September 01, 2020

New Rules and New Tools for Aggressive Enforcement of Antidumping and Countervailing Duty Laws Are Proposed by Commerce

2 min

Overseas producers and U.S. importers take note: a revamped framework for antidumping duty (ADD) and countervailing duty (CVD) investigations is in the works at the U.S. Department of Commerce. On August 13, 2020, the International Trade Administration (ITA) issued an Advance Notice of Proposed Rulemaking, seeking comments from industry on its proposal for new and updated regulations related to a host of ADD and CVD issues, including new shipper reviews, scope rulings, circumvention investigations, and more. The stated purpose of the proposed regulatory changes is to strengthen Commerce's "vigorous" and "aggressive" enforcement of ADD/CVD laws and provide the agency with new enforcement tools to address circumvention and evasion of orders.

Notably, a wide range of additions and revisions is proposed by Commerce; however, one critical proposed change is for an updated regulatory framework for scope inquiries. As part of its mandate in administering ADD and CVD orders, Commerce is tasked with determining whether imported goods fall within the "scope" of any such orders, i.e., whether they fit the description of the class or kind of merchandise subject to the order at issue. Commerce may self-initiate a "scope inquiry," or do so upon application from an interested party.

Perhaps most significant to the new regulations is ITA's proposal to apply affirmative scope (and anti-circumvention) decisions retroactively to all unliquidated entries of an importer's merchandise. Because this could include merchandise that was imported prior to the initiation of a scope inquiry, the proposed new policy has the potential to cover a period before an importer is even aware that its imported goods could be subject to an ADD or CVD order. The potential end result? A hefty duty bill that the importer never saw coming.

In addition to the potential revised framework for scope inquiries, Commerce's proposed rulemaking also addresses the following topics, among others:

  • Comments regarding industry support for ADD/CVD proceedings;
  • New shipper reviews;
  • Circumvention inquiries;
  • Referrals from CBP related to its investigations into Enforce and Protect Act (EAPA) allegations (so-called covered merchandise referrals);
  • Requests for certifications from interested parties; and
  • Import reimbursement certifications.

Comments are due by September 14, 2020. If you wish to submit comments in response to the proposed rule changes, or want to understand these proposed changes and how they might impact your business, please contact Venable's International Trade Group to discuss further.