19 U.S.C. § 1677 — Definitions; special rules

For this subtitle, this section defines the following terms.

(1) “Administering authority” means the Secretary of Commerce or another United States officer to whom law transfers the duties of that authority.
(2) “Commission” means the United States International Trade Commission.
(3) “Country” means a foreign country, one of its political subdivisions, dependent territories, or possessions. Except in antidumping proceedings, it may also mean an association of two or more such countries or places joined in a customs union outside the United States.

(4) “Industry.” (A) It means all producers of a “domestic like product,” or producers whose combined output is a major part of total United States production of that product. (B)(i) A producer may be left out in appropriate circumstances if it is related to an exporter or importer of the “subject merchandise,” or if it also imports that merchandise. (ii) A producer and exporter or importer are related if (I) either directly or indirectly controls the other; (II) the exporter or importer controls the producer; (III) a third party controls both; or (IV) both control a third party and the relationship likely makes the producer act differently from an unrelated producer. A party controls another when it is legally or operationally able to direct or restrain it. (C) In appropriate circumstances, a product market may be divided into regions treated as separate industries when producers in each region sell all or almost all of their product there and producers elsewhere in the United States do not supply that region to a substantial degree. In that situation, injury, threatened injury, or delayed establishment of an industry may be found for the region even if the national industry is not injured, when dumped or subsidized imports are concentrated in the isolated region and all or almost all regional production is materially injured, threatened, or prevented from being established because of those imports. A “regional industry” is the domestic producers treated as a separate industry under this rule. (D) The effects of dumped or subsidized imports are measured against United States production of the domestic like product when available data separately identify that production, such as by production process or profits. If they do not, the measurement uses the narrowest group or range of products that includes the domestic like product and for which the needed information is available. (E)(i) Subject to clause (v), in an investigation involving a processed agricultural product made from a raw agricultural product, the growers or producers of the raw product may be part of the processed-product industry if the products are made through one continuous production line and relevant economic factors show a substantial coincidence of interests between growers and processors. The Commission may consider price, added market value, and other economic relationships, whether or not based on a legal relationship. (ii) The line is continuous if the raw product is substantially or completely devoted to the processed product and the processed product is substantially or completely made from it. (iii) If price is considered, the Commission must consider how closely the two prices track each other. If added market value is considered, it must consider whether the raw product is a significant part of the processed product’s value. (iv) “Raw agricultural product” means any farm or fishery product. (v) This rule ends if the United States Trade Representative tells the administering authority and Commission that applying it conflicts with United States international obligations.

(5) “Countervailable subsidy.” (A) Except for paragraph (5B), it is a subsidy described here and specific under paragraph (5A). (B) A subsidy is described here when an “authority” gives a person a financial contribution; gives income or price support within Article XVI of GATT 1994; or pays a funding mechanism to provide a contribution, or directs or entrusts a private entity to provide one, when the contribution normally belongs to the government and the practice is not materially different from normal government practices, and a benefit results. “Authority” means a country’s government or a public entity there. (C) Whether the recipient is public or private and whether the subsidy is direct or indirect for manufacturing, production, or export do not matter. The administering authority need not consider the subsidy’s effect in deciding whether one exists. (D) “Financial contribution” means a direct or possible direct transfer of funds or liabilities, such as grants, loans, equity, or loan guarantees; giving up or not collecting revenue otherwise due, such as tax credits or deductions; providing goods or services other than general infrastructure; or buying goods. (E) A benefit normally exists when: (i) an equity investment is inconsistent with usual private-investor practice, including risk-capital practice, in that country; (ii) a loan recipient pays less than it would on a comparable commercial loan actually available in the market; (iii) after adjusting for guarantee fees, a guaranteed-loan recipient pays less than it would on a comparable unguaranteed commercial loan; or (iv) goods or services are provided for less than adequate payment, or goods are bought for more than adequate payment. Adequacy is judged by prevailing market conditions in the investigated country, including price, quality, availability, marketability, transportation, and other buying or selling conditions. (F) A change in ownership of all or part of a foreign enterprise or its productive assets does not alone require finding that an earlier subsidy is no longer countervailable, even after an arm’s-length transaction.

