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ITA Proposes to Modify Regulations on Price Adjustments in AD Proceedings

Wednesday, December 31, 2014
Sandler, Travis & Rosenberg Trade Report

Interested parties may submit input by Jan. 30 on a proposal by the International Trade Administration to modify two regulations pertaining to price adjustments in antidumping duty proceedings. These modifications, if adopted, are intended to clarify that the ITA generally will not consider a price adjustment that reduces or eliminates a dumping margin unless the party claiming such price adjustment demonstrates, to the satisfaction of the ITA, through documentation that the terms and conditions of the adjustment were established and known to the customer at the time of sale.

In a May 1997 rulemaking the ITA promulgated regulatory provisions governing the use of price adjustments in the calculation of export price, constructed export price and normal value in AD duty proceedings. Since enacting these regulations, the ITA has consistently applied its practice of not granting price adjustments where the terms and conditions were not established and known to the customer at the time of sale (sometimes referred to as determining the “legitimacy” of a price adjustment) because of the potential for manipulation of the dumping margin through so-called “after-the-fact” adjustments. While the ITA continues to defend its regulatory interpretation of disallowing price adjustments the terms and conditions of which were not contemplated and known to the customer at the time of sale, a recent Court of International Trade decision disagrees with that interpretation and the ITA is therefore proposing to modify the regulations at issue. 

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