Subsidies and Countervailing Duties

Subsidies and Countervailing Duties

Capital Trade’s economic consultants assist law firms and companies in all phases of countervailing duty proceedings, from pre-petition assessment to countervailing duty order compliance monitoring and review. Our experience in U.S. countervailing duty cases is extensive, encompassing over one thirty different proceedings, involving dozens of different products from over ten countries. We also use our highly specialized skills in subsidy valuation in WTO subsidy disputes.

Defining the Parameters of an Investigation

Companies and law firms must address a number of technical issues in the early phase of every countervailing duty action. We assist clients in the analysis of these critical parameters, including:

  • Pre-petition subsidy research and assessment
  • Cost/benefit analysis of participation in a proceeding
  • Search for commercial benchmarks

Questionnaire Responses

One of the most difficult and critical elements of any countervailing duty proceeding is the preparation and/or analysis of government and company questionnaire responses. Government investigative agencies, such as the U.S. Department of Commerce, requires comprehensive data on grants, loans, tax incentives, input purchases, and other potential forms of government assistances.  Capital Trade has extensive experience in:

  • Analyzing questionnaire responses in order to determine potential critical issues that can be developed in the case
  • Research on information that may lead to new subsidy allegations based on information contained in initial questionnaire responses
  • On-site review of accounting records
  • Drafting narrative questionnaire responses and technical appendices
  • Coordinating the collection of data from multiple locations
  • Preparing data for submission to the Department of Commerce

Analyzing Commercial Benchmarks

Every countervailing duty proceeding requires the analysis and calculation of commercial benchmarks by which to assess the magnitude of potential subsidies.  Capital Trade has worked on numerous countervailing duty proceedings involving subsidy programs as diverse as low cost loans to government purchases at more than market value. We assist our clients by researching public information for potential commercial benchmark information, such as:

  • Various interest rates and other measurements of the cost of borrowing money, including creditworthiness analysis
  • World market prices for inputs
  • International freight and import taxes
  • Land prices
  • Capital asset prices

Verification and Public Hearings

On-site verification of submitted information is a standard part of countervailing duty investigations. For domestic industries, Capital Trade assists in providing key arguments for verification, based on information developed in the case (as described above).  For foreign companies and governments, Capital Trade assists in preparing for these arduous audits, and provides assessments of the ensuing official verification reports. In addition, we support law firms and companies in crafting technical arguments for briefs and other submissions. For companies facing verification, briefings or public hearings, Capital Trade can:

  • Provide technical arguments and analysis for briefs
  • Testify at public hearings
  • Meet with government officials
  • Prepare document traces
  • Represent clients at on-site verification

Strategic and Commercial Implication of Trade Actions

A company’s position on trade regulatory actions, such as countervailing duty proceedings, should be framed in conjunction with its overall business objectives. Capital Trade looks at how potential or actual trade actions can affect the whole enterprise, from domestic trade, global trade, and investment flows, to the day-to-day requirements of the MIS Department. We advise companies on:

  • Strategic risks and rewards associated with launching or participating in trade proceedings
  • Assessing the potential costs of trade cases, in terms of impact on sales and human resources.
  • Considering alternative business strategies

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