(5A) “Specificity.” (A) A subsidy is specific if it is an export subsidy, an import-substitution subsidy, or specific under (D). (B) An export subsidy depends in law or fact on export performance, alone or with other conditions. (C) An import-substitution subsidy depends on using domestic goods instead of imported goods, alone or with other conditions. (D) For another subsidy: (i) expressly limiting access to an enterprise or industry makes it specific as a matter of law; (ii) objective eligibility and amount rules do not make it legally specific if eligibility is automatic, the rules are strictly followed, and they are clearly stated in an official document so they can be verified. “Objective criteria or conditions” are neutral and do not favor one enterprise or industry. (iii) If there is reason to think it is specific in fact, it is specific when actual recipients are few, an enterprise or industry is the predominant user, one receives a disproportionately large amount, or the authority’s discretionary decision favors one over others. The administering authority must consider economic diversification in the authority’s jurisdiction and how long the program has operated. (iv) Limiting a subsidy to an enterprise or industry in a designated geographic region makes it specific. Here and in (5B), “enterprise” or “industry” means a foreign enterprise or industry and includes a group.

(5B) “Categories of noncountervailable subsidies.” (A) For merchandise from a Subsidies Agreement country, despite (5) and (5A), a subsidy is noncountervailable if the administering authority finds in a part I investigation or part III review that it meets all criteria in (B), (C), or (D), or (E)(i) applies. (B)(i) Except for subsidies on civil-aircraft manufacture, production, or export, a research subsidy is noncountervailable if it covers no more than 75% of industrial-research costs or 50% of precompetitive-development costs and is limited to (I) researchers, technicians, and support staff used exclusively in research; (II) instruments, equipment, land, or buildings used exclusively and permanently for research, except commercial disposal; (III) research consulting and equivalent services, including bought-in research, technical knowledge, and patents; (IV) additional overhead directly caused by research; and (V) other direct operating costs such as materials and supplies. (ii)(I) “Industrial research” is planned searching or critical investigation to discover knowledge useful for new or significantly improved products, processes, or services. (II) “Precompetitive development activity” translates research findings into a plan, blueprint, or design for new, changed, or improved products, processes, or services, including a first prototype incapable of commercial use. It may include concepts, alternatives, demonstrations, or pilots that cannot be converted to industrial or commercial use. It excludes routine or periodic changes to existing products, lines, processes, services, or ongoing operations, even if improved. (iii)(I) If research covers both types, the subsidy may not exceed 62.5% of the listed costs. (II) The limit is based on total eligible project costs over the project’s duration. (C)(i) A regional-development subsidy to a person in a disadvantaged region is noncountervailable if it is not specific within eligible regions and: (I) each region is clearly designated, contiguous, and has an identifiable economic and administrative identity; (II) neutral, objective, verifiable rules show disadvantage from more than temporary conditions; (III) the rules measure economic development; and (IV) the general program sets assistance ceilings, differentiates them by regional development, states them as investment or job-creation costs, and distributes assistance broadly enough to avoid predominant use or disproportionate amounts by one enterprise or industry. (ii) The measure must use per-capita income, household per-capita income, or per-capita GDP no more than 85% of the country average, or unemployment at least 110% of the country average. It covers three years, may combine measures, and may include other factors. (iii)(I) A “general framework of regional development” is an internally consistent, generally applicable policy; subsidies cannot be isolated points with no or nearly no regional influence. (II) “Neutral and objective criteria” do not favor regions beyond what is appropriate to remove or reduce regional disparities. (D)(i) A subsidy for adapting existing facilities to new statutory or regulatory environmental requirements, which create greater burdens, is noncountervailable if it is one-time and nonrecurring; no more than 20% of adaptation cost; excludes replacement and operation costs paid by the recipient; is directly linked and proportionate to planned pollution reduction and excludes manufacturing-cost savings; and is available to everyone able to adopt the equipment or process. (ii) “Existing facilities” operated for at least two years before the new requirements. (E)(i) A subsidy under a program notified under Article 8.3 of the Subsidies Agreement is noncountervailable and not investigated or reviewed under this subtitle. (ii) It is countervailable despite that rule if the Trade Representative tells the administering authority that an Article 8.4 or 8.5 determination found the subsidy or program fails Article 8.2, and the subsidy is specific under (5A). (F) Domestic support for products listed in Annex 1 to the Agreement on Agriculture is noncountervailable if the administering authority finds it fully complies with Annex 2. The Trade Representative must advise on Annex 2 when asked. (G)(i) (B), (C), (D), and (E) stop applying on the first day of the month 66 months after the WTO Agreement takes effect unless extended under section 3572(c). (ii) (F) stops applying to imports from a WTO member at the end of the nine-year period beginning January 1, 1995; the Trade Representative sets and tells the administering authority the exact date for each member under Article 1(i) of the Agreement on Agriculture.

