Commerce Digs in Heels on Use of Likely Selling Prices for Non-Prime Goods Despite CAFC Opinion

The Commerce Department further defended its decision to continue relying on facts otherwise available in Nov. 8 comments submitted to the Court of International Trade, despite a U.S. Court of Appeals for the Federal Circuit opinion finding that such reliance on the current data was inappropriate. The plaintiff in the case, Dillinger France, argued that Commerce ignored the Federal Circuit's directive by continuing to rely on the "likely selling prices" in Dillinger France's records rather than the actual cost of production. Commerce responded that the plaintiff failed to submit the actual product-specific costs of producing the non-prime products or the physical characteristics of the non-prime products, leading to no other choice but to use facts otherwise available (Dillinger France S.A. v. United States, CIT #17-00159).

The case stems from the less-than-fair-value investigation of certain carbon and alloy steel cut-to-length plate from France, in which Dillinger was a respondent. In the investigation, Dillinger submitted information on its allocation of costs between its non-prime and prime products. Dillinger's books, while in accordance with Generally Accepted Accounting Principles, assigned costs to the non-prime products based on their "likely selling prices," rather than reporting the cost of the goods. This was a no-go for the Federal Circuit, which remanded the case to Commerce so the agency could get better data.

Commerce then attempted to do so, issuing a supplemental questionnaire to Dillinger requesting information about the product-specific costs of the non-prime goods. According to Commerce, Dillinger "failed to give either the physical characteristics of non-prime products produced or its actual product-specific costs of production of non-prime products, despite arguing that the actual costs of making non-prime products should have been used."

Stuck, Commerce then continued to apply facts available and saddled Dillinger with a 6.15% dumping margin (see 2108270056). The agency then continued to defend this position in light of recent Dillinger attacks in its comments on the remand results. "Here, Commerce sought to analyze information pertaining to the cost of producing the merchandise under consideration on both an aggregate and product-specific basis," the comments said. "This was in accordance with the opinion of the Federal Circuit, which specifically ordered a remand requiring Commerce to 'determine the actual costs of prime and non-prime products.'"

Commerce said that it is "perplexing" that Dillinger argues that it properly reported the total actual costs of non-prime products given the Federal Circuit's order, the agency's long-standing practice of analyzing costs on a control number-specific basis and record evidence. "If Dillinger France had wanted to present evidence of the specific non-prime products produced, it could have relied on production reports or finished goods inventory excerpts to show which production runs resulted in the production of non-prime plates," the comments said. "Dillinger France chose not to do so. Thus, because Dillinger France did not report the actual product-specific costs of producing non-prime products and, because Commerce verified the total costs of producing all products during the period of investigation, Commerce reasonably relied on the allocation of costs between prime and non-prime products recorded in Dillinger France’s normal books and records as facts otherwise available."