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

In order to prevent the abuse of the new shipper policy, some representatives of U.S. industry have suggested negotiating out of the NSR policy altogether and resorting only to administrative and expedited reviews.44 Other industry members have suggested that new shippers have their bonding privilege revoked, in contravention of the Antidumping Agreement stipulations in Article 9.5.45 Because the evidence is clear that significant cases of abuse of the NSR have occurred, the issue becomes whether we should attempt to negotiate our commitments under the Antidumping Agreement at the next WTO round or whether we should adjust our domestic regulations to reduce the likelihood of abuse.

A reasonable solution to the NSR loophole is to extend and tighten the review process prior to the initiation of a review. Since the idea of an NSR is to expedite a review to quickly grant market access to an unintended victim of an antidumping order, it would seem that any impediment to that efficiency is contrary to the NSR's intent. However, it is a method that has been successful around the world in both preventing abuse of the policy and continuing to protect industry development without excessive protectionism.

With regard to antidumping generally, the United States is one of the only countries in the world to institute a retroactive dumping duty system.46 Many other countries charge antidumping duties prospectively, allowing bonding only after the establishment of a dumping rate. The result of a retroactive system is a substantial burden on firms that have to operate, knowing they are under investigation but without knowledge as to what their goods will be charged in duty after they have already been shipped. "The amount retroactively assessed can be huge-much higher than the deposited amount-enough to bankrupt a firm."47 This is because the estimated duties for subject merchandise established in the antidumping order may or may not reflect the actual dumping duties owed by individual exporters.48

The situation changes when an NSR is initiated. Because duties cannot be charged during the investigation of the potential new shipper, all member States that adhere to Article 9.5 of the Antidumping Agreement must rely on retroactive collection of duties if an exporter is found in the final determination to owe a certain amount of duty. Then the question arises-why is the United States the prime target of fraudulent new shippers?49

Differences in the application of the NSR, or new exporter review as it is called in many other countries, account for much of the potential for abuse. In the European Union and the South African Customs Union, for example, a thorough examination of the initiating documents is conducted prior to offering the bonding privilege.50 No time is wasted in examining the documents and additional evidence supplied by the potential new shipper, and an NSR is only initiated if the documents appear legitimate to the examining authority.51

In the United States, when Commerce receives a request to initiate an NSR, it requires the submission of the following documentation: (1) certification that the initiator did not export subject merchandise during the POR of the dumping investigation; (2) certification that it is not affiliated with any exporter that did export during the subject period; (3) certification of the date on which the company first shipped the subject merchandise to the United States, the date of entry of that merchandise, and its volume and subsequent shipments; and (4) certification of the date of the first sale to an unaffiliated U.S. customer.