No Duty Drawback Adjustment Given Lack of Evidence Over Rebate Closeout, DOJ Tells CIT

The Commerce Department properly denied antidumping duty respondent Icdas a duty drawback adjustment due to the fact that the respondent gave no evidence that its Inward Processing Certificates (i.e., requests to gain the drawback) were closed, the Department of Justice told the Court of International Trade in a Dec. 30 brief. DOJ argued that the denial doesn't cut against past practice, and even if it did, would be a reasonable position to hold (Icdas Celik Enerji Tersane ve Ulasim Sanayi v. U.S., CIT #21-00306).

The case concerns Commerce's final results in the second administrative review of the antidumping duty order on steel concrete reinforcing bar from Turkey. In ADD reviews, Commerce adjusts a respondent's U.S. price by the amount of any import duties imposed by an exporting country that have been rebated or not collected. The agency typically employs a two-prong test to find whether a respondent qualifies for such an adjustment. The test looks at whether the import duty paid and rebate payment are directly linked to one another and whether there are sufficient imports of the imported raw materials to account for the drawback received.

In the review, Commerce said that Icdas, a mandatory respondent, wasn't entitled to a duty drawback adjustment since its IPCs weren't closed by the Turkish government. Icdas contested this, ultimately bringing its challenge to CIT, where it argued that the Turkish duty drawback program satisfies the traditional two-pronged test, which should be enough for the adjustment.

In its response, DOJ said that satisfaction of the two-pronged test isn't enough to grant the adjustment. "Commerce’s more-recent practice with regard to the Turkish IPR is to rely on the traditional two-pronged test and use only IPCs closed by the Turkish Government for purposes of calculating a duty drawback adjustment," the brief said. Icdas said that the IPCs are closed when imports and exports under the IPCs are completed. Commerce that the Turkish government had to close the IPCs, and that this position was recently sustained by the trade court.

"But even if Commerce had changed its methodology in this proceeding, this Court should sustain it because Commerce’s methodology is permissible under the statute and Commerce provided good reasons for requiring actual closure of the IPCs," the brief said. DOJ said that Icdas' own questionnaire responses contradict its argument that IPCs are closed when the imports and exports are completed. The questionnaires explained that after confirming that all imported inputs with Inward Processing Regime exemptions are used in the production of the exported goods, Turkey's Ministry of Trade closes out the certificates.