[Federal Register Volume 66, Number 123 (Tuesday, June 26, 2001)]
[Proposed Rules]
[Pages 33920-33926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-16020]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 6, No. 123 / Tuesday, June 26, 2001 / 
Proposed Rules  

[[Page 33920]]



DEPARTMENT OF THE TREASURY

Customs Service

19 CFR PART 159

RIN 1515-AC84


Distribution of Continued Dumping and Subsidy Offset to Affected 
Domestic Producers

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This document proposes to amend the Customs Regulations, to 
implement the Continued Dumping and Subsidy Offset Act of 2000, by 
prescribing the administrative procedures, including the time and 
manner, under which antidumping and countervailing duties assessed on 
imported products would be distributed to affected domestic producers 
as an offset for certain qualifying expenditures. This distribution to 
the affected producers is known as the continued dumping and subsidy 
offset.

DATES: Comments must be received on or before July 26, 2001.

ADDRESSES: Written comments may be addressed to and inspected at the 
Regulations Branch, U.S. Customs Service, 1300 Pennsylvania Avenue, 
NW., 3rd Floor, Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT: Jeffrey J. Laxague, Office of 
Regulations and Rulings, (202-927-0505).

SUPPLEMENTARY INFORMATION:

Background

    Antidumping duties are imposed upon imported merchandise that the 
U.S. Department of Commerce has found is, or is likely to be, sold in 
the United States at less than its fair value. Countervailing duties 
are imposed upon imported merchandise that the Department of Commerce 
determines benefit from subsidies bestowed by a foreign government. In 
all antidumping cases, and in most countervailing duty cases, these 
duties are only assessed if the U.S. International Trade Commission 
determines that the imported goods cause material injury or the threat 
of material injury to a domestic industry. The rules and procedures 
concerning proceedings leading to orders or findings under which 
antidumping and countervailing duties are assessed are found in 19 
U.S.C. 1671 et seq., in part 207 of the regulations of the U.S. 
International Trade Commission (19 CFR chapter II, part 207), and in 
part 351 of the regulations of the International Trade Administration, 
U.S. Department of Commerce (19 CFR chapter III, part 351).
    The Continued Dumping and Subsidy Offset Act of 2000 (``CDSOA'') 
was enacted on October 28, 2000, as part of the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 2001 (``Act'') (Pub. L. 106-387; 114 Stat. 1549). 
The provisions of the CDSOA are contained in Title X (sections 1001-
1003) of the Act.
    The CDSOA, in section 1003 of the Act, amended Title VII of the 
Tariff Act of 1930, by adding a new section 754 (codified at 19 U.S.C. 
1675c) in order to provide that assessed duties received pursuant to a 
countervailing duty order, an antidumping duty order, or an antidumping 
duty finding under the Antidumping Act of 1921, would be distributed by 
Customs to affected domestic producers for certain qualifying 
expenditures that these producers incur after the issuance of such an 
antidumping duty order or finding, or countervailing duty order. This 
distribution is called the continued dumping and subsidy offset.

Affected Domestic Producers

    An affected domestic producer eligible for a distribution of 
countervailing or antidumping duties assessed under an order or finding 
would include any manufacturer, producer, farmer, rancher or worker 
representative (including any association of such persons) that 
remained in operation, and that was a petitioner or an interested party 
that supported a petition for the issuance of an antidumping duty 
order, a finding under the Antidumping Act of 1921, or a countervailing 
duty order.
    However, a company, business or person that had ceased production 
of the product covered by an order or finding could not be an affected 
domestic producer eligible to receive a distribution.
    Also, a company, business or person would not be an affected 
domestic producer entitled to a distribution of assessed antidumping 
and countervailing duties if that company, business or person had been 
acquired by a company or business that was related to a company that 
had opposed the antidumping or countervailing duty investigation that 
led to the order or finding.
    In this regard, as defined in section 754(b)(5) of the Tariff Act 
of 1930 (19 U.S.C. 1675c(b)(5)), a company, business or person would be 
considered to be related to another company, business or person if: (1) 
the company, business or person directly or indirectly controlled or 
was controlled by the other company, business or person; (2) a third 
party directly or indirectly controlled both companies, businesses or 
persons; or (3) both companies, businesses or persons directly or 
indirectly controlled a third party and there was reason to believe 
that the relationship caused the first company, business or person to 
act differently than a nonrelated party. As concerns items 1-3, one 
party would be considered to directly or indirectly control another 
party if the party was legally or operationally in a position to 
exercise restraint or direction over the other party.

List of Affected Domestic Producers

    The U.S. International Trade Commission (USITC) is responsible for 
ascertaining and timely forwarding to Customs a list of the affected 
domestic producers in connection with each order or finding that would 
potentially be eligible to receive an offset. This list would consist 
of those petitioners for each order or finding as well as those parties 
that indicated support of a petition for the order or finding. The 
resolution of any dispute regarding a particular list of affected 
domestic producers in any given case would be the province of the 
USITC, and not Customs.
    It is noted that the USITC has supplied Customs with an initial 
list of affected domestic producers for the approximately 400 
individual antidumping and countervailing duty cases currently ongoing, 
comprising over 2,000 affected domestic parties

[[Page 33921]]

potentially eligible to receive an offset. This list has been posted on 
the Customs website (http://www.customs.gov/news/fed-reg/notices/dumping.pdf). Continued updates to this list will be processed as 
necessary.

