CIT Sustains Constructed Value Surrogate Company Switch in AD Review

The Court of International Trade on Aug. 8 sustained the Commerce’s Department’s third remand results in an case that revolved around the constructed value calculation in an antidumping duty administrative review on steel nails from Oman. The trade court found Commerce justified its switch on remand between surrogate companies, despite calls from the exporter under review to use a different company.

Commerce had picked the Thai company Hitech for its constructed value profit calculation, despite concerns that the company had benefited from subsidies. But in response to a Federal Circuit remand in 2021, Commerce switched to an Indian company, Sundram Fasteners (see 2204120060). Though the agency found both companies were subsidized, it said Sundram’s data, though imperfect, was at least contemporaneous.

Oman Fasteners argued that Commerce should have picked the Taiwanese company LSI or the Omani company Al Jazeera. Commerce had disqualified both at the outset in its remand results, with LSI one of two with untranslated financial statements and Al Jazeera one of six that does not make a product similar to steel nails. Oman Fasteners said Commerce should have instead compared financial statements from all 11 candidates for surrogate company before arriving at a decision.

CIT disagreed. First, though Oman Fasteners cited a Federal Circuit decision involving CP Kelco to argue that Commerce was required to compare, side by side, all 11 statements, a later decision in that case upheld Commerce’s determination to reject some financial statements as incomplete.

Similarly, in this case, “Commerce’s explanation of its rejection of the LSI, Taiwanese companies’, and Omani companies’ financial statements was sufficient to justify its choice not to further compare these financial statements to other financial statements on the record but, instead, to use an iterative process to eliminate these statements from consideration,” CIT said.

Oman Fasteners also said Commerce should have reopened the record to allow it to submit a full translation of LSI’s financial statements, but CIT said it’s generally at Commerce’s discretion whether the record should be reopened.

“Having found that substantial evidence supports Commerce’s choice of Sundram’s financial statements among the eleven financial statements on the record, the court finds no error in Commerce’s determination that ‘reopening the record was not necessary,’” CIT said. “Here, Commerce properly enforced its deadlines when it declined to allow Oman Fasteners to submit LSI’s complete translated financial statements after the deadline for such information and the court will not disturb that decision.”

(Mid Continent Steel & Wire v. U.S., Slp Op. 22-88, CIT # 15-00214, dated 08/08/22, Judge Mark Barnett. Attorneys: Adam Gordon of The Bristol Group for plaintiff/consolidated defendant-intervenor Mid Continent Steel & Wire; Mikki Cottet for defendant U.S. government; Michael House of Perkins Coie for defendant-intervenor/consolidated plaintiff Oman Fasteners)