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Antidumping(AD)/Countervailing Duty(CVD)

Petition Counseling and Analysis Unit

Administrative Protective Order: the legal mechanism that controls the limited disclosure of business proprietary information to interested parties. The DOC releases information in the following four instances Ė 1) the parties will use it in the AD proceeding, 2) to secure the information from disclosure from people not subject to the APO, 3) to report violations of the APO, 4) to acknowledge that the parties maybe subject to fines if they violate the terms of the order.

Antidumping Law: Title VII of the Tariff Act of 1930 (amended by the Uruguay Rounds, 1973).

Arms-Length Transactions: for affiliated parties, selling price between the parties is comparable to the selling prices in transactions involving persons who are not affiliated. Sales not made at arms length are considered outside of the normal course of trade.
Certification of Accuracy: all factual information submitted to the DOC must be accompanied by a certification of the completeness and accuracy of the factual information. They must be made by a knowledgeable official responsible for the presentation of the factual information and by the partyís legal counsel, if applicable.

Circumstances of Sale: adjustments made for certain differences in the circumstances of sale that exist because terms of sale in two markets differ. Normally limited to differences in direct selling expenses.

Comparison Market: home or third-country market from which DOC selects the prices used to establish normal values for market economy cases.

Constructed Export Price Offset: made when it is not possible to base normal value and export price on sales at the same level of trade. The offset is a deduction from normal value in the amount of indirect selling expenses incurred in the comparison market. The amount of this deduction may not exceed the amount of indirect selling expenses deducted in calculating constructed export price.

Constructed Value: cost of materials and fabrication + selling, general, administrative expenses, and profit of the foreign like product in the comparison market + cost of packing for export to U.S. Used when there are no sales of the foreign like product in the comparison market suitable for matching to the subject merchandise.

Cost of Manufacture: sum of material + fabrication and other processing costs incurred.

Cost of Production: Market economy cases, COP = material, fabrication, and other processing costs, selling, general, and admin expenses + cost of containers and packing expense.

Credit Expense: interest expense incurred between the shipment of merchandise to a customer and receipt of payment from the customer. Usually imputed by applying a firmís annual short-term borrowing rate in the currency of the transaction, prorated by the number of days between shipment and payment, to the unit price.

Date of Sale: usually date of invoice as recorded in the sellerís records.

Difference in Merchandise Adjustments: usually limited to differences in the costs of materials, labor and variable production costs that are attributable to physical difference in the merchandise.

Direct Expenses: these must be variable expenses (incurred as a direct and unavoidable consequence of the sale) and traceable to the sale.

Discounts: reduction to the gross price that a buyer is charged for goods. Including early payment discounts, quantity discounts, and loyalty discounts.

Dumping: imported merchandise is sold in the U.S. at less than the normal value of the merchandise. Dumping margin = normal value Ė export price or constructed export price ÷ export price or CEP. Weighted average dumping margin = sum of dumping margins / sum of export prices and constructed export prices.

Export Price and Constructed Export Price: calculated using the price at which the subject merchandise is first sold to a person not affiliated with the foreign producer or exporter. A U.S. sale is calculated as an export price when the first sale to an unaffiliated person occurs after importation. A U.S. sale is calculated as a constructed export price when the sale is first made to an unaffiliated person before import.

Factors of Production: for a non-market economy, normal value = hours required to produce the merchandise + quantities of raw materials employed + the amounts of energy and other utilities consumed + representative capital costs, including depreciation.

Facts Available: used when an interested party or other person withholds information requested, fails to provide requested information, significantly impedes an antidumping proceeded, or provides unverifiable information.

Foreign Like Product: merchandise sold in the comparison market that is identical or similar to the subject merchandise. There are no foreign like products for nonmarket economy cases.

Further Manufacturing Adjustment: when further manufacture or assembly is performed in the U.S., this is usually deducted from the price of merchandise sold in the U.S.

Home Market the market for sales of the foreign like product in the country in which the merchandise under investigation is produced.

Imputed Expenses: opportunity costs that are not reflected in the financial records of the company, but must be estimated for the AD inquiry. These include credit expenses and inventory carrying costs.

Indirect Expenses: fixed expenses that are incurred regardless of sale.