Qualifying Expenditures for Which Distribution May Be Made

    A qualifying expenditure by an affected domestic producer against 
which a distribution of assessed antidumping and countervailing duties 
could be made would encompass those expenditures that were incurred 
after the issuance of an antidumping duty order or finding or a 
countervailing duty order, provided that such expenditures fell within 
any of the following categories: manufacturing facilities; equipment; 
research and development; personnel training; acquisition of 
technology; health care benefits for employees paid for by the 
employer; pension benefits for employees paid for by the employer; 
environmental equipment, training, or technology; acquisition of raw 
materials and other inputs; and working capital or other funds needed 
to maintain production.

Customs Rulemaking

    By this document, Customs proposes to amend the Customs Regulations 
to add a new subpart F to part 159 (19 CFR part 159, subpart F; 
Secs. 159.61-159.64) that would principally prescribe the procedures, 
including the time and manner, and the required information necessary 
for the distribution of antidumping and countervailing duties assessed 
under an appropriate order or finding, that would be payable as a 
continued dumping and subsidy offset to those affected domestic 
producers for their qualifying expenditures, in accordance with section 
754 of the Tariff Act of 1930, as amended (19 U.S.C. 1675c).
    It is noted that 19 U.S.C. 1675c covers all antidumping and 
countervailing duty assessments made on or after October 1, 2000, in 
connection with all antidumping duty orders or findings, or 
countervailing duty orders, in effect as of January 1, 1999, or issued 
thereafter.

Notice of Intent To Distribute Offset

    As a first step in the distribution process, at least 60 days prior 
to the end of a fiscal year, Customs would be responsible for 
publishing in the Federal Register a notice of intention to distribute 
the offset for that fiscal year, and including in the notice the list 
of affected domestic producers, based upon the list supplied by the 
USITC, that would be potentially eligible to receive the distribution.
    The notice of intention to distribute the offset will also refer 
to: the case name and number of the particular order or finding 
concerned; and the instructions for filing a certification to claim a 
distribution.

Certifications

    To obtain a distribution of the offset, each affected domestic 
producer would have to submit a certification under oath, in 
triplicate, or electronically as authorized by Customs, to the 
Assistant Commissioner, Office of Regulations and Rulings, 
Headquarters, or designee, that must be received within 60 days after 
the date of publication of the notice in the Federal Register, 
indicating that the producer desires to receive a distribution. The 
certification must demonstrate that the producer is eligible to receive 
a distribution as an affected domestic producer, and it must enumerate 
the qualifying expenditures incurred by the producer since the issuance 
of an order or finding for which a distribution has not previously been 
made.
    More specifically, while there is no established format for a 
certification, the certification must identify the date of the Federal 
Register notice under which it is submitted, and the case name and the 
number of the particular order or finding cited in the Federal Register 
notice.
    The certification must be executed and dated by a party legally 
authorized to bind the producer, and it must include the following 
identifying information: the name of the producer and any name 
qualifier, if applicable (for example, any other name under which the 
producer does business or is also known); the address of the producer 
(if a post office box, the secondary street address must also be 
included); the Internal Revenue Service (IRS) number (with suffix) of 
the producer, employer identification number, or social security 
number, as applicable; the specific business organization of the 
producer (corporation, partnership, sole proprietorship); and the 
name(s) of any individual(s) designated by the producer as the contact 
person(s) concerning the certification, together with the phone 
number(s) and/or facsimile transmission number(s) and electronic mail 
(email) address(es) for the person(s). Parties wishing to receive their 
disbursement via electronic payment must also include their financial 
institution's Transit Routing Identification Number and applicable Bank 
Account Number.
    In addition, the certification must enumerate: the total amount of 
qualifying expenditures currently and previously certified by the 
producer, and the amount certified by category; the total amount of 
those expenditures for which there has been a prior distribution; and 
the net amount of the current claim (the total amount currently and 
previously certified minus the total amount for which there has been a 
previous distribution).
    Furthermore, the certification must contain a statement that the 
producer desires to receive a distribution and is eligible to receive 
the distribution as an affected domestic producer. Also, the producer 
must affirm that the amount claimed as an offset does not involve any 
qualifying expenditures for which distribution has previously been 
made. Moreover, the statement must include information as to whether or 
not the producer has ceased to operate or has ceased production of the 
product covered by the particular order or finding under which the 
distribution is sought. Additionally, the producer must state whether 
or not it has been acquired by a company or business that is related to 
a company, as defined in section 754(b)(5), Tariff Act of 1930 (19 
U.S.C. 1675c(b)(5)), that opposed the antidumping or countervailing 
duty investigation that resulted in the order or finding under which 
the distribution is sought. If any of the foregoing conditions are not 
met, the producer would not qualify as an affected domestic producer.
    Customs is especially interested in receiving public comment as to 
whether it should adopt the position that the name of the certifying 
producer and the total amount being certified will be considered 
information available for disclosure to the public.
    A certification that is submitted and timely received in response 
to a notice of distribution may be reviewed before acceptance to ensure 
that all informational requirements are complied with and that any 
amounts set forth in the certification for current and prior qualifying 
expenditures, including the amount claimed for distribution, appear to 
be correct. A certification that is found to be incorrect or incomplete 
will be returned to the producer and the deficiencies will be 
identified. It is the sole responsibility of the producer to ensure 
that the certification is correct, complete and satisfactory so as to 
demonstrate the entitlement of the producer to the distribution 
requested. Failure to ensure that a correct, complete and satisfactory 
certification is filed within 60 days after the date of publication of 
the notice in the Federal

