United States Court of International Trade

Attempt by Plaintiffs to Initiate Minor Alterations Inquiry Fails

Before the Court in Columbia Forest Products, et. al. v. United States, et. al., Slip Op. 19-98, Court No. 18-00098 (July 30, 2019) was a challenge to Commerce’s determination not to initiate a minor alterations anticircumvention analysis on softwood veneered plywood, under the antidumping duty and countervailing duty orders covering certain hardwood and decorative plywood products (“hardwood plywood”) from the People’s Republic of China. Id. at 3. After publishing preliminary determinations, Commerce clarified “that plywood with both a face and back veneer of coniferous wood (softwood) was not included within the scope of the investigations.” Id. at 5.  After the International Trade Commission (“ITC”) found material injury because imports of certain hardwood plywood products, plaintiffs requested that Commerce initiate an anticircumvention inquiry, “to determine whether imports of plywood with both face and back veneers of softwood involve a minor alteration to the subject merchandise such that it would be subject to the Orders.” Id. at 8. Commerce refused to initiate a minor alterations inquiry on the faulty premise that Commerce had already determined that the merchandise fell outside the plain language of the Orders. Id. at 13. For the following reasons, the Court granted the government’s motion for summary judgment.

 “The purpose of the minor alterations provision is to include merchandise that would have been included within the scope of an order but for minor alterations removing the merchandise from the order’s literal scope.” Id. at 19. The Court found that this reasonably includes an intent that the merchandise as altered would have been included in the scope of the investigation, if Commerce and the ITC had had reason to consider it at the outset of the investigation. Id. at 19. The Court found that the allegedly altered merchandise at issue was specifically considered during the investigation, was well-known at the outset of the investigation, and is different from the subject merchandise. Id. at 13. Accordingly, Commerce’s decision that an anti-circumvention inquiry was unnecessary was supported by substantial evidence.

Court Remanded Commerce’s Decision in Antidumping Case

Before the Court in Deacero S.A.P.I. De C.V., et. al. v. United States, et. al., Slip Op. 19-99, Court No. 17-00183 (August 1, 2019) was Commerce’s remand redetermination filed pursuant to the Court’s previous order.  Previously, in Deacero  S.A.P.I de C.V. v. United States, 42 CIT __, __, 353 F. Supp. 3d 1303, 1314-1315 (2018) (“Deacero I”),  the Court explained that Commerce failed to corroborate the 40.52% petition rate assigned to respondent using the “adverse facts available” (“AFA”) from the 2014–2015 administrative review of the antidumping duty (“ADD”) order covering carbon and certain alloy steel wire rod from Mexico and remanded the decision to Commerce for further explanation or reconsideration. Id. at 2. On remand, Commerce explained the “evidence it placed on the record on remand demonstrates the probative value of the assigned rate and satisfies the statutory corroboration requirement.” Id. at 2-3. Plaintiffs argued that Commerce’s corroboration analysis did not rely upon independent sources and failed to demonstrate that the petition rate was probative, relevant, and reliable. Id. at 6. For the following reasons, the Court found the Remand Results did not comply with the remand order, the results were remanded for further explanation or reconsideration consistent with this opinion. Id. at 7.

“Whenever Commerce relies on information not obtained in the course of an investigation or review, such as allegations in a petition, it is relying on secondary information and is required, to the extent practicable, to corroborate that information from independent sources.” Id. at 7. Commerce corroborates secondary information by “examining whether the secondary information to be used has probative value.” Id. at 7. The independent nature of a source depends on who originates the information provided and not by who files the information. Id. at 8. In this case, Commerce’s explanation revealed that it merely drew on the conclusions stated in the Initiation Notice and Initiation Checklist. The Court said none of the documents Commerce referenced to support its calculations as to export price and normal value were placed on the record. Id. at 10. The Court reasoned that “if the obligation to demonstrate the probative value of a rate is to have any meaning, Commerce must do more than refer to conclusions of calculations it carried out previously.” Id. at 11. The Court also reasoned that “Defendant cannot claim that Commerce used independent sources to corroborate the 40.52% AFA-rate … without identifying which independent sources Commerce relied upon, placing all such sources on the record, and explaining how such sources corroborate the AFA rate”. Id. at 12.

Court Granted Motion for a Preliminary Injunction in Antidumping Case

Before the Court in Nexteel Co., Ltd. et. al. v. United States, et. al., Slip Op. 19-101, Court No. 19-00092 (August 2, 2019) was a motion for preliminary injunction to enjoin the United States from liquidating, Plaintiff-Intervenor, Hyundai Steel Company’s entries subject to the final results of an antidumping order administrative review (“Final Results”). For the following reasons, Plaintiff-Intervenor’s motion for a preliminary injunction is granted. 

 The Court considered four factors when evaluating whether to grant a preliminary injunction: whether the party would incur irreparable harm in the absence of such injunction; whether the party was likely to succeed on the merits of the action; whether the balance of hardships favored the imposition of the injunction; and whether the injunction was in the public interest. Id. at 6. The Court concluded that Plaintiff-Intervenor would suffer irreparable harm absent injunctive relief, because absent injective relief Plaintiff-Intervenor would lose the ability to protect its entries from being liquidated at the challenged rate. Id. at 6. The Court found that Plaintiff-Intervenor showed a likelihood of success on the merits because this Court ruled against Commerce on the merits twice in related litigation. Id. at 6. Lastly, Plaintiff-Intervenor may have suffered hardship if its entries were liquidated before the conclusion of this case, whereas Defendant was unlikely to suffer hardship because Plaintiff-Intervenor’s entries are subject to cash deposits. Id. at 7.The public interest factor was neutral between the parties. As such, the Court granted the requested injunctive relief.

