Commerce Right to Pull Past CVD Margin Despite de Minimis Marks for Respondents, CIT Says

The Commerce Department properly gave a non-mandatory respondent a non-de minimis countervailing duty rate in a CVD administrative review despite the fact that both of the actual mandatory respondents received de minimis rates, the Court of International Trade said in a Dec. 2 opinion. Judge Claire Kelly held that the "expected method" for calculating duties for non-mandatory respondents only applies in the antidumping duty context, and not to CV duty proceedings.

The case, brought by Colakoglu Metalurji and Colakoglu Dis Ticaret (Colakoglu), challenges the fourth administrative review of the CVD order on steel concrete reinforcing bar from Turkey, covering entries in 2017. While Colakoglu did not serve as a mandatory respondent in this review, it had done so in two of the first three reviews. In the 2015 review, Commerce said that Colakoglu bought natural gas from a state-run company that receives subsidies from the Turkish government, but that Colakoglu paid market rates for the gas. The company then received a de minimis CVD rate in that review.

In the 2016 review, however, Commerce again found that Colakoglu bought natural gas from this same state-run company, but that Colakoglu bought the gas for less than adequate remuneration. The company was hit with a 1.82% CVD rate. In the next review -- the review under consideration in the opinion -- Colakoglu was not tapped as a mandatory respondent, but Commerce still assigned it the 1.82% rate, even though the two mandatory respondents received de minimis rates.

Colakoglu argued that this violates the law since Commerce should have used the "expected method" in this instance and averaged the de minimis rates to give Colakoglu its rate. Kelly ruled against this position, holding that there is actually no expected method in the CVD context and that such a method is reserved only for the antidumping context. "Congress could have easily included the same language in both sections or even combined the sections into one if it had intended to place the exact same restrictions on Commerce in both contexts," the opinion said. "Instead, Congress chose to elucidate an expected method of calculating an all-others rate when all mandatory respondents receive de minimis rates only in the ADD context."

The judge further held that, even if the statute obligated Commerce to use the expected method in this instance, "Commerce sufficiently explained that calculating Colakoglu's rate using the ADD expected method of averaging the mandatory respondents’ de minimis rates would not be reasonably reflective of Colakoglu's actual CVD rate." The agency found that neither of the mandatory respondents bought natural gas from the state-run company, and Colakoglu failed to produce any evidence showing that it no longer bought gas for less than adequate remuneration. Commerce could use any reasonable method to find Colakoglu's rate, as the statute permits, and it did so by carrying over the rate from the previous review, the court said.

Colakoglu also argued that even if Commerce's method of calculating the rate was reasonable, the record doesn't back the 1.82% CVD mark. The court held that this argument simply "repackages" Colakolgu's old takes that Commerce's method runs contrary to the law, so Kelly rejected it "for the same reasons." The burden to populate the record is on the companies, and since Colakoglu did not even attempt to put any relevant information on the record, Commerce properly pulled the company's prior rate for the fourth administrative review.

(Colakoglu Metalurji A.S., et al. v. United States, Slip Op. 21-161, CIT #20-00153, Judge Claire Kelly. Attorneys: Jessica DiPietro of Arent Fox for plaintiffs; Ann Motto for defendant U.S. government)