United States Court of International Trade

Slip Op. 20-37

Before the Court in Macao Commercial & Indust. Spring Mattress Mfr. v. United States, et. al., Slip Op. 20-37, Court No. 19-00005 (March 20, 2020) was a challenge to Commerce’s determination that plaintiff circumvented the antidumping duty (“AD”) order on uncovered innerspring units from China. Commerce self-initiated an anti-circumvention inquiry resulting in determinations that innersprings manufactured by plaintiff in Macau from materials originating in China, and then exported to the United States were circumventing the antidumping order. In addition, Commerce also found that there were discrepancies with plaintiff’s financial statements. This resulted in Commerce applying the adverse facts available (“AFA”) against the plaintiff for failing to cooperate to the best of its ability. For the following reasons, the Court sustained Commerce’s determination in full.

Under 19 U.S.C. § 1677j(b)(1)(B), Commerce may determine that merchandise is circumventing an AD order where, “before importation into the United States, such imported merchandise is completed or assembled in another foreign country from merchandise which— (i) is subject to such order or finding, or (ii) is produced in the foreign country with respect to which such order or finding applies.” Id. at 6. The Court said plaintiff failed to demonstrate that Commerce acted unreasonably in finding the innerspring units are completed or assembled in Macau using Chinese-origin materials prior to importation into the United States. Plaintiff also argued the application of the AFA was not permitted because Commerce failed to give notice as required under 19 U.S.C. § 1677m(d). The Court said that plaintiff’s argument “begs credulity” because of the communications on the record between Commerce and plaintiff. Id. at 13. In addition, the Court found that plaintiff’s arguments regarding Commerce’s determination that the application of the AFA was not warranted and that the Macao manufacturing was minor or insignificant was not warranted because plaintiff failed “to establish that the information on the record supported one, and only one, reasonable conclusion,” opposite of what Commerce decided. Id. at 18. In addition, the Court did not consider plaintiff’s argument regarding the value of the Macao commercial processing because plaintiff did not raise the argument before Commerce and therefore failed to exhaust administrative remedies.