United States Court of International Trade

Court Sustained Third Redetermination

Before the court in Foshan Shunde Yongjian Housewares & Hardware Co., Ltd. & Polder, Inc. v. United States, Court No. 10-59, Slip Op. 16-35 (April 7. 2016) was the United States Department of Commerce’s (“Commerce”) Third Final Results of Redetermination Pursuant to Court Remand pertaining to the fourth administrative review of the antidumping duty order covering floor-standing metal-top ironing tables and certain parts thereof from the People’s Republic of China (“PRC”).  On this Third Remand, Commerce was directed to either (1) properly corroborate the secondary information it relied upon in assigning plaintiff Foshan Shunde Yongjian Housewares and Hardware Co., Ltd. (“Foshan Shunde” or “plaintiff”), and its importer of record, Polder, Inc., an antidumping duty rate of 157.68 percent based on adverse facts available (“AFA”), or (2) determine a new rate for plaintiff that is supported by substantial evidence and is in accordance with law. Because Commerce determined it was unable to identify additional information to corroborate the previously assigned rate, it assigned, under protest, a duty rate of 72.29 percent to Foshan Shunde, which was the rate assigned to the separate-rate companies in the underlying less-than-fair-value investigation (“the Investigation”). During this Third Remand, in an attempt to corroborate the 157.68 percent rate, Commerce “opened the record, searched for independent sources that would bear on the relevance of 157.68 percent rate, but found no additional statistical data from an independent source that may represent Foshan Shunde’s ‘commercial reality,’ or that would otherwise bear on the relevance of the 157.68 percent rate.  According to Commerce, the 72.29 percent AFA rate was broader in scope than was a single rate,” and “is the current rate in effect for all companies which have demonstrated they are separate from the PRC-wide entity.” Slip Op. p. 13. Thus, Commerce applied the 72.29 rate already corroborated and assigned to separate-rate companies. Moreover, Commerce reasonably determined that, due to Foshan Shunde’s withholding of accurate factors of production and U.S. sales information, it was impossible to determine accurately Foshan Shunde’s commercial reality during the POR.  The court sustained such a rate based on the deficient record before Commerce.

Remanding a Redetermination Concerning Xanthan Gum

In CP Kelco US, Inc. v. United States, Slip Op. 16-36, Court No. 13-288 (April 8, 2016), the court reviewed a remand of the U.S. Department of Commerce’s (“Commerce” or “the agency”) final determination in its antidumping investigation of xanthan gum from the People’s Republic of China.  There were two issues requiring reevaluation on remand. First, at Commerce’s request, the court remanded so the agency could revisit how it allocated energy consumed at Fufeng’s Neimenggu plant between the production of subject merchandise (i.e. xanthan gum) and nonsubject merchandise. Second, the court remanded so that Commerce could reexamine its conclusion that the Thai Ajinomoto financial statements constituted a better source for calculating surrogate financial ratios than the Thai Fermentation statements. On remand, Commerce adjusted its allocation of energy consumed at the Neimenggu plant but continued to find that the Thai Ajinomoto statements were the better surrogate-ratio source.  While no comments were filed regarding the energy allocation, there were comments on the application of the Thai Ajinomoto financial statements.

In assessing the proper financial statements during the investigation, Commerce narrowed the field of financial statements to those from companies producing monosodium glutamate, which Commerce “consider[ed] to be comparable merchandise to xanthan gum.” This left Commerce with financial statements from Thai Ajinomoto, Thai Fermentation, and Thai Churos. Next, Commerce found Thai Fermentation’s and Thai Churos’ statements to be incomplete, missing several footnotes or no English translation for some of the data.  As for Thai Ajinomoto, even though there was evidence that Thai Ajinomoto received subsidies from the Thai government, Commerce chose to accept these where there was no other financial statement available.  In its first decision, CP Kelco US, Inc. v. United States (Kelco I), Slip Op. 15-27, 2015 WL 1544714, at *7 (CIT Mar. 31, 2015), the court held that Commerce “should have compared the two side-by-side,” given that both sets of financial statements had different flaws.  On remand, Commerce selected Thai Ajinomoto’s statements over Thai Fermentation’s because the agency has a “well-established practice” of rejecting all incomplete financial statements, and Thai Ajinomoto’s statements were not incomplete.

However, because Commerce did not review the implications of applying financial statements of a company receiving countervailable subsidies and simply harped on the incompleteness of Thai Fermentation’s records, the court did not find Commerce’s findings to be supported by substantial evidence. Moreover, there is not such “well-established practice” of rejecting all incomplete financial statements.