Commerce Publishes AD/CVD Overhaul

Commerce has proposed a series of changes to its antidumping duty (AD) and countervailing duty (CVD) regulations in a 96 page notice of proposed rulemaking published Monday.

In this proposed rule, Commerce would revise many of its procedures, codify many areas of its practice, and enhance certain areas of its methodologies and analyses to address price and cost distortions in different capacities.

Key modifications include

• clarifying the role of references, citations, and hyperlinks in submissions, addressing issues related to scope, circumvention, and covered merchandise that have emerged since 2021, and
• allowing Commerce to place previous analysis and calculation memoranda on the record without requiring additional factual information from other parties.

The proposal also includes

• addressing notices of subsequent authority and
• permitting responsive arguments and factual information,
• incorporating the CVD adverse facts available hierarchy in section 308, and
• tackling foreign government inactions benefiting foreign producers.

This last point covers countervailable subsidies from unpaid or deferred fees, fines, and penalties, as well as evidence of weak or nonexistent protections.

A new section addressing the determination of a particular market situation (PMS) and scenarios in which a PMS distorts production costs is also proposed.

Furthermore, Commerce seeks to incorporate long-standing practices into the regulations, providing guidance on topics such as subsidies, loans, equity infusions, and export insurance.

Finally, Commerce proposes eliminating the current transnational subsidies regulation [§ 351.527], but reserving the provision for future consideration. Since § 351.527 was adopted, Commerce has observed through its administrative experiences that instances in which a government provides a subsidy that benefits foreign production are far more prevalent.

Commerce proposed four exemptions in cost-based PMS analyses:

1. not requiring consideration of four specific types of information and associated arguments,
2. not needing to consider speculative costs or prices,
3. not mandating consideration of actions by governments or public entities in other market economy countries compared to the subject country, and
4. not requiring references to historical policies and actions by the subject country's government concerning subject merchandise or significant production input.

Proposed amendments also include changing "the Secretary will" to "the Secretary will normally" in § 351.525(b)(2) and (3), ensuring no conflict with § 351.525(b)(7) and indicating Commerce's discretion.

The inclusion of "normally" recognizes the increasing complexity of global subsidy programs and provides Commerce with flexibility to address CVD law effectively, regardless of the uniqueness of foreign subsidies affecting the U.S. industry.

[FR Notice]