United States Court of International Trade

Before the Court in Eregli Demir ve Celik Fabrikalari T.A.S. et. al. v. United States et. al., Slip Op. 19-135, Court No. 16-00218 (October 29, 2019) were Commerce’s remand determinations made in regards to the Court’s previous remand regarding less than fair value investigation of certain hot-rolled steel flat products from Turkey. The Court had previously remanded with respect to Commerce’s rejection of consolidated plaintiff Colakoglu’s freight expense corrections and duty drawback adjustment. On remand, the agency revised its method for calculating the drawback adjustment and made a circumstance of sale (“COS”) adjustment to normal value to increase the value by the same adjustment as the drawback adjustment. These changes resulted in Colakoglu’s weighted dumping margin increasing from 5.70% to 6.27%. For the following reasons, the Court sustained Commerce’s redeterminations regarding the drawback adjustment but remanded again in regards to Commerce’s decision to make a COS adjustment.

The Court sustained the drawback adjustment because the agency complied with the Court’s order to “revise its calculation … using exports as the denominator rather than total production.” Id. at 9. In regards to the COS issue, the governing statute and “Commerce’s regulations limit COS adjustments … to direct selling expenses and assumed expenses,” Id. at 15. The Court said “the statutory COS provision is not an omnibus provision to be used … for whatever adjustment the agency seeks to effect” and a “more limited understanding of the COS provision is confirmed by the legislative history.” Id. at 17. As such, the Court concluded “Commerce’s adjustment … is not a circumstance surrounding the sale of the merchandise.”  Instead, the Court called the adjustment “as a distortion that arose by operation of the statutory drawback adjustment,” Id. at 19. The Court remanded back to Commerce for reconsideration saying “Commerce’s circumvention of the statutory scheme cannot be saved.” Id.