Commerce's Regulations No Longer Address Indirect Reimbursement of Antidumping Duties, US Tells CIT

The Commerce Department "lawfully and reasonably" found that Australian exporter BlueScope Steel (AIS) didn't reimburse BlueScope Steel Americas (BSA) -- the U.S. affiliate for BlueScope Steel -- for antidumping duties on the relevant imports, the U.S. argued in a June 7 reply brief at the Court of International Trade. Contrary to plaintiff U.S. Steel's contention, Commerce properly concluded that AIS's pricing arrangement wasn't evidence of reimbursement for the duties because the agency no longer deducts from U.S. price any indirect reimbursement of antidumping duties, the brief said (U.S. Steel v. U.S., CIT #21-00528).

U.S. Steel challenges the final results of the third administrative review of the antidumping duty order on certain hot-rolled steel flat products from Australia in which BlueScope Steel Pty. was a mandatory respondent. In comments submitted before the review's preliminary results, U.S. Steel said BlueScope's transfer pricing formula, compared with the transfer price invoiced to its importer, shows reimbursement occurred between BlueScope's foreign producer AIS and BSA.

In its complaint, U.S. Steel blasted Commerce's decision to find that BSA wasn't reimbursed for any duty payments based on BlueScope's pricing methodology, which deducts an estimated AD amount from the price calculated for its ultimate affiliate purchaser. The plaintiff said this shows a lack of understanding of the agency's own antidumping margin calculation (see 2109210081).

In its reply brief, the U.S. said the pricing arrangement between AIS and BSA confirmed that while the anticipated duties were deducted from the calculated transfer price, BSA paid duties on the imports and wasn't reimbursed by AIS for them. Commerce said U.S. Steel's challenge is based on the agency's outdated regulations that would have Commerce deduct from U.S. price an amount reimbursed either directly or indirectly. But since this regulation was dropped and the new one no longer addresses indirect reimbursement, there's no reason to do so in the current matter.

"Plaintiffs’ challenge to Commerce’s application of its reimbursement regulation, 19 C.F.R. § 351.402(f), is based entirely upon Commerce’s long-since replaced 1980 regulations," the brief said. "Commerce’s application of the reimbursement regulation is consistent with the plain meaning of its current regulation, promulgated in 1998. The fact that the 1980 regulation included more expansive language, language that Commerce did not include when it revised the regulation in 1998, underscores Commerce’s intent not to include that language in its 1998 regulation."