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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
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Commercial Information Circulars

24-hour hotline : 23 922 922

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

Ref : EIC 111/3/10/1

22 March 2006

Dear Sirs,

Commercial Information Circular No. 111/2006

US : Market Economy Inputs Practice in Anti-dumping Proceedings Involving Non-Market Economy Countries

Our Commercial Information Circular (CIC) Nos. 188/2005 and 324/2005 of 31 May 2005 and 15 August 2005 respectively reported that the US' Department of Commerce (DOC) was seeking comments on changes to its current policy and practice regarding market economy input prices in anti-dumping proceedings involving non-market economies (NMEs). In response to the submissions received, DOC published a Federal Register (FR) notice on 21 March 2006 seeking further comments on its revised proposals with respect to the calculation of normal value in such proceedings by 19 April 2006. A copy (pdf format) of the FR notice is appended to this circular for reference.

DETAILS

The Current Practice

  1. Under the current practice, when an NME producer sources a portion of an input from a market economy and the remainder domestically, DOC "normally" uses the average market economy input price to value all of the input in question in calculating the normal value, subject to certain conditions. One of the conditions is that the volume of the imported input as a share of total purchases from all sources must be "meaningful", which is determined on a case-by-case basis.

The Revised Proposals

  1. The revised proposals consist of two parts. Under the first part of the proposals, DOC would amend its regulations to remove the regulatory requirement that the DOC "normally" use market economy input prices to value an entire input. This would allow the DOC more flexibility to consider on a case-by-case basis whether the standard surrogate value or the price of the company's market economy input purchases is the best available information to value the domestically purchased input. Under the second part of the proposals, DOC would institute a rebuttable presumption that market economy input prices are the best available information for valuing an entire input when the portion of the input purchased from market economy sources exceeds 33% of the total volume of the input.

The Interim Change

  1. Since amending the regulation will be a lengthy process, DOC also intends to introduce an interim change in its practice to clarify the term "meaningful" in the current regulation. Under this interim change, DOC would institute a flexible, rebuttable presumption that when market economy input purchases are 33% or more of the total volume of an input, the market economy input purchase prices represent the best available information to value the entire input. Where market economy input purchases constitute less than 33% of the total volume of the input in question, DOC's rebuttable presumption is that the market economy input purchases do not represent the best available information to value the input. Instead, DOC would weight average the market economy purchase prices with an appropriate surrogate value, unless parties present evidence that the market economy purchase value constitutes the best available information to value the NME-produced portion of the input.

ENQUIRIES

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

Yours faithfully,

　

(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.