Trade Updates for Week of March21, 2018

United States Court of International Trade


Remand Determination Affirmed

In DynaEnergetics U.S. Inc. v. United States, Court No. 16-45, Slip Op. 18-23 (March 16, 2018), the Court affirmed the U.S. Department of Commerce’s (“Commerce”) scope determination in the Remand Results, where Commerce determined that Plaintiff’s customized tubing for perforating gun carriers (“gun carrier tubing”) is within scope of the antidumping and countervailing duty orders.  This action involves a challenge to a U.S. Department of Commerce scope determination for the antidumping and countervailing duty orders on Certain Oil Country Tubular Goods from the People’s Republic of China, 75 Fed. Reg. 28,551 (Dep’t Commerce May 21, 2010) (final determination of sales at less than fair value and antidumping duty order) (“AD Order”); Certain Oil Country Tubular Goods from the People’s Republic of China, 75 Fed. Reg. 3,203 (Dep’t Commerce Jan. 20, 2010) (am. final affirmative countervailing duty determination and countervailing duty order) (“CVD Order”) (collectively, “AD & CVD Orders” or “the Orders”).  

Applying the 19 C.F.R. §351.225(k)(1) factors and looking specifically at the language of the scope of the orders, gun carrier tubing fits the description which covers, “hollow steel products of circular cross-section . . . of iron (other than cast iron) or steel (both carbon and alloy), whether seamless or welded, regardless of end finish (e.g., whether or not plain end, threaded, or threaded and coupled).”  Plaintiff’s description of the gun carrier tubing is “a tubular steel product used in oil and gas wells” satisfied the definition of the OCTG Commerce set forth. Given that the requirements of (k)(1) are satisfied, the Court need not look at the 19 C.F.R. § 351.225(k)(2) factors.  For this reason, the Court affirmed Commerce’s decision.


Trade Updates for Week of March 14, 2018

United States Court of International Trade


Remand Determination Affirmed

In Evonik Corporation et al. v. United States, Court No. 15-296, Slip Op.18-21 (March 12, 2018), the Court reviewed the remand determination in the 2013-2014 administrative review of the antidumping duty order on glycine from the People’s Republic of China. This consolidated action was brought by Evonik Rexim (Nanning) Pharmaceutical Co. Ltd. and Evonik Corporation (collectively, “Evonik” or “Plaintiffs”), Baoding Mantong Fine Chemistry Co., Ltd. (“Baoding”), and GEO Specialty Chemicals, Inc. (“GEO”) (collectively, “Consolidated Plaintiffs”) for judicial review of decisions made by the U.S. Department of Commerce (“Commerce” or “Department”) during the 2013–2014 administrative review of the antidumping duty order on glycine from the People’s Republic of China (“China” or “PRC”).  The court remanded the Department’s findings with respect to Baoding on (1) the surrogate value selection for liquid ammonia, and (2) the selection of companies used for Baoding’s surrogate financial ratios. Commerce found that the Indonesian GTA import data for anhydrous ammonia “were the most product-specific data placed on the record” for the administrative review period and “representative of a broadmarket average,” and, accordingly, assigned the surrogate value for liquid ammonia as $619.21 USD per metric ton.  There was an issue with which review data being used, but the Court found that the import data relied upon was 2013/2014 was used and verified.

The surrogate value was affirmed because PT Budi and PT Lautan (source of surrogate designated value) was comparable to Baoding’s processing. 


Default Judgment Granted in Crayfish Case

In United States v. Rupari Food Services In. Slip Op. 18-20, Court No. 10-00119 (March 9, 2018) the Court granted the Government’s motion for a default judgment in a case “whose background spans more than two decades, and which has seen the reorganization of a federal agency, a bankruptcy, … and the withdrawal of counsel.” Id. at 1. The Government argued that Rupari “knowingly and falsely claimed that five seized entries of frozen Chinese crawfish tail meat” imported into the US originated in Thailand, thus circumventing an antidumping order and sought civil penalties.  Id. at 2. The action was brought to recover penalties in the amount of $2,784,636.18.  For the following reasons the default judgment was granted against Rupari.

Rupari’s major business practice was to purchase crawfish internationally and sell it to restaurants for consumption in the US. One of Rupari’s major suppliers was investigated in an antidumping investigation by Commerce, and was subject to a 201.63% duty rate on crawfish. In 1998 Rupari ordered crawfish through a Thai company called Seamaster. Rupari knew that Seamaster was a shell company formed by its major supplier subject to the dumping order. The shellfish would be sent to Thailand by the Chinese producer, repacked and labeled made in Thailand and shipped to Rupari in the US. In 1998, Customs issued a request for information regarding the entries and then numerous cases were filed at the CIT for penalties against Rupari and other involved parties. These would eventually be consolidated into this action. Amid the litigation, the involved corporate officers from Rupari passed away, and the company filed for bankruptcy. However, most importantly, in June 2017 Rupari’s counsel moved to withdraw, which was granted by the Court. The Court then ordered Rupari to retain new counsel in 30 days or “it would entertain a motion for default judgment,” Rupari failed to do so. Id. at 17.   “A defendant who defaults thereby admits all well-pleaded factual allegations contained in the complaint.” Id. at 19. The complaint supports its claim by including statements from Thai government that no crawfish producers farmed in the country, and that Rupari never purchased from a source in Thailand.  Additionally, Rupari submitted documents to Customs that were false.  The Court said this was clear and convincing evidence to establish the materiality and falsehood of Rupari’s representations to Customs. As such, the default judgment for civil penalties was granted.


Rebar Scope Ruling Upheld

In Quiedan Co. v. United States et. al.  Slip Op. 18-19, Court No. 16-00275 (March 9, 2018) the Court reviewed Commerce’s final scope ruling holding an antidumping order on rebar applicable to plaintiff’s agricultural training stakes and allowing Customs to collect duty on the unliquidated entries of the product. For the following reasons the Court upholds the scope inquiry in full.

Plaintiff produces steel bars in lengths of four to five feet that are stamped into a stake at one end to help farmers grow vine plants, such as grapes, vertically. “Quiedan argues that the Department’s determination in the Final Scope Ruling is unsupported by substantial evidence” and argues that the ruling was not “supported by the plain meaning of the scope language”. Id. at 7. Commerce’s ruling found it unimportant that the bars were stamped to provide a point at the end saying that the bar was still straight, and the process of stamping the bars was not a further manufacturing process.  Quiedan argued that this ruling was incorrect because a training stake is pointed at one end and may no longer be “straight through its length.”  However, the Court said that the dictionary definition of straight on the record, “generated by a point moving continuously in the same direction and expressed by a linear equation”, applied to the product because the rod starts at one point and ends in a linear fashion at another.  Id. at 14. Plaintiff also argued that their product was not rebar because the product was different from rebar’s dictionary definition.  The Court said the dictionary definition was unnecessary, because the order defines rebar as “all steel concrete reinforcing bars (rebar) sold in straight lengths.” Id. at 15. Plaintiff also argued that ITC sunset reviews defined rebar as for use in construction. However, the Court points out language in the reviews including all steel bars used in a variety of ways, including farming.  Based on this evidence “the court concludes that the Department’s decision is reasonable and supported by substantial evidence.” The Court also found that because the product fell within the plain language of the scope no formal inquiry needed to be opened, and that Customs should be allowed to retroactively collect duties.


Amicus Curiae Status Granted

In Irving Paper Limited et al. v. United States, Court No. 17-128, Slip Op. 18-22, the Court considered the application for leave to file a brief as Amicus Curiae of the Committee Overseeing Action for Lumber International Trade (“the COALITION”).  The COALITION seeks to participate as amicus to respond to the court’s letter asking the parties to provide the specific authority according to which Commerce promulgated 19 C.F.R. § 351.214(k) (2015), establishing expedited reviews in countervailing duty (“CVD”) proceedings. The COALITION explains that its interest in the action “relates to the question of whether an expedited review of a non-individually investigated producer in a CVD proceeding is a determination provided for by 19 U.S.C. § 1675, governing the ‘administrative review of determinations.’” Because the Court found the COALITION’s argument and analysis not represented by any party, the Court determined COALITION’s comments useful to the Court’s review in this case, especially for jurisdiction purposes.

Trade Updates for Week of March 7, 2018

United States Court of International Trade


Motion to Dismiss Denied in Penalty Case

In United States v. Maverick Marketing, LLC et al., Court No. 17-174, Slip Op. 18-16 (March 7 2018), plaintiff claimed that Maverick and Good Times are liable for $3,339,011.08 worth of unpaid FET pursuant to 19 U.S.C. § 1592(d), stemming from the companies’ violations of 19 U.S.C. § 1592(a). Plaintiff, the United States (“Plaintiff”), on behalf of United States Customs and Border Protection (“CBP” or “Customs”), seeks to recover unpaid Federal Excise Tax (“FET”), in various amounts, and prejudgment interest from Defendants, Maverick, Good Times, and American Alternative Insurance Company (“AAIC”) (collectively, “Defendants”), pursuant to section 592 of the Tariff Act of 1930, as amended 19 U.S.C. § 1592 (2012). 

Plaintiff’s claim arose under 19 U.S.C. § 1592(a), (d), which allows the United States to recover any tax owed from any person who entered or introduced merchandise into United States commerce.  Plaintiff alleges that the contract between Maverick and Good Times allowed Maverick to act as a “pass-through” entity, while Good Times financed all the transactions underlying the importation of the subject merchandise. Plaintiff alleges that the Agreement allowed Maverick and Good Times to calculate the FET based on a “purported price,” i.e., the sales price from Rolida Investments, Inc. (“Rolida”), the exporter of the subject merchandise, to Maverick, plus one dollar per carton.  As a result, the sales prices were not based on the first sale of the subject merchandise domestically at an arm’s-length transaction, but instead was the result of a “special arrangement” or scheme between Maverick and Good Times.  As this special arrangement was not disclosed, such failed disclosures are “false statements and/or omissions” under 19 U.S.C 1592. Because these allegations are sufficient and not “naked assertions,” Defendants’ motion to dismiss was denied.


