CIT Says Commerce Didn't Address Comments on Benchmark Data for Land Program in CVD Review

The Commerce Department didn't adequately address questions raised by countervailing duty respondent Jiangsu Zhongji Lamination Materials Co. over the agency's use of certain benchmark information for the land program, the Court of International Trade ruled in a March 21 opinion made public March 29. Upholding parts and sending back parts of the 2016-17 administrative review of the CVD order on aluminum foil from China, Judge Timothy Reif said Commerce must reconsider its analysis of the contemporaneity of data it used for the land program benchmark.

The judge also remanded the agency's pick of data to calculate the benchmark for the aluminum plate/sheet program. Reif upheld Commerce's decision to reject as untimely benchmark information submitted by Zhongji and the agency's calculation of the benchmark for the primary aluminum program.

In April 2020, Commerce issued a memorandum tolling by 50 days all deadlines in the review due to COVID-19. Zhongji thought this applied to the deadline to submit new benchmark information, sending in the information May 18, 2020. The agency rejected the information as untimely, finding the tolling memo applied to pending deadlines for actions by parties to administrative reviews, but the deadline for submissions was no longer pending at the time the tolling memo was issued.

Reif upheld this decision as reasonable. The judge said Commerce did not abuse its discretion in rejecting the submission because the agency has broad discretion to establish its own rules. Reif ruled the fact that the benchmark submission did not have information that may have led to a more favorable benchmark selection for Zhongji "does not demonstrate that the submissions were ‘deficient’ or that Commerce acted unlawfully in failing to provide the Zhongji Respondents with an opportunity to ‘remedy or explain’ the submissions."

With the May 18, 2020, submission rejected, Zhongji's challenge to Commerce's calculation of the benchmark for the primary aluminum program fell flat. The respondent presented data from the London Metal Exchange (LME) to contest Commerce's decision to average Global Trade Atlas (GTA) and Comtrade data to calculate the benchmark. Since the LME data was in the rejected submission, though, the trade court upheld Commerce's benchmark calculation as reasonable.

However, Reif remanded Commerce's data picks to calculate the aluminum plate/sheet program benchmark. Zhongji put forth a Commodities Research Unit report that gave pricing data for aluminum alloy products classified under grade 1050 and GTA data. Commerce picked Trade Data Monitor data instead, finding it "more representative" of all the aluminum types Zhongji bought. The agency added that it previously declined to use LME data, which was part of the Commodities Research Unit report, because it only had a cash price for primary aluminum.

The judge said Commerce did not appropriately explain itself, ruling the agency must further discuss its finding that there was "wider variation between" the alloy 1050 products in the Commodities Research Unit report and the Zhongji purchases than there was between the products in the TDM data and the Zhongji purchases. “Further, Commerce did not explain adequately its conclusion regarding the relevance of LME data with respect to Commerce’s rejection of the CRU Report," the opinion said.

When calculating the land program benchmark, Zhongji presented 2016-18 reports from Coldwell Banker Richard Ellis (CBRE) and reports compiled by Nexus Innovative Real Estate Solutions that Commerce rejected in favor of a 2010 CBRE report that had data from Thailand. Zhongji argued at CIT that Commerce unreasonably decided not to use a Tier 2 benchmark to value the land program, instead picking the 2010 CBRE report and rejecting the 2016-18 CBRE and Nexus reports.

Reif said Commerce reasonably decided that neither a Tier 1 or Tier 2 benchmark was appropriate but did not properly explain its choice of the 2010 CBRE report over the 2016-18 CBRE and Nexus reports. While Zhongji said its data was clearly more contemporaneous, Commerce said the 2010 CBRE Thai data was closer to the date that Zhongji bought the land-use rights under review. The judge said the agency must further explain this position. He also said Commerce must address Zhongji's claim the Nexus reports gave information on its methodology and sourcing of its data, contrary to what the agency held.

(Jiangsu Zhongji Lamination Materials Co. v. U.S., Slip Op. 23-41, CIT # 21-00133, dated 03/21/23. Judge: Timothy Reif; Attorneys: Sarah Wyss of Mowry & Grimson for plaintiffs led by Jiangsu Zhongji; Sosun Bae for defendant U.S. government; Grace Kim of Kelley Drye for defendant-intervenors led by Aluminum Association Trade Enforcement Working Group)