best information available to it at the time. If affirmative, the preliminary determination must include an estimated amount of the net subsidy.

An expedited preliminary determination may be made based on information received during the first 50 days if such information is sufficient and the parties provide a written waiver of verification and an agreement to have an expedited preliminary determination. On the other hand, the preliminary determination may be postponed until 150 days after filing of petition or self-initiation, at the petitioner's request or in cases which DOC determines are extraordinarily complicated.

The effect of an affirmative preliminary determination is twofold: (1) the DOC must order the suspension of liquidation of all entries of foreign merchandise subject to the determination from the date of publication of the preliminary determination. The DOC must also order the posting of a cash deposit, bond, or other appropriate security for each subsequent entry of the merchandise equal to the estimated amount of the net subsidy; (2) the ITC must begin its final injury investigation, and the DOC must make all information available to the ITC which is relevant to an injury determination. If the preliminary determination is negative, no suspension of liquidation occurs, and the DOC investigation simply continues.

In cases involving "countries under the Agreement," if the petitioner alleges critical circumstances, the DOC must determine, on the basis of best information available at the time, whether (1) the alleged subsidy is inconsistent with the GATT Subsidies Code; and (2) there have been massive imports of the merchandise over a relatively short period. This "critical circumstances" determination can be made prior to the preliminary determination of subsidies. If the DOC determines critical circumstances exist, then any suspension of liquidation ordered shall retroactively apply to unliquidated entries of merchandise entered up to 90 days prior to the date suspension of liquidation was ordered.

Final DOC subsidy determination

Within 75 days after the date of its preliminary determination, the DOC must issue a final subsidy determination, unless the case involves upstream subsidies, in which case special extended time limits apply. If there are simultaneous investigations under the antidumping and countervailing duty laws involving imports of the same merchandise, the final CVD determination may be postponed until the date of the final determination in the antidumping investigation at the request of a petitioner.

If the final subsidy determination is negative, the investigation is terminated, including any suspension of liquidation which may be in effect, and all estimated countervailing duties are refunded and all appropriate bonds or other security are released. If the final determination is affirmative, the DOC orders the suspension of liquidation and posting of a cash deposit, bond, or other security (if such actions have not already been taken as a result of the preliminary determination), and awaits notice of the ITC final injury determination.

Final ITC injury determination

Within 129 days of a DOC affirmative preliminary determination or 45 days of a DOC affirmative final determination, whichever is longer, the ITC must make a final determination of material injury. If the DOC preliminary determination was negative, and the DOC final determination was affirmative, the ITC has until 75 days after the final affirmative determination to make its injury determination.

Termination or suspension of CVD investigations

Either the DOC or ITC may terminate a CVD investigation upon withdrawal of the petition by petitioner, or by the DOC if the investigation was self-initiated. The DOC may not, however, terminate an investigation on the basis of a quantitative restriction agreement limiting U.S. imports of the merchandise subject to investigation unless the DOC is satisfied that termination on the basis of such agreement is in the public interest.

The DOC may suspend a CVD investigation on the basis of one of three types of agreements entered into with the foreign government or with exporters who account for substantially all of the imports under investigation. The three types of agreements are: (1) an agreement to eliminate the subsidy completely or to offset completely the amount of the net subsidy within 6 months after suspension of the investigation; (2) an agreement to cease exports of the subsidized merchandise to the United States within 6 months of suspension of the investigation; (3) an agreement to eliminate completely the injurious effect of subsidized exports to the United States (which, unlike under the antidumping law, may be based on quantitative restrictions). The DOC may not, however, accept any such agreement unless it is satisfied that suspension of the investigation is in the public interest, and effective monitoring of the agreement is practicable.

Prior to actual suspension of an investigation, the DOC must provide notice of its intent to suspend and an opportunity for comment by interested parties. When the DOC decides to suspend the investigation, it must publish notice of the suspension, and issue an affirmative preliminary determination (unless previously issued). The ITC also suspends its investigation. Any suspension of liquidation ordered as a result of the affirmative preliminary determination, however, is to be terminated and all deposits of estimated countervailing duties or bonds posted are to be refunded or released.

