Price Undertakings Under U'S' Antidumping Duty Law

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Price Undertakings Under U.S. Antidumping Duty Law

• Prepared by Import Administration, U.S.
  Department of Commerce for the June 2nd Korea
  Trade Commissions 2005 International Trade
  Remedies Seminar

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Price Undertakings

• Are authorized under Article 8 of the WTO
  Implementation of Article VI of GATT 1994 (AD
  Agreement).
• Undertakings are also authorized under Article 18
  of the WTO Agreement on Subsidies and
  Countervailing Measures.

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Article 8 of AD Agreement

• Provides that AD proceedings may be terminated or
  suspended.
• Voluntary undertaking by an exporter.
• Exporters to revise prices or cease exports at
  dumped prices so that injurious effect of dumping
  is eliminated.

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Article 8 States

• Undertakings offered need not be accepted if the
  authorities consider their acceptance
  impractical, for example, if the number of actual
  or potential exporters is too great, or for other
  reasons, including reasons of general policy.

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Legal Authority

• Section 734 (for antidumping duty cases) of the
  Tariff Act of 1930, as amended, establishes the
  Departments authority to enter into suspension
  agreements.
• Further, the Departments regulations at 19
  C.F.R. 351.208 describe the suspension agreement
  process.

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Decision to Enter into Negotiations

• The decision whether to enter into negotiations
  is purely a policy decision.
• Commerce currently has only six suspension
  agreements in effect.
• If Commerce decides to enter into negotiations,
  Commerce then analyzes the agreement to see which
  of the two legal tracks it follows, elimination
  of injury or elimination of dumping.

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Legal Requirements Public Interest

• Public interest An agreement must be determined
  to be in the public interest before Commerce can
  sign.
• To determine whether an agreement is within the
  public interest, Commerce considers the effect on
  consumers, the international economic interests
  of the United States, and the impact on the
  domestic industry producing the like merchandise.
  

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Legal Requirements Price Suppression/Elimination
of Injury

• In addition to satisfying the public interest
  requirement, Commerce must ensure that the
  agreement will either eliminate the injurious
  effect of the exports covered by the
  investigation, or
• Prevent the suppression or undercutting of price
  levels in the U.S. market.

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Legal Requirements Signatories

• In a non-market economy agreement, the foreign
  government and Commerce.
• In a market economy agreement, exporters that
  account for substantially all, by volume or
  value, of the merchandise exported during the
  period of investigation (or another period
  considered representative) and Commerce.
  Substantially all is defined as 85in
  Commerces regulations.

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Process

• A proposed suspension agreement may be submitted
  to Commerce within 15 days after the issuance of
  the preliminary determination in an antidumping
  duty investigation.
• A proposed suspension agreement may be submitted
  by
• The foreign government, in a non-market economy
  case, or
• Exporters and producers in a market economy case.

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Process Notice and Comment

• Commerce analyzes the agreement and holds
  consultations with interested parties.
• If a preliminary agreement is reached, Commerce
  and the foreign government or exporters initial
  the preliminary agreement.
• The initialed agreement is issued to interested
  parties for comment. Parties are normally
  allowed 20 days to comment.
• After comments are received from interested
  parties, Commerce analyzes these comments and
  then holds further consultations with interested
  parties.

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Process Signature Continuation

• Signature Commerce must have made an affirmative
  preliminary determination and the ITC must have
  made an affirmative preliminary injury
  determination.
• A final suspension agreement must be signed no
  later than Commerces final antidumping
  determination.
• Continuation An interested party can request
  that the investigation can be continued.

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Signature Continuation (cont.)

• Commerce then issues its final antidumping
  determination and the ITC issues a final injury
  determination.
• If either Commerce or the ITC makes a negative
  determination at the final stage, then the
  investigation ends and the entire proceeding is
  terminated.

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Process Continuation

• If the investigation is continued, and both
  Commerce and the ITC have affirmative final
  determinations, the suspension agreement goes
  into effect.
• After the agreement goes into effect, if the
  investigation was continued, and a violation of
  the agreement takes place, Commerce will issue an
  antidumping duty order.
• If the investigation was not continued and a
  violation takes place, then Commerce will resume
  the investigation at the date of the preliminary
  determination.

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Process Duty Collection

• If an agreement is reached, all suspended entries
  would be liquidated and cash deposits would be
  returned. Going forward, entries would no longer
  be suspended.
• Merchandise subject to the agreement would not be
  subject to suspension of liquidation or an
  antidumping duty.
• Imports would have to meet the provisions of the
  agreement for entry, which might include selling
  at or above a certain price and specific
  documentation.

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Terms of Suspension Agreements

• Reference price calculation and movement
  mechanism, frequency of issuance of price.
• Normal value calculation and reporting
  instructions. Frequency of issuance of normal
  value.
• Quota period and amount of quota, calculation
  instructions.

• Documentation requirements for export.
• Reporting requirements to Commerce.
• Anti-circumvention requirements.
• Consultation mechanism.
• Duration.
• Violation provisions.

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Administration of Agreements

• Once an agreement is signed, Commerce administers
  the terms of the agreement.
• The terms of the agreement, including any quota
  for the product or price at which exporters must
  sell at or above, are continually monitored by
  Commerce staff.
• Commerce also closely monitors compliance with
  any reporting requirements included in the terms
  of the agreement, and reviews the required
  documentation required for import of the product.

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Thank You