OMAHA (DTN) -- United States importers of biodiesel from Argentina and Indonesia will face a retroactive duty as a result of an ongoing dumping investigation by the U.S. Department of Commerce, the federal government announced on Tuesday.
Commerce officials found "critical circumstances" exist with respect to imports of biodiesel from Argentina. This particular section of U.S. law allows for retroactive duties to be imposed on biodiesel imported during the 90-day period before publication of the Commerce Department's preliminary determinations.
The provision is in place to deter importers from attempting to circumvent the antidumping and countervailing duty laws.
As a result of the decision, Commerce officials will instruct U.S. Customs and Border Protection to collect cash deposits from U.S. importers in the amount of subsidies and dumping found in the past 90 days. Such action is designed to instill price disciplines on imports and re-establish fair competition for U.S. producers.
The cash deposit rates range from 50.29% to 64.17% for biodiesel from Argentina, and 41.06% to 68.28% for biodiesel from Indonesia, depending on the particular foreign producer/exporter involved, according to the National Biodiesel Board. According to a DOC news release on Tuesday, biodiesel imports from Argentina and Indonesia were valued at an estimated $1.2 billion and $268 million, respectively.
Commerce officials now are expected to conduct an audit of foreign producers and governments and a hearing may follow.
The National Biodiesel Board asked the Commerce Department back in July to immediately slap duties on imports of Argentinian and Indonesian biodiesel, claiming in a petition that "critical circumstances" exist to warrant the action.
"The commerce department has recognized what this industry has known all along -- that foreign biodiesel producers have benefited from massive subsidies that have severely injured U.S. biodiesel producers," Doug Whitehead, chief operating officer of the National Biodiesel Board, said in a statement.
"We're grateful that the commerce department has taken preliminary steps that will allow our industry to compete on a level playing field."
Back in April, Commerce officials initiated antidumping and countervailing duty investigations aimed at biodiesel imports from Argentina and Indonesia in response to a petition filed by U.S. biodiesel industry interests.
Commerce officials also are expected to announce preliminary determinations regarding the estimated rates of dumping on Oct. 20. Then the International Trade Commission's final phase of its investigation likely would run from November to May 2018.
Since the July filing, the National Biodiesel Board alleges, biodiesel imports from Argentina have increased by about 145%.
In the July petition, the biodiesel board essentially requested relief in the form of retroactive duties.
The provision of antidumping and countervailing duties laws allows duties and imports to be imposed before a preliminary determination is made on subsidies and dumping allegations previously made by the industry in the U.S.
To determine if critical circumstances exist, the Commerce Department was required to find that there are "massive" imports in a relatively short period of time, as well as other legal criteria including whether those imports benefitted from illegal subsidies.
Citing information from "a business intelligence company," the National Biodiesel Board said in its July petition that biodiesel exports from Argentina in April reached a five-month high, "all of which was shipped to the United States." It is expected about 75 million gallons of biodiesel from Argentina will reach U.S. ports.
According to the biodiesel board, after the U.S. industry filed its petition, "Argentina substantially reduced its export taxes on biodiesel, and then lifted those taxes this month, contributing to the increase in shipments and exacerbating already challenging circumstances for U.S. producers."
The biodiesel board has alleged significant increases in subsidized and dumped biodiesel imports from Argentina and Indonesia have injured U.S. producers.
In its notice of initiation, the Commerce Department stated there is reason to believe that Argentine and Indonesian biodiesel companies were selling into the U.S. "at less-than-fair value," based on information provided by the U.S. biodiesel industry. The Commerce Department estimates Argentina's dumping margin could be as high as nearly 27% and Indonesia's at about 28% from 2014 to 2016.
In written comments to the International Trade Commission, the Argentine government said the petition was based on "extremely limited" information and actually shows the U.S. industry was hardly harmed.
Argentina makes the case that U.S. producers never made a claim that imported biodiesel actually hurt profits. In addition, the government argues U.S. producers alone were unable to fulfill the Renewable Fuel Standard volume requirements from 2014 to 2016.
Todd Neeley can be reached at firstname.lastname@example.org
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