United States

J. Threat of Injury

   In determining whether a U.S. industry is threatened with material injury, the ITC is required to consider all relevant economic factors including:

         (1) if a countervailable subsidy is involved, the nature of the subsidy and whether imports are likely to increase;

         (2) any existing unused production capacity or imminent, substantial increase in production capacity in the exporting country indicating the likelihood of substantially increased imports into the U.S., taking into account the availability of other export markets to absorb additional exports;

         (3) a significant rate of increase of the volume or market penetration of imports indicating the likelihood of substantially increased imports;

         (4) whether the imports of the subject merchandise are entering at prices that are likely to have a significant depressing or suppressing effect on domestic prices, and are likely to increase demand for further imports;

         (5) inventories of the subject merchandise;

         (6) the potential for product shifting if production facilities in the exporting country, which can be used to produce the subject merchandise, are currently being used to produce other products;

         (7) in any investigation which involves imports of both a raw agricultural product and any product processed from such raw agricultural product, the likelihood that there will be increased imports by reason of product shifting, if there is an affirmative injury determination by the Commission with respect to either the raw agricultural product or the processed agricultural product (but not both);

         (8) the actual and potential negative effects on the existing development and production efforts of the domestic industry, including efforts to develop a derivative or more advanced version of the domestic like product; and

         (9) any other demonstrable adverse trend that indicates the probability that there is likely to be material injury by reason of imports of the subject merchandise.

   The ITC is required to consider these factors as a whole in making a determination of whether further dumped or subsidized imports are imminent and whether material injury by reason of the dumped/subsidized imports would occur unless an order is issue or an undertaking concluded.

   A finding of threat of material injury may not be made on the basis of mere conjecture or supposition.

K. Material Retardation

   The ITC determines whether the establishment of a U.S. industry is materially retarded as a result of imports of the subject merchandise by examining the negative effects on the development and production activities of the U.S. industry.

L. Cumulation

   In a material injury investigation, the ITC is required to cumulatively assess the volume and effect of like imports from two or more countries subject to investigation if the imports compete with each other and with like products of the domestic industry in the U.S. market provided that the relevant petitions were filed on the same day or the investigations were initiated on the same day.

   In a sunset or threat of material injury investigation, the ITC has discretion whether to cumulate. Prior to the enactment of the URAA, the ITC routinely "cross-cumulated" imports in conducting its injury analysis. That is, if other applicable cumulation requirements were satisfied, the ITC jointly considered the effects of imports subject to subsidy and dumping investigations in assessing whether the domestic industry was materially injured by reason of subject imports.

M. De Minimis Provision

1. Antidumping

   In the investigation phase of an antidumping proceeding, the dumping margin is considered de minimis if Commerce determines that the overall weighted-average margin is less than 2% ad valorem.

   During the administrative review phase, Commerce applies a 0.5% de minimis dumping margin standard, which was the de minimis standard applied under pre-URAA law.

   Imports from a country are considered negligible if they account for less than 3% of the volume of all imports of the subject merchandise corresponding to the domestic like product and if imports from all countries accounting for less than 3% do not exceed 7% of total imports.

   When the Commission finds imports from a country to be negligible, the investigation concerning that country is terminated.

2. Countervailing

   A countervailable subsidy is generally considered de minimis if Commerce determines that the aggregate net countervailable subsidy is less than 1% ad valorem.

   In cases involving merchandise from developing countries, however, an aggregate net countervailable subsidy of less than 2% ad valorem is de minimis.

   Finally, in cases involving merchandise from certain specified eligible developing countries, an aggregate net countervailable subsidy of less than 3% ad valorem is regarded as de minimis.

   These de minimis standards are applicable only to the investigation phase of the proceeding; the 0.5% de minimis standard applied under pre-URAA law applies in reviews of CVD orders.

N. Margin of Dumping

   The margin of dumping is the amount by which the normal value exceeds the export price or constructed export price of the subject merchandise.

   Normal value may be determined based on

         (a) prices in the exporting country market;

         (b) prices to a third country; or

         (c) constructed value (i.e., cost of production plus profit and SG&A expenses).

   In an investigation, Commerce will normally determine the margin of dumping by comparing the weighted average normal value to a weighted average export price (or constructed export price) for comparable merchandise, or by comparing the normal values of individual transactions to the individual export prices (or constructed export prices) for comparable merchandise.

   If, however, Commerce finds a pattern of export prices (or constructed export prices) that differ significantly among purchasers, regions or time periods and Commerce explains why such differences cannot be taken into account using the weighted average-to-weighted average methodology or the individual-to-individual methodology, then Commerce may compare a weighted average normal value to individual export prices (or constructed export prices).

