The Retroactive Application of the Antidumping Act of 1921
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
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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.
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
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
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 ANTIDUMPING
and not punitive, 8 it is anomalous in the extreme for the United States
to apply such duties retroactively. A plenary analysis of the U.S. law
and practice in this regard is warranted.
THE RETROACTIVE PROVISION AND ITS APPLICATION
The Act provides in Section 202(a): 9
In the case of all imported merchandise, whether dutiable or free of duty,
of a class or kind as to which the Secretary of the Treasury has made
public a finding [of dumping] as provided for in Section 160 of this Title,
entered, or withdrawn from warehouse, for consumption, not more than
one hundred and twenty days before the question of dumping was raised
or presented to the Secretary or to any person to whom authority under
said section has been delegated, and as to which no appraisement has
been made before such finding has been made public, if the purchase
price or exporter's sales price is less than the foreign market value (or, in
the absence of such value, than the constructed value) there shall be
levied, collected, and paid, in addition to any other duties imposed thereon
by law, a special dumping duty in an amount equal to such difference.
This section permits the assessment of dumping duties
retroactively on merchandise imported up to one hundred and twenty days
before a complaint of dumping is filed with the Commissioner of
Customs. Arguably, of course, an importer should not be required to pay
dumping duties on any imports before the date of an actual finding of
dumping. To do so is to assume the conclusion, 1e., that the
defendantimporter is guilty until proven innocent. Statistically, the number of
dumping findings actually made compared with the number of
complaints filed is so small that the probability that a dumping finding will
ever be made is very insubstantial.'0 Nevertheless, the fairness of the
assessment of dumping duties on importations prior to the date of the
dumping finding is related to the period during which they are
There are three distinct time periods encompassed by the
retroactive application of the Act:
8 C.J. Tower & Sons v. United States, 71 F.2d 438, 446 (C.C.P.A. 1934); Imbert Imports, Inc.
v. United States, 331 F. Supp. 1400 (Cust. Ct. 1971). Cf Amtorg Trading Corp. v. United States,
71 F.2d 524, 531 (C.C.P.A. 1934) (discussing the Antidumping Act and citing the holding of CJ
Tower & Sons with approval).
9 19 U.S.C. § 161 (1976).
10 Between 1955 and September 1978, only thirteen percent of the antidumping investigations
initiated resulted in a finding of dumping. Interview with Director of the Planning Branch, Duty
Assessment Division, United States Customs Service [hereinafter cited as Director's Interview].
Most of the investigations were terminated by determinations that there had been no sales at less
than fair value or that there had been no injury. Id. Another sixteen percent were terminated by
price revisions and assurances upon the part of the foreign producer resulting in a discontinuance
of the antidumping investigation. Id A year-by-year tabulation follows:
the period prior to the filing of the complaint;
the period between the filing of the complaint and the
withholding of appraisement; and
the period between the withholding of appraisement and the
finding of dumping.
Before discussing the propriety of the assessment of dumping duties in
each of these time periods, it is helpful to briefly review the procedural
course of a dumping investigation.
PROCEDURAL COURSE OF A DUMPING INVESTIGATION
The Act and the Regulations thereunder provide that a complaint
of dumping may be initiated by a Customs officer or by any person
outside of the Customs Service." Upon receipt of such a complaint,
the Commissioner of Customs conducts a "preliminary
To the left of the "Year" column, the "highs" and "lows" of the leading economic indicators of
the domestic business cycle are noted. See U.S. D0eT. OF COMMERCE, BUSINESS CONDITIONS
DIGEST I1 (Oct. 1977). It appears that dumping complaints peak about one or two years after the
business cycle hits its "low." Id
11 19 C.F.R. §§ 153.25-153.26 (1977).
tion. 12 If the Commissioner determines that the information is
erroneous, or that merchandise of the class or kind is not being and is not
likely to be imported in more than insignificant quantities, or for other
reasons determines that further investigation is not warranted, he shall so
advise the person who submitted the information and the case shall be
If the case is not closed, however, the Secretary will publish an
"Antidumping Proceeding Notice" in the FederalRegister.'4 Thereupon,
the Commissioner will proceed with a "full-scale" investigation.15 The
Commissioner "will, where appropriate," conduct an investigation of
the foreign market value and "ordinarily" will require the foreign
manufacturer, producer, or exporter to submit pricing information. 16 In
addition, the Commissioner may entertain comments by "interested
persons."' 17 If an adequate investigation is not permitted by, or if any
information deemed necessary is withheld by, the foreign manufacturer
or exporter, the Secretary will make a decision based upon the
information available to him. 18
At the conclusion of this investigation, if the Secretary determines
that there is reason to believe or suspect that the purchase price is less, or
that the exporter's sales price is less, or is likely to be less than the fair
value of such or similar merchandise, and if there is evidence on record
concerning injury or likelihood of injury to or prevention of
establishment of an industry in the United States,
he must publish a "Withholding of Appraisement Notice" in the
FederalRegister and an affirmative "Determination of Sales at Less Than
Fair Value."19 Upon publication of the "Withholding of Appraisement
Notice," the District Director of Customs at each of the ports must
withhold appraisement "as to merchandise entered, or withdrawn from
warehouse, for consumption, on or after the date of publication of the
'Withholding of Appraisement Notice,' unless the Secretary's
'Withholding of Appraisement Notice' specifies a different effective date"
and "shall notify the importer, consignee or agent immediately of each
lot of merchandise with respect to which appraisement is so
withheld. ' 20 The notice must indicate (1) the rate of duty of the
merchandise under the applicable item of the Tariff Schedules of the United
States if known, and (2) the estimated margin of the special dumping
duty that could be assessed.2'
After the publication of the "Withholding of Appraisement
