Commerce Arbitrarily, Punitively Drops Export Price by Deducting RIN Values, AD Respondent Argues
By deducting the value of Renewable Identification Numbers (RINs) -- tradeable credits issued by the EPA -- from antidumping duty respondent Wilmar Trading's export price, the Commerce Department "penalizes Wilmar for having to navigate different regulatory regimes for biodiesel in the United States and Indonesia," Wilmar argued in comments on Commerce's remand results at the Court of International Trade. The result is an arbitrarily inflated dumping margin derived from Commerce's approach, which is separate from Wilmar's "actual commercial experience," the brief said (Wilmar Trading Pte Ltd. v. United States, CIT Consol. #18-00121).
The case concerns the antidumping duty investigation on biodiesel from Indonesia in which Commerce tapped Wilmar Trading and P.T. Musim Mas as the two mandatory respondents. The agency used the findings of the countervailing duty investigation on Indonesian biodiesel and other evidence to find that the PMS made Wilmar's home market sales data unusable, relying on constructed value to determine the respondent's dumping margin. Commerce hit Musim Mas with total adverse facts available over its failure to respond to its questionnaires. In the end, the agency hit Wilmar Trading with a 92.52% dumping rate and Musim Mas with a 276.65% dumping rate.
In an opinion on the matter, the trade court told Commerce that if it wants to keep making an adjustment to Wilmar's constructed value to account for RINs, it needs to explain its legal authority to do so (see 2207050064). In the case Vicentin I, the court addressed this very issue, sending the matter back to Commerce since it could not find statutory authority for the agency's decision to adjust normal value instead of export price for RINs. In Vicentin I, Commerce accounted for RINs by decreasing export and constructed export price. The court found the issue similarly unexplained in Wilmar's case.
On remand, Commerce reduced the export price by Wilmar's RIN values, finding legal shelter under 19 U.S.C. 1677a(a)-(b) and 19 C.F.R. § 351.401(c). Wilmar, though, argued in a brief to CIT that this approach ignores evidence related to a "key element of value" that Wilmar gets on its U.S. sales through the normal operation of a legal framework governing the U.S. biodiesel market. The law requires Commerce to use the price at which the biodiesel is first sold as the export price, allowing the agency to adjust the price to account for price adjustments that make up a change in the price charged for the subject merchandise such as a discount, rebate or other adjustment reflected in the buyer's net outlay.
"Commerce fails to reconcile these legal authorities with its own prior findings and the record facts," Wilmar said. In the investigation, Commerce said that RINs are "actual values" included in the gross prices reported to Commerce for RIN-inclusive U.S. biodiesel sales. The agency then said that this finding aligns with the verification results that said that RINs are not adjustments to the buyer's net outlay but an integral part of the full price paid to the buyer. Given this finding, Commerce cannot legally say that the RIN values reflect a change in the buyer's net outlay so that the export price can be legally adjusted, the respondent argued.
"Commerce brushes past these facts and deducts the RIN value from export price because RIN-inclusive biodiesel purportedly 'does not reflect the true "starting price’" of biodiesel,'" the brief said. "That conclusion ignores what the record shows (and what Commerce concedes elsewhere in the Final Remand Results). ... In other words, RIN-inclusive biodiesel necessarily includes in its starting price some value attributable to RINs."
The U.S. wants the court to "rubber stamp" its finding since the remand results seemingly answer the legal question of the move raised under Vicentin I. However, Commerce did "not bother" to discuss or compare the facts of each case, Wilmar said. "Regardless, Vicentin does not address the undisputed fact that the starting price for Wilmar’s RIN-inclusive biodiesel includes the value of RINs, such that Vicentin is inapposite."