Monday, October 3, 2011

Show Me the Money - DOC Announces New Requirement For Cash Deposits of Provisional Measures

The US Department of Commerce (DOC) announced today a change in its regulations that will require importers to post cash deposits of estimated antidumping (AD) and countervailing (CVD) duties starting with the preliminary determination in original investigations.  This change applies to new investigations initiated as a result of petitions filed on or after November 2, 2011.  While DOC maintains discretion under the new regulations because it will "normally" require cash deposits, it recognizes that, going forward, it will be "rare and unusual circumstances" when it permits bonding.

Prior to this change, importers were allowed to post bonds in lieu of cash deposits for the so-called "provisional measures" DOC puts in place upon making an affirmative preliminary determination in an original investigation.  Under the US's retrospective system, the "provisional measures" are estimates of the importer's AD/CVD liability based on the dumping and/or subsidy margins calculated for the preliminary determination.  The final AD/CVD liability is determined later through annual administrative reviews.

DOC is making the change:
  • "to strengthen the administration of the nation's AD and CVD laws by making importers directly responsible for the payment of AD and CVD duties";
  • "to ensure that the U.S. Government collects the full amount of the duties owed"; and
  • "reduce some of the burdens that U.S. Customs and Border Protection (CBP) faces when trying to collect AD and CVD duties."
The current shortfalls in collecting AD/CVD duties are well documented: see here, here, and here.  

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