Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers

AGENCY:

U.S. Customs and Border Protection, Department of Homeland Security.

ACTION:

Notice of intent to distribute offset for Fiscal Year 2010.

SUMMARY:

Pursuant to the Continued Dumping and Subsidy Offset Act of 2000, this document is U.S. Customs and Border Protection's notice of intent to distribute assessed antidumping or countervailing duties (known as the continued dumping and subsidy offset) for Fiscal Year 2010 in connection with countervailing duty orders, antidumping duty orders, or findings under the Antidumping Act of 1921. This document sets forth the case name and number of each order or finding for which funds may become available for distribution, together with the list of affected domestic producers, based on the list supplied by the United States International Trade Commission (USITC) associated with each order or finding, who are potentially eligible to receive a distribution. This document also provides the instructions for affected domestic producers (and anyone alleging eligibility to receive a distribution) to file certifications to claim a distribution in relation to the listed orders or findings.

DATES:

Certifications to obtain a continued dumping and subsidy offset under a particular order or finding must be received by August 2, 2010. Any certification received after August 2, 2010 will be denied, making claimants ineligible for the distribution.

ADDRESSES:

Certifications and any other correspondence (whether by mail, or an express or courier service) should be addressed to the Assistant Commissioner, Office of Administration, U.S. Customs and Border Protection, Revenue Division, Attention: Melissa Kurth, 6650 Telecom Drive, Suite 100, Indianapolis, IN 46278.

FOR FURTHER INFORMATION CONTACT:

For general questions regarding preparation of certifications, contact Melissa Kurth, Revenue Division, (317) 614-4462. For questions regarding legal aspects, contact Peter Martin, Office of International Trade, Regulations and Rulings, (202) 325-0048.

SUPPLEMENTARY INFORMATION:

Background

The Continued Dumping and Subsidy Offset Act of 2000 (CDSOA) was enacted on October 28, 2000, as part of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (the “Act”). The provisions of the CDSOA are contained in title X (§§ 1001-1003) of the Act.

The CDSOA, in § 1003 of the Act, amended title VII of the Tariff Act of 1930, as amended, by adding a new § 754 (codified at 19 U.S.C. 1675c) in order to provide that assessed duties received pursuant to a countervailing duty order, an antidumping duty order, or a finding under the Antidumping Act of 1921 will be distributed to affected domestic producers for certain qualifying expenditures that these producers incur after the issuance of such an order or finding. The term “affected domestic producer” means any manufacturer, producer, farmer, rancher or worker representative (including associations of such persons) who:

(A) Was a petitioner or interested party in support of a petition with respect to which an antidumping order, a finding under the Antidumping Act of 1921, or a countervailing duty order that has been entered,

(B) Remains in operation continuing to produce the product covered by a countervailing duty order, an antidumping duty order, or a finding under the Antidumping Act of 1921, and

(C) If a company, has not been acquired by another company or business that is related to a company that opposed the antidumping or countervailing duty investigation that led to the order or finding, e.g., opposed the petition or otherwise presented evidence in opposition to the petition.

The distribution that these parties may receive is known as the continued dumping and subsidy offset.

Section 7601(a) of the Deficit Reduction Act of 2005 repealed 19 U.S.C. 1675c. According to § 7701 of the Deficit Reduction Act, the repeal takes effect as if enacted on October 1, 2005. However, § 7601(b) provided that all duties collected on an entry filed before October 1, 2007, shall be distributed as if 19 U.S.C. 1675c had not been repealed by § 7601(a).

Consequently, the full impact of the CDSOA repeal on amounts available for distribution may be delayed for several years. First, money collected on an entry filed before October 1, 2007, will continue to be subject to the distribution procedures under former § 1675c. Second, the antidumping and countervailing duty on an entry is not available for distribution until the entry is liquidated pursuant to the direction of the Department of Commerce and the duty is collected and deposited into the special account; therefore, the distribution process will continue until all entries made before October 1, 2007, are liquidated and the antidumping and countervailing duties are collected. Because of the statutory constraints in the assessments of antidumping and countervailing duties, the distribution process will be continued for an undetermined period; however, the amount of money available for distribution can be expected to diminish over time. It should also be noted that amounts distributed may be subject to recovery as a result of reliquidations, court actions, administrative errors, and other reasons.

List of Orders or Findings and Affected Domestic Producers

It is the responsibility of the U.S. International Trade Commission (USITC) to ascertain and timely forward to U.S. Customs and Border Protection (CBP) a list of the affected domestic producers that are potentially eligible to receive an offset in connection with an order or finding. In this regard, it is noted that USITC has supplied CBP with the list of individual antidumping and countervailing duty cases, and the affected domestic producers associated with each case who are potentially eligible to receive an offset. This list appears at the end of this document.

