Benefit Under Advance Authorization : Key Change In US Position

Under the WTO Agreement, any exemption of import duties on raw materials used for exported goods shall not be considered as conferring a countervailable benefit, provided the government of exporting country has a system in place to ensure that no excess benefit accrues to the exporter. Under the US law, unless the government of exporting country has a system to show that no excess benefit accrues to an exporter, or that the government has carried out an examination that no such excess benefit accrues; the entire amount of exemption received on imported raw materials is considered as a countervailable benefit. Based on this test, over the past several years, the USDOC has been considering the entire exemption of duties on imported raw materials under the Advance Authorization program of India as countervailable subsidy. However, in a recent determination, the USDOC has found that the exporter in question did not receive any benefit in the form of exemption of import