United States Court of International Trade

Commerce Determination Remanded in Part

In this copper tube and pipe case, Golden Dragon Precise Copper Tube Group, Inc. v. United States, Court No. 15-177, Slip Op. 16-71 (July 21, 2016), Golden Dragon Precise Copper Tube Group, Inc. (et al.; collectively “Golden Dragon”), challenged several aspects of Seamless Refined Copper Pipe and Tube From the People’s Republic of China, 80 Fed. Reg. 32087 (Jun. 8, 2015) (final results of 2012-2013 admin. review) (“Final Results”).  The challenges to the administrative determinations were as follows: (i) making an unrecovered Value Added Tax (“VAT”) adjustment of 4 percent to Golden Dragon’s U.S. sales, (ii) applying the byproduct offset for recovered copper to normal value rather than to direct material costs, and (iii) relying upon a truck freight surrogate value that differed from a truck freight rate used previously.

As for the VAT adjustment, Commerce did not sufficiently explain how Golden Dragon’s submissions failed to substantiate the stated PRC requirements for a VAT exemption. Accordingly, the court did not find Commerce’s determination to be based on substantial evidence, and the matter was remanded to Commerce either to further explain how Golden Dragon has failed to substantiate having met its burden under the PRC VAT regulations to qualify for the VAT exemption, or to reconsider the issue anew, with the discretion to re-open the record.

In regards to the byproduct methodology issues, the court sustained Commerce’s decisions. The court believed the Golden Dragon did not exhaust its administrative remedies by failing to raise the double counting issue regarding adjusting for the byproduct offset before the review, and the court did find substantial evidence in the means by which Commerce determined the surrogate value ratio.

Finally in regards to the truck freight surrogate value, the court sustained Commerce’s findings by deciding that it was not necessary for Commerce to apply distance figures from previous reviews to the one at issue here.

Commerce’s Final Results Remanded in Part

In Shenzen Xinboda Industrial Co., Ltd.  et al. v. United States et al, Court no. 15-179, Slip Op. 16-74 (July 27, 2016), Chinese garlic producers challenged the Department of Commerce’s (“Commerce”) final results of the nineteenth administrative review of the antidumping (“AD”) duty order on fresh garlic from the People’s Republic of China (“PRC”). Fresh Garlic from the People’s Republic of China: Final Results and Partial Rescission of the 19th Antidumping Duty Administrative Review; 2012–2013, 80 Fed. Reg. 34,141, 34,141–44 (Dep’t Commerce June 15, 2015) (“Final Results”). Before the court were the motions for judgment on the agency record pursuant to U.S. Court of International Trade (“CIT”) Rule 56.2 by Chinese producers Hebei Golden Bird Trading Co., Ltd. (“Golden Bird”), Jinxiang Richfar Fruits & Vegetables Co., Ltd., Qingdao Lianghe International Trade Co., Ltd., Shandong Chenhe International Trading Co., Ltd., and Weifang Hongqiao International Logistics Co., Ltd. (collectively, “Consolidated Plaintiffs”), and Shenzhen Xinboda Industrial Co., Ltd., (“Xinboda”).   The court remanded the Final Results in part.

As for the use of total adverse facts available (AFA), the court upheld the application of AFA to Golden Bird, where Golden Bird failed to provide all the export declarations and Phyto-sanitary certificates requested by Commerce, and it also failed to substantiate export volume. Golden Bird admitted providing potentially false price information in its export declarations, and thus impeded the proceeding and failed to cooperate to the best of its ability.

However, the court did not find that the rejection of a separate rate status for Golden Bird was supported by substantial evidence. According to the court, “Commerce improperly disregarded Golden Bird’s separate rate information as “tainted” solely because it identified deficiencies in information related to Golden Bird’s sales data. This Commerce cannot do.”  Slip Op., pg. 17. Commerce should have made an independent finding regarding the separate rate information for Golden Bird. Moreover, Golden Bird qualified for a separate rate in other proceedings and thus should qualify for one here.

As for Xinboda’s request to be a mandatory respondent, or in the alternative, a voluntary respondent, the court found that Xinboda failed to exhaust its administrative remedies by failing to submit responses to the questionnaires issued to the mandatory respondents by the deadlines established for the mandatory respondents. Moreover, Xinboda had not shown why any exception to the exhaustion of remedies doctrine applied.

With regards to Commerce’s selection of the eighteenth administrative review’s $1.82/kg separate rate and its application to this year’s separate rate respondents, the court held that such a methodology was unlawful. In the two previous Fresh Garlic Producers Association proceedings, the court twice remanded the final results of the eighteenth administrative review to Commerce because its selection of the Philippines as the primary surrogate country was not supported by substantial evidence, where it had not been shown that the Philippines was a significant producer of subject merchandise.

For these reasons, Commerce’s determination was remanded in part.