Activated Carbon Exporters Push for Romania Over Malaysia for Surrogate Country in AD Case

The Commerce Department unlawfully selected Malaysia as its surrogate country in an antidumping duty administrative review and the decision should be remanded by the Court of International Trade for reconsideration of selecting Romania instead, plaintiffs in a case challenging the review said in July 30 comments opposing the first remand results. Seeing as the remand itself recognizes the superiority of the Romanian data and acknowledges certain input data from Malaysia is aberrational, the court should hold that Commerce's reliance on Malaysia as the surrogate nation is unlawful, the plaintiffs said (Carbon Activated Tianjin Co., Ltd. et al. v. United States, CIT #20-00007).

The case stems from the 11th administrative review of the antidumping duty order on activated carbon from China wherein plaintiff Carbon Activated Tianjin Co. served as a mandatory respondent. Initially, Commerce relied on Malaysia as its surrogate country and used a financial statement from a Romanian company, Romcarbon, to calculate the surrogate financial ratios. In the final results, the agency continued to do both of these things, but also declared that Romania is not a significant producer of comparable merchandise (see 2107010079). In April, Chief Judge Mark Barnett remanded parts of these results to Commerce, finding that the agency needed to further explain its finding that Romania is not a significant producer.

In the remand results, Commerce reversed course, declaring Romania a significant producer, but continuing to rely on Malaysia as the main surrogate and using the financial statement from Romcarbon. However, it is precisely this reversal and finding that Romania is a significant producer of activated carbon that should lead Commerce to pick Romania as the surrogate nation since now the deciding factor between the two countries boils down to data considerations, the plaintiffs said.

"Commerce again concedes that 'the three Malaysian financial statements ... lack usable financial data in that none of them have separate line items breaking down the cost of raw materials and energy,'" the comments said. "Commerce thus continued using the Romcarbon S.A. financial statement, but nevertheless selected Malaysia because that country provides 'data for nearly all of the inputs used by the two mandatory respondents to produce the subject merchandise during the [period of review] -- including the bituminous coal input used to produce nearly the entire production volume of the subject merchandise reported in both mandatory respondents’ respective [factors of production] databases -- with the exception of the financial ratios.'" Meanwhile, all three Malaysian financial statements lack usable data since none have line items breaking down the cost of raw materials and energy, the plaintiffs said.