Toilet Paper Rack Holders are Classified under Harmonized Tariff Schedule Heading 8302

In Moen, Inc. v. United States, Court No. 15-145, Slip Op. 18-17 (March 7, 2018), Plaintiff contends that all of its toilet paper holders are entitled to duty-free treatment because the products are classifiable under Harmonized Tariff Schedule of the United States (HTSUS) subheading 8302.50.00, which encompasses “[b]ase metal mountings,” including “hat-racks, hat pegs, brackets and similar fixtures, and parts thereof.” See id. at 2. The United States (“Defendant” or “Government”) maintains that Customs properly classified the imported toilet paper holders under HTSUS subheading 7907.00.10, which covers “[o]ther articles of zinc” including “[t]oilet and sanitary wares.”

According to the Court, HTSUS heading 8302, encompasses objects made of base metal that are affixed to a wall and are used to hang, hold, or support other items. The subject entries should share these three features to be classifiable within the scope of this heading. Plaintiff argued that its toilet paper holders fall clearly within the scope of HTSUS heading 8302 because the products are made of base metal, are designed to be affixed to a wall, and are used to hold or hang an item.  However, the government argued because there are movable pieces “that pivots, swivels, or springs open and shut” to secure a roll of toilet paper, it is not as simple as a hat rack or bracket on which an item hangs. The Court found such distinction non-dispositive.

Because the subject toilet paper holders are made of base metal and are also designed to be mounted on a wall and are used to hold, hang, or support an object, such as toilet paper, according to plaintiff’s facts and defendant’s response to plaintiff’s facts, the Court found that the subject merchandise fall under the scope of HTSUS heading 8302, and thus are classifiable under HTSUS subheading 8302.50.00, and granted plaintiff’s motion for summary judgment denied defendant’s cross motion for summary judgment.

Trade Updates for Week of February 28, 2018

11th ADD Review on Frozen Fish Fillets from Vietnam Remanded in Part

In An Giang Fisheries Import and Export Joint Stock Company et al., v. United States, Court No. 16-72, Slip Op. 18-10 (published February 21, 2010), the court sustained in part and remanded in part, the U.S. Department of Commerce’s final determination in the eleventh antidumping administrative review of certain frozen fish fillets from the Socialist Republic of Vietnam.  Commerce initiated this eleventh ADD administrative review covering subject imports entered during the period of review (“POR”), August 1, 2013 through July 31,2014. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 79 Fed. Reg. 58,729, 58,731–32 (Dep’t Commerce Sept. 30, 2014) (initiation of [ADD] administrative review in Certain Frozen Fish Fillets from [Vietnam], A-552-801). Commerce subsequently selected Vinh Hoan Corporation (“Vinh Hoan”) and HVG as mandatory respondents in this review.

The Court sustained most of findings in the review.  For example, the court held that Commerce’s use of facts otherwise available to calculate HVG’s and Thuan An Production Trading & Services Co., Ltd.’s (“TAFISHCO”) normal value was supported by record evidence where respondents did not provide factors of production (FOP) on a CONNUM-specific basis  (“CONNUM” are control-numbers created by Commerce and specific to the subject merchandise, where they identify the key physical characteristics that are commercially meaningful to the U.S. market) and they failed to accurately report water soaking levels of the fillets sold in the United States. Likewise, the Court sustained Commerce’s surrogate value selections for fish feed, fingerlings, water, fish waste by-product, and packing tape.

However, the Court remanded HVG’s farming FOPs because Commerce’s adjustment to the farming FOP denominator without adjusting the numerator wrongfully inflated HVG’s farming FOP. While Commerce adjusted the denominator to represent “shark equivalent” farming FOP to account for differences in whole fish to subject merchandise (shank fillets)FOP, the numerator had no such adjustment as Commerce simply added farming FOPs from all farming activities at HVG, Agifish, and Europe JSC.

For these reasons, the Court sustained and remanded this decision in part.


TAA Decision Sustained in Full

In Former Employees of Geokinetics v. United States Secretary of Labor Slip Op. 18-11, Court No. 16-00057 (February 16, 2018) the Court reviewed the Department of Labor’s determinations on remand in a Trade Adjustment Assistance (“TAA”) case. On remand Labor was to reconsider the appropriate time period for assessing Geokinetics’ decrease in sales, “whether like imports had shifted to foreign countries, or explain why it was reasonable not to examine whether like imports had shifted to foreign countries; and to explain its determination not to certify Plaintiffs as secondary workers eligible for TAA benefits.” Id. at 7. For the following reasons the Court sustains Labor’s remand results in full.

The first issue was Labor’s failure in explaining the reasoning for not requesting necessary sales data from Geokinetics. On remand, Labor requested data for all the necessary time periods and explained its general practice was to request data “through the month that just ended” when a TAA petition is filed. Id. at 10. Labor admitted it had inadvertently not requested the data.

The next issue was the Court’s concern that Labor had not explained the process of determining a product shift of like articles, properly to Geokinetics. It was not clear that Labor considered whether there was a shift in production of seismic data services in foreign countries or acquisition of seismic data services from foreign countries. On remand, Labor again found that there was no shift in production in seismic data services. However, Labor took steps to “ensure that Geokinetics understood that it was to report whether the firm had or planned to shift” seismic data services to a foreign country or overseas.

Finally, the Court sustained Labor’s determination that Geokinetics employees were not eligible for assistance as secondary workers. Secondary workers are eligible for TAA assistance if a client firm’s “workers are eligible for adjustment assistance benefits” and these clients accounted for a significant percentage of the decline in sales that Geokinetics experienced over the review.  The Court said that because Labor provided evidence it had searched data bases of “all of the firms provided in Geokinetics’ client list” that its determination would be upheld.  Id. at 26.


Trade Updates for Week of February 21, 2018

United States Court of International Trade


ITC Decision on Hydrofluorocarbons Remanded in Part

In Arkema Inc., The Chemours Company FC, LLC, Honeywell International Inc. v. United States, Court No. 16-179, Slip Op. 18-12 (Feburary 16, 2018), the court remanded in part the material injury determination of the International Trade Commission.  This action involved the final affirmative material injury determination of the U.S. International Trade Commission (“ITC” or the “Commission”) in the antidumping duty investigation covering hydrofluorocarbon (“HFC”) blends and components from the People's Republic of China (“PRC”). See Hydrofluorocarbon Blends and Components from China, 81 Fed. Reg. 53,157 (Int’l Trade Comm’n Aug. 11, 2016) (“Final Determination”). The court agreed with plaintiffs that it appears that the ITC incorrectly relied upon the X percent figure as the approximate percentage of HFC Components used in out-of-scope blends, and that this figure weighed significantly in the ITC’s finding that HFC Components are not dedicated for use in the production of HFC Blends. The court also agreed that in comparing the HFC blends to HFC components the ITC wrongly relied upon value added data that included costs and expenses used in the manufacture of HFC components rather than the blending of the components into Blends.

However, on all other decisions, the court sustained the ITC’s findings.  Thus, the Final Determination was sustained except for the ITC’s dedicated for use and value added portions of its semi-finished products analysis.

Trade Updates for Week of February 14, 2018

United States Court of International Trade


Pet Carriers are Not Classified under Heading 4202

In Quaker Pet Group LLC v. United States, Slip Op. 18-9, Court No. 13-0093 (February 12, 2108), plaintiffs challenged Customs denial of an administrative protest, and classification of imported pet carrier bags.  Customs found that the pet carriers were classifiable under “HTSUS heading 4202, which covers travel, sports, and similar bags, and carries a 17.6 percent duty rate.” Id. at 2. Plaintiffs argued “that pets are not personal effects and therefore the pet carriers -- cloth and mesh carrying bags used for transporting pets -- are classifiable under … heading 6307, carrying a duty rate of seven percent” Id. For the following reasons the Court agreed with plaintiffs that the pet carriers were not classifiable under heading 4202. The Court also found that there was not enough evidence to decide if heading 6307 was the proper classification.

The first issue was whether the Government was correct in classifying the pet carriers under heading 4202. “Tariff classification is determined according to the General Rules of Interpretation.” Id. at 8. Under GRI 1, “classification shall be determined according to the terms of the headings and any relative section or chapter notes.” Id. at 8. The Court of Appeals for the Federal Circuit, has developed a test for determining if an article is included in language of Heading 4202, that the “the common characteristic or unifying purpose of the goods in heading 4202 consist[s] of organizing, storing, protecting, and carrying various items.” Id. at 13. The Court determined that because pets are living things they do not fit into the definition of items as is used in the HTSUS; therefore heading 4202 was not applicable. The next issue was if the plaintiffs proposed classification under 6307 was correct.  The Court said “the undisputed facts contained in the pleadings do not provide sufficient information … for the court to determine whether the pet carriers are properly classifiable under HTSUS heading 6307 or another heading.” Id. at 16.  The Court has a duty to determine the correct classification for the goods, and will do so in the future.