Notice," interested persons may make written submissions to the
Commissioner of Customs and request the opportunity for an oral presentation
of their views.22 When the Secretary makes the "Determination of
Sales at Less Than Fair Value" the matter is referred to the United
States International Trade Commission (ITC) for a determination of
injury.23 Any interested party may submit a written statement of
information pertinent to the subject matter of any injury investigation. 24
Public hearings may also be held at which interested parties may
appear and present their views. 25 If the ITC determines that "an industry
in the United States is being or is likely to be injured, or is prevented
from being established, by reason of the importation of such
merchandise into the United States," the determination is published in the
Federal Register, and the Secretary of the Treasury is notified of the
decision. 26 The Secretary of the Treasury accordingly enters a finding
of dumping which is published in the FederalRegister.27 Thereafter,
upon completion of of the appraisement process and the liquidation of
the entries, the district directors at the ports must notify the importer,
consignee, or agent of the increase in duties and will require the
importer to file a statement certifying whether or not he will be
reimbursed by the exporter, manufacturer, producer, or seller for the
dumping duties which will be assessed. 28
THE PERIOD BETWEEN THE WITHHOLDING OF APPRAISEMENT AND
THE FINDING OF DUMPING
The rationale for imposing dumping duties prior to the actual
finding of dumping is strongest during the period between the
withholding of appraisement and the finding of dumping. After the
Secretary of the Treasury publishes the "Withholding of Appraisement
Notice," the importer is on notice that the Secretary has determined
that there are reasonable grounds to suspect sales of imported
merchandise at less than fair value and that evidence exists of injury or
likelihood of injury to, or of prevention of, the establishment of an
industry of the United States. Although at this point the plenary injury
determination has not yet been made by the ITC, the importer has been
made aware of his potential liability and of the estimated dumping
margins. With this knowledge, he is capable of making the business
decision of whether to continue to import the merchandise, to negotiate
price revisions, or to discontinue importation of the merchandise. If he
chooses to continue importing at that price, he does so at his own risk.
In the event that a dumping finding is actually made, "retroactive"
assessments on importations made after the notification to the importer
are, therefore, not without justification.29
THE PERIOD BETWEEN THE FILING OF THE COMPLAINT AND THE
WITHHOLDING OF APPRAISEMENT
The justification for retroactive imposition of dumping duties
diminishes as to merchandise imported before the Secretary publishes a
"Withholding of Appraisement Notice."'30 Although a preliminary and
perhaps full-scale investigation will be underway, there is no reason to
assume at this point that the Customs Service will reach an affirmative
conclusion. Indeed, the ease with which disgruntled competitors may
file a colorable dumping complaint, the rights of the importer and
exporter to oppose it, the uncertainty of the results of the foreign value
investigation, and the high statistical probability in favor of a negative
finding all dictate that it would be an unjustifiable restriction upon the
importer to require him to suspend his importations during this period.
Even after the complaint has been filed, it may be some time before the
29 THE FIRST REPORT OF THE GROUP OF EXPERTS, note 4 supra, at 19, 23. The Report
recognized that, under the International Antidumping Code, antidumping duties could be levied
against merchandise subject to "provisional measures." Id. However, it stressed that "it was
desirable that such provisional measures should not be of retroactive application and that they should
preferably take the form of bond or cash deposits .. ." Id Further, it stressed that "provisional
measures should be used sparingly and for the shortest possible time in order to interfere as little
as possible with normal trade and in order that they should not assume a protectionist character."
Id However, even the conclusion in the text is not accurate where, as in the television
antidumping case, the Treasury Department departs from its usual method of appraisement after the
merchandise is already imported. Some televisions manufactured by Sony Corporation, Mitsubishi
Electric Corporation, and Sharp Corporation which had previously been free of dumping duties
became theoretically subject to duties by the application of the commodity tax formula method of
estimating foreign market value. See Council Report No. 44, supra note 2. Electronic Industries
Assn. of Japan, An Open Letter to the U.S. Congresson Dumping andthe Cost of T 1 Sets, N.Y.
Times, Feb. 6, 1979, § A, at 10-11.
30 As to merchandise imported before the dumping complaint is filed, the justification for the
application of retroactive dumping duties is even less tenable. See notes 34-45 and accompanying
importer becomes aware of the dumping investigation. 3 ' Moreover,
even if the importer believes the complaint is legitimate, a further
period of time may pass before he can arrange his business affairs to stop
shipments or negotiate price revisions.
Nevertheless, under present law and practice the importer may be
liable for duties assessed retroactively on importations within this
period.32 The only rationale which could justify these assessments would
be the Commissioner's decision to conduct a full-scale investigation
based upon the results of the preliminary inquiry; however, the
standards which must be met before a full-scale investigation may proceed
are so minimal that no importer should-be required to curtail his
imports based upon a mere decision by the Commissioner to undertake
such an investigation.3 3
THE PERIOD PRIOR TO THE FILING OF THE COMPLAINT
During the period after the complaint has been filed, it may be
argued that the fact that someone has complained about dumping may
have come to the importer's attention, and therefore, he should have
discontinued his importations. No such argument can be made as to
importations made prior to the filing of the complaint. However, under
present law and practice, importations made up to 120 days prior to the
filing of the complaint which remain unappraised for any reason on the
date of the dumping finding are subject to the duty.34
Several reasons have been advanced to justify the retroactive
imposition of dumping duties. It has been argued that the retroactive
imposition of these duties "may act as a warning that will deter future
dumping. '35 Assuming that a particular exporter is contacted by a U.S.
