretary 

will not instruct U.S. Customs and 

Border Protection to suspend 

liquidation of entries or collect cash 

deposits on the merchandise produced 

and exported from the producer/ 

exporter combinations examined in the 

investigation and identified in the 

Federal Register, as the investigated 

combinations will not be subject to 

provisional measures under sections 

703(d) or 733(d) of the Act. 

(ii) Final determinations. In general, 

in accordance with sections 705(a), 

735(a), 706(a), and 736(a) of the Act, if 

the Secretary makes an affirmative final 

determination, issues an antidumping or 

countervailing duty order and 

determines an individual weightedaverage dumping margin or individual 

net countervailable subsidy rate of zero 

or de minimis for an investigated 

producer or exporter, the Secretary will 

exclude from the antidumping or 

countervailing duty order only 

merchandise produced and exported in 

the producer/exporter combinations 

examined in the investigation and 

identified in the Federal Register. An 

exclusion applicable to a producer/ 

exporter combination shall not apply to 

resellers. Excluded producer/exporter 

combinations may include transactions 

in which the exporter is both the 

producer and exporter, transactions in 

which the producer’s merchandise has 

been exported to the United States 

through multiple exporters individually 

examined in the investigation, and 

transactions in which the exporter has 

sourced from multiple producers 

identified in the investigation. 

(iii) Example. If during the period of 

investigation, Exporter A exports to the 

United States subject merchandise 

produced by Producer X, based on an 

examination of Exporter A the Secretary 

may determine that the dumping 

margins with respect to the examined 

merchandise are de minimis. In that 

case, the Secretary would normally 

exclude only subject merchandise 

produced by Producer X and exported 

by Exporter A. If Exporter A began to 

export subject merchandise produced by 

Producer Y, that merchandise would be 

subject to the antidumping duty order. 

(4) Certification requirements. If the 

Secretary determines that parties must 

maintain or provide a certification in 

accordance with § 351.228, the 

Secretary may instruct U.S. Customs 

and Border Protection to apply a cash 

deposit requirement that is based on the 

facts of the case and effectuates the 

administration and purpose of the 

certification. 

(d) The antidumping duty order cash 

deposit hierarchies—(1) In general. If 

the Secretary has not previously 

established a combination cash deposit 

rate under paragraph (c)(2) of this 

section for the producer and exporter in 

question, the following will apply: 

(i) A market economy country 

proceeding. In a proceeding covering 

merchandise produced in a market 

economy country: 

(A) If the Secretary has established a 

current cash deposit rate for the 

exporter of the subject merchandise, the 

Secretary will instruct U.S. Customs and 

Border Protection to apply the cash 

deposit rate established for the exporter 

to entries of the subject merchandise; 


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(B) If the Secretary has not established 

a current cash deposit rate for the 

exporter, but the Secretary has 

established a current cash deposit rate 

for the producer of the subject 

merchandise, the Secretary will instruct 

U.S. Customs and Border Protection to 

apply the cash deposit rate established 

for the producer of the subject 

merchandise to entries of the subject 

merchandise; and 

(C) If the Secretary has not established 

a current cash deposit rate for either the 

producer or the exporter of the subject 

merchandise, the Secretary will instruct 

U.S. Customs and Border Protection to 

apply the all-others rate determined in 

the investigation to entries of the subject 

merchandise, pursuant to section 735(c) 

of the Act and § 351.109(f). 

(ii) A nonmarket economy country 

proceeding. In a proceeding covering 

merchandise originating from a 

nonmarket economy country: 

(A) If the Secretary has established a 

current separate cash deposit rate for the 

exporter of the subject merchandise, the 

Secretary will instruct U.S. Customs and 

Border Protection to apply the cash 

deposit rate for the exporter to entries of 

the subject merchandise; 

(B) If the Secretary has not established 

a current separate cash deposit rate for 

an exporter of the subject merchandise, 

the Secretary will instruct U.S. Customs 

and Border Protection to apply the cash 

deposit rate determined by the Secretary 

for the nonmarket economy entity to 

entries of the subject merchandise, 

pursuant to § 351.108(b); and 

(C) If the entries of subject 

merchandise were resold to the United 

States through a third-country reseller, 

the Secretary will normally instruct U.S. 

Customs and Border Protection to apply 

the current separate cash deposit rate 

applicable to the nonmarket economy 

country exporter (or the applicable 

producer/exporter combination, if 

warranted) that supplied the subject 

merchandise to the reseller to those 

entries of the subject merchandise. 

(2) Exception. If the Secretary 

determines that an application of cash 

deposit rates other than that described 

in paragraph (d)(1) of this section to 

particular producers or exporters is 

warranted, the Secretary may instruct 

U.S. Customs and Border Protection to 

use an alternative methodology in 

applying those cash deposit rates to 

entries of subject merchandise. 

(e) The countervailing duty order cash 

deposit hierarchy—(1) In general. If the 

Secretary has not previously established 

a combination cash deposit rate under 

paragraph (c)(2) of this section for the 

producer and exporter in question and 

the exporter and producer have differing 

cash deposit rates, the following will 

apply: 

(i) If the Secretary has established 

current cash deposit rates for both the 

producer and the exporter of the subject 

merchandise, the Secretary will instruct 

U.S. Customs and Border Protection to 

apply the higher of the two rates to the 

entries of subject merchandise; 

(ii) If the Secretary has established a 

current cash deposit rate for the 

producer but not the exporter of the 

subject merchandise, the Secretary will 

instruct U.S. Customs and Border 

Protection to apply the producer’s cash 

deposit rate to entries of subject 

merchandise; 

(iii) If the Secretary has established a 

current cash deposit rate for the 

exporter but not the producer of the 

subject merchandise, the Secretary will 

instruct U.S. Customs and Border 

Protection to apply the exporter’s cash 

deposit rate to entries of subject 

merchandise; and 

(iv) If the Secretary has not 

established current cash deposit rates 

for either the producer or the exporter 

of the subject merchandise, the 

Secretary will instruct U.S. Customs and 

Border Protection to apply the all-others 

rate determined in the investigation 

pursuant to section 705(c)(5) of the Act 

and § 351.109(f) to the entries of subject 

merchandise. 

(2) Exception. If the Secretary 

determines that an application of cash 

deposit rates other than that described 

in paragraph (e)(1) of this section to 

particular producers or exporters is 

warranted, the Secretary may instruct 

U.S. Customs and Border Protection to 

use an alternative methodology in 

applying those cash deposit rates to the 

entries of subject merchandise. 

(f) Effective dates for amended 

preliminary and final determinations 

and results of review upon correction of 

a ministerial error. If the Secretary 

amends an agency determination in 

accordance with sections 703, 705(e), 

733 and 735(e) of the Act and § 351.224 

(e) through (g): 

(1) If the Secretary amends a 

preliminary or final determination in an 

investigation for a ministerial error and 

the amendment increases the dumping 

margin or countervailing duty rate, the 

new cash deposit rate will be effective 

to entries made on or after the date of 

publication of the amended 

determination; 

(2) If the Secretary amends a 

preliminary or final determination in an 

investigation for a ministerial error and 

the amendment decreases the dumping 

margin or countervailing duty rate, the 

new cash deposit rate will be retroactive 

to the date of publication of the original 

preliminary or final determination, as 

applicable; 

(3) If the Secretary amends the final 

results of an administrative review 

pursuant to a ministerial error, the 

effective date of the amended cash 

deposit rate will be retroactive to entries 

following the date of publication of the 

original final results of administrative 

review regardless of whether the 

antidumping duty margin or 

countervailing duty rate increases or 

decreases; and 

(4) If the Secretary amends the final 

results of an investigation or 

administrative review pursuant to 

litigation involving alleged or disputed 

ministerial errors, the effective date of 

the amended cash deposit rate may 

differ from the effective dates resulting 

from the application of paragraphs (f)(1) 

through (3) of this section and normally 

will be identified in a Federal Register 

notice. 

■ 5. Add § 351.108 to subpart A to read 

as follows: 

§ 351.108 Rates for entities exporting 

merchandise from nonmarket economies in 

antidumping proceedings 

(a) Introduction—(1) The nonmarket 

economy entity. When the Secretary 

determines that a country is a 

nonmarket economy country in an 

antidumping proceeding pursuant to 

section 771(18) of the Act, the Secretary 

may determine that all entities located 

in that nonmarket economy country are 

subject to government control and thus 

part of a single, government-controlled 

entity, called the nonmarket economy 

entity. 

(2) The nonmarket economy entity 

rate. All merchandise from the 

nonmarket economy exported to the 

United States and subject to an 

antidumping proceeding by entities in 

the nonmarket economy determined by 

the Secretary on the basis of record 

information to be part of the 

government-controlled entity may be 

assigned the antidumping cash deposit 

or assessment rate applied to the 

government-controlled entity. That rate 

is called the nonmarket economy entity 

rate. 

(3) Entities in third countries owned 

or controlled by the nonmarket economy 

government. If a nonmarket economy 

government has direct ownership or 

control, in whole or in part, of an entity 

located in a third country and that 

entity exports subject merchandise to 

the United States, the Secretary may 

determine on the basis of record 

information that such an entity is part 

of the government-controlled entity and 

assign that entity the nonmarket 

economy entity rate. 


