On November 4, 2013, the U.S. Department of Commerce ("Commerce")
published changes to procedures for selecting respondents for
administrative reviews of antidumping duty orders. A new
sampling approach to respondent selection could result in exporters
of relatively low volumes shipped to the United States being chosen
as respondents. This, in turn, is expected to generally result
in higher average dumping rates.
Antidumping Cases
"Dumping" is importation of merchandise for less than "fair
value" – often, an estimate of production and sales costs.
Under U.S. law, Commerce is to impose an antidumping duty on imports
of merchandise found to be dumped if the U.S. International Trade
Commission determines that the imports injure or threaten injury to
U.S. competitors.
Once an antidumping order is imposed, Commerce generally requires
that final antidumping duties be collected from importers
retroactively, often years after dutiable imports occur. For
any given year, Commerce ordinarily calculates rates for assessment
of duties on imports during that year through an administrative
review of imports covered by the antidumping order during that
year.
For administrative reviews, Commerce does not normally examine
imports of the subject merchandise from all foreign producers.
Rather, it typically evaluates whether and the extent to which the
top three or four exporters of subject merchandise – "mandatory
respondents" – dumped merchandise in the U.S. market during that
year. The review results in each of these respondents being
accorded its own antidumping duty rate. An average of these
rates is often applied to other imports of subject merchandise
during the year.
Respondent Selection Based on Sampling
In the November 4 notice, Commerce announced that in some
circumstances it plans to change its approach to selecting mandatory
respondents for antidumping administrative reviews when it examines
less than all imports of subject merchandise. Rather than
examining the top three or four producers, it might select
respondents through a sampling technique. Commerce said
that it plans to use sampling if:
- there is a request by an interested party for the use of
sampling to select respondents;
- Commerce has the resources to examine individually at least
three companies;
- the largest three exporters subject to the administrative
review account for no more than half of the total export volume
under review; and
- Commerce has a reasonable basis to believe or suspect that the
average export prices, dumping margins or both for the largest
exporters differ from those of the remaining exporters.
As a result, relatively small exporters will now have a
significant chance of being selected as mandatory respondents in
administrative reviews of antidumping orders. Since
individually examined respondents are assigned company-specific
antidumping margins, this new procedure could prove very helpful to
smaller exporters that are well organized and can produce data
indicating that they are not dumping. But sampling selection
could prove damaging to smaller exporters that are not prepared to
be individually examined by Commerce or, for some other reason, are
found to be dumping at higher-than-average margins.
On balance, it is expected that examinations of smaller exporters
will tend to produce higher dumping margins than do examinations of
top-volume exporters. In this regard, it is understood that
smaller exporters often will not obtain expert guidance that could
result in lower dumping margins. Critically, this will affect
not only the individually examined respondents but also other
exporters to which the "all others" rate – a weighted-average of
mandatory respondents' rates – applies.
The
Orrick International Trade & Compliance Group is deeply involved
in antidumping and other unfair trade matters. For more information
about these developments, please contact Harry L. Clark at (202)
339-8499 or [email protected], W. Clark McFadden II at (202)
339-8479 or [email protected], or your
Orrick relationship lawyer. |