Customs representative requesting foreign market value information,
this reasoning applies with some force after that contact and with even
more force after the withholding of appraisement. It cannot apply
prior to that time, for neither the exporter nor the importer would have
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received notice of the potential dumping complaint. Therefore, the
eventual imposition of dumping duties during this period would have
come too late to "deter" any conduct on the part of either. Indeed,
since the importer is liable for the duty, the exporter would never be
deterred at all. 36
Another argument runs: "since duties will not be imposed unless
dumped imports have already caused injury or threatened injury,
further injury will surely result if dumped, but as yet unappraised, imports
are allowed to enter without paying dumping duties."' 37 Proponents of
this argument fail to realize that the importer, the party upon which the
duty is imposed, can take no action until after the filing of the
complaint to curb his imports. The underlying rationale for this argument
appears to be based more on heaping penal duties upon the importer
rather than on stopping the flow of the offending merchandise. 38
Finally, commentators have also argued that retroactivity is
needed to prevent "hit-and-run" or "spot" dumping from escaping
dumping duties. 39Aside from the conclusion which most economists
have drawn that "spot" dumping causes no injury to domestic industry
and actually results in a net economic benefit to the consumer,40 there
is little objective evidence to indicate that foreign producers can
sufficiently control their production in relation to their domestic demand
and negotiate sales with U.S. buyers with sufficient alacrity to "spot"
dump their excess production in U.S. markets.4 ' Assuming that it was
possible, one question which would still remain is whether the Act
should err on the side of the imposition of duties on a single U.S.
importer or on the side of an occasional loss of sales absorbed by the
entire U.S. industry.
The unarticulated justification for retroactivity appears to rest on
the assumption that the importer should know at the time he purchases
a foreign product that the price he has paid is a dumping price.
Simi36 This last argument fails, of course, if the exporter has agreed to reimburse the importer for
any dumping duties. Such agreements are not permitted on entries made after the date of
withholding of appraisement. 19 C.F.R. § 153.49 (1977). See note 28 and accompanying text supra.
37 Conner & Buschlinger, supra note 35, at 131.
38 It is also incorrect to assume that the American importer merely "passes on" the increased
duty to his customers. Aside from the fact that the importer may have stopped importing the
merchandise long before the dumping finding is entered, the American importer's ability to pass
along the duties is limited by the elasticity of demand for the merchandise and the terms of the
contract with his buyer.
39 Conner & Buschlinger, supranote 35, at 132.
40 McFadyean, INTERNATIONAL TRADE: COOPERATIVE OR COMPETITIVE 44-52 (C. Peters ed.
1946); J. VINER, DUMPING: A PROBLEM IN INTERNATIONAL TRADE 245 (1966).
larly, related exporters and importers are presumed to know that the
price demanded by the foreign exporter is a dumping price.4 2 These
are unrealistic assumptions. Most importers are small and
unsophisticated. 43 They are incapable of forecasting the allowances which the
U.S. Customs Service could eventually grant for the differences in
circumstances of sale, In addition, the ordinary importer does not have
the economic leverage necessary to extract a "dumping" price and lacks
the ability to verify the price in the foreign market. Moreover, the
importer should be able to rely on the sworn declarations of foreign
market value and non-dumping contained in the Special Customs Invoice
signed by the exporter.44 In return, the exporter should be able to rely
on the need to make these declarations to prevent an economically
powerful buyer from seeking a "dumping" price.
As the Act is now enforced, the United States imposes dumping
duties on U.S. importers even though the foreign seller is often the only
party which can ascertain the foreign market value. The only logical
rationale appears to be the inability of the United States to obtain
jurisdiction over the foreign sellers.4 5 As a result, the Act, as applied,
presumes a conspiracy on the part of the exporter and importer or
presumes bad faith in price bargaining on the part of the importer.
42 See Coudert, The Application ofthe UnitedStatesAntidumpingLaw in the Light ofa Liberal
Trade Policy, 65 COLUM. L. REv. 189, 198 (1965).
43 According to data compiled by the U.S. Customs Service, in fiscal year 1975 there were
116,234 importers of record in the United States. Director's Interview, note 10 supra. Of these,
84,783 or 73% were "one-time shippers," ie., they entered only one shipment of goods during the
year. Id Another 27,009 importers or 23% entered between 2 and 99 entries that year. Id
Another 2,900 importers entered between 100 and 249 entries that year. Id Another 990 importers
entered between 250 and 499 entries that year. Id Another 387 importers entered between 500
and 999 entries that year. Id And, 174 importers made over 1,000 entries during the year. Id
Additionally, this data shows that 83% of all importations made were under $10,000 in value. Id
44 United States Customs Form 5515, §§ IV, V, Question 9 (1978). An interesting but
unlitigated question exists as to whether litigation to collect damages by the importer against the
exporter for breach of this "warranty" would be a reimbursement of dumping duties under the
Customs Regulations. Cf. 19 C.F.R. § 153.49 (1978) (a refund of dumping duties by the exporter
to the importer will only result in an increase in the dumping duties assessed in the amount of the
refund unless the refund relates to merchandise purchased before the withholding of appraisement
and exported before a determination of sales at less than fair value is made.)
