Chinese Exporters Challenge AFA on EBC, Electricity and Glue and Paint Programs in CVD Review

The Commerce Department cannot apply adverse facts available to countervailing duty respondents over their customers' alleged use of China's Export Buyer's Credit Program, two Chinese exporters said in a Dec. 23 complaint at the Court of International Trade. Citing 13 prior CIT decisions striking down Commerce's use of AFA in this way, the plaintiffs -- Dunhua City Jisen Wood Industry Co. and Dalian Shumaike Floor Manufacturing Co. -- said that the mandatory respondents showed they didn't use this program and that no evidence exists to the contrary (Dunhua City Jisen Wood Industry Co. v. U.S., CIT #21-00599).

The case concerns the administrative review of the countervailing duty order on multilayered wood flooring from China, in which Jiangsu Senmao Bamboo and Wood Industry Co. and Riverside Plywood Corp. served as the two mandatory respondents. In the review, Commerce requested information from the government of China over the EBCP to help it verify non-use of the program. When China did not turn it over, Commerce applied AFA. The trade court has ruled against this type of application of AFA in other cases.

The two Chinese exporters, though, are also contesting Commerce's use of AFA in two other areas. During the review, Commerce said that the respondents benefited from the provision of electricity for less than adequate remuneration and glue and paint for LTAR. The plaintiffs argue that Commerce cannot use AFA to find that the electricity or paint and glue programs are specific. "For electricity, the GOC fully provided information that the [National Development and Reform Commission (NDRC)] has delegated its price-setting authority to the local provinces," the complaint said. "For paint and glue, the GOC consistently explained that there is no government provision of glue and paint, and there is nothing on the record contradicting the GOC’s claims that there were no programs in place for the provision of these inputs."