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New Legislation on AD/CV Duties, Product Labeling, Drug Imports, Corporate Tax

Tuesday, May 31, 2016
Sandler, Travis & Rosenberg Trade Report

AD/CV Duty Distribution. The American Manufacturing and Worker Protection Act (H.R. 5209, introduced May 12 by Rep. McKinley, R-W.Va.) would provide for the payment to affected producers and their employees of duties that are collected pursuant to antidumping and countervailing duty orders. This bill appears to be an attempt to reinstate the Continued Dumping and Subsidy Offset Act, which was repealed years ago after an adverse ruling by the World Trade Organization. Trade sanctions associated with that dispute are still being imposed by the European Union and Japan.

Product Labeling. The Cleaning Product Right to Know Act (H.R. 5205, introduced May 12 by Rep. Israel, D-N.Y.) would require cleaning products imported, manufactured for sale, offered for sale or distributed in commerce beginning one year after the date of enactment to bear a label with a complete and accurate list of all their ingredients, including the individual ingredients in dyes, fragrances and preservatives.

Opioid Imports. The Budgeting for Opioid Addiction Treatment Ac (S. 2977, introduced May 24 by Sen. Manchin, D-W.Va.) would establish an excise tax on the production and importation of opioid pain relievers to pay for opioid addiction treatment. This fee would be one cent per milligram of active opioid ingredient in a prescription pain pill.

Corporate Tax. The Protecting the U.S. Corporate Tax Base Act (H.R. 5261, introduced May 17 by Rep. Levin, D-Mich.) would limit two tax loopholes Levin said are commonly used by foreign-controlled U.S. multinational groups like those formed through tax inversions and other foreign acquisitions to invest deferred earnings back into the U.S. without paying taxes. The first loophole allows a foreign parent or foreign affiliate to borrow deferred earnings of controlled foreign corporations without subjecting U.S. shareholders to U.S. tax. The second permits foreign-controlled U.S. multinational groups to avoid U.S. tax on deferred earnings of CFCs by reducing the U.S. ownership of CFCs to a level that no longer subjects the foreign subsidiaries to U.S. taxation.

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