45 HearingOn the InternationalAntidumpingCode Before the Senate Comm. on Finance,90th
Cong., 2d Sess. 1 (1968) (statement of Senator Russell B. Long). Senator Long stated:
The Antidumping Act is one feature of a body of unfair trade laws that this Nation has
provided to prevent foreign merchandise and foreign merchants from victimizing American
industry. It is designed to protect against the rankest kind of commercial injustice-price
discrimination by foreign competitors who are immune to prosecution under the laws of this
country. The Antidumping Act operates directly against the offending goods as they come
into this country, since we are unable to act against the offender himself.
In 1947, the United States became a contracting party to the
General Agreement on Tariffs and Trade (GATT).4 6 The purpose of the
Agreement was to reduce the number of tariffs and other trade barriers
which impeded free trade among the contracting nations.47 Eventually,
the contracting parties were able to agree that a substantial non-tariff
trade barrier was the discriminatory and politically motivated
administration of national dumping legislation. Their agreement to eliminate
this barrier became Article VI of GATT, also known as the
While the Code dealt with the substantive and procedural aspects
of dumping, Article II specifically dealt with retroactivity. 49
this Article provides that antidumping duties shall only be imposed on
merchandise entered after the date of the dumping finding unless:
provisional measures have been applied, e.g., withholding of
appraisement, in which case duties may be assessed for the
pe46 Oct. 30, 1947, 61 Stat. 1103, T.I.A.S. No. 1700, 55 U.N.T.S. 194.
48 [19681 19 U.S.T. 4348, T.I.A.S. No. 6431 [hereinafter cited as Code].
49 Article II reads:
Anti-dumping duties and provisional measures shall only be applied to products which enter
for consumption after the time when the decision taken under Articles 8(a) and 10(a),
respectively, enters into force, except that in cases:
(i) Where a determination of material (injury but not of a threat of material injury, or
a material retardation of the establishment of an industry) is made or where the
provisional measures consist of provisional duties and the dumped imports carried
out during the absence of these provisional measures, have caused material injury,
anti-dumping duties may be levied retroactively for the period for which
provisional measures, if any, have been applied.
If the anti-dumping duty fixed in the final decision is higher than the provisionally
paid duty, the difference shall not be collected. If the duty fixed in the final
decision is lower than the provisionally paid duty or the amount estimated for the
purpose of the security, the difference shall be reimbursed or the duty recalculated,
as the case may be.
Where appraisement is suspended for the product in question for reasons which
arose before the initiation of the dumping case and which are unrelated to the
question of dumping, retroactive assessment of anti-dumping duties may extend
back to a period not more than 120 days before the submission of the complaint.
Where for the dumped product in question the authorities determine
(a) either that there is a history of dumping which caused material injury or that
the importer was, or should have been, aware that the exporter practices
dumping and that such dumping would cause material injury, and
(b) that the material injury is caused by sporadic dumping (massive dumped
imports of a product in a relatively short period) to such an extent that, in order
to preclude its recurring, it appears necessary to assess an anti-dumping duty
retroactively on those import.
the duty may be assessed on products which were entered for consumption not more than 90
days prior to the date of application of provisional measures. 1d.
,Retroactive Application of the Antidumping Act
riod of application of the provisional measure;50
(2) appraisement is suspended for reasons which are unrelated to
dumping and which arose before the dumping complaint was
filed, in which case duties may be assessed for a period of up to
120 days before the filing of the complaint;5 or
(3) the exporter has a history of sporadic dumping which has
caused material injury, or the importer should have been aware
that the exporter was sporadically dumping and causing
material injury.52 Under these circumstances, duties may be
assessed for a period of up to 90 days before the application of
provisional measures.5 3
Subsequent history indicates that the other contracting parties to
the Code were opposed to all forms of retroactivity and were
particularly critical of the long period of time required to complete a dumping
investigation in the United States.54 In exacerbation of the lengthy
investigations, the United States commonly imposed withholding of
appraisement during this period of time,5 5 which effectively destroyed
imports of the articles under investigation and increased retroactivity.
This was unjustifiable in light of the small number of investigations
which eventually resulted in a finding of dumping.5 6 The contracting
parties resolved the issue in part by including a provision in the Code
which permits the imposition of dumping duties on goods subject to
provisional measures.5 7 In return, the United States agreed to
provisions5s which (1) require some evidence of injury before the application
of provisional measures, and (2) place a time limit upon the length of
investigations. The United States successfully insisted upon retaining
its practice of 120 days of pre-complaint retroactivity on unappraised
entries for no apparent reason other than the Treasury Department's
own backlog and inefficiency.5 9 In addition, the parties agreed to
permit retroactivity for 90 days prior to the imposition of provisional
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measures where the importer knew or should have known that the
exporter was a recidivist. 60
The fact that the other contracting parties were never satisfied with
this compromise is revealed in the minutes of the Committee on
Antidumping Practices, which meets annually to discuss current issues. 6 1
Attacks have repeatedly been made upon the U.S. for retroactive
application of duties and other violations of the Code. 62
The other contracting parties soon implemented the Code in their
national legislation and complied with its requirements. With the
exception of Japan, whose legislation was modeled on U.S. law, the
author has been unable to find a single example of national legislation,
either before or after the enactment of the Code, permitting any
retroactivity prior to the application of provisional measures. 63 The U.S.
response to the Code, however, was the Renegotiations Amendments
Act of 1968,64 which stated that, in the event of conflict between the
Code and the Act, the Act would supersede the Code, viz., the U.S.
would continue its former practice with regard to retroactivity in any
event. All of this might be justified if the United States could advance
cogent arguments for maintaining its position. Unfortunately, it has
continued to indicate in substance that it is not very important
JUDICIAL INTERPRETATION OF THE RETROACTIVE PROVISION
The earliest version of the Antidumping Act 66 did not specifically
address the issue of retroactivity. The Act merely provided that the
Customs officer could unilaterally withhold appraisement where he
suspected dumping. 67 Dumping duties were imposed on unappraised
merchandise as of the date of the dumping finding.68 Retroactivity was
involved in the appraisement process, since prior to the withholding of
appraisement most entries were not liquidated.69
However, one of the first challenges to be made by an importer to
the retroactive application of the Act was raised in Kleberg & Co. v.
