Background

The International Trade Administration announced Nov. 10 that that after 20 years it is rescinding Russia’s status as a market economy for purposes of the ITA’s antidumping proceedings, a decision that will likely result in higher AD duties on imports from Russia.

The ITA determined to continue market economy status for Russia in October 2021 but in May 2022 said that in light of developments in Russia’s economy (largely associated with its invasion of Ukraine) reforms related to the six statutory factors governing NME determinations may have backtracked.

In reversing its previous position this week the ITA said it found that extensive government involvement in the economy has led to distorted prices and costs in Russia that do not accurately reflect whether Russian companies are fairly pricing imports into the U.S. Specifically, “an in-depth analysis of research from impartial, third-party sources” found “extensive backtracking” by Russia on issues such as currency convertibility, how wages are determined, the climate for foreign investment, government control of the means of production, and government control over firm business decisions.

The ITA said that as a result of this change, in future AD cases involving imports from Russia it will apply an alternative methodology to calculate AD duties using market-based prices and costs from a country at a comparable level of economic development that produces comparable merchandise. The ITA said this approach “will ensure that Commerce’s dumping calculations reflect economic realities on the ground and that U.S. industries get the relief from unfair imports that they are entitled to under the law.”

For more information on the impacts of this change, please contact attorney Kristen Smith at (202) 730-4965 or via email.  

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