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(b) Separate rates. An entity exporting 

merchandise to the United States from 

a nonmarket economy may receive its 

own rate, separate from the nonmarket 

economy entity rate, if the Secretary 

determines that the exporter has 

demonstrated that it operates certain 

activities sufficiently independent from 

nonmarket economy government control 

to justify the application of a separate 

rate. In determining whether an entity 

operates certain activities sufficiently 

independent from government control 

to receive a separate rate, the Secretary 

will normally consider the following: 

(1) Nonmarket economy government 

ownership and control in the nonmarket 

economy—(i) Government control 

through ownership. When a nonmarket 

economy government, at a national, 

provincial, or other level, holds an 

ownership share of an entity located in 

the nonmarket economy, either directly 

or indirectly, the level of ownership and 

other factors may indicate that the 

government exercises or has the 

potential to exercise control over an 

entity’s general operations. No separate 

rate will be applied when the 

nonmarket economy government either 

directly or indirectly holds: 

(A) A majority ownership share (over 

fifty percent ownership) of an entity; or 

(B) An ownership interest in the 

entity of fifty percent or less and any 

one of the following criteria applies: 

(1) The government’s ownership share 

provides it with a disproportionately 

larger degree of influence or control 

over the entity’s production, 

commercial, and export decisions than 

the ownership share would normally 

entail, and the Secretary determines that 

the degree of influence or control is 

significant; 

(2) The government has the authority 

to veto the entity’s production, 

commercial and export decisions; 

(3) Officials, employees, governmentappointed or government-controlled 

labor union members, representatives of 

the government, or their family 

members have been appointed as 

officers or managers of the entity, 

members of the board of directors, or 

other governing authorities in the entity 

that have the ability to make or 

influence production, commercial and 

export decisions for the entity; or 

(4) The entity is obligated by law or 

its foundational documents, such as 

articles of incorporation, or other de 

facto requirements to maintain one or 

more officials, employees, governmentappointed or government-controlled 

labor union members, or representatives 

of the government as officers or 

managers, members of the board of 

directors, or other governing authorities 

in the entity that have the ability to 

make or influence production, 

commercial and export decisions for the 

entity. 

(ii) Absence of de jure government 

control. If an entity demonstrates that 

neither § 351.108(b)(1)(i)(A) nor (B) 

applies to the entity, the entity must 

then demonstrate that the government 

has no control in law (de jure) of the 

entity’s export activities. The following 

criteria may indicate the lack of 

government de jure control of the 

entity’s export activities: 

(A) The absence of a legal requirement 

that one or more officials, employees, 

government-appointed or governmentcontrolled labor union members, or 

representatives of the government serve 

as officers or managers of the entity, 

members of the board of directors, or 

other governing authorities in the entity 

that make or influence export activity 

decisions; 

(B) The absence of restrictive 

stipulations by the government 

associated with an entity’s business and 

export licenses; 

(C) Legislative enactments 

decentralizing government control of 

entities; and 

(D) Other formal measures by the 

government decentralizing control of 

companies. 

(iii) Absence of de facto government 

control. If the entity demonstrates that 

§ 351.108(b)(1)(i)(A) and (B) and 

(b)(1)(ii) do not apply to the entity, the 

entity must then demonstrate that the 

government has no control in fact (de 

facto) of the entity’s export activities. 

The following criteria may indicate de 

facto government control of the entity’s 

export activities: 

(A) Whether the entity maintains or 

must maintain one or more officials, 

employees, representatives of the 

government, or their family members as 

officers or managers, members of the 

board of directors, or other governing 

authorities in the entity which have the 

ability to make or influence export 

activity decisions; 

(B) Whether export prices are set by 

or are subject to the approval of a 

government agency; 

(C) Whether the entity has authority 

to negotiate and sign contracts and other 

agreements without government 

involvement; 

(D) Whether the entity has autonomy 

from the government in making 

decisions regarding the selection of its 

management; 

(E) Whether the entity retains the 

proceeds of its export sales and makes 

independent decisions regarding 

disposition of profits or financing of 

losses; and 

(F) Whether there is any additional 

evidence on the record suggesting that 

the government has direct or indirect 

influence over the entity’s export 

activities. 

(2) Nonmarket economy government 

ownership or control of an entity 

located in a third country. If the 

Secretary determines that a nonmarket 

economy government owns or controls, 

in whole or in part, an entity located in 

a third country, the Secretary may 

determine on the basis of record 

information that the entity should be 

assigned the nonmarket economy entity 

rate or that the entity should be granted 

a separate rate. 

(c) Entities wholly owned by foreign 

entities incorporated and headquartered 

in a market economy. In general, if the 

Secretary determines based on 

information submitted in a separate rate 

application or certification that an entity 

exporting merchandise subject to a 

nonmarket economy country 

antidumping proceeding is wholly 

owned by a foreign entity and both 

incorporated and headquartered in a 

market economy country or countries, 

then the Secretary will consider the 

entity independent from control of the 

nonmarket economy government and an 

analysis under paragraph (b) of this 

section will not be necessary. 

(d) Separate rate applications and 

certifications. In order to demonstrate 

separate rate eligibility, an entity subject 

to a nonmarket economy country 

antidumping proceeding will be 

required to timely submit a separate rate 

application, as made available by the 

Secretary, or a separate rate 

certification, as applicable. If no 

separate rate application or certification 

is timely submitted, the Secretary may 

apply the nonmarket economy entity 

rate to merchandise exported to the 

United States and subject to the 

nonmarket economy country 

antidumping proceeding. In filing a 

separate rate application or certification, 

the following applies: 

(1) In an antidumping investigation, 

the entity will normally file a separate 

rate application on the record of the 

investigation no later than twenty-one 

days following publication of the notice 

of initiation in the Federal Register; 

(2) In a new shipper review or an 

administrative review in which the 

entity has not been previously assigned 

a separate rate, the entity will normally 

file a separate rate application on the 

record no later than fourteen days 

following publication of the notice of 

initiation in the Federal Register. In 

both new shipper reviews and 

administrative reviews, documentary 

evidence of an entry of subject 


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merchandise for which liquidation was 

suspended during the period of review 

must accompany the separate rate 

application. 

(3) In an administrative review, if the 

entity has been previously assigned a 

separate rate in the proceeding, no later 

than fourteen days following 

publication of the notice of initiation in 

the Federal Register, the entity will 

instead file a certification on the record 

in which the entity certifies that it had 

entries of subject merchandise for which 

liquidation was suspended during the 

period of review and that it otherwise 

continues to meet the criteria for 

obtaining a separate rate. If the Secretary 

determined in a previous segment of the 

proceeding that certain exporters and 

producers should be treated as a single 

entity for purposes of the antidumping 

proceeding, then a certification filed 

under this paragraph must identify and 

certify that that the certification applies 

to all of the companies comprising that 

single entity. 

(e) Examined respondents and 

questionnaire responses. Entities that 

submit separate rate applications or 

certifications and are subsequently 

selected to be an examined respondent 

in an investigation or review by the 

Secretary must fully respond to the 

Secretary’s questionnaires and 

participate in the antidumping 

proceeding in order to be eligible for 

separate rate status. 

■ 6. Add § 351.109 to subpart A to read 

as follows: 

§ 351.109 Selection of examined 

respondents; single-country subsidy rate; 

calculating an all-others rate; calculating 

rates for unexamined respondents; 

voluntary respondents. 

(a) Introduction. Sections 777A(c)(2) 

and 777A(e)(2)(A) of the Act provide 

that when the Secretary determines in 

an antidumping or countervailing duty 

investigation or administrative review 

that it is not practicable to determine 

individual dumping margins or 

countervailable subsidy rates for all 

potential respondents, the Secretary 

may determine individual dumping 

margins or countervailable subsidy rates 

for a reasonable number of exporters or 

producers using certain criteria set out 

in the Act. This section sets forth those 

criteria, describes the methodology the 

Secretary generally applies to select 

examined producers and exporters, and 

provides the means by which the 

Secretary determines the ‘‘all-others 

rate’’ set forth in sections 705(c)(5) and 

735(c)(5) of the Act, separate rates in 

nonmarket economy antidumping 

proceedings, and review-specific 

margins or rates in administrative 

reviews. This section also addresses the 

treatment of voluntary respondents in 

accordance with section 782(a) of the 

Act. 

(b) Examining each known exporter or 

producer when practicable. In an 

investigation or administrative review, 

the Secretary will determine, where 

practicable, an individual weightedaverage dumping margin or individual 

countervailable subsidy rate for each 

known exporter or producer of the 

subject merchandise. 

(c) Limiting exporters or producers 

examined—(1) In general. If the 

Secretary determines in an investigation 

or administrative review that it is not 

practicable to determine individual 

dumping margins or countervailable 

subsidy rates because of the large 

number of exporters or producers 

involved in the investigation or review, 

the Secretary may determine individual 

margins or rates for a reasonable number 

of exporters or producers, In accordance 

with sections 777A(c)(2) and 

777A(e)(2)(A) of the Act, the Secretary 

will normally limit the examination to 

either a sample of exporters or 

producers that the Secretary determines 

is statistically valid based on record 

information or exporters and producers 

accounting for the largest volume of the 

subject merchandise from the exporting 

country that the Secretary determines 

can be reasonably examined. 

