Congress Passes Pension Protection Bill (Part II - Temporary Suspension of AD/CV New Shipper Bonding Privileges, Etc.)

This is Part II of a multi-part series of summaries of H.R. 4 and focuses on the provision to suspend antidumping(AD)/countervailing (CV) new shipper bonding privileges. See future issues of ITT for additional summaries of the trade-related provisions of H.R. 4. See ITT's Online Archives or 08/11/06 news, 06081115, for Part I.)

(See ITT's Online Archives or 08/03/06 news, 06080399 1, for BP summary on House passage of H.R. 4. See ITT's Online Archives or 08/07/06 news, 06080799 1, for BP summary of Senate passage of H.R. 4.)

Temporary Suspension of AD/CV New Shipper Bonding Privileges, Etc.

H.R. 4 would suspend, for the period beginning on April 1, 2006 and ending on June 30, 2009, 19 USC 1675(a)(2)(B)(iii), which requires the International Trade Administration (ITA), at the time the AD or CV duty new shipper review is initiated for a new exporter or producer, to direct U.S. Customs and Border Protection (CBP) to allow, at the option of the importer, the posting, until the completion of the review, of a bond or security in lieu of an AD/CV cash deposit for each entry of the subject merchandise.

(According to the Congressional Research Service, new shipper reviews establish an individual weighted average dumping margin or an individual CV duty rate (as the case may be) for a new exporter or producer that (1) did not export the merchandise that was the subject of an AD or CV duty order to the U.S. during the period of investigation; and (2) was not affiliated with any exporter or producer who did.

Report on whether suspension should be extended beyond June 30, 2009. H.R. 4 would also require, not later than December 31, 2008, the Secretary of Treasury, in consultation with the Secretary of Commerce, U.S. Trade Representative, and Secretary of Homeland Security, to submit a report to specified Congressional committees containing:

1. recommendations on whether the suspension of 19 USC 1675(a)(2)(B)(iii) should be extended beyond June 30, 2009; and
2. an assessment of the effectiveness of any administrative measure that was implemented to address the difficulties that necessitated the suspension of 19 USC 1675(a)(2)(B)(iii), including (a) any problem in the collection of AD duties on imports from new shippers; and (b) any burden imposed on legitimate trade and commerce by the suspension of bonds to new shippers.

Report on collection problems and analysis of proposed solutions. Not later than 180 days after the date of enactment, the Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the Secretary of Commerce, would be required to submit to specified congressional committees a report describing:

1. any major problems experienced in the collection of duties during the 4 most recent fiscal years for which data are available, including any fraudulent activity intended to avoid payment of duties; and
2. an estimate of the total amount of duties that were uncollected during the most recent fiscal year for which data are available, including, with respect to each product, a description of why the duties were uncollected.

The report shall include recommendations on any additional action needed to address problems related to the collection of duties; and for each recommendation (i) an analysis of how the recommendation would address the specific problem; and (ii) an assessment of the impact that implementing the recommendation would have on international trade and commerce (including any additional costs imposed on U.S. businesses).

H.R. 4, as passed by House and Senate available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_bills&docid=f:h4enr.txt.pdf.

Senate' technical explanation of H.R. 4 available at http://www.house.gov/jct/x-38-06.pdf.

House Ways and Means press release on H.R. 4, dated 07/28/06, available at http://waysandmeans.house.gov/media/pdf/taxdocs/072806pensionsummary.pdf

BP Notes

On November 16, 2005, the Senate passed the New Shipper Review Amendment Act of 2005 which contained new shipper bonding privilege suspension and Congressional reporting requirements similar to those in H.R. 4. In addition, similar AD new shipper bonding privilege suspension provisions were contained in the House-passed U.S. Trade Rights Enforcement Act. Neither of these bills has become law. (See ITT's Online Archives or 11/30/05 and 07/29/05 news, 05113030 and 05072910, for BP summaries of these bills.)

(See ITT's Online Archives or 10/21/03 news, 03102115, for BP summary of ITA Policy Bulletin on charging interest for rescinded AD/CV new shipper reviews, which notes that in certain cases, the ITA found that the volume of shipments made under an invalid bond between the initiation and rescission of the new shipper review were exceptionally high.)

CBP refers to the trade portion of the Pension Protection Act of 2006 (P.L. 109-280) as the Miscellaneous Trade and Technical Corrections Act of 2006.