Recently Proposed AD/CVD Changes Squeeze Importers, Commenters Say

Importers and domestic producers predictably clashed over the Commerce Department’s recently proposed changes to its antidumping and countervailing duty regulations (see 2008120037), in comments recently submitted to the agency. While domestic industry urged Commerce to move forward with the changes, importers challenged proposed changes to liquidation timelines in scope inquiries, as well as tighter deadlines that they said make it harder to defend from AD/CVD cases.

“The proposed new regulations further increase the uncertainty on importers -- making them potentially subject to company destroying additional duties and assessments by increasing the retroactivity and decreasing the avenues to address such assessments,” Now Plastics said in comments submitted ahead of Commerce’s Sept. 14 deadline (see 2009090021). “The Department appears to view importers as ‘the enemy’, treating them as if most of their actions are intended to improperly bring goods into the United States. This is simply not true,” the importer said.

Many comments addressed a proposal by Commerce to apply scope rulings to all unliquidated entries of any merchandise found to be subject to AD/CV duties, rather than just entries on or after the date Commerce begins the inquiry.

“RILA is deeply concerned regarding Commerce's proposal to apply retroactive cash deposit requirements stemming from an affirmative scope inquiry to unliquidated entries,” the Retail Industry Leaders Association said in its comments. “Many SMEs might face bankruptcy if they are subject to retroactive liability for products that they did not believe at the time of importation were subject to an AD/CVD order,” the trade group said.

RILA also took issue with a proposed lengthening of timelines for scope decisions from 120 to 300 days. “Regardless of the inconsistency of Commerce affording itself more time in scope inquir[i]es with its proposal to apply retroactive duty liability, the proposal should be rejected because it imposes a steep burden on U.S. importers. The current 120-day deadline is already exceedingly difficult on U.S. companies, which face legal and business uncertainty as to the ultimate status of products subject to a scope inquiry. A 300-day deadline would increase that burden exponentially,” RILA said.

Importers also had concerns about a shortening of the time frame for comments on industry support for AD/CVD investigations, which are gathered by Commerce following submission of a petition for AD/CV duties to gauge whether to begin a formal investigation.

Shortening the time to file comments on industry support would “seriously prejudice” foreign exporters and U.S. importers, given that the 20-day period for considering industry support is “already short,” the American Association of Exporters and Importers said. “Given that respondent parties rarely have advance notice of new petitions, they have very little time to prepare and file comments,” AAEI said. Commerce may only begin AD/CV duty investigations if support for it within the relevant industry represents at least 25% of domestic production and 50% of the domestic production produced by that portion of the industry expressing support for, or opposition to, the petition.

Domestic producers and the law firms that generally represent them, on the other hand, applauded the proposal, and in some cases asked Commerce to implement even tougher modifications to its AD/CVD regulations.

The proposed change to liquidation timelines in scope inquiries represents “an improvement on the current regulations, which permit entries subject to an order to escape suspension of liquidation merely based on the fact they have not been declared as subject merchandise,” law firm Kelley Drye said. But rather than retroactively suspend liquidation only after an affirmative preliminary or final scope decision, Commerce “should instruct Customs to suspend liquidation of all unliquidated entries of the product at issue at the time a scope inquiry is initiated,” Kelley Drye said. “This is the best way to preserve the status quo and to prevent unscrupulous parties from gaming the system.”

Current deadlines for industry support comments leave Commerce with “little or no time to consider fully such comments for purposes of determining whether the petition has sufficient industry support,” said Wiley Rein, another law firm that generally represents domestic industry. The shorter deadline would ensure the filers of a petition have enough time to respond to opposing comments, it said. Commerce should also add additional certifications from commenters opposing the investigation, and require more justification as to why Commerce should disregard the industry support date in the original petition, the law firm said.

Picard Kentz said that provisions in Commerce’s proposal on new shipper reviews don’t do enough to address concerns over loss of revenue. Per language in the Trade Facilitation and Trade Enforcement Act of 2015, Commerce should require new shippers to have multiple sales before they can qualify for their own rate, rather than the single sale required by Commerce’s current regulations.

The Committee to Support U.S. Trade Laws “supports the immediate and timely implementation of the modifications,” it said in comments. “We do not support any extensions of time for submissions of comments to the proposed rule, and we urge Commerce to reject any such requests. These adjustments represent common-sense improvements that are long overdue. It is crucial that the Department move forward with the proposed rule, as originally proscribed in the Federal Register announcement, if the improvements are to be completed by the end of 2020. CSUSTL urges Commerce to move forward with the proposed rule’s prompt implementation.”