[[Page 33922]]

Register will result in the producer not receiving a distribution.

Verification

    Customs reserves the right to determine whether certifications will 
be verified through audit or otherwise. Because certifications may be 
subject to verification, parties are required to maintain records 
supporting their claims for a period of three years after the filing of 
the certification.

Special Accounts, Clearing Accounts

    As directed in the legislation (19 U.S.C. 1675c(e)), Customs will 
establish a Special Account for each antidumping duty order or finding 
or countervailing duty order, into which antidumping or countervailing 
duties liquidated pursuant to the order or finding will be deposited.
    To facilitate this process, Customs is also establishing a Clearing 
Account into which all estimated antidumping or countervailing duties 
will initially be deposited, that are collected under an entry, but 
that are not yet available for distribution because their liquidation 
has not been achieved. However, once antidumping or countervailing 
duties are liquidated, these duties will be transferred from the 
Clearing Account to the Special Account established for that order or 
finding. When transferred to the appropriate Special Account, the 
antidumping or countervailing duties will be considered to be received 
by Customs and distributions will be made from that Special Account.

Interest on Special Accounts, Clearing Accounts

    In accordance with Federal appropriations law, and Treasury 
guidelines on Special Accounts governed by this law, funds in such 
accounts are not interest-bearing unless specified by Congress. 
Likewise, funds being held in Clearing Accounts are not interest-
bearing unless specified by Congress. Therefore, no interest will 
accrue in these accounts. However, if there is interest paid by the 
importer on any antidumping or countervailing duties billed in the 
liquidation process for the import entries, that interest will be 
transferred to the Clearing Account or Special Account, as appropriate.

Distribution of Assessed Duties Received as Continued Dumping and 
Subsidy Offset

    Under 19 U.S.C. 1675c(c), the Commissioner of Customs is authorized 
to prescribe procedures for distributing the continued dumping and 
subsidy offset. Section 1675c(c) also requires that this distribution 
be made, not later than 60 days after the first day of a fiscal year, 
from those antidumping or countervailing duties assessed and received 
during the preceding fiscal year. In the same vein, 19 U.S.C. 
1675c(d)(3) authorizes the Commissioner to distribute all funds from 
assessed duties received in the preceding fiscal year.
    Antidumping and countervailing duties are assessed on imported 
merchandise as instructed by the U.S. Department of Commerce 
(Commerce), 19 U.S.C. 1671e(a)(1) and 1673e(a)(1), such assessment to 
occur within six months after Customs receives notice from Commerce of 
the removal of a suspension of liquidation required by statute or court 
order under 19 U.S.C. 1504(d). These statutory provisions distinguish 
assessments of antidumping or countervailing duties from the mere 
deposit of estimated duties which occurs at entry. See, e.g., 19 U.S.C. 
1671e(a)(3) and 1673e(a)(3)).
    When instructed by Commerce, Customs assesses the final amount of 
antidumping or countervailing duties accruing on an entry for imported 
merchandise, which is accomplished by liquidating the subject entry. 19 
U.S.C. 1500. The term ``liquidation'' is defined in this context as the 
final computation or ascertainment of the duties accruing on an entry. 
19 CFR 159.1.
    In brief, antidumping or countervailing duties accruing on imported 
merchandise are not assessed until each entry covering the merchandise 
is liquidated. Prior to liquidation, any estimated antidumping or 
countervailing duties that may have been deposited on an entry are 
first placed into the Clearing Account and are not available for 
distribution. Once an entry has been liquidated, the estimated 
antidumping or countervailing duties in the Clearing Account for that 
entry are assessed and then received by Customs into the appropriate 
Special Account.
    Once assessed and received into a Special Account, duties will 
become available for distribution as part of the continued dumping and 
subsidy offset and will be distributed within 60 days of the beginning 
of the following fiscal year. In the case of entries that are 
reliquidated at lower antidumping or countervailing rates than 
originally liquidated, the difference will be refunded to importers 
from funds in the corresponding Clearing Account and/or Special Account 
during subsequent fiscal years. If Customs determines that funds in the 
Clearing Account or Special Account are insufficient to support a 
refund, affected domestic producers who previously received 
distributions under the Special Account will be billed. The amount of 
each affected domestic producer's bill will be directly proportional to 
the total offset amount previously received. Customs will use all 
available collection methods to collect outstanding bills, including, 
but not limited to, administrative offset. Interest will begin to 
accrue on unpaid bills beginning 30 days from the bill date.
    When entries are reliquidated at higher rates than originally 
liquidated, importers will be billed for the difference. These duties 
will be distributed within 60 days of the beginning of the following 
fiscal year in which they were received into the Special Account.
    If the total amount of the net claims contained in certifications 
filed under a given notice of distribution does not exceed the amount 
of the offset available for distribution in a given fiscal year, the 
certified net claim for each affected producer will be paid, and the 
balance remaining will be returned to the Clearing Account, where it 
will be retained for the sole purpose of future importer refunds. In 
the alternative, if the net claims exceed the available offset for a 
fiscal year, such offset will be subject to a pro rata allocation to 
each of the affected domestic producers based upon the total of the net 
claims certified.
    Finally, before the last distribution may be made under an order or 
finding that has terminated, all remaining entries covered by the order 
or finding must have been finally liquidated, no longer subject to 
reliquidation, and all duties assessed under the entries must have been 
fully collected (19 U.S.C. 1675c(e)(4)(B)). Any funds remaining in the 
Special Account following the final distribution will be transferred to 
the General Fund.

