Commerce Ditches AFA Rate for Chinese Export Aid Program in CVD Case, CIT Sustains Remand

The Court of International Trade sustained the Commerce Department's second remand results that scrapped the adverse facts available rate in a countervailing duty case, in a May 6 opinion. Judge Richard Eaton found that Commerce's eventual decision to ditch the AFA subsidy rate relating to alleged benefits that exporter Heze Huayi Chemical Co. received from China's Export Buyer's Credit Program was consistent with prior remand instructions. Plaintiffs Clearon and Occidental Chemical initially filed the challenge, claiming that the AFA rate for Heze relating to the EBCP was too low and inconsistent with prior Commerce practice.

The case emerged from the first administrative review of the countervailing duty order on chlorinated isocyanurates from China that established a 0.87% AFA subsidy rate relating to Heze's benefits from the EBCP. After two remands of the findings from Eaton that there was no evidence to support the rate and no gap in the record, Commerce dropped the 0.87% subsidy rate. Commerce only continued to apply AFA to Heze because the agency said it would be unduly burdensome to verify Heze's non-use of the program without information regarding the EBCP's operation from the Chinese government -- information the government allegedly refused to provide.

Following the second remand, plaintiffs Clearon and Occidental held that Commerce did not properly adhere to the court's remand instructions since the agency failed to confer with parties on a verification procedure. Eaton said this didn't matter, for it was in the remand instructions, and Commerce decided to drop the 0.87% rate, which did not require verification. The case mirrors another CIT decision finding that Commerce's application of AFA on the EBCP was made without evidence and without a true gap in the record (see 2105030040).