United States.70 The importer in Kleberg had argued that any
retroactivity prior to the actual finding of dumping was contrary to the Act.
The court rejected the contention, stating:
It is argued that the Secretary's order could not be retroactive and be
made to apply to goods entered several months before the order was
issued. However, papers disclose that the appraisement was held in
abeyance by the local appraiser upon this entry until after the Secretary's
order was promulgated, in accordance with the provision of said Section
201(b), 19 U.S.C.A. § 160(b). The goods were imported subject to the
pthroerveisbiyo.n7s' of said Act, and the importer's rights must be measured
Kleberg may be read to stand for two propositions: (1) the imposition
of dumping duties on goods entered prior to the dumping finding is not
per se contrary to the Act; and (2) goods which have not been
appraised in accordancewith Section 201(b) ofthe Act may be subjected to
dumping duties. The case did not decide the validity of the imposition
of dumping duties upon unappraised goods where the appraisement is
withheld for reasons other than those listed in Section 201(b) of the
The court in Kleberg attempted to justify its decision by explaining
that "the goods were imported subject to the provisions of said Act."'7 3
This in effect requires an importer to accept any assessment or
imposition by the Customs Service even though a reading of the statute would
not have reasonably led him to suspect that such a result would occur.
In short, the court imposed the then accepted strict liability standard of
business tort causation rather than the now widely accepted reasonably
forseeable consequences standard.74
In the second case dealing with the issue of retroactivity, the court
in Kreutz v. Durning75 stated:
Finally, we can see no grievance in the supposed retroactive feature of the
act. It is quite true that an importer brings goods into the United States at
69 Director's Interview, note 10 supra Most entries were liquidated within one year. Id
70 71 F.2d 332 (C.C.P.A. 1933).
71 Id at 335.
72 Appraisement was withheld in Kleberg because the appraising officer suspected dumping.
71 F.2d at 334. The court did not imply that the same rationale would apply where the
appraisement was withheld for reasons unrelated to suspected dumping, e.g., a value investigation or
administrative backlog. Id Accord, Section 201(b).
73 71 F.2d at 335.
74 See generallyW. PROSSER, LAW OF ToRTs §§ 41-44 (4th ed. 1971).
75 69 F.2d 802 (2d Cir. 1934).
his peril, that it may be found that he has been "dumping"; and that the
decision will follow the importation. All decisions in that sense are
retroactive; but the constitutive factors on which the duty is reckoned are
expressly referred to the time of exportation. That the importer may not
them is nothing; he obviouslywtailkl edsishciosvcehra nthceems. ,76or choose to act upon
know whether the Secretary
The court's distrust of the importer and its open hostility to the
importation of foreign goods is clearly evident in the language of the
decision.77 Retroactivity should only be applied where the importer is
adequately apprised of the legal consequences which may flow from a
contemplated course of action.78 The mere fact that the importer has
purchased the goods prior to the date of importation has no bearing on
the issue of whether he can reasonably be assumed to have had
knowledge (1) of the foreign market value on the date of purchase or
exportation; (2) that the representations of the seller-exporter sworn to in the
Special Customs Invoice as to foreign market value and non-dumping
are false; and (3) that somewhere a disgruntled competitor might file a
dumping complaint which will lead to the imposition of duties on
goods purchased and imported months before, if they remain
unappraised for any reason on the date of the dumping finding.
With the exponential expansion of trade in the post-World War II
era, the Customs Service soon had a backlog of entries which remained
unappraised for varying reasons. 79 As a result, when a dumping
finding was eventually entered, Customs had many unappraised entries to
which duties applied even though they may have been imported long
before the filing of the dumping complaint. Under the Customs
Simplification Act of 1954,80 it was proposed that this retroactivity be
eliminated.8' Instead, the present Section 202(a), 82 which limits the
retroactivity to 120 days, was enacted. There is nothing in the
legislative history of the Act to explain why the 120-day period was chosen or
even why any retroactivity was necessary. 83 Subsequently, however,
John D. Rode, then-vice president of the Association of the Customs
Bar, during hearings on the Act observed that "there is nothing
sacrosanct about the period of 120 days."' 84 The Customs Service, however,
has continued to rely upon this enactment as a Congressional stamp of
approval for retroactivity. 5
At least one judge has expressed serious reservations about the
validity of the conclusions of Kreutz v. Durning. In Horton v.
Humphrey,86 the court stated:
Plaintiffs urge two constitutional contentions. The first is that the effect of
the Act is retroactive in that the dumping duty may be imposed on goods
imported up to 120 days prior to the time the question of the dumping
was first raised by or presented to the Secretary of Treasury, and in that
the time when the question is first raised or presented to the Secretary of
the Treasury may itself be substantially before the importer first hears of
the proceeding or of the possibility of an additional duty being imposed.