(6) To find the net countervailable subsidy, the administering authority may subtract from the gross subsidy: (A) an application fee, deposit, or similar payment needed to qualify for or receive it; (B) loss in value from delayed receipt when government order required the delay; and (C) export taxes, duties, or other charges specifically imposed on exports to the United States to offset the subsidy.

(7) “Material injury.” (A) It means harm that is more than inconsequential, immaterial, or unimportant. (B) For determinations under sections 1671b(a), 1671d(b), 1673b(a), and 1673d(b), the Commission must consider import volume, effects on United States prices of domestic like products, and effects on United States domestic producers, limited to United States production operations. It may consider other relevant economic factors. Its required notice must explain every factor under (i), identify each factor under (ii), and fully explain its relevance. (C)(i) It must decide whether import volume or an increase is significant in absolute terms or compared with United States production or consumption. (ii) It must decide whether imports significantly undersell domestic products, significantly depress prices, or significantly prevent price increases that otherwise would happen. (iii) It must evaluate all relevant industry factors, including actual or potential declines in output, sales, market share, gross and operating and net profits, debt service, productivity, investment returns, assets, capacity use; price factors; negative cash flow, inventory, employment, wages, growth, capital raising, and investment effects; development and production efforts, including derivative or more advanced products; and, in a part II proceeding, the dumping-margin size. It must consider them in the industry’s business cycle and distinctive competitive conditions. (iv) If producers transfer significant product internally for a downstream article and also sell significant amounts in the merchant market, and the transferred product does not enter that market and is the downstream article’s main material input, market share and financial factors must focus mainly on the merchant market. (D) For agricultural products, the Commission cannot find no injury or threat merely because the market price meets or exceeds the minimum support price, and it must consider added burdens on government income or price-support programs. (E)(i) For threat, it must consider information from the administering authority about the subsidy’s nature, especially whether it is an Article 3 or 6.1 Subsidies Agreement subsidy, and likely effects. (ii) No single required factor necessarily decides injury. (F)(i) For threat, it must consider: subsidy nature and likely import increases; unused or soon-added foreign capacity, considering other export markets; rapidly increasing import volume or penetration; entry prices likely to significantly depress or suppress domestic prices and increase import demand; inventories; ability to switch foreign facilities to this product; in a combined raw/processed agricultural investigation, product shifting likely to increase imports if only one of the two products receives an affirmative determination; negative domestic development and production effects; and other demonstrable adverse trends showing probable injury, whether or not imports are then occurring. (ii) It must consider these factors together to decide whether further dumped or subsidized imports are imminent and injury would occur without an order or suspension agreement. No factor alone decides, and the finding cannot rest on conjecture. (iii)(I) In a part II investigation, it must consider dumping in foreign markets shown by findings or antidumping remedies in other WTO-member markets against the same class or kind made or exported by the same party, and must request information from the foreign manufacturer, exporter, or United States importer. (II) “WTO member market” means a WTO member country’s market. (III) The European Communities count as a foreign country. (G)(i) For volume and price effects, subject to (ii), the Commission must combine imports from countries whose petitions were filed on the same day, investigations began on the same day, or a petition and investigation began on the same day, when the imports compete with each other and domestic like products. (ii) It must not combine imports: (I) after a preliminary negative administering-authority decision unless a later final affirmative decision occurs before the Commission’s final decision; (II) from a terminated investigation; (III) from a Caribbean Basin beneficiary country when deciding about that country, though it may combine that country with other such beneficiaries as (i) allows; or (IV) from a country with a pre-January 1, 1987 free-trade-area agreement, unless it finds injury or threat from that country. (iii) In a final combined determination, it uses the record from the first final investigation; parties in a later investigation may comment on a later final authority decision, which must be added with the comments to that later record. (iv) For a regional industry, combined assessment uses imports into the region or regions, and (iii) applies. (H) When practicable and subject to (G)(ii), for threat price and volume analysis the Commission may combine imports from countries meeting the same filing or initiation timing rules in (G)(i), if they compete with one another and domestic products. (I) It must consider whether post-petition changes in import volume, price effects, or impact result from the pending investigation; if so, it may give post-petition data less weight. (J) It cannot find no injury or threat merely because the industry is profitable or recently improved.

