No Gaps in Record in Remand Results Flipping AD/CVD Circumvention Ruling, DOJ Says

No serious gaps in the record exist proving that plywood producer Shelter Forest did not develop its plywood after the Commerce Department issued antidumping and countervailing duty orders on hardwood plywood products from China, the Department of Justice said in a brief June 16. Contradicting comments on Commerce's remand results from petitioner Coalition for Fair Trade in Hardwood Plywood, DOJ backed Commerce's remand decision to reverse its affirmative determination that Shelter Forest's plywood circumvented the AD/CV duties.

The anti-circumvention inquiry at issue in the case concered plywood with face and back veneers of radiata or agathis pine, CARB or TSCA-compliant, made with resin composed mostly of urea formaldehyde, polyvinyl acetate or soy, allegedly developed after the AD/CVD orders on hardwood plywood were put in place (see 2105110035). During the inquiry, Commerce said that Shelter Forest, a voluntary respondent, made the goods from resins that were similar to, but not exactly one of the resins at issue in the case. Finding no other plywood made prior to the order that met the description of merchandise at issue in the inquiry, Commerce found the merchandise circumvented the orders as later developed merchandise.

In her initial ruling in the Court of International Trade, Judge Jane Restani said Commerce did not have sufficient evidence to find Shelter Forest's plywood was not made prior to the order. Finding the agency made it impossible for the companies in question to prove the plywood was commercially available before the order was put in place, Restani ordered Commerce to consider evidence it had previously rejected (see 2102180040). After doing so, Commerce flipped its circumvention decision and conceded that Shelter Forest made its glue with urea formaldehyde.

The coalition argued that there still existed two large gaps in the record that support Commerce's original decision (see 2106080039). The coalition said there was information missing from the record over the inclusion of melamine in Shelter Forest's urea formaldehyde glue and that information in Shelter Forest's 2012 public catalog contradicts supplemental information provided by the company. According to the coalition, the 2012 catalog did not mention that Shelter Forest's products had a water-boil proof (WBP) rating. Shelter Forest, in contrast, says that by adding melamine to the glue, it obtains a WBP rating. Commerce ignored this evidence when determining Shelter Forest added melamine to its glue, the coalition said.

"Commerce did not ignore this evidence," DOJ said. "Instead, Commerce examined this evidence in context of the record as a whole." The agency looked at Shelter Forest's specific sales and supplier documentation rather than the generic catalog, which is "less probative" than the submitted information, DOJ said. Also, Shelter Forest had good reason to not publicize the addition of melamine to the glue, DOJ said, as it was considered a "trade secret."

DOJ also countered the coalition's claims by saying that the court remanded for consideration whether the glue was majority urea formaldehyde and not whether it was WBP rated. In that case, it doesn't matter if Commerce assesses whether the glue was WBP rated. "To the extent that Shelter Forest’s initial submissions do not address how melamine was used in its production process, that is consistent with the purpose of the submission," the brief said. Nevertheless, Commerce did inquire about the addition of melamine to make the plywood WBP-rated. Shelter Forest said that it fortified its glue with melamine and "did not purport to address all components used in the entire plywood production process," in its original submissions to Commerce, DOJ said.