This, they say, deprives plaintiffs of their property without due
process. . . . In the instant case the complaint asserts that the tax will be
applied to importations starting on April 21, 1954, and that there was no
notice to plaintiffs that would warn them of risks of liability for the duty
until mid-summer 1955. Taking these allegations at face value the
hardship is apparent. . .. The Government argues that the risk of liability
for additional duties appears from the face of the Antidumping Act itself.
This seems rather unrealistic in the light of the fact that importers must
usually fix prices and sell their goods as promptly as they can and in the
light of plaintiffs' contention that as a practical matter they cannot keep
track of the price at which the imported items are being sold abroad.
However, in Kreutz v. Durning ... . the Second Circuit sustained the
statute in spite of the retroactivity problems. And certainly any alleged
retroactivity beyond the 120-day period could be raised in the Customs
tChoautrstt,aatustowreyllpaesritohde.8q7uestion of the validity of any retroactivity during
The district court did not decide the constitutional issue, however,
holding that it had no jurisdiction over the case since it belonged in the
Timken Co. v. Simon8 9 is the most recent case dealing with the
question of retroactivity. The court of appeals in Timken held that the
Secretary of the Treasury does not have the discretion to eliminate
dumping duties on entries imported after the date of the notice of
withholding of appraisement. 90
However, the court did not have to decide
84 Hearingon HR. 6006, 6007, and5120 Before the House Committee on Ways andMeans,
86 146 F. Supp. 819 (D.D.C. 1956), aFdpercuriam, 352 U.S. 921 (1956).
87 Id at 820.
88 Id at 821.
89 539 F.2d 221 (D.C. Cir. 1976).
90 Id at 231.
whether assessments on importations prior to the date of notice of
withholding would be subject to assessment, as it appears there were none
which were still unappraised on the date of the finding of dumping. 9'
After the decisions were rendered in Kleberg and Kreutz, Section
201 of the Act 92 and its regulations 9 3 were amended. Customs officers
are no longer permitted to withhold appraisement unilaterally 4 They
must await authorization by the Commissioner of Customs. 95
Section 201 of the Act as presently amended provides that
appraisement will be withheld for merchandise entered after the date of
publication of the "Withholding of Appraisement Notice" or "such
earlier date, not more than one hundred and twenty days before the
date [of the complaint], as the Secretary may prescribe [by
regulation]."'96 The regulations issued pursuant to this Section now provide
that the effective date of the withholding of appraisement shall be "the
date of publication of the Withholding of Appraisement Notice unless
the Secretary's [notice] specifies a different effective date. '97
Thus, in theory, the amended statutory and regulatory language
appears to indicate that retroactivity will not normally be imposed
earlier than the date of withholding of appraisement. In practice,
however, the U.S. Customs Department has continued to assess dumping
duties one hundred and twenty days before the filing of the complaint
on any unappraised entries pursuant to its authority under Section
202(a). 98 This practice is followed even where the "Withholding of
Appraisement Notice" does not provide for such retroactivity. 99
Furthermore, except for the recidivist regulations, 00 the Act provides no
standards for the Secretary to follow in deciding whether to issue a
"Withholding of Appraisement Notice" effective for an earlier date.
CONSTITUTIONAL OBJECTIONS TO RETROACTIVITY
The Act's retroactive provisions raise serious constitutional
questions. As the Act is presently applied, the retroactive provisions offend
due process and equal protection of the law.
Due Process of Law
Due process of law with regard to federal legislation is guaranteed
to U.S. citizens by the fifth amendment to the United States
Constitution. 0 1 The retroactive application of the Act violates due process by
failing to provide the importer with adequate notice of what acts are
prohibited. Adequate notice would give the importer the opportunity
to correct his conduct should he wish to avoid the imposition of
dumping duties. Such notice would adhere to the concept of "fair warning"
which has developed under the due process clause.
Generally, the "fair warning" concept has been applied in the
context of void-for-vagueness analysis of criminal statutes. 10 2 However,
the courts have recognized that the principles involved in the concept
are equally applicable in civil liability situations. 10 3
The concept of "fair warning" is much broader than the
constitutional test for vagueness.'0 4 Even if a statute is clear in defining what
conduct is prohibited, it is still objectionable under the fair warning
standard if an actor cannot know whether this conduct will be within
that definitionprior to undertaking the action.105
The Antidumping Act is not so indefinite, ambiguous, or unclear
that the importer is unaware at the time of importing that his imported
merchandise may be subject to antidumping duties. This knowledge,
however, is of little use to the importer since importing per se is not
unlawful. What precipitates dumping liability is the act of importing
merchandise at less than its fair value, coupled with injury or
likelihood of injury to an industry in the United States. The importer only
becomes aware that he is engaging in the activity after a dumping
complaint has been filed, the "sales at less than fair value" investigation has
been concluded, and notice has been given to him of the withholding of
appraisement. Before this notice has been received by the importer, he
has not, therefore, been given "fair warning" of the impropriety of his
101 U.S. CONST. amend. V. The fifth amendment provides; "nor shall any person ... be
deprived of life, liberty, or property without due process of law..."
102 See generally W. LAFAVE & A. SCOTT, JR., CRIMINAL LAW 11 (1972).
103 Seegenerally 16A C.J.S. Constitutional Law § 569(5) nn. 28-29 (1956); C. ANTIEAU,
MODERN CONSTITUTIONAL LAW § 7.20 (1969); Giaccio v. Pennsylvania, 382 U.S. 399, 402-05, (1966);
Bence v. Breier, 501 F.2d 1185, 1188-90, (7th Cir. 1974), cert. denied419 U.S. 1121 (1974); Wright
v. Arkansas Activities Ass'n, 501 F.2d 25, 28-29, (8th Cir. 1974).
conduct. From this point on, however, the importer cannot maintain
that he has not had fair warning. Further importations should
rightfully be at the importer's own risk.
