Fushun Jinly Petrochemical Carbon Co. v. United States

Slip Op. 16 - 25
UNITED STATES COURT OF INTERNATIONAL TRADE
:
FUSHUN JINLY PETROCHEMICAL CARBON :
CO., LTD. and FANGDA CARBON NEW :
MATERIAL CO., LTD., :
:
Plaintiffs, :
:
v. :
:
UNITED STATES, : Before: R. Kenton Musgrave, Senior Judge
:
Defendant, : Court No. 14-00287
:
and :
:
SGL CARBON LLC and :
SUPERIOR GRAPHITE CO., :
:
Defendant-Intervenors. :
:
OPINION
[Sustaining fourth administrative review of antidumping duty order on small diameter graphite
electrodes from the People’s Republic of China.]
Decided: March 23, 2016
Lizbeth R. Levinson and Ronald M. Wisla, Kutak Rock LLP, of Washington DC, for the
plaintiffs.
Melissa M. Devine, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington DC, for the defendant. With her on the brief were Benjamin
C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia
Burke, Assistant Director. Of Counsel on the brief was Nanda Srikantaiah, Attorney, Office of the
Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce.
Court No. 14-00287 Page 2
David A. Hartquist, R. Alan Luberda, and Brooke M. Ringel, Kelley Drye & Warren LLP,
of Washington DC, for the defendant-intervenors SGL Carbon LLC and Superior Graphite
Company.
Musgrave, Senior Judge: This opinion addresses challenges brought by the plaintiffs
Fushun Jinly Petrochemical Carbon Co., Ltd. (“Fushun”) and Fangda Carbon New Material Co., Ltd.
(“Fangda”) to Small Diameter Graphite Electrodes from the People’s Republic of China: Final
Results of Antidumping Duty Review; 2012-2013, 79 Fed. Reg. 57508 (Sep. 25, 2014) (“Final
Results”) as reasoned in the accompanying issues and decision memorandum (“IDM”). Substantial
evidence of record, however, supports the Final Results on those challenges.
Background
The matter concerns the fourth administrative review of the order on subject
merchandise,1 as determined by the International Trade Administration, U.S. Department of
Commerce (“Commerce”). After the review’s March 29, 2013 initiation, Commerce selected
Fushun and Fangda as mandatory respondents, PDoc 16, and published preliminary results on March
24, 2014. Small Diameter Graphite Electrodes from the PRC, 79 Fed. Reg. 15994 (Mar. 24, 2014)
(prelim. determ.), PDoc 228 (“Preliminary Results”), and accompanying preliminary decision
memorandum, PDoc 222 (“PDM”).
Concerning two of the issues brought here, Commerce preliminarily found that
Fushun had withheld or misrepresented information and had impeded the review, and accordingly
applied “total” facts available with an adverse inference after disregarding Fushun’s submissions.
PDM at 4-7; CDoc 243 (“AFA Memo”). As a consequence, because Fushun had not demonstrated
1
See Antidumping Duty Order: Small Diameter Graphite Electrodes from the PRC
(hereinafter “PRC”), 74 Fed. Reg. 8775 (Feb. 26, 2009).
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its separation from the PRC government, Commerce preliminarily determined that Fushun was also
subject to the 159.64 percent PRC-wide margin. PDM at 7; AFA Memo at 14.
Concerning one of the other challenges brought here, after the Ukraine was selected
as the primary surrogate country Commerce granted Fangda a by-product offset for its forming scrap
by-product and valued it with the Ukrainian Harmonized Tariff Schedule (“HTS”) item 2713.12 for
“Petroleum Coke, Calcined.” PDM at 23; IDM at 31.
Fushun and Fangda submitted administrative case briefs after publication of the
Preliminary Results. Fangda’s brief objected to Commerce’s valuation of its “forming scrap”
by-product, arguing that the Ukrainian value was aberrational, and it also challenged Commerce’s
VAT methodology. CDoc 251. Fushun’s brief was rejected on the ground that it improperly
contained new factual information, and its revised brief challenged Commerce’s determination to
apply total facts available with an adverse inference. CDoc 254. In a separate submission, Fushun
requested that Commerce reconsider its rejection of the original brief, arguing that the rejection
deprived it of the opportunity to comment on the impact of the final determination on liquidation
instructions with respect to a certain customer. CDoc 256.
On September 25, 2014, Commerce published its Final Results. 79 Fed. Reg. 57508.
Commerce continued to apply total facts available with an adverse inference to Fushun, see IDM at
8-13, and continued to find that the Ukrainian value for Fangda’s forming scrap by-product was
appropriate, see id. at 30-36. Commerce also rejected Fushun’s request to reconsider its rejected
case brief arguments and Fangda’s challenge to its VAT methodology. Id. at 2-3, 22-25. Commerce
made no changes to either party’s margin. See Final Results, 79 Fed. Reg. at 57509.
Court No. 14-00287 Page 4
The plaintiffs then brought suit here, challenging (1) the selection of the surrogate
price for valuing the factors of production for forming scrap, arguing that Commerce’s selection is
aberrational and unsupported by substantial evidence, (2) the deduction of non-refunded value added
taxes (“VAT”) from U.S. price as not in accordance with law, (3) the application of total adverse
facts available to Fushun, arguing that substantial evidence does not support finding that Fushun
concealed or withheld information, and that (4) Fushun deserved a separate rate. In addition, Fushun
urges the court (5) to fashion a remedy to exclude an importer that did not purchase merchandise
from Fushun during the period of review (“POR”) from being subject to the adverse rate.
Jurisdiction and Standard of Review
Jurisdiction is predicated upon 19 U.S.C. §1516a(a)(2)(B)(iii) and 28 U.S.C.
§1581(c). Commerce’s final results are to be sustained unless they are “unsupported by substantial
evidence on the record, or otherwise not in accordance with law”. 19 U.S.C. §1516a(b)(l)(B)(i).
Discussion
I
First briefed is the plaintiffs’ challenge to the selection of the surrogate value (“SV”)
for the Fangda Group’s forming scrap by-product created during and reintroduced into the
production of the subject merchandise.
A
“Normal” value for products from a non-market economy country is typically
determined on the basis of surrogate values selected for the factors of production (“FOPs”) utilized
in producing the merchandise, plus amounts for general expenses, the cost of containers, coverings,
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and other expenses, and assumed profit. See 19 U.S.C. §1677b(c)(1). Because FOPs are based on
“the values of such factors in a market economy country or countries considered to be appropriate”,
id., Commerce has discretion in the selection of FOPs, so long as they represent the “best available
information” for using as a surrogate value. See 19 U.S.C. §1677b(c)(1)(B); see also Nation Ford
Chemical Co. v. United States, 166 F.3d 1373, 1377 (Fed. Cir. 1999).