The courts have interpreted various provisions of the CDSOA, particularly those related to the definition of the term “affected domestic producer.” In both SKF USA Inc. v. United States, 451 F. Supp. 2d 1355 (Ct. Int'l Trade 2006), and PS Chez Sidney, L.L.C. v. United States, 502 F. Supp. 2d 1318, 1325 (Ct. Int'l Trade 2007), the U.S. Court of International Trade (CIT) held that the CDSOA's support requirement was unconstitutional and severed this requirement for eligibility and remanded the matters to the USITC and CBP to review their decisions regarding CDSOA distributions. Both cases have been appealed. The CIT subsequently affirmed the USITC and CBP remand actions for both cases in SKF USA INC. v. United States, 502 F. Supp. 2d 1325 (Ct. Int'l Trade 2007), and PS Chez Sidney, L.L.C. v. United States, 558 F. Supp. 2d 1370 (Ct. Int'l Trade 2008). SKF was reversed by the Court of Appeals for the Federal Circuit (CAFC) in SKF USA, Inc. v. United States, 556 F. 3d 1337 (Fed. Circ. 2009). The CAFC held that the CDSOA's support requirement did not violate either the First Amendment or the Fifth Amendment. The Supreme Court of the United States denied plaintiff's petition for certiorari, 2010 U.S. Lexis 3940 (May 17, 2010). However, this decision may be subject to further judicial review through a request for a rehearing. The CIT's decision in PS Chez Sidney, L.L.C. has been appealed to the CAFC, and the appeal has been stayed pending final disposition of SKF.

In another relevant court case, Pat Huval Restaurant & Oyster Bar, Inc. v. United States, 547 F. Supp. 2d 1352 (Ct. Int'l Trade 2008), the CIT held that a domestic producer's failure to file timely certification in certain fiscal years was not necessarily a bar to seek judicial review for disbursement made within two years of filing suit because “Customs could have done nothing but reject them.” That litigation is ongoing.

As a result of these decisions and a number of other pending cases, CBP has calculated and withheld from distribution an amount corresponding to the pro-rata share of all domestic producers who have filed timely and factually accurate certifications starting in 2006, despite the fact that some claimants may not have appeared on the ITC list. Therefore, at a minimum, even under the relevant court decisions, it would not have been futile for domestic producers not appearing on the ITC list to file certifications starting in fiscal year 2006. CBP will determine the proper recipients of these funds once certain legal issues are resolved. As a result, domestic producers who are not on the USITC list but believe they nonetheless are eligible for a CDSOA distribution under one or more antidumping and/or countervailing duty cases are required, as are all potential claimants that expressly appear on the list, to file their certification(s) within 60 days after this notice is published. Certifications that are not timely filed within the requisite 60 days will be summarily denied.

The CAFC ruled in Canadian Lumber Trade Alliance v. United States, 517 F.3d 1319 (Fed. Cir. 2008), cert. deniedsub nom.United States Steel v. Canadian Lumber Trade Alliance, 129 S. Ct. 344 (2008), that CBP was not authorized to distribute such antidumping and countervailing duties to the extent they were derived from goods from countries that are parties to the North American Free Trade Agreement (NAFTA). Due to this decision, CBP will no longer list cases related to NAFTA on the Preliminary Amounts Available report, and no distributions will be issued on these cases.

Regulations Implementing the CDSOA

It is noted that CBP published Treasury Decision (T.D.) 01-68 (Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers) in the Federal Register (66 FR 48546) on September 21, 2001, which was effective as of that date, in order to implement the CDSOA. The final rule added a new subpart F to part 159 of title 19, Code of Federal Regulations (19 CFR part 159, subpart F (§§ 159.61-159.64)). More specific guidance regarding the filing of certifications is provided in this notice in order to aid affected domestic producers and other domestic producer alleging eligibility (“claimants” or “domestic producers”).

Notice of Intent to Distribute Offset

This document announces that CBP intends to distribute to affected domestic producers the assessed antidumping or countervailing duties that are available for distribution in Fiscal Year 2010 in connection with those antidumping duty orders or findings or countervailing duty orders that are listed in this document. Section 159.62(a) of title 19 (19 CFR 159.62(a)) provides that CBP will publish such a notice of intention to distribute assessed duties at least 90 calendar days before the end of a fiscal year. Failure to publish the notice at least 90 calendar days before the end of the fiscal year will not impact an affected domestic producer's obligation to file a timely certification within 60 days after the notice is published. See, Dixon Ticonderoga v. United States, 468 F.3d 1353, 1354 (Fed. Cir. 2006).