Furthermore, where the Act has no provision for giving the
importer-the person liable for the duties-personal notice of the filing
of the dumping complaint, any assessment of dumping duties on
purchases made prior to receipt of that notice violates the standards
established by the Supreme Court in Mullane v. CentralHanover Bank
& Trust Co. 106
EqualProtectionof the Law
The Act as presently applied by the Department of the Treasury
also denies importers the equal protection of the laws. The Supreme
Court has protected this right from federal intrusion as part of the due
process clause of the fifth amendment to the U.S. Constitution. 0 7
Equal protection under the fifth amendment prevents unequal
treatment of similarly situated persons by the federal government. 10 8
The Act's denial of equal protection may be best illustrated by a
hypothetical situation involving two importers. Let us suppose that
Importer A shipped his imports to a port of entry which was reasonably
current in its appraisements when an antidumping investigation was
begun. The result? Only those imports which were entered after the
date of withholding of appraisement notice would remain unappraised
on the date of the dumping finding. Thus, all prior imports will escape
the application of Section 202(a) of the Act. 10 9 On the other hand,
assume Importer B shipped his merchandise to a port of entry which was
delinquent in its appraisements or which had begun a value
investigation unbeknownst to the importer. The result? Imports which were
entered within 120 days prior to the initiation of an antidumping
investigation would be subject to a dumping finding. This administrative
interpretation by the Department of the Treasury of section 202(a) of
106 339 U.S. 306 (1950). The means employed to notify the interested party must be
"reasonably certain to inform those affected." Id at 315. This standard cannot be met without personal
notice where, as here, the names and addresses of the affected parties are known by those assessing
the dumping duties.
107 U.S. CONST. amend. XIV, § I. The fourteenth amendment provides: "nor shall any state
. . .deny to any person within itsjurisdiction the equal protection of the laws." Id This
guarantee of equal protection from slate action has been read into the due process clause of the fifth
amendment, note 108 infra, to require equal protection when federal action is involved.
108 Buckley v. Valeo, 424 U.S. 1, 93-98 (1976); Weinberger v. Weisenfeld, 420 U.S. 636, 642-53
(1975); United States v. Yount, 267 F. 861, 863 (D.Pa. 1920); Neidd v. District of Columbia, 110
F.2d 246, 256 (D.C. Cir. 1940).
109 19 U.S.C. § 161(a) (1976).
the Act thus results in unequal treatment for persons who are similarly
situated. In addition, instead of deterring dumping, the Act as applied
promotes "port shopping."
The retroactive application of the Act, particularly with regard to
the period prior to the date of withholding of appraisement, violates
due process and equal protection of the law. In addition, the U.S.
practice of retroactive application of its antidumping legislation continues
to draw criticism from the world trading community for being
inconsistent with the practice of nations. The U.S. position, however, cannot be
supported by either superior logic or justifiable need.
As a punitive measure, the retroactive assessment of dumping
duties is simply inconsistent with the remedial objective of the Act. In
addition, the application of the Act in a retroactive manner is based on
unrealistic assumptions, ie., that the importer is aware of the foreign
market value of the merchandise at the time of purchase or exportation,
that a dumping investigation once begun will result in a finding of
dumping, that the importer will become immediately aware of the
initiation of a dumping investigation,1 10 that the typical importer can
negotiate price revisions or discontinue importation instantaneously, that
there is a conspiracy between the exporter and the importer, and that
the exporter has sworn to a false Special Customs Invoice.
One rationale for the retroactive provisions in the Act is the desire
to deter unfair foreign competition. This rationale completely ignores
a commonly recognized principle of business tort law that has been
frequently applied by courts in the area of economic regulation: a
tortfeasor is liable only for the reasonably forseeable consequences of
his acts."'1 The retroactive application of this Act imposes a strict
liability standard in an area where political and economic factors make
In defense of the retroactive provisions, the Treasury Department
has maintained that an investigation requires such a great length of
time to complete that some form of retroactivity is necessary.1 2 While
this was formerly the case, recent changes in the Customs Regulations
110 It is possible for a district director to liquidate all unappraised importations which entered a
port of entry prior to the date of the withholding of appraisement notice and prior to the finding of
dumping (see discussion of Timken Co. v. Simon, nn.89 i nd 90 and accompanying text supra);
however, no law or regulation specifically permits this exercise of authority. To the extent that it
is exercised, it cannot be done except in an arbitrary, capricious, and discriminatory manner.
111 See generally W. PROSSER, note 74 supra
112 Report ofthe U.S. TariffCommission to the Senate Committee on Financeon S. Con. Res. 38
have limited the investigation period."l 3 Moreover, in the case of
egregious dumping, the Department has the power to begin withholding
appraisement promptly. As a result, little harm would result if the Act
were not applied to those imports which are entered before the
withholding of appraisement date.
Perhaps the United States has chosen to ignore the fact that it is
one of the most egregious dumpers in the world. In general, prevailing
price levels are higher in the United States and other industrialized
nations than anywhere else in the world. Thus, sales in foreign markets of
products made in the United States at the prevailing price levels within
those markets is blatant dumping, whereas sales at U.S. price levels
frequently result in charges of economic imperialism.