Illustrations of the Process for Distributing the Offset

    To demonstrate the process of distributing the continued dumping 
and subsidy offset, the following illustrations are provided:
    I. For entries of merchandise, subject to antidumping and 
countervailing duty (AD/CVD) orders, that are imported prior to the 
October 1, 2000, effective date for CDSOA:
    A. If the entries are liquidated prior to 10-1-2000, there is no 
offset disbursement of the AD/CV duties.

    Example: Merchandise was entered in July 1999, and was 
liquidated in September 2000.

    B. If the entries are liquidated after 10-1-2000, the liquidated 
AD/CV duties will be disbursed.

[[Page 33923]]

    1. For no change liquidation and partial refund liquidations: the 
liquidated AD/CV duties will be disbursed, based on the fiscal year of 
the date of liquidation.

    Example: Merchandise was entered in August 1999, and was 
liquidated in November 2000. The AD/CVD duties will be disbursed no 
later than November 2001.

    2. For liquidations that bill additional duty and interest: The 
total amount of liquidated AD/CV duties and the interest paid will be 
disbursed. The amount of AD/CV duty already collected by Customs at the 
time of liquidation will be disbursed based on the fiscal year of the 
date of liquidation. The additional AD/CV duty and interest paid will 
be disbursed based on the fiscal year of the date of payment.

    Example: Merchandise was entered in September 2000, and was 
liquidated in September 2001. The AD/CV duties already collected at 
the time of liquidation will be disbursed no later than November 
2001. If the bill for additional duties and interest is paid in 
December 2001, those funds will be disbursed no later than November 
2002.

    II. For entries of merchandise, subject to AD/CVD orders, that are 
imported after 10-1-2000:
    A. For no change liquidations and partial refund liquidations: the 
liquidated AD/CV duties will be disbursed, based on the fiscal year of 
the date of liquidation.

    Example: Merchandise was entered in December 2000, and was 
liquidated in January 2002. The liquidated AD/CV duties will be 
disbursed no later than November 2002.

    1. For liquidations that bill additional AD/CV duties and interest: 
the total liquidated AD/CV duties and interest paid will be disbursed. 
The amount of AD/CV duties already collected by Customs at the time of 
liquidation will be disbursed based on the fiscal year of the date of 
liquidation. The additional AD/CV duty and interest paid will be 
disbursed based on the fiscal year of the date of payment.

    Example: Merchandise was entered in May 2001, and was liquidated 
in August 2002. The AD/CV duties already collected at the time of 
liquidation will be disbursed no later than November 2002. If the 
additional AD/CV duty and interest is paid in November 2002, those 
funds will be disbursed no later than November 2003.

    III. For entries of merchandise, imported after 10-1-2000, that are 
subject to terminated AD/CVD orders: All AD/CV duties and interest 
collected pursuant to the final liquidation instructions for a 
terminated case will be disbursed, but only after all liquidations are 
final and all claims have been settled; this will not occur in the 
fiscal year of liquidation, but in a subsequent fiscal year.

    Example: Merchandise imported in May 2002, the case is 
terminated in July 2003, and the entry is liquidated in August 2003. 
Final AD/CV duties will be disbursed no sooner than August 2004, 
assuming no claims are pending on that entry or that case.

Refunds Due Importers Based on Reliquidations

    Until the liquidation of an entry becomes final, the duties 
assessed on the entry may be subject to reliquidation as the result of 
19 U.S.C. 1501, 1514, 1520, or court order. Such a reliquidation would 
operate as a new liquidation and an abandonment of any prior 
liquidation of the amount of the duties due.
    Consequently, should liquidated duties that have been distributed 
to affected domestic producers thereafter be subject to a reliquidation 
that results in a refund of duties being due to an importer, such 
refund will be made to the importer from duties that are deposited in 
the Clearing Account and/or the Special Account established for that 
order or finding, as described below, during the next fiscal year 
immediately following the fiscal year in which the distributed duties 
were liquidated. However, for the last fiscal year during which a 
Special Account is established under an order or finding, and prior to 
the termination of the Special Account, no final distribution may be 
made from this Account until all remaining entries covered by the order 
or finding have been finally liquidated, and are no longer subject to 
reliquidation, and all duties assessed under the entries have been 
fully collected or properly accounted for by Customs (19 U.S.C. 
1675c(e)(4)(B)).

