Under United States law, no anti-dumping duty order, countervailing duty order, or agreement to suspend an anti-dumping or countervailing duty investigation can remain effective for more than five years without being subject to a 'sunset review'. The Commerce Department and the International Trade Commission conduct such sunset reviews to determine whether revocation of an anti-dumping or countervailing duty order, or termination of a suspension agreement, would be likely to lead to continuation or recurrence of dumping or subsidization and material injury to the domestic industry. If both agencies find that dumping or subsidization and material injury are likely to continue if the order or suspension agreement are ended, then the order or suspension agreement will continue to be effective. If either agency finds that dumping or subsidization or material injury will not continue if the measure is revoked, then the order or suspension agreement will be officially terminated.

After an anti-dumping or countervailing duty order or a suspension agreement has been in effect for five years, both the Commerce Department and the Commission automatically initiate sunset reviews to determine whether these measures should be maintained. Under United States law, each agency is tasked with different responsibilities in sunset reviews; Commerce Department and Commission sunset reviews are separate proceedings. The Commerce Department's sunset review examines whether termination of the order or suspension agreement would be likely to lead to recurrence of dumping or subsidization and, if so, the dumping or countervailing duty margin that would likely result.

The Department notifies the Commission of the results of its sunset review. The Commission then determines whether termination of the order or suspension agreement on the subject merchandise would be likely to lead to continuation or recurrence of material injury to the United States industry. After the Commission notifies the Department of its decision to either continue or terminate an order or suspension agreement, the Department publishes an official determination that the order or suspension agreement has either been 'sunsetted' or will continue to be effective. The entire sunset review process, with decisions by both agencies, takes a little more than one year to complete. Orders or suspension agreements that are 'sunsetted' will automatically be subject to another sunset review five years from the publication of the Commerce Department's notice that the order or agreement continued to be effective.

The sunset review process results from changes to the WTO Anti-Dumping and Subsidies Agreements that were made in 1994 as a result of the Uruguay Round of multilateral negotiations. Before the changes to these agreements, United States law allowed anti-dumping and countervailing duty orders to remain in existence indefinitely. For example, the anti-dumping duty order on steel jack from Canada was imposed in September 1966 and was in effect until July 1998 when it was formally abolished as a result of the United States adopting a sunset review process. Another example is the anti-dumping duty order on colour televisions from Japan imposed in March 1971 that remained in effect until 1999 when it, too, was revoked as a result of the United States sunset review process.

The WTO Anti-Dumping and Subsidy Agreements contain specific provisions calling for the revocation of anti-dumping and countervailing duty orders after they have been in place for five years. Such orders may be continued after this five-year period only if 'sunset' reviews are initiated and if it is determined that revocation of the orders would be likely to lead to the continuation or recurrence of both dumping/subsidization and injury. This WTO provision is referred to as the 'sunset provision', and reviews conducted under it are called 'sunset reviews'.

Commerce Department responsibilities in sunset reviews

The Commerce Department has two responsibilities in sunset reviews. First, it must decide whether revocation of the countervailing or anti-dumping duty order or suspension agreement is likely to lead to recurrence of subsidization or dumping by the foreign government or exporters. Second, if the answer is yes, the Commerce Department must inform the Commission of what the countervailing or dumping margins would be if the orders were revoked or a suspension agreement cancelled.

In sunset reviews of anti-dumping orders or suspended anti-dumping investigations, the Commerce Department's analysis of whether dumping would be likely to continue or resume focuses on the weighted-average dumping margins calculated for companies in the investigations and administrative reviews. The levels of subject merchandise imports after the anti-dumping order is also an important consideration. The Commerce Department is likely to determine that revocation of an anti-dumping order will lead to continued or recurred dumping if it determines that either of the following three conditions exist:

- Dumping continued at any level above de minimis (defined as 0.5% or less) after the issuance of the anti-dumping duty order;

- Imports of the subject merchandise ceased after issuance of the order; or

- Dumping was eliminated after the issuance of the order or suspension agreement, and import volumes declined.

Under the Commerce Department's approach, if any of these three factors are present, there is a presumption that the foreign exporters are not able to ship merchandise to the United States without dumping. In short, rather than undertaking a serious analysis, the Commerce Department simply relies on these three presumptions to justify a decision to continue orders under the argument that dumping is likely to resume.

If the Commerce Department determines that the order should continue, it will provide the Commission with an estimated margin of dumping that would result if the order or suspension agreement were terminated. Normally, for individual companies, the Commerce Department uses the anti-dumping or countervailing duty margin established for the company in the investigation as the estimate of the margin that would result if an order were revoked or a suspension agreement terminated. If the company did not participate in the original investigation, however, the Commerce Department usually relies on the all-others rate calculated in the investigation. Although these 'sunset review' dumping margins may inform the Commission of possible outcomes if an order or suspension agreement are sunsetted, they basically serve only as a rationale for the Commerce Department to endorse a continuation of the order or suspension agreement. These estimated 'sunset review' margins do not affect the companies' cash deposit rates and otherwise have no significance to the respondents.

The Commerce Department's role in sunset reviews of countervailing duty proceedings is similar to its role in anti-dumping proceedings.

In initiating sunset reviews of both anti-dumping and countervailing duty orders, the Commerce Department's practice has been to notify interested parties of upcoming sunset reviews by mail. Specifically, the Commerce Department has sent the approximate date on which sunset reviews will be initiated to all persons on the service list for any proceeding that is subject to the sunset review. However, the Commerce Department officially announced on 3 May 2005 that it will no longer follow this practice. Instead, starting with sunset reviews initiated in June 2005, the Commerce Department will provide interested parties with advance notice of upcoming sunset reviews by publishing these in monthly Federal Register notices. The Commerce Department will publish the notice for an upcoming sunset review in the month prior to the month in which the sunset review is initiated.

Commission responsibilities in sunset reviews

The Commission examines whether revocation of the anti-dumping order would be likely to lead to continuation or recurrence of material injury. Unlike the Commerce Department sunset review, the Commission takes its sunset analysis seriously. In cases in which both sides participate, the Commission undertakes a fresh examination of whether the anti-dumping order needs to be continued. The sunset law requires the Commission to:

- Determine which product manufactured in the United States is 'like' the

imported product under review;

- Define the composition of the relevant domestic industry producing the product 'like' the imported product under review; and

- Determine whether that domestic industry is materially injured by reason of

the imports under investigation.

In making this determination, the Commission examines 'the likely volume, price effect, and impact of imports of the subject merchandise on the industry if the order is revoked'.

Source: Business Guide to Trade Remedies in the United States: Anti-dumping, countervailing and safeguards legislation practices and procedures