United States Court of International Trade

Court Sustained Remand Results

In Juancheng Kangtai Chemical Co., Ltd. et al. v. United States et al., Court No. 14-0056, Slip Op.17-3, the court considered the redetermination on the seventh administrative review of chlorinated isocyanurates from the People’s Republic of China (PRC).  On remand, Commerce reconsidered (1) selection of the primary surrogate country, (2) adjustment of the financial ratio calculation to reflect production labor costs, (3) use of ammonium sulfate as a by-product offset, (4) valuation of ammonium chloride, and (5) adjustment of U.S. price to account for the portion of the PRC’s value added tax (VAT) that is not refunded upon export.

In the remand results, Commerce continued to choose the Philippines as the primary surrogate country as it was on a level comparable to the PRC and India was not. Commerce had fully explained that when considering an all-else-being-equal choice between economically comparable countries, the quality of chlorine input that India provided may prevail.  However, according to Commerce — “all else is not equal when choosing between a country at the same level of economic development and one that is less comparable.”  As for Thailand, the Redetermination indicated that Commerce did consider in fact whether the Thai data were superior to the Philippine data, all else being equal, and information presented showed the Thai data not to be superior.

As to the financial data ratio calculation and by product offset findings, the court sustained these findings despite the contrary arguments which were similarly posed in Clearon III.

For purposes of the valuation of ammonium chloride, the court found reasonable and supported by substantial evidence, Commerce’s finding that the 5,464 kilograms of Philippine imports of ammonium chloride reflected competitive commercial transactions, and thus sustained Commerce’s determination.

Finally, as for adjustment for the irrevocable VAT, the court first considered what is permissible under the law.  Pursuant to the applicable statute, the export price or constructed export price shall be reduced by any export tax, duty, or other charge imposed on the subject merchandise, with certain limitations. 19 U.S.C. §1677a(c)(2)(B). Because this irrecoverable VAT is a charge imposed only on exports, Commerce reasonably concluded that it is a cost imposed “on the exportation of the subject merchandise”. See 19 U.S.C. §1677a(c)(2)(B).

For all these reasons the court sustained the remand redetermination.