Court Sustained Commerce’s Determination in CORE Products case

In Nucor Corporation and Accelormittal USA LLC et al., v. United States, Slip Op. 18-7, Court No. 16-164 (Published February 14, 2018), Nucor and Plaintiff-Intervenors challenged as contrary to law, arbitrary and capricious, and unsupported by substantial evidence Commerce’s determinations: (1) that the Government of Korea’s (“GOK”) price-setting method or standard pricing mechanism for electricity did not confer a benefit; and (2) not to apply an adverse inference that state intervention by the GOK results in electricity prices that are inconsistent with market principles.  This motion for judgment on the agency record challenged U.S. Department of Commerce’s (“Commerce”) final determination in the countervailing duty investigation of certain corrosion-resistant steel (“CORE”) products from the Republic of Korea.

For a subsidy to be countervailable, Commerce must determine that an authority provides a subsidy that is specific and constitutes a financial contribution, by which a benefit is conferred. See 19 U.S.C. § 1677(5), (5A). A benefit is conferred “where goods or services are provided, if such goods or services are provided for less than adequate remuneration.” 19 U.S.C. § 1677(5)(E)(iv).

Commerce’s regulations provide that the agency shall measure the adequacy of remuneration by comparing the government price to a multi-tiered series of benchmark prices. See 19 C.F.R. § 351.511(a)(2)(i)–(iii). Generally, Commerce “will normally seek to measure the adequacy of remuneration by comparing the government price to a market-determined price for the good or service resulting from actual transactions in the country in question,” (i.e., a tier one benchmark). 19 C.F.R. § 351.511(a)(2)(i).

Commerce recognized “what constitutes adequate remuneration depends on the nature of the marketplace, and where the marketplace is a government-controlled monopoly, there is a role for a preferentiality based test.” Slip Op., pg. 15. Commerce only uses the tier three benchmark analysis when market prices outside of the government controlled market are not available. Further, plaintiffs argued that Commerce’s methodology did not evaluate a benefit because it compared the Korea Electric and Power Corporation’s (“KEPCO”) electricity rates to themselves rather than to benchmark, market determined rates. However, Commerce found that the relevant price for KEPCO’s industrial tariff schedule is the price KEPCO pays for the electricity through the Korea Power Exchange (“KPX”).  Given the statutory and regulatory language, the Court found Commerce’s methodology to be reasonable and upheld the determination that no benefit was conferred.

As for prices paid, Commerce focused on prices KEPCO paid on the KPX and determined that KEPCO fully covered its cost for the industry tariff applicable to respondents. Thus, Commerce’s determination that KEPCO’s electricity prices are consistent with market principles was supported by substantial evidence.  Moreover, Commerce identified flaws in the alternative calculations proposed by plaintiffs and the Court declined to reweigh the evidence based on the alternative calculations.

Finally, AFA is not warranted where GOK submitted timely and complete responses to Commerce’s questionnaires.

For all these reasons, Commerce’s determinations were sustained.

Trade Updates for Week of February 7, 2018

United States Court of International Trade


Remand Decision Regarding LTAR Sustained

In Ozdmir Boru San. Ve Tic. Ltd. Sti., v. United States, Court No. 16-206,  Slip Op. 18-6 (February 1, 2018), the Court sustained the remand decision. Commerce chose to maintain its Land for Less than Adequate Remuneration (LTAR) benchmark calculation on remand by explaining that “there is a reasonable basis for treating the Istanbul and Yalova land parcels as outliers because (1) the prices of these parcels deviate substantially from the other prices in the dataset, and consequently, (2) the average price of the land parcels in the benchmark is skewed if the Istabul and Yalova land parcels are not removed from the dataset.”  Therefore Commerce removed the two parcels from the dataset, thus found moot other issues raised by the Court including “the relative levels of development of the land parcels in the benchmark, the importance of a land parcel’s future usage in benchmark selection, and issues involving comparability.”

Trade Updates for Week of January 24, 2018

United States Court of International Trade


Remand Determination Sustained on Nails Case

In Itochu Bldg. Prods. Co et. al. v. United States et. al. Slip Op. 18-03, Court No. 13-00132 (January 18, 2018) the Court reviewed remand redeterminations made by Commerce in regards to an annual administrative review of antidumping duties on steel nails from China. Previously in the case, the Court had remanded the case to Commerce for reconsideration of the selection of Thai GTA data as a surrogate value. The Court specifically asked Commerce to weigh the Thai GTA data against Ukrainian metal expert data, and to determine if carbon content or diameter were more important input in the the nails imported by plaintiffs. For the following reasons the Court upheld Commerce’s remand findings in full.

The first issue was whether Thai GTA data was more product specific then Ukrainian metal expert data.  Plaintiffs argued the Thai data was not product specific because it included data about nails created from steel bars and wires rods, while the nails at issue were solely created from wire rods. Commerce reviewed Thai HTS data and determined the data was “unlikely to contain unrelated products.” Id. at 9. The Court said that “Commerce’s determination on remand … is supported by substantial evidence.” Id. at 10. The Court also said that “Ukrainian metal expert data are only specific to one of the respondents, whereas GTA data covered” both respondents. Id. at 10. The Thai GTA data was the more appropriate surrogate value. The next issue was Commerce’s determination that carbon content, not diameter, was the primary factor in assessing steel nails. Plaintiffs argued that Commerce did not base its determination on substantial evidence. Commerce explained “the diameter of the wire rod may change throughout the production process, rendering the initial diameter less important.” The Court said there was adequate evidence of this on the record to support Commerce’s determination. As such, the determinations were upheld in full. 


Commerce Determination Remanded Regarding Corrosion-Resistant Steel Products

In Prosperity Tieh Enterprise Co., Ltd. and Yieh Phui Enterprise Co., Ltd., v. United States, Court No. 16-138, Slip Op. 18-5 (January 23, 2018), the Court remanded the determination by the U.S. Department of Commerce (“Commerce”).  Plaintiffs Prosperity Tieh Enterprise Co., Ltd. (“Prosperity”) and Yieh Phui Enterprise Co. Ltd. (“Yieh Phui”) are Taiwanese producers and exporters of corrosion-resistant steel products (“CORE”).  The determination at issue is Certain Corrosion-Resistant Steel Products From India, Italy, the People’s Republic of China, the Republic of Korea and Taiwan: Amended Final Affirmative Antidumping Determination for India and Taiwan, and Antidumping Duty Order, 81 Fed. Reg. 48,390 (Int’l Trade Admin. July 25, 2016) (“Amended Final Determination”). The period of investigation (“POI”) was April 1, 2014 through March 31, 2015. Id. at 35,313. 

Yieh Phui claims that Commerce violated 19 C.F.R. § 351.401(c) when it failed to make corresponding downward adjustments in the starting prices Commerce used in determining normal value, i.e., the prices at which Yieh Phui and Synn sold the foreign like product in its home market. The regulations require Commerce to recognize a reduction in the purchaser’s net outlay for the foreign like product that satisfies the definition of a “price adjustment” in section 351.102(b)(38). First the Court held that Commerce must make downward adjustments to Yieh Phui’s and Synn’s home market sales prices to account for rebates granted to their home customers.  Further, the Court determined that there was no substantial evidence to support collapsing Prosperity and Yieh Phui into one entity and that the case be remanded to further investigate and review this decision. Finally, there was no evidence to support the use of adverse facts available in calculating certain CORE sales, when there was an interpretation issue with yield strength reporting specifications.


United States Court of Appeals for the Federal Circuit


Commerce Cannot Use “Guideline” to Change Scope of Regulation

Once a regulation has been published, a government agency may  not change its scope or range of operation through issuance of an informal “guidance” document which has not been adopted using Administrative Procedure Act (APA) rulemaking procedures, according to a recent Federal Circuit opinion.

In Glycine & More v. United States, No. 2017-1312 (January 23, 2018), the Federal Circuit upheld a Court of International Trade determination that Commerce lacked the power to limit the circumstances where a regulation applied. . 

The case involved a Commerce Department regulation concerning when a request for review of an antidumping or countervailing duty order could be filed after the 90-day regulatory deadline for same. As enacted, the regulation said a party could file a tardy withdrawal request "for good cause shown". But Commerce, in a 2011 "Guidance" document, said that it would henceforth only honor tardy withdrawal requests if the party concerned showed "extraordinary circumstances" which prevented it from making its request within the 90 day period.  Glycine & More filed a tardy withdrawal request, and had good cause for doing so, But Commerce, applying the stricter standard from its "guidance" document, rejected the withdrawal, conducted an antidumping review no party wanted, and when Glycine & More did not respond to questionnaires, assigned that company a 457% antidumping rate based on "facts available".

Affirming the CIT decision, the Federal Circuit held that once a regulation has been enacted which defines its scope of operation, an agency may not thereafter change that scope of operation using a "guidance" document or anything less than formal APA rulemaking. The Commerce Department had rescinded its review determination “under protest”, but oddly did not make an appearance in the appeal.


Trade Updates for Week of January 10, 2018

United States Court of International Trade


Remand Ordered in Antidumping Duty Investigation Results of CORE from Korea

In Hyundai Steel Co. v. United Sates et al., Slip Op. 18-2, Court No. 16-161 (published January 10, 2018), the Court reviewed the final results in an antidumping investigation involving Corrision-Resistant Steel Products (“CORE”) from Korea.  This action concerns Commerce’s treatment, for computation of the United States sale price, of Hyundai’s further manufactured products, other than completed automobiles, including skelp, sheets or blanks (“SSBs”), tailorwelded blanks (“TWBs”), and after-market auto parts. To manufacture the latter two product categories, Hyundai first sold CORE to its U.S. subsidiary, Hyundai Steel America, Inc. (“HSA”), in coil form. HSA then sold the imported CORE: (1) in unaltered form; (2) in slightly further manufactured form, e.g., as SSBs; or (3) as TWBs. HSA sold the foregoing products to both affiliated and unaffiliated vendors that performed additional further processing before selling the ultimate product to an affiliated automobile manufacturer. While Commerce’s findings were generally supported by substantial evidence, calculations regarding Hyundai’s SSB data were remanded.

