Types of Suspension Agreements

According to Section 734 of the Tariff Act, there are four scenarios under which the DOC may suspend an investigation:

3.3.1 Cessation of Exports

According to Section 734(b) (1) of the Tariff Act, the exporters who are signatories to the agreement, and account for substantially all (i.e., 85 percent or greater) of the imports of the subject merchandise, agree to cease exports of the product concerned to the United States within 6 months after the date on which the investigation is suspended. From the perspective of the exporters, it is impossible that a complete cessation of exports is preferable to a price revision agreement or even to the imposition of duties upon completion of the investigation.⁵⁰

Urea Ammonium Nitrate Solutions (UANS) from the Russian Federation, an example of a Suspension Agreement of cease exports, the signatory exporters (85 percent or greater) have agreed to cease exports of UANS to the U.S. from March 3, 2003 to June 30, 2003. Since the DOC has determined that extraordinary circumstances are present in this case in accordance with section 734(c) (l) of the Tariff Act, following the Moratorium Period ( i.e., beginning July 1, 2003), each signatory agrees that each entry of UANS from Russia, the amount by which the estimated normal value exceeds the export price (or constructed export price) will not exceed 15 percent of the weighted-average amount by which the estimated normal value exceeded the export price (or constructed export price) for all less-than-fair-value entries of the producer/exporter examined during the course of the investigation in accordance with Section 734(c)(1)(B) of Tariff Act.⁵¹

50 Francesco Perone (1995), Page 68

51 Suspension of Investigation, Urea Ammonium Nitrate Solutions from the Russian Federation, 68 FR 9980- 9984 (March 3, 2003), please see appendix 1.

3.3.2 Elimination of Sales at Less Than Fair Value

In accordance with Section 734(b) (2) of the Tariff Act and 19 CFR 351.208(a), the exporter(s) who account for substantially all (i.e., 85 percent or greater) of the imports of the subject merchandise must agree to revise their prices to completely eliminate any amount by which the normal value of the merchandise which is the subject of the agreement exceeds the export price (EP) or constructed export price (CEP) of that merchandise.

Certain Cut-to-Length Carbon Steel Plate (CTL Plate) from the Russian Federation is an example of a Suspension Agreement of elimination of sales at less than fair value. The DOC has determined that the agreement will eliminate completely sales at less than fair value of imported subject merchandise.

Moreover, it is in the public interest, and that the agreement can be monitored effectively. The criteria for suspension of an investigation pursuant to Sections 734(b) and (d) of the Act have been met.⁵²

3.3.3 Elimination of Injurious Effect

According to Section 734(c) of the Tariff Act and 19 CFR 351.208(c), if the DOC determines that

“extraordinary circumstances” are present, it may suspend an investigation based on an agreement by exporters who account for substantially all (i.e., 85 percent or greater) of the imports of the subject merchandise to eliminate the injurious effect of imports by revising prices if it is satisfied that the agreement will completely eliminate the injurious effect and if:

(1) the suppression or undercutting of price levels of domestic products by imports of the subject merchandise will be prevented; and

(2) for each entry of each exporter, the dumping margin will not exceed 15 percent of the weighted-average dumping margin for that exporter during the investigation.

52 Suspension of Antidumping Investigation of Certain Cut-to-Length Carbon Steel Plate from the Russian Federation, 68 FR 3859 (January 27, 2003), please see appendix 2.

In accordance with Section 734(c) (2) (A) of the Tariff Act, “extraordinary circumstances” means circumstances in which (1) suspension of an investigation will be more beneficial to the domestic industry than continuation of the investigation, and (2) the investigation is complex. According to Section 734 (c) (2) (b), “complex” means (1) there are a large number of transactions to be investigated or adjustments to be considered, (2) the issues raised are novel, or (3) the number of firms involved is large.

The Tariff Act does not provide any guidance in determining whether the injurious effects are completely eliminated. The discretion enjoyed by the DOC in making this determination. Since the DOC is responsible for dumping investigation and the ITC is in charge of injury investigation, the DOC's decision to accept an agreement of eliminating the injurious effects is still subject to ITC's review as to whether the agreement actually eliminates the injury. The DOC is expected to base its injury analysis on the injury determination made by the ITC, or its decision might eventually be reversed by the Commission itself.