In that exercise, Commerce relies on one or more surrogate countries that are (A) at
a level of economic development comparable to that of the non-market economy country, and (B)
significant producers of comparable merchandise. 19 U.S.C. §1677b(c)(4). Commerce will
normally value all FOPs from a single surrogate country source, 19 C.F.R. §351.408(c)(2), and in
the selection of the surrogate country Commerce attempts to seek data representing investigation or
review period-wide prices, prices specific to the input in question, prices that are net of taxes and
import duties, prices that are contemporaneous with the period of investigation or review, and data
that are publicly available. See Import Administration Policy Bulletin No. 04.1: Non-Market
Economy Surrogate Country Selection Process (Dep’t of Commerce Mar. 1, 2004).
The primary raw material inputs for small diameter graphite electrode (“SDGE”)
products are calcined petroleum coke and “needle” coke, which is a premium-quality type of
calcined petroleum coke produced only by a small number of specialized producers in the United
States, the United Kingdom, Japan, and the PRC. Responding to Commerce’s requests for
information on its production of SDGEs, Fangda’s Group2 reported separate FOPs for domestic
2
“Collapsed” alongside Fangda during the administrative proceeding were affiliates Beijing
Fangda Carbon Tech Co., Ltd., Chengdu Rongguang Carbon Co., Ltd., Fushun Carbon Co., Ltd., and
Hefei Carbon Co., Ltd. (“Fangda Group”). IDM at 1 n.1. See 19 C.F.R. §351.401(f).
Court No. 14-00287 Page 6
needle coke,3 imported needle coke, self-produced calcined petroleum coke (involving raw
petroleum coke, labor and electricity inputs) and forming scrap. Because the Fangda Group’s
reported market economy POR purchases of needle coke exceeded 33 percent of its total POR
purchases of domestic and market economy needle coke,4 Commerce valued both the reported
domestic and market economy needle coke FOPs using the weighted average of the Fangda Group’s
market economy needle coke purchases during the POR in accordance with the provisions of 19
C.F.R. §351.408(c)(l) that were in effect at that time. Preliminary SV Mem., CDocs 242-43, at 9-10
and Ex. 3. See Pls’ 56.2 Br. at 15 (confidential). That surrogate value is undisputed here.
All calcined petroleum coke consumed by the Fangda Group in production during the
POR was “self-produced” by two of the group’s members and another affiliate of the Fangda Group.
Commerce valued the self-produced calcined petroleum coke based on its FOPs, consisting of raw
petroleum coke, electricity, and labor inputs.5 There is no dispute over Commerce’s selection of the
surrogate values for the reported FOPs for the Fangda Group’s self-produced calcined petroleum
coke. See Preliminary Analysis Mem. for Fangda Group at 4. Commerce valued the raw petroleum
coke inputs using the average unit value (“AUV ”) of imports under Ukrainian HTS item 2713.11
3
According to the papers, needle coke has a distinct crystalline structure that is necessary
for achieving high power, super-high power and ultra-high power performance standards in the
highest-quality electrode products. Generally speaking, the higher the performance standard of a
given electrode, the higher will be the needed percentage of needle coke relative to calcined
petroleum in the production process, in contrast to “regular” power electrode products that may be
manufactured solely with calcined petroleum coke inputs and without incorporating any needle coke.
4
See Fangda Section D Resp., CDocs 44-61, at Ex. D-6.
5
See Fangda 2nd Supp. Resp., CDocs 231-39, at Exs. S2-D2, p. 23, and S2-D3, p. 30
(Calcined Petroleum Coke Worksheets).
Court No. 14-00287 Page 7
(raw petroleum coke) equal to $243.8298/MT, valued the reported electricity inputs at 0.8199
Ukrainian Hryvnia (“UAH ”) per kilowatt hour/MT, and valued the reported direct and indirect labor
hours at 16.3033 UAH per hour. Preliminary SV Mem. at Ex. 3, supra. Fangda points out that when
the surrogate values Commerce selected for raw petroleum coke, electricity, and labor inputs are
applied to the FOPs reported by the Fangda Group affiliate for its entire POR production of calcined
petroleum coke, based upon the average of monthly UAH/dollar exchange rate during the POR of
$0.1220917, the resulting value of its self-produced calcined petroleum coke is a certain,
determinable figure between $250 and $450 per metric ton (“benchmark”).
The specific issue here disputed concerns the surrogate value for forming scrap, a by-
product of SDGE production. Although the antidumping statute does not address the treatment of
by-products generated during the production process, from an accounting perspective it is
appropriate to offset production costs by the value of such by-products, and towards that end
Commerce considers its by-product accounting methodology as consistent with the statute, see 19
U.S.C. §1677b(c), as further honed from time to time, cf. Guangdong Chemicals Import & Export
Corp. v. United States, 30 CIT 1412, 1422, 460 F. Supp. 2d 1365, 1373 (2006) with, e.g., Juancheng
Kangtai Chemical Co. v. United States, 39 CIT ___, Slip Op. 15-93 (Aug. 21, 2015) at 66-81.
Parties requesting the offset have the burden of presenting to Commerce evidence regarding the
amount of by-product produced, as well as evidence that the generated by-product is re-used in the
production of the subject merchandise or has commercial value, before Commerce will incorporate
offsets into the margin calculation. E.g., American Tubular Prods., LLC v. United States, 38 CIT
___, Slip Op. 14-116 (Sep. 26, 2014) at 17-18, appeal pending, Fed. Cir. No. 2016-1127.
Court No. 14-00287 Page 8
Forming scrap is produced in the initial forming stage of electrode production.6
Fangda mixes all forming scrap from all power levels of electrode products together, and on this
point Commerce emphasizes that there is no record information that indicates the component
breakdown of forming scrap when it is reintroduced into the kneading stage of production. See
generally Fangda 2d Supp. Sec. D Resp. at Ex. D-1, CDoc 56; cf. Pl’s USCIT R. 56 Brief at 5-6 with
Def’s Resp. at 9, 11. Fangda reintroduces its forming scrap at that stage in order to lower its cost
of SDGE production.
In the Preliminary Results, Commerce identified the Fangda Group’s FOPs for
forming scrap as a type of calcined petroleum coke by-product, and valued it using the AUV of
Ukrainian import data for HTS item 2713.12 (calcined petroleum coke), i.e., $1,820 per MT. See
Fangda 2d Supp. Sec. D Resp. at 9 and Ex. 3. Fangda agreed in its administrative case brief that
HTS 2713.12 is the proper category for valuing the forming scrap by-product, but it argued that the
Ukrainian AUV is aberrational when compared with its own values for calcined petroleum coke and
its needle coke purchases. E.g., Fangda Admin. Case Brief at 15, CDoc 251. Fangda did not
recommend an alternative methodology for valuing the forming scrap by-product but suggested
instead a “building up” methodology based on its self-produced calcined petroleum coke input.
