CIT Sustains Most but Remands 2 Surrogate Value Picks in Activated Carbon Review

The Court of International Trade issued a decision Aug. 8 remanding surrogate value calculations in an antidumping duty review on activated carbon from China to the Commerce Department for reconsideration or explanation. While CIT sustained five of the seven surrogate selections at issue in the case, it found the agency failed to explain its surrogate value selection of a dataset for carbonized material and its pick of a company for determining surrogate financial ratios.

The review covered entries in 2018 and 2019. Carbon Activated challenged Commerce’s selection of surrogate values for bituminous coal, anthracite coal, hydrochloric acid, carbonized materials, caustic soda and steam, along with the agency’s selection of surrogate financial rations. For bituminous coal, anthracite coal, hydrochloric acid, caustic soda and steam, CIT found Commerce’s selections reasonable, especially in light of the lack of evidence on the record to support the alternatives supported by Carbon Activated.

On the other hand, the trade court found Commerce didn't adequately justify its selection of a more specific Malaysian tariff subheading for coconut shell charcoal, rather than a basket category for all wood charcoal (including shell or nut). Though the agency said there was no evidence that Carbon Activated specifically used wood charcoal, it failed to cite any evidence that Carbon Activated specifically used coconut charcoal either, CIT said.

“Commerce is within its discretion to choose among imperfect datasets; however, Commerce’s decision-making must take into account the facts on the record and reflect a well-reasoned application of its methodology to the situation,” CIT said. “Here, Commerce has failed to explain its choice between two imperfect datasets and the court remands that selection for further explanation or reconsideration.”

Likewise, Commerce failed to properly justify the selection of a Malaysian surrogate company for determining surrogate financial ratios. The agency had selected the admittedly imperfect financial statements of Bravo Green based on its preference for using financial statements from the primary surrogate country, in this case Malaysia. But the agency didn't explain why the use of a Malaysian company’s financial statements was preferable to more complete financial statements from companies in other countries.

“It appears that Commerce did not consider JSC Sorbent or Romcarbon for the sole reason that they were not from Malaysia but did not explain why association with the primary surrogate country outweighed other considerations or criteria,” CIT said. “The court remands this issue to Commerce. In so doing, the court does not require Commerce to choose any particular financial statement or reject Bravo Green’s 2018 financial statements. Commerce must, however, fairly weigh the available options and explain its decision in light of its selection criteria, addressing any shortcomings,” the court said.

(Carbon Activated Tianjin Co., Ltd. v. U.S., Slip Op. 22-89, CIT # 21-00131, dated 08/08/22, Judge Mark Barnett. Attorneys; Dharmendra Choudhary of Grunfeld Desiderio for plaintiffs Carbon Activated Tianjin and affiliates; Mollie Finnan for defendant U.S. government; John Herrmann of Kelley Drye for defendant-intervenors Calgon Carbon and Cabot Norit Americas.)