Commerce failed to provide adequate notice of deficiency when it came to discrepancies in Hyundai’s SSB data, and did not provide an opportunity for Hyundai to remedy the deficiencies.  Moreover, Commerce’s Third Supplemental Questionnaire precluded Hyundai from submitting “any new or revised sales, cost, or further manufacturing databases in response.” Thus, Hyundai may have been precluded from moving for exceptional treatment after the Preliminary Determination to submit more information. Accordingly, this matter was remanded for Commerce to address Hyundai’s SSB cost data, and to recalculate the overall margin as necessary.


Trade Updates for Week of January 3, 2018

United States Court of International Trade


Affirming Commerce’s Determination in Hot-Rolled Steel Flat Products Case

 In Hyundai Steel Co. v. United States Slip Op. 17-173, Court No. 16-00238 (December 27, 2017)  the court reviewed Commerce’s determinations from a less-than-fair-value antidumping investigation of hot-rolled steel flat products from Korea. In August 2016 Commerce issued the results of the investigation finding a 9.49% antidumping margin. Hyundai challenged Commerce’s application of adverse facts available to Hyundai’s reported expenses with affiliated companies, and Commerce’s determination not to grant a constructed export price offset to the company because of trade differences in other markets. For the following reasons the Court upholds Commerce’s determinations in full.

The first issue was Commerce’s application of the adverse facts available to Hyundai’s expenses incurred with affiliated companies.  Moreover, the information provided by Hyundai was not enough for Commerce to complete an arm’s-length determination.  When information is not available on the record, or a respondent withholds information, or does not cooperate Commerce shall “use the facts otherwise available in reaching the applicable determination.” Id. at 5.  Commerce had requested contracts between Hyundai’s affiliates and all unaffiliated freight providers through supplemental questionnaires and at verification. Hyundai “did not furnish in entirety the documents requested by Commerce.” Id. at 16.  The Court found “Commerce’s resort to facts otherwise available … in order to complete its analysis was reasonable.”  Id. at 17.  The Court also found that it was reasonable for Commerce to expect Hyundai to access its affiliates’ documentation, and that the adverse facts available were lawfully applied. The final issue was Commerce’s determination not to grant a constructed export price offset to Hyundai. Constructed export price offsets are used by Commerce to account for different levels of trade in home markets and in the US market. Hyundai argued the determination was unsupported by evidence, and was arbitrary and capricious. The Court found that all of evidence on the record was enough for Commerce to determine the same level of trade existed in Hyundai’s home market and in the US, and that any minor differences did not require the need for a CEP offset. In addition, the Court found the determination was not arbitrary and capricious and that it was a reasonable for Commerce to deny the offset. 


Remanded Separate Rate Request Decision

In National Nail Corp. et. al. v. United States Slip. Op. 18-001, Court No. 16-00052, (January 2, 2018) the court reviewed Commerce’s determinations from the sixth annual review of the antidumping order on steel nails from China. Commerce determined that because the agency used adverse facts available in determining an antidumping margin, plaintiff National Nail Corp.’s  (“National Nail”) request for a separate rate from the China wide rate was denied. For the following reasons the court remanded the issue back to the agency for reconsideration. 

The primary issue was that because the agency used adverse facts available in regards to the factors of production, and sales and product specifications that plaintiff was not entitled to a separate rate from the PRC-wide rate of 118.04 percent. The determination to apply adverse facts available was resulted from Commerce’s findings that Shandong’s Section C and D nonmarket economy questionnaire (“Original Questionnaire”) responses regarding its affiliate Jining Dragon Fasteners’ product and U.S. sales of shooting nails were unreliable and incomplete.  However, these sections of the questionnaire had nothing to do with the information submitted in the separate rate responses. It was unfair to assume that because plaintiff did not provide the best information in one section they should suffer in another because of it. The Court said “the denial of a separate rate ... appears to be based on deficiencies in questionnaire responses unrelated to evidence dealing with whether or not Shandong was part of the PRC-wide entity.” Id. at 11. The request for a separate rate needed to be considered independently. The court remanded the case for Commerce to reconsider the separate rate request information independently from the other sections of the Original Questionnaire.


United States District Court  for the Northern District of Illinois


Customs Power of Attorney Not a Contract, But Does Create Fiduciary Relationship

 A Customs Power of Attorney is not a contract, but does create a fiduciary relationship and a duty to account for funds received, according to a new decision from the United States District Court for the Northern District of Illinois.

In Union Pacific Railroad Company v. Pactrans Air & Sea, Inc., et al., No 16-c-8092 (December 20, 2017), the railroad sued the defendants, a freight forwarding company and its owners, seeking the return of $5.8 million which Union Pacific had advanced to the forwarder, ,and which was supposed to be used to pay estimated antidumping and countervailing duties on imports of certain shipping containers. Pactrans, the defendant freight forwarder, was not itself a licensed Customs broker, but gave a power of attorney to a licensed broker to make entries of the containers on Union Pacific’s behalf.  Ultimately, the United States International Trade Commission made a negative determination of injury in the AD and CVD cases, and Customs was ordered to refund estimated duty deposits. Only then did Union Pacific learn that the defendants had not returned the duties, and indeed, had not forwarded much of the monies entrusted to them to the broker for payment of the duties. Pactrans, the defendant forwarder, claimed that it lacked the wherewithal to pay back the $5.8 million, having commingled the funds with its own and used the same for business expenses.

Magistrate Judge Sheila Finnegan, considering Union Pacific’s motions for summary judgment on various claims, first held that the Customs power of attorney issued to Pactrans created a “principal and agency” relationship, sufficient to create a fiduciary obligation from Pactrans to Union Pacific, notwithstanding that Pactrans was not itself a licensed Customs broker. “The mere fact that Pactrans subcontracted the licensed brokerage services out to Nissin [a licensed broker] in no way relieved it of its own obligation as Union Pacific’s agent to ensure that Nissin paid all necessary Customs Charges on Union Pacific’s behalf”, the court ruled.  The court also found that Pactrans had breached its fiduciary duty under the Customs POA, and that this was the proximate cause of Union Pacific’s damages.

The court also ruled that the monies which Union Pacific paid to Pactrans were sufficiently identifiable, based on available records, to support a claim for conversion against Pactrans.

However, the Court found that Union Pacific had not proven its claim of breach of contract, since it had not shown that the Customs power of attorney constituted a “contract. There was no offer, acceptance or supporting consideration.  The POA did not, by itself, constitute a contract.  The court also denied Union Pacific’s claim for monies had and received, noting that since Union Pacific had prevailed on its legal claim for breach of fiduciary duty, it was not entitled to also receive equitable relief.

The Court granted Union Pacific’s request for an accounting, but held that the company had not pleaded sufficient facts to grant it a piercing of the corporate veil, indicating that the company needed to prove this claim at trial.

Trade Updates for Week of December 20, 2017

U.S. Court of International Trade



Officers and employees of corporate importers may have reason to be concerned about their personal liability for Customs penalties and withheld duties, based on the sweeping discovery which the Court of International Trade recently granted the government in a pending lawsuit.

In United States v. Greenlight Organics Inc., Slip Op. 17-168 (December 19, 2017), the Court held that the government could conduct extensive discovery concerning the affairs of two individual officer of a corporate importer, requiring them to disclose all of their sources of income for a period of more than 10 years.  Holding that the scope of discovery was broader than the scope of the complaint, the Court held that the government could take discovery regarding the officers’ individual affairs, even though they had not been named parties to the lawsuit. The government claimed that the discovery was necessary to allow it to explore its claims of fraud in the classification and valuation of imported wearing apparel, and to determine whether the individual officers should be added as defendants to the case.

The CIT also outlined an incredibly broad theory of liability, under which corporate employees of an importer could be held liable for 19 U.S.C. §1592 civil penalties and withheld duties:

Liability for claims brought under Section 1592 is not limited to companies. Under principles of agency law, “an agent who actually commits a tort is generally liable for the tort along with the principal, even though the agent was acting for the principal.” United States v. Trek Leather, Inc., 767 F.3d 1288, 1299 (Fed. Cir. 2014) (citing Restatement (Second) of Agency § 343 (Am. Law Inst. 1958); Restatement (Third) of Agency § 7.01 (Am. Law Inst. 2006)). An officer of a corporation may be liable personally for violating Section 1592, even when the conduct falls within the scope of the officer’s authority. Trek Leather, Inc., 767 F.3d at 1299. The court will allow discovery into the officers’ sources of income and the companies with whom the officers have conducted business, in order to determine whether Greenlight’s officers may be liable individually in the Government’s Section 1592 case.

This sweeping language goes beyond merely “piercing the corporate veil”, which might be used to hold corporate owners liable, and beyond the holding in the Trek Leather case (which held a company President separately liable for “introducing” merchandise by means of false statements), to suggest that corporate employees must be responsible for corporate Section 592 violations simply by virtue of being considered “agents” of the company.

It should also be borne in mind that recently, in United States v. Greenlight Organic Inc., Slip Op. 17-126 (September 15, 2017), the CIT ruled that the corporate defendant’s decision to file bankruptcy did not trigger the “automatic stay” under the Bankruptcy Code and prevent the government from pursuing its case.  Perhaps fearing difficulties in collecting against the corporate defendant, the government may now be looking for other pockets to hit.

