Exporter Attacks AFA Decision for China's EBCP, Cites CIT's 'Cascade of Criticism' on the Practice

Chinese exporter Yinfeng ripped the Commerce Department's decision to apply adverse facts available relating to the agency's inability to verify non-use of China's Export Buyer's Credit Program, in a motion for judgment at the Court of International Trade. Commerce's use of AFA for the EBCP has been shot down repeatedly at CIT, yet the practice continues, Yinfeng said (Fujian Yinfeng Imp & Exp Trading Co., Ltd. v. United States, CIT #21-0088).

"The Department for years seems content to rely upon its unsupported assertions that it is not possible to verify a customer’s loans or the reasons for the loans," the motion said. "Nothing has changed in the Department’s stance in Final Determination on review despite a cascade of criticism from all corners of the U.S. Court of International Trade."

Yinfeng challenges Commerce's final results in the countervailing duty investigation into wood mouldings and millwork products from China where it was a mandatory respondent. As it has done in other cases, Commerce applied AFA for Yinfeng's alleged use of the EBCP. In particular, Commerce could not get the Chinese government to provide it with certain information on how the program works, so the agency hit Yinfeng with an AFA rate for the loan program even though it had cooperated in an attempt to show non-use of the program.

In many of the cases, Commerce says that it sought information on the third-party banks that collaborate with the EBCP and knowledge on the threshold for the EBCP's loans from the Chinese government. The agency wants this information to make it easier to see if a respondent's U.S. customers used the program. CIT has repeatedly said that the lack of this information does not create a "gap" in the record, warranting the use of AFA, Yinfeng pointed out.

"But until these reasons [for AFA] are grounded in facts supported by the record -- that is, until the Department actually attempts verification and adequately confronts these (purportedly) insurmountable challenges, there is little for the Department to hang its hat on when it 'continues to find a "gap" in the record,'" the brief said.

In a separate case over the EBCP, the court instructed Commerce to thoroughly explain why the application of AFA was needed to verify non-use of the EBCP or drop the label entirely. The agency chose the former, explaining how verification of non-use is virtually impossible if the agency does not have this key information on how the program works (see 2109090069). However, Commerce has never appealed one of CIT's many rulings finding the use of AFA for the EBCP improper.