United States Court of International Trade

Court Remands Commerce’s Decision Regarding Polyethylene Terephthalate

In Tianjin Wanhua Co., Ltd. v. United States, Court No. 15-190, Slip Op. 16-79 (August 15, 2016, the court remanded the U.S. Department of Commerce’s (“Commerce”) results from its fifth administrative review of the antidumping duty order covering polyethylene terephthalate film, sheet, and strip from the People’s Republic of China. See Polyethylene Terephthalate Film, Sheet, and Strip from the People’s Republic of China, 80 Fed. Reg. 33,241 (Dep’t Commerce June 11, 2015) (final results admin. review) (“Final Results”). Plaintiff challenged: (1) Commerce’s rejection, as untimely, of certain surrogate value information; (2) Commerce’s treatment of Wanhua’s request for clarification of the reasons for Commerce’s rejection of Wanhua’s administrative case brief and the redaction instructions for that brief; and (3) Commerce’s selection of Indonesia as the primary surrogate country. 

While defendant agreed to a remand, it wanted to limit the scope of the remand to Wanhua’s request for clarification of Commerce’s rejection of its brief, and Commerce’s selection of Indonesia as the primary surrogate country.  However, the court does not agree that a limited remand would be sufficient without review of Wanhua’s submission of 2013 GNI data. Therefore, the court remanded the case back to Commerce. 

U.S. Court of Appeals for the Federal Circuit

Reversed in Part, Affirmed in Part, and Remanded in Part CIT’s Decision Regarding Wind Towers from the People’s Republic of China and Socialist Republic of Vietnam

In CS Wind Vietnam Co., Ltd., CS Wind Corporation v. United States et al., Court No. 2015-1850 (August 12, 2016), the Federal Circuit reviewed the finding of the U.S. Department of Commerce (“Commerce”) that a Vietnamese manufacturer of wind towers was selling its products in the United States at about 51.5% below normal value, a figure that Commerce calculated using methods made applicable by statute when imported goods come from a nonmarket economy. The underlying investigation and petition dealt with the issuance of an antidumping duty order against wind towers imported from Vietnam. See Utility Scale Wind Towers From the People’s Republic of China and the Socialist Republic of Vietnam, 77 Fed. Reg. 3,440, 3,440 (Dep’t of Commerce Jan. 24, 2012)

Plaintiffs challenged three aspects of Commerce’s calculation upheld by the Court of International Trade: Commerce’s selection of data to determine the weight of the manufacturer’s products; Commerce’s presumption-based premise that the company’s supplier received subsidies from the Korean government; and Commerce’s calculation of certain overhead expenses for inclusion in the base of costs that go into normal value. The court reversed as to Commerce’s weight calculation; affirmed as to Commerce’s treatment of Korean subsidies; and vacated and remanded as to Commerce’s overhead-expense calculation.

In determining the weight of the CS Wind products (to be multiplied by the surrogate per-kilogram values), Commerce reviewed two such sources of information available: CS Wind’s listing of the components of the wind towers and their weights, produced to and verified by Commerce during the investigation; and packing slips containing customer supplied (not manufacturer-supplied) weight estimates for tower sections to provide center-of-gravity information for the transocean shipping.  The Federal Circuit reversed the lower court’s decision to affirm Commerce’s findings regarding the packing slips because there was no substantial evidence that the packed weight listing was “nearly double” CS Wind’s report weights for those components.  However, the entire weight discrepancy between the CS Wind figures and the packing list figures lay in the internal components, and that discrepancy as a percent of the weight of the overall towers was less than 4%. According to the court, there was no evidence that either (a) a mere 4% difference in overall weight or (b) the specific difference in weight figures for the small internal components portion of the towers would make a difference in maintaining balance on the vessels used for transportation here.

The Federal Circuit affirmed as to Commerce’s decision on subsidies because CS Wind did not demonstrate that the purchases at issue were unaffected by the generally available export subsidies in Korea. Commerce could choose to use surrogate values for those components of the wind towers.

As for Commerce’s overhead-expense calculation, Commerce was supposed to provide a reasoned grounding, in the statute and evidence, for whatever choice it made about what portion of “Jobwork Charges (including Erection and Civil Expenses)” to include in overhead in calculating the normal value of the wind towers at issue.  CS Wind argued to subtract erection and civil income from the expense line item which includes erection and civil expenses.  The court provided an example for such reasoning.  “As we currently understand the matter, one possible scenario supporting that position would be the following: Ganges does essentially no tower setup through its own employees but hires subcontractors for all such work (erection and civil activities), pays the subcontractors (incurring erection and civil expenses), and then charges its tower customers for such setup (receiving erection and civil income). If that were an accurate description of how Ganges conducts its business, the case for CS Wind’s subtraction approach, with a possible small adjustment, would seemingly be strong.” Slip Op., pg. 19.  However, Commerce only reduced outsourced tower set up as an expense by 13% but did not explain why.  Thus, Commerce included all but some tower setup related work as overhead for purposes of calculating normal value. Commerce had not distinguished in determining Jobwork Charges what was Ganges-performed tower setup, Ganges-purchased tower setup, or both.  For these reasons, the Federal Circuit vacated and remanded the lower court’s decision on this issue.