The Court also directed the corporate defendant to review its records and supplement its responses to discovery, after the government charged that the defendants’ responses had been incomplete.


CIT Directs Government to Correct Claims of “Deliberative Privilege” in Penalty Case

In a simultaneously issued opinion, the Court of International Trade directed the government to respond to discovery requests propounded by the defendant in a Section 592 penalty proceeding. In United States v. Greenlight Organic Inc., Slip Op. 17-167 (December 19, 2017), the government asserted “deliberative process” privilege with respect to some 145 documents sought by the defendant and provided an “enhanced” privilege log. However, the Court found that the privilege log did not describe the documents in sufficient detail to enable the court to determine whether the privilege was properly asserted. The court directed the government to revise the log to provide the required detail, and indicated that it would thereafter rule on the privilege claims.


Final Decision on Garlic Remanded in Part

In Shenzen Xinboda Industrial Co., Ltd. v. United States et al., Court No. 11-267, Slip Op. 17-66 (December 15, 2017), plaintiff Shenzen Xinboda Industrial Co.., Ltd. (“Xinboda”) challenged the Final Determination in the U.S. Department of Commerce’s fifteenth administrative review of the antidumping duty order covering fresh garlic from the People’s Republic of China.  Specifically Xinboda contested: Commerce’s selection of surrogate financial statements used to derive surrogate financial ratios, Commerce’s calculation of the surrogate value for labor (i.e., the surrogate wage rate), and Commerce’s calculation of the surrogate value for whole raw garlic bulbs, as well as Commerce’s application of its “zeroing” methodology in calculating Xinboda’s dumping margin.

For purposes of the surrogate value for the raw bulbs, Xinboda argued that the contemporaneous Azadpur Market prices for A-grade garlic bulbs that Commerce is using already reflect prices for garlic bulbs that previously would have been classified as grade S.A., and that this improperly inflates Commerce’s calculated surrogate value for whole raw garlic bulbs.  Instead, Commerce needs to adjust the values using price data from an Indian garlic processor and trader, Garlico which closely matches Xinboda’s experience. However, Commerce has discounted the use of a Xinboda’s consultant’s declaration which provided the condition of the garlic bulbs sold at the Azadpur not being similar to those delivered to Dadi, an affiliated producer which supplied garlic products from local Chinese garlic farmers.  According to the Court, “If the garlic bulbs sold at the Azadpur APMC Market were at a more advanced level of trade (i.e., had been subjected to more processing) than the garlic bulbs that were delivered to Dadi (as all existing record evidence indicates), the Azadpur Market prices cannot reasonably be used as a surrogate value for the garlic bulbs that were delivered to Dadi at least not without further adjustment.”  Slip Op. at pg. 47.  Moreover, adjustment should be made for intermediary expenses. The decision regarding the surrogate value of the bulbs was remanded.

As for the surrogate financial statements, the Court held that this decision should be remanded to fully consider the evidence of alleged subsidies and explain the rational for its determination.

Finally, the Final Results were sustained as to Commerce’s determination on the surrogate value for labor and Commerce’s application of zeroing.


Trade Updates for Week of December 13, 2017

United States Court of International Trade


New Shipper Review Decision Remanded

 In Huzhou Muyun Wood Co. v. United States Slip Op. 17-162, Court No. 16-00245 (December 11, 2017) the court reviewed Commerce’s determination to rescind plaintiff’s request  for a new shipper review. In June 2015, plaintiff requested a review under an antidumping duty on multilayered wood floors. One week before the close of review period, Commerce requested data, about other exporters, from plaintiff. Plaintiff requested a time extension for Commerce to explain the data’s role in the investigation. This request was denied by Commerce and the review was rescinded because Commerce concluded that plaintiff had not made bona fide sales. Plaintiff raised two issues in this action, that Commerce abused its discretion in placing data on the record without clarifying its use, and that there was not substantial evidence for Commerce to conclude plaintiff’s sales were not bona fide. For the following reasons the Court agreed with plaintiff and remanded the issue to Commerce for reconsideration.

The first issue was if Commerce abused its discretion by placing data in the review a week before its conclusion, and by failing to explain to plaintiff what role the data will play in any of Commerce determinations. “Parties are permitted one opportunity to submit factual information to rebut, clarify, or correct factual information placed on the record of the proceeding by the Department.” Id. at 15. The Court believed that because of Commerce’s late request and failure to explain the use of the data, plaintiff was not presented with any of these required opportunities. The next issue was if there was substantial evidence for Commerce to conclude that plaintiff’s sales were not bona fide. Commerce evaluates six factors in deciding if a sale is bona fide.  Commerce found the sales not bona fide because of a price discrepancy, submitted data, and late payment from a customer. The Court concludes the use of this data and the late payment was unsupported by evidence and needed to be further explained by Commerce on remand.


Commerce Decision Remanded in Part

In GGB Bearing Technology Co., LTD. and Stemco LP, v. United States Slip. Op. 17-164, Court No. 12-00386 (December 12, 2017) the Court reviewed Commerce’s determinations made in a new shipper review of plaintiff under a 1987 antidumping order on tapered roll bearings from China. In 2011, plaintiff’s requested a new shipper review to receive a different antidumping margin. Since plaintiffs were based in the non-market economy of China, Commerce used surrogate values to calculate a 12.64% weighted dumping margin. Plaintiffs argued two main issues involving the surrogate selection. These were that the Commerce erred in choosing appropriate Thai companies for surrogates and that Commerce erred in choosing Thailand as a surrogate as opposed to other countries. For the following reasons the Court upheld Commerce’s determination in part and remanded in part.

The first main issue plaintiffs argued was that the Thai surrogate companies received a subsidy from the Thai government that made them unfit to be surrogates. Specifically at issue is whether the NSK financial statement may have been distorted by countervailable subsidies. The Court examined the Thai Investment Protection Act and its application to surrogate companies and found it reasonable for Commerce to conclude the surrogates did not receive a subsidy and that no financial data was distorted.

Plaintiffs also argued that manufacturing wage data from the Philippines and Ukraine were more accurate than those from Thailand for purposes of valuing GGB’s labor costs. 19 U.S.C. § 1677b(c)(1) requires Commerce to use the best available information to choose financial data from surrogate countries.  The Court held in this case, because Commerce had not determined “the Philippines and Ukraine were, or were not, significant producers of comparable merchandise” the surrogate country decisions was not made on the best available information. The Court remanded the case back to Commerce to determine if the Philippines and Ukraine are better surrogates and if so a determination on the best available information from their industries.


Sustained Remand Results

In Shenyang Yuanda Aluminum et. al. v. United States Slip Op. 17-163, Court No. 14-00106 (December 11, 2017) the Court reviewed a scope ruling made in a remand determination concerning Commerce’s antidumping and countervailing duty investigations on aluminum extrusions from the People’s Republic of China. Plaintiffs challenged Commerce’s determination that an aluminum curtain wall, imported in individual parts, was within the scope of the investigations. “Plaintiffs argued that curtain wall units, imported under a supply contract for a complete curtain wall, were partially assembled subassemblies of a complete curtain wall, and therefore excluded from the Orders as a finished goods kit.” Id. at  5. Commerce determined that the “entries failed the subassemblies test because … documents show that the individual curtain wall units do not contain all parts necessary to install them.” Id. at 7. Commerce identified additional finishing procedures required before the curtain walls could be installed, and thus the subject product failed the subassemblies test. The Court was unpersuaded by any of plaintiff’s arguments and agreed with Commerce.

Trade Updates for Week of December 6, 2017

United States Court of International Trade


Changed Circumstances Decision Remanded

In Inmax Sdn. al. v. United States Slip Op. 17-158, Court No. 17-00205 (December 4, 2017) the Court reviewed Commerce’s determination to conduct a changed circumstances investigation of plaintiff, and the results of the investigation.  Plaintiff and affiliated company were respondents to an ADD investigation, and requested to be investigated as one company.  Commerce denied the request to collapse the companies and issued an ADD rate of 39.35% for Inmax and 2.66% for the affiliate. In response, Inmax sent a letter to the Taiwanese Stock Exchange stating sales to the US will take place through the affiliate company because of the high ADD rate. Commerce was requested to conduct a changed circumstances investigation of Inmax for illegally evading the ADD because of the letter. Commerce initiated the investigation and found that Inmax has stopped production of goods subject to the 39.35% ADD. The affiliate company had developed an independent product line and was legally exporting to the U.S. However, Commerce also found production could be shifted between the companies and Inmax could avoid a statutory remedy. For the following reasons, the Court remanded the changed circumstances findings in accordance with its decision.

In general, Commerce may initiate a changed circumstances investigation if good cause exists and that circumstances have changed since the last investigation.  The Court said, “it is difficult to imagine a better cause for initiating a changed circumstances review” than the evasion of an order by one company through the use of an affiliate.  Id. at 6. However, since Commerce determined that there was no evasion of the order, the dynamics of the rest of the investigation was changed. “Although the court believes Commerce had good cause to initiate the changed circumstances review—there were changed circumstances plus the possibility of evasion—the subsequent finding by Commerce that Inmax was not shipping its merchandise through Inmax Industries, does alter the dynamics of the proceeding and challenges the reasonableness of several aspects of Commerce’s subsequent decision. The court therefore must remand this matter to Commerce for further explanation.”  See Id. at 8.  The reasonableness of several aspects of Commerce’s subsequent decision” was uncertain. Id.   The Court remanded these issues to Commerce for further explanation.