If, within 20 days after notice of suspension is published, the DOC receives a request for continuation of the investigation from a domestic interested party or from the foreign government, then both the DOC and ITC must continue their investigations.

The DOC has responsibility for overseeing compliance with any suspension agreement. Intentional violations of suspension agreements are subject to civil penalties.

ASSESSMENT OF CVD DUTIES

Under title VII and in section 303 investigations requiring an injury test, both the DOC and ITC must issue affirmative final de

terminations in order for a CVD order to be issued. In section 303 investigations not requiring an injury determination, the CVD order is issued on the basis of an affirmative final DOC determination alone. Within 7 days of notice of an affirmative final ITC determination, the DOC must issue a countervailing duty order which (1) directs the Customs Service to assess countervailing duties equal to the amount of the net subsidy; (2) describes the merchandise to which the CVD applies; and (3) requires the deposit of estimated CVD's pending liquidation of entries, at the same time as estimated normal customs duties are deposited. Customs must assess countervailing duties within 6 months after the DOC receives satisfactory information on which to base the assessment, but no later than 12 months after the end of the annual accounting period within which the merchandise is imported or sold in the United States. The DOC must publish notice of its determination of net subsidy which shall be the basis for assessment of CVD's and for deposit of estimated CVD's on future entries.

Differences between estimated and final CVD's

If the cash deposit, bond, or other security for estimated countervailing duties pursuant to an affirmative preliminary determination is greater than the amount of CVD assessed pursuant to a CVD order, then the difference between the deposit and the amount of final CVD will be refunded for entries prior to notice of the final injury determination. If the cash deposit is lower than the final CVD under the CVD order, then the difference is disregarded. No interest accrues in either case.

If estimated countervailing duties deposited for entries pending liquidation are greater than the amount of final CVD's determined under a CVD order, then the difference will be refunded, together with interest on the amount of overpayment. If estimated CVD's are less than the amount of final CVD's then the difference will be collected together with interest.

ADMINISTRATIVE REVIEW

The DOC is required, upon request, to conduct an annual review of outstanding CVD orders and suspension agreements. For all entries of merchandise subject to the review, the DOC must review and determine the amount of any net subsidy. Such determination will provide the basis for assessment of CVD's on all entries subject to the review, and for deposits of estimated duties on entries subsequent to the period of review. The results of its annual review must be published together with a notice of any CVD to be assessed, estimated duty to be deposited, or investigation to be resumed. The DOC cannot, however, revoke a CVD order or terminate a suspended investigation on the basis of offsets.

A review of a final determination or of a suspension agreement shall be conducted by the DOC or ITC whenever it receives information or a request showing changed circumstances sufficient to warrant such review. Without good cause shown, however, no final determination or suspension agreement can be reviewed within 24 months of its notice.

ANTI-CIRCUMVENTION AUTHORITY

In 1988, specific authority was added to U.S. law to authorize the DOC to take action to prevent or address attempts to circumvent an outstanding countervailing duty order. The authority addresses four particular types of circumvention: assembly of merchandise in the United States, assembly of merchandise in a third country, minor alterations of merchandise, and later-developed merchandise. Under certain circumstances and after considering certain specified factors, DOC may extend the scope of the countervailing duty order to include parts and components (in cases involving U.S. assembly), third country merchandise (in cases involving third country assembly), altered merchandise, or later-developed merchandise.

JUDICIAL REVIEW

An interested party who is dissatisfied with a final determination under the countervailing duty law may file an action in the U.S. Court of International Trade for judicial review. To obtain judicial review of the administrative action, a summons and complaint must be filed concurrently within 30 days of publication of the final determination. The standard of review used by the Court is whether the determination is supported by "substantial evidence on the record, or otherwise not in accordance with law."

