1. What types of plastic bags are covered by the anti-dumping orders?
The anti-dumping orders cover non-sealable carrier bags with handles (including drawstrings) made of polyethylene film (polyethylene retail carrier bags or PRCBs) manufactured in China, Malaysia, and Thailand. Covered PRCBs are typically (but not always) provided individually (that is, not contained in any consumer packaging) and free of charge by retail establishments (for example, grocery, drug, convenience, department, specialty retail, and discount stores, and restaurants) to their customers to package and carry purchased products. The orders cover bags with or without gussets and with or without printing, having a thickness no greater than 0.035 inch and no less than 0.00035 inch, and with no length or width shorter than 6 inches or longer than 40 inches.
The anti-dumping orders exclude bags without handles and bags with zippers or other integral, extruded closures other than drawstrings. They also exclude (1) polyethylene bags that are not printed with logos or store names and that are closeable with drawstrings made of polyethylene film (for example, garbage bags) and (2) polyethylene bags that are packed in consumer packaging with printing that refers to specific end-uses other than packaging and carrying merchandise from retail establishments (for example, garbage bags, lawn bags, and trash-can liners).
The covered bags are currently classifiable under statistical category 3923.21.0090 of the Harmonized Tariff Schedule of the United States. The written description of the scope of the order from the U.S. Department of Commerce (Department), however, not the tariff classification used, is dispositive.
The anti-dumping orders can be found online at:
2. Which foreign producers are covered by the anti-dumping orders?
All producers in Thailand, all but two producers in China, and all but one producer in Malaysia are covered by the anti-dumping orders. These three companies are excluded because the Department found in the investigation that their dumping margins are de minimis (that is, less than two percent). The domestic industry has appealed the Department's calculation of de minimis margins for the two Chinese companies to the U.S. Court of International Trade in New York City. If that appeal is successful, imports from those two companies will also be subject to duties, retroactive to at least August 2004. In addition, any bags exported by the three currently excluded companies are subject to anti-dumping duties if they were actually produced by other companies. In other words, covered companies cannot avoid the duties by having their production exported by an excluded company.
3. Who is responsible for paying the anti-dumping duties?
The U.S. importer of record is responsible for the payment of anti-dumping duties. The exporter or producer may not pay the anti-dumping duty directly on behalf of the importer or reimburse the importer for such payments. According to the Department's regulations, any such reimbursement or payment will be deducted from the U.S. price when the Department analyzes the sales in subsequent reviews of the order, resulting in an increase in the dumping margin (and the anti-dumping duty owed) by the amount of the reimbursement received.
4. What are the amounts of the anti-dumping duties owed from the various countries and foreign producers?
After an anti-dumping order is issued, U.S. importers are required to pay cash deposits to the U.S. Bureau of Customs and Border Protection (Customs) for the estimated anti-dumping liability on all imports of the subject merchandise entered after publication of the order. The required cash deposits are equal to the percentage calculated as the dumping margin times the entered value of each entry. These cash deposits, however, represent estimated anti-dumping duties only and are not a final account of what the importer will actually owe to Customs. The United States has a “retrospective” assessment system under which the final anti-dumping duty liability (that is, the liquidation rate) on entries of subject merchandise is determined by the Department after merchandise is imported in a later proceeding known as an administrative review.
In the investigation of PRCBs from China, the Department calculated dumping margins ranging from 19.79 to 41.28 percent for four companies. For 19 companies that requested a separate rate, the Department calculated a weighted-average dumping margin of 25.69 percent. For all other Chinese manufacturers of PRCBs (with the exception of two companies that are currently excluded from the order), the Department calculated a China-wide margin of 77.57 percent.
In the investigation of PRCBs from Malaysia, the Department calculated a dumping margin of 101.74 percent for five companies. For all other manufacturers in Malaysia (with the exception of one company that is excluded from the order), the Department calculated a dumping margin of 84.94 percent.
In the investigation of PRCBs from Thailand, the Department calculated a dumping margin of 122.88 percent for three companies. For Thai Plastic Bags Group and Universal Polybag, the Department calculated rates of 2.26 percent and 5.35 percent, respectively. For all other manufacturers in Thailand, the Department calculated a margin of 2.80 percent.
For the list of companies and the applicable dumping margins, please see the anti-dumping orders available online at:
5. What is the difference between anti-dumping duty cash deposits and final anti-dumping duties?
The anti-dumping orders require a cash deposit for imports of subject merchandise equal to the estimated anti-dumping margins determined by the Department in the investigation — identified in the anti-dumping orders — multiplied by the entered value of the subject merchandise. Liquidation rates or final anti-dumping duties, however, are not determined until the completion of the first administrative review and any appeals.
For example, if the cost of a key raw material such as polyethylene resin rose during the time between the close of the period of the initial investigation (March 31, 2003 in this case) and the first administrative review period (January 2004 to July 2005), but foreign producers did not increase their U.S. prices for subject merchandise to cover their increased costs, the actual dumping margin calculated in the first administrative review could be significantly higher than the cash deposit rate, which was based on estimated margins. Under these circumstances, the final anti-dumping duty owed would be higher than the cash deposits that were paid.
If the final assessed duty is higher than the cash deposit, the importer of record is responsible for payment of the difference, plus interest. The final dumping margins calculated for each respondent in the administrative review also serve as the new cash deposit rates for entries of subject merchandise made after the date of publication of the final results of the review.