Court Sustains Commerce’s Final Negative Determination in Countervailing Case

Before the Court in Archer Daniels Midland Company et.al. v. United States, Slip Op. 19-103, Court No. 18-00160 (August 2, 2019) was a challenge to Commerce’s final negative determination in the countervailing duty investigation of citric acid and certain citrate salts from Thailand. Plaintiffs’ argument was centered around Commerce’s selection of the ASEAN-CHINA FTA as a benchmark to compare possible benefits received by COFCO Biochemical (Thailand) Co., Ltd. (“COFCO”); Niran (Thailand) Co., Ltd. (“Niran”); and Sunshine Biotech International Co., Ltd. (“Sunshine”) (collectively, “Respondents”) when importing machinery duty-free into Thailand pursuant to Section 28 of  Investment Promotion Act (“IPA Section 28”), a subsidy program exempting certain imported machinery from payment of import duties when used in specified projects. Id. at 2. Commerce determined using the benchmark, that no benefit was received by respondents from the IPA Section 28 program. Plaintiffs contend that Commerce’s determination was unsupported by substantial evidence because the record showed Respondents did not import the machinery pursuant to the ASEAN-China FTA and could not have complied with its requirements. Id. at 3. Defendant argued Commerce’s determination was supported by substantial evidence because the record was “replete” with documents demonstrating that Respondents’ machinery “originated from China.” Id. at 3. For the following reasons, the Court sustained Commerce’s final negative determination.

“Commerce is required to impose countervailing duties on merchandise that is produced with the benefit of government subsidies when it causes material injury to a domestic industry.” Id. at 3. “Such a subsidy exists when (1) a foreign government provides a financial contribution (2) to a specific industry and (3) a recipient within the industry receives a benefit as a result of that contribution.” Id. at 3. “A party benefits from the contribution when taxes or import charges paid by a firm as a result of the program are less than the taxes the firm would have paid in the absence of the program.” Id. at 4. “Commerce must establish a benefit calculation benchmark, or more precisely, determine what tariff rate would have applied absent the alleged subsidy. Once this benchmark is established, Commerce will have a reference point from which it can determine the amount of benefit that has been conferred.” Id. at 4. In this case, the parties dispute whether it was reasonable for Commerce to select the ASEAN-China FTA duty-free rate as the benchmark against which to measure whether Respondents received a countervailable benefit for imports of machinery through the IPA Section 28 program. Id. at 11. The Court found that, as Commerce explained, there is no support in its regulations or practice for requiring evidence of parallel compliance with ASEAN-China FTA procedural requirements as part of its identification of a suitable benchmark. Id. at 11. The Court reasoned Plaintiffs failed to identify any legal authority or record evidence suggesting that Commerce’s refusal was unreasonable.  Id. at 15. Thus, Commerce’s decision to use the ASEAN-China FTA tariff rate as the benchmark tariff rate is supported by substantial evidence. Id. at 15.

Court Sustains Commerce’s Redetermination Upon Remand in Antidumping Case

Before the Court in Hyundai Heavy Industries, Co. Ltd. v. United States et. al., Slip Op. 19-104, Court No. 17-00054(August 2, 2019) was a challenge to certain aspects of Commerce’s final results in the third administrative review of the antidumping duty order on large power transformers (“LPT”) from the Republic of Korea. Specifically, plaintiff challenged Commerce’s decision to assign plaintiff a weighted-average dumping margin of 60.81 percent based on the use of total adverse facts available (“AFA”). Id. at 2. On remand, Commerce determined that plaintiff had properly reported accessories, consistent with the scope of the antidumping duty order, but that plaintiff selectively reported certain sales information and provided unreliable data. Id. at 4. Because of this, Commerce again determined use of the AFA was appropriate. Id. For the following reasons, the Court sustained Commerce’s remand results.

“The mere production of a substantial volume of documents does not, ipso facto, demonstrate that a respondent acted to the best of its ability. The inquiry is whether a respondent has put forth its maximum effort to provide Commerce with full and complete answers to all inquiries in an investigation.” Id. at 12. “In general, use of partial facts available is not appropriate when the missing information is core to the antidumping analysis and leaves little room for the substitution of partial facts without undue difficulty.” Id. at 14. Commerce uses “total AFA” when it concludes “that all of a party’s reported information is unreliable or unusable. The Court found the record adequately supports Commerce’s decision to make an adverse inference because “despite a specific and comprehensive request for sales and expense documentation, plaintiff selectively reported what it considered necessary and sufficient.” Id. at 13. The Court reasoned that plaintiff’s ability to provide supporting documentation for some commission expenses indicates that additional documents existed, but plaintiff failed to provide them. Under these circumstances, “it is reasonable to conclude that” plaintiff demonstrated “less than full cooperation.” Id. at 14. Thus, the Court concluded that Commerce reasonably determined that the use of partial AFA was not practicable. Id. In addition, the Court also sustained Commerce’s use of the total AFA in regards to missing documents, finding plaintiff was not entitled to endless opportunities to cure deficiencies in its reporting. Id. at 10.