Certifications; Submission and Content

To obtain a distribution of the offset under a given order or finding, an affected domestic producer (and anyone alleging eligibility to receive a distribution) must submit a certification for each order or finding under which a distribution is sought, to CBP, indicating their desire to receive a distribution. To be eligible to obtain a distribution, certifications must be received by CBP no later than 60 calendar days after the date of publication of this notice of intent to distribute in the Federal Register. All certifications not received by the 60th day will not be eligible to receive a distribution.

As required by 19 CFR 159.62(b), this notice provides the case name and number of the order or finding concerned, as well as the specific instructions for filing a certification under § 159.63 to claim a distribution. Section 159.62(b) also provides that the dollar amounts subject to distribution that are contained in the Special Account for each listed order or finding are to appear in this notice. However, these dollar amounts were not available in time for inclusion in this publication. The preliminary amounts will be posted on the CBP Web site (http://www.cbp.gov). However, the final amounts available for disbursement may be higher or lower than the preliminary amounts.

CBP will provide general information to claimants regarding the preparation of certification(s). However, it remains the sole responsibility of the domestic producer to ensure that the certification is correct, complete, and accurate so as to demonstrate the eligibility of the domestic producer for the distribution requested. Failure to ensure that the certification is correct, complete, and accurate as provided in this notice will result in the domestic producer not receiving a distribution.

Specifically, to obtain a distribution of the offset under a given order or finding, each potential claimant must timely submit a certification containing the required information detailed below as to the eligibility of the domestic producer to receive the requested distribution and the total amount of the distribution that the domestic producer is claiming. Certifications should be submitted to the Assistant Commissioner, Office of Administration, U.S. Customs and Border Protection, Revenue Division. The certification must enumerate the qualifying expenditures incurred by the domestic producer since the issuance of an order or finding and it must demonstrate that the domestic producer is eligible to receive a distribution as an affected domestic producer or allege another basis for eligibility.

A successor to a company that was an affected domestic producer at the time of acquisition should consult 19 CFR 159.61(b)(1)(i). We note that the successor company may assume joint and several liability for the return of any overpayments arising under § 159.64(c)(3) that were previously paid to the predecessor. CBP may require the successor company to provide documents to support its eligibility to receive a distribution as set out in § 159.63(d).

A member company (or its successor) of an association that appears on the list of affected domestic producers in this notice, where the member company itself does not appear on this list, should consult 19 CFR 159.61(b)(1)(ii). Specifically, for a certification under 19 CFR 159.61(b)(1)(ii), the claimant must name the association of which it is a member and specifically establish that it was a member of the association at the time the association filed the petition with the USITC and establish that the company is a current member of the association. In order to promote accurate filings and more efficiently process the distributions, we offer the following guidance. If claimants are members of an association but the association does not file on their behalf, each association will need to provide their members with a statement which contains notarized company specific information including dates of membership, and an original signature from an authorized representative of the association. An association filing a certification on behalf of a member must also provide a power of attorney or other evidence of legal authorization from each of the domestic producers it is representing. An association filing a certification on behalf of a member is responsible for verifying the accuracy of the member's financial records, which support their claim, and is responsible for that certification. Any association filing a certification on behalf of a member is responsible for verifying the legal sufficiency and accuracy of the member's financial records, which support the claim and may be liable for repayment of any claim found to have been paid in error.

The association may file a certification in its own right to claim an offset for that order or finding, but its qualifying expenditures would be limited to those expenditures that the association itself has incurred after the date of the order or finding in connection with the particular case.

As provided in 19 CFR 159.63(a), certifications to obtain a distribution of an offset must be received by CBP no later than 60 calendar days after the date of publication of the notice of intent in the Federal Register. All certifications received after the 60-day deadline will be summarily denied, making claimants ineligible for the distribution regardless of whether or not they appeared on the USITC list.

A list of all certifications received will be published on the CBP Web site shortly after the receipt deadline. This publication will not confirm acceptance or validity of the certification, but merely receipt of the certification. Due to the high volume of certifications, CBP is unable to respond to individual telephone or written inquiries regarding the status of a certification appearing on the list.

While there is no required format for a certification, CBP has developed a standard certification form to aid claimants in filing certifications. The certification form is available at http://www.pay.gov under Public Form Name entitled CDSOA. The certification form also follows this Federal Register Notice. The certification form can be submitted electronically through http://www.pay.gov or by mail. All certifications not submitted electronically must include original signatures.