(2) Limiting examination to the largest 

exporters or producers. In general, if the 

Secretary determines to limit the 

number of exporters or producers for 

individual examination, otherwise 

known as respondents, based on the 

largest volume of the subject 

merchandise from the exporting country 

that the Secretary determines can be 

reasonably examined, the Secretary will 

apply the following methodology: 

(i) Selecting the data source to 

determine the largest exporters or 

producers of subject merchandise. The 

Secretary will normally select 

respondents based on data for entries of 

subject merchandise made during the 

relevant time period derived from U.S. 

Customs and Border Protection. If the 

Secretary determines that the use of the 

U.S. Customs and Border Protection 

data source is not appropriate based on 

record information, the Secretary may 

use another reasonable means of 

selecting potential respondents in an 

investigation or review including, but 

not limited to, the use of quantity and 

value questionnaire responses derived 

from a list of possible exporters of 

subject merchandise. 

(ii) Selecting the largest exporters or 

producers of subject merchandise based 

on volume or value. The Secretary will 

normally select the largest exporters or 

producers based on the volume of 

imports of subject merchandise. 

However, the Secretary may determine 

at times that volume data are unreliable 

or inconsistent, depending on the 

product at issue. In those situations, the 

Secretary may instead select the largest 

exporters of subject merchandise based 

on the value of the imported products 

instead of the volume of the imported 

products. 

(iii) Determining whether the number 

of exporters or producers is too large to 

make individual examination of each 

known exporter or producer of subject 

merchandise practicable. The Secretary 

will determine on a case-specific basis 

whether the number of exporters or 

producers is too large to make 

individual examination of each known 

exporter or producer of subject 

merchandise practicable based on the 

potential exporters or producers 

identified in a petition, the exporters or 

producers identified in the data source 

considered in paragraph (c)(1) of this 

provision, or the exporters or producers 

for which an administrative review is 

requested. In determining whether the 

number of exporters or producers is too 

large to make individual examination of 

each known exporter or producer of 

subject merchandise practicable, the 

Secretary will normally consider: 

(A) The amount of resources and 

detailed analysis which will be 

necessary to examine each potential 

respondent’s information; 

(B) The current and future workload 

of the office administering the 

antidumping or countervailing duty 

proceeding; and 

(C) The Secretary’s overall current 

resource availability. 

(iv) Determining the number of 

exporters or producers that can be 

reasonably examined. In determining 

the number of exporters or producers 

(respondents) that can be reasonably 

examined on a case-specific basis, the 

Secretary will normally: 

(A) Consider the total and relative 

volumes (or values) of entries of subject 

merchandise during the relevant period 

for each potential respondent derived 

from the data source considered in 

paragraph (c)(2) of this section; 

(B) Rank the potential respondents by 

the total volume (or values) of entries 

into the United States during the 

relevant period; and 

(C) Determine the number of exporters 

or producers the Secretary can 

reasonably examine, considering 

resource availability and statutory 

requirements, and select the exporters 

or producers with the largest volume (or 


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values) of entries consistent with that 

number. 

(v) Selecting additional respondents 

for examination. Once the Secretary has 

determined the number of exporters or 

producers that can be reasonably 

examined and has selected the potential 

respondents for examination, the 

Secretary will issue questionnaires to 

those selected exporters or producers. If 

a potential respondent does not respond 

to the questionnaires or elects to 

withdraw from participation in the 

segment of the proceeding soon after 

filing questionnaire responses, or the 

Secretary otherwise determines early in 

the segment of the proceeding that a 

selected exporter or producer is no 

longer participating in the investigation 

or administrative review or that the 

exporter’s or producer’s sales of subject 

merchandise are not bona fide, the 

Secretary may select the exporter or 

producer with the next largest volume 

or value of entries to replace the 

respondents initially selected by the 

Secretary for examination if the 

Secretary determines that such a 

selection will not inhibit or impede the 

timely completion of that segment of the 

proceeding. 

(d) Waiver for certain selected 

respondents. The Secretary may waive 

individual examination of an exporter 

or producer selected to be an examined 

respondent if both the selected 

respondent and the petitioner file 

waiver requests for that selected 

respondent no later than five days after 

the Secretary has selected respondents. 

If the Secretary provides such a waiver 

and previously selected the waived 

respondent in accordance with 

paragraph (c)(2) of this section, the 

Secretary may select the respondent 

with the next largest volume or value of 

entries for examination to replace the 

initially selected respondent. 

(e) Single country-wide subsidy rate. 

In accordance with 777A(e)(2)(B) of the 

Act, in limiting exporters or producers 

examined in countervailing duty 

proceedings, including countervailing 

duty investigations under sections 

703(d)(1)(A)(ii) and 705(c)(5)(B) of the 

Act, the Secretary may determine, in the 

alternative, a single country-wide 

subsidy rate to be applied to all 

exporters and producers. 

(f) Calculating the all-others rate. In 

accordance with sections 705(c)(1)(B), 

705(c)(5), 735(c)(1)(B)(i), and 735(c)(5) 

of the Act, if the Secretary makes an 

affirmative antidumping or 

countervailing duty determination, the 

Secretary will determine an estimated 

all-others rate as follows: 

(1) In general. (i) For an antidumping 

proceeding involving a market economy 

country, the all-others rate will 

normally equal the weighted average of 

the estimated weighted-average 

dumping margins established for the 

individually investigated exporters or 

producers, excluding any zero and de 

minimis margins and any margins 

determined entirely under section 776 

of the Act. 

(ii) For a countervailing duty 

proceeding, the all-others rate will 

normally equal the weighted average of 

the countervailable subsidy rates 

established for the individually 

investigated exporters and producers, 

excluding any zero and de minimis 

countervailable subsidy rates and any 

rates determined entirely under section 

776 of the Act. 

(2) Exceptions to the general rules for 

calculating the all-others rate. The 

Secretary may determine not to apply 

the general rules provided in paragraph 

(f)(1) of this section: 

(i) If the Secretary determines that 

only one individually investigated 

exporter or producer has a calculated 

weighted-average dumping margin or 

countervailable subsidy rate that is not 

zero, de minimis, or determined entirely 

under section 776 of the Act, the 

Secretary may apply that weightedaverage dumping margin or 

countervailable subsidy rate as the allothers rate. 

(ii) If the Secretary determines that 

weight-averaging calculated dumping 

margins or countervailable subsidy rates 

established for individually investigated 

exporters or producers could result in 

the inadvertent release of proprietary 

information among the individually 

investigated exporters or producers, the 

Secretary may apply the following 

analysis: 

(A) First, the Secretary will calculate 

the weighted-average dumping margin 

or countervailable subsidy rate for the 

individually investigated exporters or 

producers using their reported data, 

including business proprietary data; 

(B) Second, the Secretary will 

calculate both a simple average of the 

individually investigated exporters’ or 

producers’ dumping margins or 

countervailable subsidy rates and a 

weighted- average dumping margin or 

countervailable subsidy rate using the 

individually investigated exporters’ or 

producers’ publicly-ranged data; and 

(C) Third, the Secretary will compare 

the two averages calculated in 

paragraph (f)(2)(ii)(B) of this section 

with the weighted-average margin or 

rate determined in paragraph (f)(2)(ii)(A) 

of this section. The Secretary will apply, 

as the all-others rate, the average 

calculated in paragraph (f)(2)(ii)(B) of 

this section which is numerically the 

closest to the margin or rate calculated 

in paragraph (f)(2)(ii)(A) of this section. 

(iii) If the estimated weighted average 

dumping margins or countervailable 

subsidy rates established for all 

individually investigated exporters and 

producers are zero, de minimis, or 

determined entirely under section 776 

of the Act, the Secretary may use any 

reasonable method to establish an allothers rate for exporters and producers 

not individually examined, including 

averaging the estimated weighted 

average dumping margins or 

countervailable subsidy rates 

determined for the individually 

investigated exporters and producers. 

(3) A nonmarket economy country 

entity rate is not an all-others rate. The 

all-others rate determined in a market 

economy antidumping investigation or 

countervailing duty investigation may 

not be increased in subsequent segments 

of a proceeding. The rate determined for 

a nonmarket economy country entity 

determined in an investigation is not an 

all-others rate and may be modified in 

subsequent segments of a proceeding if 

selected for examination. 

(g) Calculating a rate for unexamined 

exporters and producers. In determining 

a separate rate in an investigation or 

administrative review covering a 

nonmarket economy country pursuant 

to § 351.108(b), a margin for 

unexamined exporters and producers in 

an administrative review covering a 

market economy country, or a 

countervailable subsidy rate for 

unexamined exporters and producers in 

a countervailing duty administrative 

review, the Secretary will normally 

apply the methodology set forth in 

paragraphs (f)(1) and (2) of this section. 

If the Secretary determines that weightaveraging calculated dumping margins 

or countervailable subsidy rates 

established for individually investigated 

exporters or producers could result in 

the inadvertent release of proprietary 

information among the individually 

examined exporters or producers, then 

the Secretary may establish a separate 

rate, review-specific margin, or 

countervailable subsidy rate using a 

reasonable method other than the 

weight-averaging of dumping margins or 

countervailable rates, such as the use of 

a simple average of the calculated 

dumping margins or countervailable 

subsidy rates. 

(h) Voluntary respondents—(1) In 

general. If the Secretary limits the 

number of exporters or producers to be 

individually examined under sections 

777A(c)(2) or 777A(e)(2)(A) of the Act, 

the Secretary may choose to examine 

voluntary respondents (exporters or 

producers, other than those initially 


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selected for individual examination) in 

accordance with section 782(a) of the 

Act. 

