Exporter Attacks AFA on Ribbon Input Subsidies, Says Chinese Gov't Answered Commerce Questions
The Commerce Department's decision to continue applying adverse facts available due to the Chinese government's alleged shortcoming in its questionnaire responses during a countervailing duty investigation runs contrary to a court order from the Court of International Trade, plaintiff Yama Ribbons and Bows Co. said in a Sept. 13 filing. Commerce held that AFA was warranted, in part, because the Chinese government did not fully answer its questions on subsidy programs for synthetic yarn and caustic soda. The court ruled to the contrary, making the continued use of AFA in Commerce's remand results unsupported and contrary to law, the brief said (Yama Ribbons and Bows Co., Ltd. v. United States, CIT #19-00047).
In 2017, Yama was subject to a countervailing duty administrative review on narrow woven ribbons with woven selvedge from China for entries in 2016. Commerce included 16 different subsidy programs that Yama allegedly benefited from, resulting in a final CVD rate of 23.70%. Yama contested Commerce's determinations of some of the subsidies, including the AFA rates for China's Export Buyers Credit Program and synthetic yarn and caustic soda subsidies. Commerce found that the government of China (GOC) did not respond to the best of its ability to the agency's requests for information as to its rationale for applying AFA for both of these alleged subsidies.
Judge Timothy Stanceu then ruled that Commerce wrongly applied AFA in its EBCP determination (see 2105030040), which Commerce then dropped on remand under respectful protest (see 2108130039). Yama does not contest that decision.
As for the provision of synthetic yarn and caustic soda for less than adequate remuneration (LTAR), Commerce originally said it lacked information from the Chinese government to find whether the prices from the transactions were "significantly distorted" by China's involvement and whether the private companies that supplied Yama with the yarn and caustic soda were "authorities." China didn't supply the information Commerce wanted, so the agency applied AFA for these subsidies. The court also instructed Commerce to evaluate the "specificity" requirement in the statute, which holds that Commerce must find that these programs benefited a limited or preferred group. The agency did that, still holding AFA was warranted for the Chinese government's deficiencies in its reporting and that the subsidies were appropriately specific.
Yama, in its comments, argues that Commerce is attempting to pass off its remand results as in line with the court's orders using a semantic trick. The Chinese government said that it did not have any "programs" for LTAR for either yarn or caustic soda, using the term as a synonym for "laws, plans or policies" -- the specific wording used by Commerce when asking how, if at all, the Chinese government subsidizes these inputs.
"The GOC answered the specific question asked by Commerce," Yama said. "Now, as a post hoc justification to ignore the GOC’s clear answers, Commerce says 'program' is not a legal term. If that is true, why did Commerce not simply ask about 'subsidies' rather than 'laws, plans, or policies' in its questionnaires? ... A party is only required to answer questions asked of it. No party is obliged to guess what questions Commerce should have asked."
Commerce's take that the subsidies on the two inputs were appropriately specific is a moot point, Yama also argued. "Once the Court determined that the GOC answered the question about any law, plan, or policy regarding LTAR, the inquiry should have ended," the brief said. "One does not need to then address specificity, authorities, etc. if the subsidy question is fully answered in the negative. There cannot be any specificity related to the lack of a subsidy, nor any authority, since nothing was granted, much less received by Yama."