Commerce Defends 4-Step Hierarchy for Selecting Adverse Inference Rate in CVD Case on Chinese Ribbons

Commerce's use of adverse inferences in selecting a countervailing duty rate in an administrative review on narrow woven ribbons with woven selvedge from China was correct and done using an established Commerce hierarchy, DOJ argued in its April 17 remand comments (Yama Ribbons and Bows v. U.S., CIT # 20-00059).

Yama had challenged its calculated 10.54% subsidy rate selected as the adverse facts available rate. In a December remand order, CIT told Commerce that it needed to reconsider its use of adverse facts available in its calculation, calling the rate "punitive" despite finding that AFA as applied to the Export Buyer’s Credit Program was itself reasonable (see 2212270028).

Consistent with the remand order, Commerce reconsidered the 10.54% rate and found it to be appropriate under its countervailing duty adverse inference hierarchy, DOJ said. Commerce admitted that it "misstated" its hierarchy in the final results. Because the agency had not previously calculated a non-de minimis rate for the EBCP in this proceeding and found no similar program, it relied on the rate determined for a similar program in another countervailing duty proceeding involving China, in accordance with its methodology. That program was the Preferential Lending to the Coated Paper Industry Program, for which Commerce had calculated a 10.54% subsidy rate in a separate proceeding.

Based on its four-step hierarchy, only the final step requires that Commerce use a program available to the industry under examination, DOJ argued, so Commerce was not required to examine whether the Preferential Lending to the Coated Paper Industry Program is available to the woven ribbons industry. It simply looked for a program with "the same type of benefit," DOJ said.

In this case, Commerce found the programs to be similar because the credits functioned as short- or medium-term loans. DOJ said that Yama did not challenge the lawfulness of the hierarchy nor did Commerce improperly depart from it in selecting the rate. Instead, Yama argued only that Commerce’s determination that the two programs were similar was unsupported by evidence, DOJ said.

Yama had argued that Commerce failed to follow the court's directive and said that no evidence showed that Yama could have used a program previously found to benefit the Chinese coated paper industry (see 2303200073).