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.
"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.