   In administrative reviews, Commerce will continue to compare a monthly weighted average normal value to an individual export price (or constructed export price) for comparable merchandise.

   In an antidumping proceeding, Commerce will convert foreign currencies into United States dollars using the exchange rate in effect on the date of sale of the subject merchandise.

   If a currency transaction on forward markets is directly linked to an export sale under consideration, Commerce will convert the foreign currency using the exchange rate specified with respect to such currency in the forward sale agreement.

   Commerce will ignore fluctuations in exchange rates.

   In addition, in an antidumping investigation, if there is a sustained movement in the value of the foreign currency relative to the United States dollar, Commerce will allow exporters at least 60 days to adjust their export prices to reflect the sustained movement.

O. Subsidy Rate

   To determine the net countervailable subsidy, Commerce may subtract from the gross countervailable subsidy the amount of

         (1) any application fee, deposit, or similar payment paid in order to qualify for, or to receive, the benefit of the countervailable subsidy;

         (2) any loss in the value of the countervailable subsidy resulting from its deferred receipt, if the deferral is mandated by government order; and

         (3) export taxes, duties, or other charges levied on the export of merchandise to the U.S. specifically intended to offset any countervailable subsidy received.

   Under the pre-URAA statute, there was a presumption in favor of a single, country-wide CVD rate.

   Under the URAA, however, there is a general rule in favor of calculating individual CVD rates for each exporter or producer individually investigated.

   There is an exception to this general rule for cases involving a large number of producers and exporters.

   In such situations, Commerce may limit its investigation to a reasonable number of exporters or producers by using statistically valid sampling techniques or by examining those exporters or producers accounting for the largest volume of the merchandise that Commerce is reasonably able to investigate.

   Commerce retains the authority to calculate a country-wide CVD rate on the basis of aggregate data when appropriate.

   For those exporters and producers not individually investigated, Commerce will calculate an "all others" rate to be applied to imports from those companies.

   The "all others" rate is based on the weighted-average individual CVD rates established for those exporters and producers individually investigated, excluding any de minimis and zero rates and rates determined entirely the basis of the facts available.

IV. Steps of the Investigation

A. Petition Filing

   AD and CVD investigations may be self-initiated by Commerce, or initiated pursuant to a petition filed by an interested party on behalf of a domestic industry.

   A petitioner may be:

         (1) a manufacturer, producer, or wholesaler in the United States of a like product;

         (2) a trade or business association, a majority of whose members manufacture, produce or wholesale a domestic like product; or

         (3) a certified or recognized union or group of workers which is representative of an industry engaged in the manufacture, production, or wholesale in the U.S. of a domestic like product.

   A petition must be filed simultaneously with both Commerce and the ITC and must be accompanied by information reasonably available to the petitioner which supports the allegations contained in the petition, including:

         (1) the identity of the petitioner, all known domestic producers of the domestic like product, and each known exporter, foreign producer, and importer of the merchandise;

         (2) the volume and value of the domestic like product;

         (3) a description of the merchandise to be investigated;

         (4) the name of each country in which the merchandise originates or from which it is exported; and

         (5) information relating to injury.

   In addition, AD petitions must provide an estimate of the export price or constructed export price of the merchandise and the normal value of the merchandise.

   CVD petitions must include information describing the nature and, if available, the amount of the alleged subsidy provided.

B. Initiation of Investigation

   1. COMMERCE

   Upon receipt of a properly filed petition, Commerce conducts an examination of the accuracy and adequacy of the evidence provided in the petition in order to determine whether it contains the necessary information in support of petitioner's allegations.

   However, Commerce is only required to check the accuracy and adequacy of petition information based on "sources readily available".

   In addition, as a result of new standing provisions in the WTO Agreements and codified in the URAA, Commerce must determine whether the petition has been filed by or on behalf of the domestic industry producing a like product.

   If the petition does not establish on its face the support of those U.S. producers accounting for at least 50 percent of total U.S. production, Commerce must determine industry standing on the basis of polling or some other method.

   Under such circumstances, the Commerce Department may extend the period for initiating the investigation by 20 days. (See also discussion under "Standing" above).

   Once Commerce has determined the requisite industry support for the petition exists at the time of initiation of the investigation, the U.S. statute precludes any reconsideration of that determination.

