PROMOTING INTERNATIONAL BUSINESS DEVELOPMENT WHILE PROTECTING DOMESTIC MARKETS: AN ANALYSIS OF THE NEW SHIPPER REVIEW POLICY OF THE UNITED STATES

Georgetown Journal of International Law, Winter 2005 by Fandl, Kevin J

An NSR was requested by, among others, Zhoushan Huading Seafood Company (Zhoushan) for imports of freshwater crawfish tail meat from the PRC. A case was initiated by Commerce on November 7, 2002.33 Based on its submissions, Zhoushan was given a bonding option and could thereafter import merchandise into the United States without a cash deposit. Commerce stated; "[W]e will instruct the Customs Service to allow, at the option of the importer, the posting, until the completion of the review, of a bond or security in lieu of a cash deposit for each entry of the subject merchandise from [Zhoushan]."34

On December 5, 2003, Commerce rescinded the NSR for Zhoushan.35 In its discussion, Commerce found that the new shipper sale made by Zhoushan was "commercially unreasonable and therefore not bona fide" because the price was too high, quantity was too low, merchandise was resold at a loss by the buyer, and contradictory information and documentation was provided by the exporter.36 Although Zhoushan would now have to make cash deposits at a rate of 223.01%, they successfully avoided duties and cash deposits for nearly a year.

Nutrin S.A., an Argentine exporter of honey to the United States, requested an NSR that was initiated on February 6, 2003.3? After receiving Nutrin's responses to the questionnaire sent by Commerce, a notice of intention to rescind was published. The final notice was published on October 9, 2003.38 In that notice, Commerce described numerous inconsistencies in the responses by Nutrin including, among others, "[h]ighly unusual sales and shipping arrangements."39

Nutrin was returned to the full duty rate of 30.24% for honey from Argentina and was no longer permitted to post a bond for its imports. During the eight months of the review, Nutrin was able to avoid paying a cash deposit for merchandise subject to an antidumping order.

In these cases, by the time the final results or rescission was handed down by Commerce, the exporter has typically already had the opportunity to flood the market with its products, which were sold at a price low enough to cause the same injury identified by Commerce in establishing the dumping order in the first place. Because Commerce utilizes a retroactive system-applying duties based on prior sales-exporters are able to abuse the new shipper policy in order to bypass applicable duties and deposits.

This is not to say that all exporters requesting an NSR are trying to avert antidumping duties based on false pretenses or with the intention of dumping goods on the U.S. market. Many actually fit the profile of a new shipper and should therefore qualify under the rule. Some of these cases are reflected in final reviews by Commerce that result in a continued duty rate of 0% (or de minimis).40

IX. How TO SECURE THE NEW SHIPPER POLICY LOOPHOLE

While the intent of antidumping policy is to prevent injury to domestic industry through the establishment of a fair global marketplace, overuse of such a policy can lead to trade protectionism.41 "Antidumping actions are popular because it is relatively easy to file a successful complaint, to directly target specific competitors, and to impose duties that have a direct and sustained price effect on specific merchandise and may even act as market barriers."42 Since the implementation of the Byrd Amendment, which allows complaining industries in the United States to take part in antidumping investigations by signing on to industry dumping complaints and then receiving any dumping duties paid by exporters if the investigation results in an affirmative finding, the number of dumping investigations initiated have increased.43 However, payments received under this Amendment and duties collected by CBP are far less than what would be expected from increased antidumping cases because many companies disappear prior to paying their bills.