International Client Alert, April 2007

Commerce Implements Some WTO Zeroing Findings

The Department of Commerce ("DOC") recently concluded section 129 proceedings to recalculate the original dumping margins in 12 cases in order to implement a WTO Appellate Body decision on zeroing: Certain Hot-rolled Carbon Steel from the Netherlands; Stainless Steel Bar from France; Stainless Steel Bar from Germany, Stainless Steel Bar from Italy; Stainless Steel Bar from the United Kingdom; Stainless Steel Wire Rod from Spain; Stainless Steel Wire Rod from Sweden; Stainless Steel Wire Rod from Italy; Certain Stainless Steel Plate in Coils from Belgium; Stainless Steel Sheet and Strip in Coils from Italy; Certain Cut-to- Length Carbon-quality Steel Plate from Italy; and Certain Pasta from Italy. (See the October 11, 2006 International Client Alert for information on zeroing and the WTO.) Section 129 of the Uruguay Round Agreements Act provides for implementation of WTO decisions by DOC's Import Administration at the request of the United States Trade Representative ("USTR").

On April 10, 2007, DOC issued the final decisions in the 12 section 129 proceedings. For these decisions, DOC reopened the records from the original investigations to recalculate the margins. As a result, for two investigations, DOC concluded that all margins would have been zero or de minimis and indicated its intent to revoke those orders: Certain Hot-Rolled Carbon Steel from the Netherlands and Stainless Steel Wire Rod from Sweden. In four other cases (Stainless Steel Bar from France; Stainless Steel Bar from Germany; Stainless Steel Bar from Italy; and Stainless Steel Bar from the United Kingdom) only certain companies' margins were zero or de minimis. DOC indicated its intent to exclude those individual companies from the orders. Ironically, because of changes in the mix of margins that were included in the calculation, in several cases the "all others rate," i.e., the margin that applies to companies that are not specifically investigated and do not have company-specific margins, has increased.

For those orders being revoked or companies being excluded from the existing order as a result of these proceedings, only entries made on or after the date USTR asked the Department to implement the decisions will be affected. The European Union ("EU") contended, however, that this action only partially implemented the WTO decision. The EU expressed concern that entries prior to the effective date of the decisions will still be subject to duties, despite the finding that no duties should ever have been imposed on them.

Additionally, the EU complained that the United States still has not implemented the WTO Appellate Body decision faulting DOC's use of zeroing in 16 administrative reviews. Finally the EU faulted DOC's calculation of the "all others rate." DOC has not yet implemented the WTO decision regarding shrimp from Ecuador. For existing orders, any country seeking to have investigation margins recalculated without zeroing presumably needs to go through WTO dispute settlement, because DOC will not apply its methodology change retroactively.

For further information on this or other trade remedy issues, please contact Peggy Clarke or Carolyn Lindsey.

Before You Name Your Kids, Check The SDN List

If your name is Daniel Garcia, don't even think of applying for an apartment, a job, a mortgage or a car loan. Because you'll be denied. Thanks, apparently, to increased use of the Office of Foreign Assets Control's Specially-Designated Nationals ("SDN") list to scan routine domestic transactions from used car sales to lease applications.

This is the conclusion of a report issued recently by the Lawyers Committee for Civil Rights of the San Francisco Bay Area. The report trots out a half-dozen horror stories of OFAC screening gone wrong and finds:

A couple whose mortgage application was denied simply because the husband's middle name "Hassan" was listed on the SDN list as an alias for one of Saddam Hussein's sons;

A couple whose first home purchase couldn't close because the first and last name of the husband, both common Hispanic names, matched a name on the SDN list;

An individual who couldn't purchase a car simply because his last name, Muhammad, caused a credit agency to report that he was a hit on the SDN list

An individual that could not pick up $50 that had been sent to him by a money transfer service because his first and middle names were Mohammed Ali;

A PayPal customer named Yusuf Mohammed who had his account closed; and

A man who couldn't buy a treadmill because his first name is Hussein.

The problem occurred in these instances for one of three reasons: (1) the company didn't know how to properly identify a hit; (2) the company didn't want to take time to determine if a proper hit was a false positive; or (3) even if the company was willing to take that time, the SDN entry lacked sufficient identifying information (e.g. no date or place of birth) to determine whether the hit was a false positive.

Our not-so-hypothetical SDN Daniel Garcia (not one of the Lawyer's Committee's examples) has a common Hispanic name and his SDN entry has no place of birth or date of birth that would allow a simple ID check to verify that the hit was a false positive. See for yourself:

GARCIA, Daniel, Avenida Insurgentes Sur No.

421, Bloque B Despacho 404, C.P. 06100,

Mexico, D.F., Mexico; Manager, Promociones

Artisticas (PROARTE)(individual)[CUBA]

Needless to say as more and more companies with less and less screening experience screen customers against the SDN list, anyone named Daniel Garcia might consider changing his name.

The Lawyer's Committee report raises two interesting issues. First, although the real SDN has the legal right to challenge his designation, the mistaken SDN has neither the right to challenge the designation nor to obtain an official determination that he or she isn't the real SDN. OFAC's refusal to provide such an avenue of relief is, indeed, hard to rationalize. OFAC is giving more rights to the alleged terrorist than to an ordinary...