   Within 20 days of receipt of the petition (or 40 days if polling is required), Commerce must publish in the Federal Register either a notice of "Dismissal of Antidumping/Countervailing Duty Investigation Petition" or a notice of "Initiation of Antidumping/Countervailing Duty Investigation".

   The latter notice signals the initiation of a formal investigation by the Commerce Department.

   2. ITC

   Upon receipt of a petition, the ITC must publish a notice of "Institution and Scheduling of Preliminary Phase Investigation" in the Federal Register.

   The ITC is not required to publish this notice within any specified deadline; however, the notice of institution will typically be published within a week of the date of the petition filing.

C. Issuance of Questionnaire

   1. COMMERCE - AD INVESTIGATION

   Once an antidumping investigation is initiated, Commerce issues a questionnaire requesting from the foreign producer(s) and/or exporter (s) general information about the company, its operations and the products produced and/or sold, transaction - specific data on U.S. sales, home market (or third country, if applicable) sales, cost of production information, etc.

   Companies are required to submit their questionnaire responses in English and in accordance with certain specified formats and on computer medium.

   2. COMMERCE - CVD INVESTIGATION

   Once a CVD investigation is initiated, Commerce issues a questionnaire to the foreign producer(s) and/or exporter(s) involved in the proceeding, as well as to the national government and, if applicable, any sub-national governments in the country/countries where the producers and/or exporters are located.

   The government questionnaires seek information on the nature of the alleged subsidy programs and the amount of benefits bestowed on specific companies.

   The company questionnaires seek information on the product, the value and volume of domestic and export sales, and the total amount of benefits received under the alleged subsidy programs.

   3. ITC INVESTIGATION

   In order to obtain information for its injury investigation, the ITC issues questionnaires to U.S. producers, importers, and purchasers (purchasers do not receive questionnaires in a preliminary phase investigation).

   The ITC only issues questionnaires to foreign producers and exporters if they are represented by counsel.

   The ITC requests financial information from U.S. producers, and information from all recipients on purchasing, production, firm operations, competition, and data on imports, exports, shipments, and pricing.

D. Response to Questionnaire

   1. COMMERCE

   During the investigation phase of an AD or CVD proceeding, Commerce generally grants 30 calendar days to respond to the questionnaire.

   If requested, a one-to-two week extension to complete the questionnaire may be granted, provided the exporter provides an explanation of the need for such an extension.

   After reviewing the initial questionnaire responses, Commerce typically issues at least one supplemental questionnaire to respondents, which usually must be answered within two weeks.

   For cost of production ("COP") questionnaires issued after the initial questionnaire, Commerce may allow less than 30 days to respond.

   2. ITC

   Deadlines for issuing questionnaires and receiving responses are set by the Commission in each investigation.

   In the preliminary investigation, recipients usually have two weeks to respond to a questionnaire from the ITC.

   In the final investigation, this deadline is usually extended to one month.

E. Preliminary Determination

1. Injury

   The ITC must determine within 45 days after the date on which the petition is filed whether there is a "reasonable indication" that a U.S. industry is materially injured or threatened with material injury by reason of allegedly dumped or subsidized imports of the subject merchandise.

   If Commerce has extended the period for initiation in order to poll the industry to determine standing, then the ITC must make its preliminary injury determination no later than 25 days after the date on which the ITC receives notice of the Commerce Department's initiation.

   The determination is accompanied by written views explaining the basis for the determination.

   If the ITC makes a negative preliminary determination, or if it finds imports to be negligible, the investigation is terminated, including the Commerce Department's investigation of dumping and/or countervailable subsidies".

2. Antidumping

   In AD investigations, Commerce must determine within 140 days after the date on which the investigation was initiated whether there is a "reasonable basis to believe or suspect that the merchandise is being sold, or is likely to be sold, at less than fair value".

   The preliminary AD determination includes an estimated weighted average dumping margin, which is based on a preliminary analysis of each foreign producer's/exporter's questionnaire response.

   Commerce may postpone the preliminary AD determination by a maximum of 50 days, until no later than 190 days after the date of initiation, if the petitioner so requests or in cases which Commerce determines are extraordinarily complicated.

   U.S. law prohibits the imposition of provisional measures less than 60 days after the initiation of an investigation.

   U.S. law also prohibits the imposition of provisional measures generally for more than 4 months (the period may be extended to 6 months if exporters representing a significant proportion of exports of the subject merchandise so request).

3. Countervailing

   In CVD investigations, Commerce must determine within 65 days after the date on which the investigation was initiated whether there is a "reasonable basis to believe or suspect" that a countervailable subsidy is being provided to the subject merchandise.

