Trade Updates for Week of December 26, 2018

United States Court of International Trade

Remand Decision Sustained in Off-The-Road Tire Case

Before the Court in Qingdao Qihang Tyre Co. et. al. v. United States, Slip Op. 18-176, Court No. 16-00075 (December 19, 2018) were Commerce’s determination made on remand regarding the administrative review of an antidumping duty order on off-the-road tires from China. The Court previously remanded the results for Commerce to reconsider downward adjustments made to determine export price to account for Chinese irrecoverable VAT, the surrogate value for the reclaimed rubber manufacturing input based on Global Trade Atlas data from Thailand, and the surrogate value obtained from the World Bank’s Doing Business 2015 report for valuing foreign inland freight. For the following reasons, the Court sustained Commerce’s remand determination.

Commerce, under protest, recalculated export price without making downward adjustments for Chinese irrecoverable VAT. Commerce was required to address any “export tax, duty, or other charge imposed by the exporting country on the exportation of the subject merchandise to the United States.” The Court dismissed Commerce’s protest and sustained the determination because “the record in this case does not support the notion that China imposed an export tax, or anything resembling one, on the subject merchandise.” Id. at 7. Commerce also reconsidered its surrogate values and instead used Romanian import price data for reclaimed rubber, and the World Bank’s Doing Business 2016: Thailand report for inland freight. The Court sustained these determinations because the sources “constituted the best available information.” Id. at 8. 

Motion for Summary Judgment Granted in Plaintiff’s Favor

Before the Court in Arbed Americas, LLC v. United States, Slip Op. 18-177, Court No. 15-00095 (December 21, 2018) were cross motions for summary judgement regarding Customs denial of protest regarding the collection of antidumping (“ADD”) and countervailing (“CVD”) duties assessed on six entries of stainless steel plate coils from Belgium. The entries of steel in question were produced in Belgium and imported into the U.S. by plaintiff in 1999. In 2001, Commerce published an administrative reviews of ADD and CVD orders covering the period and products at issue. The reviews were challenged, but ultimately Commerce issued instructions to Customs to liquidate the concerned entries, including plaintiff’s entries. The application of this instruction was challenged in further litigation. However, the litigation only included 211 specific entries, none of which were plaintiff’s entries. A preliminary injunction was ordered by the Court of Appeals for the Federal Circuit (“CAFC”), and instructions issued to Commerce not to liquidate any of the 211 entries concerned.  Eventually, litigation ended and in January 2011 Customs attempted to liquidate the plaintiff’s entries and receive ADD and CVD payment. Plaintiff filed a protest arguing that under 19 U.S.C. § 1504(d) the six entries were deemed liquidated six months after August 31, 2006 when Customs received instructions that implemented the preliminary injunction ordered by the CAFC. For the following reasons, the Court agreed with plaintiffs that the entries had previously liquidated. 

“An entry must be liquidated within one year after the date the merchandise is entered for consumption unless the time for doing so is extended administratively or suspended by a statute or court order.” Id. at 6. “The Federal Circuit has held that in order for deemed liquidation to occur by operation of law, three elements must be met: “(1) the suspension of liquidation that was in place must have been removed; (2) Customs must have received notice of the removal of the suspension; and (3) Customs must not liquidate the entry at issue within six months of receiving such notice.” Id. at 7. The Court said that the instructions issued to Customs about the CAFC’s preliminary injunction was an “unambiguous and public notice to Customs … that suspension of the liquidation of Arbed’s six entries … orders had been removed.” Id. at 15. The Court dismissed the Government’s arguments regarding CBP’s ministerial role because a reasonable Customs official could not have read the instructions other than applying to the 221 entries specifically named in the instructions, none of which were plaintiff’s entries. The Court found that the entries were deemed liquated by operation of law on “September 13, 2006, when the 90-day period for petitioning the Supreme Court for certiorari from the Federal Circuit’s decision of June 15, 2006 expired.” Id. at 18.


Commerce Remand Determination Sustained in Part in Raw Garlic Case

Before the Court in Shenzhen Xinboda Indus. Co. et. al. v. United States et. al., Slip Op. 18-179, Court No. 16-0016 (December 26, 2018) was Commerce remand determinations regarding the final results in an administrative review of the antidumping duty order on fresh garlic from China. The Court had previously remanded for Commerce to reconsider the issue of surrogate country information and deferred consideration of Plaintiff’s additional challenges pending the results of Commerce’s remand redetermination.  For the following reasons, the Court sustains Commerce determinations regarding surrogate value for raw garlic and remands Commerce’s addition of delivery costs to the surrogate value for raw garlic and calculation of Plaintiff’s movement expenses.

“When an antidumping duty proceeding involves a nonmarket economy country, Commerce determines normal value by valuing the factors of production in a surrogate country.” Id. at 6. “In selecting surrogate values, Commerce must use the best available information that is, to the extent possible, from a market economy country or countries that are economically comparable to the nonmarket economy country and significant producers of comparable merchandise.” Id.  On remand, Commerce reopened the record and choose Romania as a surrogate as opposed to its previous surrogate Mexico. The Court sustained this determination because the Romanian data was “more contemporaneous than the annual data from Mexico” and the “Romanian data represented a broad market average,” which could not be said about Mexico. Id. at 9. By contrast, the Court disagreed with the surrogate values for movement expenses.  While calculating the cost of inland freight using the Romanian surrogate data, Commerce presumed a container payload weight of 10,000kg for the garlic. The Court said that this was unsupported by substantial evidence because there was no record evidence to support the payload weight. Only the weight issue was remanded for reconsideration.