Commerce Updates Regulations to Improve Trade Remedy Enforcement

Trade Update • SEPTEMBER 27, 2021

The U.S. Department of Commerce last week announced extensive modifications to its antidumping duty and countervailing duty regulations, which are intended to improve enforcement activities designed to defend U.S. companies from unfair and illegal trade practices.

The near 300-page final document represents “the most comprehensive updates to trade enforcement in more than two decades” aiming to close loopholes and address inefficiencies following a years-long rulemaking process.

The new regulations apply to various aspects of AD/CVD proceedings, including:

• Standalone rules governing circumvention inquiries and determinations;
• Rules for Commerce to assist U.S. Customs and Border Protection in combating duty evasion;
• Rules to prevent abuse of new shipper reviews;
• Rules updating the procedures and standards for scope inquiries and rulings; and
• Revised timeline for submitting comments pertaining to industry support.

Commerce notes that the final regulations take into consideration comments from the public on the draft regulations, which were published on August 13, 2020. A detailed explanation of various modifications from the proposed rule to the final rule, along with specific responses to comments is included in the Federal Register notice.

Implementation

Certain parts of the rule will be effective within 30 days of the September 20, 2021 publication date (October 20, 2021) while other parts will be effective within 45 days (November 4, 2021).

Effective October 20, 2021:

• Deadlines for submission of comments re industry support in AD/CVD proceedings (19 C.F.R. § 351.203(g)). Commerce sets out deadlines for comments on industry support no later than five business days before the scheduled date of initiation and for rebuttal comments no later than two calendar days from the time limit for filing comments.
• ‘New shipper’ reviews (19 C.F.R. § 351.214).
  This covers a procedure by which “new shippers” can obtain their own individual dumping margin or countervailable subsidy rate on an expedited basis. The new regulation also clarifies the circumstances when Commerce will grant a new shipper review and establishes the specific factors to be considered “bona fide sales” in determining whether the sales at issue constitute under the AD and CVD laws.
• Documentation requirements (19 C.F.R. § 351.214(b)(2)(v)(D), (E))
  Detailed new documentation and certification requirements have been established in connection with an exporter or producer requesting a new shipper review. The new regulation also empowers Commerce to rescind the new shipper review if the necessary information regarding the bona fide sale issue is not on record, or if the exporter or producer failed to demonstrate the existence of such a sale to an unaffiliated customer.
• Certifications (19 C.F.R. § 351.228)
  This codifies Commerce’s existing practice to require certifications in certain proceedings, setting out procedures for compliance and “consequences” for non-compliance with the requirements.
• Importer reimbursement certifications (19 C.F.R. § 351.402(f))
  Importers are now required to certify with CBP before liquidation of its entry (irrespective of any agreement for the payment or reimbursement of AD/CVDs by the exporter or producer).

Effective November 4, 2021:

• Scope matters in AD and CVD proceedings (19 C.F.R. § 351.225).
• Circumvention of AD and CVD orders (19 C.F.R. § 351.226).
• Covered merchandise referrals received from CBP (19 C.F.R. § 351.227).
• Certain procedures for access to business proprietary information in AD/CVD proceedings (19 C.F.R. §§ 351.103(d), 351.305).

Additional information on the new regulations can be found in the Federal Register notice and the updated AD/CVD FAQ section on trade.gov.