Cash settlements believed common
By Thomas Russell -- Furniture Today, May 21, 2007
High Point — The furniture industry isn't the only one where foreign producers are believed to pay cash settlements to be excluded from an antidumping review list.
Last month, The Wall Street Journal reported on similar agreements between Asian shrimp harvesters and U.S. petitioners supporting an antidumping case in that industry.
The petitioners in that case sought cash settlements from overseas shrimp producers in exchange for not subjecting them to potentially higher duties that could arise from an annual administrative review by the U.S. Department of Commerce, the paper reported. It said 104 foreign shrimp suppliers paid millions of dollars to the petitioners, who removed the companies' names from the review list.
The petitioners didn't reveal the exact amount collected, but said some of the money went toward legal expenses, promotional efforts to raise consumer awareness of the domestic shrimp industry, and lobbying efforts to protect the industry.
John Greenwald, a Washington attorney who has been active in international trade law and represented the Furniture Retailers of America in the Chinese wood bedroom furniture case, told Furniture/Today that cash settlements are commonplace and legal in antidumping cases. He declined to comment on the furniture case, but said that, in general, such settlements may raise concerns.
"It is fair to say that there is a smell factor to this," said Greenwald. "If you went back 10 years ago, it would be extremely rare. Now it is more common and it leaves a bad taste for outside observers about what the law is all about."
He added that it implies a "cynical use (of trade laws) to maximize the profitability of petitioners, rather than being a pure instrument of enforcing fair trade. There is no doubt about that."
At the same time, he said the opportunity to settle gives foreign producers a level of security about future duty rates they would not have if they were subject to the review process.
"The business dynamic pushes you to get that level of certainty," he said.
