The Retroactive Application of the Antidumping Act of 1921

Northwestern Journal of International Law & Business, Dec 1979

In 1921, the United States Congress enacted the Antidumping Act which provides for the imposition of dumping duties on imports sold to United States merchants at prices below their fair value. The Act permits the assessment of dumping duties retroactively on merchandise imported up to one hundred and twenty days before a complaint of dumping has been filed with the Commissioner of Customs. Mr. Johnson examines the retroactive provisions of the Act and its regulations, the case law surrounding those provisions, and the constitutionality of the provisions. Against this background, he concludes that the retroactive application of the Act, particularly with regard to the period prior to the withholding of appraisement, is not onlyunfair to importers and inconsistent with U.S. free trade policy, but also in violation of the due process and equalprotection clauses of the U. S. Constitution.

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The Retroactive Application of the Antidumping Act of 1921

Recommended Citation Thomas E. Johnson, The Retroactive Application of the Antidumping Act of The R etroactive Application of the Antidumping Act of 1921 as E. Johnson 0 1 0 This Article is brought to you for free and open access by Northwestern University School of Law Scholarly Commons. It has been accepted for inclusion in Northwestern Journal of International Law & Business by an authorized administrator of Northwestern University School of Law Scholarly Commons 1 Part of the Antitrust and Trade Regulation Commons, Constitutional Law Commons, International Trade Commons, and the Law and Economics Commons Follow this and additional works at: http://scholarlycommons.law.northwestern.edu/njilb - Thom / The Retroactive Application of the Antidumping Act of 1921 Thomas E. Johnson* In 1921, the United States Congress enacted the Antidumping Act which providesfor the imposition of dumping duties on imports sold to United States merchants atprices below theirfair value. The Act permits the assessment of dumping duties retroactivelyon merchandise importedup to one hundredand twenty days before a complaint of dumping has been filed with the Commissionerof Customs. Mr. Johnsonexamines the retroactiveprovisions of the Act and its regulations,the case law surroundingthose provisions, and the constitutionality of the provisions. Against this background,he concludes that the retroactiveapplicationof the Act, particularly with regardto theperiodpriorto the withholding ofappraisement,is not only unfairto importersand inconsistent with U.S.free tradepolicy, but also in violation of the dueprocessand equalprotectionclauses of the U.S. Constitution. Not until the last ten years has the Antidumping Act of 19211 been so thoroughly studied, applied, and criticized by any legal practitioner other than the customs specialist. Today the general corporate practitioner has found the application of provisions in the Act to be invaluable in accomplishing the goals of corporate clients who seek more sophisticated means to deter foreign competition. Complaints by American businessmen of violations under the Act tend to increase as American productivity drops, United States sensitivity to domestic profit margins increases, and the portion of the United States market controlled by foreign producers grows. 2 Because the Act permits a finding of dumping under a wide range of divergent facts and circumstances, 3 enforcement of the Act is susceptible to political and eco* Presently associated with Baker & McKenzie, Chicago, Illinois; member, Illinois Bar; B.S., Univ. of Utah; J.D., Northwestern University. 1 19 U.S.C. §§ 160-173 (1976). 2 "Customs in 1975 was investigating, administering, and monitoring approximately 75 cases. By July of this year (1978), the case load was up to 129 cases, a 72 percent increase." United States-Japan Trade Council, Council Report No. 44 (October 3, 1978) [hereinafter cited as Council Report No. 44]. See also note 10 infra. 3 See, e.g., 19 C.F.R. § 153.9 (1978) which provides that "reasonable allowances will be made Retroactive 4pplication of the Antidumping Act 1:262(1979) nomic influences not common to other laws. The sometimes haphazard enforcement of the Act has led U.S. trading partners to charge that the Act constitutes a substantial non-tariff barrier to trade with the United 4 States. The difficulties inherent in the interpretation and enforcement of the Act have been addressed by numerous commentators.5 While some improvements have been made, one area that remains in distress is the retroactive application of the Act. Within our own country, retroactivity is offensive to basic notions of fair play and due process as guaranteed by the United States Constitution.6 Outside of the United States, the application of the Act in a retroactive manner continually draws criticism from the world trading community.7 As United States courts have held on numerous occasions that dumping duties are remedial for the differences in quantities [of sale], including such differences in individual sales, f it is established to the satisfaction of the Secretary [of the Treasury] that the amount of any price differential is wholly or partly due to such differences." (Emphasis added). See also 19 C.F.R. § 153.10 (1978)(discretionary allowances for credit terms, guarantees, warranties, technical assistance, servicing, assumption by a seller of a purchaser's advertising or other selling costs, and commissions); id § 153.11 (allowances for differences in merchandise); id§ 153.15 (allowances for differences in level of trade); id § 153.16 (determination of fair value for sales at varying prices). 4 See, e.g., FIRST REPORT BY THE COMMITTEE ON ANTIDUMPING PRACTICES, 8th Supp., BISD 145, 11 19, 23 (1960); SECOND REPORT BY THE COMMITTEE ON ANTIDUMPING PRACTICES, 9th Supp. BISD 194, T 9 (1961); FOURTH REPORT BY THE COMMITTEE ON ANTIDUMPING PRACTICES, 19th Supp. BISD 15, 11 (1972); FIFTH REPORT BY THE COMMITTEE ON ANTI (...truncated)


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Thomas E. Johnson. The Retroactive Application of the Antidumping Act of 1921, Northwestern Journal of International Law & Business, 1979, Volume 1, Issue 1,