CHAPTER 2: THE ANTI - DUMPING CASE FRAMEWORK
2.1. The US anti - dumping legal framework
2.1.6. The US anti - dumping measures
Agency issued: DOC a. Conditions issued:
When DOC has the final decision to affirm that the products were dumped.
ITC affirmed that the dumping caused the injury to the importing country.
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Exporters are liable to pay AD duty from the preliminary determination by DOC. A deposit or bond must be posted at the time of preliminary determination to cover duty at the preliminary rate for imports over the period to the final determination. Rates are adjusted at the final determination, and then at annual reviews, administrative reviews or sunset reviews. The liability of an exporter (additional payment or refund) is adjusted at each review based on the difference between the previous rate and the new rate. This is an incentive to increase prices.
According to the agreement, 7 days after receiving the final conclusion Which ITC announces that there was the injury, DOC must issue an order to impose the anti - dumping duty.
b. Purpose:
To protect the domestic production, the United States enacted the Anti - dumping Law that allows the US government to impose special import duties, called "anti - dumping duties" to offset the injury due to the import of goods at a low price that is considered "unfair".
c. Anti - dumping duty imposition will be determined by DOC as follows:
After a preliminary determination by DOC (prelim) "liquidation" (i.e., the final determination of duties owed to the Customs Service) is suspended for all future imports. A cash deposit or bond must be posted by importers to cover possible AD duties on further imports during the period of review at the rate announced in the prelim.
Following an affirmative final determination, respondents must pay cash deposits for possible antidumping duties on imports at the rate announced in the final.
ITC has 45 days to make its final injury finding. If affirmative future imports are subject to AD duty deposits equal to the calculated rate of dumping.
d. Anti - dumping duties rates
Since the United States calculates the official duties rate on the basis of the actual dumping margin in the duties period, in the statement of the imposition of anti - dumping, DOC only sets the temporary duties rate for each producer, exporter surveyed, relevant producers and exporters but not investigated. This temporary duties rate is
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determined on the basis of the dumping margin calculated by DOC during the investigation process.
The official duties rate will be calculated in detail after 12 months from the date of the decision of DOC, the parties request DOC to calculate the actual duties rate accurately. The period from the Order of imposition of anti - dumping duties until the decision to set the official duties rate (the result of administrative review), the relevant manufacturer and exporter have to pay the temporary duties under the technical form of funds.
Normally, an imposition anti - dumping duties decision will take effect within 5 years.
e. Time to calculate the official duties rate:
The AD duties rate stated in the imposing duties decision after the investigation is only temporary; every year from the date of this decision, the investigating agency will determine the actual dumping margin for exporters in that year and decide the official duties rate for them (if this is higher than the temporarily calculated duties rate, enterprises must submit additional duties. In contrast, they will be refunded.)
f. Dumping margin
This is the difference between the price paid for Vietnamese product in the US (sometimes known as the US price, or export price) and the normal or fair value of the product (based on price in the exporting country's own domestic market, or an estimate based on production costs plus profit).
Calculation of the dumping margin: The dumping margin can then be calculated simply as the difference between the estimated normal value or fair price and the adjusted US price, divided by the US price, i.e.
Dumping margin (%) = (normal value - US price)/US price.
DOC will determine the normal value of imported goods in one of three ways. In order of priority are:
- The selling price of goods in the domestic market - The selling price of goods to a third country market
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- "Calculation value" is considered the normal value for calculating the dumping margin when the selling price in the domestic market or the selling price to the third country is lower than the cost of production or goods under investigation sold in the domestic market, or not sold in a third country.
However, Viet Nam is considered as the non - market economy by the USA, so they will use another way to calculate the normal price for this country. DOC think that the intervention of the government in non - market economies (NME) makes production and price data do not reflect the normal value of the product accurately. Therefore, DOC uses factors of production information from respondents coupled with prices from a surrogate market economy country to construct normal value for a non - market economy country.
The calculation of normal value for the non - market economy is based on prices and other values taken from a surrogate country – one at a similar level of development to the NME that is also a significant producer of comparable merchandise.
DOC uses factors of production information from respondents (i.e. the number of inputs used to generate a unit of output during the period of investigation) and multiplies these input factors by surrogate prices from publically available trade data, publications and financial statements from producers in the surrogate country. DOC also uses data on overhead and profit ratios from surrogate countries.
US price is the price on the contract between the foreign exporter and the USA importer (or the constructed export price based on the selling price for the first independent buyer).
In addition, the United States also applies the "Zeroing" method to calculate the dumping margin for some importing countries. However, the use of zeroing will always increase any anti - dumping duties rate and sometimes create a duty that has never been before. Therefore, this is a method of fierce controversy in the practical application of anti - dumping measures in the world.
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As a rule, DOC may take provisional measures if the preliminary determination determines the existence of dumping and the injury caused by dumping to a domestic industry.
Temporary measures may be applied:
- Temporary anti - dumping duties;
- Provision of cash deposits, bonds or other forms of security that do not exceed the dumping margin established in the preliminary decision.
The limited time for temporary measures prescribed by the United States is no more than 4 months and in special cases may last up to 9 months.
2.1.6.3. Price commitments
First, according to DOC regulations, during the anti - dumping investigation, the dumping exporter has proposed to DOC a commitment to change the selling price or stop exporting dumped goods. This commitment is called "price commitment". The terms of the US Price Commitment define as follows: The term "Price Commitment"
mentioned in these regulations is a voluntary commitment of exporters and manufacturers to DOC. They responded the anti - dumping investigation by changing the selling price or stopping the export of goods being subjected to anti - dumping investigations to be approved by the DOC to suspend or terminate the investigation.
Secondly, according to the US Antidumping Regulation, if exporters violate price commitment agreements, the US investigating agency may continue investigating based on the best available information and decided to apply temporary measures and impose anti - dumping duties.
Thirdly, the provisional provisions on price commitments further stipulate that if in the final conclusion, the official anti - dumping duties rate is lower than the deposit rate in the preliminary conclusion, the difference will be refunded.
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