CIT Affirms ITA Remand due to Fraud in 2006-07 AD Review of China Magnesium

The Court of International Trade affirmed a voluntary remand by the International Trade Administration on the issue of fraud by plaintiff Tianjin Magnesium International, a respondent in the 2006-07 administrative review of an antidumping duty order on pure magnesium from China (A-570-832). CIT also affirmed the ITA’s decision to apply Adverse Facts Available (AFA) in determining Tianjin’s rate as a result of that fraud.

(In 2010, CIT remanded the final results of the review at issue to ITA after concluding that not all of the surrogate values relied on by ITA were supported. In its remand proceedings, the ITA found that Tianjin’s claim of offsets for sale of waste magnesium byproducts during the 2006-07 review period, as well as documents submitted by Tianjin in support of that claim, was contradicted by the discovery in the 2007-08 review that Tianjin did not sell the byproducts during the 2006-07 review period. The ITA then requested another remand to determine whether to reopen the 2006-07 review, which CIT granted. The second redetermination applied an AFA rate of 111.73% to Tianjin as a result of the alleged fraud.)

Remand Required when Review “Tainted by Material Fraud”; Tianjin’s Conduct Warranted ITA Remand, AFA

Plaintiff challenged the ITA’s decision to reopen the 2006-06 review due to its finding of fraud, because the ITA did not conduct an analysis of the elements of fraud and, according to Tianjin, its conduct did not rise to the level of fraud.

CIT, referring to the Court of Appeals for the Federal Circuit’s decision in Home Products, Int’l, Inc. v. United States (which dealt with the question of whether remand is required when evidence of fraud is presented), found that there is nothing in the Home Products decision that requires a threshold analysis regarding each of the elements of fraud in order to remand. Instead, CIT said Home Products requires remand when evidence is sufficient to make a prima facie case that the agency proceedings under review were tainted by material fraud. CIT found that the ITA’s determination that the 2006-07 review was tainted by material fraud was supported, and that Tianjin’s conduct was egregious enough to warrant the ITA’s application of AFA.

Therefore, CIT affirmed the ITA’s 2nd remand redetermination without modification, and dismissed the action.

(CIT Slip Op. 12-54, dated 04/25/12, Judge Tsoucalas)