United States Court of International Trade

Court Sustained Remand Redetermination

In Gang Yan Diamond Products, Inc. et al. v. United States, Court No. 14-148, Slip Op. 16-49 (May 11, 2016), the court considered the results of remand of Diamond Sawblades from the People’s Republic of China (“PRC”) (“Remand”) of the defendant’s International Trade Administration, U.S. Department of Commerce (“Commerce”). The plaintiffs’ (“Gang Yan”) comments on the remand results address the appropriate rate to be assigned to the Advanced Technology & Materials (“ATM”) single entity, of which the plaintiffs are part. Commerce’s remand redetermination explains that during the original third administrative review proceeding, the PRC-wide entity was under review for two similar reasons: (1) 27 non-selected companies, for which administrative review was initiated, did not rebut the presumption of government control, and (2) the ATM single entity, a mandatory respondent, also failed to rebut the presumption. Pursuant to Commerce’s practice at the time, that failure (of these 27 companies as well as of ATM) triggered a review of the PRC-wide entity, and Commerce applied the only PRC-wide rate available at that time, i.e., the 164.09 percent rate determined in the LTFV investigation. However, in light of the affirmed PRC-wide rate from the second administrative review, Commerce recognized that the PRC-wide rate had changed from its original results in the third administrative review, and it assigned the PRC-wide entity the rate (i.e., 82.05 percent) from the remand redetermination of the second review. Commerce explained that the 82.05 percent rate, consisted of a simple average of the PRC-wide rate of 164.09 percent from the investigation and the 0.00 percent weighted-dumping margin calculated for the ATM single entity in the second administrative review, and included the experience of a fully cooperative element of the PRC-wide entity.

Gang Yan challenged the reasons for including the 164.09 PRC rate in the third review where the PRC-wide entity cooperated with the review.  But because it never raised in the administrative proceedings, the court did not address it here as it failed to exhaust administrative remedies.  For this reason the court sustained Commerce’s remand redetermination.

Remand Results Sustained

At issue before the court in Diamond Sawblades Manufacturers’ Coalition v. United States, Court No. 13-168, Slip Op. 16-48 (May 11, 2016), were the results of remand (“Remand”) of the administrative determination to revoke in part the antidumping duty order on diamond sawblades from the People’s Republic of China (“PRC”) with respect to subject merchandise produced or exported by the “ATM entity” of which the defendant-intervenors Beijing Gang Yan Diamond Products Company and Gan Yan Diamond Products Company were a part.  Defendant U.S Department of Commerce (“Commerce”) voluntarily remanded the case to revoke the antidumping order on diamond sawblades as it applied to the ATM entity.   The ATM entity had been deemed eligible for a rate separate from that of the PRC-wide entity. Subsequent litigation, however, resulted in alteration of the ATM entity’s separate rate eligibility, i.e., its status, and because the ATM entity’s status (quo ante) was the legal predicate for the determination to revoke (via the matter of the section 129 proceeding that the plaintiff here challenged), the ATM entity’s altered status necessarily triggered the defendant’s request to re-evaluate the revocation determination. The matter was thus remanded for further consideration. 

As part of the remand Commerce reinstated the antidumping duty order as the basis for the partial revocation was no longer valid.  Diamond Sawblades Manufacturing Coalition (DSMC) agreed with the reinstatement but asserted that simultaneous cash deposits should be require for retroactive and future entries.  However, DSMC provided no evidence that Commerce would not be able to make such collections of duties from the ATM entity, and therefore Commerce argued that such deposits were not necessary. For the reasons stated, the court affirmed the remand results.

Commerce Determination Remanded in Part

In United States Steel Corporation et al., and Maverick Tube Corporation et al. v. United States, Court No. 14-263, Slip Op. 16-44(published May 16, 2016), plaintiffs filed USCIT Rule 56.2 motions for judgment on the agency record, challenging the Department of Commerce’s (“Department” or “Commerce”) final determination in the antidumping duty (“ADD”) investigation of imports of certain oil country tubular goods (“OCTG”) from India for the period of July 1, 2012 through June 30, 2013. See Certain Oil Country Tubular Good From India, 79 Fed. Reg. 41,981 (Dep’t Commerce July 18, 2014) (final determination of sales at less than fair value and final negative determination of critical circumstances) (“Final Determination”). To address matters more efficiently, the court consolidated U.S. Steel’s challenge with an action filed by GVN Fuels Limited (“GVN”), an individual exporter of OCTG, Maharashtra Seamless Limited (“MSL”) and Jindal Pipes Limited, (“JPL”), individual producers of OCTG (collectively “GVN Plaintiffs”). Plaintiffs, and Plaintiff-Intervenors Maverick Tube Corporation (“Maverick”) filed motions for judgment on the agency record pursuant to USCIT Rule 56.2.  The court sustained Commerce’s determinations: (1) granting GVN a duty drawback adjustment under the advance license export program operated by the Indian government; (2) collapsing GVN with MSL and JPL, its affiliated producers; and (3) finding that all of MSL and JPL’s home market sales occurred within the same level of trade. However, the court remanded Commerce’s determination with respect to its differential pricing analysis, specifically Commerce’s application and explanation of its ratio test in this case, for further explanation and consideration. Further, the court remands Commerce’s determinations for further explanation and consideration that: (1) Jindal SAW was unaffiliated with certain suppliers of inputs; (2) Jindal SAW’s yield loss data reasonably reflected its costs of production; and (3) the highest COP in GVN’s cost database should be assigned to its dual-grade products.

