Metal Locker Importer Pushes for Mexico Over Turkey for Surrogate Country in AD Investigation

The Commerce Department's decision to pick Turkey over Mexico as a surrogate country in an antidumping duty investigation was not backed by sufficient evidence, importer List Industries argued in an Oct. 14 complaint at the Court of International Trade. Seeing as the Mexican surrogate company's data was more detailed and that the company was actually profitable, unlike the Turkish company's, Commerce should have gone with the Mexican surrogate company, List said.

The case concerns the less than fair value investigation of certain metal lockers and parts thereof from China that led to the AD duty order on the metal lockers. Since China is a non-market economy, Commerce had to pick a surrogate country for which to determine normal value. The agency determined that Turkey and Mexico could be surrogate countries since they both were at a similar level of economic development, so it examined the financial statements of one Mexican company, Grupo Carso, and one Turkish company, Ayes Celikhasir. Commerce then said that only Ayes makes merchandise comparable to the metal lockers subject to review, and so tapped its financial statements to come up with normal value.

List now contests this, arguing that Commerce failed to explain how the "physical characteristics, end uses, and production processes" of Ayes' products were comparable to metal lockers or why they were actually more comparable to Grupo Carso's goods, which include products such as air coolers, surface capacitors and large containers. The record disagrees with Commerce's contention that Grupo Carso doesn't produce comparable merchandise, List said.

In any antidumping duty investigation, Commerce is to look at the reliability and completeness of the data when picking a surrogate country and company. So, in the course of completing this process, the agency said that Grupo Carso does not have a complete set of information from which to derive surrogate values and surrogate financial ratios. But this is predicated on the wrong conclusion that Grupo Carso is not a producer of comparable merchandise, List said. Flip the comparable merchandise finding, and then one can reasonably flip the finding over the completeness of the data, the complaint argued. List also said that Commerce disregarded other surrogate values for Mexico that were "qualitatively better" than surrogate values for Turkey.

Generally, Ayes' financial statements are less detailed than Grupo Carso's, and so, even if Commerce's decision to tap Turkey as the surrogate country was reasonable, the agency's decision to not use Grupo Caro's financial statements to calculate surrogate financial ratios was not supported, the complaint said. List also said Ayes is actually not a profitable company, and Commerce only made them appear that way by excluding most line items categorized as "other real operating income" in finding Ayes' selling, general and administrative ratios.