U.S. Federal Circuit Restores Countervailing Duty Expedited Reviews

Under Commerce’s regulations, in CVD investigations that involve numerous foreign producers/exporters as respondents, Commerce will typically select a few respondents to be mandatory or voluntary respondents, individually investigate only those few selected respondents and determine individual subsidy rates for them, and then apply a weighted average of the subsidy rates for the selected respondents as the “all others” rate for all nonselected respondents. In these circumstances, nonselected respondents that are not in fact subsidized nonetheless have their exports subject to high CVDs at the “all others” rate.

Commerce’s regulations, therefore, provided an opportunity through 19 C.F.R. § 351.214(k) (now § 351.214(l)) for such nonselected respondents to undergo “expedited reviews” upon the conclusion of the investigation to obtain an individual subsidy rate and, if that rate were established to be de minimis, be excluded from the CVD order and thus not be subject to any CVDs.

However, in 2019, in the CVD proceeding concerning Certain Softwood Lumber Products from Canada, the Committee Overseeing Action for Lumber International Trade Investigations or Negotiations (COALITION) — the petitioner in that proceeding — challenged Commerce’s authority to conduct “expedited reviews” in a case filed with the U.S. Court of International Trade (CIT), arguing that Congress had not granted such authority to Commerce under the governing statute.

In its final judgment dated August 18, 2021, in Committee Overseeing Action for Lumber International Trade Investigations or Negotiations v. United States, 535 F. Supp. 3d 1336 (Ct. Int’l Trade 2021), the CIT agreed with the COALITION that Commerce did not have statutory authority to promulgate 19 C.F.R. § 351.214(k) and thus vacated the expedited review regulation as well as the final results of the expedited review that had been conducted in that proceeding. The various Canadian parties involved in that proceeding then appealed to the Federal Circuit.

In its decision dated April 25, 2023, the Federal Circuit reversed and remanded the matter to the CIT. In short, the Federal Circuit concluded that Commerce had the authority to promulgate its expedited review regulation pursuant to 19 U.S.C. § 1677f-1(e), which provides that as a general rule, Commerce “shall determine an individual countervailable subsidy rate for each known exporter or producer of the subject merchandise.” The Federal Circuit concluded: “Commerce’s regulation, 19 C.F.R. § 351.214(k), provides one procedure for giving effect to the primary policy of providing individual-company rate determinations.”

As a result, nonselected respondents in CVD investigations now once again have the option to undergo an “expedited review” if such respondents believe the “all others” rate does not reflect their own lower subsidy rate. This is especially important if such respondents believe their own subsidy rate is de minimis, because in that circumstance the regulation permits Commerce to completely exclude the respondent from the CVD order and therefore not be subject to any CVDs.

Respondents in these situations should therefore seriously consider requesting an expedited review upon conclusion of a CVD investigation (which must be done within 30 days of publication of a CVD order). Sidley attorneys have assisted numerous respondents in such expedited reviews, including obtaining exclusions from CVD orders pursuant to such expedited reviews, and stand ready to assist.