U.S. industries may petition the International Trade Commission (ITC )and the Department of Commerce (Commerce) for relief from unfairly priced and subsidized imports. Subsidizing occurs when a foreign government provides financial assistance to benefit the production, manufacture, or exportation of a good. If the Department of Commerce finds that an imported product is subsidized and the ITC finds that a U.S. industry producing a like product is materially injured or threatened with material injury, a countervailing duty order will be imposed to offset the subsidies.

A countervailing duty petition must be filed on behalf of an industry. This means that “(i) the domestic producers or workers who support the petition account for at least 25 percent of the total production of the domestic like product, and (ii) the domestic producers or workers who support the petition account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for or opposition to the petition.” If the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, the Department of Commerce polls the industry or uses other information to determine if the required level of support for the petition exists. It is common practice for various producers to file as co-petitioners (either as separate entities or collectively as in the form of an ad hoc committee); or for producers to file as co-petitioners with unions or trade associations; or for petitioners to obtain letters of support from non-petitioning members of the domestic industry, from unions, or from trade associations.

After an interested party files a countervailing duty petition, the investigation goes through the following stages:

1. Initiation (completed within 20 days of the filing of the petition): Commerce determines whether the petition alleges the elements necessary for the imposition of a duty and contains information reasonably available to the petitioner supporting the allegations. If the determination is affirmative, Commerce initiates an investigation to determine whether dumping exists; if negative, it dismisses the petition and terminates the proceeding.
2. Preliminary Determination by the Commission (completed within 45 days of the filing of the petition).
3. Preliminary Determination by Commerce Department (completed within 40 days of the Commission’s Preliminary Determination).
4. Final Determination by Commerce (completed within 75 days of Commerce’s Preliminary Determination).
5. Final Determination by the Commission (completed within 120 days after Commerce’s Preliminary Determination or 45 days after its Final Determination, whichever is sooner).

Commerce and the ITC review each outstanding and countervailing duty order every five years to determine whether revocation of the order would be likely to lead to continuation or recurrence of or subsidies and of material injury within a reasonably foreseeable time. If both agencies make affirmative determinations, the order is continued for another five years; if not, the order is revoked.

Countervailing duties collected are distributed annually to affected domestic producers (those producers who publicly expressed support for the petition during the investigation) for qualifying expenditures incurred. The producers submit certifications to Customs of qualifying expenditures in order to receive a pro rata share of the annual distribution of duties collected.

The above is intended as a general introduction and should not be construed as legal advice or legal opinion for your particular case. Please contact the Law Offices of Yu & Associates with any specific questions. Tel: (301) 838-8986, Email: syu@yulegal.com, Address: 110 N Washington Street, Suite 328E, Rockville, MD 20850.