Interested party in support of the petition with

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interested party in support of the petition with respect to which an anti-dumping duty order or a countervailing duty order has been entered; qualifying expenditures encompass most fixed and some variable costs. Allocations under the CDSOA are distributed on an annual basis. 5. The proposed budget appropriation for the CDSOA in FY 2002 was US$200 million. The distribution of the offset proceeds is assigned to the Commissioner of Customs, and is proportional to producers' new and remaining "qualifying" expenditures, as defined by the CDSOA. 34 The Commissioner of Customs must establish special accounts in the Treasury for each AD and CVD order, and deposit in them all anti-dumping or countervailing duties assessed. In this respect, a Clearing Account has been established via regulation for the deposit of all AD and CV duties at the time of importation. These duties remain in the Clearing Account until liquidation. At liquidation, the funds are transferred to the CDSOA Special Account for disbursement. CDSOA deposits in the Clearing Account were US$2.6 billion on 1 October 2003, of which US$1.4 billion from the AD and CVD cases on softwood lumber from Canada. In FY 2003, the estimated value of disbursements was US$280 million (Table III.3). Table III.3 CDSOA disbursements from the Special Account Year Amount (US$ million) Number of claims FY 2001 230 900 FY 2002 330 1,200 FY 2003 280 a 2,100 a Estimate. Source : Information provided by the U.S. authorities. 6. Aspects of the legal framework, as well as the procedures under which AD and CVD investigations take place, continued to be challenged in the WTO during the period under review. In a prominent case various WTO Members challenged the CDSOA and in July 2001 requested the establishment of a Panel. 35 A Panel Report was issued in September 2002 36 ; the United States appealed the case, and in January 2003 the Appellate Body affirmed the Panel's findings that the CDSOA was inconsistent with certain provisions of the AD Agreement, the SCM Agreement, the GATT 1994, and the WTO Agreement, namely that the "offsets" under the CDSOA were a non- permissible specific action against dumping or a subsidy and that they nullified or impaired benefits accruing to the complaining parties, but reversed the finding with respect to their being an incentive to file petitions. 37 The "reasonable period of time" for implementation was determined by arbitration to expire on 27 December 2003. 38 7. Other cases leading to DSB rulings and still active since 2001 include Canada's claim that, in certain cases, the URAA prevented the United States from complying fully with the DSB ruling 39 ; the Panel concluded in July 2002 that Canada had failed to establish that the U.S. legislation was inconsistent with the relevant WTO provisions and made no recommendations. 40 An earlier challenge of the Anti-Dumping Act of 1916, resulted in the Panels finding the Act inconsistent with multilateral 34 WTO (2001).
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