United States Court of International Trade
An Emergency Action Notification from the USDA is a Not a Customs Exclusion which May Be Protested under 19 USC 1514(a); the CIT Does Not Have Jurisdiction
Andritz Sundwig GmBH v. United States, Case No. 18-142, Slip Op. 18-74 (June 20, 2018), involved a request seeking the Court’s intervention to prevent the emergency exportation of machinery in wood packaging material containing an invasive insect species of the family Siricidae, commonly known as horntails or woodwasps. Plaintiff Andritz Sundwig GMBH (“Andritz” or “Plaintiff”) is a German company that supplies production machinery to steel and aluminum manufacturers. Plaintiff protested the Emergency Action Notification (EAN) which found the Siricidae in the packaging of imported cold rolling mills. The Court held that since the USDA action was not a Customs exclusion, it could not be protested under 28 U.S.C. 1581(a) nor was the residual statute available for purposes of the enforcement of agricultural laws. For these reasons, the Court dismissed plaintiff’s case.
Commerce’s Decision Regarding Frozen Warmwater Shrimp
In SOC Trang Seafood Joint Stock Company et al., v. United States and Ad Hoc Shrimp Trade Action, Slip Op. 18-75, Court No. 16-205 (June 21, 2018), the Court decided two motions for judgment on the agency record challenging various aspects of the U.S. Department of Commerce’s (“Department” or “Commerce”) final determination in the tenth administrative review of the antidumping duty (“ADD”) order covering certain frozen warmwater shrimp from the Socialist Republic of Vietnam (“Vietnam”). First, the Respondents challenge Commerce’s differential pricing analysis as not in accordance with law and unsupported by substantial evidence. Second, the Respondents challenge Commerce’s selection of surrogate value data sources to value head and shell byproducts, frozen shrimp, and ice. Third, the Respondents challenge Commerce’s decision to deny a byproduct offset for revenue from excess or scrap packaging. Fourth, the Respondents challenge as not in accordance with law and unsupported by substantial evidence Commerce’s calculation of the all-others separate rate.
The Court upheld the differential pricing analysis. It stated, “Commerce’s differential pricing analysis, as applied, constitutes a reasonable methodology for identifying patterns of prices that differ significantly and is therefore in accordance with law. As applied by Commerce, this tool measures “the extent to which the net prices to a particular purchaser, region, or time period [i.e., the test group] differ significantly from the net prices of all other sales of comparable merchandise [i.e., the base or comparison group].”” Slip Op., pg. 13. The Court also upheld the all others separate rate based on a remaining respondent.
Finally, while the Court upheld the head and shell by product values, it remands the surrogate value for the frozen shrimp. As for the frozen shrimp, Commerce did not explain why it was reasonable to default to data from the primary surrogate country when that data is not contemporaneous and the record includes a more specific data source.
Sustained Remand Determinations in Pasta and Corrosive Steel Products
In La Molisana S.p.A v. United States et. al., Slip Op. 18-76, Court No. 16-00047 (June 21, 2018) the Court reviewed Commerce’s remand determinations of an administrative review of an antidumping order on pasta from Italy. The Court had previously remanded to Commerce two issues for reconsideration, whether Commerce failed to provide meaningful opportunity for addressing the agency’s differential pricing analysis, and whether Commerce erred in requiring the La Molisana to report its pasta sales product shapes in conformity with the existing identities and categories of shapes on Commerce’s pasta shape classification list. For the following reasons the Court sustains Commerce’s remand determinations in full.
Plaintiff argued that it had not been provided opportunity to address Commerce’s differential pricing analysis. Yet, the Court pointed to a recent Court of Appeals for the Federal Circuit decision which upheld the “the application of zeroing when using the average-to-transaction comparison methodology”, effectively disposing of plaintiff’s arguments. Id. at 2. Furthermore, there was no analysis or evidence on the record to support plaintiff’s position.
