Trade Court Upholds Commerce Surrogate Value Selection in Activated Carbon AD Review

The Court of International Trade upheld the Commerce Department's remand results in an antidumping duty review on activated carbon from China. In an April 28 opinion, Judge Mark Barnett said the court was satisfied with the agency's further explanation of its surrogate value selection for coal-based carbonized materials and its selection of financial statements used to calculate surrogate ratios.

The court found Commerce’s selection of Malaysian data for Harmonized System subheading 4402.90.1000 to value carbonized material, known as carbmat, was supported by substantial evidence. "While a reasonable case might also be made for the use of Malaysian HS 4402.90," Commerce has "significant discretion" in choosing the best available information to value factors of production, Barnett said.

Commerce chose between Malaysian subheading 4402.90, the basket category that includes other wood charcoal, and Malaysian subheading 4402.90.1000, a more precise category within the basket, limited to coconut shell charcoal (see 2303020062). The court agreed with Commerce's explanation that chemically activated carbon is generally made using wood-based materials.

On remand, Commerce explained there was “a long, demonstrable history in this proceeding of using coconut-shell carbmat in the production of the subject merchandise, unlike wood carbmat, which has never been used to produce the subject merchandise.” The court noted that while each review is separate and based on an independent record, Commerce is not prevented from acting in accord with prior reviews when the present review does not contain new information warranting a departure from prior practice, Barnett said, finding Commerce supported its surrogate value selection.

CIT also found that Commerce supported its selection of the 2018 Bravo Green financial statements. The trade court had remanded on the grounds that Commerce had failed to consider the potential benefits of using non-Malaysian data or explain why Commerce’s preference to select data from the primary surrogate country outweighed the shortcomings of the Bravo Green data.

The court agreed with Commerce's remand explanation that Romcarbon’s financial statements were not broken down by business units and because activated carbon accounted for only a small percentage of the company's revenue, use of those financial statements would have produced surrogate financial ratios unrelated to the respondents' production, distorting the margin calculations. Barnett agreed with Commerce that the use of Bravo Green data was appropriate, because, like the respondents, Bravo Green manufactures only activated carbon.

(Carbon Activated Tianjin Co., et al. v. U.S., Slip Op. 23-66, CIT # 21-00131, dated 4/28/23; Judge: Mark Barnett; Attorneys: Francis Sailer of Grunfeld Desiderio for plaintiffs Carbon Activated Tianjin, et al.; Antonia Soares for defendant U.S. government; John Herrmann for defendant-intervenors Calgon Carbon Corporation and Cabot Norit Americas)