Scope Ruling Sustained

In Adams Thermal Systems, Inc. v. United States and Aluminum Extrusions Fair Trade Committee, Court No. 16-128, Slip Op. No. 17-161 (December 6, 2017), plaintiff Adams Thermal Systems (“ATS”) contested the Final Scope Ruling on certain aluminum products imported by ATS.  For the reasons that follow, the Court sustained the ruling. The determination contested in this action is Antidumping and Countervailing Duty Orders on Aluminum Extrusions from the People’s Republic of China: Final Scope Ruling on Adams Thermal Systems’ Certain Fittings and Related Products for Engine Cooling Systems (July 11, 2016) (P.R. Doc. 26), available at (last visited Dec. 1, 2017) (“Final Scope Ruling”).

Initially, the plaintiff argued that the scope language should be confined to products that retain the general shape and form imparted by the extrusion process.  Specifically, ATS interprets the words “produced by an extrusion process” as a limitation on the meaning of the words “shapes and forms” that confines the scope to articles retaining the basic shape obtained upon extrusion. However, that is not the only interpretation and could include several conditions: that they be “shapes or forms”; that they be produced by an extrusion process in addition to being drawn, finished, or fabricated; and that they must be made from a specified alloy. All are reasonable interpretations.

Second, plaintiff has not shown how Commerce has misunderstood the scope to include articles which have “undergone fabrication that significantly altered their cross-sectional shape” or that resulted in a substantial transformation.

Finally, plaintiff has not shown how Commerce misapplied parameters in 19 C.F.R. section 351.225(k)(1) in support of an “overbroad” interpretation of the scope language.

Trade Updates for Week of November 29, 2017

United States Court of International Trade


Differential Pricing Analysis Upheld

In The Stanley Works (Langfang) Fastening Systems Co. Ltd., et. al. v United States  Slip Op. 17-156, Court No. 14-00112 (November, 27 2017) the Court reviewed Commerce’s differential pricing analysis and its application in the fourth administrative review of nails from China. Plaintiffs argued that Commerce’s pricing test was an unlawful application of statutory authority given to Commerce, and even if lawful the application was unreasonable, and that the results contravene applicable regulations. For the following reasons the Court sustained Commerce’s Final Results in full.

To determine whether a class or kind of foreign merchandise is being sold in the United States at less than fair value to certain purchasers in certain regions or during certain periods of time, also known as targeted dumping, Commerce uses the average to transaction (“A to T”) method, where it compares averaged values to the values of individual transactions. In order to analyze the presence of targeted dumping of goods sold in the United States, Commerce has developed three differential price analysis tests: the ratio test, Cohen’s d test (CDT), and the meaningful difference test. Of the many claims made by plaintiffs, plaintiffs argued that the CDT was unlawfully applied because the test was not designed to be used in antidumping or pricing scenarios and that CDT is an estimation tool to be used for evaluating the size of a value in a sample of data.

To review whether Commerce’s interpretation and application of the statute was in accordance with the law, the Court applied the parameters set forth in Chevron U.S.A, Inc. v. Natural Res. Def. Council, Inc., 467 U S. 837, 842–43 (1984).  First, the Court questioned if there is an ambiguity in the authorizing statute delegating certain powers to an agency, then if the agency’s regulation was a reasonable interpretation of such delegation. The Court found that Commerce has not specifically instructed Commerce on how to measure targeted dumping. The Court also found that the test was valid because Commerce had “adequately explained on the record the choices it made in employing that methodology.” Id. at 19.  The Court also held that the application of the CDT in this scenario was valid because it was used to “assess the presence and significance of differences of United States sales prices among purchasers, regions, or periods of time” Id. at 21. The Court held that Stanley had failed to exhaust its administrative remedies in regards to arguments about the meaningful difference test because no such claims were made in briefs to the agency during the administrative process. Finally, the Court held that 19 C.F.R. § 351.414(f) does not apply to administrative reviews at issue here.


EAJA Fees were Not Available Where Customs Substantiated its Protest Denial

In Consolidated Fibers Inc. v United States Slip Op. 17-157, Court No. 14-00222 (November, 27 2017) the Court reviewed plaintiff’s application for attorney fees under the Equal Access to Justice Act (EAJA). Plaintiff filed this case to protest Commerce’s re-liquidation of imported fiber to include increased antidumping duties. Previously, plaintiff followed the proper administrative process to protest the re-liquidation. After discovery, defendants moved for a judgment on confession regarding the duties. Afterwards, plaintiff filed EAJA petition for $30,000 in attorney fees. For the following reasons the Court denied the application and does not award any fees.

When a party files suit against the United States in a civil matter Court’s must award attorney fees when “the claimant is a prevailing party “or when “the government’s position was not substantially justified.” Id. at 4.  Because in this case the defendant sought to “conclude litigation by satisfying plaintiff’s claim”, the Court will take judicial notice of the legal arguments presented by Customs in the administrative process. Id. at 5. In this case, Customs considered the legal arguments raised and denied plaintiff’s protest, arguing that because of an amendment in the law, re-liquidation was available if done within 90 days of the bulletin notice of the original liquidation. The protest denial laid out valid legal arguments and proved the government’s argument was substantially justified. Plaintiff also argued that attorney fees were available because the government unnecessarily delayed litigation, but the Court did not find any convincing evidence of this on the record.

Trade Updates for Week of November 15, 2017

United States Court of International Trade


Protest Not Approved Until Entry Reliquidated, CIT Says

In a case of first impression, the United States Court of International Trade has ruled that a protest is not “allowed” until the protested entries have been reliquidated and refunds granted.

In Erwin Hymer Group, f/k/a Roadtrek Motorhomes, Slip Op. 17-151, an importer challenged Customs decision to liquidate certain entries of imported motorhomes without an HTS subheading 9802.00.50 “repairs or alterations” allowance. Customs at the port of Detroit “approved” the protest, and sent notice of allowance to both the importer and the broker. However, Customs refused to reliquidate the entries or pay duty refunds, claiming that it had placed the entry in “suspended” status, while awaiting the outcome of a case being litigated before the United States Court of Appeals for the Federal Circuit.

The importer brought suit, invoking the CIT’s “residual” jurisdiction, and challenging Customs’ refusal to pay the refunds. Once the protest is allowed or denied, the importer argued, Customs has to take a second, implementing action which is non-discretionary – reliquidating the entry and issuing refunds in the case of an allowance, or sending notice of denial if the protest if denied.

The CIT agreed that the importer’s suit was properly commenced under the Administrative Procedure Act, and that the Court had jurisdiction over it. However, the Court held that the protest is not “allowed” until the entry reliquidated. So the entry remains in the curious status of being “approved” but “suspended”.

Trade Updates for Week of November 8, 2017

United States Court of International Trade


Casings Classified as Other Made-Up Textiles

In Kalle USA, Inc. v. United States, Court No. 13-00003, Slip Op.17-149 (November 2, 2017), the Court denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment.  The classification issue was whether the G1 and G2 products – which are used for encasing raw sausage, scalded-emulsion sausage, ham and other processed meat, and cheese, should be classified as plastics under Heading 3917 or under textiles products under Heading 6307.  The casings are textile fabrics with coated plastic layers; thus the Court found that the G1 and G2 casings are textiles made from man-made viscose rayon and polyester fibers, which are coated with plastic.  The Court held under GR1 that the casings were more correctly classified under Heading 6307, because (1) they are textile and (2) they are made-up, due to the gluing process of the ends of the casings, pursuant to Heading 6307.  Moreover Note 1(h) of Section XI does not preclude the classification of this textile article under Chapter 63, as a textile-plastic composite.  For these reasons, the Court denied plaintiff’s motion and granted defendant’s cross motion.


Remand Results Affirmed

In Ajinomoto North America, Inc. v. United States, Court No. 14-351, Slip Op. 17-150, the Court previously granted plaintiff’s motion to the extent of remand to ITA for reconsideration of the issues of (1) the appropriate corn factor-of-production weight and (2) the calculation of an inland-freight surrogate value.  The defendant filed ITA’s Final Results of Redetermination Pursuant to Court Remand (Aug. 30, 2017), amending its analysis thereof and resulting dumping margin from 21.28 percent to 34.15 percent.  With no opposition to the remand results, and after the Court has reviewed the results, the Court affirmed the remand determination.

Trade Updates for Week of October 25, 2017

United States Court of International Trade


Commerce Decision Sustained

In Weishan Hongda Aquatic Food Co., Ltd. et al. v. United States and Crawfish Processors Alliance, Court No. 16-73, Slip Op. 17-45 (October 25, 2017), Plaintiffs Weishan Hongda Aquatic Food Co., Ltd (“Weishan”), China Kingdom (Beijing) Import & Export Co., Ltd. (“China Kingdom”), Shanghai Ocean Flavor International Trading Co., Ltd. (“Ocean Flavor”), and Deyan Aquatic Products and Food Co., Ltd. (“Deyan”) (collectively, “Plaintiffs”) initiated this case challenging Commerce’s Final Results in the 2013-2014 administrative review (“AR”) and new shipper review (“NSR”) of the antidumping duty order covering freshwater crawfish tail meat from the People’s Republic of China (“PRC” or “China”).1 See Freshwater Crawfish Tail Meat from the People’s Republic of China, 81 Fed. Reg. 21,840 (Dep’t Commerce Apr. 13, 2016) (final results of antidumping duty admin. review and new shipper review).

Plaintiffs challenged Commerce’s rejection of Thai financial statements in favor of a 2014 Annual Report from a South African seafood processor, Oceana Group (the “Oceana Report”), to value factory overhead, selling, general and administrative expenses, and profit (hereinafter referred to as “financial ratios”).  Specifically, plaintiffs argued that Commerce did not adequately support or explain its determination that the Oceana Report provided the necessary information to accurately calculate financial ratios or compare the Thai and South African financial statements to determine which was more reliable and representative of Plaintiffs’ production experience.  Moreover, plaintiffs argued that South Africa is not a significant producer of comparable merchandise.

