Trade Updates for Week of June 5, 2019

United States Court of International Trade

Court Sustained Commerce’s Determinations in CVD Investigation

Before the Court in Rebar Trade Action Coal. et. al. v. United States et. al., Slip Op. 19-65, Court No. 17-00202 (May 31, 2019) was a challenge to the affirmative final determination of  Commerce in the countervailing duty investigation of  Steel Concrete Reinforcing Bar From Turkey. Plaintiffs challenged Commerce’s application of the adverse facts available (“AFA”) against Habas, one of the consolidated plaintiffs, and Commerce’s natural gas benchmark selection. For the following reasons, the Court sustained Commerce in full.

Commerce may draw an adverse inference against a respondent “when it finds that a respondent has failed to cooperate by not acting to the best of its ability.” Id. at 4. Commerce applied the AFA against Habas for failing to report export related incentives received from Turkey’s Domestic Processing Regime. Habas argued application of AFA was not warranted because the company reasonably believed the program was not countervailable because Commerce had examined the program before and found it not countervailable. Habas also argued even if warranted the 14.01% rate applied was unreasonable. The Court said “Commerce’s determination as to whether a duty drawback program is countervailable is a fact-intensive examination that the agency is entitled to undertake, and Habas cannot unilaterally foreclose it by refusing to respond to the agency.” Id. at 8. The Court also explained that Commerce provided “a reasonably discernable path for how the agency selected of the 14.01% AFA rate” and sustained all AFA determinations.  Id. at 18. In regards to the benchmark selection, the Court said plaintiff “has failed to establish that a reasonable mind would have to credit Habas’ position as the one and only correct position on the administrative record” and sustained Commerce’s data selection. Id. at 22.

Court Sustained Commerce’s Antidumping Determinations in Part and Remanded in Part

Before the Court in Linyi Chengen Imp. & Exp. Co. et. al. v. United States et. al., Slip Op. 19-67, Court No. 18-00002 (June 3, 2019) was a challenge to Commerce’s  final determination in the antidumping duty investigation of certain hardwood plywood products from China, in which Commerce found that the subject merchandise is being sold for less than fair value. The Court reviewed several issues, if Commerce’s actions regarding the administrative record were arbitrary and capricious, if Commerce’s determination to apply adverse facts available (“AFA”) to Bayley was supported by substantial evidence, if Commerce’s determination not to verify certain submissions was in accordance with the law, and Commerce’s actions regarding Bayley’s affiliation with Company D was in accordance with the law and not arbitrary and capricious. For the following reasons, the Court sustained in part and remanded in part.

Plaintiff, Linyi Chengen, argued that Commerce mishandled the administrative record and acted in an arbitrary and capricious manner. The Court found the final determination was arbitrary and capricious in light of perceived inconsistencies on the record, such as, Commerce claiming record documents provided no indication that Linyi Chengen used the China National Standard in the company’s logs, while plaintiff argued untranslated Chinese characters on the same document showed the company did. The Court did not rule on other arguments from Linyi because of this issue. The Court then moved on to Bayley’s arguments. The Court said in regards to the AFA “it was reasonable for Commerce to suspect that Bayley failed to provide Commerce with information at the outset of the investigation, based on the evidence on the record.” Id. at 24. The court concluded  Commerce’s decision not to verify both Bayley’s questionnaire responses and the evidence the Petitioner put on the record was in accordance with the law because “the evidence that Petitioner placed on the record was not their own” and Commerce could not request Petitioner to verify it. Id at 25. The Court also found Commerce’s rejection of Company D’s information was reasonable because of Bayley’s failure to cooperate and comply with Commerce’s requests.