The United States countervailing duty law has a very long history - it is even older than the anti-dumping law. During much of this history, there was no clear statutory framework for determining whether a programme provided a subsidy or not. The various agencies administering this law over time adopted policies to define what was and was not a subsidy. This issue was fiercely debated during the Uruguay Round, and the Agreement on Subsidies and Countervailing Measures (the SCM Agreement) provided for the first time an internationally agreed-on definition of a subsidy. United States law now basically tracks this definition.

Not every type of government subsidy or benefit programme is considered a countervailable subsidy for the purposes of United States law. Under United States law there are three basic elements that must exist before the Commerce Department will deem a subsidy or benefit to be countervailable: First, there must be a financial contribution provided by a government or public body (directly or indirectly); second, the financial contribution must provide a benefit to the recipient; and third, the financial contribution must be provided to a specific enterprise or industry, or group of enterprises or industries.

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