Regardless of the format for a certification, per 19 CFR 159.63(b), the certification must contain the following information:

1. The date of this Federal Register notice;

2. The Commerce case number;

3. The case name (producer/country);

4. The name of the domestic producer and any name qualifier, if applicable (for example, any other name under which the domestic producer does business or is also known);

5. The mailing address of the domestic producer (if a post office box, the physical street address must also appear) including, if applicable, a specific room number or department;

6. The Internal Revenue Service (IRS) number (with suffix) of the domestic producer, employer identification number, or social security number, as applicable;

7. The specific business organization of the domestic producer (corporation, partnership, sole proprietorship);

8. The name(s) of any individual(s) designated by the domestic producer as the contact person(s) concerning the certification, together with the phone number(s), mailing address, and, if available, facsimile transmission number(s) and electronic mail (e-mail) address(es) for the person(s). Correspondence from CBP will be directed to the designated contact(s) by either mail or phone or both;

9. The total dollar amount claimed;

10. The dollar amount claimed by category, as described in the section below entitled “Amount Claimed for Distribution”;

11. A statement of eligibility, as described in the section below entitled “Eligibility to Receive Distribution”; and

12. For certifications not submitted electronically through www.pay.gov,, an original signature by an individual legally authorized to bind the producer.

Qualifying Expenditure Which May Be Claimed for Distribution

Qualifying expenditures which may be offset by a distribution of assessed antidumping and countervailing duties encompass those expenditures that are incurred by the domestic producer after issuance of an antidumping duty order or finding or a countervailing duty order, and prior to its termination, provided that such expenditures fall within certain categories. The repeal language parallels the termination of an order. Therefore, for duty orders or findings that have not been previously revoked, expenses must be incurred before October 1, 2007, to be eligible for offset. For duty orders or findings that have been revoked, expenses must be incurred before the effective date of the revocation to be eligible for offset. For example, assume for case A-331-802 certain frozen warm-water shrimp and prawns from Ecuador, that the order date is February 1, 2005 and that the revocation effective date is August 15, 2007. In this case, eligible expenditures would have to be incurred between February 1, 2005 and August 15, 2007.

For the convenience and ease of the domestic producers, CBP is providing guidance on what the agency takes into consideration when making a calculation for each of the following categories: (1) Manufacturing facilities (Any facility used for the transformation of raw material into a finished product that is the subject of the related order or finding); (2) Equipment (Goods that are used in a business environment to aid in the manufacturing of a product that is the subject of the related order or finding); (3) Research and development (Seeking knowledge and determining the best techniques for production of the product that is the subject of the related order or finding); (4) Personnel training (Teaching of specific useful skills to personnel, that will improve performance in the production process of the product that is the subject of the related order or finding); (5) Acquisition of technology (Acquisition of applied scientific knowledge and materials to achieve an objective in the production process of the product that is the subject of the related order or finding); (6) Health care benefits for employees paid for by the employer (Health care benefits paid to employees who are producing the specific product that is the subject of the related order or finding); (7) Pension benefits for employees paid for by the employer (Pension benefits paid to employees who are producing the specific product that is the subject of the related order or finding); (8) Environmental equipment, training, or technology (Equipment, training, or technology used in the production of the product that is the subject of the related order or finding, that will assist in preventing potentially harmful factors from impacting the environment); (9) Acquisition of raw materials and other inputs (Purchase of unprocessed materials or other inputs needed for the production of the product that is the subject of the related order or finding); and (10) Working capital or other funds needed to maintain production (Assets of a business that can be applied to its production of the product that is the subject of the related order or finding).

Amount Claimed for Distribution

In calculating the amount of the distribution being claimed as an offset, the certification must indicate: (1) The total amount of any qualifying expenditures previously certified by the domestic producer, and the amount certified by category; (2) The total amount of those expenditures which have been the subject of any prior distribution for the order or finding being certified under 19 U.S.C. 1675c; and (3) The net amount for new and remaining qualifying expenditures being claimed in the current certification (the total amount previously certified as noted in item “(1)” above minus the total amount that was the subject of any prior distribution as noted in item “(2)” above). In accordance with 19 CFR 159.63(b)(2)(i)-(b)(2)(iii), CBP will deduct the amount of any prior distribution from the producer's claimed amount for that case. Total amounts disbursed by CBP under the CDSOA for Fiscal Years 2001 through 2009 are available on the CBP Web site.

Additionally, under 19 CFR 159.61(c), these qualifying expenditures must be related to the production of the same product that is the subject of the order or finding, with the exception of expenses incurred by associations which must be related to a specific case.