After noting that Fangda did not supply a build-up methodology and that Fangda did
not provide evidence as to the ratio of calcined petroleum coke to needle coke in the forming scrap
by-product, Commerce concluded that the data would not support a build-up calculation of the
forming scrap value and that selecting a surrogate value that included both calcined petroleum and
6
Fangda Group’s production process is apparently similar to that described in U.K. Carbon
and Graphite Co. v. United States, 37 CIT ___, ___, 931 F. Supp. 2d 1322, 1330-31 (2013).
Court No. 14-00287 Page 9
needle coke would be more specific to the by-product in question. See IDM at 31. Continuing to
evaluate the surrogate value information from the Ukraine, the primary surrogate country, Commerce
then determined that it would be appropriate to value forming scrap using Ukrainian HTS 2713.12
because it is the most product-specific HTS category available. Id. at 31-32.
Summarizing, Commerce found that: (a) the record shows that the forming scrap used
by Fangda Group contains both needle coke and calcined petroleum coke, (b) Ukrainian HTS
2713.12 covers both products and contains imports of both, (c) Ukrainian import data for HTS
2713.12 are publicly available, contemporaneous to the period of review and duty and tax exclusive,
and therefore (d) those data, with an AUV of $1,820/MT, comprise the best available information.
Id. at 31, 36. Commerce further determined that the record did not indicate the ratio of calcined
petroleum coke to needle coke in the forming scrap, and that the Ukrainian value for HTS 2713.12
did not contain a small quantity of imports and was therefore not aberrational. Id. at 31-35.
Consequently, Commerce continued to use HTS 2713.12 data from the Ukraine to value Fangda’s
forming scrap by-product.
B
Fangda agrees in principle that forming scrap may be valued using import statistics
under HTS item 2713.12, but it argues that the agency’s determination to value the Fangda Group’s
forming scrap using the AUV of $1,820/MT based on the Ukrainian import data for that tariff item
“as is” was not supported by substantial evidence and not the best information available for valuing
forming scrap.
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Fangda first contends the Ukrainian AUV is “skewed” by the needle coke prices
reflected in the underlying data and is therefore overinflated as compared with the composition of
its forming scrap. This is so, Fangda argues, because the Fangda Group’s forming scrap consists
“predominantly” of calcined petroleum coke: all forming scrap from the group’s electrode
production is mixed together, and for the “vast majority” of its products, more calcined petroleum
coke was consumed than needle coke. Fangda argues that its group provided Commerce the
purchase information for all of its FOP inputs as well as the information related to all of its self-
produced calcined coke, and that the information clearly showed that the combined production and
consumption of calcined petroleum coke in the forming stage (from which point the forming scrap
was reclaimed as a by-product) was vastly greater than the consumption of needle coke. Fangda
further argues that the cost of manufacture and production worksheets for the three Fangda
production companies corroborated this point, and that based on a reasonably conservative inference
of the approximate ratio of calcined petroleum coke to needle coke in its forming scrap, the
commercial value thereof should thus at most be substantially less than the premium needle coke
price that the Ukrainian AUV “obviously” reflects from the import data for HTS item 2713.12.7
Those import data, Fangda argues, are “weighted” with a “higher” proportion of
needle coke because the import data from the four needle coke producing countries alone account
7
Fangda juxtaposes the Ukrainian AUV of $1,820 against the Fangda Group’s somewhat-
higher purchase prices of imported needle coke as well as the data covering the wide range of prices
it proposed as surrogate values for valuing calcined petroleum coke ($266 MT to $700 MT), see Pls’
56.2 Br. at 14-15, and while Fangda allows that forming scrap may contain varying amounts of
needle coke if the earlier production involved electrode products containing needle coke, it also
allows that in addition to containing previously reintroduced forming scrap, graphite scrap, modified
coal tar pitch and stearic acid, forming scrap obtained from “regular” power electrodes will contain
little or no needle coke.
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for approximately half the imports into the Ukraine. Fangda juxtaposes the average prices thereof
against the average price of the remaining half of the imports into the Ukraine from the non-needle
coke producing countries, and in doing so Fangda argues the Ukrainian AUV more closely
approximates a needle coke price, as may be discerned by comparison of the Ukrainian AUV with
the Fangda Group’s purchases of needle coke. Fangda argues the AUV of $514.43/MT from South
Africa’s imports during the POR under HTS item 2713.12 is the best information in the record for
valuing forming scrap rather than the Ukrainian import data, since Commerce identified South Africa
as a potential surrogate country source and its AUV for HTS item 2713.12 is more reasonably
representative of the commercial value of the Fangda Group’s forming scrap when juxtaposed
between its logically-determined benchmark for calcined petroleum coke, supra, and the average
price of the Fangda Group’s own needle coke purchases. See Pls. 56.2 Br. at 9-13.
The court must conclude Fangda’s arguments on the record insufficient to overcome
Commerce’s surrogate value selection for forming scrap. Regarding the argument that South
Africa’s data is “best” for valuing the Fangda Group’s forming scrap, if one were to calculate a
weighted average based on Fangda’s argued benchmark for calcined petroleum coke and the simple
average of Fangda Group’s needle coke purchase prices in (rough) proportion to Fangda’s argued
ratio of calcined petroleum coke and needle coke in its group’s forming scrap, the resulting figure
is significantly higher than the South African AUV for HTS 2713.12, which hardly supports the
argument that that AUV is the “best” information on the record for valuing its forming scrap.
Regarding the AUV of the Ukrainian import data, Fangda’s arguments do not
overcome the absence of information on the record necessary to establish its case. Fangda argues
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that its purchase and consumption information clearly establish the overall average ratio of needle
coke and calcined petroleum coke in the forming scrap by-product for the entire POR, but
Commerce’s expressed concern is regarding the lack of record evidence establishing that ratio for
subject merchandise, i.e., the relevant subset of the Fangda Group’s production, and Fangda does
not refer the court to an aspect of the record that would indicate the ratio of inputs in its group’s non-
subject merchandise forming scrap input that might be used to reconcile the averages for the entire
POR production and consumption information for calcined petroleum coke and needle coke and the
(implicit) production ratio for subject merchandise as argued by Fangda.
Instead, while claiming that the “vast majority” of its products consume more
calcined petroleum coke than needle coke, Fangda allows that “regular” graphite electrodes may be
produced without needle coke. That implies, for example, that production runs of “regular” non-
subject merchandise graphite electrodes using only calcined petroleum coke (with concomitant
forming scrap produced, mixed together with other forming scrap, and reintroduced during such
runs) will necessarily result in increases of the percentage of needle coke and decreases of the
percentage of calcined petroleum coke in the remaining needle-coke-to-calcined-petroleum-coke
inputs ratio that would be attributable to subject merchandise production runs from Fangda’s
reported consumption of needle coke and calcined petroleum coke in production during the POR.