However, because plaintiff Weishan only contested the cost of sales data and insufficient disaggregation of line items for labor and raw materials in the Oceana Report administratively, it may not raise other issues regarding overhead, general and administrative expenditures. These cost of sales data and disaggregation issues were addressed in Commerce’s discussion of its preferred methodology in the Final Results. Moreover, Commerce’s decision regarding its choice of the Oceana Report was supported by evidence where Commerce explained that the Thai financial statements were not sufficient because they benefitted from countervailable subsidies and that the South Africa data was comparable to the PRC as well as contemporaneous, and that South Africa was a significant producer.

For all these reasons, the Court sustained Commerce’s decision.


Commerce’s Decision Regarding Crystalline Silicon Photovoltaic Cells Remanded in Part

In SolarWorld Americas, Inc. et al. v. United States and Changzhou Trina Solar Energy Co., Ltd. et al., Consol. Court No. 16-00134, Slip Op.17-134 (Public Version published October 25, 2017), plaintiff, SolarWorld Americas, Inc. (“SolarWorld”), commenced this action pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) to review the second administrative review of the antidumping duty (“ADD”) order covering crystalline silicon photovoltaic cells, whether or not assembled into modules, from the People’s Republic of China (“China” or “the PRC”). See Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the [PRC], 81 Fed. Reg. 39,905 (Dep’t Commerce Jun. 20, 2016).  SolarWorld moved for judgment on the agency record, challenging five aspects of the final determination.  The Court sustained Commerce’s selection of financial statements for calculating financial ratios for respondents’ overhead, selling, general, and administrative (“SG&A”) expenses, and profit, and Commerce’s application of adverse facts available (“AFA”) to respondent’s unreported, purchased solar cells. 

However, the Court remanded for further explanation Commerce’s surrogate value selection for valuing respondents’ tempered glass.  Specifically in regards to the use of inputs of tempered glass, Commerce must explain the use of disproportionate Hong Kong values, and why the benchmark valued from Ecuador and Ukraine are not reliable. 

The Court also remanded Commerce’s valuation of broken and scrapped polysilicon cells and modules using Harmonized Tariff Schedule category 8548.10.  Commerce failed to address SolarWorld’s argument that the language of heading 8548, HTS, evidences that the products imported under that heading are specific to electrical batteries and “are produced using a significantly different manufacturing process with completely different raw material inputs than are solar cells.”

Finally, the Court remanded Commerce’s determination to include import data with quantities of zero in the surrogate value calculations.  Trina argued that the inclusion of these reported quantities of zero in the surrogate value calculations, distorted surrogate values.  However, it is uncontested that the majority of the values with zero quantities were not within range of other low-quantity values, and that there is a lack of an alternate reasonable explanation as to why these values are reliable.  Commerce is therefore required to explain why such import data with reported quantities of zero should be included in the surrogate value calculations.

Trade Updates for Week of October 18, 2017

United States Court of International Trade


Commerce Decision Remanded in Part

In Özdemir Boru San. Ve. Tic. Ltd. Sti., v. United States, Court No. 16-00206, Slip Op. 17-142, (October 16, 2017), Plaintiff, Özdemir Boru San. ve Tic. Ltd. Sti (“Özdemir”), a Turkish producer and exporter to the United States of heavy walled rectangular welded carbon steel pipes and tubes (“HWR pipes and tubes”), brought this action against Defendant, the United States (“the Government”), to challenge Commerce’s final determination in Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes from the Republic of Turkey: Final Affirmative Countervailing Duty Determination, 81 Fed. Reg. 47,349 (Dep’t Commerce July 21, 2016) (final results of investigation) Özdemir argues that Commerce’s application of adverse facts available (“AFA”) to Özdemir regarding the Turkish Exemption from Property Tax (“EFPT”) program, and Commerce’s inclusion of two particular land parcels in the Land for Less-than-Adequate-Remuneration (“LTAR”) benchmark, are actions unsupported by record evidence and contrary to law.

Because Özdemir withheld information as shown by Özdemir’s brief, its incorrect QR statement, and explicit requests for information by Commerce, applied AFA was supported by substantional evidence.  Specifically, Commerce’s Questionnaire asked for detailed responses regarding its history with the EFPT program. When Özdemir responded that it did not have plants located in regions for the EFPT program, Commerce discovered this response was not accurate as Özdemir did take advantage of the EFPT program with facilities in the designated region. Thus full and complete answers to Commerce’s questionnaire warranted the application of AFA. Despite Özdemir’s arguments that Commerce could have used additional tax information provided at verification to ascertain participation in the EFPT, the Court was not persuaded by Özdemir’s arguments that it complied when it did not provide accurate responses.  Additionally, Commerce reasonably determined the AFA rate and correctly corroborated that rate.

As for the LTAR benchmarks, the Court remanded the decision finding that Commerce’s selection of land price data in Istanbul and Yalova Altinova are highly priced and anomalous compared to other areas in Turkey. Commerce must consider relevant record evidence to compare land parcels and provide a reasonable benchmark to alleviate the distortive pricing.  For these reasons, Commerce’s decision was remanded in part.


Personal Liability Tested in Footwear Case

In United States v. Sterling Footwear Inc., et. al. Slip. Op. 17-140, Court No. 12-00193, (October 12, 2017) the Court heard summary judgment arguments regarding Customs and Border Protection’s (CBP) attempts to collect unpaid duty and monetary penalties from entries of shoes imported by the defendant.  From 2007 and 2009, Sterling Footwear Inc. (“Sterling”) imported rubber tennis shoes into the United States which were classified under HTSUS 6402.91.40 described as “tennis shoes” with a “textile upper, rubber sole and foxing band.” Id. at 9. Starting in May 2009, Customs import specialists began to examine the shoes.  After a meeting in July, Sterling agreed to submit post entry amendments.  However, this was never done and CBP reviewed all of Sterling’s past entries.  CBP also issued notices to Alex Ryan Ng and Ng Branding involving the entries because they felt Ng actions as the president, CEO, and majority stake holder of both companies made him liable and that the two companies were operated as continuation of each other. For the following reasons the Court granted the Government’s motion for summary judgment against Sterling and denied the motion for summary judgment against Alex Ryan Ng and Ng Branding.

The first issue was whether Alex Ryan Ng could be personally liable for the unpaid duties. Under United States v. Trek Leather, Inc., 767 F.3d 1288 (Fed. Cir. 2014) individuals may be held liable for violating § 1592(a)(1)(A) if that individual engages in conduct proscribed by the statutory provision. However, the Court said summary judgment was inappropriate because there was “conflicting evidence regarding Ng’s role in determining the tariff provision pursuant to which Sterling’s footwear would be entered.” Id. at 30. Mr. Ng’s testimony regarding his role in selecting the tariff classifications conflicts with that of employees and other evidence on the record.  For this reason, the Court denied the motion.  The Court then reviewed the tariff classification used by Sterling.  HTSUS 6402.91.40 describes “tennis shoes” with a “textile upper, rubber sole and foxing band.” Id. at 9.  Using photos submitted by plaintiff the Court says it is obvious the goods were misclassified. “Several of the photographs depict boots, one with tassels, that clearly are not tennis shoes, rubber or otherwise.” Id. at 38.  The next issue was the culpability of Sterling and Ng Branding for the misclassification.  The government sought to prove gross negligence or that the companies acted “with actual knowledge of or wanton disregard for the relevant facts” and obligations under the statute. Id. at 41. The Court said the record indicated “Sterling had knowledge of the footwear it imported, because it had designed it. It knew that it was responsible for correctly classifying its footwear. Yet, Sterling repeatedly described the footwear as rubber tennis shoes.” Id. at 44. As a result, Sterling was found to have been grossly negligent. The government sought to hold Ng Branding liable for gross negligence because it was a mere continuation of Sterling. However, “In the absence of undisputed evidence that a purchase or transfer of assets occurred” the Court could not hold Ng Branding liable.  Id. at 50. The final issue was the amount of penalties to be collected from Sterling.  Under statute the government is entitled to collect at maximum four times the revenue lost by grossly negligent defendants.  However, the Court said that in order to decide the penalties further briefing on the 14 factor test from Complex Mach. Works Co., 23 CIT 942, 949–50, 83 F. Supp. 2d 1307, 1315 (1999) was required. This issue will be decided upon consideration of these factors.


Optical Fibers for Telecommunications Network Classified as Other Optical Appliances

In ADC Telecommunications, Inc. v. United States, Court No. 13-400, Slip Op. 17-144 (October 18, 2017), plaintiff ADC challenged the liquidation of “value added modules” or  VAMS are under Harmonized Tariff Schedule Subheading as 9013.80.90 “other optical appliances and instruments” and argued that they were more accurately classifiable under  Harmonized Tariff Schedule of the United States (“HTSUS”), subheading 8517.62.00, as “machines for the reception, conversion and transmission or regeneration of voice, images or other data”, duty-free. The VAMS are intended to ease installation of articles into the plaintiff’s telecommunications network operator customers’ fiber optic network using optical fibers.  Plaintiff argued that the VAMs are not classifiable as optical appliances or optical instruments of Chapter 90 because they do not aid or enhance human vision, and that the VAMs are more appropriately classified under HTS Subheading 8517.62 as apparatus used for transmission of voice, images, or other data, including for communication in a wired or wireless network.  However, because the Court more closely associated “optical fibers” with “other optical appliances,” as per defendant’s reiteration of the definition “optical,” it classified the VAMs under Heading 9013. The Court therefore granted defendant’s motion for summary judgment and denied plaintiff’s motion.