Eligibility To Receive Distribution

As noted, the certification must contain a statement that the domestic producer desires to receive a distribution and is eligible to receive the distribution as an affected domestic producer or on another legal basis. Also, the domestic producer must affirm that the net amount certified for distribution does not encompass any qualifying expenditures for which distribution has previously been made (19 CFR 159.63(b)(3)(i)).

Furthermore, under 19 CFR 159.63(b)(3)(ii), where a domestic producer files a separate certification for more than one order or finding using the same qualifying expenditures as the basis for distribution in each case, each certification must list all the other orders or findings where the producer is claiming the same qualifying expenditures.

Moreover, as required by 19 U.S.C. 1675c(b)(1) and 19 CFR 159.63(b)(3)(iii), the certification must include information as to whether the domestic producer remains in operation at the time the certifications are filed and continues to produce the product covered by the particular order or finding under which the distribution is sought. If a domestic producer is no longer in operation, or no longer produces the product covered by the order or finding, the producer will not be considered an affected domestic producer entitled to receive a distribution.

In addition, as required by 19 U.S.C 1675c(b)(5) and 19 CFR 159.63(b)(3)(iii), the domestic producer must state whether it has been acquired by a company that opposed the investigation or was acquired by a business related to a company that opposed the investigation. If a domestic producer has been so acquired, the producer will not be considered an affected domestic producer entitled to receive a distribution. However, CBP may not make a final decision regarding a claimant's eligibility to receive funds until certain legal issues which may affect that claimant's eligibility are resolved. In these instances, CBP may withhold an amount of funds corresponding to the claimant's alleged pro rata share of funds from distribution pending the resolution of those legal issues.

The certification must be executed and dated by a party legally authorized to bind the domestic producer and it must state that the information contained in the certification is true and accurate to the best of the certifier's knowledge and belief under penalty of law, and that the domestic producer has records to support the qualifying expenditures being claimed (see section below entitled “Verification of Certification”).

Moreover as provided in 19 CFR 159.64(b)(3), overpayments to affected domestic producers are recoverable by CBP and CBP reserves the right to use all available collection tools to recover overpayments. Overpayments may occur for a variety of reasons such as reliquidations, court actions, and administrative errors.

Review and Correction of Certification

A certification that is submitted in response to this notice of distribution and received within 60 calendar days after the date of publication of the notice in the Federal Register may, at CBP's sole discretion, be subject to review before acceptance to ensure that all informational requirements are complied with and that any amounts set forth in the certification for qualifying expenditures, including the amount claimed for distribution, appear to be correct. A certification that is found to be materially incorrect or incomplete will be returned to the domestic producer within 15 business days after the close of the 60 calendar-day filing period, as provided in 19 CFR 159.63(c). CBP must receive a corrected certification from the domestic producer and/or an association filing on behalf of an association member within 10 business days from the date of the original denial letter. Failure to receive a corrected certification within 10 business days will result in denial of the certification at issue. It is the sole responsibility of the domestic producer to ensure that the certification is correct, complete, and satisfactory so as to demonstrate the eligibility of the domestic producer to the distribution requested. Failure to ensure that the certification is correct, complete, and satisfactory will result in the domestic producer not receiving a distribution.

Verification of Certification

Certifications are subject to CBP's verification. Claimants may also be required to provide copies of additional records for further review by CBP. Therefore, parties are required to maintain records supporting their claims for a period of five years after the filing of the certification (19 CFR 159.63(d)). The records must support each qualifying expenditure enumerated in the certification and they must support how the qualifying expenditures are determined to be related to the production of the product covered by the order or finding. Although CBP will accept comments and information from the public and other domestic producers, CBP retains complete discretion regarding the initiation and conduct of investigations stemming from such information.

Disclosure of Information in Certifications; Acceptance by Producer

The name of the claimant, the total dollar amount claimed by the party on the certification, as well as the total dollar amount that CBP actually disburses to that affected domestic producer as an offset, will be available for disclosure to the public, as specified in 19 CFR 159.63(e). To this extent, the submission of the certification is construed as an understanding and acceptance on the part of the domestic producer that this information will be disclosed to the public. Alternatively, a statement in a certification that this information is proprietary and exempt from disclosure will result in CBP's rejection of the certification.

List of Orders or Findings and Related Domestic Producers

The list of individual antidumping duty orders or findings and countervailing duty orders is set forth below (following the CDSOA certification form), together with the affected domestic producers associated with each order or finding who are potentially eligible to receive an offset. Those domestic producers not on the list must allege another basis for eligibility in their certification.