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Commerce Department Overhauls Trade Enforcement Regulations – International Law

Yesterday the US Department of Commerce (Commerce) published the
most comprehensive revisions to its regulations for enforcing trade
remedy laws since the 1990s—the completion of a rulemaking
process that started under the Trump
Administration.1 The regulations establish entirely
new procedures for three types of proceedings (scope, circumvention
and covered merchandise inquiries), and make a variety of other
substantive and technical revisions. Overall, the changes are
intended to strengthen enforcement and deter avoidance of trade
remedies by foreign producers and exporters as well as US
importers, and also to make the administration of the trade remedy
laws more efficient.

As background, the trade remedy laws authorize Commerce to issue
antidumping and countervailing duty (AD/CVD) orders on particular
products. The purpose of such duties is to level the playing field
for US producers, workers, farmers and ranchers who are injured by
imports that are dumped (i.e., sold at less than fair value) or
unfairly subsidized. Commerce conducts scope inquiries to determine
whether a particular product is within the scope of an AD/CVD
order. Commerce conducts circumvention inquiries to determine
whether a product, although not within the scope of an AD/CVD
order, should nonetheless be subject to the order because the
statutory definition of circumvention
applies.2 Covered merchandise inquiries are a new
type of proceeding that Commerce can initiate based on a referral
from US Customs and Border Protection (CBP) to determine whether a
particular product is within the scope of an AD/CVD
order.3 The Enforce and Protect Act of 2015 (EAPA)
established a framework for CBP to investigate AD/CVD evasion and
make referrals to Commerce in that context.4

In broad strokes, the new rules for scope, circumvention and
covered merchandise inquiries are similar. They establish timelines
for the initiation of the proceeding and the issuance of a final
determination, and they provide that Commerce may, but need not,
issue a preliminary determination prior to the final determination.
The rules provide that Commerce may initiate scope and
circumvention inquiries either based on a request from an
interested party or by self-initiation (which Commerce used on
several occasions under the prior administration). By contrast,
under the current regulations, Commerce performs either a formal or
informal scope inquiry, each with its own procedures—a
distinction eliminated by the new regulations. In addition, the
current regulations contain no stand-alone regulation on
circumvention inquiries,5  no explicit recognition
of Commerce’s authority to self-initiate circumvention
inquiries and no regulations on covered merchandise

One controversial aspect of the new rules is the possibility of
retroactive application of AD/CVD duties. Specifically, for scope
and covered merchandise inquiries, at the time of an affirmative
preliminary or final scope ruling, Commerce “normally
will” direct CBP to begin the suspension of liquidation of
unliquidated entries not yet suspended, which entered before the
date of initiation of the scope inquiry, and collect applicable
cash deposits (with possible exceptions).7  This is
based on the principle that “a scope ruling that a product is
covered by the scope of an order is a determination that the
product in question has always been covered by the scope of that
order.”8  By contrast, under Commerce’s
current practice, the date of initiation of the scope inquiry
functions as a cutoff date, before which no unsuspended entries are
subject to duties (even if they involve merchandise subsequently
determined to be within the scope of an AD/CVD
order).9  The new circumvention rules also state
that Commerce “may” apply duties retroactively “if
the Secretary determines that it is appropriate to do
so.”10  In effect, this new retroactive
element increases the incentive for foreign producers and
exporters, as well as importers, to seek scope rulings
earlier—rather than seeking to postpone the applicable cutoff

Other changes to Commerce’s regulations include:

  • Bona fide sales requirement for initiating new shipper
    : New shipper reviews allow foreign producers/exporters
    to obtain a company-specific AD/CVD rate, if they did not
    produce/export the relevant merchandise to the United States during
    the time period covered by the original AD/CVD investigation (and
    are not affiliated with any such producer/exporter). Under the new
    regulations, an exporter or producer may only request a new shipper
    review if it is able to establish the existence of a bona fide
    sale.11  No such requirement exists under the
    current regulations.12  This change may result in
    Commerce declining to initiate new shipper reviews in situations
    where it believes the inquiry is unwarranted.

  • Time limit on industry support challenges to
    : Commerce normally has 20 days from the submission
    of a petition to decide whether to initiate an AD/CVD
    investigation. The new rules require challenges to
    petitions—on the basis of inadequate domestic industry
    support13 —to be submitted no less than five
    business days prior to the 20th day.14 By contrast,
    the current rules contain no deadline for industry support
    challenges.15 The new rules are intended to give
    Commerce additional time to consider industry support challenges,
    and they will also require opponents of a petition to mobilize more

  • Importer certifications: The new regulations codify
    Commerce’s authority to require importers and other interested
    parties to certify whether a particular product is subject to an
    AD/CVD order. If a party fails to provide the certification upon
    request, or the certification is false, then the regulations
    provide that Commerce may order CBP to collect AD/CVD duties from
    the importer at the applicable rate.16

The new regulations apply to Commerce proceedings initiated
30–45 days from today (depending on the particular
provision). This includes proceedings related to AD/CVD orders that
have already been issued.


1. Regulations To Improve Administration and
Enforcement of Antidumping and Countervailing Duty Laws
, 86
Fed. Reg. 52,300 (Dep’t Commerce Sept. 20, 2021); see
Regulations To Improve Administration and Enforcement
of Antidumping and Countervailing Duty Laws
, 85 Fed. Reg.
49,472 (Dep’t Commerce Aug. 13, 2020) (proposed

2. See 19 U.S.C. § 1677j.

3. 19 U.S.C. § 1517.

4. EAPA is Title IV of the Trade Facilitation and Trade
Enforcement Act of 2015, signed into law in 2016. Public Law
114-125, 130 Stat. 122, 155 (2016).

5. Circumvention inquiries are referenced in the current
regulation on scope rulings. See 19 C.F.R. §

6. 19 U.S.C. § 1517 provides that if CBP is
conducting an EAPA investigation and is unable to determine whether
the merchandise at issue is covered by an AD/CVD order, it shall
refer the matter to Commerce to make a covered merchandise
determination. The resulting Commerce proceeding is the covered
merchandise inquiry described in the new 19 C.F.R. §

7. See new 19 C.F.R. §§
351.225(l)(2)(iii) and (l)(3)(iii), and 351.227(l)(2)(iii) and

8. Regulations To Improve Administration and
Enforcement of Antidumping and Countervailing Duty Laws
, 86
Fed. Reg. at 56,312.

9. See Regulations To Improve Administration and
Enforcement of Antidumping and Countervailing Duty Laws
, 86
Fed. Reg. at 52,327.

10. See new 19 C.F.R. §§
351.226(l)(2)(iii) and (l)(3)(iii).

11. See new 19 C.F.R. § 351.214(b). EAPA
added a provision to the AD/CVD statute providing that the
individual AD/CVD rate determined for a new shipper must be based
on bona fide sales in the United States, and it codified the
factors that Commerce has historically used to determine whether a
sale is bona fide. See 19 U.S.C. §

12. See 19 C.F.R. § 351.214(b).

13. Commerce initiates AD/CVD investigations based on
petitions only if it determines that the petitions are filed on
behalf of the domestic industry, as defined by statute.
See 19 U.S.C. §§ 1671a, 1673a.

14. See new 19 C.F.R. §

15. See Regulations To Improve Administration and
Enforcement of Antidumping and Countervailing Duty Laws
, 85
Fed. Reg. at 49,473.

16. See new 19 C.F.R. §

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