S. 691 — Leveling the Playing Field 2.0 Act

This section establishes special rules under 19 U.S.C. 1677(7) for the U.S. International Trade Commission's (ITC) material injury determinations in successive antidumping and countervailing duty investigations (i.e., investigations initiated by Commerce pursuant to petitions under 19 U.S.C. 1671a(f) or 1673a(f) following revocation of prior orders). (As background, in such proceedings, Commerce determines whether subject imports are dumped or subsidized, and the ITC determines whether they cause material injury, threat thereof, or retardation to a domestic industry—defined generally as producers of a domestic like product whose output constitutes a major proportion of total U.S. production.) Specifically, the section inserts new subparagraph (E), requiring the ITC, when evaluating the impact of imports on domestic producers under subparagraph (C)(iii)—(1) to consider the industry's condition as found in a recently completed investigation; (2) to consider the effect of a concurrent or recently completed investigation on trade and the industry's financial performance, including the likelihood of continuation or recurrence of prior material injury; and (3) to include prior ITC injury determinations in the record. It further provides that the ITC may not determine no material injury or threat solely based on recent improvements in the industry's performance (e.g., increased sales, market share, or profitability) attributable to relief from a concurrent or recently completed investigation. (Thus, these rules limit the weight given to post-relief recovery in successive cases.) In addition, for critical circumstances findings under 19 U.S.C. 1671d(b)(4)(A) or 1673d(b)(4)(A), the ITC must consider that a concurrent or recently completed investigation contributes to the likelihood that a new countervailing or antidumping duty order's remedial effect will be undermined. The section also adds definitions in new 19 U.S.C. 1677(37)—(1) concurrent investigation, as an ongoing investigation with an affirmative preliminary injury determination by the ITC on the same or similar merchandise; (2) recently completed investigation, as one with an affirmative final injury determination issued not more than two years before the successive investigation's initiation; and (3) successive investigation, as defined above. (The section makes conforming redesignations and cross-reference updates.)

This section requires the administering authority to initiate a successive countervailing duty investigation (i) upon its own initiative under subsection (a) if the requirements of that subsection are met for imports of a class or kind of merchandise that is the same or similar to merchandise subject to a concurrent or recently completed investigation, or (ii) upon petition under subsection (b) if the administering authority makes affirmative preliminary determinations under subsection (c)(1)(A)(i) and (ii) for such imports; it establishes the same requirements for successive antidumping duty investigations. (Countervailing duty investigations impose duties to offset foreign government subsidies on exports to the United States; antidumping duty investigations impose duties on imports sold at less than fair value.)

This section establishes expedited deadlines and procedures for determinations by the administering authority (i.e., Commerce Department) in successive countervailing duty (CVD) and antidumping (AD) investigations on merchandise previously subject to an AD or CVD order or agreement. (Successive investigations under current law allow faster processing when a new petition covers the same class or kind of merchandise as a prior investigation.) Specifically, for successive CVD investigations under section 702(f): (1) requires a preliminary determination under section 703(b) not later than 85 days after initiation; (2) prohibits postponement under section 703(c) unless requested by the petitioner; (3) requires a critical circumstances determination under section 703(e) upon a petitioner allegation; (4) requires a final determination under section 705(a) not later than 75 days after the preliminary determination; and (5) requires extension of the final determination deadline if requested by the petitioner. For successive AD investigations under section 732(f): (1) requires a preliminary determination under section 733(b) not later than 140 days after initiation; (2) prohibits postponement under section 733(c) unless requested by the petitioner; (3) requires a critical circumstances determination under section 733(e) upon a petitioner allegation; (4) requires a final determination under section 735(a) not later than 75 days after the preliminary determination; and (5) authorizes extension of the final determination deadline under section 735(a)(2) if requested by the petitioner. (Thus, these changes accelerate investigation timelines, condition postponements and extensions on petitioner requests, and mandate agency action on petitioner-submitted critical circumstances allegations.)

This section revises countervailing duty (CVD) law to expand treatment of cross-border subsidies in CVD investigations (i.e., proceedings to impose duties equal to the net countervailable subsidy on imports injuring or threatening to injure a U.S. industry). Specifically, it amends section 701(d) (1) to change the subsection heading to "Cumulation of cross-Border subsidies"; (2) to extend existing rules on international consortia to multinational corporations receiving countervailable subsidies enabling production of subject merchandise in the subject country; and (3) to add a new paragraph requiring the administering authority to treat and cumulate transnational subsidies (i.e., third-country subsidies facilitated by the subject country) as provided by the subject country. The section further amends the definitions in section 771 (1) to incorporate transnational subsidies into the specificity analysis for whether a subsidy benefits a specific industry or group; (2) to designate third-country governments as interested parties in proceedings involving transnational subsidies; and (3) to define "multinational corporation" as a person, firm, or corporation owning or controlling production facilities for subject merchandise in two or more foreign countries. Finally, the section adds a new subsection (d) to the upstream subsidies provision (section 771A) to apply upstream subsidy rules to purchases of inputs by multinational corporations from cross-owned companies in third countries that received countervailable subsidies, if the administering authority determines those subsidies confer a competitive benefit on subject merchandise. All changes apply consistent with U.S. international obligations.

