Practice in the rule

• New regulation (19 CFR § 351.226) effective November 4, 2021 governs anti-circumvention investigations that were previously part of the scope regulations (19 CFR § 351.225). The new regulations incorporate current practice but also some new elements.
• The Commerce Department can investigate anti-dumping and countervailing duty (AD / CVD) fraud through anti-circumvention investigations that examine whether AD / CVD duties are evaded by products that are slightly modified by manufacturing processes to fail to respond on the initial order or by shipment to a third country, where sufficient inputs come from the country concerned.
• This is because anti-circumvention investigations extend the anti-dumping / countervailing order to countervailing duties to cover other countries or goods that were not originally part of the investigation.

What there is to know

• The regulations allow for self-initiated or requested anti-circumvention investigations. The Commerce Department will accept or reject the circumvention investigation request within 30 days (but may extend the 15-day deadline). The initiation of a circumvention investigation will be published in the Federal Register and the parties will have an opportunity to provide comments and factual information and to rebut, clarify or correct the factual information submitted.
• The preliminary determination is due 150 days from the publication of the Federal Register notice of initiation and the final determination is due 300 days from the publication of the opening of the Federal Register notice. The final decision can be extended for 65 days.
• Like AD / CVD investigations and administrative reviews, the Department of Commerce is also authorized to verify submissions for anti-circumvention investigations.
• If the Commerce Department makes a preliminary affirmative determination, it will order the United States Customs and Border Protection (CBP) to begin the stay of liquidation and require the cash deposit of the anti-dumping / CVD rate. applicable for each unliquidated entry of the product not yet suspended, entered, or removed from the warehouse, for consumption from the date of publication of the notice of initiation of the anti-circumvention investigation.
• The Department of Commerce has the discretion to initiate the suspension of liquidation and to require a cash deposit of the estimated duties after a preliminary or final affirmative determination of circumvention of all unliquidated imports dating back to the first date of suspension under of the order, generally the preliminary determination of the underlying investigation, as opposed to the date of initiation of the anti-circumvention investigation.
• However, the Commerce Department said it would not enforce the provisions “in a manner that directs CBP to begin the suspension of the clearance of unliquidated entries not yet suspended, entered or withdrawn from the warehouse, to consumption, before [the stated effective date of November 4, 2021]. “Therefore, the most distant retroactive suspension ordered by the Department of Commerce that could apply in this framework concerns unliquidated entries not yet suspended, entered or withdrawn from the warehouse, for consumption, as of November 4, 2021. .
• The Commerce Department has discretion in determining whether the remedy should be:
  • by producer, by exporter, by importer, or a combination of both;
  • on a national basis to all products from the same country as the product in question with the same relevant physical characteristics (including chemical, dimensional and technical characteristics), regardless of the producer, exporter or importer of these products ;
  • nationally to all products from the same country as the product at issue having similar relevant physical characteristics (including chemical, dimensional and technical characteristics), regardless of the producer, exporter or importer of those products; and
  • implementation of a certification requirement under 19 CFR 351.228 (certification as to whether or not the imported merchandise is subject to anti-dumping or countervailing duties).

The Commerce Department has not been shy about initiating anti-circumvention investigations before formalizing the process in the new regulations and we expect it will continue to prioritize the enforcement of anti-circumvention orders after the publication of the regulations. anti-circumvention regulations. Companies navigating this space should ensure that they monitor DOC’s anti-circumvention investigations and whether the expansion of existing AD / CVD orders will impact their imports.