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U.S. Commerce Department Announces Preliminary Determination in the Countervailing Duty Investigations of OCTG from Russia, South Korea 

Council Member Buchanan, Ingersoll & Rooney provides insights on international trade issues specific to energy services and technology companies.

On March 9, the U.S. Department of Commerce announced its affirmative preliminary determination in the countervailing duty (CVD) investigations of oil country tubular goods (OCTG) from Russia. In a somewhat surprisingly development, Commerce preliminarily determined that OCTG from South Korea was not receiving countervailable subsidies. Accordingly, while imports of OCTG from Russia will soon be subject to cash deposit requirements, imports from Korea will not be subject to the same requirements. The products covered by the case include casing, tubing, and coupling stock of carbon and alloy steel used in oil and gas wells.

The case arises from petitions filed on October 6, 2021 alleging that OCTG from Argentina, Mexico, and Russia were being sold at dumped prices in the United States and also that OCTG from Korea and Russia were being subsidized by their home governments. Accordingly, it was alleged that these imports were injuring U.S. manufacturers of OCTG. On November 19, 2021, the U.S. International Trade Commission (ITC), an independent federal agency, determined there was a “reasonable indication of material injury” caused by these imports. Imports from all of the covered countries were valued at approximately $493 million and held 15.8% of U.S. market share in 2020.

Antidumping (AD) and countervailing duty cases proceed on parallel tracks before Commerce and the ITC. Commerce determines the extent of dumping and subsidization, while the ITC determines whether the imports are causing injury to the U.S. industry. These investigations proceed quickly: an industry seeking trade relief can benefit from AD/CVD duties imposed as soon as four months after initiation of an investigation, and the entire case is completed in about one year.

In its March 9 decision, Commerce assigned CVD rates of between 1.37% to 1.68% for the Russian producers, but separately determined that the Korean manufacturers had received only “de minimis” levels of subsidization. Commerce’s preliminary determination regarding the extent of dumping in the current trade case has been postponed until May 4.

The preliminary determination in regard to the extent of dumping by producers in Argentina, Mexico and Russia was expected last week on March 15. However, and as is normal in such cases, the petitioners in the domestic industry requested that the preliminary determination be extended “due to the size and complexity of the investigations, the extensions of time already granted by Commerce to respondents, and the amount of time needed for Commerce to conduct complete and thorough analyses in these investigations, including the issuance and review of additional supplemental questionnaires.”

Once Commerce has made its final determinations in regard to the extent (if any) of dumping and subsidization then the case will return to the ITC. It is the ITC, an independent, nonpartisan, quasi-judicial federal agency, that will ultimately determine whether the U.S. industry has been materially injured or is threatened with material injury by reason of the imports.

A final decision in the matter in not expected until approximately November 2022. If the ITC makes an affirmative injury determination, then a trade remedy order will be issued for a five-year period (although it is capable of being renewed for additional five-year periods through the “sunset review” mechanism).  If the ITC makes a negative determination of injury or threat of injury, then the case will be terminated, no order will be issued, and all cash deposits will be refunded to importers.

Council Member Daniel Pickard, Buchanan, Ingersoll & Rooney, works with U.S. manufacturing companies on the laws and regulations governing international trade, specifically import remedy, anti-bribery, national security, and export control issues. He has extensive experience in trade remedy investigations, including antidumping, countervailing duty, and safeguard cases, as well as related foreign policy and national security matters.


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