Commerce Finds Russia a Nonmarket Economy in AD Cases

Russia will no longer be considered a market economy in antidumping duty investigations, which will likely cause future AD rates to rise for some Russian companies and rates to be set higher in AD duty orders issued for the country going forward.

Alongside its final determination in the AD investigation on emulsion styrene butadiene rubber from Russia, the Commerce Department found Russia’s continued backsliding on liberalization initiatives and increasing government control over the economy mean actual prices in the country can no longer be relied upon to calculate AD rates.

Similar to AD proceedings involving China, another nonmarket economy, Commerce will now rely on surrogate prices from other countries and producers, and will set a Russia-wide rate for all Russian companies that don’t demonstrate independence from state control. As the Russia-wide rate companies are considered a single entity, any failure by a company to respond to Commerce questionnaires can result in high penalty rates for all Russia-wide companies. China-wide AD rates can reach into the hundreds percent.

The decision is a reversal from Commerce’s 2021 determination that Russia was still a market economy. Backsliding since that determination includes “a demonstrable aggrandizement in government control over the economy; an increase in government control over prices; a deterioration in rights associated with freedom of information; and the ability of workers to bargain freely with management for wages,” Commerce said in a memo released Nov. 10.

Russia’s newfound nonmarket economy status will apply to all antidumping duty proceedings with a period of review or investigation starting after Nov. 1, 2022. Market economy status will still apply to proceedings covering a period entirely before that date. Commerce will determine its approach “on a case-by-case basis” for proceedings covering a period straddling that date, it said.

The nonmarket economy determination will not apply to Commerce’s investigation on emulsion styrene butadiene rubber from Russia. The agency had transferred its review of Russia’s status to that investigation after the investigation of non-urea ammonium nitrate under which the review was previously conducted was terminated due to an International Trade Commission finding of no injury.