Thai Exporter Challenges Commerce's POR-Wide Allocation Method for Certification Expenses

The Commerce Department erred in using an allocation method for Thai exporter Sahamitr Pressure Container's (SMPC) certification expenses that covered the whole period of review, SMPC said in an April 6 complaint at the Court of International Trade. By doing so, Commerce violated its own practice of using the most detailed transaction-specific expense data and distorted the data, the exporter said (Sahamitr Pressure Container v. U.S., CIT #22-00107).

SMPC filed its case to contest the first administrative review of the antidumping duty order on steel propane cylinders from Thailand. In the review, the exporter reported market- and month-specific certification expenses that Commerce requested. However, SMPC now says that Commerce disregarded this data in favor of using a POR-wide allocation method for the certification expenses, saying SMPC's allocation method was unreliable due to timing differences based on when the exporter makes and sells cylinders and when it records the certification expenses for those sales.

SMPC said in the complaint that Commerce did not explain how using an annual average addressed the timing differences. "In its case brief, SMPC argued that the Department’s methodology departed from the Department’s requirement and practice of using the most detailed transaction-specific expense data available," the brief said. "As a result, the Department calculated a 'less accurate and more distorted dumping margin' than if SMPC’s reported expenses were used. Department had not provided a reasonable rationale or justification for disregarding the reported data, which was 'specific, record-based, and verifiable.'"

The complaint also laid out the challenge to Commerce's decision to reduce SMPC's reported scrap offset and increase the overall reported direct material costs and cost of production. In the review, the agency said it did this to limit the scrap offset to the value of the generated scrap since SMPC sold more scrap than it reasonably could've made. "The evidence on the record does not support the conclusion that 'SMPC sold more scrap than it reasonably could have generated,'" the complaint said. "The Department therefore erred in reducing the reported scrap offset, which increased the reported direct material costs and production costs, ultimately yielding an inaccurate dumping margin."