2011-10045. Modification of Regulations Regarding the Practice of Accepting Bonds During the Provisional Measures Period in Antidumping and Countervailing Duty Investigations

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Proposed rule; request for comments.

SUMMARY:

The Department of Commerce (the Department) proposes to modify its regulation that states that provisional measures during an antidumping or countervailing duty investigation usually take the form of a bonding requirement. The modification, if adopted, would establish that the provisional measures during an antidumping or countervailing duty investigation will normally take the form of a cash deposit.

DATES:

To be assured of consideration, comments must be received no later than May 26, 2011.

ADDRESSES:

All comments must be submitted through the Federal eRulemaking Portal at http://www.regulations.gov,, Docket No. ITA-2011-0005, unless the commenter does not have access to the Internet. Commenters who do not have access to the Internet may submit the original and two copies of each set of comments by mail or hand delivery/courier. All comments should be addressed to Ronald K. Lorentzen, Deputy Assistant Secretary for Import Administration, Room 1870, Department of Commerce, 14th Street and Constitution Ave., NW., Washington, DC 20230. The comments should also be identified by Regulation Identifier Number (RIN) 0625-AA88.

The Department will consider all comments received before the close of the comment period. The Department will not accept comments accompanied by a request that part or all of the material be treated confidentially because of its business proprietary nature or for any other reason. All comments responding to this notice will be a matter of public record and will be available for inspection at Import Administration's Central Records Unit (Room 7046 of the Herbert C. Hoover Building) and online at http://www.Regulations.gov and on the Department's Web site at http://www.trade.gov/​ia/​.

Any questions concerning file formatting, document conversion, access on the Internet, or other electronic filing issues should be addressed to Andrew Lee Beller, Import Administration Webmaster, at [phone], e-mail address: [e-mail].

FOR FURTHER INFORMATION CONTACT:

Thomas Futtner at [phone], Mark Ross at [phone], or Joanna Theiss at [phone].

SUPPLEMENTARY INFORMATION:

Background

The Department proposes to modify its regulation to establish that the provisional measures during an antidumping or countervailing duty investigation will normally take the form of a cash deposit. The provisional measures period is the period between the publication of the Department's preliminary affirmative determination and the earlier of (1) the expiration of the applicable time period set forth in sections 703(d) and 733(d) the Tariff Act of 1930, as amended (the Act), or (2) the publication of the International Trade Commission's final affirmative injury determination.^[1] During the provisional measures period in antidumping and countervailing duty investigations, the Department is instructed by the Act to order “the posting of a cash deposit, bond, or other security, as the administering authority deems appropriate.” See Sections 703(d)(1)(B) and 733(d)(1)(B) of the Act.

Our regulations describe the preliminary determination in antidumping and countervailing duty investigations as the first point at which the Department may provide a remedy if we preliminarily find that dumping or countervailable subsidies has occurred. The regulations at 19 CFR 351.205(a) state that, “[t]he remedy (sometimes referred to as `provisional measures') usually takes the form of a bonding requirement to ensure payment if antidumping or countervailing duties ultimately are imposed.” Section 351.205(d) states that, “[i]f the preliminary determination is affirmative, the Secretary will take the actions described in section 703(d) or section 733(d) (whichever is applicable).”

A key reason for requiring that the provisional measures during an antidumping or countervailing duty investigation take the form of a cash deposit is to better ensure that importers bear full responsibility for any future antidumping and countervailing duties they may owe. While most of the duties on entries secured by a bond during the provisional measures period are ultimately collected, these collections can be very slow and involve burdensome administrative problems for U.S. Customs and Border Protection (CBP).

We also believe that this change to our regulation will bring the United States in line with the practices of other World Trade Organization (WTO) Members. We are aware of no other WTO Member that is currently permitting importers the option of posting bonds during the provisional measures period of antidumping and countervailing duty investigations.

Explanation of Proposed Modification to 19 CFR 351.205

The second sentence of 19 CFR 351.205(a) states that, “[t]he remedy (sometimes referred to as `provisional measures') usually takes the form of a bonding requirement to ensure payment if antidumping or countervailing duties ultimately are imposed.” The Department proposes deleting most of this sentence because U.S. importers would normally no longer be permitted to post bonds during the provisional measures period. The Department proposes keeping the “(sometimes referred to as `provisional measures')” phrase and moving it to the first sentence of 19 CFR 351.205(a). We view this phrase as a useful link between this part of our regulations and the terminology under Article 7 of the WTO Antidumping Agreement. Further, to clarify that provisional measures will take the form of cash deposits the Department proposes adding a sentence to 19 CFR 351.205(d) that states, “[w]ith respect to section 703(d)(1)(B) and 733(d)(1)(B) of the Act, the Secretary will normally order the posting of cash deposits to ensure payment if antidumping or countervailing duties ultimately are imposed.” This change, in our view, places the requirement for cash deposits in the appropriate part of 19 CFR 351 (i.e., in the part that explains the effects of an affirmative preliminary determination). These modifications would reflect the Department's change in practice of normally requiring cash deposits rather than bonds during the provisional measures period. This modification is also in line with 19 CFR 351.205(d), which provides that “if the preliminary determination is affirmative, the Secretary will take the actions described in section 703(d) or section 733(d) of the Act (whichever is applicable)” because these sections of the Act provide that the Department shall order the posting of cash deposits or bonds, as the Department deems appropriate.

