U.S. International
Trade Commission AD
& CVD Investigations
Catherine DeFilippo
Director, Office of Operations
ITC Role in Import Injury
Investigations
The Commission determines whether the
U.S. industry making products comparable
to the dumped or subsidized imports is
materially injured by reason of the dumped
or subsidized imports.
ITC Preliminary Phase (AD/CVD)


45 days from the filing of the petition to conduct
preliminary injury investigation
“Reasonable Indication” standard: Allows negative
preliminary determination if:



(1) record as a whole contain clear and convincing evidence
that there is no material injury or threat of material injury by
reason of the subject imports, AND
(2) no likelihood exists that contrary evidence will arise in a final
investigation.
ITC negative preliminary determination terminates the
entire investigation
ITC Final Phase (AD/CVD)
Determination follows Commerce’s final
affirmative determination
 Possible ITC determinations:

 Affirmative
present material injury
 Affirmative threat of material injury
 Affirmative material retardation of
establishment of an industry
 Negative determination
Multi-disciplinary team approach

Investigation team
 Supervisory
Investigator
 Investigator
 Economist
 Auditor
 Industry
Analyst
 Attorney
 Statistician
Gathering of information
 Questionnaires
are sent to--
All U.S. producers of subject merchandise
 All U.S. importers of product from subject countries
 Major importers of product from non-subject
countries
 Major U.S. purchasers (normally only in final
phase)
 All producers/exporters in subject countries

Gathering of information (cont.)
 Timing
of questionnaires
At the beginning of the preliminary phase and at
the beginning of the final phase
 Responses are due back in 10-14 days in
preliminary phase, 4-5 weeks in final phase

 U.S.
companies are required by law to
respond to questionnaires

Subpoenas may be issued to compel the
submission of records or information
Gathering of information (cont.)
 Information
collected through questionnaires
From U.S. producers—Trade data, employment
data, financial data, price data, lost sales and lost
revenue allegations, other non-quantitative
information
 From U.S. importers—Trade data, price data, other
non-quantitative information
 From U.S. purchasers—Purchase data, price data,
other non-quantitative information
 From foreign producers/exporters—Trade data,
other non-quantitative information

Gathering of information (cont.)
 Time
period for questionnaire data: generally
most recent three calendar years and year-todate periods of the current and preceding
year
Financial data are collected from U.S. producers
on a fiscal year basis
 Projected data are collected from foreign
producers and exporters for the current year and
the following year

 Purchasers
are also contacted to verify
producers’ lost sales/lost revenue allegations
Gathering of information (cont.)
 Information
from public sources
U.S. government import statistics, if relevant
 U.S. government statistics in investigations
involving agricultural products

 Information
submitted by parties in briefs
 Testimony at preliminary phase conferences
and final phase hearings
 All information gathered becomes part of the
administrative record of the investigation
Submission of Information/
Arguments in ITC Investigations

Parties may submit arguments in the
following documents:
 Post-conference
briefs in preliminary phase
 Pre-hearing briefs in final phase
 Post-hearing briefs in final phase
 Final comments in final phase
Submission of Information/
Arguments in ITC Investigations

Parties may provide oral testimony in the
following fora:
 Conferences
in preliminary phase
Each side gets one hour for direct testimony and
additional time for opening and closing statements
 Witnesses are questioned by staff
 Chaired by Director of Investigations
 Transcribed by court reporter

Submission of Information/
Arguments in ITC Investigations
 Hearings
in final phase
Each side gets one hour for direct testimony and
rebuttal, and additional time for opening
statements
 Witnesses are questioned by Commissioners,
staff, and parties
 Chaired by Chairman of Commission
 Transcribed by court reporter

Verifications
 Conducted
by ITC auditors (CPAs)
 When?

