Trade Court Says Info on 95% of Exporter's Sales Enough to Fill Gap on China's EBCP in CVD Case

The Court of International Trade on April 11 again sent back the Commerce Department's application of an adverse facts available rate to countervailing duty respondent Risen Energy Co. for its alleged use of China's Export Buyer's Credit Program in the sixth administrative review of the CVD order on solar cells from China. Judge Jane Restani said that Risen provided enough gap-filling information related to 95% of its sales to cover the Chinese government's failure to explain the EBCP.

"Commerce cannot reasonably conclude that Risen did not supply information that rendered the missing data from the [Chinese government] irrelevant and essentially eliminated any gap in the record," the opinion said. "Risen substantially complied with Commerce’s investigation efforts and provided near complete data for Commerce to review even after the long passage of time."

In the review, the Chinese government was asked for two key pieces of information related to how the program works. When it did not respond, Commerce hit Risen and Jingao Solar Co., the other respondent, with AFA -- a position that has routinely been rejected by the trade court but only recently upheld (see 2209140029). Restani in a previous opinion in the present case rejected the use of AFA over the EBCP based on the Chinese government's inaction. On remand, Commerce said it was able to corroborate JA Solar's claims of non-use related to the EBCP but not Risen's (see 2210070039).

Risen argued that it supplied enough information to show it did not benefit from the EBCP. The respondent gave information, including financial, loan and record information, relating to six of its 12 customers, representing around 95% of its sales during the review period. Restani said that was good enough. "Considering that the [period of review] was five years ago, that Commerce changed its policy, and that Risen complied to the best of its ability, the court concludes it is unreasonable for Commerce to require perfection," the opinion said.

“We appreciated the Court’s careful consideration of all the arguments and difficulty for small importers to respond to very burdensome questionnaires when there is no real evidence that they took advantage of the Export Buyer’s Lending Program in China," said Greg Menegaz, counsel for Risen. "We look forward to working with Commerce on a reasonable outcome for this review segment on remand.”

The judge previously also remanded Commerce's use of a 2010 CBRE Asian Marketview Report for Thailand to use as land benchmark data, questioning why the agency didn't use more contemporaneous data provided by JA Solar from Mexico and Brazil. On remand, Commerce used a simple average of Malaysian land values from the Malaysian Investment Development Authority Cost of Doing Business Report and the Thai data.

Restani again sent back the agency's use of the Thai data. "Because the Malaysian data is useable and the Thai appears to be defective, at this late stage, Commerce must provide a compelling reason for its continued use of the stale 2010 CBRE report or otherwise use the Malaysian data only," the opinion said. The judge ruled that Commerce failed to provide sufficient reasons to continue using the "stale data from Thailand" when the Malaysian data exists.

The court also again sent back Commerce's use of Descartes data in setting the price of ocean freight. Restani previously remanded the issue after pointing out flaws in the Descartes data, which included limited samples. The judge said that if Commerce decided to continue using the Descartes data, it should average it with data from Xeneta on the U.S.-to-China routes instead of using it in a simple average with the Xeneta data. On remand, the agency excluded the double counting of inland freight by dropping that data and averaging the Descartes route values with the Xeneta values for shipments from the U.S.

Restani ruled that Commerce did not comply with the court's previous remand. The agency said that it could not find that the tariff and freight forwarder codes in the Descartes data indicate a shipment method an importer would be unlikely to use. "The court’s concern was not about whether this was a shipping method a Chinese company would use, but instead about whether the Descartes data was a high-cost, low-quantity dataset that improperly ballooned the benchmark when averaging," the opinion said. "Commerce did not fully consider the potential impact that a small sample size could have when affecting the comparability of the Descartes and Xeneta datasets."

(Risen Energy Co. v. United States, Slip Op. 23-48, CIT Consol. # 20-03912, dated 04/11/23; Judge: Jane Restani; Attorneys: Gregory Menegaz of deKieffer & Horgan for plaintiff Risen; Sarah Wyss of Mowry & Grimson for consolidated plaintiffs led by Jingao Solar; Craig Lewis of Hogan Lovells for plaintiff-intervenor Shanghai BYD Co.; Jonathan Freed of Trade Pacific for plaintiff-intervenor Trina Solar Co.; Joshua Kurland for defendant U.S. government)