The process of “mixing of all forming scrap . . . together”, Pl’s 56.2 Br. at 10, must be one that is
continuous throughout the POR (a single or even occasional such mixing during the POR would be
risable), but Fangda’s papers to the court do not illuminate further on its subject and non-subject
merchandise production.
Court No. 14-00287 Page 13
Similarly, Fangda’s argument that the Ukrainian data are “heavily skewed toward
needle coke”, e.g., Pls’ Reply at 9, must be placed in context vis-à-vis Fangda’s arguments regarding
the composition of its group’s forming scrap. Therein, the argument does not overcome Commerce’s
concern that without more precise record information as to the composition of forming scrap
produced during production runs of subject merchandise, one cannot conclude that the composition
of the Ukrainian import data for HTS 2713.12 is distortive. See, e.g., Def’s Resp. at 12 (“the
purchase and consumption information that Fangda provided . . . is limited to subject small diameter
electrodes, and does not reflect all electrode production during the period of review”); IDM at 32
(“the forming scrap from the production of different power levels of SDGE production is not kept
separate, and that production information does not contain all electrodes produced”).
Furthermore, even if Fangda’s arguendo proportions of calcined petroleum coke and
needle coke in forming scrap produced during production of subject merchandise are accurate (from
which it might be concluded that the Ukrainian import data are “distortive” because they are not
representative of those proportions; e.g., Pls’ 56.2 Br. at 10-12), the point would not necessarily
result in resort to selection of HTS 2713.12 data pertaining to an entirely different country in
contravention of Commerce’s preference for selecting surrogate values for FOPs from a single
surrogate country. See 19 C.F.R. §351.408(c)(2). The solution might involve, for example,
conversion of the AUV of the Ukrainian data for HTS 2713.12 from a simple to a weighted average
that would reflect Fangda’s argued calcined-petroleum-coke-to-needle-coke ratio. But whether that
exercise even produces a “better” value for the Fangda Group’s forming scrap, at any rate, it is not
one that Fangda framed to Commerce, and regardless, the court may not, sua sponte or otherwise,
“displace the [agency’s] choice between two fairly conflicting views”, id., because “the possibility
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of drawing two inconsistent conclusions from the evidence does not prevent an administrative
agency’s finding from being supported by substantial evidence.” Consolo v. Federal Maritime
Commission, 383 U.S. 607, 620 (1966) (citations omitted).
On the other hand, in evaluating the reasonableness of the AUV of the Ukrainian
import data for HTS 2713.12 as a surrogate for approximating the value of Fangda Groups’s forming
scrap, it is always the case that the “substantiality of evidence must take into account whatever in
the record fairly detracts from its weight.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 488
(1951). In that regard, Commerce’s analysis is thin at points to the extent it appears to resolve to
ipse dixit statements or circular reasoning. For example, even though no party placed information
on the record concerning the precise composition in imports of needle coke versus calcined coke
under Ukrainian HTS 2713.12 or under the same HTS category of another potential surrogate
country, see IDM at 31-32, Commerce cannot avoid the not-unreasonable inference that the imports
into the Ukraine under HTS 2713.12 likely consisted of roughly half needle coke and half “all other”
calcined petroleum coke. Cf. IDM at 26 n.108 (acknowledging Fangda’s arguments in this regard).
Commerce may technically be correct as to the “unknown” percentages of needle coke and calcined
petroleum coke among the Ukrainian import data, but this is not an instance of an “unknown
unknown;” rather it is an instance of a “known unknown,”8 i.e., there are indicia on the record of a
reasonable range within which those percentages likely fall. See infra.
However, given the absence of more precise information regarding the composition
of the Fangda Group’s forming scrap, the above is of less concern here than Commerce’s atypical
8
Cf., e.g., Yates v. United States, 135 S.Ct. 1074, ___ (2015) (“Congress enacts catchalls
for known unknowns”) (internal quotes, brackets, and citation omitted).
Court No. 14-00287 Page 15
response to Fangda’s argument that the Ukrainian import data are aberrationally small9 (i.e., 4,442
MT during the entire POR) as compared to the import data for South Africa (207,682 MT) or those
of Thailand, Indonesia and the Philippines (53,534 MT, 54,204 MT and 61,569 MT, respectively).
The court’s understanding is that when considering an allegation that data represent an aberrationally
small quantity, Commerce typically determines whether the price represented thereby (i.e., the
Ukrainian AUV in this instance) is aberrational by comparing it against other sources of market
value. See, e.g., Shakeproof Assembly Components Division of Illinois Tool Works, Inc. v. United
States, 23 CIT 479, 485, 59 F. Supp. 2d 1354, 1360 (1999); Certain Cut-to-Length Carbon Steel
Plate From the PRC, 62 Fed. Reg. 61964, 61981 (Nov. 20, 1997) (final LTFV determ.) (“[f]or pig
iron, we were unable to use the Indian Monthly Statistics as we determined that the import price was
aberrational because the Indian data was based on a very small quantity and was almost two times
the price of the Indonesian pig iron”); Hand Tools Final Results, Heavy Forged Hand Tools,
Finished or Unfinished, With or Without Handles, from the PRC, 60 Fed. Reg. 49251, 49253 (Sept.
22, 1995) (final rev. results) (“we have compared the Indian import statistics to [other] sources of
market value to determine whether the Indian import values are aberrational”). Commerce did not
engage in such an exercise during the administrative proceeding but instead concluded that the
Ukrainian import data for HTS 2713.12 are not aberrationally small by noting, first, that the
Ukrainian import volume for that tariff item is still 61% of the volume of Ukrainian electrode
exports in category HTS 8545.11 (which Commerce concluded does not represent an aberrationally
9
See Pls’ 56.2 Br. at 21-22, quoting, inter alia, Shanghai Foreign Trade Enterprises Co.
Ltd. v. United States, 28 CIT 480, 495, 318 F. Supp. 2d 1339, 1353 (2004) (Commerce’s practice
is normally to “ensure that a small quantity of imports did not produce a price that is aberrational
relative to other sources of market value”).
Court No. 14-00287 Page 16
small percentage), and second, by observing that in “scale” the volume of Ukrainian imports of HTS
2713.12 represents a “substantial” volume of Ukrainian electrode exports. IDM at 34.