Fresh Tomatoes from Mexico is an example of a Suspension Agreement of elimination of injurious effect. The 2002 U.S. and Mexican Suspension Agreement provides that the subject merchandise will be sold at or above the established reference price and, for each entry of each exporter, the amount by which the estimated normal value exceeds the export price will not exceed 15 percent of the weighted-average amount by which the estimated normal value exceeded the export price for all Less Than Fair Value entries of the producer/exporter. The DOC determined that the 2002 Suspension Agreement will eliminate completely the injurious effect of exports to the United States of the subject merchandise and prevent the suppression or undercutting of price levels of domestic fresh tomatoes by imports of that merchandise from Mexico.⁵³

53 Suspension of Antidumping Investigation: Fresh Tomatoes from Mexico. Federal Register / Vol. 67, No. 241 Dec.

16, 2002 / Notices. 77044, please see appendix 3.

3.3.4 Special Rule for NME Suspension Agreements

According to Section 734(l) of the Tariff Act, the DOC may suspend an investigation based on an agreement with a NME country to restrict the volume of imports into the U.S. if the DOC determines that: (1) the agreement is in the public interest; (2) monitoring of the agreement is practicable; and (3) the agreement will prevent the suppression or undercutting of price levels of domestic products by imports of the subject merchandise under investigation.

Solid Fertilizer Grade Ammonium Nitrate from the Russian Federation is an example of NME Suspension Agreements. The DOC consulted with the parties to the proceedings and has considered the comments submitted with respect to the proposed suspension agreement. The DOC has determined that the agreement will prevent the suppression or undercutting of price levels of domestic products by imports of the merchandise under investigation. Moreover, in accordance with section 734(d) of the Act, the DOC and ITC determined that the agreement is in the public interest, and that the agreement can be monitored effectively.⁵⁴

On October 24, 1997, the DOC signed the NME Suspension Agreements with the government of the Russian Federation, the People’s Republic of China and Ukraine respectively. Those Suspension Agreements are to suspend the anti-dumping investigation of Cut-to-Length Carbon Steel Plate. The U.S. and China Suspension Agreement provided for five years of quotas, and the agreement was extended through October 31, 2003. After the DOC’s and ITC’s affirmative determinations in the first Five Year (Sunset) Reviews, on August 29, 2003 the Government of China announced its intention to withdraw from the Suspension Agreement. Therefore, the DOC terminated the agreement with respect to China and issued an antidumping duty order effective November 3, 2003.⁵⁵

54 Suspension of Antidumping Investigation: Solid Fertilizer Grade Ammonium Nitrate from the Russian Federation.

Federal Register /Vol. 65, No. 117 / Friday, June 16, 2000 /Notices 37759, please see appendix 4.

55 Termination of Suspension Agreement and Notice of Antidumping Duty Order. Federal Register /Vol.68, No 203/ Oct.

21, 2003/ Notices 60081, please see appendix 5

The U.S. and Russian Suspension Agreement provided for quotas and the agreement was replaced by a market economy agreement on December 20, 2002. On January 23, 2003, the agreement was revised to eliminate the quotas, and each CTL plate producer/exporter individually agreed to make any necessary price revisions to eliminate completely any amount by which the normal value of the merchandise exceeds the U.S. price of its merchandise subject to the agreement.⁵⁶

The U.S. and Ukraine agreement set a quota, or export limit, for shipments of CTL plate and set a minimum reference price at which Ukrainian mills were required to sell their CTL plate products. On February 17, 2006, the DOC revoked Ukraine’s status as a NME country. Effective November 1, 2008, the DOC converted the NME Suspension Agreement to a market economy agreement based on a request by certain Ukrainian producers of CTL plate.⁵⁷ Under the current agreement, signatory producers/exporters in Ukraine agree to make any necessary price revisions to eliminate completely any amount by which the normal value of their merchandise exceeds the U.S. price of the merchandise subject to the agreement.⁵⁸