(8) “Subsidies Agreement” means the Agreement on Subsidies and Countervailing Measures referred to in section 3511(d)(12). “Agreement on Agriculture” means the agreement referred to in section 3511(d)(2).
(9) “Interested party” includes: (A) a foreign manufacturer, producer, exporter, United States importer, or qualifying trade association; (B) the government where the merchandise is made or exported; (C) a United States manufacturer, producer, or wholesaler of the domestic like product; (D) a certified or recognized union or worker group representing that industry; (E) a trade or business association whose majority makes, produces, or wholesales that product in the United States; (F) an association mainly made up of parties in (C), (D), or (E); and (G), in a processed-agricultural investigation, a representative coalition or trade association of processors, processors and producers, or processors and growers. (G) ends if the Trade Representative notifies the authority and Commission that it conflicts with United States international obligations.
(10) “Domestic like product” means a product like, or if none is like, most similar in characteristics and uses to, the article under investigation.
(11) If Commission votes are evenly split between affirmative and negative, the Commission is deemed affirmative, including in a section 1675 determination. For injury, threat, or delayed establishment, an affirmative vote on any issue counts as an affirmative determination.
(12) For part I, merchandise is treated as the product of the country where manufactured or produced, whether imported directly or indirectly, in the same condition or changed by remanufacture or otherwise.
(13) Repealed.
(14) “Sold or, in the absence of sales, offered for sale” means sold or offered: (A) to all purchasers in commercial quantities; or (B) in ordinary trade to selected purchasers in commercial quantities at a price fairly reflecting market value. Buyer restrictions on disposition or use are disregarded unless they affect market value, in which case the price is adjusted.
(15) “Ordinary course of trade” means conditions and practices normal for a reasonable time before export, for merchandise of the same class or kind. The authority must treat as outside it sales disregarded under section 1677b(b)(1), transactions disregarded under section 1677b(f)(2), and situations where a particular market situation prevents proper comparison with export or constructed export price.
(16) “Foreign like product” is the first category for which a satisfactory part II determination can be made: (A) identical physical merchandise made in the same country by the same person; (B) same-country, same-person merchandise like it in component materials and uses and approximately equal in commercial value; or (C) same-country, same-person, same general class or kind merchandise like it in uses and reasonably comparable as the authority determines.
(17) “Usual commercial quantities” are, when prices vary by quantity, the quantity sold at the price or prices whose combined volume is greater than the combined volume at any other quantity price.
(18) “Nonmarket economy country” is a foreign country the authority finds does not use market-based cost or pricing structures, so its sales do not show fair value. It must consider currency convertibility; freely bargained wages; permission for foreign joint ventures or investments; government ownership or control of production; government control of resource allocation and enterprise prices and output; and other appropriate factors. A designation remains until revoked, and may be made at any time. It cannot be judicially reviewed in a part II investigation. On request, the Customs and Border Protection Commissioner must give relevant public and proprietary information to the authority, which must protect proprietary information under section 1677f.
(19) In deciding whether a lease equals a sale, the authority must consider lease terms, industry practice, transaction circumstances, operational integration, likelihood of continuation or renewal for a significant time, and other relevant factors, including whether the lease could avoid antidumping or countervailing duties.
(20)(A) Government departments’ and agencies’ imports, including chapter 98 merchandise, are subject to countervailing or antidumping duties under this subtitle or section 1303 unless this paragraph says otherwise. (B) Department of Defense imports are exempt if acquired from a country covered by a January 1, 1988 memorandum of understanding that continued through a comparable or replacing agreement and the import follows the agreement in effect, or if the merchandise has no substantial nonmilitary use.
