CIT Says Perfection Not Required When Non-Use Info on China's EBCP Fills Gap Left by Chinese Gov.

The Commerce Department can't use total adverse facts available for countervailing duty respondent The Ancientree Cabinet Co.'s alleged use of China's Export Buyer's Credit Program, the Court of International Trade ruled in a decision released to the public May 3. While Ancientree only submitted loan information for most but not all of its customers, the trade court found perfection is not required to verify non-use of the program.

CIT had instructed Commerce in its initial remand to find a practical solution to the issue of verifying non-use of the EBCP. The agency asked respondents Dalian Meisen Woodworking and Ancientree to submit all loan information for each of its U.S. customers. Meisen found the information irrelevant and did not submit it in the form requested by Commerce, while Ancientree submitted loan information for around 90% of its customers. Judge Richard Eaton upheld the use of adverse facts available on Meisen but sent back the decision on Ancientree.

"It was not reasonable for Commerce to find that Ancientree failed to fill the gap on the record as to non-use because the record contains not only uncontroverted non-use declarations by all of its U.S. customers, but also complete loan information for 90% of Ancientree’s U.S. sales (more than half of its customers)," the opinion said.

In the CVD investigation on wood cabinets and vanities from China, Commerce, as it has in many other CVD proceedings, used AFA to set duties on the respondents for their U.S. customers' supposed use of the EBCP after the Chinese government refused to submit information about the program. After Meisen's and Ancientree's U.S. customers submitted evidence that they didn't use the EBCP, Eaton ruled that Commerce must find an actual solution to verifying non-use (see 2205230033).

In response, Commerce asked the respondents to submit all loans to each U.S. customer that were received during the investigation period via a loan template issued by the agency. In not submitting the information Commerce requested, Meisen said all of its U.S. customers were affiliates with "simple accounting systems," meaning they were unable to provide the level of detail requested. Meisen added that most of the loan information was "irrelevant," since many of the loans were shareholder or vehicle/property financing loans. The respondent also did not use the loan template.

Eaton found that the agency did in fact find a "practical solution to verify" the U.S. customers' non-use declarations, ultimately upholding the use of AFA on Meisen but not on Ancientree. The judge said Meisen "failed to provide the information Commerce asked for in the form and manner requested," but that Ancientree did not. While 90% is not 100%, the judge cited the CIT's recent decision in Risen Energy Co. v. U.S., which also involved the EBCP, to find that perfection is not required where the non-use information essentially eliminates any gap left by China's non-compliance.

"On remand the Department is instructed to attempt to verify Ancientree’s submissions to the extent it finds appropriate, and if that is successful, it should either accept the pro rata adjustment proposed by Ancientree or conclude that the Export Buyer’s Credit Program was not used at all, and recalculate the all-others rate accordingly," the judge said.

(Dalian Meisen Woodworking Co. v. United States, Slip Op. 23-57, CIT # 20-00110, dated 04/20/23; Judge: Richard Eaton; Attorneys: Stephen Brophy of Husch Blackwell for plaintiff Dalian Meisen Woodworking Co.; Alexandra Salzman of deKieffer & Horgan for plaintiff-intervenor The Ancientree Cabinet Co.; Mark Ludwikowski of Clark Hill for plaintiff-intervenor Cabinets to Go; Tara Hogan for defendant U.S. government; and Christopher Cloutier of Schagrin Associates for defendant-intervenor American Kitchen Cabinet Alliance)