Commerce does not here enlighten as to the relevance of such a comparison, but the
court can “uphold a decision of less than ideal clarity if the agency’s path may reasonably be
discerned.” Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 286
(1974). Of course, an administrative determination that does not reflect “economic reality” is
unsustainable as unsupported by substantial evidence. Yangzhou Bestpak Gifts & Crafts Co., Ltd.
v. United States, 716 F. 3d 1370, 1378 (Fed. Cir. 2013), quoting Eurodif, supra, 555 U.S. at 317-18.
Still, Commerce need not duplicate the exact production experience of a respondent, so long as it
chooses, to the extent possible from the record, a surrogate value for the input that most accurately
represents the “fair” market value in a hypothetical market-economy picture of the NME relevant
to the proceeding. Nation Ford, supra, 166 F.3d at 1377 (quoting CIT decision). The “hypothetical”
used for that purpose in this instance is the Ukraine -- which, as the domestic industry here points
out, accorded with the plaintiffs’ request not only to include the Ukraine among Commerce’s list of
countries determined to be at a level of economic development comparable to the PRC but also to
select it as the primary surrogate country in the review. Def-Ints’ Resp. at 4, referencing
Respondents’ Surrogate Country Cmts (Aug. 21, 2013), PDoc 88, at 2.
Obviously, Fangda had second thoughts on the Ukraine’s selection as the primary
surrogate country when it came to the forming scrap surrogate value selection, and Fangda here
claims it proved the Ukrainian import volume aberrationally small via comparison thereof with the
import volumes of the other potential surrogate countries as well as based on Fangda’s own analysis
Court No. 14-00287 Page 17
of price. See Pls’ Reply at 3. According to the IDM, however, Fangda was only able to identify the
import value by metric ton and total price from each of the “dominant” needle coke producing
countries (the United States, the United Kingdom, and Japan), IDM at 32-33, and
[i]mports from these countries into [the] Ukraine amount to 50 percent[ ] of the
Ukrainian summary quantity of HTS 2713.12 and have an average unit value of
2,703 USD/MT while the Ukrainian value [i.e., AUV] of HTS 2713.12 is 1820.86
USD/MT. Also, Fangda Group attempts to quantify the makeup of Ukrainian HTS
2713.12 by comparing the ratio of import values to quantities from each of these
countries to the weighted average market economy price we established for needle
coke based on Fangda Group market economy purchases. Fangda Group then
attempts to conclude that all imports from these countries are so valuable that they
must all be needle coke. If the same logic is applied to South African imports of HTS
2713.12[,] we find that 52 percent of imports come from a dominant provider of
needle coke, the United States,[ ] and the average unit value of these imports is 557
USD/MT while the South African value of HTS 2713.12 is 510 USD/MT.
IDM at 33 (footnotes omitted).
At least in that regard, Fangda’s logic appeared flawed to Commerce. Fangda here,
however, stresses: that the AUVs for HTS 2713.12 for South Africa, Indonesia, the Philippines, and
Thailand ranged from $161.39/MT to $605.19/MT, or between one-tenth and on-third of the
Ukranian AUV; that its group’s total purchase volume of raw petroleum coke (for processing into
calcined petroleum coke), calcined petroleum coke, domestic needle coke, and imported needle coke
was over 40 times that of the Ukrainian import volume during the POR; that the administrative
record established that under HTS 2713.12, the AUVs for Indonesia, the Philippines, and Thailand
were each based upon sample sizes 12 times greater than the Ukrainian sample size; and also that
the South African AUV was based upon a sample size almost 50 times greater than the Ukrainian
AUV. See Respondents’ Post-Preliminary Surrogate Value Submission at Ex. 2; PDoc 231. Those
points, however, shed only dim light on the reasonableness of relying upon the Ukrainian AUV and
Court No. 14-00287 Page 18
none on the proportions of calcined petroleum coke and needle coke among those countries’ imports
under HTS 2713.12 or on the underlying variation in the values thereof, nor do they conclusively
prove that the Ukrainian AUV is a statistical outlier in the trade of HTS 2713.12 imports. The fact
that the Ukrainian AUV may be “the” outlying value among those countries on Commerce’s primary
surrogate country list is an accident of the surrogate valuation process, from a particular country, and
over a particular time period, but that is not, in and of itself, a reason for rejecting that value.
The real question then, in accordance with Commerce’s “typical” consideration of
an aberrational volume assertion, is whether the Ukrainian import data represent non-aberrational
commercial values, not simply the country-wide volume itself. See, e.g., Shakeproof, supra; cf. Pls’
Reply at 7. And on that question, the fact of the matter is that Commerce had to consider, in addition
to its preference for data are publicly-available, contemporaneous with the period of review,
tax-exclusive, reflective of broad market averages, and representative of FOPs from the primary
surrogate country, the Ukrainian import data in light of the fact that the forming scrap input is itself
a hybridization of a number of other inputs including calcined petroleum coke and needle coke. See
IDM at 31, 36. If “the process of constructing foreign market value for a producer in a nonmarket
economy country is difficult and necessarily imprecise”, Sigma Corp. v. United States, 117 F.3d
1401, 1408 (Fed. Cir. 1997) (discussing predecessor provision of normal value), then multiple
variables necessarily introduce an even greater level of complexity and imprecision into the analysis
of selecting a single surrogate FOP therefor.
As Fangda points out, the record reflects a range of values for the inputs that comprise
forming scrap against which to evaluate the Ukrainian value(s) of the import data for HTS 2713.12,
Court No. 14-00287 Page 19
but not all of them would meet Commerce’s selection criteria. Fangda emphasizes that the
Ukrainian imported needle coke prices are approximately $2,703/MT on average, which far
exceeded the average of its own group’s market economy purchase prices of needle coke, but as
Commerce also pointed out, Fangda’s conclusions as to the price differential at this point, resting
largely on its own purchases of needle coke, reflect isolated transactions between Fangda and its
needle coke suppliers rather than broad market averages. Fangda’s own purchase prices reflect its
own “economic reality,” but they are not dispositive of the reasonableness of using the Ukrainian
data for HTS 2712.12 as a surrogate for the value of forming scrap, which also reflect “economic
reality” (of the “fair” market values of the chosen “hypothetical” market economy’s mix of calcined
petroleum coke and needle coke within the HTS item number that Fangda agrees is the appropriate
item for seeking a surrogate value for forming scrap). See Nation Ford, supra, 166 F.3d at 1377.
