United States Court of International Trade

New Shipper Review Should Not Have Been Rescinded for Insufficient Information

The court in Jinxiang Huameng Imp & Exp Co., Ltd. and CS Farming Products, Inc., v. United States, Court No. 16-243, Slip Op. 18-116 (September 10, 2018) reviewed whether Plaintiff Jinxiang Huamgeng Imp & Exp Co., Ltd. (“Huameng”) was not bona fide was supported by substantial evidence. Huameng is an exporter and producer of fresh garlic who applied for a New Shipper Review based on a single sale of single-clove garlic that it produced and exported.

Commerce may rescind a new shipper review (1) if there has not been an entry and sale to an unaffiliated customer in the United States of the subject merchandise during the period of review, and (2) an “expansion of the normal period of review to include an entry and sale to an unaffiliated customer in the United States of subject merchandise would be likely to prevent the completion of the review within the [required] time limits.”  See 19 CFR 351.214(f)(2). Commerce interprets the term sale in section 351.214(f)(2) to mean that a transaction it determines not to be bona fide, is not a sale under the regulation.  Here, Commerce rescinded the new shipper review because Huameng did not provide information regarding contractual payments for the goods or for payment of freight and duties. However, the Court held the review should not have rescinded the review and that Commerce should have decided using facts available to fill any gaps in the record. For this reason the Commerce’s decision to rescind the new shipper review was remanded.

Drawback Refund Claims were Untimely and Incomplete

Before the Court in Flint Hill Resources, LP. et. al. v. United States, Slip. Op. 18-110, Court No. 06-00065 (September 6, 2018) were cross motions for summary judgment regarding Customs denial of plaintiff’s drawback refunds on Harbor Maintenance Taxes (“HMT”), Merchandise Processing Fees (“MPF”), and Environmental Taxes (“ET”). When plaintiffs imported their product in the U.S. “an importer could receive a refund of up to 99 percent of the amount paid on any duty, tax, or fee imposed under federal law “because of its importation” into the United States.” Id. at 3-4. Court precedent had found that HMT, MPF, and ET were ineligible under the drawback statute for refund. In response, Congress changed the law to make the fees eligible for drawback in 2004. After the change in legislation, numerous cases were filed to claim drawback on past entries. The Federal Circuit ruled the three year deadline included in 19 U.S.C. § 1313(r)(1) was applicable and the claims were time barred. Plaintiffs filed timely protest for the drawback of duty refunds paid on imports between 1998 and 2002, but not for other fees. After liquidation of previous the claims, plaintiffs filed protest seeking drawback refund of taxes and fees. Plaintiffs challenged the denial of these protest in this action. For the following reasons the Court sustained Customs denial of the protest, and found in favor of defendant’s summary judgment motion. 

“In order for Customs to grant a drawback claim, the claim must be complete.” Id. at 13. A complete claim includes providing notice to Customs that an importer is seeking a refund of HMT, MPF, and ET and a correct calculation of any taxes and fees sought within the three year time limit. In regards to plaintiffs’ drawback claims in this case, the Court said “plaintiffs here failed to put Customs on notice that they were seeking drawback of taxes and fees within the statutory timeframe.” Id. at 17. The Court also said plaintiffs had not provided a correct calculation in their initial drawback request by “merely setting forth a claim for drawback of import duties.” Id. at 20-21. Plaintiffs also argued the statute of limitations regarding plaintiffs’ claims did not begin until after the 2004 legislation was passed by Congress, that enactment of the legislation was a violation of separation of powers, and the defendant was responsible for the delays and the statute of limitation should be waived. The Court was unpersuaded by any of these arguments and found plaintiffs’ claims to be untimely.

Commerce Decision Regarding Hot Rolled Steel Products Remanded in Part

Before the Court in both POSCO et. al. v. United States et. al., Slip Op 18-115, Court No. 16-00225 (September 10, 2018) (Case #1) & POSCO et. al. v. United States et. al., Slip Op. 18-117, Court No. 16-00227 (September 11, 2018) (Case #2) were determinations made by Commerce in the countervailing duty (“CVD”) investigation of hot-rolled steel flat products from Korea. Commerce had chosen to apply the adverse facts available (“AFA”) against POSCO for failure to truthfully respond to Commerce regarding its cross owned companies, to report a facility owned in a free trade zone, and for failure to report any affiliated company loans. Commerce applied the same AFA as have been applied in previous CVD investigations involving Korea. Commerce also found that Government of Korea’s provision of electricity did not benefit POSCO and was not countervailable. POSCO challenges several issues regarding Commerce’s application of the AFA. For the following reasons the Court sustained Commerce in part and remanded in part in one case, and sustained the remand decision in the other.

In Case #1, the first issue the Court dealt with was whether the AFA should be applied at all to POSCO. Plaintiff argued Commerce’s decision to apply AFA is improper because POSCO did not fail to cooperate and it acted to the best of its abilities by sending corrections to Commerce. However, the Court pointed out POSCO had violated Commerce’s deadline by not submitting the corrections 30 days before a preliminary determination was issued. Instead the corrections were submitted after a preliminary determination was issued, therefore Commerce’s decision to apply AFA was reasonable. Plaintiff’s next argument regarding the AFA was that Commerce violated 19 U.S.C. § 1677e(d)(2) by “defaulting” to the highest rate and needed to evaluate the facts and circumstances that led to the application of the highest rate. The Court said “the statute allows Commerce to select the highest rate, but only after Commerce examines the circumstances that led to the application of AFA” and because “Commerce did not provide any such explanation in this investigation,” the issue would be remanded Id. at 19. In Case #1, the Court also sustained all of Commerce’s decisions finding electricity from the Korean Government a non-countervailable subsidy.  

In Case #2, determinations on remand regarding similar issues were before the Court. The Court said “On remand, Commerce explained, with citations to supporting evidence, why this case did not merit a deviation from the highest calculated rate selected pursuant to Commerce’s hierarchical methodology,” and the results were sustained.  Case #2 at 8.

Court Sustained Commerce’s New Antidumping China Wide Rate on Glycine

Before the Court in both Evonik Rexim (Nanning) Pharmaceutical Co. Ltd. et. al. v United States, Slip Op. 18-112, Court No. 17-00132 (September 7, 2018) and Pharm-RX Chemical Corporation v. United States, Slip Op. 18-113, Court No. 17-00268 (September 7, 2018) were Commerce’s determinations in administrative reviews of antidumping duties on glycine from China in 2010-11 and 2013-14. In both cases plaintiffs challenged the China-wide entity rate of 453.79 percent. In separate litigation the China wide rate was challenged, and Commerce calculated a new 155.89 percent dumping rate. Both plaintiffs did not challenge the new rate, as a result the Court sustained Commerce’s determination.