US Urges CIT to Reconsider Opinion Over Use of Transaction-Specific AD Margin as Adverse Rate

The Court of International Trade should reconsider its decision to send back the Commerce Department's adverse facts available rate for antidumping duty respondent Sino-Maple, the U.S. argued in a Jan. 23 brief. The decision is based on an "incorrect interpretation of" the statute, and the parties never presented the issue of whether the statute, 19 U.S.C. Section 1677e(d), lets Commerce use a transaction-specific margin as an adverse rate, the government claimed (Fusong Jinlong Wooden Group v. U.S., CIT # 19-00144).

The case concerns the sixth administrative review of the antidumping duty order on multilayered wood flooring from China, in which Sino-Maple and Jiangsu Senmao Bamboo and Wood Industry Co. served as mandatory respondents. After Sino-Maple reported that it made sales in the U.S. only to unaffiliated buyers., it later came out that the respondent made sales to third-country manufacturers, which then sold merchandise to Sino-Maple's affiliate, Alpha Floors. Commerce told Sino-Maple those sales should be listed in the database as constructed export price sales, but Sino-Maple was denied an extension request to submit corrected information, leading to a zero percent margin for Senmao and a 85.13% margin for Sino-Maple.

Sino-Maple, among other companies, took to the trade court to contest the review, with the respondent challenging both the use of AFA and the AFA margin. The trade court sided with Commerce, however (see 2301130059). The judge upheld the agency's decision to disregard all of Sino-Maple's information, noting the failure to provide the constructed export price information on a per-transaction basis deprived the agency of carrying out a key part of its analysis.

However, the court sent back the actual AFA rate itself. The statute lets Commerce use the highest dumping margin from any "segment of the proceeding" as the AFA rate. The agency took this to mean it could use the highest transaction-specific dumping margin calculated for the other respondent in the review. The judge found this to not be a lawful interpretation of the statute. A segment means a reviewable part of the proceeding, meaning the margin must be able to be reviewed. Since a transaction-specific margin cannot be reviewed, it may not be used in this context, the court held.

The ruling prompted the U.S. to file for reconsideration, arguing that, had the trade court used the "correct interpretation of 19 U.S.C. § 1677e(d), which was not presented in the parties’ briefing, the Court would have sustained the method Commerce used to select Sino-Maple’s AFA rate." The correct interpretation of the statute, derived from its plan language and construction, lets Commerce use a transaction-specific dumping margin as an AFA rate, the government argued. The U.S. said a transaction-specific margin is a dumping margin from a "segment" of a proceeding within the meaning of the statute. When calculating the AFA rate, Commerce arrived at 85.13% by equating the amount by which the normal value goes beyond the export price of the merchandise, meaning the agency clearly created a "dumping margin."

The term "dumping margin" includes transaction-specific margins, so "we respectfully disagree that Congress 'rejected' using transaction-specific margins as the basis for an AFA rate," the government said. "To the contrary, the statute’s use of the term 'dumping margin' confirms Senator [Sherrod] Brown’s original intent for Commerce to have discretion to select the highest transaction-specific dumping margin where warranted." The U.S. also claimed that a transaction-specific margin is a margin calculated in a segment of a proceeding "reviewable by the court" since it was calculated during an AD review.

"Reconsideration is additionally warranted because the parties have not previously raised the issue, either before this Court or before Commerce, of whether 19 U.S.C. § 1677e(d) authorizes the use of a transaction-specific dumping margin as an AFA rate and whether the method Commerce used to select Sino-Maple’s AFA rate is consistent with this interpretation of 19 U.S.C. § 1677e(d)," the U.S. claimed. "... The principle of party presentation dictates that a reviewing court should not normally search the record for unargued and unbriefed reasons to find in favor of one party." If the court does not take up the government's interpretation of the statute, it should modify the opinion to order Commerce to give its interpretation of the statute, the brief said.