(2) Acceptance of voluntary 

respondents. The Secretary will 

determine, as soon as practicable, 

whether to examine a voluntary 

respondent individually. A voluntary 

respondent accepted for individual 

examination under paragraph (h)(1) of 

this section will be subject to the same 

filing and timing requirements as an 

exporter or producer initially selected 

by the Secretary for individual 

examination under sections 777A(c)(2) 

or 777A(e)(2)(A) of the Act, and, where 

applicable, the use of the facts available 

under section 776 of the Act and 

§ 351.308. 

(3) Requests for voluntary treatment. 

(i) An interested party seeking treatment 

as a voluntary respondent must so 

indicate by including as a title on the 

first page of the first submission, 

‘‘Request for Voluntary Respondent 

Treatment.’’ 

(ii) If multiple exporters or producers 

seek voluntary respondent treatment 

and the Secretary determines to 

examine a voluntary respondent 

individually, the Secretary will select 

voluntary respondents in the 

chronological order in which complete 

requests were filed correctly on the 

record. 

(4) Timing of voluntary respondent 

submissions. The deadlines for 

voluntary respondent submissions will 

generally be the same as the deadlines 

for submissions by individually 

investigated respondents. If there are 

two or more individually investigated 

respondents with different deadlines for 

a submission, such as when one 

respondent has received an extension 

and the other has not, voluntary 

respondents will normally be required 

to file their submissions with the 

Secretary by the earliest deadline of the 

individually investigated respondents. 

■ 7. In § 351.204: 

■ a. Revise the section heading and 

paragraphs (a), (c), and (d); and 

■ b. Remove paragraph (e). 

The revisions read as follows: 

§ 351.204 Period of investigation; requests 

for exclusions from countervailing duty 

orders based on investigations conducted 

on an aggregate basis. 

(a) Introduction. Because the Act does 

not specify the precise period of time 

that the Secretary should examine in an 

antidumping or countervailing duty 

investigation, this section sets forth 

rules regarding the period of 

investigation (‘‘POI’’). In addition, this 

section covers exclusion requests in 

countervailing duty investigations 

conducted on an aggregate basis. 

* * * * * 

(c) Limiting exporters or producers 

examined and voluntary respondents. 

Once the Secretary has initiated the 

antidumping or countervailing duty 

investigation, the Secretary may 

determine that it is not practicable to 

examine each known exporter or 

producer. In accordance with 

§ 351.109(c), the Secretary may select a 

limited number of exporters or 

producers to examine. Furthermore, in 

accordance with section 782(a) of the 

Act and § 351.109(h), the Secretary may 

determine to examine voluntary 

respondents. 

(d) Requests for exclusions from 

countervailing duty orders based on 

investigations conducted on an 

aggregate basis. When the Secretary 

conducts a countervailing duty 

investigation on an aggregate basis 

under section 777A(e)(2)(B) of the Act, 

the Secretary will consider and 

investigate requests for exclusion to the 

extent practicable. An exporter or 

producer that desires exclusion from an 

order must submit: 

(1) A certification by the exporter or 

producer that it received zero or de 

minimis net countervailable subsidies 

during the period of investigation; 

(2) If the exporter or producer 

received a countervailable subsidy, 

calculations demonstrating that the 

amount of net countervailable subsidies 

received was de minimis during the 

period of investigation; 

(3) If the exporter is not the producer 

of subject merchandise, certifications 

from the suppliers and producers of the 

subject merchandise that those persons 

received zero or de minimis net 

countervailable subsidies during the 

period of investigation; and 

(4) A certification from the 

government of the affected country that 

the government did not provide the 

exporter (or the exporter’s supplier) or 

producer with more than de minimis net 

countervailable subsidies during the 

period of investigation. 

■ 8. In § 351.212 revise paragraph (b)(1) 

to read as follows: 

§ 351.212 Assessment of antidumping and 

countervailing duties; provisional measures 

deposit cap; interest on certain 

overpayments and underpayments. 

* * * * * 

(b) * * * 

(1) Antidumping Duties—(i) In 

general. If the Secretary has conducted 

a review of an antidumping duty order 

under § 351.213 (administrative review), 

§ 351.214 (new shipper review), or 

§ 351.215 (expedited antidumping 

review), the Secretary normally will 

calculate an assessment rate for each 

importer of subject merchandise 

covered by the review by dividing the 

dumping margin found on the subject 

merchandise examined by the estimated 

entered value of such merchandise for 

normal customs duty purposes on an ad 

valorem basis. If the resulting 

assessment rate is not zero or de 

minimis, the Secretary will then instruct 

U.S. Customs and Border Protection to 

assess antidumping duties by applying 

the assessment rate to the entered value 

of the merchandise. 

(ii) Assessment on a per-unit basis. If 

the Secretary determines that the 

information normally used to calculate 

an ad valorem assessment rate is not 

available or the use of an ad valorem 

rate is otherwise not appropriate, the 

Secretary may instruct U.S. Customs 

and Border Protection to assess duties 

on a per-unit basis. 

* * * * * 

■ 9. In § 351.213, revise paragraph (f) to 

read as follows: 

§ 351.213 Administrative review of orders 

and suspension agreements under section 

751(a)(1) of the Act. 

* * * * * 

(f) Limiting exporters or producers 

examined and voluntary respondents. 

Once the Secretary has initiated an 

antidumping or countervailing duty 

administrative review, the Secretary 

may determine that it is not practicable 

to examine each known exporter or 

producer. In accordance with 

§ 351.109(c), the Secretary may select a 

limited number of exporters or 

producers to examine. Furthermore, in 

accordance with section 782(a) of the 

Act and § 351.109(h), the Secretary may 

determine to examine voluntary 

respondents. 

* * * * * 

■ 10. In § 351.214, revise the section 

heading and paragraphs (l)(1) 

introductory text and (l)(3)(iii) to read as 

follows: 

§ 351.214 New shipper reviews under 

section 751(a)(2)(B) of the Act; expedited 

reviews in countervailing duty proceedings. 

* * * * * 

(l) * * * 

(1) Request for review. If, in a 

countervailing duty investigation, the 

Secretary limited the number of 

exporters or producers to be 

individually examined under section 

777A(e)(2)(A) of the Act, an exporter 

that the Secretary did not select for 

individual examination or that the 

Secretary did not accept as a voluntary 

respondent (see § 351.109(h)) may 

request a review under this paragraph 


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(l). An exporter must submit a request 

for review within 30 days of the date of 

publication in the Federal Register of 

the countervailing duty order. A request 

must be accompanied by a certification 

that: 

* * * * * 

(3) * * * 

(iii) The Secretary may exclude from 

the countervailing duty order in 

question any exporter for which the 

Secretary determines an individual net 

countervailable subsidy rate of zero or 

de minimis (see § 351.107(c)(3)(ii)), 

provided that the Secretary has verified 

the information on which the exclusion 

is based. 

* * * * * 

■ 11. In § 351.301, revise paragraphs 

(b)(2), (c)(1), and (c)(3)(i) and (ii) to read 

as follows: 

§ 351.301 Time limits for submission of 

factual information. 

* * * * * 

(b) * * * 

(2) If the factual information is being 

submitted to rebut, clarify, or correct 

factual information on the record, the 

submitter must provide a written 

explanation identifying the information 

which is already on the record that the 

factual information seeks to rebut, 

clarify or correct, including the name of 

the interested party that submitted the 

information and the date on which the 

information was submitted. The 

submitter must also provide a written 

explanation describing how the factual 

information provided under this 

paragraph rebuts, clarifies, or corrects 

the factual information already on the 

record. 

(c) * * * 

(1) Factual information submitted in 

response to questionnaires. During a 

proceeding, the Secretary may issue to 

any person questionnaires, which 

includes both initial and supplemental 

questionnaires. The Secretary will not 

consider or retain in the official record 

of the proceeding unsolicited 

questionnaire responses, except as 

provided under § 351.109(h)(2), or 

untimely filed questionnaire responses. 

The Secretary will reject any untimely 

filed or unsolicited questionnaire 

response and provide, to the extent 

practicable, written notice stating the 

reasons for rejection (see § 351.302(d)). 

* * * * * 

(3) * * * 

(i) Antidumping and countervailing 

duty investigations. (A) All submissions 

of factual information to value factors of 

production under § 351.408(c) in an 

antidumping investigation are due no 

later than 60 days before the schedule 

date of the preliminary determination. 

(B) All submissions of factual 

information to measure the adequacy of 

remuneration under § 351.511(a)(2) in a 

countervailing duty investigation are 

due no later than 45 days before the 

scheduled date of the preliminary 

determination. 

(C) If the Secretary determines that 

interested parties will not have 

sufficient time to submit factual 

information under the deadlines set 

forth in paragraph (c)(3)(i)(A) or (B) 

because of circumstances unique to a 

given segment of a proceeding, the 

Secretary may issue a schedule with 

alternative deadlines for parties to 

submit factual information on the 

record. 

(ii) Administrative reviews, new 

shipper reviews, and changed 

circumstances reviews. (A) All 

submissions of factual information to 

value factors under § 351.408(c) or to 

measure the adequacy of remuneration 

under § 351.511(a)(2) in administrative 

reviews, new shipper reviews and 

changed circumstances reviews are due 

no later than 60 days before the 

scheduled date of the preliminary 

results of review. 