This section modifies the definition of ordinary course of trade under the antidumping law (19 U.S.C. 1677(15)) to specify that situations in which the quantity of a foreign like product selected for comparison under comparison methodology provisions (19 U.S.C. 1677(16)) is insufficient to establish a proper comparison to the export price or constructed export price are outside the ordinary course of trade. (As background, the Department of Commerce calculates normal value—the basis for antidumping margins—using prices from sales in the ordinary course of trade in the producer's home market or a third country; thus, such insufficient-quantity sales may be disregarded.)

This section limits the amount of rebated (or uncollected) import duties imposed by the country of exportation—which are added to export price or constructed export price in antidumping proceedings—to the per unit amount of such duties contained in the weighted average cost of production (previously, any amount). (Export price and constructed export price determine U.S. sales prices for dumping margin calculations under the Tariff Act of 1930.)

This section modifies the calculation of normal value in antidumping proceedings by (1) replacing "business" with "trade" in the particular market situation exception under 19 U.S.C. 1677b(b)(3)(A) and authorizing the Department of Commerce to use alternative methodologies if a particular market situation causes costs of materials and processing not to reasonably reflect the ordinary course of trade; (2) changing "accurately" to "reasonably" reflect costs in constructed value determinations under 19 U.S.C. 1677b(e); and (3) expanding the definition of ordinary course of trade under 19 U.S.C. 1677(15) to disregard sales where a particular market situation distorts costs of production for normal value under 19 U.S.C. 1677b(b) or (e). (As background, normal value is generally based on foreign market sales prices or constructed value using reported costs; disregarding distorted costs—often due to foreign government intervention—typically results in higher U.S. antidumping duties to offset below-fair-value imports.) The section further defines "particular market situation" under 19 U.S.C. 1677(39) as circumstances preventing proper price comparisons or distorting costs of production and lists 12 non-exhaustive examples of cost distortions (e.g., predominant state-owned input suppliers, government export limits or tax rebates on inputs, financial support to producers, or non-market input pricing arrangements). (Thus, Commerce may adjust or reject distorted costs without quantifying the distortion's precise effect.)

This section revises the special rules for calculating cost of production and constructed value in antidumping duty investigations (i.e., 19 U.S.C. 1677b(f)(3)) by redesignating the existing rule for major inputs from affiliated persons as subparagraph (A) and adding subparagraph (B). Under new subparagraph (B), the administering authority (i.e., Department of Commerce) may value major inputs acquired from certain unaffiliated persons using information on what an arm's-length price would have been if higher than the amount in the exporter's or producer's records. (Thus, this raises the potential normal value used to calculate dumping margins when input costs appear artificially low.) Unaffiliated persons covered include (i) any person in a nonmarket economy country (unless the input is produced in the exporting country); (ii) producers, exporters, or suppliers of identical or comparable inputs found to receive countervailable subsidies or to sell below fair market value in the subject country (with conditions on duties imposed by the exporting country and unless produced there); (iii) a government or public body in the exporting or any other country; or (iv) groups thereof accounting for a meaningful share of input production.

This section revises the procedures for circumvention inquiries under section 781 of the Tariff Act of 1930 by replacing subsection (f) with new requirements for initiation, deadlines, and determinations and by adding a new subsection (g) on suspension of liquidation and cash deposits for subject entries. (Circumvention inquiries by the Department of Commerce determine whether imports circumvent antidumping or countervailing duty orders (e.g., through minor alterations or third-country assembly), thereby extending duties to evasive merchandise.) Under new subsection (f), the administering authority must (1) initiate an inquiry upon its own determination or within 45 days (extendable by 15 days) of an interested party's inquiry request alleging circumvention elements supported by available information, either by initiating the inquiry, dismissing the request, or addressing it via a class-or-kind determination under section 781A within 335 days of filing; (2) issue a preliminary determination within 150 days (extendable by 60 days) of initiation as to whether there is a reasonable basis to suspect circumvention; and (3) issue a final determination within 150 days (extendable by 65 days) of the preliminary determination. Under new subsection (g), upon initiation of an inquiry, the administering authority must order continued suspension of liquidation and cash deposits (at all-others or country-wide rates) for already-suspended unliquidated entries; and upon a preliminary affirmative determination, must order such continued suspension and deposits for those entries, plus suspension and deposits for later-entered unliquidated entries (and potentially earlier ones if warranted). (Thus, these provisions expedite circumvention reviews and ensure duties apply promptly to potentially evasive imports.)