Given the record evidence of indirect ownership and close supplier relationships, Commerce failed to adequately explain why it was reasonable to conclude that Jindal SAW and its suppliers of steel billets and electricity were not under the common control of the O.P. Jindal family. Commerce did not evaluate the collective stock ownership (including indirect stock ownership), management positions, and board memberships held by O.P. Jindal family members in Jindal SAW, JSPL, and others as its practice requires.  Therefore, the court remanded this decision back to Commerce for further explanation.

As for Jindal SAW’s yield loss data, Commerce found no reason to apply AFA where Jindal SAW cooperated and Commerce verified the yield loss methodology.  Yet Commerce provided no evidence to show that Jindal SAW’s reported methodology reflected its cost of production (COP) for each specific category of merchandise. The court stated, “Since Commerce merely accepted Jindal SAW’s reported yield losses without comparing costs, as it had with respect to conversion costs, Commerce could not have determined if this yield loss reporting methodology potentially distorted Jindal SAW’s yield losses.”  Slip Op., pg. 33. On remand, Commerce was asked to explain why Jindal SAW’s reported yield loss data, which clearly did not track yield losses by production stage or physical characteristics of the merchandise, nonetheless did not distort Jindal SAW’s COP for specific cost information in its cost database for each control number (CONNUMs) of subject merchandise or reconsider its determination.

As for the dual-grade products, Commerce identified a gap in the record that prevented it from calculating GVN’s COP for its N/L-80 products based upon its cost database, finding that “GVN submitted data on the record for sales of N-80 grade OCTG, but it explicitly identified sales of N/L-80 grade product as N-80 grade product.”  Lacking COP data on the record for N/L-80 grade product, Commerce assigned the N/L- 80 dual grade product costs associated with L-80 grade product because it has the stricter performance requirements. However, nothing in Commerce’s practice indicates that it selects the highest costs associated with the product with the highest performance specifications where there are multiple CONNUMs within that higher performance product category included with a respondent’s COP database. Nor did Commerce explain why it selects the highest costs in regards to the L-80 grouping. For this reason, the court remanded Commerce’s decision concerning selection of highest costs for GVN’s COP and asked for explanations for this selection.

Final Results of Redetermination Sustained

In Maverick Tube Corporation, and Toscelik Profil ve Sac Endustrisi A.S., Cayirova Boru Sanayi ve Ticaret A.S., and  Boomerang Tube LLC, Energex Tube (A Division of JMC Steel Group), Tejas Tubular Products, TMK IPSCO, Vallourec Star, L.P., Welded Tube USA Inc., and United States Steel Corporation v. United States, and Borusan Istikbal Ticaret A.S., Borusan Mannesmann Boru Sanayi ve Ticaret A.S., Toscelik Profil ve Sac Endustrisi A.S., and Cayirova Boru Sanatyi Ve Ticaret A.S., the Court sustained the U.S. Department of Commerce’s (“Commerce”) Final Results of Redetermination pursuant to Remand, ECF No. 111-1, of the final determination in the antidumping investigation of oil country tubular goods “(OCTG”) from the Republic of Turkey, for the period of investigation between July 1, 2012 and June 30, 2012.  Court No. 14-00244, Slip Op. 16-46 (May 10, 2016).  Previously the court remanded Commerce’s calculation of the constructed value (“CV”) profit margin (“CV Profit”) and duty drawback adjustment used in determining the antidumping (“AD”) margin for mandatory respondent Cayirova Boru Sanayi ve Ticaret A.S., and its affiliated exporter Yucel Bora Ithalat-Pazarlama A.S..

