CIT Remands 2008 China Wooden Bedroom Furniture AD Review for Zeroing, Indian Wage Data, Etc.

The Court of International Trade ordered the International Trade Administration to redetermine or further explain some aspects of its 2008 administrative review of the antidumping duty order on wooden bedroom furniture from China (A-570-890), including, among other issues, the ITA’s use of zeroing (on voluntary remand), aspects of Chinese manufacturer Fairmont’s¹ partial adverse facts available (AFA) rate, some surrogate values used by the ITA to determine wages for respondents, including the use of Indian wage data, and some financial statements relied on by the ITA in its calculations.

In response to a challenge by the American Manufacturers Committee for Legal Trade (AMFC), which said the ITA should have investigated allegations of circumvention of the AD order by some non-individually selected separate rate respondents, CIT expressed concern that the ITA’s separate rate applications do not require information on shipments of subject merchandise for or by another company, but CIT declined to remand the issue at this time.

CIT Says ITA Correct that Some Products are In-Scope, but AFA Rate Applied was too High

Fairmont, which was given an AD rate of 43.23% in the final results at issue, said the ITA improperly applied an AFA rate of 216.01% to six sales that Fairmont had said were not of subject merchandise, and therefore had not reported. CIT disagreed with Fairmont’s arguments that the three products sold in the six transactions were out of scope: Fairmont’s dresser and custom cabinet products (that included a minibar), nightstand back panel, and wall-mounted nightstand were all covered by the wooden bedroom furniture AD order, said CIT, and Fairmont’s contentions to the contrary were the result of an improperly narrow reading of the scope. Furthermore, said CIT, Fairmont did not act to the best of its ability when it assigned a clerk to determine in-scope and out-of-scope sales without proper instructions.

However, said CIT, the ITA’s use of a 216.01% AFA rate on the six sales, which was taken from an earlier new shipper review of a different company, was not supported with enough evidence by the ITA. The vast majority of Fairmont’s sales for which the ITA had information were determined to be dumped at a rate of about 34%, said CIT, and the ITA did not provide evidence that justified why the six sales at issue would have been dumped at a significantly higher rate.

CIT Orders ITA to Consider Industry-Specific Wage Data, Raises Questions About Reliability of Indian Data

CIT also remanded the ITA’s use of economy-wide data instead of industry-specific data, despite such evidence having been placed on the record, as well as the ITA’s use of wage-rate data from India that could potentially be distorted by an Indian wage reporting cap (India only reports wages for workers earning less than a certain level). With respect to the ITA’s use of economy-wide wage data, CIT said Fairmont placed such data on the record before the ITA’s deadline, and therefore with enough time for the ITA to consider the data. CIT also said the ITA did not adequately justify its use of economy-wide wage data over the industry-specific data provided by Fairmont.

With respect to the Indian wage data, CIT noted that the data showed Indian wages nearly tripled from 2005 to 2006 after the Indian cap on wage reporting was increased in 2005, and said an Indian wage reporting cap law would taint the data the ITA uses.

CIT Expresses Concern over Separate Rate Applications, but Declines to Remand

Finally, although it didn’t remand the issue, CIT expressed concerns with the ITA’s separate rate applications. AFMC argued the ITA should have asked companies for data on shipments of wooden bedroom furniture for or by other companies, which could have been used to investigate allegations of circumvention of the AD order through third-party shipments. CIT said that this was, in fact, the ITA’s previous practice on separate rate applications. CIT said it was concerned with the ITA’s argument that it has no circumvention data to investigate such claims because the it does not ask for such data, and said that the ITA’s reasoning is circular. Although CIT declined to remand the issue, CIT said the ITA should be prepared to alter its investigation techniques or explain its actions more carefully in the future.

CIT Remands 5 Issues, Otherwise Sustains

Therefore, CIT remanded the final results to the ITA to: (1) redetermine Fairmont’s AFA rate if an AFA rate is used; (2) redetermine Fairmont’s separate rate using industry-specific wage data or provide substantial evidence as to why manufacturing sector data is preferable; (3) explain whether the Indian wage data are distorted by a reporting cap; (4) explain why Insular Rattan’s financial statement is generally reliable and usable; and (5) provide an explanation of its zeroing practice. CIT also said if the ITA calculates a separate rate for Fairmont, it must make adjustments to the separate rates of the other parties of this litigation. CIT sustained the ITA’s final results in all other respects.

(Slip Op. 12-79, dated 06/06/12, Judge Restani)

¹Dongguan Sunrise Furniture Co., Ltd.; Taicang Sunrise Wood Industry Co., Ltd.; Taicang Fairmont Designs Furniture Co., Ltd.; and Meizhou Sunrise Furniture Co., Ltd.