This section establishes in the Tariff Act of 1930 a certification requirement that the administering authority may impose on importers or other parties for merchandise imports, requiring a certification (at entry, with entry summary, maintained, or upon request) that the merchandise and its production inputs are not subject to antidumping or countervailing duty proceedings or duties. (Thus, antidumping duties address imports sold at less than fair value and countervailing duties address subsidized imports, both intended to protect U.S. industries from unfair trade practices.) If the certification is not provided or contains false, misleading, fraudulent statements or material omissions, the administering authority must instruct U.S. Customs and Border Protection to (1) suspend liquidation of the entry, (2) require a cash deposit equal to applicable antidumping or countervailing duties, and (3) assess duties upon liquidation or reliquidation (using the cash deposit rate if no final rate is available). Importers are subject to penalties under Tariff Act section 592 (civil penalties for entry fraud or negligence), 18 U.S.C. 1001 (criminal penalties of up to $250,000 fine and 5 years imprisonment for false statements, or 8 years if involving specified sex offenses or terrorism), or other applicable law. This section also makes a conforming change to the Tariff Act table of contents.

This section inserts new §781A into subtitle D of title VII of the Tariff Act of 1930, authorizing the administering authority (Department of Commerce) to determine independently—using any reasonable method and unbound by rulings from other federal agencies, including U.S. Customs and Border Protection tariff classifications or origin markings—whether imported merchandise is covered by an antidumping or countervailing duty proceeding or order. (As background, antidumping and countervailing duties offset unfairly traded imports that injure U.S. industries; such scope rulings by Commerce resolve whether specific products or shipments are subject to duties.) Subsection (b) addresses class-or-kind determinations, and subsection (c) directs Commerce to consider seven factors in assessing origin, including substantial transformation of essential characteristics, physical characteristics, end use, value added from third-country processing, processing sophistication, investment levels, and other relevant factors. This section makes a clerical amendment to the Act's table of contents. This section amends the 30-day judicial review period in the U.S. Court of International Trade for certain determinations (19 U.S.C. 1516a(a)(2)(A)) by (1) striking the reference to clause (iv) [scope rulings] from the list of determinations triggered by Federal Register publication under clause (i)(I), and (2) replacing clause (ii) to provide that review of scope rulings commences upon Federal Register publication of notice thereof or, if no notice is published, the date the administering authority conveys a copy to an interested party who is a party to the proceeding (previously, clause (ii) specified the mailing date for determinations under clause (vi)).

This section establishes asset requirements for nonresident importers (i.e., importers as defined in 19 U.S.C. 641(i)) by adding new section 484c to the Tariff Act of 1930. It requires the Commissioner of U.S. Customs and Border Protection (CBP) to (1) mandate that such importers maintain U.S.-based assets (e.g., in U.S. financial institutions, U.S. entities, or U.S. real/personal property) with clear title from entry to liquidation, sufficient to cover all potential duties, fees, interest, taxes, charges, and deposits calculated at the highest applicable duty rate using the merchandise's fair market value; and (2) require bonds ensuring full liability based on those assets. Exceptions apply to validated Tier 2 or Tier 3 participants in the Customs-Trade Partnership Against Terrorism (C-TPAT) program or importers for whom CBP determines it has equivalent collection ability as for U.S. residents; CBP must prescribe related procedures. Violations are unlawful, with civil penalties of $50,000 per violation for merchandise with domestic value of $50,000 or more, or 50% of domestic value if less, plus any other applicable penalties. The requirements take effect 180 days after enactment for merchandise entered or withdrawn from warehouse for consumption; CBP procedures must be in place within 90 days of enactment.

This section requires the administering authority (i.e., Commerce's International Trade Administration) to examine, in countervailing duty investigations under subtitle B of the Tariff Act of 1930 where the U.S. International Trade Commission issues affirmative preliminary determinations under clauses (i) and (ii) of 1671b(a)(1)(A) and the petition alleges currency undervaluation by the government of the relevant country or a public entity within its territory, or in administrative reviews under subtitle C involving such an allegation, whether the undervaluation provides a countervailable subsidy (i.e., a financial contribution conferring a benefit). (As background, countervailing duties offset foreign government subsidies injuring U.S. industries; previously, currency undervaluation was generally not treated as a subsidy.)