On remand, Commerce recalculated Yucel’s constructed value profit margin, and therefore AD duty margin, using Borusan’s home market data and CV rates.  Although plaintiffs argued relying on business proprietary information unnecessarily risked disclosure, the Court held that Commerce’s decision was supported by substantial evidence and the refined methodology implemented prevented such disclosure.  While Commerce selected an alternative method not commonly employed, such a change in position is permissible as long as the basis for the change is explained.  The Court held that Commerce adequately explained why a different methodology was used on remand and distinguished previous cases before the Court.

Commerce also reconsidered the question of Yucel’s duty drawback on Remand and concluded that the company was not entitled to an adjustment because the inputs were not suitable for or used in the production of the subject merchandise, relying on the Federal Circuit’s decision in Saha Thai Steel Pipe Co. v. United States, 635 F.3d 1335 (Fed. Cir. 2011). The Court upheld this determination, finding that Commerce’s determination was a permissible construction of the AD statute and consistent with statutory purpose and text.

Final Results of Remand Redetermination Sustained

The Timken Company v. United States and NSK Ltd., NSK Corporation, NSK precision America, Inc., NTN Bearing Corp. of America, NTN Corporation, NTN Bower, Inc., NTN Driveshaft, Inc., American NTN Bearing Manufacturing Corp., Jtekt Corporation, Jtekt North America, Inc., Nachi-Fujikoshi Corporation, Nachi America, Inc. Nachi Technology, Inc. NSK Bearings Europe, Ltd., NSK Europe Ltd., concerned a challenge to the Final Results of Remand Redetermination in the annual antidumping duty review of imports of ball bearings and parts thereof from Japan and the United Kingdom.  Court No. 14-00155, Slip Op. 16-47 (May 10, 2016).   Finding that Commerce complied with the remand order with instructions to apply its usual differential pricing (“DP”) analysis, the Court sustained the Remand Results.

The Court found NTN’s argument that it was deprived of an opportunity to comment on the Draft Remand Results unpersuasive.  Although certain parties did not receive an automated notification due to a failure of the electronic filing system, Commerce granted an extension to those parties to file comments.  Furthermore, the seven day time limit to provide comments was not unreasonable as NTN was aware more than a month before comments were initially due of the Court’s Remand Order for Commerce to apply the DP analysis.

NTN’s claim that the DP analysis involves double counting also failed since, the Court held, it was reasonable that where there are two purchasers, the value of the sales are included just once in the numerator and denominator.  Indeed, the Federal Circuit decision in JBF RAK LLC v. United States, 790 F.3d 1358 (Fed. Cir. 2015), upheld Commerce’s DP analysis methodology as lawful.  Similarly, NTN failed to demonstrate that Commerce’s decision to use product control numbers to compare data and merchandise was unreasonable as the statutory language provides for such a practice.  Finally, the Court held that Commerce’s use of zero as part of the DP analysis was lawful, even if mixed with the average-to-average transaction (“A-T”) methodology, because substantial evidence supported Commerce’s determination.

As to NTN’s challenge to Commerce’s application of its DP analysis to NTN’s sampled sales database, the Court held this argument equally without merit.  To begin, the Court found that NTN failed to exhaust administrative remedies by not raising certain arguments in its comments on the Draft Remand Results.  Furthermore, the Court found, the application of the DP analysis to a subset of NTN sales database was not an abuse of discretion.  The Court previously upheld Commerce’s sampling methodology and NTN was aware before remand that Commerce had a sampled database but did not raise objections or ask Commerce to reopen the record to obtain a full reporting of sales. 

Finally, the Court held that Commerce sufficiently explained its decision not to use the default average-to-average (“A-A”) methodology.  Commerce explained that the A-A methodology would not account for price differences.  The use of the A-T methodology was more appropriate because of significant price differences in the U.S. price and meaningful amount of offsets that impact the amount of dumping.  Unlike the A-A methodology, Commerce explained, the A-T methodology does not allow the offsets to dilute het weighted-average dumping margin.  The Court held that Commerce’s explanation was adequate and reasonable. 

Canadian Internatonal Trade Tribunal

Disney Table and Chair Set Classified as “Furniture”, Rather than a “Toy”

A Disney children’s table and chair set is properly classifiable as “other furniture” of Harmonized Tariff Schedule subheading 9403.20.00, rather than as a “toy” of Heading 9503, according to a recent decision of the Canadian International Trade Tribunal (CITT).

In Jakks Pacific Inc. v. President, Canada Border Services Agency, AP 2015-12 (2016) the Tribunal, upholding a CBSA ruling, held that the table and chair set, which featured an erasable tabletop for children to draw on, was not classifiable as a toy merely because it provided amusement. Even though the product had a 100-pound weight limit, the Tribunal found that the article was primarily utilitarian, and that the chairs, which featured a metal frame and padded seats, were properly considered juvenile “furniture”, rather than “toys.