(B) If the Secretary determines that 

interested parties will not have 

sufficient time to submit factual 

information under the deadlines set 

forth in paragraph (c)(3)(ii)(A) of this 

section because of circumstances unique 

to a given segment of a proceeding, the 

Secretary may issue a schedule with 

alternative deadlines for parties to 

submit factual information on the 

record. 

* * * * * 

■ 12. In § 351.302, revise paragraph 

(d)(1)(ii) to read as follows: 

§ 351.302 Extension of time limits; return 

of untimely filed or unsolicited material. 

* * * * * 

(d) * * * 

(1) * * * 

(ii) Unsolicited questionnaire 

responses, except as provided for 

voluntary respondents under 

§ 351.109(h)(2). 

* * * * * 

■ 13. In § 351.306, revise paragraph 

(a)(3) to read as follows: 

§ 351.306 Use of business proprietary 

information. 

(a) * * * 

(3) An employee of U.S. Customs and 

Border Protection directly involved in 

conducting an investigation regarding 

negligence, gross negligence, or fraud 

relating to an antidumping or 

countervailing duty proceeding; 

* * * * * 

■ 14. In § 351.308, add paragraphs (g) 

through (i) to read as follows: 

§ 351.308 Determinations on the basis of 

the facts available. 

* * * * * 

(g) Partial or total facts available. In 

accordance with section 776(a) of the 

Act, if the Secretary determines to apply 

facts available, regardless of the use of 

an adverse inference under section 

776(b) of the Act, the Secretary may 

apply facts available to only a portion of 

its antidumping or countervailing duty 

analysis and calculations, referred to as 

partial facts available, or to all of its 

analysis and calculations, referred to as 

total facts available, as appropriate on a 

case-specific basis. 

(h) Segment-specific dumping and 

countervailable subsidy rates. If the 

Secretary has determined dumping 

margins or countervailable subsidy rates 

in separate segments of the same 

proceeding in which the Secretary is 

applying facts available, in accordance 

with section 776(c)(2) of the Act the 

Secretary may apply those margins or 

rates as facts available without being 

required to conduct a corroboration 

analysis. 

(i) Selection of adverse facts available. 

If the Secretary determines to apply 

adverse facts available, in accordance 

with sections 776(d)(1), (2), and (3) of 

the Act, the following applies: 

(1) In an antidumping proceeding, the 

Secretary may use a dumping margin 

from any segment of the proceeding as 

adverse facts, including the highest 

dumping margin available. The 

Secretary may use the highest dumping 

margin available if the Secretary 

determines that such an application is 

warranted after evaluating the situation 

that resulted in an adverse inference; 

(2) In a countervailing duty segment 

of the proceeding, in accordance with 

the hierarchy set forth in paragraph (j) 

of this section, the Secretary may use a 

countervailing subsidy rate applied to 

the same or similar program in a 

countervailing duty proceeding 

involving the same country or, if there 

is no same or similar program, use a 

countervailing subsidy rate from a 

proceeding that the Secretary 

determines is reasonable to use. The 

Secretary will normally apply the 

highest calculated above-de minimis 

countervailing duty rate available if the 

Secretary determines that such an 

application is warranted after evaluating 

the situation that resulted in an adverse 

inference; and 

(3) In applying adverse facts available, 

the Secretary will not be required to: 

(i) Estimate what a countervailable 

subsidy or dumping margin would have 


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been if an interested party that was 

found to have failed to cooperate under 

section 776(b)(1) of the Act had 

cooperated; or 

(ii) Demonstrate that the 

countervailable subsidy rate or dumping 

margin used by the Secretary as adverse 

facts available reflects an alleged 

‘‘commercial reality’’ of the interested 

party. 

* * * * * 

■ 15. In § 351.309, revise paragraphs 

(c)(2) and (d)(2) to read as follows: 

§ 351.309 Written argument. 

* * * * * 

(c) * * * 

(2) The case brief must present all 

arguments that continue in the 

submitter’s view to be relevant to the 

Secretary’s final determination or final 

results, including any arguments 

presented before the date of publication 

of the preliminary determination or 

preliminary results. As part of the case 

brief, parties are requested to provide 

the following: 

(i) A table of contents listing each 

issue; 

(ii) A table of authorities, including 

statutes, regulations, administrative 

cases, dispute panel decisions and court 

holdings cited; and 

(iii) A public executive summary for 

each argument raised in the brief. 

Executive summaries should be no more 

than 450 words in length, not counting 

supporting citations. 

(d) * * * 

(2) The rebuttal brief may respond 

only to arguments raised in case briefs, 

should identify the arguments raised in 

case briefs, and should identify the 

arguments to which it is responding. As 

part of the rebuttal brief, parties are 

requested to provide the following: 

(i) A table of contents listing each 

issue; 

(ii) A table of authorities, including 

statutes, regulations, administrative 

cases, dispute panel decisions and court 

holdings cited; and 

(iii) A public executive summary for 

each argument raised in the rebuttal 

brief. Executive summaries should be no 

more than 450 words in length, not 

counting supporting citations. 

* * * * * 

■ 16. In § 351.401, revise paragraph (f) 

to read as follows: 

§ 351.401 In general. 

* * * * * 

(f) Treatment of affiliated parties in 

antidumping proceedings—(1) In 

general. In an antidumping proceeding 

under this part, the Secretary will 

normally treat two or more affiliated 

parties as a single entity if the Secretary 

concludes that there is a significant 

potential for manipulation of prices, 

production, or other export decisions. 

(2) Significant potential for 

manipulation. In identifying a 

significant potential for the 

manipulation of price, production or 

other export decisions, the factors the 

Secretary may consider for all affiliated 

parties include: 

(i) The level of common ownership; 

(ii) The extent to which managerial 

employees or board members of one 

firm sit on the board of directors of an 

affiliated firm; and 

(iii) Whether operations are 

intertwined, such as through the sharing 

of sales and export information; 

involvement in production, pricing, and 

other commercial decisions; the sharing 

of facilities or employees; or significant 

transactions between the affiliated 

parties. 

(3) Additional considerations for 

affiliated parties with access to 

production facilities in determining the 

significant potential for manipulation. 

In determining whether there is a 

significant potential for manipulation, if 

the Secretary determines that affiliated 

parties have, or will have, access to 

production facilities for similar or 

identical products, the Secretary shall 

consider if any of those facilities would 

require substantial retooling in order to 

restructure manufacturing priorities. 

(4) Exceptions. If the following 

affiliated parties do not produce similar 

or identical products to the subject 

merchandise or export subject 

merchandise to the United States, the 

Secretary will normally not treat those 

parties as part of a single entity for 

purposes of the Secretary’s calculations 

under this provision: 

(i) Input suppliers; 

(ii) Sellers of the foreign like product 

in the home market; and 

(iii) Affiliated entities for which the 

Secretary determines that treating those 

parties as a single entity would be 

otherwise inappropriate based on record 

information. 

* * * * * 

■ 17. In § 351.404, add paragraph (g) to 

read as follows: 

§ 351.404 Selection of the market to be 

used as the basis for normal value. 

* * * * * 

(g) Special rule for certain 

multinational corporations. In the 

course of an antidumping investigation, 

if the Secretary determines that the 

factors listed in section 773(d) of the Act 

are present, the Secretary will apply the 

special rule for certain multinational 

corporations and determine the normal 

value of the subject merchandise by 

reference to the normal value at which 

the foreign like product is sold in 

substantial quantities from one or more 

facilities outside the exporting country. 

In making a determination under this 

provision, the following will apply: 

(1) Interested parties alleging that the 

Secretary should apply the special rule 

for certain multinational corporations 

must submit the allegation in 

accordance with the filing requirements 

set forth in § 351.301(c)(2)(i). 

(2) If the Secretary determines that the 

non-exporting country at issue is a 

nonmarket economy country and, in 

accordance with § 351.408, normal 

value would be determined using a 

factors of production methodology if the 

special rule for certain multinational 

corporations was applied, the Secretary 

will not apply the special rule for 

certain multinational corporations. 

■ 18. In § 351.405, revise paragraph (a) 

and add paragraph (b)(3) to read as 

follows: 

§ 351.405 Calculation of normal value 

based on constructed value. 

(a) Introduction. In certain 

circumstances, the Secretary may 

determine normal value by constructing 

a value based on the cost of 

manufacturing, selling, general and 

administrative expenses and profit. The 

Secretary may use constructed value as 

the basis for normal value when: neither 

the home market nor a third country 

market is viable; sales below the cost of 

production are disregarded; sales 

outside the ordinary course of trade or 

sales for which the prices are otherwise 

unrepresentative are disregarded; sales 

used to establish a fictitious market are 

disregarded; no contemporaneous sales 

of comparable merchandise are 

available; or in other circumstances 

where the Secretary determines that 

home market or third country prices are 

inappropriate. (See section 773(e) and 

(f) of the Act.) This section clarifies the 

meaning of certain terms and sets forth 

certain information which the Secretary 

will normally consider in determining a 

constructed value. 

