ITA Seeks Comments on Additional Changes to its Separate Rates Policies and Practices for AD Proceedings Involving NMEs

(In May 2004, the ITA issued an earlier request for comments on possible changes it is considering that could affect "Section A" and "voluntary" respondents. See ITT's Online Archives or 05/06/04 news, 04050630, for BP summary of the ITA's May 2004 proposed changes as well as an explanation of the need for such changes.)

The ITA states that this second request for comments is on an additional set of options it is considering regarding the growing administrative burden of analyzing requests for separate rates; the fact that its separate rates test, as currently constructed may not offer the most effective means of determining whether exporters act, de facto, independently of the government in their export activities; and potential evasion issues.

(According to the ITA, it intends to consider additional changes to its NME practice and may solicit additional public comment on other potential changes, as appropriate.)

Additonal Options for Changes to Separate Rates Policies/Practices for NMEs

The following are highlights of the additional changes being considered by the ITA:

Separate rate application process (instead of Section A response process). The ITA is considering a change in its separate rates process from a Section A response process to an application process, with a goal of streamlining the separate rates process and focusing the analysis on those issues most relevant to separate rate eligibility.

The ITA states in such an application, all exporters, including those that are 100% foreign-owned, would be required to certify their eligibility for separate rates (i.e. to certify that they exported subject merchandise to the U.S. and that they operate de jure and de facto independently of the government), as well as to potentially identify any affiliates involved in the production or sale of the subject merchandise and the producers from whom they sourced the merchandise during the period of investigation.

Under such a system, the ITA would list the documents required to substantiate these certifications and would require that the applicant provide original and translated copies of all those documents with the application. At the same time, the ITA would continue to reserve the right to issue supplemental questionnaires and verify applicants if necessary.

According to the ITA, the application would be available as a form on the Import Administration web site and, after a transition period, the ITA would require that parties complete and submit this form electronically on the Import Administration web site.

NME exporters would receive exporter/producer combination rate (not exporter-specific rate).The ITA states that it is considering extending its practice of assigning exporter/producer combination rates, rather than exporter-specific rates, to NME exporters receiving a separate rate so that only the specific exporter/producer combination that existed during the period of investigation or review would receive the calculated rate for establishing the cash deposit rate for estimated AD duties.

For example, if an exporter qualifying for a separate rate during an investigation sourced its subject merchandise from three producers during the period of investigation, the separate rate it receives would only apply as a cash deposit to merchandise produced by any of these three suppliers. While the exporter would be free to adjust its sourcing from among the three suppliers that supplied it during the investigation, merchandise sourced from new suppliers would fall outside the combination rate.

(See ITA's notice for list of three exceptions which currently receive exporter/producer combination rates rather than exporter-specific rates.)

Rebuttable presumption that NME producers shipping to 3rd countries know merchandise is bound for U.S.The third change being considered by the ITA concerns scenarios when NME producers sell subject merchandise through exporters located outside the NME country.

The ITA is now considering instituting a rebuttable presumption that NME producers shipping subject merchandise through third countries are aware that their goods are bound for the U.S. In other words, the ITA would assume the NME producers shipping through third countries set the export price to the U.S. and assign to them, and not the reseller, AD duty rates unless evidence were presented to the contrary.

-written comments must be submitted by October 15, 2004

ITA Contact - Lawrence Norton (202) 482-1579

ITA Notice (FR Pub 09/20/04) available at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-21208.pdf