CIT Cements Rejection of Duty Drawback, COS Adjustment Methodology in Antidumping Case

The Court of International Trade upheld the Commerce Department's second remand results which, under court order, added the full amount of duty drawback adjustment to two companies' export prices and nixed two circumstances of sale adjustments in an antidumping case on Turkish steel. Judge Gary Katzmann in his May 20 opinion ruled against arguments from petitioner Nucor Corporation that Commerce find another "duty neutral" methodology for allocating the drawback adjustment. Commerce had originally applied the adjustment to all production, effectively reducing the adjustment to export prices for Icdas Celik Enerji Tersane and Habas Sinai in an antidumping duty investigation on carbon and alloy steel wire rod from Turkey.

Icdas and Habas, both mandatory respondents in the investigation, benefited from duty rebates on exports of subject merchandise due to Turkey's Inward Processing Regime. After originally attempting to allocate the exporter's duty drawback over “all production for the relevant period,” Commerce had to revise its duty drawback adjustment for Icdas and Habas after an initial ruling from Katzmann. In its remand results, however, Commerce maintained the same dumping margin for the exporters after making two circumstances of sale adjustments to Icdas' and Habas' normal value of sale in their home market.

After another remand by Katzmann on the circumstances of sale issue, Nucor tried to defend a different duty neutral application of the duty drawback. Nucor claimed Commerce's duty drawback methodology of adding the rebated duties onto the export price “distorts the normal value to export price comparison by disproportionately accounting for duties on export price.” Nucor said Commerce should have selected another duty-neutral methodology, specifically adjusting the cost-side drawback methodology, to show that the “per-unit costs are duty-reflective to the same degree as per-unit [export price].”

Siding with both the government and the plaintiffs, who argued that Nucor cites no authority that would permit Commerce to “artificially allocate the exempted duty only to those home market sales used for dumping matches or artificially increase the actual drawn back duty burden on each home market sale to equal that included in the United States price,” Katzmann determined there was no authority requiring Commerce to change its methodology from the second remand results.

(Icdas Celik Enerji Tersane Ve Ulasim Sanayi, A.S. v. The United States, Slip Op. 21-65, CIT # 18-00143, dated 05/20/21, Judge Katzmann. Attorneys: Matthew Nolan of Arent Fox for plaintiff Icdas; Kara Westercamp for defendant U.S. government)