(b) * * * 

(3) Under section 773(e)(2)(B)(iii) of 

the Act, the Secretary will normally 

consider the following criteria in 

selecting sources for selling, general and 

administrative expenses, as well as 

profit, in calculating constructed value: 

(i) The similarity of the potential 

surrogate companies’ business 

operations and products to the 

examined producer’s or exporter’s 

business operations and products; 

(ii) The extent to which the financial 

data of the surrogate company reflects 


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sales in the home market and does not 

reflect sales to the United States; 

(iii) The contemporaneity of the 

surrogate company’s data to the period 

of investigation or review; and 

(iv) The extent of similarity between 

the customer base of the surrogate 

company and the customer base of the 

examined producer or exporter. 

■ 19. In § 351.408, revise paragraph (b) 

to read as follows: 

§ 351.408 Calculation of normal value of 

merchandise from nonmarket economy 

countries. 

* * * * * 

(b) Selecting surrogate countries—(1) 

Determining comparable economies. 

The Secretary is directed by sections 

773(c)(2)(B) and 773(c)(4)(A) of the Act 

to select surrogate countries which are 

at a level of economic development 

comparable to that of the nonmarket 

economy country at issue. 

(i) Measuring economic 

comparability. In determining whether 

market economy countries are at a level 

of economic development comparable to 

the nonmarket economy at issue, the 

Secretary will place primary emphasis 

on per capita gross domestic product 

(GDP). 

(ii) Additional considerations in 

determining economic comparability. 

When the Secretary determines that 

such an analysis is warranted, the 

Secretary may consider additional 

factors in determining whether certain 

market economy countries are at a level 

of economic development comparable to 

the nonmarket economy at issue. If the 

Secretary considers additional factors in 

its analysis, the Secretary will identify 

those factors and provide the reason it 

considered those factors along with the 

list of comparable market economies 

issued under paragraph (b)(1)(iii) of this 

section. 

(iii) Annual listing of comparable 

economies. On an annual basis, the 

Secretary will determine market 

economies comparable to individual 

nonmarket economies and list those 

market economies on the Secretary’s 

website. 

(2) Determining significant producers 

of comparable merchandise. In selecting 

a surrogate country from those countries 

which the Secretary determines are 

economically comparable, the Secretary 

will consider, in accordance with 

section 773(c)(2)(A) and (c)(4)(B) of the 

Act, those countries that are significant 

producers of merchandise comparable 

to the subject merchandise. 

(3) Selecting between surrogate 

countries which are economically 

comparable and significant producers of 

comparable merchandise. If more than 

one economically comparable country 

produces comparable merchandise, the 

Secretary will consider the totality of 

the information on the record in 

selecting a surrogate country. Among 

the criteria the Secretary may consider 

in selecting a surrogate country are the 

availability, accessibility, and quality of 

data from those countries and the 

similarity of products manufactured in 

the potential surrogate countries in 

comparison to the subject merchandise. 

* * * * * 

■ 20. In § 351.502: 

■ a. Revise paragraphs (d) and (e); and 

■ b. Remove paragraphs (f) and (g). 

The revisions read as follows: 

§ 351.502 Specificity of domestic 

subsidies. 

* * * * * 

(d) Disaster relief. The Secretary will 

not regard disaster relief including 

pandemic relief as being specific under 

section 771(5A)(D) of the Act if such 

relief constitutes general assistance 

available to anyone in the area affected 

by the disaster. 

(e) Employment assistance. The 

Secretary will not regard employment 

assistance programs as being specific 

under section 771(5A)(D) if such 

assistance is provided solely with 

respect to employment of general 

categories of workers such as those 

based on age, gender, disability, longterm unemployment, veteran, rural or 

urban status and is available to everyone 

hired within those categories without 

any industry or enterprise restrictions. 

■ 21. In § 351.503, add paragraph (b)(3) 

to read as follows: 

§ 351.503 Benefit. 

* * * * * 

(b) * * * 

(3) Contingent liabilities and assets. 

For the provision of a contingent 

liability or asset not otherwise 

addressed under a specific rule 

identified under paragraph (a) of this 

section, the Secretary will treat the 

balance or value of the contingent 

liability or assets as an interest-free 

provision of funds and will calculate the 

benefit using, where appropriate, either 

a short-term or long-term commercial 

interest rate. 

* * * * * 

■ 22. In § 351.505, add paragraph 

(a)(6)(iii) and revise paragraphs (b), (c), 

and (e) to read as follows: 

§ 351.505 Loans. 

(a) * * * 

(6) * * * 

(iii) Initiation standard for 

government-owned policy banks. An 

interested party will normally meet the 

initiation threshold for specificity under 

paragraph (a)(6)(ii)(A) of this section 

with respect to section 771(5A)(D) of the 

Act if the party can sufficiently allege 

that the government-owned policy bank 

provides loans pursuant to government 

policies or directives and loan 

distribution information for the bank is 

not reasonably available. A policy bank 

is a government-owned special purpose 

bank. 

(b) Time of receipt of benefit. The 

Secretary normally will consider a 

benefit as having been received in the 

year in which the firm otherwise would 

have had to make a payment on the 

comparable commercial loan. 

(c) Allocation of benefit to a 

particular time period—(1) Short-term 

loans. The Secretary will allocate 

(expense) the benefit from a short-term 

loan to the year(s) in which the firm is 

due to make interest payments on the 

loan. 

(2) Long-term loans. The Secretary 

normally will calculate the subsidy 

amount to be assigned to a particular 

year by calculating the difference in 

interest payments for that year, i.e., the 

difference between the interest paid by 

the firm in that year on the governmentprovided loan and the interest the firm 

would have paid on the comparable 

commercial benchmark loan. 

* * * * * 

(e) Contingent liability interest-free 

loans—(1) Treatment as loans. In the 

case of an interest-free loan for which 

the repayment obligation is contingent 

upon the company taking some future 

action or achieving some goal in 

fulfillment of the loan’s requirements, 

the Secretary normally will treat any 

balance on the loan outstanding during 

a year as an interest-free, short-term 

loan in accordance with paragraphs (a), 

(b), and (c)(1) of this section. However, 

if the event upon which repayment of 

the loan depends will occur at a point 

in time more than one year after the 

receipt of the contingent liability loan, 

the Secretary will use a long-term 

interest rate as the benchmark in 

accordance with paragraphs (a), (b), and 

(c)(2) of this section. 

(2) Treatment as grants. If at any point 

in time the Secretary determines that 

the event upon which repayment 

depends is not a viable contingency or 

the loan recipient has met the 

contingent action or goal and the 

government has not taken meaningful 

action to collect repayment, the 

Secretary will treat the outstanding 

balance of the loan as a grant received 

in the year in which this condition 

manifests itself. 


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■ 23. In § 351.509, revise paragraph 

(a)(1) and (b)(1) to read as follows: 

§ 351.509 Direct taxes. 

(a) * * * 

(1) Exemption or remission of taxes. 

In the case of a program that provides 

for a full or partial exemption or 

remission of a direct tax (for example, 

an income tax), or a reduction in the 

base used to calculate a direct tax, a 

benefit exists to the extent that the tax 

paid by a firm as a result of the program 

is less than the tax the firm would have 

paid in the absence of the program, 

including as a result of being located in 

an area designated by the government as 

being outside the customs territory of 

the country. 

(b) * * * 

(1) Exemption or remission of taxes. 

In the case of a full or partial exemption 

or remission of a direct tax, the 

Secretary normally will consider the 

benefit as having been received on the 

date on which the recipient firm would 

otherwise have had to pay the taxes 

associated with the exemption or 

remission. For all exemptions or 

remissions related to income taxes, this 

date will be the date on which the firm 

filed its tax return. 

* * * * * 

■ 24. In § 351.510, revise paragraph 

(a)(1) to read as follows: 

§ 351.510 Indirect taxes and import 

charges (other than export programs). 

(a) * * * 

(1) Exemption or remission of taxes. 

In the case of a program other than an 

export program that provides for the full 

or partial exemption or remission of an 

indirect tax or an import charge, a 

benefit exists to the extent that the taxes 

or import charges paid by a firm as a 

result of the program are less than the 

taxes the firm would have paid in the 

absence of the program, including as a 

result of being located in an area 

designated by the government as being 

outside the customs territory of the 

country. 

* * * * * 

■ 25. In § 351.511, revise paragraphs 

(a)(2)(i) and (iii) to read as follows: 

§ 351.511 Provision of goods or services. 

(a) * * * 

(2) * * * 

(i) In general. The Secretary will 

normally seek to measure the adequacy 

of remuneration by comparing the 

government price to a marketdetermined price for the good or service 

resulting from actual transactions in the 

country in question. Such a price could 

include prices stemming from actual 

transactions between private parties or 

actual imports. In choosing such 

transactions or sales, the Secretary will 

consider product similarity; quantities 

sold or imported; and other factors 

affecting comparability. 

* * * * * 

(iii) World market price unavailable. 

If there is no world market price 

available to purchasers in the country in 

question, the Secretary will normally 

measure the adequacy of remuneration 

by assessing whether the government 

price is consistent with market 

principles. In making an assessment of 

whether a government price is 

consistent with market principles under 

this provision, the Secretary may assess 

such factors as costs (including rates of 

return sufficient to ensure future 

operations), the government’s price 

setting methodology, possible price 

discrimination, or a government price 

derived from actual sales from 

competitively run government auctions 

if the government auction: 

(A) Uses competitive bid procedures 

that are open without restriction on the 

use of the good or service; 

(B) Is open without restriction to all 

bidders, including foreign enterprises, 

and protects the confidentiality of the 

bidders; 

(C) Accounts for the substantial 

majority of the actual government 

provision of the good or service in the 

jurisdiction in question; and 

(D) Determines the winner based 

solely on price. 

