United States Court of International Trade

Labor FOP was Reconsidered on Remand

In Ad Hoc Shrimp Trade Action Committee v. United States, Slip. Op. 17-76, Court No. 15-00279 (June 29, 2017), the Court reviewed Commerce’s determinations on remand filed pursuant to Ad Hoc Shrimp Trade Action Committee v. United States, 41 CIT__, 219  F. Supp. 3d 1286 (2017) (Ad Hoc Shrimp 1). In the case, plaintiffs challenged Commerce’s use of Bangladeshi labor values as a surrogate value in calculating antidumping margins on frozen shrimp from Vietnam.  Plaintiff presented evidence of systematic labor abuse in the Bangladeshi shrimp industry to the Court. The Court remanded the decision to Commerce for an explanation as to whether the Bangladeshi data was still the best available.  On remand, Commerce decided “the Bangladeshi wage rate data does not constitute the best available information for valuing the labor factor” and opted to use Indian labor statistics instead. Id. at 4. The Court upheld Commerce’s decision on remand for the following reasons. 

“To determine normal value for subject merchandise exported from a nonmarket economy country, Commerce uses surrogate values for the factors of production.” Id. at 5.  However, “Commerce has acknowledged that aberrational values should not be used to value FOPs.” Id. at 7.  Where aberrational values are found Commerce must justify the data as the best available, or decide the data is unreliable and use data from another surrogate country.  In the original case the court held that Commerce had not addressed “evidence of alleged systemic labor abuses and thus had not reasonably found the Bangladeshi labor data to be the best available information.” Id. at 7.  On remand, Commerce reconsidered if the statistics was aberrational and the best available.  Given the Court’s concerns regarding the Bangladeshi labor abuse, Commerce decided to use wage rate data from another potential surrogate country on the record, and therefore applied Indian labor data as a surrogate. No party challenged Commerce’s remand results and the court sustained the remand.

Court Dismissed Case Where 1581(c) Was Not Manifestly Inadequate

In Shandong Dongfang Bayley Wood Co., Ltd. v. United States, Slip Op. 17-77, Court No. 17-00094 (July 3, 2017), plaintiff sought “declaratory and equitable relief following the publication of the preliminary results of a countervailing duty investigation.” Id. at 1. Bayley was assigned a 111.09% subsidy rate during a preliminary investigation. Certain Hardwood Plywood Product’s From the People’s Republic of China: Preliminary Affirmative Countervailing Duty Determination, Preliminary Affirmative Critical Circumstances Determination, in Part, and Alignment of Final Determination with Final Antidumping Investigation, 82 Fed. Reg. 19,022 (Int’l Trade Admin. Apr. 25, 2017).   Bayley sought to compel Commerce to consider a questionnaire submitted by Bayley, conduct verification, and assign Bayley a lower cash deposit rate. Bayley argued that they could lose millions of dollars as a result of the preliminary investigation. Commerce did not assign this rate based on review of subsidies provided to Bayley, but from authority under section 776 of the Tariff Act for when a party does not cooperate. The Court found that Bayley withheld necessary information that Commerce requested, and had failed to follow deadlines which impeded the agency proceeding under review.  For the following reasons, the court dismissed the action for lack of subject matter jurisdiction.

“In section 516A of the Tariff Act, Congress specifically has provided for the judicial review of the U.S. Court of International Trade of certain determinations issued under the antidumping and countervailing duty laws.” Id. at 4. Only, a final affirmative countervailing duty determination is expressly authorized for judicial review. However, the determination at issue in this case is a preliminary affirmative determination, which is not reviewable under 516A and 28 U.S.C. §1581(c). Bayley also asserted the court’s residual jurisdiction, 28 U.S.C. S 1581(i). “Resort to this jurisdictional provision is available only if the remedy potentially available in an action bought under 28 U.S.C. §1581 (c) would be manifestly inadequate.” Id. at 5. Under this provision, Bayley bore the burden of proving “the manifest inadequacy of its remedy.”  Id at 5.  Bayley alleged that they are “missing out on millions of dollars.” Id. at 6. However, the Court determined that this claim was not backed up by any factual allegations in the complaint. The Court stated, “Bayley has alleged no facts from which the court may conclude that the remedy available upon its contesting a final affirmative CVD determination … is manifestly inadequate.” Id at 5, and thus, the Court dismissed the case.

United States Court of Appeals for the Federal Circuit

Lower Court Decision on Offset Affirmed

In Maverick Tube Corporation et al. v. United States, Court No. 2016-2330 (July 3, 2017), appellants, Toscelik Profil ve Sac Endüstrisi A.S., and Çayirova Boru Sanayi ve Ticaret A.S. (collectively, “Çayirova”), appealed from the final judgment of the United States Court of International Trade (“Trade Court”) sustaining Commerce’s decision that Çayirova is not entitled to a duty drawback adjustment for its exports of oil country tubular goods.   Çayirova argued that because it received the duty drawbacks on its non-J55 coils solely “by reason of the exportation of the [oil country tubular goods] to the United States,” 19 U.S.C. § 1677a(c)(1)(B), Commerce should have offset Çayirova’s export price by the duty drawback. Commerce, however, determined that Çayirova was not entitled to a duty drawback adjustment because none of the goods for which duties were exempted, i.e., the non-J55 coils, were capable of being used to produce Çayirova’s oil country tubular goods. Here, Appellant Çayirova produces various types of steel pipes from different grades of hot-rolled steel coils. However, the particular pipes at issue here, oil country tubular goods, may only be produced from a grade of coil known as J55. Thus, offset may not be given to for duty drawback on nonJ55 coils, where it sourced it domestically from a Turkish producer.

Because the statute does not address the issue of whether offset should only be allowed on inputs of the subject merchandise, the court affirmed Commerce’s and the lower court’s reasoning.  Moreover, “allowing for duty drawbacks for goods unrelated to the subject merchandise contravenes the statutory goal of making apples-to-apples comparisons between foreign and United States prices.”  See Slip Op. pg.  9.