Trade Updates for Week of October 11, 2017

United States Court of International Trade


Customs Allowed to Collect Dump Duties from Surety with Interest

In United States v. International Fidelity Insurance Company, Slip Op. 17-136, Court No. 13-00256, (October 5, 2017) the Court heard arguments about the United States efforts to collect unpaid antidumping duties from Fidelity. In May of 2002, China Leader Express Co. imported fresh garlic from China with a 376.67% antidumping rate. China Leader submitted a bond as security for the estimated dumping duties, with Fidelity as the surety.  In December of 2002, Commerce began a periodic review of Huaiyang Hongda Dehydrated Vegetable Company (“Hongda”) the exporter of garlic imported by China Leader. However, Commerce rescinded the review with respect to Hongda, and the garlic was subject to the full PRC rate. Commerce’s decision was challenged in Court, which suspended efforts to collect. In November of 2004, the Court sustained Commerce’s decision, and no appeals were filed. In January 2007, Commerce notified Customs the injunction had expired and the shipments were to be liquidated. In September 2007,  Customs liquidated the goods with a 376.67% duty. Customs’ attempts to collect from China Leader and Fidelity were unsuccessful which resulted in the filing of this case on July 23, 2013. For the following reasons the Court agreed with the government and ordered Fidelity to pay $231,000 plus pre-judgment and post judgment interest.

The first issue was whether the Government’s case was commenced after the statute of limitations for collecting on a bond had expired. The government may collect “within six years of the date on which the Government’s right of action accrues,” which for a Customs bond is the date of liquidation. Id. at 7. “Here, the six-year statute of limitations on the Government’s collection action commenced on the date the subject entry was deemed liquidated by operation of law.”  Id. at 8.  Notice of removal of the suspension is when deemed liquidation occurred.  In this case, Commerce sent the liquidation instructions to Customs on July 24, 2007; the summons was filed on July 23, 2013, one day before the six year period expired. Thus, the case was timely.

Next, the Court denied any claims that the bond was invalid due to handwritten changes on the bond made by Customs.  The Court said that “Fidelity offers no evidence in support” of this claim and the bond was valid. Id. at 17.

The final issue was the amount of interest that the Government was entitled to collect. The Court allowed the government to collect statutory pre judgment interest because “19 U.S.C. § 580 provides for interest on bonds securing both traditional customs duties and antidumping duties” at a rate of 6% per annum. Id. at 21. The Court stated that “the Government's entitlement to statutory pre-judgment interest” outweighs any equitable factors in the Government’s favor because “the 6% rate under § 580 far exceeds the applicable rates at which the Government would receive equitable interest.” Id. at 25.  Post judgment interest was allowed because 28 U.S.C. § 1961(a) provides that post-judgment “interest shall be allowed on any money judgment in a civil case”. Id. at 26. For these reasons, the Court denied defendant’s motion for summary judgment and granted plaintiff’s cross motion.


U.S. Commissions are Constructed Export Price Selling Expenses

In ABB, Inc. v. United States, Court No. 15-108, Slip Op. 17-137 (October 10, 2017), the Court sustained Department of Commerce’s (“Commerce”) redetermination on remand in the first administrative review of the antidumping duty order on large power transformers from the Republic of Korea (“Korea”), for the period of review (“POR”) February 16, 2012, through July 31, 2013 (“POR 1”). The court directed Commerce to “further address the sequencing of certain of [Hyundai Heavy Industries Co., Ltd. and Hyundai Corporation USA’s (collectively “Hyundai”)] documents in the record,” and “defer[red] ruling on the issue of whether Commerce should have applied facts available or [adverse facts available (“AFA”)] in calculating Hyundai’s dumping margin with respect to the discrepancies in the sequencing of Hyundai’s documents alleged by ABB.” ABB Inc. v. United States (ABB I), 40 CIT_ 190 F. Supp. 3d 1159, 1164, and 1184 (2016). The court also directed Commerce to “further explain its treatment of the respondents’ U.S. commissions, the record basis for such treatment, whether such U.S. commissions result in the granting of commission offsets, and the legal and factual basis for the granting or denial of the commission offsets.” See id.

As for the sequencing of Hyundai’s sales documents, on remand, all discrepancies on the sequencing were resolved.  However, in regards to commission offsets, because respondents’ commissions were incurred in the U.S., Commerce denied home market commission offsets to Hyosung Corporation, the defendant intervenor, and Hyundai, because there were no commission expenses in the home market.  Such expenses are already treated as constructed export price or CEP selling expenses and get deducted from the price to establish CEP. Both Hyosung and Hyundai challenged this decision, arguing that Commerce went beyond the remand instructions in its factual findings to findwhere the commissions were incurred and that the review was “results-oriented” and contrary to government statutes and regulations.

The Court accorded substantial weight to the agency’s interpretation of the statute it administers and held that deductions in the CEP for U.S. commissions is in accordance with the law under 19 U.S.C. § 1677a(d)(1)(A).  For these reasons, the Court sustained Commerce’s redetermination.


Default Judgment Granted in Misclassification Case

In a penalty case seeking the collection of duties amounting to $40,288.82 and penalties totaling $131,358.22 for misrepresentations on entry documents regarding the classification of dairy products, defendants Juan Carlos Chavez and Chavez Import & Export, Inc. (“CIE”) failed to appear. Summary judgment was already granted in plaintiff’s favor against Chavez in a previous opinion. Plaintiff then moved for entry of default judgment against CIE. Because CIE has failed to appear or respond to the government’s allegations, CIE has not shown that it exercised reasonable care or competence to justify the claimed classifications.  As result, the Court granted default judgment in favor of plaintiff and against CIE for unpaid duties, penalty, interest, and costs. 

Trade Updates for Week of October 4, 2017

United States Court of International Trade


Motion to Dismiss Cross Claim Granted in Part

In United States v. UPS Supply Chain Solutions, Inc. et al., Court No,16-00010, Slip Op. 17- 134 (September 29, 2017 ), the Court considered a motion to dismiss cross claims initiated by Defendant 4174925 Canada, Inc. d/b/a Majestic Mills (“Majestic Mills”). Plaintiff United States, on behalf of U.S. Customs and Border Protection (“Customs”), brought claims against Majestic Mills, UPS, American Service Insurance Co. (“ASI”), and Great American Alliance Insurance Co. (“Great American”) (collectively, “Defendants”) for unpaid duties and civil penalties under Section 592 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1592(a) and (d) (2012). In UPS’ cross-claim, UPS alleged that Majestic Mills agreed to indemnify UPS from any liabilities arising from the importation of subject merchandise through a series of contractual agreements. The other causes of action in the cross-claim: breach of contract, fraud, and negligent representation were borne from Majestic Mills’ provision of incorrect information to UPS upon which UPS relied upon to declare classifications to Customs.

While the Court denied counts regarding breach of contract, fraud, and negligence, because they were time barred, the Court did allow the claim regarding indemnification. 28 U.S.C. § 1583 grants the Court the authority to decide cross-claims when “(1) such claim or action involves the imported merchandise that is the subject matter of such civil action, or (2) such claim or action is to recover upon a bond or customs duties relating to such merchandise. UPS seeks judgment on which party is liable to pay duties sought by plaintiff United States involving those entries, and reimbursement of any amounts plaintiff obtains from UPS in the underlying action.  Because liability of the duties owed and reimbursement of those duties involve the imported merchandise, the case falls in the CIT’s jurisdiction under section 1583(1). Moreover, because of judicial efficiency and because both parties are defendants in the case, the Court allowed jurisdiction over the indemnification claim.


Commerce’s Decision Remanded in Part

Before the Court in Aristocraft of America, LLC, et al. v. United States, Court No. 15-307, Slip Op. 17-132 (September 28, 2017) were the USCIT Rule 56.2 motions for judgment on agency record of Plaintiffs Shanghai Wells Hanger Co., Ltd., Hong Kong Wells Ltd., and Hong Kong Wells Ltd. (USA), (collectively “Shanghai Wells”); Best For Less Dry Cleaners Supply LLC, Ideal Chemical & Supply Company, Laundry & Cleaners Supply Inc., Rocky Mountain Hanger MFG Co., Rosenberg Supply Co., Ltd., and ZTN Management Company, LLC (collectively, “U.S. Distributors”); and Aristocraft of America LLC (“Aristocraft”), (together with Shanghai Wells and U.S. Distributors, “Plaintiffs”). This action involves the sixth administrative review conducted by the U.S. Department of Commerce (“Commerce”) of the antidumping duty order covering steel wire garment hangers from the People’s Republic of China (“PRC”). See Steel Wire Garment Hangers from the PRC, 80 Fed. Reg. 69,942 (Dep’t of Commerce Nov. 12, 2015) (final results admin. rev.) (“Final Results”). First, plaintiff challenged Commerce’s calculations of Export Price (EP) and Constructed Export Price (CEP). The issue was whether irrevocable VAT may be deducted from EP and CEP. While the Court agreed that the irrevocable VAT should be deducted, it did not agree with the manner in the amount of VAT to be deducted was calculated.

Second, the Court sustained both the surrogate value of Shanghai Wells’ corrugated paper input and the B&H surrogate costs because they were the “best information available”.  Finally, in regards to selecting financial statements for calculating surrogate financial ratios, the Court remanded this issue to Commerce to address reasonably the importance of drawing wire from wire rod as a surrogate company selection criterion. An efficient way to address this would be to simply use the one company’s statements (LS) that drew wire from wire rod, as Commerce did in the fourth administrative review.