Changes to Commerce’s “New Shipper” Policy and Procedure for Obtaining an Individual AD or CVD Rate

What’s Changed?

• Amended regulation (19 C.F.R. § 351.214) effective October 20, 2021 addresses how Commerce will decide whether to grant a new shipper review.
• A “new shipper” is an exporter or producer who did not export the product subject to an AD or CVD order to the United States during the original investigation and is not affiliated with an exporter or producer that exported to the United States during the period of investigation. Such a new shipper can obtain its own individual dumping margin or countervailing duty rate on an accelerated basis.
• The regulation now requires the individual AD/CVD rate to be determined based on bona fide sales and requires new shippers to continue to post cash deposits while the review is pending.
• The individual AD/CVD rate obtained through a new shipper review then becomes the liquidation rate of the covered entries and the new cash deposit rate for future entries until an administrative review changes the rate.

What to Know

• AD/CVD duties must be deposited for all products within the scope of an order, even when the exporting company is a new shipper that was not part of the original investigation.
• U.S. law allows such a new shipper to obtain an individual rate on an expedited basis. A new shipper only has one year to request a new shipper review from the first date of entry of merchandise within the scope of an AD/CVD order.
• The sale(s) for review must be bona fide sale(s) and Commerce can only use bona fide sales to calculate the individual rate. The product must enter the United States and there must be a sale to an unaffiliated customer in the United States.
• In making its bona fide sale determination, Commerce reviews documentation regarding the date of sale, commercial quantities of the sale, circumstances of the sale (including price, expenses, and profit), and business activities of the producer or exporter. Commerce may also consider whether any of the entities involved in the sale were established after the imposition of the AD/CVD order, whether the business lines of the new shipper are unrelated to the subject merchandise, the quantity of sales and any other factor that it deems relevant.

How We Can Help

Arent Fox can help companies determine whether they would qualify as new shippers and to report the necessary information to Commerce to obtain an individual rate. Even where a company can qualify as a new shipper, there may be strategic reasons why participating in an administrative review is a better option. Arent Fox can assist clients in understanding all of their options relating to AD/CVD orders, reviews, cash deposits and liquidation rates.