Entries Containing Anti-Dumping Duties Create Special Liabilities for U.S. Importers (French)

Issue 026, August 31, 2007

Anti-dumping (ADD) duties are special duties assessed on imported merchandise which has been deemed to be of a class or kind being sold at a price less than the deemed fair market value. Fair market value of merchandise is defined as the price at which it is normally sold in the manufacturer’s home market.

Detailed information on antidumping duties can be found on the U.S. Customs & Border Protection website http://www.cbp.gov/xp/cgov/import/add_cvd/ or at the Import Administration website http://www.trade.gov/ia/.

ADD duty amounts can range from 0% to well over 100% of the value of the imported subject goods. Needless to say, the resulting duty liability at time of entry has an immediate effect on importers. However, it is important for importers to also remember that the liabilities associated with importing ADD-subject goods extend out far after the date of the entry.

ADD Deposit vs. Final ADD Assessment:
ADD duties paid at time of entry summary filing are actually a deposit of estimated ADD duties.
The U.S. International Trade Administration (ITA) establishes an estimated ADD rate and instructs U.S. Customs & Border Protection (CBP) to collect the ADD duties at time of entry using that estimated rate. Liquidation of the entries containing ADD-subject goods are then suspended until such time the ITA completes its review, issues the finalized ADD rate, and provides instructions to CBP to liquidate the entries. The finalized ADD rate will sometimes vary from the estimated rate applied at time of entry, resulting in adjustment of the amount of monies due on the entry.

As such, importers must monitor the liquidation of their ADD entries and be prepared to pay additional duties (if final rate is higher than deposit rate) or receive a refund (if final rate is lower than deposit rate) at time of liquidation. It may take several years for the ITA to establish the finalized ADD rates for subject goods imported within a certain timeframe. Importers may not see their ADD entries liquidate for years after the date of entry. This means they may receive service bills or refund checks years after the entries occurred, perhaps even past the timeframe that CBP requires importers to maintain their entry records (5 years).

Re-imbursement Certificate Requirement:
A requirement on ADD entries is for the importer to supply documentation confirming they were not reimbursed by the manufacturer, producer, seller, or exporter for the ADD duties the importer was required to pay. This certificate must be on file with CBP prior to the date of liquidation of the entry. Failure to supply the reimbursement certificate will result in CBP assessing double the calculated ADD due.

Reseller Policy:
Under an antidumping duty case, there are specific ADD rates collected based on the producer of the subject good. At time of entry, CBP will collect an ADD deposit based on the rate assigned to the producer of the good. If the producer doesn’t have their own assigned rate, then ADD is collected at an “all other” rate (which, of course, is usually the highest possible rate). As outlined above, after the ITA has performed its review they will issue liquidation instructions to CBP with the final established ADD rates to be applied to the entry.

At time the ADD rate is finalized and liquidation of the entry occurs:

• In instances where the actual producer of the goods was also the exporter/seller, the rate collected will be based on the specific rate assigned to that producer.
• In instances where another party is the seller of goods, depending on the circumstances, the final ADD rate collected may be either based off the producer’s specific rate OR it may be changed over to the “all other” rate. This will depend whether, within the ITA’s administrative review, they determine that the producer did (or did not) know that the merchandise it sold to the reseller was destined for the United States.

Based on the above, importers who purchase ADD subject goods from resellers must be aware of the potential that the producer specific ADD rate collected at time of entry may be changed to the “all other” rate at time of liquidation based on this policy.

Detailed information on this “reseller” policy can be found in the U.S. Federal Register at:
http://frwebgate3.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=96685124273+1+0+0&WAISaction=retrieve

Best regards,
Paul E. Vroman
Regulatory & Compliance Consultant/ Compliance Projects Manager
Licensed Customs Broker
NCBFAA Certified Customs Specialist