* * * * * 

■ 26. Revise § 351.512 to read as 

follows: 

§ 351.512 Purchase of goods. 

(a) Benefit—(1) In general. In the case 

where goods are purchased by the 

government from a firm, in accordance 

with section 771(5)(E)(iv) of the Act a 

benefit exists to the extent that such 

goods are purchased for more than 

adequate remuneration. 

(2) Adequate remuneration defined— 

(i) In general. The Secretary will 

normally seek to measure the adequacy 

of remuneration by comparing the price 

paid to the firm for the good by the 

government to a market-determined 

price for the good based on actual 

transactions, including imports, 

between private parties in the country 

in question, but if such prices are not 

available, then to a world market price 

or prices for the good. 

(ii) Actual market-determined prices 

unavailable. If there are no marketdetermined domestic or world market 

prices available, the Secretary may 

measure the adequacy of remuneration 

by analyzing any premium in the 

request for bid or government 

procurement regulations provided to 

domestic suppliers of the good or use 

any other methodology to assess 

whether the price paid to the firm for 

the good by the government is 

consistent with market principles. 

(iii) Exclusion of certain prices. In 

measuring the adequacy of 

remuneration under this section, the 

Secretary may exclude certain prices 

from a particular country from its 

analysis if the Secretary determines that 

interested parties have demonstrated, 

with sufficient information, that certain 

actions, including government laws or 

policies, such as price or production 

mandates or controls, likely impact such 

prices. 

(iv) Use of ex-factory or ex-works 

price. In measuring adequate 

remuneration under paragraph (a)(2)(i) 

or (ii) of this section, the Secretary will 

use an ex-factory or ex-works 

comparison price and price paid to the 

firm for the good by the government in 

order to measure the benefit conferred 

to the recipient within the meaning of 

section 771(5)(E) of the Act. The 

Secretary will, if necessary, adjust the 

comparison price and the price paid to 

the firm by the government to remove 

all delivery charges, import duties, and 

taxes to derive an ex-factory or ex-works 

price. 

(3) Exception when the government is 

both a provider and purchaser of the 

good. When the government is both a 

provider and a purchaser of the good, 

such as electricity, the Secretary will 

normally measure the benefit to the 

recipient firm by comparing the price at 

which the government provided the 

good to the price at which the 

government purchased the same good 

from the firm. 

(b) Time of receipt of benefit. In the 

case of the purchase of a good, the 

Secretary normally will consider a 

benefit as having been received as of the 

date on which the firm receives 

payment for the purchased good. 

(c) Allocation of benefit to a 

particular time period. In the case of the 

purchase of a good, the Secretary will 

normally allocate (expense) the benefit 

to the year in which the benefit is 

considered to have been received under 

paragraph (b) of this section. However, 

if the Secretary considers this purchase 

to be for or tied to capital assets such 

as land, buildings, or capital equipment, 

the benefit will normally be allocated 

over time as defined in § 351.524(d)(2). 

■ 27. Revise § 351.521 to read as 

follows: 


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§ 351.521 Indirect taxes and import 

charges on capital goods and equipment 

(export programs). 

(a) Benefit—(1) Exemption or 

remission of taxes and import charges. 

In the case of a program determined to 

be an export subsidy that provides for 

the full or partial exemption or 

remission of an indirect tax or an import 

charge on the purchase or import of 

capital goods and equipment, a benefit 

exists to the extent that the taxes or 

import charges paid by a firm as a result 

of the program are less than the taxes 

the firm would have paid in the absence 

of the program, including as a result of 

being located in an area designated by 

the government as being outside the 

customs territory of the country. 

(2) Deferral of taxes and import 

charges. In the case that the program 

provides for a deferral of indirect taxes 

or import charges, a benefit exists to the 

extent that appropriate interest charges 

are not collected. Normally, a deferral of 

indirect taxes or import charges will be 

treated as a government-provided loan 

in the amount of the taxes deferred, 

according to the methodology described 

in § 351.505. The Secretary will use a 

short-term interest rate as the 

benchmark for tax deferrals of one year 

or less. The Secretary will use a longterm interest rate as the benchmark for 

tax deferrals of more than one year. 

(b) Time of receipt of benefit—(1) 

Exemption or remission of taxes and 

import charges. In the case of a full or 

partial exemption or remission of an 

indirect tax or import charge, the 

Secretary normally will consider the 

benefit as having been received at the 

time the recipient firm otherwise would 

be required to pay the indirect tax or 

import charge. 

(2) Deferral of taxes and import 

charges. In the case of the deferral of an 

indirect tax or import charge of one year 

or less, the Secretary normally will 

consider the benefit as having been 

received on the date on which the 

deferred tax becomes due. In the case of 

a multi-year deferral, the Secretary 

normally will consider the benefit as 

having been received on the anniversary 

date(s) of the deferral. 

(c) Allocation of benefit to a 

particular time period. The Secretary 

normally will allocate (expense) the 

benefit of a full or partial exemption, 

remission or deferral of taxes or import 

charges described in paragraph (a) of 

this section to the year in which the 

benefit is considered to have been 

received under paragraph (b) of this 

section. 

§ 351.522 [Removed and Reserved] 

■ 28. Remove and reserve § 351.522. 

■ 29. In § 351.525: 

■ a. Revise paragraphs (b)(1) and 

(b)(6)(iii), (iv), (v), and (vi); 

■ b. Add paragraphs (b)(6)(vii) and 

(b)(8) and (9); 

■ c. Revise paragraph (c); and 

■ d. Add paragraph (d). 

The revisions and additions read as 

follows: 

§ 351.525 Calculation of ad valorem 

subsidy rate and attribution of subsidy to a 

product. 

* * * * * 

(b) * * * 

(1) In general. In attributing a subsidy 

to one or more products, the Secretary 

will apply the rules set forth in 

paragraphs (b)(2) through (9) of this 

section. The Secretary may determine to 

limit the number of cross-owned 

corporations examined under this 

section based on record information and 

resource availability. 

* * * * * 

(6) * * * 

(iii) Holding or parent companies. If 

the firm that received a subsidy is a 

holding company, including a parent 

company with its own business 

operations, the Secretary will attribute 

the subsidy to the consolidated sales of 

the holding company and its 

subsidiaries. 

(iv) Input producer—(A) In general. If 

there is cross-ownership between an 

input producer that supplies, either 

directly or indirectly, a downstream 

producer and production of the input 

product is primarily dedicated to 

production of the downstream products, 

the Secretary will attribute subsidies 

received by the input producer to the 

combined sales of the input and 

downstream products produced by both 

corporations (excluding the sales 

between the two corporations). 

(B) Primarily dedicated. In 

determining whether the input product 

is primarily dedicated to production of 

the downstream product, the Secretary 

will determine, as a threshold matter, 

whether the input could be used in the 

production of a downstream product 

including subject merchandise. The 

Secretary may also consider the 

following factors, which are not in 

hierarchical order: whether the input is 

a link in the overall production chain; 

whether the input provider’s business 

activities are focused on providing the 

input to the downstream producer; 

whether the input is a common input 

used in the production of a wide variety 

of products and industries; whether the 

downstream producers in the overall 

production chain are the primary users 

of the inputs produced by the input 

producer; whether the inputs produced 

by the input producer are primarily 

reserved for use by the downstream 

producer until the downstream 

producer’s needs are met; whether the 

input producer is dependent on the 

downstream producers for the 

purchases of the input product; whether 

the downstream producers are 

dependent on the input producer for 

their supply of the input; the 

coordination, nature and extent of 

business activities between the input 

producer and the downstream 

producers whether directly between the 

input producer and the downstream 

producers or indirectly through other 

cross-owned corporations; and any 

other factor deemed relevant by the 

Secretary based upon the case-specific 

facts. 

(v) Providers of utility products. If 

there is cross-ownership between a 

corporation providing electricity, 

natural gas or other similar utility 

product and a producer of subject 

merchandise, the Secretary will 

attribute subsidies received by that 

provider to the combined sales of that 

provider and the sales of products sold 

by the producer of subject merchandise 

if at least one of the following two 

conditions are met: 

(A) A substantial percentage, 

normally defined as 25 percent or more, 

of the production of the cross-owned 

utility provider is provided to the 

producer of subject merchandise, or 

(B) The producer of subject 

merchandise purchases a substantial 

percentage, normally defined as 25 

percent or more, of its electricity, 

natural gas, or other similar utility 

product from the cross-owned provider. 

(vi) Transfer of subsidy between 

corporations with cross-ownership. If a 

cross-owned corporation received a 

subsidy and transferred the subsidy to a 

producer of subject merchandise, the 

Secretary will only attribute the subsidy 

to products produced by the recipient of 

the transferred subsidy. When the crossowned corporation that transferred the 

subsidy could fall under two or more of 

the paragraphs under paragraph (b)(6) of 

this section the transferred subsidy will 

be attributed solely under this 

paragraph. 

(vii) Cross-ownership defined. Crossownership exists between two or more 

corporations when one corporation can 

use or direct the individual assets of the 

other corporation(s) in essentially the 

same ways it can use its own assets. 

