Neville Peterson LLP: Customs and International Trade Law

M E M O R A N D U M
TO:	Clients and Friends of the Firm
FROM:	George W. Thompson & John M. Peterson
RE:	Procedures for Distribution of Antidumping and Countervailing Duties to Domestic Industries

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This memorandum outlines the procedures and schedule that an eligible domestic producer of merchandise like that covered by an antidumping duty order or countervailing duty order must follow to request a distribution of antidumping or countervailing duties from the United States Customs Service (Customs). The statute authorizing such distributions, the Continued Dumping and Subsidy Offset Act of 2000 (popularly called the Byrd Amendment), requires each producer to submit a ÒcertificationÓ to claim a share of the antidumping or countervailing duties in accordance with the following requirements.

A. Procedures for Seeking a Distribution

Timing

The law requires that Customs publish notice in the Federal Register that it intends to distribute funds for a specific fiscal year at least sixty (60) days prior to the end of that fiscal year. Certifications must be filed within 60 days of the notice’s publication. Customs published notice of its intent to distribute funds for fiscal year 2002 on July 3, 2002. CERTIFICATIONS FOR FISCAL YEAR 2002 CONSEQUENTLY MUST BE RECEIVED BY CUSTOMS NO LATER THAN SEPTEMBER 3, 2002. This is nearly one month earlier than last year’s due date. Customs’ notice listed the affected domestic producers potentially eligible to receive the distribution, and sets forth the procedures for submitting the certification required to apply for the funds. Each domestic producer seeking a distribution will be required to submit a certification in triplicate, or electronically if authorized, to Customs, to the Assistant Commissioner, Office of Regulations and Rulings, Headquarters.

Certification Contents

Although there is no specific certification form, the certification must:

Indicate that the producer desires to receive a distribution.
Demonstrate that the producer is eligible to receive a distribution as an “affected domestic producer”.
Enumerate the qualifying expenditures incurred by the producer since the issuance of an order or finding for which a distribution has not previously been made. In this regard, those domestic producers that requested a distribution for Fiscal Year 2001 should not include in this certification the amount of expenditures for which they received a distribution. Expenditures previously certified, but for which a distribution payment was not received, may be included in this certification. (In other words, you are ineligible to receive multiple payments for the same expenditure.)
Identify the date of the Federal Register notice under which it is submitted, and the case name and the number of the particular order or finding cited in the Federal Register notice. The Federal Register notice of intent to distribute the offset for Fiscal Year 2002 was published on July 3, 2002, at 67 Fed. Reg. 44722.
Be executed and dated by a party legally authorized to bind the producer, and it must include the following identifying information: the name of the producer and any name qualifier, if applicable (for example, any other name under which the producer does business or is also known); the address of the producer (if a post office box, the secondary street address must also be included); the Internal Revenue Service (IRS) number (with suffix) of the producer, employer identification number, or social security number, as applicable; the specific business organization of the producer (corporation, partnership, sole proprietorship); and the name(s) of any individual(s) designated by the producer as the contact person(s) concerning the certification, together with the phone number(s) and/or facsimile transmission number(s) and electronic mail (email) address(es) for the person(s).
Enumerate the total amount of qualifying expenditures currently and previously certified by the producer, and the amount certified by category; the total amount of those expenditures for which there has been a prior distribution; and the net amount of the current claim (the total amount currently and previously certified minus the total amount for which there has been a previous distribution). The amounts certified for a previous fiscal year must be identified by category and in the aggregate.
Contain a statement that the producer desires to receive a distribution and is eligible to receive the distribution as an affected domestic producer.
Affirm that the amount claimed as an offset does not involve any qualifying expenditures for which distribution has previously been made.
Include information as to whether or not the producer has ceased to operate or has ceased production of the product covered by the particular order or finding under which the distribution is sought.
State whether or not the producer has been acquired by a company or business that is related to a company, as defined in section 754(b)(5), Tariff Act of 1930 (19 U.S.C. 1675c(b)(5)), that opposed the antidumping or countervailing duty investigation that resulted in the order or finding under which the distribution is sought.

     If any of the these requirements are not met, the producer would not qualify as an affected domestic producer. Failure to ensure that a correct, complete and satisfactory certification is filed within 60 days after the date of publication of the notice in the Federal Register will result in the producer not receiving a distribution.

     Parties wishing to receive their disbursement via electronic payment must also include their financial institution's Transit Routing Identification Number and applicable Bank Account Number.

     Customs reserves the right to determine whether certifications will be verified through audit or otherwise. Because certifications may be subject to verification, parties are required to maintain records supporting their claims for a period of three years after the filing of the certification.

     B. Parties Eligible to Receive Distributions

     The regulation provides that parties eligible to receive distributions (i.e., “affected domestic producers”) are limited to any manufacturer, producer, farmer, rancher or worker representative (including any association of such persons) that remained in operation, and that was a petitioner or an interested party that supported a petition for the issuance of an antidumping or countervailing duty order. A company, business or person that had ceased production of the product covered by an order or finding could not qualify an affected domestic producer eligible to receive a distribution. Also, a company, business or person would not be an affected domestic producer entitled to a distribution if it had been acquired by a company, or a business that was related to a company, that had opposed the antidumping or countervailing duty investigation that led to the order or finding.

     The Customs notice identified the eligible producers eligible for distributions under each outstanding antidumping or countervailing duty order.

     C. Qualifying Expenditures for Which Distribution May Be Made

     An affected domestic producer is entitled to a distribution of antidumping or countervailing duties only to the extent that it has incurred qualifying expenses. These expenses can date back to the date of issuance of the antidumping or countervailing duty order. The qualifying expenditures include expenditures made on the following categories:

Manufacturing facilities equipment.
Research and development.
Personnel training.
Acquisition of technology.
Health care benefits for employees paid for by the employer.
Pension benefits for employees paid for by the employer.
Environmental equipment, training, or technology.
Acquisition of raw materials and other inputs.
Working capital or other funds needed to maintain production.

     D. Calculation of the Distribution Amounts

     The amount of duties available for distribution will be based on antidumping or countervailing duties that are liquidated in a particular fiscal year; “liquidation” is the final assessment of tariff liability, including antidumping duties. Duty deposits placed on entries that have not yet been liquidated during the fiscal year will not be distributed during that year, but must await liquidation.

     The distribution amount for fiscal year 2002 (October 1, 2001 through September 30, 2002) will consist of duties liquidated during that period for imports made on or after January 1, 1999.

     Customs will not distribute more funds than are available through liquidation. In the event that the total amount of claimed eligible expenditures exceeds the liquidated duties available, the distributions will be limited to the available funds, and will be made on a pro rata basis to the eligible producers. Therefore, it is in each producer’s interest to identify the maximum expenditures for which it is eligible.

     Not that Customs has identified the antidumping and countervailing duties available for distribution as of June 30, 2002 under each order on its website: http://www.customs.treas.gov/impoexpo/2002_fy_cdsoa.xls . Because additional entry liquidations are likely to take place in the next three months, these published numbers probably tend to understate the duties available for distribution.

     Please let us know whether you have any questions about the antidumping duty distributions.

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