United States Court of International Trade

Slip On. 21-149

Before the Court in Carbon Activated Tianjin Co., Ltd., et. al., v. United States, et. al., Court No. 20-00007, Slip Op. 21-149 (October 22, 2021) was Plaintiffs challenge against Commerce’s final results in the eleventh administrative review of the antidumping duty order on certain activated carbon from China for the period of review April 1, 2017 through March 31, 2018. Id. at 2-3. “Plaintiffs challenged Commerce’s (1) selection of Malaysia instead of Romania as the primary surrogate country; (2) selection of surrogate values for Carbon Activated and DJAC’s inputs of bituminous coal and coal tar pitch; and (3) calculation of surrogate financial ratios.” Id. at 3. Specifically, Plaintiffs contended that “Commerce should have valued all bituminous coal with an unknown calorific value using the average of Romanian HS 2701.12 and HS 2701.19 data.” Id. at 9. The Government contended that, “with respect to bituminous coal having unknown calorific value, Commerce reasonably relied on Romanian HS 2701.12.” Id. Additionally, Plaintiffs contended that “Commerce should have valued all bituminous coal having known calorific value below 5,833 kcal/kg using Romanian HS 2701.19.” Id. at 13. The Government contended that “Commerce’s selection of Malaysian import data under HS 2701.19 should be sustained because Commerce provided a reasoned explanation for its selection of such data and Plaintiffs’ assertions of unreliability are unsupported.” Id. Furthermore, Plaintiffs contended that Commerce should have chosen Romania over Malaysia as the primary surrogate country because, in their view, “Romania provides superior data quality” to Malaysia. Id. at 16. The Government contended that “Commerce’s reliance on the specificity of the tariff classification for coconut shell charcoal, used by some respondents, provides support for Commerce’s selection of Malaysia as the primary surrogate country.” Id. Moreover, Plaintiffs contended that Commerce “erroneously allocated [ ] ‘Social Contributions’ and ‘Meal Tickets’ under SG&A” instead of labor costs. Id. at 22. The Government contended that Commerce’s retention of “Social Contributions” and “Meal Tickets” under SG&A is supported by substantial evidence and lawful. Id. For the following reasons, the Court sustained Commerce’s Remand Results. Id. at 1.

“The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C § 1516a(b)(1)(B)(i).” Id. at 4. Pursuant to 19 C.F.R. § 351.408(c)(2), Commerce “normally will value all [factors of production] in a single surrogate country.” Id. at 13. The court has acknowledged Commerce’s regulatory preference “to use surrogate value data from the primary surrogate country to minimize distortion.” Id. Here, the Court found that Commerce’s selection of Romanian HS 2701.12 data to value bituminous coal of unknown calorific value was supported by substantial evidence. Id. at 10-12. Furthermore, the court explained, “the parties to the proceeding bear the burden of establishing an adequate record,” and in this case, “Plaintiffs have not met that burden with respect to this issue.” Id. at 14. In this case, the Court found that “Commerce has provided a reasoned explanation as to why it selected Malaysia as the primary surrogate country: the specificity of the HS number for a known input (coconut shell charcoal) and data that was more contemporaneous with the POR.” Id. at 17. Thus, the Court sustained Commerce’s selection of Malaysia as the Primary Surrogate Country. Id. Here, in the Remand Results, Commerce explained that the source of the Malaysian surrogate value for labor did not indicate whether “Social Contributions” or “Meal Tickets” were included in that surrogate value and there was no record evidence indicating “that the labor [surrogate value] used was overstated.” Id. at 23. Thus, the Court sustained Commerce’s allocation of “Social Contributions” and “Meal Tickets” to SG&A. Id. As such, the Court sustained Commerce’s Remand Results. Id. As such, the Court sustained Commerce’s Remand Results. Id. at 24.