Opinion ID: 624415
Heading Depth: 2
Heading Rank: 1

Heading: Antidumping Statutory Scheme

Text: Dumping occurs when a foreign company sells a product in the United States at a lower price than what it sells that same product for in its home market. Such a product can be described as being sold below fair value. Dumping presents unfair competition concerns because foreign companies selling goods below fair value can undercut domestic producers selling those same goods at market prices. Congress attempted to offset the harmful effects of dumping by enacting the Tariff Act of 1930. This statute, in combination with other statutes and regulations, provides a complex framework for determining the extent to which an imported product is being dumped, and for calculating a duty rate that offsets the dumping. Under the antidumping statutes, a domestic producer suspecting a foreign company of dumping can petition the Department of Commerce (Commerce) for an investigation of that foreign company's merchandise. Additionally, Commerce itself may initiate such an investigation. In an investigation. Commerce analyzes the prices of the imported goods and determines whether dumping occurred. 19 U.S.C. §§ 1671, 1673. The International Trade Commission (ITC) conducts a parallel investigation to determine whether an industry in the United States suffers injury from the imports at issue. Id. If the final determinations of Commerce and the ITC are affirmative (i.e., if they conclude that dumping and injury occurred), Commerce issues an antidumping order (AD order), which publishes duty rates for the investigated products. Id. §§ 1671e, 1673e. The duty rates calculated by Commerce throughout the antidumping investigation are called deposit rates. The AD order also instructs United States Customs and Border Protection (Customs) to collect cash deposits for merchandise subject to the order when that merchandise enters the country. The values of these deposits are based on the duty rates published in the order. Technically speaking, the duty rates published in the AD order are not the final, assessed rates. Rather, as explained below, rates are finalized later in the process. Therefore, the cash deposits collected upon entry are considered estimates of the duties that the importer will ultimately have to pay as opposed to payments of the actual duties. Each year after an AD order issues, an interested party can request that Commerce conduct an administrative review of the order. In this review, Commerce analyzes the actual merchandise imported throughout the previous year that is subject to the order. (In some administrative reviews, Commerce analyzes the merchandise imported over the previous year and a half.) This system, often described as a retroactive system, enables Commerce to calculate a final duty rate based on the actual imports themselves as opposed to information obtained before importation even began. The final anti-dumping duty rate obtained through the administrative review is called the liquidation rate. Commerce communicates this liquidation rate to Customs through liquidation instructions, and Customs then instructs its staff at each port to assess final duties on all relevant entries. If the deposit rate (i.e., the estimated rate calculated during the antidumping investigation) is higher than the final liquidation rate, then the importer overpaid and is entitled to a refund. If the deposit rate equals the liquidation rate, then the importer's previous deposit satisfies its duty obligation. Notably, if no administrative review is requested, the deposit rate is generally used to assess the final duty. Additionally, the antidumping statutes permit accelerated review for companies that ship the same type of product covered by a previously-issued antidumping duty order, but where that shipping occurs outside of the timeframe encompassed by order's period of review. Such companies are often called new shippers, and this accelerated review program is called a new shipper review. If a new shipper does not participate in a new shipper review, its merchandise will likely be subject to a predetermined deposit rate that applies generally to companies whose products were never individually investigated. These predetermined rates are often higher than the individual rates obtained through an investigation. Like importers participating in an initial antidumping investigation, new shippers participating in a new shipper review must post a deposit intended to reflect the value of the antidumping duties that will ultimately be owed. 19 U.S.C. § 1675(a)(2)(B)(iii). For over eleven years (January 1, 1995 through April 1, 2006), new shippers were allowed to satisfy this deposit requirement by having a surety post a Customs bond in lieu of cash (also referred to as a new shipper bond). Id. This bond posting process was (and still is) governed by contracts involving new shippers, sureties, and the government. These bond contracts are intertwined with the federal antidumping regime, as they incorporate numerous antidumping statutes and regulations by reference. In August 2006, however, Congress suspended the bonding option, thereby making cash deposits mandatory. Finally, as mentioned, the antidumping statutes require Customs to distribute collected duties to domestic companies harmed by dumping. Specifically, in October 2000, Congress passed the Continued Dumping and Subsidy Offset Act, which provides that Customs shall distribute antidumping duties collected on imports to the affected domestic producers. 19 U.S.C. § 1675c(a). While Congress repealed the CDSOA in 2005, it allowed for the continued distribution of duties assessed and collected before October 1, 2007. See Continued Dumping and Subsidy Offset Act of 2000, Pub.L. No. 106-387, § 1001-1003, 114 Stat. 1549, 1549A-72-75 (codified at 19 U.S.C. § 1675c (2000)), repealed by Deficit Reduction Act of 2005, Pub.L. 109-171, § 7601(a), 120 Stat. 4, 154 (Feb. 8, 2006; effective Oct. 1, 2007).