Classification

Executive Order 12866

This rule has been determined to be not significant for purposes Executive Order 12866.

Regulatory Flexibility Act

The Chief Counsel for Regulation has certified to the Chief Counsel for Advocacy of the Small Business Administration (“SBA”) under the provisions of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that the proposed rule would not have a significant economic impact on a substantial number of small business entities. A summary of the need for, objectives of, and legal basis for this rule is provided in the preamble, and is not repeated here.

The entities upon which this rulemaking could have an impact include foreign exporters and producers, some of whom are affiliated with U.S. companies, and U.S. importers. Some of these entities may be considered small entities under the SBA small business size standard. The Department is not able to estimate the number of small entities this proposed rule will affect; however, the Department anticipates that it will not be a substantial number based on our experience with the administration of antidumping and countervailing duty proceedings.

The Department also estimates that this proposed rule's economic impact on small entities will not be significant. In 2008 and 2009, antidumping and countervailing duty remedies were applied to less than 2% of imports into the United States. Further, because provisional antidumping and countervailing duties only apply during the investigation phase of a case, this proposed rule is not applicable to a significant portion of our antidumping and countervailing duty remedies. Finally, the Act provides that provisional measures may only be in force for a four-month period, which can be extended to no longer than six months in antidumping cases.

Moreover, given the nature of our retrospective duty assessment system, eliminating effectively the bonding option and requiring cash deposits during the provisional measure period should not have a significant economic impact on small business entities. Under the U.S. retrospective system, for the provisional measure period an estimated antidumping or countervailing duty rate is established (based on the dumping margin or subsidy rate found in the preliminary determination of the original investigation), and this rate is applied to subject merchandise as it is imported. This duty rate is for deposit purposes only. Final duties are not assessed at the time the subject merchandise is imported into the United States. Rather, beginning one year after the imposition of any antidumping or countervailing duty order, interested parties (e.g., domestic producers, importers, or foreign exporters) may request an administrative review to determine the actual amount of duties to be collected based on the level of dumping or subsidization that occurred during the review period. Further, small business entities will continue to have the option to post cash deposits during the provisional measures period, either from the entity's assets or borrowed from third parties.

For all of these reasons, the proposed rule would not have a significant economic impact on a substantial number of small business entities. Since this proposed modification to 19 CFR 351.222, if adopted, will not have a significant economic impact on a substantial number of small entities, an Initial Regulatory Flexibility Analysis is not required and, therefore, has not been prepared.

Paperwork Reduction Act

This rule does not contain a collection of information for purposes of the Paperwork Reduction Act of 1980, as amended (44 U.S.C. 3501 et seq.).

List of Subjects in 19 CFR Part 351

• Administrative practice and procedure
• Antidumping
• Business and industry
• Cheese
• Confidential business information
• Countervailing duties
• Freedom of information
• Investigations
• Reporting and recordkeeping requirements

Dated: April 20, 2011.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

For the reasons stated, 19 CFR part 351 is proposed to be amended as follows:

PART 351—ANTIDUMPING AND COUNTERVAILING DUTIES

1. The authority citation for 19 CFR part 351 continues to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C 1202 note; 19 U.S.C. 1303 note; 19 U.S.C. 1671 et seq.; and 19 U.S.C. 3538.

2. In § 351.205, revise paragraphs (a) and (d) to read as follows:

(a) Introduction. A preliminary determination in an antidumping or countervailing duty investigation constitutes the first point at which the Secretary may provide a remedy (sometimes referred to as “provisional measures”) if the Secretary preliminarily finds that dumping or countervailable subsidization has occurred. Whether the Secretary's preliminary determination is affirmative or negative, the investigation continues. This section contains rules regarding deadlines for preliminary determinations, postponement of preliminary determinations, notices of preliminary determinations, and the effects of affirmative preliminary determinations.

* * * * *

(d) Effect of affirmative preliminary determination. If the preliminary determination is affirmative, the Secretary will take the actions described in section 703(d) or section 733(d) of the Act (whichever is applicable). With respect to section 703(d)(1)(B) and 733(d)(1)(B) of the Act, the Secretary will normally order the posting of cash deposits to ensure payment if antidumping or countervailing duties ultimately are imposed. In making information available to the Commission under section 703(d)(3) or section 733(d)(3) of the Act, the Secretary will make available to the Commission and to employees of the Commission directly involved in the proceeding the information upon which the Secretary based the preliminary determination and which the Commission may consider relevant to its injury determination.

Footnotes

1.  Also, pursuant to sections 703(e)(2) and 733(e)(2) of the Act, if the Department makes an affirmative determination of critical circumstances, then provisional measures shall apply on or after the later of (A) the date which is 90 days before the date on which the suspension of liquidation was first ordered, or (B) the date on which notice of the determination to initiate the investigation is published in the Federal Register.