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  • Pre-emptive Measures Required Against More Rigid and Continuous US Import Restrictions
    2018-01-15

    Pre-emptive Measures Required Against More Rigid and Continuous US Import Restrictions

     

    - Guidelines to avoid the application of the US AFA (adverse facts available) -

     

     

    Since the inauguration of President Trump this year, the further strengthened anti-dumping measures has not only increased the number of measures but also continued the trends of the high anti-dumping duties. It adds difficulties to Korean exports to the United States. In particular, the US Department of Commerce is increasingly imposing high rates of anti-dumping duties utilizing the AFA clause *. Therefore, it is urgent for Korean companies to work on risk management as well as countermeasures as this trend is expected to continue next year.

     * AFA (adverse facts available): Provision of evidence that allows judgment based on adverse inference when the import regulatory investigation authority determines that the subject entity is uncooperative in the investigation

     

     

    According to the Import Regulation Support Center of the Korea International Trade Association (Chairman, Kim Young-joo), the U.S. has launched 54 new anti-dumping investigations this year, the largest number in the last 10 years, and six of them are Korean companies. In addition, the number of companies that the U.S. applied the AFA in the process of antidumping investigations was only one digit before 2013, but it increased to 23 in 2014. It appeared that the AFA was applied to 40 companies by the end of November this year. When the AFA is applied, a fairly high dumping margin rate is calculated. The average dumping margin rate of the companies that were not subject to apply AFA this year was 10.3percent, while the average dumping margin rate of the AFA applied companies exceeded 100 percent.

     

    When high rates of anti-dumping duties are levied, the companies are required to give up exports in the worst cases. Considering these economic losses, it is pointed out that the most important thing is to be prepared thoroughly to minimize the dumping rates without having AFA applied at the time of investigation. Therefore, Korean companies need to be well aware of the typical cases that the United States applies the AFA and be prepared for them before the antidumping investigations are initiated.

     

    The report titled "The US AFA Applied Cases and Countermeasures" published by the Korea International Trade Association’s Import Regulation Support Center The report introduces specific details of each of the five cases by analyzing the domestic and foreign cases that the US Department of Commerce applied the AFA from 2016 to the present, and provides guidelines for Korean companies to be aware of. According to the report, it is essential to understand the investigation practices of the Department of Commerce, and it is necessary to understand that the recent investigation practice of the Department of Commerce has been very rigid. Therefore, it is important for Korean companies to cooperate upon the Department of Commerce's request as much as possible without any mistakes and to be prepared in advance for the possibility of excessive information request.

     

    Lee Mi-hyun, head of International Trade Cooperation, stressed “Since self-initiated investigation of the U.S. Department of Commerce has been revived, it is expected that the United States will not only increase the number of import restrictions but also expand the scope of items next year. Therefore, it is important to make sure to minimize dumping rates without having the AFA applied.

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