Legal Issues and Regulation

State Business Incentives – Trends and Options

Over the last four decades American states launched business incentive programs to generate economic growth and create new businesses.  The possibilities resulting from these programs are manifold, ranging from “business incentives” (e.g. public subsidies), over “tax incentives” (e.g. tax abatements of corporate or personal income) to “financial incentives” like direct loans or loan guarantee grants. All these are supposed to help create and retain businesses. Additionally some states offer customized, company-specific incentives. This concept could also provide interesting opportunities for German businesses.

The initiative was supported by the Council of State Governments, a nonpartisan, non-profit organization in the U.S. serving the State Governments by providing advice to legislatures, the executive branch and the state courts.

To help state policy makers to make sufficiently informed decisions, the Council of State Governments has published a number of reports concerning states’ business incentives. The latest report contains state by state information and data on the various business incentives. It provides an overview of incentive programs and information on relevant tax exemptions. It also gives information on accountability procedures, necessary oversight, proposes political options and courses of action in the future. The following topics have gained increasing significance: International economic development and the “Green Economy”.  As regard to the latter, issues like renewable energies and energy efficiency have gained increasing significance.

To see the full report, including all the data and numbers, please click here.

CVD Law Cannot Apply to Non-Market Economies Including China, According to the Court of Appeals for the Federal Circuit

A recent ruling by the Court of Appeals for the Federal Circuit (CAFC) in GPX Int'l Tire Corp. v. United States has confirmed that the U.S. Department of Commerce (DOC) may not impose both antidumping and countervailing duties on imports of goods from countries which the US treats as nonmarket economies (NME), and calls into question the future of certain trade actions.  Moreover, the ruling, which takes practical effect on February 2, 2012, may lead to the reimbursement of countervailing duties already paid by exporters from certain NMEs.

The CAFC’s ruling essentially affirms – although on different grounds - a decision from the lower U.S. Court of International Trade (CIT) that the current methodology applied by the DOC in terms of countervailing and antidumping duties on Chinese imports is invalid, due to the fact that "double counting" would arise.  WTO agreements allow for the imposition of anti-dumping duties to remedy a situation where sales in export markets are at prices below valuation within the country of origin, with attendant material injury to domestic industry occurring in the country into which such goods are imported.  Additionally, the WTO agreements permit for the imposition of countervailing duties where subsidies in export countries allow exporters to sell at a price so low as to cause harm to domestic manufacturers in the importing countries.

Further Information to this subject can be found under "Legislative and Regulatory Update". 

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