During its investigation, the Commerce Department will require that the foreign company report all of its United States sales during the investigation period. The `period of investigation' consists of the previous four calendar quarters. The sales to be included are those to unaffiliated United States customers.

 

In addition, a foreign respondent is required to report all sales of the imported targeted merchandise which has undergone further processing or manufacturing in the United States, even if the final product that is sold to the first unaffiliated customer no longer meets the definition of the targeted merchandise. For example, assume an anti-dumping investigation on colour picture tubes: if a foreign manufacturer has shipped colour picture tubes to an affiliated company in the United States which incorporated the colour picture tubes into colour televisions prior to sale to an unaffiliated customer, the Commerce Department would require the sales of the colour televisions to be included in the foreign company's United States sales database. For the dumping margin calculation, the Commerce Department would deduct the further processing expenses in order to derive the 'sale price' of the targeted merchandise, that is, the colour picture tube.

 

Under United States anti-dumping law, sales made directly from the foreign company to the United States company are called 'export price' (EP) sales. Sales made in the United States by a United States affiliate (even if the merchandise is shipped directly) are called 'constructed export price' (`CEP') sales. The critical difference between EP and CEP sales is whether the sale or transaction takes place inside or outside the United States, and whether it is made by a United States affiliate. As will be discussed later in this chapter, United States law adopts a different dumping margin calculation methodology depending on whether the foreign company's United States sales meet the definition of EP sales or CEP sales.

 

Source: Business Guide to Trade Remedies in the United States: Anti-dumping, countervailing and safeguards legislation practices and procedures

nited States: Anti-dumping, countervailing and safeguards legislation practices and procedures