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May 9 -- Pursuant to its authority under Title VII of the Tariff Act of 1930, as amended (the Act), the U.S. Department of Commerce (Commerce) proposes to amend its regulations to enhance, improve and strengthen its enforcement of trade remedies through the administration of antidumping duty (AD) and countervailing duty (CVD) laws. 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. Commerce is seeking public comment on these proposed revisions to the AD and CVD regulations. To be assured of consideration, written comments must be received no later than July 10, 2023.

Title VII of the Act vests Commerce with authority to administer the AD/CVD trade remedy laws. In particular, section 731 of the Act directs Commerce to impose an AD order on merchandise entering the United States when it determines that a producer or exporter is selling a class or kind of foreign merchandise into the United States at less than fair value (i.e., dumping), and material injury or threat of material injury to that industry in the United States is found by the U.S. International Trade Commission (ITC). Section 701 of the Act directs Commerce to impose a CVD order when it determines that a government of a country or any public entity within the territory of a country is providing, directly or indirectly, a countervailable subsidy with respect to the manufacture, production, or export of a class or kind of merchandise that is imported into the United States, and material injury or threat of material injury to that industry in the United States is found by the ITC.
We are proposing several modifications to the AD and CVD regulations to clarify and bring them into conformity with our practice and procedures, as well as to enhance and strengthen other regulatory provisions to enforce the trade remedy laws more effectively. The proposed changes are summarized here and discussed in greater detail below. We invite comments on these proposed regulatory changes and clarifications, including suggestions to improve these proposed regulations.

• Modify section 104 to clarify that references, citations, and hyperlinks to most documents provided in a submission do not incorporate the underlying referenced information on to the official record. The modification also explains the exception and the documents that meet the exception to this rule. This clarification is necessary because some interested parties over time have failed to put information on the official record such as website printouts and academic literature, creating confusion and inefficiencies.

• Modify sections 225, 226, 227, 301 and 306 to update and address scope, circumvention and covered merchandise issues that have arisen since Commerce amended and created those regulations in 2021. This includes addressing merchandise commercially produced, but not yet imported; the acceptance of pre-initiation submissions in response to scope applications and circumvention inquiry requests; the revision of time limits if Commerce seeks clarification on a scope application or circumvention inquiry request; clarification of when section 301 does and does not apply to such proceedings; a clarification of when “continue to suspend” language applies to entries pre-initiation in scope and covered merchandise proceedings; revisions to allow the sharing of information between AD and CVD segments when scope, circumvention, or covered merchandise inquiries for companion orders are conducted on the AD segment; providing greater detail on the application of scope clarifications; and allowing for extensions for initiation and preliminary circumvention determinations.

• Modify section 301 to allow Commerce to place previous analysis and calculation memoranda from other segments or proceedings on the record after written arguments have been submitted without being required to allow other parties to submit new factual information in response. Interested parties may still submit arguments as to the relevance of the agency analysis and calculation memoranda, but the submission of new factual information so late in the segment created unreasonable administrative burdens on the agency.

• Modify section 301 to address notices of subsequent authority submitted on the record and allow for the filing of responsive arguments and factual information.

• Modify section 308 to include the CVD adverse facts available hierarchy.

• Modify sections 408 and 511, and create new section 529, to address foreign government inactions that benefit foreign producers. This includes codifying Commerce's practice of determining that countervailable subsidies are conferred by certain unpaid or deferred fees, fines, and penalties. It also addresses the consideration of evidence on the record of weak, ineffective, or nonexistent property, intellectual property, human rights, labor, and environmental protections and the impact that the lack of such protections has on the prices and costs of products in selecting surrogate values and benchmarks.

• Create a new section 416 to address a determination of the existence of a PMS, including a PMS such that the cost of materials and fabrication or other processing of any kind does not accurately reflect the cost of production in the ordinary course of trade. This regulation takes into consideration the comments received from the public in response to the PMS ANPR and addresses the elements that Commerce may consider in determining if a market situation exists that likely distorts the cost of production and if the market situation is particular. It also provides 12 examples of scenarios in which Commerce might determine the existence of a PMS which distorts the cost of production and indicates that allegations of a PMS must be accompanied on the record by relevant information reasonably available to the interested party making the allegation.

• Modify sections 503, 505, 507, 508, 509, 520, and 525 to provide guidance to the public by incorporating our long-standing practices into the regulations. This includes addressing subsidies provided to support compliance with government-imposed mandates; treatment of outstanding loans as grants after three years of no payments of interest and principal; the use of an outside investor standard in determining the benefit of an equity infusion; the allocation period in measuring the benefit of an equity infusion; the allocation period in measuring the benefit of debt forgiveness; the treatment of certain income tax subsidy benefits as not tied with respect to particular markets or products; the use of a five-year period to determine if the premium rates charged on export insurance are inadequate to cover long-term operating costs and losses; and the use of alternative methodologies in attributing export subsidies and domestic subsidies to certain products exported and/or sold by a firm.
FRN: https://www.federalregister.gov/d/2023-09052 [29 pages]

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