6. When will the amount of the final anti-dumping duties be determined?
The amount of the final anti-dumping duties assessed will be determined by the first administrative review. An administrative review may be requested by an “interested party” — domestic producers, U.S. importers, and foreign producers are interested parties — at any time during the anniversary month of the publication of the anti-dumping orders.
In this case, the anti-dumping orders were published in August 2004. Therefore, August is the anniversary month, and administrative reviews may be requested at any time during the month of August. The first administrative review may be requested in August 2005. The administrative review must be completed within 12 to 18 months. Therefore, in this case, the first administrative review must be completed no later than February 2007. An appeal of the final determination in the administrative review could last another 1-2 years. The final anti-dumping liability of the importer will not be determined until the first administrative review (and any appeal thereof) is complete. Thus, there is no way for U.S. importers to know today the extent of their ultimate liability for anti-dumping duties. Moreover, importers must certify that their duties have not been reimbursed by their foreign suppliers.
If no review is requested of certain entries, those entries must be liquidated automatically at the cash deposit rate. Thus, in order to avoid liquidation of certain entries at the cash deposit rate, an interested party must request an administrative review of those entries.
7. What is the status of the appeals of the Department's final determination in the China investigation?
Petitioners and certain respondents have filed appeals at the U.S. Court of International Trade of the Department's final determination in the China investigation. Petitioners are appealing the Department's calculation of de minimis margins for two companies and are arguing that the Department should have calculated higher dumping margins for all other companies because the Department understated certain raw material costs. The appeal is currently in the briefing stage, and is likely to be argued during the Fall of 2005. The Court's decisions are expected in 2006.
8. If bags are produced in a subject country such as China but then transshipped to the United States through a third country, such as Mexico or Canada, must anti-dumping duties still be paid?
Yes. Anti-dumping duties must still be paid because the country of origin of the merchandise (i.e., location of manufacture) dictates whether the merchandise is subject to an order.
9. Is it legal for an individual producer in China and Malaysia that is excluded from the anti-dumping order to ship bags manufactured by other producers that are covered by the order as a way of avoiding duties on those exports to the United States?
No. This and other forms of circumvention of the anti-dumping order are prohibited. Therefore, the three currently excluded producers may not ship bags that are produced by other producers. Importers of such merchandise are required to ensure that the excluded company is actually the manufacturer of the merchandise.
10. What are the legal responsibilities of U.S. importers to ensure that imports of plastic bags are being made in compliance with U.S. law, including the anti-dumping orders?
Importers must exercise reasonable care, including the development of reliable procedures, to ensure that merchandise is entered in compliance with all applicable U.S. laws, including the anti-dumping orders.
11. What are the potential civil and criminal penalties for entering plastic bags into the United States in violation of U.S. law, including in violation of the anti-dumping orders?
Customs, through the use of investigations, audits, penalties, detentions, seizures, and forfeitures, ensures that importers comply with U.S. law, regulations, and other requirements, including anti-dumping orders. Specifically, U.S. law provides significant civil and criminal penalties for violations relating to the entry of goods into the commerce of the United States. For example, it would be illegal for a covered Chinese producer to attempt to avoid the duties by transshipping the bags through another country that it falsely claims is the country where the bags were produced.
Federal law provides for substantial civil penalties for making material false statements or material omissions in any documents or electronically transmitted data or information, written or oral statements, or acts, irrespective of whether falsity or omission causes a loss of revenue to the United States. The amount of the penalty depends on the importer's level of culpability. The three applicable levels of culpability are fraud (a violation committed voluntarily and intentionally), gross negligence (a violation committed with actual knowledge or wanton disregard), and negligence (a violation as a result of the failure to exercise reasonable care). In limited circumstances, the merchandise may be seized to insure the payment of the penalty and may be forfeited if the penalty is not paid.
Federal law also provides criminal penalties, including fines and imprisonment, for importers who import goods by means of any fraudulent or false invoice, declaration, affidavit, letter, paper, or by means of any false statement, written or verbal, or by means of any false or fraudulent practice or appliance, or that make any false statement in any declaration without reasonable cause to believe the truth of such statement, or procure the making of any such false statement as to any matter material thereto without reasonable cause to believe the truth of such statement, whether or not the United States shall or may be deprived of any lawful duties.
In addition, another federal law, the False Claims Act, provides penalties for an importer that knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government. The importer may be liable to the United States Government for a civil penalty of $5,000 to $10,000 per violation, plus three times the amount of damages that the Government sustains because of the act of that person. The term “knowingly” includes importers having actual knowledge, acting in deliberate ignorance of the truth or falsity of the information, and acting in reckless disregard of the truth or falsity of the information. No proof of specific intent to defraud is required, and a civil action may be brought on behalf of the government by a private whistleblower.
12. How long will the anti-dumping duties remain in place?
The anti-dumping duties remain in place indefinitely. After five years, however, the Department and the ITC will conduct a “sunset review” to determine whether revocation of the anti-dumping orders would be likely to lead to continuation or recurrence of dumping and injury. If they make affirmative determinations, the orders will remain in effect another five years until the next sunset review. The orders will remain in place until there is a negative sunset review determination.