Inventory Carrying Costs: interest expenses incurred (or interest revenue foregone) between the time the goods are shipped to the first unaffiliated customer. DOC calculates these costs by applying the firmís annual short-term borrowing rate in the currency of the country where the merchandise is held, prorated by the number of days between leaving the production line and shipment to the customer, to the unit cost or price.

Market Oriented Industry: for NME cases, exists when there is virtually no government involvement in setting prices or amounts produced, is privately or collectively owned, or market-determined prices are paid for all significant inputs.

Movement Expenses: expenses directly attributable to bringing the merchandise from the original place of shipment to the place of delivery of the U.S. or foreign market sale.

Nonmarket Economy (NME): any foreign country the DOC determines to not operate on market principles of cost and pricing structures. The DOC considers currency convertibility, extent of free bargaining for wage rates, government allowance of foreign and joint investments, the governmentís control of production, government control over allocation of resources, and other factors the DOC considers appropriate.

Normal Value: adjusted price of the foreign like product in the home or third country market or to the constructed value of the subject merchandise. The DOC compares the normal value to the export price and/or the constructed export price to determine the margin of dumping, if any.

Ordinary Course of Trade: sales are in the ordinary course of trade if made under conditions and practices that, for a reasonable period of time prior to the date of sale of the subject merchandise, have been normal for sales of the foreign like product.

Proprietary Information: sensitive business data that would cause substantial harm to the submitter if disclosed publicly. This includes trade secrets concerning production process, costs, terms of sale, prices, and names of customers and suppliers.

Proprietary Treatment: protect information from public disclosure. The DOC will disclose proprietary information only to U.S. ITC and U.S. Customs Service officials and, under limited APO, representatives of interested parties.

Rebates: reductions in the gross price that a buyer is charge for goods. These do not usually result in a reduction in the remittance from the buyer but are credited against monies due on future purchases or the conveyance of another item of value after the buyer has paid for the merchandise. The DOC reduces gross selling price by the amount of the rebate.

Related Party: Pursuant to Section 771(4)(B)(ii) of the Act, "...a producer and an exporter or importer shall be considered to be related parties, if -
(I) the producer directly or indirectly controls the exporter or importer,
(II) the exporter or importer directly or indirectly controls the producer,
(III) a third party directly or indirectly controls the producer and the exporter or importer,
(IV) the producer and the exporter or importer directly or indirectly control a third party and there is reason to believe that the relationship causes the producer to act differently than a nonrelated producer.
For purposes of this subparagraph, a party shall be considered to directly or indirectly control another party if the party is legally or operationally in a position to exercise restraint or direction over the other party."

Similar merchandise: for NME cases, used when there are no identical products to compare. Similar merchandise is produced by the same manufacturer in the same country as the subject merchandise and is (in order of preference) similar to the subject merchandise in component materials, use and value; or similar in use to, and reasonably comparable to the subject merchandise.

Surrogate Country: for NME cases, the DOC values factors of production in a surrogate country. The surrogate is a market economy that the Department of Commerce has determined is at a comparable level of economic development and is a significant producer of comparable merchandise.

Technical Service Expenses: incurred when a producer provides technical advise to customers which are industrial users of the product. The DOC considers travel expenses and contract services performed by unaffiliated persons to be direct expenses.

Third-Country Market: used when the DOC cannot use home market sales to determine normal value. The DOC usually chooses one of three third-country markets with the largest aggregate quantity of sales of the foreign like products. The DOC considers product similarity, similarity of third-country and U.S. markets, and whether sales to the thirds country are representative when choosing the third-country.

Verification: to establish the adequacy and accuracy of information submitted, the DOC examines the records of the responding foreign parties and interviews company personnel who prepared the questionnaire responses. The DOC must verify information relied upon when making a final determination in an investigation, or in an administrative review when revocation of an AD order is requested. The DOC also verifies information submitted in an administrative review if a party so requests or if good cause is shown.

Note: For general information purposes only. When interpreting and applying the law, please refer to the Tariff Act of 1930,
as amended, (19 U.S.C. 1671-1671h, 1673-1673h) and the related regulations in Title 19 of the Code of Federal Regulations.
Counseling Assistance Hotline: (202) 482-1255

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United States Department of Commerce . International Trade Administration . Enforcement and Compliance . 1401 Constitution Ave. N.W. Washington DC 20230
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