Normally, this standard will be met 

when there is a majority voting 

ownership interest between two 

corporations or through common 


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ownership of two (or more) 

corporations. 

* * * * * 

(8) Attribution of subsidies to plants 

or factories. The Secretary will not tie or 

attribute a subsidy on a plant- or 

factory-specific basis. 

(9) General standard for finding tying. 

A subsidy will normally be determined 

to be tied to a product or market when 

the authority providing the subsidy was 

made aware of, or otherwise had 

knowledge of, the intended use of the 

subsidy and acknowledged that 

intended use of the subsidy prior to, or 

concurrent with, the bestowal of the 

subsidy. 

(c) Trading companies—(1) In 

general. Benefits from subsidies 

provided to a trading company that 

exports subject merchandise shall be 

cumulated with benefits from subsidies 

provided to the firm which is producing 

subject merchandise that is sold through 

the trading company, regardless of 

whether the trading company and the 

producing firm are affiliated. 

(2) The individually examined 

respondent exports through trading 

company. To cumulate subsidies when 

the trading company is not individually 

examined as a respondent, the Secretary 

will pro-rate the subsidy rate calculated 

for the trading company by using the 

ratio of the producer’s total exports of 

subject merchandise to the United 

States sold through the trading company 

divided by producer’s total exports of 

subject merchandise to the United 

States and add the resultant rate onto 

the producer’s calculated subsidy rate. 

(3) The individually examined 

respondent is a trading company. To 

cumulate subsidies when the trading 

company is individually examined as a 

respondent, the Secretary will pro-rate 

the subsidy rate calculated for the 

producer(s) by the ratio of the 

producer’s sales of subject merchandise 

to the United States purchased or 

sourced by the trading company to total 

sales to the United States of subject 

merchandise from all selected producers 

sourced by the respondent trading 

company and add the resultant rates to 

the trading company’s calculated 

subsidy rate. 

(d) Ad valorem subsidy rate in 

countries with high inflation. For 

countries experiencing an inflation rate 

greater than 25 percent per annum 

during the relevant period, the Secretary 

will normally adjust the benefit amount 

(numerator) and the sales data 

(denominator) to account for the rate of 

inflation during the relevant period of 

investigation or review in calculating 

the ad valorem subsidy rate. 

■ 30. Revise § 351.526 to read as 

follows: 

§ 351.526 Subsidy extinguishment from 

changes in ownership. 

(a) In general. The Secretary will 

normally presume that non-recurring 

subsidies continue to benefit a recipient 

in full over an allocation period 

determined consistent with 

§§ 351.507(d), 351.508(c)(1), or 351.524, 

notwithstanding an intervening change 

in ownership. 

(b) Rebutting the presumption of 

subsidy continuation notwithstanding a 

change in ownership. (1) An interested 

party may rebut the presumption in 

paragraph (a) of this section by 

demonstrating with sufficient evidence 

that, during the allocation period, a 

change in ownership occurred in which 

the seller sold its ownership of all or 

substantially all of a company or its 

assets, retaining no control of the 

company or its assets, and 

(i) In the case of a government-toprivate sale, that the sale was an arm’slength transaction for fair market value, 

or 

(ii) In the case of a private-to-private 

sale, that the sale was an arm’s-length 

transaction, unless a party demonstrates 

that the sale was not for fair market 

value. 

(2) Arm’s-length. In determining 

whether the evidence presented in 

paragraph (b)(1) of this section 

demonstrates that the transaction was 

conducted at arm’s length, the Secretary 

will be guided by the SAA, which 

defines an arm’s-length transaction as a 

transaction negotiated between 

unrelated parties, each acting in its own 

interest, or between related parties such 

that the terms of the transaction are 

those that would exist if the transaction 

had been negotiated between unrelated 

parties. 

(3) Fair Market Value. (i) In 

determining whether the evidence 

presented by parties pursuant to 

paragraph (b)(1) of this section 

demonstrates that the transaction was 

for fair market value, the Secretary will 

determine whether the seller, including 

in the case of a privatization through the 

government in its capacity as seller, 

acted in a manner consistent with the 

normal sales practices of private, 

commercial sellers in that country, 

taking into account evidence regarding 

whether the seller failed to maximize its 

return on what it sold. 

(ii) In making the determination 

under paragraph (b)(3)(i) of this section, 

the Secretary may consider information 

regarding comparable benchmark prices 

as well as information regarding the 

process through which the sale was 

made. The following is a non-exhaustive 

list of specific considerations that the 

Secretary may find to be relevant in this 

regard: 

(A) Objective analysis. Whether the 

seller performed or obtained an 

objective analysis in determining the 

appropriate sales price and, if so, 

whether it implemented the 

recommendations of such objective 

analysis for maximizing its return on the 

sale, including in regard to the sales 

price recommended in the analysis; 

(B) Artificial barriers to entry. 

Whether the seller-imposed restrictions 

on foreign purchasers or purchasers 

from other industries, overly 

burdensome or unreasonable bidder 

qualification requirements, or any other 

restrictions that artificially suppressed 

the demand for, or the purchase price 

of, the company; 

(C) Highest bid. Whether the seller 

accepted the highest bid, reflecting the 

full amount that the company or its 

assets (including the value of any 

subsidy benefits) were actually worth 

under the prevailing market conditions 

and whether the final purchase price 

was paid through monetary or close 

equivalent compensation; and 

(D) Committed investment. Whether 

there were price discounts or other 

inducements in exchange for promises 

of additional future investment that 

private, commercial sellers would not 

normally seek (for example, retaining 

redundant workers or unwanted 

capacity) and, if so, whether such 

committed investment requirements 

were a barrier to entry or in any way 

distorted the value that bidders were 

willing to pay for what was being sold. 

(4) Deadline to rebut the presumption 

under paragraph (b)(1) of this section. 

The Secretary will normally not 

consider information submitted by a 

respondent or government on the record 

to be sufficient to rebut the presumption 

of subsidy continuation under 

paragraph (b)(1) of this section unless 

that submitted information is timely 

filed as part of the respondent’s or 

government’s initial questionnaire 

response. 

(5) Market distortion. Information 

presented under paragraphs (b)(2) and 

(3) of this section notwithstanding, the 

Secretary will not find the presumption 

in paragraph (a) of this section to be 

rebutted if an interested party has 

demonstrated that, at the time of the 

change in ownership, the broader 

market conditions necessary for the 

transaction price to accurately reflect 

the subsidy benefit were not present or 

were severely distorted by government 

action or inaction such that the 

transaction price was meaningfully 


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Federal Register / Vol. 89, No. 241 / Monday, December 16, 2024 / Rules and Regulations 101769 

different from what it would otherwise 

have been absent the distortive 

government action or inaction. In 

assessing such claims, the Secretary 

may consider, among other things, the 

following factors: 

(i) Fundamental conditions. Whether 

the fundamental requirements for a 

properly functioning market are 

sufficiently present in the economy in 

general as well as in the particular 

industry or sector, including, for 

example, free interplay of supply and 

demand, broad-based and equal access 

to information, sufficient safeguards 

against collusive behavior, and effective 

operation of the rule of law; and 

(ii) Legal and fiscal incentives. 

Whether the government has used the 

prerogatives of government in a special 

or targeted way that makes possible or 

otherwise significantly distorts the 

terms of a change in ownership in a way 

that a private seller could not. Examples 

of such incentives include, but are not 

limited to, the following: 

(A) Special tax or duty rates that make 

the sale more attractive to potential 

purchasers; 

(B) Regulatory exemptions particular 

to the privatization (or to privatizations 

generally) affecting worker retention or 

environmental remediation; or 

(C) Subsidization or support of other 

companies to an extent that severely 

distorts the normal market signals 

regarding company and asset values in 

the industry in question. 

(c) Subsidy benefit extinguishment— 

(1) In general. If the Secretary 

determines that any evidence presented 

by interested parties under paragraph 

(b) of this section rebuts the 

presumption under paragraph (a) of this 

section, the full amount of pretransaction subsidy benefits, including 

the benefit of any concurrent subsidy 

meeting the criteria in paragraph (c)(2) 

of this section, will be found to be 

extinguished and therefore not 

countervailable. Absent such a finding, 

the Secretary will not find that a change 

in ownership extinguishes subsidy 

benefits. 

(2) Concurrent subsidies. For 

purposes of paragraph (c)(1) of this 

section, concurrent subsidies are those 

subsidies given to facilitate or encourage 

or that are otherwise bestowed 

concurrent with a change in ownership. 

The Secretary will normally consider 

the value of a concurrent subsidy to be 

fully reflected in the fair market value 

price of an arm’s-length change in 

ownership and, therefore, to be fully 

extinguished in such a transaction 

under paragraph (c)(1) of this section, if 

the following criteria are met: 

(i) The nature and value of the 

concurrent subsidies are fully 

transparent to all potential bidders and, 

therefore, reflected in the final bid 

values of the potential bidders, 

(ii) The concurrent subsidies are 

bestowed prior to the sale, and 

(iii) There is no evidence otherwise 

on the record demonstrating that the 

concurrent subsidies are not fully 

reflected in the transaction price. 

[FR Doc. 2024–29245 Filed 12–10–24; 8:45 am] 

BILLING CODE 3510–DS–P 


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