Overpayment of Distribution to Affected Domestic Producer

    Any overpayment of a distribution made by Customs to an affected 
domestic producer will be subject to billing and other collection 
methods, including, but not limited to, administrative offsets 
resulting from a reliquidation.

Distribution Final and Conclusive on All Parties

    Except in the case of an overpayment made by Customs to an affected 
domestic producer, any distribution from a Special Account established 
under section 1675c(e)(1) for an antidumping duty order or finding, or 
a countervailing duty order, that is made by Customs in accordance with 
section 1675c(d)(3) to an affected domestic producer, based upon the 
certification that this producer has filed, will be final and 
conclusive on the affected domestic producer.

Annual Report

    Although it is not mandated in the legislation (19 U.S.C. 1675c), 
Customs intends to issue an annual report on the disbursements. This 
report will be available to the public via the Customs website.

Comments

    Before adopting this proposal, consideration will be given to any 
written comments that are timely submitted to Customs. Customs 
specifically requests comments on the clarity of this proposed rule and 
how it may be made easier to understand. In addition, as already stated 
above, Customs is especially interested in receiving public comment as 
to whether it should adopt the position that the name of the certifying 
producer and the total amount being certified will be considered 
information available for disclosure to the public. Comments submitted 
will be available for public inspection in accordance with the Freedom 
of Information Act (5 U.S.C. 552), Sec. 1.4 of the Treasury Department 
Regulations (31 CFR 1.4), and Sec. 103.11(b), Customs Regulations (19 
CFR 103.11(b)), on regular business days between the hours of 9:00 a.m. 
and 4:30 p.m. at the Regulations Branch, U.S. Customs Service, 1300 
Pennsylvania Avenue, NW., 3rd Floor, Washington, DC.

Regulatory Flexibility Act and Executive Order 12866

    The proposed amendments would implement the terms and conditions of 
the Continued Dumping and Subsidy Offset Act of 2000, which applies to 
antidumping and countervailing duties assessed on or after October 1, 
2000. Pursuant to the provisions of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), it is certified that, if adopted, the proposed 
amendments will not have a significant economic impact on a substantial 
number of small entities. Nor do the proposed amendments meet the 
criteria for a ``significant regulatory action'' as specified in E.O. 
12866.

Paperwork Reduction Act

    The collection of information in this notice of proposed rulemaking 
has been submitted to the Office of Management and Budget (OMB) for 
review in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507). This collection of information is contained in 
Sec. 159.63. This information

[[Page 33924]]

is necessary in order to enable, and to expedite, the distribution of 
the continued dumping and subsidy offset to the affected domestic 
producers. The likely respondents and/or recordkeepers are domestic 
business organizations, such as manufacturers, producers, ranchers, 
farmers and worker representatives (including associations of such 
persons).
    Estimated total annual reporting and/or recordkeeping burden: One 
hour.
    Estimated average annual burden per respondent/recordkeeper: One 
hour.
    Estimated number of respondents and/or recordkeepers: One.
    Estimated annual frequency of responses: One.
    Comments on the collection of information should be sent to the 
Office of Management and Budget, Attention: Desk Officer of the 
Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503. A copy should also be sent to the 
Regulations Branch, Office of Regulations and Rulings, U.S. Customs 
Service, 1300 Pennsylvania Avenue, NW., 3rd Floor, Washington, DC 
20229. Comments should be submitted within the same time frame that 
comments are due regarding the substance of the proposal.
    Comments are invited on: (a) Whether the collection is necessary 
for the proper performance of the functions of the agency, including 
whether the information will have practical utility; (b) the accuracy 
of the agency's estimate of the burden of the collection of the 
information; (c) ways to enhance the quality, utility, and clarity of 
the information to be collected; (d) ways to minimize the burden of the 
collection of information on respondents, including through the use of 
automated collection techniques or other forms of information 
technology; and (e) estimates of capital or startup costs and costs of 
operations, maintenance, and purchase of services to provide 
information.
    Part 178, Customs Regulations (19 CFR part 178), containing the 
list of approved information collections, would be appropriately 
revised upon adoption of the proposal as a final rule.

List of Subjects in 19 CFR Part 159

    Antidumping (Liquidation of duties), Countervailing duties 
(Liquidation of duties), Customs duties and inspection, Liquidation of 
entries for merchandise.

Proposed Amendments to the Regulations

    It is proposed to amend part 159, Customs Regulations (19 CFR part 
159), as set forth below.

PART 159--LIQUIDATION OF DUTIES

    1. The general authority citation for part 159 continues to read as 
follows, and it is proposed to add an authority citation for Subpart F 
to read as follows:

    Authority: 19 U.S.C. 66, 1500, 1504, 1624. * * * Subpart F also 
issued under 19 U.S.C. 1675c.
* * * * *
    2. It is proposed to amend part 159 by adding a new subpart F to 
read as follows:
Sec.
Subpart F--Continued Dumping and Subsidy Offset
Sec. 159.61   General.
Sec. 159.62   Notice of Distribution.
Sec. 159.63   Certifications.
Sec. 159.64   Distribution of offset.