In regards to Commerce’s classification of pasta, the agency has a duty “to uphold a stable and consistent model match methodology”, it is long-standing practice “that once a model-match methodology has been established, it will not” be modified “unless there are compelling reasons to do so”. Id. 3-4. Commerce had determined that no industry wide change had occurred to compel a reclassification of pasta. Plaintiff had failed to supply Commerce with information for 14 out of the 20 pasta shapes that plaintiff would like reclassified. In addition, the only changes the plaintiffs designated were company specific, which Commerce did not allow due to the ability of producers to manipulate classification systems.
In Hyundai Steel Company v. United States et. al., Slip Op. 18-77. Court No. 16-00161 (June 22, 2018), the Court reviewed remand determinations made by Commerce concerning an antidumping investigation of corrosive resistant steel products from Korea. Previously, the Court had remanded the order to Commerce to reconsider the agency's use of the adverse facts available ("AFA") in calculating Hyundai Steel's dumping margin. Commerce had decided to apply AFA to Hyundai after identifying several problems in the company's responses to questionnaires. The Court remanded in order for Hyundai to be given an opportunity to explain or correct the deficiencies. On remand, Commerce recalculated Hyundai's dumping margin without using AFA. Despite defendant intervenors arguments, the Court upholds Commerce's remand determinations.
Commerce can make use of AFA where "necessary information is not available on the record, or an interested party withholds requested information, fails to timely provide information in the form requested, significantly impedes proceedings, or provides information which cannot be verified.” Id. at 5. Defendant-intervenors argued Hyundai’s databases and submissions were unverifiable even after Commerce’s remand determinations. The Court said these databases were subject to verification by Commerce, and Commerce’s reports find the databases verifiable. Since the databases were verified by Commerce, AFA could not be applied to them. Defendant-intervenors also argued AFA should have been applied because Hyundai incorrectly calculated yield loss, and improperly included management fees and misstated cost in calculating general and administrative expenses (“G&A”). The Court said Commerce’s determination was based on substantial evidence because the agency indicated the methodology was correct, and used the methodology in recalculating the dumping margin. In regards to the G&A, the Court said Commerce “commonly adjusts respondents’ ratio calculations” in dumping investigations. Id. at 7. The agency did not believe the adjustments of the reported G&A rose to the level to require the use of AFA, as such the Court sustained the determination.
No Cross-Ownership; Commerce Determination Sustained
In Nantong Uniphos Chemical Co. Ltd., et. al. v. United States et. al., Slip Op. 18-78, Court No. 17-00150 (June 25, 2018) the Court reviewed arguments regarding Commerce’s determinations in a countervailing duty investigation of 1-Hydoxythylidene-1, 1-Disphosphonic Acid (“HEDP”) from China. Plaintiff, Nanjing University of Chemical Technology Changzhou Wujin Water Quality Stabilizer Factory (“Wujin”), was named a mandatory respondent to the countervailing duty investigation. Wujin disclosed that Nantong Uniphos Chemicals Co., Ltd. (“Nantong”) was an affiliate. Commerce ultimately determined Wujin and Nantong were not crossed owned, and could not share the same rate. As a result, Wujin received a de minimis rate and Nantong received the all other rate of 2.40%. Plaintiffs jointly challenged Commerce’s determination the companies are not jointly owned. For the following reasons, the Court sustains Commerce’s determinations in full.
Plaintiffs argued that by “failing to find cross-ownership between Nantong and Wujin, Commerce failed to properly apply 19 C.F.R. § 351.525(b)(6)(vi).” Id. at 5. The regulation provides “cross-ownership does not require one corporation to own 100 percent of the other corporation,” rather “cross-ownership will exist where there is a majority voting ownership interest between two corporations or through common ownership of two (or more) corporations.” Id. at 5. Commerce had found that Wujin acquired its shares in Nantong in 2014, and held that at the same level throughout the period of investigation. The agency also found Wujin was the second largest of three shareholders and held the same number of directors as the largest shareholder. In addition, despite its large number of shares, Commerce determined Wujin could not exercise exclusive control because any action would require two out of the three shareholders to consent. The Court found Commerce’s determinations were based on substantial evidence and sustained the determinations.