As coda, the defendant also emphasizes that Fangda’s arguments do not take into
account the value added by other material inputs within forming scrap (such as stearic acid -- which
surrogate value Commerce determined to be $1,803.40/MT -- see Prelim. SV Memorandum, CDocs
242-43 at Ex. 3), as well as labor and electricity. See, e.g., Def’s Resp. at 11; IDM at 32. The court
acknowledges it would not be inappropriate to conceptualize the value of forming scrap as
represented by more than simply the separate proportional values of calcined petroleum coke and
needle coke, but the bottom line here is that given the absence of precise information as to the
composition Fangda’s forming scrap and of the ranges and variation on the record of the values of
calcined petroleum coke and needle coke as compared with the ranges of those values among the
Ukrainian import data, see, e.g., Pls’ 56.2 Br. at 13-14, it cannot be concluded that the Ukrainian
Court No. 14-00287 Page 20
AUV of $1,820 for HTS 2712.12 is significantly overstated or “skewed” as a surrogate for Fangda’s
forming scrap, because the standard of review is one of substantial record evidence.
In the final analysis of the relief Fangda seeks, by arguing for the South African AUV,
Fangda is fundamentally asking the court to reweigh the evidence or substitute its own analysis or
judgment thereon, which the court may not do in the absence of a reason from the record therefor
without intruding into Commerce’s domain. See, e.g., Downhole Pipe & Equipment, L.P. v. United
States, 776 F.3d 1369, 1376-77 (Fed. Cir. 2015), referencing Trent Tube Division, Crucible
Materials Corp. v. Avesta Sandvik Tube AB, 975 F.2d 807, 815 (Fed. Cir. 1992). Sub silencio, the
court has considered Fangda’s remaining arguments on the issue and finds them to be similar in
effect, by asking the court to reweigh or substitute a different analysis of the record. Thereby, they
do not overcome Commerce’s “broad discretion to determine ‘the best available information’ in a
reasonable manner on a case-by-case basis.” Timken Co. v. United States, 26 CIT 434, 438, 201 F.
Supp. 2d 1316, 1321 (2002) (citation omitted). Commerce selected an HTS category that reflected
the two primary components of forming scrap (needle coke and calcined petroleum coke), it
evaluated the Ukrainian import data therefor, and it concluded that they were not aberrational.
Substantial evidence of record supports Commerce’s determination, and the court will not “second
guess” the agency on the issue. Cf. JTEKT Corp. v. United States, 642 F.3d 1378, 1382 (Fed. Cir.
2011); Royal Thai Gov’t v. United States, 436 F.3d 1330, 1339 (Fed. Cir. 2006).
II
The statute authorizes a deduction from U.S. price equal to “the amount if included
in such price, of any export tax, duty, or other charge imposed by the exporting country on the
Court No. 14-00287 Page 21
exportation of subject merchandise to the United States”. 19 U.S.C. §1677a(c)(2)(B). On this point,
the plaintiffs argue Commerce’s deduction from their U.S. price to account for the unrefunded
portion of PRC domestic VAT taxes upon their exports to the United States is contrary to law. Pls’
56.2 Br. at 25-32. The IDM explains that the deduction is consistent with Methodological Change
for Implementation of Section 772(c)(2)(B) of the Tariff Act of 1930, as Amended, In Certain
Non-Market Economy Antidumping Proceedings, 77 Fed. Reg. 36481 (June 19, 2012)
(“Methodological Change”), which recognized that the PRC’s VAT operates differently than a
typical VAT, pursuant to which companies typically either receive a full rebate of the VAT upon
export or may credit the VAT paid on input purchases against the VAT the companies collect from
their domestic sales. The IDM explains that the unrefunded (or irrecoverable) portion of the PRC
VAT amounts to a “tax, duty or other charge imposed on exports that is not imposed on domestic
sales.” IDM at 23.
The plaintiffs argue that the holdings of Magnesium Corporation of America v.
United States, 166 F.3d 1364 (Fed. Cir. 1999) (“Magnesium Corporation ”) still control, i.e., that
the “plain meaning” of the relevant statutory language was consistent with Commerce’s previous
interpretation of the statutory provision and “prohibited” Commerce from making any deduction
from U.S. price to account for export taxes, duties, or charges imposed by non-market economy
(“NME”) countries as defined by 19 U.S.C. §1677(18), and that this court recently affirmed
Commerce’s previous interpretation that this statutory provision “prevented” Commerce from
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adjusting U.S. price on account of the PRC’s VAT, ruling that this issue had been “resolved long
ago”10 by the CAFC in Magnesium Corporation.
The plaintiffs misinterpret. The relevant appellate decision found “plain” that the
language of the statute does not require all export taxes to be deducted from the U.S price but
requires only deduction of those amounts that are included in the price of the merchandise; hence,
whether VAT and export taxes are included in, and should be deducted from, the U.S. price is within
Commerce’s discretion to determine. Magnesium Corporation, 166 F.3d at 1370-71.
At any rate, the plaintiffs agree that change in administrative practice is permissible
if a reasoned explanation is provided for the change. They argue, however, that Commerce cannot
change practice or interpret the statute contrary to the plain language of the statute. Dorbest v.
United States, 604 F.3d 1363, 1371 (Fed. Cir. 2010). Specifically, they contend that the plain terms
of the stature require an “export tax, duty or other charge” that is “imposed by the exporting
country”, 19 U.S.C. §1677a(c)(2)(B), and that the PRC’s VAT is an internal tax only that by
definition is not “imposed” upon export of the subject merchandise. They also argue that the statute
only permits Commerce to deduct from U.S. price “the amount if included in such price” and that
neither the final results nor the response briefs submitted by the opposition explain how the
non-receipt of the refund of internal VAT taxes is reflected in the U.S. price of the subject
merchandise, and that nothing in the administrative record establishes that the PRC’s VAT was
“added” to the invoiced sales price to Fangda’s U.S. customers. Pls’ 56.2 Br. at 30; Pls’ Reply at
12. Similar contentions, however, were addressed at length in Methodological Change:
10
Globe Metallurgical, Inc. v. United States, 35 CIT ___, ___, 781 F. Supp. 2d 1340, 1348
(2011).
Court No. 14-00287 Page 23
In adopting this methodological change, the Department considers taxes levied by the
[PRC] and Vietnamese governments to be different from other internal transactions
between companies in an NME context. Although we do not know how individual
companies in those NME countries set prices, we do know that the government taxes
a portion of companies’ sales receipts. Consistent with our CVD determinations in
CFS Paper and PRCBs, we can measure a transfer of funds between certain NMEs
and companies therein, regardless of the direction the money flows. Given that, and
given that we know how much respondent companies receive for the U.S. sale, we
have determined it appropriate to take taxes into account, as directed by the statute.
See section 772(c)(2)(B) of the Act.
Specifically, the statute defines an NME as “any foreign country that the
administering authority determines does not operate on market principles of cost or
pricing structures, so that sales of merchandise in such country do not reflect the fair
value of the merchandise.” See section 771(18) of the Act. As a result, when the
Department evaluates whether a tax is included in the price of an NME export sale,
it cannot take into consideration the same assumptions as those taken into account
when performing a similar type of evaluation for a market economy sale, which does
operate in accordance with market principles of cost or pricing structures.