Subpart F--Continued Dumping and Subsidy Offset


Sec. 159.61  General.

    (a) Continued dumping and subsidy offset. Under section 754 of the 
Tariff Act of 1930, as amended by Pub. L. 106-387, 114 Stat. 1549 (19 
U.S.C. 1675c), known as the Continued Dumping and Subsidy Offset Act of 
2000, assessed duties received on or after October 1, 2000 under a 
countervailing duty order, an antidumping duty order, or a finding 
under the Antidumping Act of 1921, will be distributed, as provided 
under this subpart, to affected domestic producers for certain 
qualifying expenditures that these affected domestic producers incur 
after the issuance of such an antidumping duty order or finding, or 
countervailing duty order. This distribution is called the continued 
dumping and subsidy offset.
    (b) Affected domestic producer defined. Except as otherwise 
provided in paragraphs (b)(1) and (b)(2) of this section, an ``affected 
domestic producer'' under paragraph (a) of this section means any 
manufacturer, producer, farmer, rancher or worker representative 
(including any association of such persons) that remains in operation, 
and that was a petitioner or an interested party that supported a 
petition concerning an antidumping duty order, a finding under the 
Antidumping Act of 1921, or a countervailing duty order that was 
entered. It is the responsibility of the U.S. International Trade 
Commission (USITC) to ascertain and timely forward to Customs a list of 
the domestic producers potentially eligible to receive a distribution 
in connection with each order or finding.
    (1) Product no longer produced. A company, business or person that 
has ceased production of the product covered by the antidumping duty 
order or finding, or countervailing duty order, is not an affected 
domestic producer under this section.
    (2) Acquisition by related company. (i) Related company defined. A 
company, business or person is not an affected domestic producer if 
that company, business, or person has been acquired by another company 
or business that is related to a company that opposed the antidumping 
or countervailing duty investigation that led to the order or finding. 
For purposes of this paragraph, a company, business or person is 
related to another company, business or person if:
    (A) The company, business or person directly or indirectly controls 
or is controlled by the other company, business or person;
    (B) A third party directly or indirectly controls both companies, 
businesses or persons; or
    (C) Both companies, businesses or persons directly or indirectly 
control a third party and there is reason to believe that the 
relationship causes the first company, business or person to act 
differently than a nonrelated party.
    (ii) Control of one party by another. For purposes of paragraphs 
(b)(2)(i)(A) through (b)(2)(i)(C) of this section, one party would be 
considered to directly or indirectly control another party if the party 
was legally or operationally in a position to exercise restraint or 
direction over the other party.
    (c) Qualifying expenditures. A qualifying expenditure which may be 
offset by a distribution of assessed antidumping and countervailing 
duties encompasses those expenditures that are incurred after the 
issuance of an antidumping duty order or finding or a countervailing 
duty order, provided that such expenditures fall within any of the 
following categories:
    (1) Manufacturing facilities;
    (2) Equipment;
    (3) Research and development;
    (4) Personnel training;
    (5) Acquisition of technology;
    (6) Health care benefits for employees paid for by the employer;
    (7) Pension benefits for employees paid for by the employer;
    (8) Environmental equipment, training, or technology;
    (9) Acquisition of raw materials and other inputs; and
    (10) Working capital or other funds needed to maintain production.


Sec. 159.62  Notice of distribution.

    (a) Publication of notice. At least 60 days before the end of a 
fiscal year, Customs will publish in the Federal Register a notice of 
intention to

[[Page 33925]]

distribute assessed duties received as the continued dumping and 
subsidy offset for that fiscal year. The notice will include the list 
of domestic producers, based upon the list supplied by the USITC (see 
Sec. 159.61(b)), that would be potentially eligible to receive the 
distribution.
    (b) Content of notice. The notice of intention to distribute the 
offset will also contain the following:
    (1) The case name and number of the particular order or finding 
concerned; and
    (2) The instructions for filing the certification under Sec. 159.63 
in order to claim a distribution.


Sec. 159.63  Certifications.

