                        TITLE 19--CUSTOMS DUTIES
 
                      CHAPTER 4--TARIFF ACT OF 1930
 
           SUBTITLE IV--COUNTERVAILING AND ANTIDUMPING DUTIES
 
                       Part IV--General Provisions
 
Sec. 1677-1. Upstream subsidies


(a) ``Upstream subsidy'' defined

    The term ``upstream subsidy'' means any countervailable subsidy, 
other than an export subsidy, that--
        (1) is paid or bestowed by an authority (as defined in section 
    1677(5) of this title) with respect to a product (hereafter in this 
    section referred to as an ``input product'') that is used in the 
    same country as the authority in the manufacture or production of 
    merchandise which is the subject of a countervailing duty 
    proceeding;
        (2) in the judgment of the administering authority bestows a 
    competitive benefit on the merchandise; and
        (3) has a significant effect on the cost of manufacturing or 
    producing the merchandise.

In applying this subsection, an association of two or more foreign 
countries, political subdivisions, dependent territories, or possessions 
of foreign countries organized into a customs union outside the United 
States shall be treated as being one country if the countervailable 
subsidy is provided by the customs union.

(b) Determination of competitive benefit

                           (1) In general

        Except as provided in paragraph (2), the administering authority 
    shall decide that a competitive benefit has been bestowed when the 
    price for the input product referred to in subsection (a)(1) of this 
    section for such use is lower than the price that the manufacturer 
    or producer of merchandise which is the subject of a countervailing 
    duty proceeding would otherwise pay for the product in obtaining it 
    from another seller in an arms-length transaction.

                           (2) Adjustments

        If the administering authority has determined in a previous 
    proceeding that a countervailable subsidy is paid or bestowed on the 
    input product that is used for comparison under paragraph (1), the 
    administering authority may (A) where appropriate, adjust the price 
    that the manufacturer or producer of merchandise which is the 
    subject of such proceeding would otherwise pay for the product to 
    reflect the effects of the countervailable subsidy, or (B) select in 
    lieu of that price a price from another source.

(c) Inclusion of amount of countervailable subsidy

    If the administering authority decides, during the course of a 
countervailing duty proceeding that an upstream countervailable subsidy 
is being or has been paid or bestowed regarding the subject merchandise, 
the administering authority shall include in the amount of any 
countervailing duty imposed on the merchandise an amount equal to the 
amount of the competitive benefit referred to in subparagraph (1)(B),\1\ 
except that in no event shall the amount be greater than the amount of 
the countervailable subsidy determined with respect to the upstream 
product.
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``subsection (a)(2) of this 
section,''.
---------------------------------------------------------------------------

(June 17, 1930, ch. 497, title VII, Sec. 771A, as added Pub. L. 98-573, 
title VI, Sec. 613(a), Oct. 30, 1984, 98 Stat. 3035; amended Pub. L. 99-
514, title XVIII, Sec. 1886(a)(10), Oct. 22, 1986, 100 Stat. 2922; Pub. 
L. 103-465, title II, Secs. 233(a)(5)(GG), 268, 270(a)(1)(K), (L), 
(2)(B), (c)(3), Dec. 8, 1994, 108 Stat. 4901, 4916, 4917; Pub. L. 104-
295, Sec. 20(b)(2), Oct. 11, 1996, 110 Stat. 3527.)


                               Amendments

    1996--Subsec. (c). Pub. L. 104-295 amended directory language of 
Pub. L. 103-465, Sec. 270(a)(2)(B). See 1994 Amendment note below.
    1994--Subsec. (a). Pub. L. 103-465, Sec. 268, inserted introductory 
provisions and struck out former introductory provisions which read as 
follows: ``The term `upstream subsidy' means any subsidy described in 
section 1677(5)(B)(i), (ii), (iii), or (iv) of this title by the 
government of a country that--'', and in concluding provisions, inserted 
``countervailable'' before ``subsidy''.
    Subsec. (a)(1). Pub. L. 103-465, Sec. 268(1), added par. (1) and 
struck out former par. (1) which read as follows: ``is paid or bestowed 
by that government with respect to a product (hereafter referred to as 
an `input product') that is used in the manufacture or production in 
that country of merchandise which is the subject of a countervailing 
duty proceeding;''.
    Subsec. (b)(2). Pub. L. 103-465, Sec. 270(a)(1)(K), inserted 
``countervailable'' before ``subsidy'' in two places.
    Subsec. (c). Pub. L. 103-465, Sec. 270(a)(2)(B), as amended by Pub. 
L. 104-295, inserted ``countervailable'' before ``subsidy'' in heading.
    Pub. L. 103-465, Sec. 270(a)(1)(L), (c)(3), inserted 
``countervailable'' after ``upstream'' and substituted ``the 
countervailable subsidy determined'' for ``subsidization determined''.
    Pub. L. 103-465, Sec. 233(a)(5)(GG), substituted ``subject 
merchandise'' for ``merchandise under investigation''.
    1986--Subsec. (a). Pub. L. 99-514 substituted ``(ii), (iii), or 
(iv)'' for ``(ii), or (iii)'' in introductory provisions.


                    Effective Date of 1994 Amendment

    Amendment by Pub. L. 103-465 effective, except as otherwise 
provided, on the date on which the WTO Agreement enters into force with 
respect to the United States [Jan. 1, 1995], and applicable with respect 
to investigations, reviews, and inquiries initiated and petitions filed 
under specified provisions of this chapter after such date, see section 
291 of Pub. L. 103-465, set out as a note under section 1671 of this 
title.


                             Effective Date

    Section effective Oct. 30, 1984, see section 626(a) of Pub. L. 98-
573, set out as an Effective Date of 1984 Amendment note under section 
1671 of this title.


           Plan Amendments Not Required Until January 1, 1989

    For provisions directing that if any amendments made by subtitle A 
or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII 
[Secs. 1801-1899A] of Pub. L. 99-514 require an amendment to any plan, 
such plan amendment shall not be required to be made before the first 
plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. 
L. 99-514, as amended, set out as a note under section 401 of Title 26, 
Internal Revenue Code.

                  Section Referred to in Other Sections

    This section is referred to in section 1671 of this title.
