Antidumping Duties – The Administrative Process – Related Importer & Producer
A special report by RIGGLE & CRAVEN
Antidumping Duty issues need to be examined from 2 different perspectives - that of the foreign producer and that of the related U.S. importer. The nature of any relationship between the
Related Producers and importers share a common interest in obtaining the lowest possible rate. Both have responsibilities in the review, and while the responsibilities are not identical, the success is dependent upon mutual participation. The financial exposure of the related producer and importer will depend, to a large extent, on the nature of the relationship.
How Does The
The determination as to whether two parties are related is specifically addressed by the statute and the regulations. It is a test that examines control, both de facto and de jure, and ownership. It includes members of a family, including brothers, sisters, spouses, ancestors and lineal descendents; officers and directors, partners, employer and employee, any person owning, directing or controlling 5% of the voting stock, two or more organizations under common control or other means of control. The key is whether the person alleging to control both entities is in a position to exercise restraint or direction.
In interpreting this portion of the statute and regulations, Commerce has on occasion found a lack of a relationship between two companies owned by blood relatives due to lack of control. On other occasions, they have found control notwithstanding a lack of common ownership. The determination is very fact specific, although if any indicia of control is present or if the ownership or blood relationship percentages are met, it is more likely than not that the entities will be found to be related.
Summary: The foreign producer has the greatest control over the antidumping process and has a significant part of the burden of responding to the Department Questionnaires. The direct financial exposure depends on the nature of the relationship between the producer and the related
The Review Process: Antidumping duties are normally based on a comparison between actual sales prices in the home market or third country market and sale prices in the
In the case of a related imported and foreign producer, the
These amounts are calculated either in the internal investigation or in an Aannual review@ process. An annual review is an administrative process in which the U.S. Department of Commerce issues a complex multipart questionnaire to the foreign producer and the related
This information submitted is subject to a process called verification. Verification is the equivalent of a tax audit and can be performed by the Department of Commerce to verify the accuracy of the information submitted. Verifications are either passed or failed. The Department is not required to conduct a verification, but such verifications often occur in both investigations and reviews. A failure of verification is a serious matter with significant adverse consequences while passing a verification does not ensure a low rate. Notwithstanding Department claims to the contrary, verifications are never beneficial to foreign producers. The determination that a verification has been failed can be based on any number of reasons, such as a failure to report certain sales, failure to identify a related supplier, failure to properly report a production cost, or other failure to fully cooperate. In such case the Department assigns a Afacts available@ rate as a substitute for the calculated rate. Depending on the nature of the failure, this rate is either a cooperative or uncooperative facts available rate. The facts available rates are arbitrary rates based on results from prior reviews or investigations. It is a substitute for the actual rate where the actual rate cannot be determined. While normally high, it is not a penalty or fine and is an ordinary duty treated in same fashion as other ordinary customs duties.
Financial Impact: The Foreign producer faces no direct financial consequences from the result of any review. Antidumping duties are the sole obligation of the importer of record and can only be paid by the importer of record. The antidumping duty law expressly forbids the refunding or rebating of the antidumping duties, whether directly or indirectly, by the foreign producer and any such refunds or rebates must be turned over to the
Summary : The Related U.S. Importer has significant control over antidumping duties and also bears the most immediate and serious financial consequences for a high rate.
The Review Process: The
Financial Impact: The
In sum, antidumping duty reviews significant burden on foreign producers and their related importers. Strategies need to be established to enable the smooth resolution of the issues created and to obtain the most economically efficient results.
Riggle and Craven and its affiliates have experience in representing a wide range of foreign producers and related and unrelated
The law firm of RIGGLE & CRAVEN is providing this as part of a commitment to advise of recent developments which are of importance to the international trade community. Permission to reproduce, photocopy, reprint or excerpt this advertising material is granted provided the source is attributed to RIGGLE & CRAVEN. The information provided is in summary form and we urge readers to confirm any conclusions reached before taking action based on it.
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