    (a) Requirement and purpose for certification. In order to obtain a 
distribution of the offset, each affected domestic producer must submit 
a certification, in triplicate, or electronically as authorized by 
Customs, to the Assistant Commissioner, Office of Regulations and 
Rulings, Headquarters, or designee, that must be received within 60 
days after the date of publication of the notice in the Federal 
Register, indicating that the affected domestic producer desires to 
receive a distribution. The certification must enumerate the qualifying 
expenditures incurred by the domestic producer since the issuance of an 
order or finding for which a distribution has not previously been made, 
and it must demonstrate that the domestic producer is eligible to 
receive a distribution as an affected domestic producer.
    (b) Content of certification. While there is no established format 
for a certification, the certification must identify the date of the 
Federal Register notice under which it is submitted, and the case name 
and the number of the particular order or finding cited in the Federal 
Register notice. The certification must be executed and dated by a 
party legally authorized to bind the domestic producer and state that 
the information contained in the certification is true and accurate to 
the best of the certifier's knowledge and belief.
    (1) Identifying information for domestic producer. The 
certification must include the following identifying information 
related to the domestic producer:
    (i) The name of the domestic producer and any name qualifier, if 
applicable (for example, any other name under which the domestic 
producer does business or is also known);
    (ii) The address of the domestic producer (if a post office box, 
the secondary street address must also be included);
    (iii) The Internal Revenue Service (IRS) number (with suffix) of 
the domestic producer, employer identification number, or social 
security number, as applicable;
    (iv) The specific business organization of the domestic producer 
(corporation, partnership, sole proprietorship);
    (v) The name(s) of any individual(s) designated by the domestic 
producer as the contact person(s) concerning the certification, 
together with the phone number(s) and/or facsimile transmission 
number(s) and electronic mail (email) address(es) for the person(s); 
and
    (vi) The Transit Routing Identification Number of the financial 
institution and applicable Bank Account Number for the domestic 
producer (if disbursement is sought via electronic payment).
    (2) Amount of claim. In calculating the amount of the distribution 
being claimed as an offset, the certification must enumerate the 
following:
    (i) The total amount of qualifying expenditures currently and 
previously certified by the domestic producer, and the amount certified 
by category (see Sec. 159.61(c)(1)-(10));
    (ii) The total amount of those expenditures which have been the 
subject of any prior distribution under section 754, Tariff Act of 
1930, as amended (19 U.S.C. 1675c); and
    (iii) The net amount for new and remaining qualifying expenditures 
being claimed in the current certification (the total amount currently 
and previously certified as noted in paragraph (b)(2)(i) of this 
section minus the total amount the subject of any prior distribution as 
noted in paragraph (b)(2)(ii) of this section).
    (3) Statement of eligibility to receive distribution. The 
certification must contain a statement that the domestic producer 
desires to receive a distribution and is eligible to receive the 
distribution as an affected domestic producer. The domestic producer 
must affirm that the net amount certified for distribution does not 
encompass any qualifying expenditures for which distribution has 
previously been made (see paragraphs (b)(2)(ii) and (b)(2)(iii) of this 
section). Further, the statement must include information as to whether 
the domestic producer remains in operation and continues to produce the 
product covered by the particular order or finding under which the 
distribution is sought (see Sec. 159.61(b)(1)). In addition, the 
domestic producer must state whether it has been acquired by a company 
or business that is related to a company, within the meaning of 
Sec. 159.61(b)(2)(i)(A)-(C), that opposed the antidumping or 
countervailing duty investigation that resulted in the order or finding 
under which the distribution is sought.
    (c) Review and correction of certification. A certification that is 
submitted in response to a notice of distribution and received within 
60 days after the date of publication of the notice in the Federal 
Register may be reviewed before acceptance to ensure that all 
informational requirements are complied with and that any amounts set 
forth in the certification for current and prior qualifying 
expenditures, including the amount claimed for distribution, appear to 
be correct (see paragraph (b)(2) of this section). A certification that 
is found to be incorrect or incomplete will be returned to the domestic 
producer. It is the sole responsibility of the domestic producer to 
ensure that the certification is correct, complete and satisfactory so 
as to demonstrate the entitlement of the domestic producer to the 
distribution requested. Failure to ensure that certification is 
correct, complete and satisfactory within 60 days after the date of 
publication of the notice of distribution in the Federal Register will 
result in the domestic producer not receiving a distribution.
    (d) Verification of certification; supporting records. Customs 
reserves the right to determine whether certifications will be verified 
through audit or otherwise. Because certifications may be subject to 
verification, parties are required to maintain records supporting their 
claims for a period of three years after the filing of the 
certification.


Sec. 159.64  Distribution of offset.

    (a) The creation of Special Accounts and Clearing Accounts.
    (1) Special Accounts. As directed in the legislation (19 U.S.C. 
1675c(e)), Customs will establish Special Accounts for each antidumping 
duty order or finding or countervailing duty order, into which funds 
will be transferred as set out in paragraph (b) of this section. All 
distributions to affected domestic producers will be made from the 
Special Accounts.
    (2) Clearing Accounts. In order to properly manage and account for 
dumping and subsidy offsets, as well as any requisite refunds to 
importers, Customs will also establish Clearing Accounts. All estimated 
antidumping and countervailing duties received pursuant to an 
antidumping or countervailing order or finding in effect on January 1, 
1999, or thereafter, will be deposited into a Clearing Account.