(21) “United States-Canada Agreement” means the United States-Canada Free-Trade Agreement. (22) “USMCA” has the meaning in section 4502.
(23) “Entry” may include an importer-initiated reconciliation^* entry under section 1401(s). Importer liability attaches to that entry. Suspending liquidation of it to enforce this subtitle equals suspension of the related individual entries, but does not prevent liquidation for another purpose.
(24) “Negligible imports.” (A)(i) Except as stated in (ii) and (iv), imports from a country are negligible if they are under 3% of all United States imports of the Commission-identified domestic like product during the latest available 12 months before the petition or, for a self-started investigation, before initiation. (ii) They are not negligible if same-day investigations involving all those countries together exceed 7%. (iii) The Commission excludes countries specified in (7)(G)(ii) when calculating that total. (iv) For threat, it must not treat imports as negligible if they may soon exceed 3%, or combined imports may soon exceed 7%; it considers them only for threat. (B) In a section 1671 investigation involving developing countries, use 4% instead of 3% and 9% instead of 7%. (C) The Commission may reasonably estimate volumes from available statistics. (D) For a regional industry, use merchandise exported for sale in the region, not all United States imports.
(25) “Subject merchandise” means the class or kind within an investigation, review, suspension agreement, order under this subtitle or section 1303, or 1921 Antidumping Act finding. (26) “Section 1303” and “1303” mean that section as it existed the day before title II of the Uruguay Round Agreements Act took effect. (27) “Suspension agreement” means an agreement described in sections 1671c(b), 1671c(c), 1673c(b), 1673c(c), or 1673c(l). (28) “Exporter or producer” means the exporter, the producer, or both when appropriate. For section 1677b, it includes both as needed to calculate accurately all costs, expenses, and profits connected with production and sale. (29) “WTO Agreement” means the agreement defined in section 3501(9). (30) “WTO member” and “WTO member country” mean a state or separate customs territory under Article XII of that agreement to which the United States applies it. (31) “GATT 1994” means the General Agreement on Tariffs and Trade annexed to the WTO Agreement. (32) “Trade Representative” means the United States Trade Representative.
(33) “Affiliated persons” are: (A) family members, including full- or half-blood siblings, spouses, ancestors, and lineal descendants; (B) an organization’s officer or director and the organization; (C) partners; (D) employer and employee; (E) a person owning, controlling, or holding voting power over at least 5% of an organization’s voting stock or shares and that organization; (F) persons controlling, controlled by, or under common control with another person; and (G) a person controlling another and that other person. Control means legal or operational ability to direct or restrain.
(34) “Dumped” and “dumping” mean selling or likely selling goods below fair value.
(35) “Dumping margin” is the amount by which normal value exceeds export price or constructed export price. “Weighted average dumping margin” is total margins for an exporter or producer divided by that party’s total export and constructed export prices. The Commission uses: (A) for a section 1673b(a) preliminary investigation determination, the margin published in the initiation notice; (B) for a section 1673d(b) final determination, the latest margin published before the record closes; (C) for a section 1675(b)(2) review, the latest margin under section 1675a(c)(3), if any, or under section 1673b(b) or 1673d(a); and (D) for a section 1675(c) review, the margin under section 1675a(c)(3).
(36) “Developing country” means one designated by the Trade Representative. “Least developed country” means one determined to be listed in Annex VII(a) of the Subsidies Agreement or another Annex VII country with per-capita gross national product under $1,000 per year using the latest World Bank data. The Trade Representative must publish and update a Federal Register list of developing countries that eliminated export subsidies on the expedited basis in Article 27.11 and countries determined to be least developed or developing. In deciding developing-country status, the Trade Representative considers appropriate economic, trade, and other factors, including economic development and per-capita GNP and the country’s share of world trade. The designation applies only to this subtitle and does not change status under another law.