Antidumping & countervailing duties

The two duties answer different questions. Under 19 U.S.C. 1673 an antidumping order applies where Commerce finds a foreign producer sold merchandise into the United States below normal value. Under 19 U.S.C. 1671 a countervailing order applies where Commerce finds the producer took a countervailable subsidy. In both cases the International Trade Commission must separately find that a US industry was materially injured or threatened. Two agencies, both affirmative, or there is no order.

The deposit rate is not the duty rate

Where an order is in force, subject merchandise is entered as type 03 and liquidation is suspended. You pay a cash deposit at the rate assigned to your producer and exporter combination, and then nothing happens for a long time. Commerce reviews actual pricing after the fact through the administrative review process at 19 CFR 351.213, which any interested party can request during the anniversary month of the order.

If a review is requested and the final assessment rate comes out above your deposit, you owe the difference with interest. If no review is requested covering your entries, they liquidate at the deposit rate and the file closes. That is the whole risk in one paragraph: the exposure stays open for years, it is retroactive, and nothing you signed caps it.

The rate belongs to a company, not to a country

Rates are assigned to named producers and exporters. In non-market-economy cases an exporter has a rate of its own only if it demonstrated independence from government control. Everything else falls to the country-wide rate, which is the punishing one. Buying an identical article from a different factory in the same country can move your deposit by two orders of magnitude.

So get the producer name, the exporter name and the case numbers before you send a deposit to the supplier. Antidumping cases run A-000-000 and countervailing cases C-000-000, and both belong on the entry summary. A shipment where the invoice says only "manufactured in" and names a trading company is a shipment nobody can price.

Scope is where the argument actually happens

An order covers written scope language, not an HTS number. The tariff numbers listed in an order are there for convenience and customs administration, and the words control. If your article is arguably outside the description, you can request a scope ruling from Commerce under 19 CFR 351.225 and the answer binds CBP. If the allegation is that production shifted to a third country to escape the order, Commerce runs a circumvention inquiry under 19 CFR 351.226. Where CBP is unsure whether goods in front of it are covered, it refers a covered merchandise inquiry under 19 CFR 351.227.

Scope rulings are published. Reading the ones that touch your product is an afternoon of work that regularly saves a year of exposure, and it is work we do before the first entry rather than after a CBP request for information.

EAPA: the allegation arrives before the finding

The Enforce and Protect Act, 19 U.S.C. 1517 and 19 CFR part 165, lets a domestic producer or a competitor allege that you evaded an order. CBP investigates. Within 90 days of initiating, if there is reasonable suspicion, CBP can impose interim measures before it has decided anything: suspend liquidation of your unliquidated entries, extend liquidation on the rest, and require single transaction bonds or live entry going forward.

The determination comes much later. The interim measures land first, they are not a finding against you, and they will still take your working capital out of circulation. The defence is records, produced quickly: purchase orders, production records, mill certificates, raw material sourcing and payment trails that show where the goods were actually made. Build that file when the goods are made, not when the notice arrives.

Four things that surprise people

• Reimbursement doubles the duty. If the exporter pays or reimburses your antidumping duty and you do not disclose it, Commerce doubles the duty at liquidation under 19 CFR 351.402(f). A discount described as covering the duty is exactly what this rule is about.
• Drawback does not reach it. Re-exporting the goods does not bring an AD/CVD deposit back. Ordinary duty, often. These, no.
• Your bond saturates.A continuous bond sized on last year's duty does not survive a three-figure deposit rate attaching to routine volume. CBP asks for an increase and the surety asks for collateral, usually in the same week.
• Critical circumstances reach backwards. A critical circumstances finding can apply deposits to entries made up to 90 days before the preliminary determination. Goods that sailed before the order existed can still be caught.

The check to run before you buy

Classify the article. Read the scope of every order touching that classification and that country of origin. Confirm the producer and the exporter by name against the current rate list. Then price the deposit into landed cost as a real number rather than a footnote, and decide with that number in front of you.

If it is arguable, ask Commerce for a scope ruling rather than guessing. If you are looking at a quote now and are not certain whether an order reaches it, send us the product description, the HTS you are using and the factory name: contact.