[[Page 33926]]

    (b) Distribution of assessed duties received from the Special 
Accounts; refunds resulting from reliquidation or court action; and 
overpayments to affected domestic producers.
    (1) Distribution of assessed duties received from the Special 
Accounts.
    (i) No later than 60 days after the end of a fiscal year, Customs 
will distribute the assessed duties transferred from the Clearing 
Accounts and received into the Special Accounts for purposes of 
distribution. The amount distributed shall be referred to as the 
dumping and subsidy offset;
    (ii) Transfers from the Clearing Accounts to the Special Accounts 
will be made by Customs throughout the fiscal year. Transfers will 
occur between a Clearing Account and a Special Fund Account when an 
entry upon which antidumping or countervailing duties are owed is 
properly liquidated pursuant to an order, finding or receipt of 
liquidation instructions;
    (iii) The amount transferred at liquidation to the Special Account 
will be dependent upon the amount actually collected on the entry and 
in the Clearing Account. Following liquidation, additional transfers 
will be made on the liquidated entry to the corresponding Special 
Account, as additional antidumping or countervailing duties owing are 
collected.
    (2) Refunds resulting from reliquidation or court action. If any of 
the underlying entries composing a prior distribution should 
reliquidate for a refund, such refund will be recovered, to the extent 
possible, from the corresponding Clearing Account and/or Special 
Account balances available for refund or distribution. Similarly, 
refunds to importers resulting from any court action involving those 
entries will also be recovered, to the extent possible, from 
corresponding Clearing Account and/or Special Account balances 
available for refund or distribution.
    (3) Overpayments to affected domestic producers. Overpayments to 
affected domestic producers resulting from subsequent reliquidations 
and/or court actions and determined by Customs to be not otherwise 
recoverable from the corresponding Clearing Account or Special Account 
as set out in paragraph (b)(2) of this section will be collected from 
the affected domestic producers. The amount of each affected domestic 
producer's bill will be directly proportional to the total dumping and 
subsidy offset amounts that that affected domestic producer previously 
received under the related Special Account. All available collection 
methods will be used by Customs to collect outstanding bills, including 
but not limited to, administrative offset. Interest will begin to 
accrue on unpaid bills 30 days from the bill date.
    (c) Payment of certified claims.
    (1) If the total amount of the certified net claims filed by 
affected domestic producers does not exceed the amount of the offset 
available for distribution in the corresponding Special Account, the 
certified net claim for each affected domestic producer will be paid in 
full. Any balance that remains in a Special Account after an annual 
distribution has occurred will be transferred back into the appropriate 
Clearing Account. Funds transferred back to the appropriate Clearing 
Account will not be available for future distributions to affected 
domestic producers. Rather, those amounts will be available to Customs 
to pay refunds owed to importers due to reliquidations and/or court 
action. Funds transferred back to the Clearing Account and not paid out 
to importers will be transferred to the General Fund when the 
corresponding Special Account is terminated in accordance with 
paragraph (d) of this section.
    (2) If the certified net claims exceed the dumping and subsidy 
offset amount available in the corresponding Special Account, such 
offset will be made on a pro rata basis based on each affected domestic 
producer's total certified claim.
    (3) In any case where the distribution is not for the entire 
certified qualifying expenditure submitted by an affected domestic 
producer, the Customs Service will, at the time of payment, provide a 
written notification explaining the reason for the entire amount not 
being paid. If the affected domestic producer believes that the 
reduction was the result of clerical error or mistake by Customs, it 
must file a request for reconsideration within 10 business days to the 
address given in the notification. After considering the matter, the 
Customs Service will notify the party requesting reconsideration of its 
decision. However, any adjustments will be made only from funds 
remaining in the account for that case in the current or future fiscal 
years, but will be paid prior to any future distributions.
    (d) Final distribution and termination of the Special Account.
    (1) A Special Account will be terminated and a final distribution 
will occur when:
    (i) The order or finding with respect to which the account was 
established has terminated; and
    (ii) All entries relating to the order or finding are liquidated, 
all outstanding amounts collected or properly accounted for by Customs, 
all related protests, petitions, and court actions fully concluded, and 
all refunds due to importers on the underlying entries are paid in 
full.
    (2) Once the requisite requirements set out in paragraph (d)(1) of 
this section have been met, notice of a final distribution will be 
issued pursuant to Sec. 159.62.
    (3) Amounts not timely claimed under the notice of final 
distribution will be permanently deposited into the General Fund of the 
Treasury.
    (e) Interest on Special Accounts and Clearing Accounts. In 
accordance with Federal appropriations law, and Treasury guidelines on 
Special Accounts, funds in such accounts are not interest-bearing 
unless specified by Congress. Likewise, funds being held in Clearing 
Accounts are not interest-bearing unless specified by Congress. 
Therefore, no interest will accrue in these accounts. However, 
statutory interest charged on antidumping and countervailing duties at 
liquidation, will be transferred to the Clearing Account or Special 
Account, as appropriate, when collected from the importer.
    (f) Distribution final and conclusive. Except as provided in 
paragraphs (b)(3) and (c)(3) of this section, any distribution made to 
an affected domestic producer under this section shall be final and 
conclusive on the affected domestic producer.
    (g) Annual report. Although it is not mandated in the law (19 
U.S.C. 1675c), Customs will issue an annual report on the 
disbursements. This report will be available to the public via the 
Customs website.

    Approved: June 21, 2001.
Timothy E. Skud,
Acting Deputy Assistant Secretary of the Treasury.

Charles W. Winwood,
Acting Commissioner of Customs.
[FR Doc. 01-16020 Filed 6-25-01; 8:45 am]
BILLING CODE 4820-02-P