Commerce Drops Loan Program From Upstream Subsidy Calculation in CVD Review on Remand

The Commerce Department found that the Rediscount Loan Program offered to Kenertec Power System is an export subsidy and thus excluded from Kenertec's upstream subsidy calculation in a countervailing duty investigation on utility scale wind towers from Indonesia, it said in Aug. 19 remand results submitted to the Court of International Trade. Bringing the results of the review in line with CIT's decision in the matter, Commerce dropped the loan program from the CV rate it calculated in the investigation, resulting in a de minimis CVD rate for Kenertec (PT. Kenertec Power System & Wind Tower Trade Coalition v. U.S., CIT #21-03687).

Kenertec served as the sole mandatory respondent. In the case, Commerce requested the partial voluntary remand to reconsider whether the loan program was improperly included in its subsidy calculation, despite Kenertec's objections (see 2107200061).

During the CVD investigation, Commerce partially relied on the results from a separate CVD case into cut-to-length steel plate from Indonesia. The agency said it based the all-others rate in that investigation on one of the mandatory respondents, Krakatau Steel, by finding that it received countervailable subsidies. Part of Krakatau's margin was derived from upstream subsidies through its purchases of CTL plate from Krakatau POSCO. Kenertec said that Commerce found these upstream subsidies by identifying subsidy rates for the CTL plate from Indonesia specific to Krakatau and based on adverse facts available. In doing so, the agency unwittingly but improperly included the loan program that the agency previously ruled was an export subsidy, Kenertec said.

So Commerce reconsidered, finding that indeed the loan programs were export subsidies and thus must be excluded from the upstream subsidy calculation. "The Rediscount Loan Program was found to be contingent upon export performance in two prior countervailing duty proceedings involving Indonesia, including CTL Plate from Indonesia," the remand results said. "Nothing on our record indicates that we should change that finding here."