   The preliminary CVD determination includes an estimated countervailing duty rate for each producer and/or exporter investigated, or an estimated country-wide rate (see Subsidy Rate section, below), which is based on a preliminary analysis of the questionnaire responses submitted by the foreign government and the foreign producers and/or exporters.

   Commerce may postpone the preliminary CVD determination until 130 days after the date of initiation if the petitioner so requests or in cases which Commerce determines are extraordinarily complicated.

   U.S. law prohibits the imposition of provisional measures less than 60 days after the initiation of an investigation.

   U.S. law also prohibits the imposition of provisional measures for more than 4 months.

F. Conduct Verification

1. Antidumping

   1. COMMERCE

   In an AD investigation, Commerce must conduct a verification of the submitted data at the respondents' premises in order to verify the accuracy and completeness of submitted factual information.

   During the investigation phase of an AD proceeding, verifications almost always occur after Commerce issues the preliminary determination.

   During the administrative review phase, however, verification typically occurs prior to the preliminary determination.

   In administrative reviews, verifications are not mandatory (except every third year, if no verification was conducted in the previous two years).

   As part of the verification process, Commerce representatives meet with company officials and review accounting and financial records as well as other records deemed relevant.

   2. ITC

   The ITC has the authority to verify the information submitted in the petition and in questionnaire responses.

   Additionally, ITC representatives will often visit the production facilities of domestic producers to familiarize themselves with the product subject to the investigation and the production process.

2. Countervailing

   1. COMMERCE

   In a CVD investigation, Commerce conducts verification of the data submitted by both the foreign producers/exporters and the foreign government.

   During the investigation phase of a CVD proceeding, verifications almost always occur after Commerce issues the preliminary determination.

   During the administrative review phase, however, verification typically occurs prior to the preliminary determination.

   As part of the verification process, Commerce representatives meet with company officials and review accounting and financial records as well as other records deemed relevant.

   In CVD proceedings, Commerce representatives also meet with officials of the foreign government and review the official records and accounts concerning any alleged government subsidy programs.

   2. ITC

   The ITC has the authority to verify the information submitted in the petition and in questionnaire responses.

   Additionally, ITC representatives will often visit the production facilities of domestic producers to familiarize themselves with the product subject to the investigation and the production process.

G. Hearings

1. Antidumping

   1. COMMERCE

   After Commerce issues a preliminary AD determination and conducts verification, any interested party may request that Commerce hold a hearing.

   Only issues raised in an interested party's legal briefs may be discussed at the hearing.

   Business confidential information may not be discussed at the public hearing.

   2. ITC

   In the ITC's preliminary phase injury investigation, the Commission's Director of Operations generally schedules a conference in connection with the investigation.

Conference procedures (i.e., date, time, arrangements for party participation, oral argument, and witness testimony) are published as part of the ITC institution notice in the Federal Register.

   In the final phase injury investigation, the ITC is required to hold a public hearing before making a final determination.

   A hearing is held after a notice is published in the Federal Register.

   Parties participating in the hearing are required to limit their presentations to a summary and analysis of the information and arguments contained in their pre-hearing briefs and information not available at the time their pre-hearing briefs were filed.

   Upon a request filed by a party to the investigation no later that seven days prior to the date of the hearing which justifies the need for a closed session in order to discuss business proprietary information, the ITC may close a portion of a hearing to persons who do not have authorized access to business proprietary information.

2. Countervailing

   1. COMMERCE

   After Commerce issues a preliminary AD determination and conducts verification, any interested party may request that Commerce hold a hearing.

   Only issues raised in an interested party's legal briefs may be discussed at the hearing.

   Business confidential information may not be discussed at the public hearing.

   2. ITC

   In the ITC's preliminary phase injury investigation, the Commission's Director of Operations generally schedules a conference in connection with the investigation.

   Conference procedures (i.e., date, time, arrangements for party participation, oral argument, and witness testimony) are published as part of the ITC institution notice in the Federal Register.

   In the final phase injury investigation, the ITC is required to hold a public hearing before making a final determination.

   A hearing is held after a notice is published in the Federal Register.

   Parties participating in the hearing are required to limit their presentations to a summary and analysis of the information and arguments contained in their pre-hearing briefs and information not available at the time their pre-hearing briefs were filed.

   Upon a request filed by a party to the investigation no later that seven days prior to the date of the hearing which justifies the need for a closed session in order to discuss business proprietary information, the ITC may close a portion of a hearing to persons who do not have authorized access to business proprietary information.

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