CIT Says ITA Must Also Examine Liquidated Entries in AD Review of China Threaded Rod

September 21, 2012 by Brian Feito|Penalties and Courts

The Court of International Trade remanded the final results of the 2008-10 antidumping administrative review of steel threaded rod from China (A-570-932) in order for the International Trade Administration to reconsider its rescission of the review with respect to Gem Year and placement of Gem Year in the China-wide entity. The ITA said Gem Year had no entries for which liquidation was suspended to review, ignoring Gem Year’s entries of subject merchandise that had been liquidated due to an error by an unaffiliated importer. But CIT said the ITA’s position that liquidated entries are unreviewable is unjustified by the statute and the regulations, because both only refer to “entries.”

Gem Year was selected as a mandatory respondent in the review, but CBP data showed that it had no entries for which liquidation was suspended. The company said this was due to an error by Hubbell Power Systems, an unaffiliated U.S. importer, that resulted in liquidation of the entries. The ITA rescinded the review with respect to Gem Year because it said it could only review unliquidated entries. Additionally, the ITA placed Gem Year in the China-wide entity because the company could only qualify for a separate rate if it was eligible for full review (i.e., if it had unliquidated entries).

CIT said the statute and regulations both refer to “entries” rather than “unliquidated entries.” Specifically, 19 CFR 351.213(d)(3) permits the ITA to rescind a review of an individual exporter if there were no “entries, or sales of the subject merchandise" during the period of review. Here, said CIT, both Gem Year and the ITA agreed there were entries. Nothing in the statute or regulations limits the ITA to unliquidated entries, it said.

The ITA said there is no reason to review a company without unliquidated entries because the review would not affect importer assessment rates. CIT, however, said reviews affect more than assessment rates, particularly in reviews of products from non-market economy countries. In this case, the ITA’s decision not to review Gem Year resulted in its placement in the China-wide entity with an AD rate of 206 percent, which would prevent exportation of subject merchandise. Furthermore, the decision not to review Gem Year affected the AD rates for separate rate companies because their rates are an average of mandatory respondents' rates.

CIT also remanded the ITA’s decision not to review Gem Year’s separate rate application. Applications for separate rates are distinct from other parts of the review because the ITA can’t base the decision of whether a company is under state control on fantasy, CIT said. Also, the ITA’s adverse facts available rate assigned to Gem Year as a result of its decision to put it in the China-wide entity was unsupported because Gem Year cooperated with the review.

CIT ordered the ITA to, at a minimum, review Gem Year’s separate rate application. If Gem Year is entitled to a separate rate and the parties do not agree otherwise, the ITA must also conduct a full examination of Gem Year’s sales, CIT said. If the ITA determines that Gem Year is not entitled to a separate rate, the ITA must consider Gem Year’s challenge to the 206 percent adverse facts available rate.

(Hubbell Power Sys., Inc. v. United States, CIT Slip Op. 12-123, dated 09/20/12, Judge Restani)

(Attorneys: Kevin O’Brien of Baker & McKenzie for plaintiff Hubbell; Peter Koenig of Squire Sanders for consolidated plaintiff Gem Year; Jane Dempsey for defendant U.S. government; Frederick Waite of Vorys Sater for defendant-intervenor Vulcan)