Accordingly, it is not an issue of price formation (i.e., whether the seller considers
tax when forming price) because that is a market economy concept which is
inapplicable by the very definition of an NME.
Additionally, because these are taxes affirmatively imposed by the [PRC] and
Vietnamese governments, we presume that they are also collected.[ ] The unrefunded
VAT or affirmatively imposed export tax only arises through the fact that there were
export sales.
As a result, because the liability arises as a result of export sales, this is where
payment originates. Therefore, to achieve what is called for in the statute, the gross
price charged to the customer must be reduced to a net price received. In cases
involving imports from the PRC or Vietnam, “included in the price” means whether
the respondent has reported a price which is gross (i.e., inclusive) or net (i.e.,
exclusive) of tax. As such, if a gross price has been reported, a deduction must be
made for those taxes imposed on the sale, and if a net price has been reported,
deductions are not required. We note that, in prior cases involving imports from the
PRC or Vietnam where the Department was aware that such a tax was imposed, it has
typically been expressed as a percentage of the export selling price. Therefore, any
such deduction to export price would also be performed on a percentage basis.
We further note that deducting internal NME tax transactions from export price or
constructed export price is consistent with the Department’s longstanding policy,
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which is consistent with the intent of the statute, that dumping comparisons be
tax-neutral. See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27369
(May 19, 1997) (citing Statement of Administrative Action accompanying the
Uruguay Round Agreements Act, H.R. Doc. No. 103-316, vol. 1, 827, reprinted in
1994 U.S.C.C.A.N. 3773, 4172).
In response to comments that the methodological change does not consider other cost
elements that are presumed to be reflected in a price from a market economy country,
but not from an NME country, we note that the new methodology does not consider
other elements of cost or price because, pursuant to section 773(c)(1)(B) of the Act
and consistent with the PRC’s and Vietnam’s Protocols of Accession to the World
Trade Organization (“WTO”), the Department can reject internal costs and prices in
an NME country for antidumping and countervailing duty purposes. What is relevant
for margin calculation purposes is the net revenue the company ultimately receives
on sales made to its U.S. customers, after adjusting for taxes, as provided for by the
statute.
Methodological Change, 77 Fed. Reg. at 36483.
The plaintiffs, however, contend that Commerce’s and the defendant-intervenors’
explanation (that the agency’s interpretation is permissible because the PRC is not a Soviet-style
NME)11 is “utter nonsense” because the relevant statutory provisions, 19 U.S.C. §1677a(c)(2)(B) and
19 U.S.C. §1677(18), do not contemplate “different levels of NME status”: a country is either an
NME or it is not an NME. Likewise, the plaintiffs criticize the Final Results’ explanation of the
statute’s encompassing of irrevocable VAT as “a cost that arises as a result of export sales”, IDM
at 23, because “[t] he whole purpose of the statute’s NME methodology statute is to disregard prices
and costs incurred in the production and sale of the subject merchandise that were incurred in the
NME country”. Pls’ Reply at 13, referencing 19 U.S.C. §1677a(c).
The court disagrees that “disregard” is accurate or necessarily (depending upon
circumstances) appropriate. First, the plaintiffs’ points appear addressed more towards the
11
See Def’s Resp. at 17-19; Def-Ints’ Resp. at 30.
Court No. 14-00287 Page 25
determination of the “normal value” (“NV”) of a product of an NME country, not U.S. price. NMEs
are specified in the NV statute, 19 U.S.C. §1677b(c)(1)(B), not in the U.S. price statute, 19 U.S.C.
§1677a(c)(2)(B), and the NV statute explicitly permits the addition of “other expenses” to the FOP
methodology. Second, with regard to U.S. price, neither the governing statute nor its legislative
history defines “export tax, duty or other charge imposed” for the purpose of adjusting U.S. price,
which is aside from the import of the terms “if included in the price” in the statute that were held
unambiguous (in the sense of the relevant amount either being included or not included in such
price) by Magnesium Corporation. Commerce reconsidered its interpretation and concluded that
“export tax, duty or other charge imposed” includes VAT that is not fully refunded upon exportation
and also that whether a deduction therefor is required depends upon whether the price is reported on
a gross or net basis. 77 Fed. Reg. at 36482-83. Cf. 19 U.S.C. §1677a(c)(2)(B) (“if included in the
price”). Such a methodological update, achieved through notice and comment, compels Chevron
deference. See United States v. Eurodif S.A., 555 U.S. 305, 316 (2009), referencing United States
v. Mead Corp., 533 U.S. 218, 229 230 (2001) (citing Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. 837 (1984)). On this issue, the plaintiffs do not persuade that deduction of
the portion of the PRC’s VAT that was unrefunded or irrecoverable upon export of their subject
merchandise to the United States was contrary to law and not supported by substantial evidence.
III
The third issue argued by the plaintiffs concerns Commerce’s determination to apply
total adverse facts available (“AFA”) to Fushun. See IDM at 8-13; AFA Memo at 1-14. The statute
authorizes Commerce to use “facts otherwise available” if the record lacks necessary information,
Court No. 14-00287 Page 26
if a party withholds information Commerce requested, fails to provide information in a timely
manner or in the form or manner Commerce requested, significantly impedes the proceedings, or
provides information that cannot be verified. 19 U.S.C. §1677e(a). Commerce may disregard all
of the information a party submits and determine the party’s dumping margin using “total” facts
otherwise available when the deficiency affects the reliability of all or most of a respondent’s
submissions. See Ad Hoc Shrimp Trade Action Comm. v. United States, 802 F.3d 1339, 1357 (Fed.
Cir. 2015); Jiangsu Changbao Steel Tube Co. v. United States, 36 CIT ___, ___, 884 F. Supp. 2d
1295, 1302 (2012), citing Shanghai Taoen Int’l Trading Co. v. United States, 29 CIT 189, 193 n.13,
360 F. Supp. 2d 1339, 1348 n.13 (2005)). Further, Commerce can apply an adverse inference under
19 U.S.C. §1677e(b) if an interested party “has failed to cooperate by not acting to the best of its
ability to comply with a request for information”. See also Ad Hoc Shrimp, 802 F.3d at 1357.
