Antidumping and Countervailing Duty Actions

by Nexsen Pruet, PLLC
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Antidumping (AD) and countervailing duty (CVD) actions in the United States against foreign companies have increased markedly in recent years.  The US Government has prioritized the protection of domestic industries impacted by ‘dumped’ or ‘subsidized’ foreign products.  AD/CVD actions are serious – company fortunes are routinely altered by these complex investigations that involve, at a minimum, two agencies of the U.S. Federal Government.  These actions are also extremely time sensitive.  Nexsen Pruet can assist foreign companies in negotiating the “AD/CVD minefield.”

US law defines ‘dumping’ as the sale of a foreign product in the United States at a price that is below the producer’s sales price in their home market, or at a price that is lower than the cost of production (generally described as products that are sold at “less than their fair value”).  A ‘dumping margin’ is calculated and is then offset with a higher importation duty.  However, as long as a product does not fall within this definition, sales in the United States at prices below those of American products does not constitute dumping.

‘Subsidized’ products are goods that have benefited from foreign government financial assistance in the production, manufacture or exportation of that product.  The amount of the subsidy is then offset, or ‘countervailed,’ through higher import duties.

Petitions are filed with the International Trade Commission (ITC) and the US Department of Commerce, International Trade Administration (ITA).  This filing starts an extremely time sensitive process.  Missed deadlines can have disastrous impact on a company.  In addition, failure to participate at important milestones in the process can adversely impact a company’s sales in the United States for years.     

This process unfolds quickly.  As the ITC and the ITA try to determine: (1) whether there is a dumping margin or a subsidized product, and (2) whether there is injury to a domestic industry, there are several opportunities afforded to foreign producers to defend their practices, or to re-define the AD/CVD analysis.  The ITA will normally assess whether a petition complies with certain statutory guidelines within 20 days of filing.  At the same time, the ITC will normally take 45 days to decide whether to pursue an investigation.  Thereafter, AD preliminary investigations are usually concluded within 190 days of filing; 130 days for CVD investigations.  Final phases of investigation are typically concluded within 12 to 18 months of initiation.  During this process US counsel is customarily required to review business proprietary information disclosed as part of the investigations. 

Nexsen Pruet can assist foreign clients with their ITC questionnaires; and our lawyers can assist with keeping your business proprietary information confidential.  We can represent foreign producers and US importers (both named parties, and interested foreign producers who might be impacted by a particular investigation) before the ITC and the ITA.  And, we can provide strategic and tactical advice as the process unfolds - again, failure of both the ITA and the ITC to make an affirmative ruling in a particular matter will result in dismissal of the petition. 

AD/CVD investigations are just that: investigations.  An investigation can shift direction, or expand or contract, as it runs its course.  There are opportunities for foreign producers to state their case; but, only if they have counsel who understand the process and the strict timelines involved.  Related to AD/CVD actions, we also assist foreign producers and US importers with requesting formal determinations of whether a particular product falls within the scope of an existing AD/CVD order.  With new AD/CVD petitions filed often, and as every AD/CVD determination must be re-reviewed every five (5) years, we can also continually monitor actions and orders ‘real time’ on behalf of our clients. 

Nexsen Pruet would welcome an opportunity to assist your company with its international trade needs; often at a fraction of the cost of Washington, DC counsel.  AD/CVD investigation responses and briefs (the primary means of stating a case before the ITA and the ITC) are normally submitted electronically – there is no need to be in Washington, DC to participate meaningfully in the process; and, Washington, DC is an easy drive from our offices should representation at an AD/CVD hearing become necessary.  

Please do not hesitate to contact our International Team at any time.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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