This section amends the definition of a benefit under countervailing duty law to add that, in the case of an exchange of an undervalued currency under a unified exchange rate, a benefit exists to the extent of the difference between the amount of foreign currency received in exchange for U.S. dollars and the amount that would have been received absent undervaluation. For such determinations, the administering authority (i.e., the Department of Commerce) must compare exchange rates derived from an appropriate methodology to actual exchange rates and consider whether government action contributed to the currency undervaluation. (Thus, this enables countervailing duties to offset subsidies arising from government-induced currency undervaluation.)

This section limits protests under section 514 of the Tariff Act of 1930 (19 U.S.C. 1514) against certain U.S. Customs and Border Protection (CBP) decisions related to evasion of antidumping and countervailing duty (AD/CVD) orders under the Enforce and Protect Act (EAPA; 19 U.S.C. 1517). Specifically, it (1) expands the finality provision in 1514(b) to include EAPA determinations reviewable under EAPA section 517(g) (similar to certain AD/CVD determinations reviewable under 19 U.S.C. 1516a), and (2) amends EAPA section 517(h) to exclude from protests CBP decisions on liquidation or reliquidation of entries of covered merchandise pursuant to an EAPA evasion determination under 517(c) (and administrative review under 517(f), if applicable). (As background, EAPA authorizes CBP to investigate allegations of AD/CVD evasion, such as through entry prior to completion of AD/CVD reviews or other means, with final determinations generally subject to judicial review in the Court of International Trade under 28 U.S.C. 1581(i). Thus, the amendments channel challenges to EAPA decisions away from the standard 180-day protest process and toward EAPA-specific reviews.)

This section expands the Enforce and Protect Act (EAPA) evasion investigation procedures in Section 517 of the Tariff Act of 1930 (19 USC 1517)—which enable U.S. Customs and Border Protection (CBP) to investigate allegations of entering merchandise into the United States through false statements or omissions that avoid antidumping or countervailing duties—to also cover evasion of safeguard actions under Section 203 of the Trade Act of 1974 (19 USC 2253). (Safeguard actions impose temporary import restrictions to protect U.S. industries from surges of imports causing serious injury.) Specifically, the section (1) inserts "and safeguard actions" in the section heading; (2) adds safeguard actions to the definition of covered merchandise; (3) includes "any applicable safeguard action" in the definition of evasion; and (4) makes conforming changes to distinguish evasion of antidumping or countervailing duties from safeguard actions in investigation and determination provisions. The section also makes parallel changes to EAPA definitions in Section 402 of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA, 19 USC 4361 et seq.) and expands continuous bond requirements in TFTEA Section 412 to cover persons reasonably suspected of evasion.

This section applies confidentiality and limited disclosure protections for proprietary information in antidumping and countervailing duty proceedings under 19 U.S.C. 1677(b)-(d) to evasion proceedings under 19 U.S.C. 1517 (i.e., investigations by U.S. Customs and Border Protection of entry of merchandise subject to AD/CVD orders through false statements or omissions that reduce or avoid duties), with modifications including (1) substituting "the Commissioner" for "the administering authority" or "Commission," (2) excluding 1677(b)(1)(A), (b)(3), and the second/third sentences of 1677(c)(1)(A), (3) in 1677(c)(1)(B) limiting sanctions to those "determine[d] to be appropriate" (excluding disbarment), in 1677(c)(1)(C)(i) standardizing notice periods to 14 days (from 14 days or 7 days for preliminary determinations), and in 1677(c)(1)(C)(ii) standardizing response periods to 30 days (from 30 days or 10 days for preliminary determinations), and (4) in 1677(c)(2) substituting "United States Court of International Trade" for "United States Customs Court." (Thus, these rules govern treatment of business proprietary information submitted in evasion cases, adapted to CBP's role.) The Commissioner must issue implementing regulations, and the amendment takes effect 180 days after enactment.

This section establishes the effective date and applicability of amendments made by the Act to countervailing duty (CVD) and antidumping duty (AD) investigations, title VII reviews, and circumvention inquiries under the Tariff Act of 1930. In general, the amendments apply to such proceedings initiated on or after the date of enactment. The amendments also apply to (1) pending title VII investigations or reviews where the fully extended preliminary determination is scheduled no earlier than 45 days after enactment; (2) circumvention inquiries pending on the date of enactment; and (3) circumvention inquiries requested but not initiated before enactment. For pending circumvention inquiries, amended section 781(f)(4) deadlines are calculated from the date of enactment (instead of initiation or filing dates); for requested but uninitiated inquiries, the administering authority must act on the request within 20 days after enactment per amended section 781(f)(3). Separately, amendments made by section 204—concerning normal value determinations that account for cost distortions in foreign countries—apply retroactively to AD investigations and reviews initiated on or after June 29, 2015, as well as related U.S. Customs and Border Protection actions and federal court proceedings without final judgment by the date of enactment.