Aftermarket Insider - October/November 2009 - (Page 23)

both agencies and involve submitting basic information on production, sales, and exports together with an authorization for a Chinese law firm to represent the registrant. Shortly after registration, BOFT and IBII issue questionnaires asking for detailed information on sales (including customer names and prices), costs, production and, in countervailing duty investigations, government subsidy programs. Responses to the questionnaires are normally due 37 days after they are issued, although short extensions are sometimes allowed. Respondents may designate information confidential. Confidential information is redacted from public versions of submissions. In most cases, MOFCOM issues its preliminary determination between six and nine months after initiation, although it has taken closer to one year in some cases. Importers of the subject merchandise are then required to pay cash deposits to China Customs at the rates specified in the preliminary determinations. If the rates established in the final determinations are lower than the preliminary rates, importers may apply for a refund. As in other jurisdictions, imports from U.S. producers that do not participate in the investigation will be subject to a high “all others” duty rate. Moreover, MOFCOM has the option to use adverse inferences when any particular respondent fails to cooperate, in whole or in part, to requests for information. After the preliminary determination, MOFCOM will visit the facilities of cooperating U.S. respondents to audit the information submitted. This on-site verification can last for a week or more and requires at least as much time to prepare. After verification, MOFCOM will issue a statement of essential facts for comment by interested parties followed by a final determination establishing the antidumping and countervailing duty rates that will apply to imports of the subject merchandise for the next five years. The applicable duties may be reviewed and adjusted during this five-year period and may be renewed for additional five-year periods in so-called “sunset” reviews, if requested by the Chinese domestic industry. Conclusion Partial cooperation generally leads to the worst result, a high margin rate and the expenditure of significant resources. Appeals An interested party may appeal an antidumping or countervailing duty determination to a Chinese court but, to date, no party has done so. MOFCOM also has a little-used administrative review process. The United States government may also appeal a final antidumping or countervailing duty determination under the WTO’s dispute settlement procedures. Based on our experience in a dozen Chinese antidumping cases and in the first Chinese countervailing duty case, we consider the following to be important factors in evaluating whether and how to participate in a Chinese trade remedy case. First, given the substantial resources necessary to defend a case, any potential U.S. respondent should explore commercial alternatives for supplying the Chinese market, such as sourcing from other countries. Second, failure to cooperate in any investigation will almost certainly result in duties that will make it virtually impossible to supply the Chinese market from the United States on a competitive basis. Third, the early testing of data to estimate potential dumping margins is important to inform strategic and technical decisions, including whether there is any potential benefit to submitting extensive confidential information to MOFCOM. Downstream industry support is also particularly important for the injury determination. Finally, if the decision is made to participate, sufficient internal resources need to be assigned to ensure that full cooperation is possible. Partial cooperation generally leads to the worst result, a high margin rate and the expenditure of significant resources. Gil Kaplan gkaplan@kslaw.com; 202-661-7981 King & Spalding LLP 1700 Pennsylvania Ave. NW, Suite 200 Washington, D.C. 20006-2706 www.kslaw.com This is a guest article for Aftermarket Insider, with content provided by the author. Information included in this article and the views and opinions of the author do not state or reflect those of AAIA. AFTERMARKET INSIDER | OCTOBER • NOVEMBER 2009 | 23 http://www.kslaw.com

Table of Contents for the Digital Edition of Aftermarket Insider - October/November 2009

Aftermarket Insider - October/November 2009
Contents
President's Message
New Members
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“Be Car Care Aware” Vehicle Check-Up Events
Industry Events
Member Profile
Technology Update
International Focus
Association News
Market Research
Company Profile
Government Affairs
Industry News
Market Research

Aftermarket Insider - October/November 2009