Trade Remedies: “New Shipper” Reviews Page: 4 of 6
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CRS-4
Alleged Abuse of New Shipper Rules
Many U.S. producers of goods subject to AD or CVD orders cited the new shipper
bonding privilege as one of the ways that importers circumvented the duties owed. One
method that was reported involved exporters subject to high AD duty rates setting up
"shell" companies in the source country to act as new shippers. Other such companies
were set up in the United States to act as the importer of record, or arrangements were
made with other collusive importers. These "new shippers" exported a minimal amount
of the goods at a "fair" price and subsequently requested that the ITA undertake a new
shipper review of its export sales price.12 While the new shipper review was underway,
the importer posted a bond - generally for a substantially lesser amount than the AD/CV
duty amount that was assessed at the end of the investigation.13
Administrative authorities sometimes discover this or other types of fraudulent
arrangements in the course of the new shipper review. If not discovered, however, the
"new entity" can receive a very low dumping margin and continue to supply the market
with the original shipper's merchandise at a much lower AD/CV duty rate than previously
assigned. Even if the arrangement was discovered, the receiving company can succeed
in importing unlimited quantities of the subject merchandise for many months.14
Second, since the United States uses a retrospective system of assessing AD/CVD
tariffs, the time between the actual entry of the merchandise and receipt of the final bill
assessing the duties is 3.3 years on average, which can add to the risk that duties are
uncollected, especially when dealing with illegitimate importers.5 During the elapsed
time, the shipper, the importer, or both, may have gone out of business or have declared
bankruptcy. Therefore, in many cases, the higher duties owed remain uncollected.
ITA and CBP Efforts
The ITA and CBP have both made significant policy changes in an effort to restrict
abuses of the new shipper bonding privilege and other forms of duty circumvention. In
procedures implemented in October 2002, the ITA began requiring additional
certifications and qualifying paperwork from all exporters requesting new shipper reviews
in order to (1) ensure that these exporters actually meet all regulatory requirements and
(2) limit the application of the bonding privilege so that the new shipper under review
could not become a conduit for exports from producers not involved in the review.16
12 U.S. Congress. House. Committee on Ways and Means. Hearing. "United States-China
Relations and China's Role in the Global Economy." October 30-31, 2003. Statement of the
Customs Bond Committee of the American Surety Association (ASA).
13 WTO, Negotiating Group on Rules, United States. "New Shipper Reviews (ADA Article 9.5),"
July 14, 2004. No. TN/RL/GEN/11.
14 Ibid., p. 2.
15 GAO Report, p. 23.
16 The ITA began requiring these additional certifications in Preserved Mushrooms from
Indonesia: Initiation of New Shipper Antidumping Duty Review, 67 FR 62437. For further
clarification, see U.S. Department of Commerce, International Trade Administration, Import
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Trade Remedies: “New Shipper” Reviews, report, May 12, 2008; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc820712/m1/4/: accessed April 24, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.