Plaintiffs in CVD Case at Trade Court Make Case Against AFA Over China's Export Buyer's Credit Program

Plaintiffs in a countervailing duty case railed against the Commerce Department's reliance on adverse facts available over the CVD respondents' alleged use of China's Export Buyer's Credit Program, filing a series of four separate briefs at the Court of International Trade. The plaintiffs, led by nonselected respondent Evolutions Flooring, argued that the use of AFA over the EBCP has been "consistently rejected under almost identical factual circumstances," and that Commerce was able to verify non-use of the program without certain information in a different CVD case (Evolutions Flooring v. United States, CIT #21-00591).

The case concerns the 2018 administrative review of the countervailing duty order on multilayered wood flooring from China, in which Baroque Timber Industries served as a mandatory respondent. The lawsuit, brought by a total of 18 plaintiffs, challenged the use of AFA over the EBCP, Commerce's calculations for the provision of veneer and electricity for less than adequate remuneration, and the agency's decision to use a VAT rate that doesn't reflect what the respondent actually paid.

The EBCP is a program whereby China pays U.S. customers to buy goods exported by China. In the review, it was alleged that Baroque Timber benefitted from this program. To verify whether this claim is true, Commerce requested two pieces of information from China about how the program works: reforms to the program made a few years prior and which third-party banks participate in the program. The Chinese government did not respond, so the agency used AFA over the program, despite the respondent submitting verifications from its U.S. customers saying that they did not use the program.

Baroque Timber and Riverside Plywood Corp. argued that Commerce's use of AFA over the EBCP has been repeatedly rejected by CIT. "The Court has addressed Commerce’s application of AFA to the usage of the EBCP in numerous cases now, under almost identical facts," the brief said. "In these cases, when cooperative respondents have provided evidence of non-use of the EBCP, the Court has unequivocally rejected Commerce’s attempts to apply AFA due to the GOC’s perceived failure to provide requested information on the EBCP."

The respondent and Riverside also said that record evidence shows that they did benefit from the EBCP. Arguing that its case is indistinguishable from past ones in which the court has rejected the use of AFA by pointing to its record, Baroque Timber said that it was a cooperating respondent and that statements of non-use and other such evidence proves that they did not use the EBCP.

"The agency’s continued befuddlement with EBCP appears to have no end," multiple plaintiffs led by Yihua Lifestyle Technology Co. said in a brief. "Commerce continuously fails to see the forest for the trees -- the issue is not whether Commerce has a complete and clear understanding of the administration of the program, but rather, as the CIT stated in Yama Ribbons, whether the respondents did or did not use or benefit from that program."

Baroque Timber and Riverside argued that none of the information requested by Commerce "actually creates a gap in the record concerning usage." The information Commerce requested only concerns how the program works and not whether the respondent's U.S. customers used the program, the brief said. Multiple ones of the briefs also pointed out that Commerce was able to verify that it did not use the EBCP in a separate CVD proceeding without the requested information from the Chinese government that served as the basis for AFA.