Judicial review of interlocutory decisions, previously permitted, was eliminated by section 623 of the Trade and Tariff Act of 1984. Decisions of the Court of International Trade are subject to appeal to the U.S. Court of Appeals for the Federal Circuit.

As a result of provisions in the U.S.-Canada Free Trade Agreement and its implementing legislation, final determinations in countervailing duty proceedings involving products of Canada are reviewed by a binational panel instead of by the U.S. Court of International Trade, if either the U.S. or Canadian Government so requests. The binational panel will apply only U.S. law and U.S. standards of judicial review to decide whether U.S. law was applied correctly.

Antidumping (AD) Law

Dumping generally refers to a form of international price discrimination, whereby goods are sold in one export market (such as the United States) at prices significantly lower than the prices at which comparable goods are sold in the home market of the exporter, or in its other export markets. Such pricing practices often are made possible when market barriers in the exporter's home market protect its higher home market price.

Three different provisions of U.S. law address different types of dumping practices. The Antidumping Act of 1916 provides for criminal and civil penalties for the sale of imported articles at a price substantially less than the actual market value or wholesale price, with the intent of destroying or injuring an industry in the United States. Title VII of the Tariff Act of 1930, as amended, provides for the assessment and collection of antidumping duties by the U.S. Government after an administrative determination that

foreign merchandise is being sold in the U.S. market at less than fair value and that such imports are materially injuring the U.S. industry. Finally, section 1317 of the Omnibus Trade and Competitiveness Act of 1988 establishes procedures for the U.S. Trade Representative to request a foreign government to take action against third-country dumping that is injuring a U.S. industry.

HISTORICAL BACKGROUND

In 1916 the Congress enacted the Antidumping Act of 1916, providing a civil cause of action in Federal court for private damages as well as for criminal penalties against parties who dumped foreign merchandise in the United States. The requirements under this statute, however, particularly the need to show evidence of intent, are difficult to meet, and the need for a different type of antidumping law was subsequently considered by Congress. In 1921 the Antidumping Act of 1921 was passed, which provided the statutory basis, until 1979, for an administrative investigation by the Department of the Treasury of alleged dumping practices and for imposition of antidumping duties. In 1954, the administration of the antidumping law was split, and the function of determining injury was transferred from the Treasury Department to the U.S. Tariff Commission (now the International Trade Commission). The function of determining sales at less than fair value (LTFV) was left with the Treasury Department (until 1979).

During the post-World War II negotiations to establish an International Trade Organization, the United States proposed a draft article on dumping, based on the Antidumping Act of 1921. This draft became the basis for Article VI of the General Agreement on Tariffs and Trade (GATT), which is the international framework governing national antidumping laws.

During the 1960's, antidumping actions and their potential for abuse, rather than the dumping practice itself, became a source of great concern to many nations. As a result, during the Kennedy Round of multilateral trade negotiations, the GATT Antidumping Code of 1967 was established. The 1967 Code had three main functions: (1) to clarify and elaborate on the broad concepts of Article VI of the GATT; (2) to supplement Article VI by establishing appropriate procedural requirements for antidumping investigations; and (3) to bring all GATT signatory countries into conformity with Article VI. The GATT Antidumping Code came into force on July 1, 1968, and provided for the establishment of a GATT Committee on Antidumping Practices, whose function was to review annually the operation of national antidumping laws.

During the Tokyo Round of multilateral trade negotiations in the 1970's, the GATT Antidumping Code was amended to conform to the newly negotiated Agreement Relating to Subsidies and Countervailing Measures, also negotiated at that time and involving changes in Article VI of the GATT. The GATT Agreement on Implementation of Article VI of the GATT, Relating to Antidumping Measures came into force on January 1, 1980.8

Act of September 8, 1916, ch. 463, sec. 801, 39 Stat. 798, 15 U.S.C. 72. 7 Act of May 27, 1921, ch. 14, 42 Stat. 11, 19 U.S.C. 160 (now repealed).

Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, MTN/NTM/W/232, reprinted in House Doc. No. 96-153, pt. I at 311.