Commerce Can Easily Verify Non-Use of China's EBCP, Exporter Tells CIT

The Commerce Department can easily verify non-use of China's Export Buyer's Credit Program (EBCP) in countervailing duty reviews, plaintiff Yama Ribbons and Bows Co. told the Court of International Trade in a Feb. 4 brief. Refuting Commerce's contention that it needed certain information from the Chinese government to verify non-use, which has been struck down by the trade court, Yama said that the agency actually had all it needed to verify that the CVD respondent's U.S. customers didn't use the program (Yama Ribbons and Bows Co., Ltd. v. United States, CIT #21-00402).

The brief comes in a case over the 2018 administrative review of the CVD order on narrow woven ribbons with woven selvedge from China. In the review, Commerce hit Yama with adverse facts available over its customers' alleged use of the EBCP -- a program whereby China pays U.S. customers to buy China-exported goods -- and the provision of synthetic yarn and caustic soda at less than adequate remuneration. Commerce applied AFA over both of these issues for the Chinese government's failure to provide the agency with requested information.

Yama, though, said that verifying non-use of the EBCP can actually be done "very simply." Commerce asks for a sample of U.S. invoices in every review, and, among the 50-60 documents that an exporter will submit with each U.S. sale, is a wire transfer, showing payment from the customer's U.S. bank to the exporter's bank. Yama says that if this wire transfer is instead from the Export-Import Bank of China, Commerce would "immediately know that the payment did not come from the U.S. customer directly." This is all Commerce needs to look at to verify non-use, the plaintiff said. "It is really quite easy to verify the source of payment," the exporter quipped.

Commerce was also able to verify non-use of more than 17 other programs with "zero explanation on the record" from either Yama or the Chinese government over how they operated, Yama pointed out. Commerce did not need two pieces of information from the Chinese government to figure out how the program worked to then be able to find whether the EBCP was used, as it required during the review, Yama said.

The plaintiff also challenged Commerce's use of AFA over the provision of synthetic yarn and caustic soda for LTAR. AFA was applied due to the Chinese government's failure to answer questions, though Yama fully responded to Commerce's questionnaires. Yama argues that China did cooperate to the best of its ability, however, since it either didn't have the information Commerce requested or the information would violate confidentiality elements of Chinese law.

The statute is clear as to how Commerce can find that a countervailable benefit has been preferred, and the agency has failed to meet these requirements, Yama argued. "The Statute requires that a foreign country (1) have a specific 'program' in place that is specific to the alleged LTAR in question, (2) that this program be administered by some 'authority,' and (3) that it be in existence for a definable amount of time," the brief said. "There is not even a scintilla of evidence on the record that any of these requirements existed in the [period of review]."