During the administrative proceeding, Commerce applied total AFA after considering
the totality of Fushun’s responses on the initial question of whether Fushun’s U.S. sales involved
any resellers during the POR. By way of brief background, during the prior three administrative
reviews Fushun dealt with one of its customers in the United States directly and informally (i.e.,
orally). During this fourth administrative review, Fushun continued such dealings with this customer
as to most contractual terms including price, but payment to Fushun was to be handled by another
company assisting Fushun’s customer. Fushun initially reported the new arrangement as a single
hyphenated-entity consisting of its customer and the new company making payment(s). Upon further
questioning by Commerce, Fushun provided copies of two written contracts it had executed with the
paying company to Commerce as part of Fushun’s second supplemental questionnaire response as
Court No. 14-00287 Page 27
well as a full explanation (with apologies for any confusion that arose as to its prior responses to
Commerce’s questions) regarding reseller arrangements. See Non-Market Economy Antidumping
Proceedings: Assessment of Antidumping Duties, 76 Fed. Reg. 65694 (Oct. 24, 2011) (reseller
policy).
Here, the court must observe that the reseller policy appears concerned only with the
proper margin for “non-reviewed entries,” which margin depends upon whether record evidence
indicates a producer or exporter knew or should have known that its sales to a third party (or reseller)
were destined for the United States. See generally id. That is apparently not the case on this record,
as Fushun clearly knew that its sales to the particular U.S. customer were destined for the United
States notwithstanding the involvement of the paying company (or “reseller”), and Fushun reported
the relevant sales on its U.S. sales database to Commerce. The AFA problem before the court,
however, encompasses more than the arguable initial confusion Fushun may have experienced in
attempting to describe to Commerce its sales to the relevant U.S. customer, with whom Fushun’s
apparently cordial business relationship spanned years.
The plaintiffs’ papers present a (mostly) compelling recap of relevant events from
Fushun’s perspective, but, and without delving here into the myriad (and mostly confidential)
arguments the parties present on the AFA issue, the basic problem, from Commerce’s perspective,
was that the issue had “morphed” over time during the administrative proceeding. In particular, in
the process of responding to Commerce’s questionnaires, Fushun also provided certain
documentation that showed a discrepancy on an important sale term, which Fushun claimed was
created at the behest of its customer as a result of advice the customer had received from a customs
Court No. 14-00287 Page 28
broker regarding the reseller policy. That advice turned out to be erroneous, as such documentation
was unnecessary for the customer to import the subject merchandise at the cash deposit rate set for
Fushun.
Be that as it may, after considering the totality of record, including the inconsistencies
of Fushun’s section A, section C, first supplemental, and second supplemental responses, Commerce
determined that Fushun withheld information that Commerce had requested, failed to provide
information in the form or manner Commerce requested, impeded the proceeding, and provided
information that could not be verified. IDM at 8-11; AFA Memo at 1-13; 19 U.S.C. §1677e(a)(A),
(C), (D). In light of the administrative memorandum on the subject (with record citations therein)
the court cannot conclude Commerce’s determination on the issue unsupported by substantial
evidence or not in accordance with law. The Federal Circuit has held that withholding key
information or providing false information “unequivocally” demonstrate that a party did not put forth
its “maximum effort.” Essar Steel Ltd. v. United States, 678 F.3d 1268 (Fed. Cir. 2012).
IV
The penultimate issue concerns the plaintiffs’ arguments that Fushun should be
entitled to a separate rate. The arguments are unpersuasive. Unlike Qingdao Taifa Group Co. v.
United States, 33 CIT 1090, 637 F. Supp. 2d 1231 (2009), aff’d, 467 Fed. Appx. 887 (Fed. Cir.
2012), to which Fushun refers for support, see Pls’ 56.2 Br. at 42, Fushun failed to “establish[ ]
independence from government control”12 and therefore eligibility for a separate rate, given its
original section A and supplemental section A responses that were deemed unreliable. See PDM at
12
See Qingdao Taifa, 33 CIT at 1098, 637 F. Supp. 2d at 1240-41 (citation omitted).
Court No. 14-00287 Page 29
4-7; AFA Memo at 14. Because Commerce uses total facts available “in situations where none of
the reported data is reliable or usable”, Zhejiang DunAn Hetian Metal Co. v. United States, 652 F.3d
1333, 1348 (Fed. Cir. 2011), discussing Steel Authority of India, Ltd. v. United States, 25 CIT 472,
149 F. Supp. 2d 921 (2001), Commerce applies in such situations the presumption of government
control as well as the PRC-wide rate. See Ad Hoc Shrimp, supra, 802 F.3d at 1356-57. Commerce’s
application thereof in this instance was in accordance with law.
V
Last addressed is the plaintiffs’ request for equitable relief for one of Fushun’s
importers. The issue involves certain entries that Fushun claimed in its administrative case brief as
pertaining to purchases of subject merchandise during the previous administrative review that did
not enter the United States until this fourth administrative review. The basis for this claim was
predicated upon certain data from U.S. Customs and Border Protection (“CBP”) for the POR on the
record. Commerce rejected Fushun’s case brief on the ground that it involved “new factual
information”, see IDM at 2-3, and Commerce here contends the issue should be dismissed because
it involves the factual information that should have been submitted at least 30 days prior to the
preliminary determination, i.e., March 24, 2014. See 19 C.F.R. §351.301(c)(3)(ii). Commerce
argues that because Fushun did not do so, these “new” arguments should be disregarded for failure
to exhaust administrative remedies.
The plaintiffs contend that the issues raised in Fushun’s case brief were “legal,” not
factual. Pls’ 56.2 Br. at 43-44. Commerce insists, however, that the plaintiffs do not cite to any
statutory or regulatory provision that would provide relief for Fushun’s importer under this set of
Court No. 14-00287 Page 30
circumstances, they simply rely on the assertion that the sales relevant to their claim were made
during the previous review period and lack record evidence showing a connection between this
importer, the date of sale that the plaintiffs proffer, and the entries identified among the CBP data.
Commerce contends that the plaintiffs would have needed to substantiate the conclusion they draw
from the data in Fushun’s United States Sales Listing, CDoc 32, to the amount of the particular type
of entries they contend are listed in the CBP data, CDoc 2, by submitting actual evidence, but the
time for submissions of factual information had already passed, and that without such record
evidence it would be mere speculation concerning the entries in question. In short, Commerce
contends it simply could not rely upon the unsubstantiated statements made by Fushun’s counsel.
Def’s Resp. at 44-45, citing Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1327 (Fed.
Cir. 2009) and Home Meridian International Inc. v. United States, 36 CIT ___, ___, 865 F. Supp.
2d 1311, 1322 (2012), reversed in part on other grounds, 772 F.3d 1289 (Fed. Cir. 2014).
All of which, however, is rather academic, because the law governing this issue is
explicit, as outlined in the defendant’s confidential response to the plaintiffs’ brief on their USCIT
Rule 56.2 motion. Fushun’s entries therefore appear to have been properly assessed.
Conclusion
There appearing to be no grounds for the relief requested, a separate judgment
dismissing this action will be entered concurrently herewith.
/s/ R. Kenton Musgrave
R. Kenton Musgrave, Senior Judge
Dated: March 23, 2016
New York, New York