Prior to hearing in final phase
 Which
firms get verified?
Normally U.S. producers
 Occasionally U.S. importers or foreign producers

 Where?
Full verifications on site
 Some verifications take place in Washington

Submission of Information by
interested parties

Parties may submit arguments in the following
documents:





Post-conference briefs in preliminary phase
Pre-hearing briefs in final phase
Post-hearing briefs in final phase
Final comments in final phase
Hearings/Staff conferences

Interested parties also have the opportunity to appear before the
Commission to present oral testimony in support of their position
(Staff conference run by Dir., INV for preliminaries and
Commission hearings for finals
Access to and Protection of Information
in ITC Injury Investigations

Authorized representatives of interested parties may
obtain confidential information under an Administrative
Protective Order (APO)
 These representatives are usually attorneys or
economic consultants specializing in international
trade (must be independent (i.e., not in-house
company official)).
 They are prohibited from disclosing the information to
unauthorized individuals; severe sanctions are
imposed in the event of a breach of the APO
 They must follow strict rules regarding the handling of
such information
Access to and Protection of Information
in ITC Injury Investigations

What is considered confidential information?
 Any individual company information that is not otherwise
available to the public (questionnaire responses are treated as
confidential in their entirety)
 Aggregate (total) industry data if—
 Only one or two companies are included in the total, or
 If the total includes three or more companies and one firm
accounts for at least 75 percent of the total or two firms
account for at least 90 percent of the total
 Notwithstanding the above, trends in statistical information are
not treated as confidential
Dissemination of Information in ITC
Injury Investigations

All confidential information in the record of an
investigation is released to qualified
representatives of parties under an
Administrative Protective Order, including—
 Questionnaire responses
 Party briefs and submissions
 Staff notes and worksheets
 Staff reports
 Commissioner opinions
Analysis of Import Volume


Whether the volume of subject imports, or any
increase in that volume, is significant in either
absolute terms or relative to production or
consumption in the United States
Only subject imports are considered. Imports
found by DOC not to be dumped or subsidized
are excluded from the volume of subject imports
calculation
Analysis of Price Effects

Statute requires ITC to consider
 whether
there has been significant price
underselling by the subject imports as
compared with the domestic like products,
and
 whether the effect of subject imports is to
depress prices to a significant degree or to
prevent price increases which otherwise
would have occurred to a significant degree
Analysis of Impact on Industry


Commission must evaluate all relevant economic factors which have
a bearing on the state of the industry in the United States, including,
but not limited to—
 actual and potential decline in output, sales, market share,
profits, productivity, return on investments, and utilization of
capacity
 factors affecting domestic prices
 actual and potential negative effects on cash flow, inventories,
employment, wages, growth, ability to raise capital, and
investment
 actual potential and negative effects on the existing development
and production efforts of the domestic industry; and
 the magnitude of the margin of dumping
ITC considers these factors in “context of the business cycle and
conditions of competition that are distinctive to the industry”
Threat of Material Injury



Under statute, ITC may find that a domestic
industry is threatened with material injury by
reason of the subject imports
Generally, the Commission only addresses
threat if it has reached a determination that there
is no current material injury by reason of subject
imports
A threat determination may not be made on the
basis of mere conjecture or supposition
Threat Factors




Existing unused production capacity, or imminent
substantial increases in production capacity in the
exporting country, indicating the likelihood of
substantially increased imports of subject merchandise
into the United States
 Take into account other export markets
Significant rate of increase of the volume or market
penetration of subject imports indicating the likelihood of
substantially increased imports
Whether subject imports are entering at prices that are
likely to have a significant depressing or suppressing
effect on domestic prices, and are likely to increase
demand for further imports
Inventories of the subject merchandise
(Continued)
Threat Factors, continued





Potential for product shifting if production facilities in
subject country currently being used to produce other
products can be used to produce the subject
merchandise
Actual or potential negative effects on the existing
development and production efforts of the domestic
industry
Other demonstrable adverse trends that indicate the
probability that there is likely to be material injury by
reason of subject imports
Nature of subsidy, in countervailing duty cases
Product shifting between raw and processed agricultural
products, where pertinent
Post-Investigation Review
Judicial Review
 NAFTA panel review (limited)
 WTO panel review

Sunset or Five-Year Reviews


Statute requires review of existing AD/CVD
orders no later than five years after order is put
in place or continued (by a previous review)
Reviews by the Commission can be expedited or
full
 Expedited
= completed within 150 days of the
publication of the ITC’s Notice of Institution
 Full = completed within 360 days of the publication of
the ITC’s Notice of Institution
Sunset or Five-Year Reviews


Commission determines whether revocation of
the AD and/or CVD order would be likely to lead
to continuation or recurrence of material injury
Commission is directed (by law) to consider the
likely volume, price effect and the impact of
imports of subject merchandise on the industry if
the order is revoked.