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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
Brand Hong Kong - Asia world city
MY COLOUR

Commercial Information Circulars

24-hour hotline : 23 922 922

e-mail address : enquiry@tid.gov.hk

Ref : EIC 111/3/10/1

 24 September 2004

Dear Sirs,

Commercial Information Circular No. 234/2004

US : Separate-Rates Practice in Antidumping Proceedings
involving Non-Market Economy Countries

The US Department of Commerce (DOC) published a notice in the Federal Register (FR) notice on 20 September 2004 requesting comments on its proposals to introduce changes to anti-dumping (AD) proceedings involving non-market economy countries (NMEs). Interested parties are invited to submit comments on the proposals to DOC by 15 October 2004. A copy of the FR notice outlining the details is appended (pdf format) to this circular for reference.

The Current Practice and Problems Identified

  1. In current AD proceedings involving NMEs, including Mainland China, DOC presumes that all firms within the NME are subject to government control and thus should all be assigned a single, country-wide rate unless a respondent can demonstrate the absence of both de jure and de facto government control over its export activities. In that case, DOC assigns the respondent its own individually calculated rate. For exporters who have not been selected as mandatory respondents, DOC assigns them a weighted-average of the rates of the fully analyzed companies, excluding any rates that were zero, de minimis, or based entirely on facts available, provided that they fulfil two requirements. First, they must submit a request for separate rates treatment, along with a timely response to section A of DOC's questionnaire. Secondly, DOC must determine, after reviewing the requesting companies' submissions, that separate rates treatment is warranted. Currently, DOC considers all submitted requests to review their eligibility and may ask for further proof in separate communications. The increasing number of requests for separate rates in recent years as well as the increasing need to issue supplemental questionnaires were said to have created an administrative burden on DOC.
     
  2. The AD rates are assigned only to exporters, regardless of which entity produces the subject merchandise. In cases where the rates vary from exporter to exporter, it was said to exist an incentive for exporters assigned with a higher rate to ship their merchandise through an exporter assigned with a lower rate. If NME producers sell subject merchandise through exporters located outside the NME country, DOC applies a rate to the NME producer only where there is evidence that the NME producer knows that the ultimate destination of the merchandise is the US. Otherwise, DOC considers the third-country reseller to be the exporter and assigns it an AD rate. DOC commented that recent AD investigations indicate that the relationship between Chinese producers, in particular, and resellers outside Mainland China can be complex and difficult to assess given its limited resources.

The Proposal

  1. Having regard to the problems identified as outlined in the above paragraphs, DOC proposes the following changes to streamline its process:

    - DOC will only process requests for separate AD rates from respondents who submit completed applications with all the required documentary proof certifying their eligibility for separate rates. After a transition period, DOC will require respondents to complete and submit the application forms electronically on the Import Administration website;

    - to prevent the potential evasion of AD duties by NME producers who ship through exporters enjoying lower AD rates, DOC seeks to assign exporter-producer combination rates, instead of exporter-specific rates under the current practice; and

    - also to prevent the potential evasion of AD duties by NME producers who sell goods subject to AD duties through exporters located outside the NME country, DOC will institute a rebuttable presumption that these NME producers are aware that their goods will be destined to the US, and that they set the export price of the goods. DOC will assign AD duty rates to these producers, not the resellers.

ENQUIRIES

  1. For enquiries concerning the content of this circular, please contact the undersigned at 2398 5682




Yours faithfully,



(Miss Amanda Kwong)

for Director-General of Trade and Industry




Note : While every effort is made to ensure the accuracy of the above information, the Department cannot guarantee this to be so and will not be held liable for any reliance placed on the same.