Part of the difficulty may be attributed to the schizophrenic
approach of the U.S. dumping laws. Whereas the focus was once on the
unfair competition aspect of dumping, where intent and purpose were
determinative," 4 the protectionists' focus is presently on a tariff
construction where the effect alone is conclusive. If effect is to be the only
criterion, unlimited retroactivity could perhaps be argued. This,
however, would still violate the fifth amendment.' 15 On the other hand, if
the intent and purposes of the exporter or importer are still relevant
considerations, the retroactive application of the Act prior to the
withholding of appraisement cannot be justified.
At the very least, the Act should be amended or judicially
construed to require that the retroactivity of Section 202(a) be limited to
entries which remain unappraised for reasons related to suspected
dumping.1 6 Even better, all retroactivity prior to the withholding of
appraisement should be eliminated. This would conform with the
requirements of the due process and equal protection clauses because the
dumping duty would only be imposed on importations which are
entered after the importer has had adequate notice.
It is unfortunate that the greatest interest in the Act is evoked
during periods of recession when the Act is employed, not by U.S.
businessmen, their lawyers, and U.S. courts to deter truly unfair
in Hearingon InternationalAntidumping Code before the Committee on Finance, United States
Senate, note 54 supra.
113 In 1975 the investigation period was limited to six months, Pub. L. No. 93-618, § 321(a)(2),
88 Stat. 2043 (codified in 19 U.S.C. 160 (b)(1) (1976)). The Customs Regulations reflected this
change in 1976, 19 C.F.R. § 153.32 (1979) (first reported in 41 Fed. Reg. 26204, 26209 (1976)).
114 Cf. Revenue Act of 1916, 15 U.S.C. § 72 (1976).
115 See authority cited in notes 101-09 and accompanying text supra.
116 The Customs Service itself appears to recognize that appraisements for value and dumping
purposes are unrelated. United States v. Manahan Chemical Co., 24 C.C.P.A. 53, T.D. 48333
(1936); U.S. Customs Service, Fundamentals of Duty Assessments 4-135 (August, 1976).
competition, but to create a non-tariff trade barrier. At such times, the
political climate makes it unlikely that an amendment to the Act, which
would limit the retroactive application of dumping duties, would pass.
One must hope for the sake of U.S. importers that a period of economic
normalcy is just around the corner which will enable them to obtain the
relief they justly deserve.
31 The Act and Regulations do not provide for personal notice to the importer-the person liable for the duties-upon the filing of the dumping complaint. Requests for information on the foreign market value are directed to the exporter, and not until an affirmative determination is reached and a "Withholding of Appraisement Notice" issued, do the Regulations provide for personal notice of the investigation to the importer . 19 C.F.R . § 153 .48 ( 1977 ).
32 See note 9 and accompanying text supra .
33 Indeed, according to the U.S. Customs Service, only where the complaint is "not in proper form" would the full-scale investigation not proceed. Interview with Operation Officers, Duty Assessment Division, United States Customs Service .
34 See note 9 and accompanying text supra .
35 Conner & Buschlinger, The UnitedStatesAntidumplingAct: A Timely Survey, 7 VA . J. INT'L L . 117 , 131 - 32 ( 1966 ).
50 Art. 11 , 1 (i).
51 Id T (ii ).
52 Id I (iii ).
54 See REPORTS BY THE COMMITTEE ON ANTIDUMPING PRAcTIcES, note 4 supra, U.S. Tariff Commission, Report of the U.S. Tariff Commission to the Senate Committee on Finance on S. Con . Res. 38 , 90th Congress , A Concurrent Resolution Regarding the International Antidumping Code signed at Geneva on June 30, 1967 , ( 1968 ), reprinted in Hearingson S, Con . Res. 38 Before the Senate Committee on Finance 90th Cong., 2d Sess . 351 ( June 27, 1968 ).
55 FOURTH REPORT BY THE COMMITTEE ON ANTIDUMPING PRACTICES, note 4 supra, FIFTH REPORT BY THE COMMITTEE ON ANTIDUMPING PRACTICES, note 4 supra.
56 See note 10 supra.
57 Code, supranote 48 , at arts. 10 , 11 .
58 See 19 C.F.R. §§ 153 .29, 153 .30( b ), 153 .32, 153 .35, 208 .6 ( 1978 ).
59 Code, supranote 48 , at art. 11 , (ii).
60 Id. (iii)(a).
61 See REPORTS BY THE COMMITTEE ON ANTIDUMPING PRACTICES, note 4 supra.
63 See generally K. JUNCKERSTORFF, ANTIDUMPING RECHT ( 1974 ). See also GATT , ANTIDUMPING LEGISLATION ( 1970 ).
64 Pub. L. 90 - 634 , Title II , § 201 , 82 Stat. 1347 ( 1968 ).
65 "U.S. law permits the retroactive assessment of duties 120 days before the complaint. The discrepancy exists but is unimportant in practice: The retroactive provision is seldom used." UNITED STATES CUSTOMS SERVICE, U .S. ANTIDUMPING PROCEDURES No. 13 - 72 (Oct. 19 , 1972 ). Obviously, this is completely unconsoling to those importers who are assessed duties .
66 Pub. L. No. 67 - 10 , 42 Stat. 11 ( 1921 ) (current version at 19 U.S.C. §§ 160 - 173 ( 1976 )).
67 Id § 201 (b) (current version at 19 U.S.C. § 160 (b) ( 1976 )).
68 Id 85th Cong., 1st Sess . 32 , 225 ( 1957 ).
85 Letter from Thaddeus Rojek, Chief Counsel, U.S. Customs Service, to the author (Aug . 24,