DOJ Defends Commerce's Treatment of Chinese Exporter After Errors in CVD Review

The Commerce Department correctly followed a Court of International Trade remand order when it declined to use a mistakenly chosen respondent's individually calculated rate in its calculation of the non-selected respondents rate, instead basing the non-selected rate on the individual rate for a single mandatory respondent, DOJ said in its May 31 remand comments at the Court of International Trade (Jiangsu Senmao Bamboo and Wood Industry v. U.S., CIT # 20-03885).

As a mandatory respondent in the 2017 countervailing duty review on multilayered wood flooring from China, Jiangsu Guyu had been picked based on faulty data. When Commerce discovered its mistake in a first remand proceeding, it determined no longer to consider Jiangsu Guyu a mandatory respondent and to remove the company's rate from its calculation of the non-selected rate (see 2302150029).

Given the reversal on remand, Commerce also correctly decided not to include Jiangsu Guyu's rate in the non-selected company rate as such a move would have been inconsistent with the first remand order, DOJ said. The company was only individually investigated because it was mistakenly thought to be one of the largest exporters of and representative of the industry. In the first remand order, the court said that the respondents could not be treated as representative of the industry and that Commerce could not rely upon them to calculate the rate for non-examined companies. Commerce "reasonably viewed this language as a clear instruction from the Court not to include any such rate in the calculation of the all-others rate," DOJ said.

On the other hand, Commerce also correctly continued to assign respondent Jiangsu Guyu its individually calculated rate, despite arguments that after the mistakes were discovered it should have been assigned the non-selected rate. The department reasonably determined that, because Jiangsu Guyu had already been "fully investigated" during the review, it should treat it as an individually investigated exporter, despite the department’s determination on remand not to treat it as a mandatory respondent. Given the "statutory preference for individual rates," there was no reason for Commerce to use the all-others rate on Jiangsu Guyu when its individual rate was already available, DOJ said.

Lead plaintiff and exporter Jiangsu Senmao Bamboo and Wood Industry Co. had claimed that the agency should have replaced Jiangsu Guyu with itself, citing the U.S. Court of Appeals for the Federal Circuit's decision in YC Rubber v. U.S. wherein the Federal Circuit found Commerce couldn't pick a single mandatory respondent and base its non-selected rate on only that single rate (see 2208290026). The agency correctly found that there are exceptions to the rule that it must always choose multiple respondents, DOJ said. If there were no exceptions, "Commerce could be endlessly obliged to review period-specific information for additional companies well beyond the original review," DOJ said.

In YC Rubber, Commerce had decided early on in the relevant review to only individually review one respondent. Here, the decision to rely on one respondent came well after the final results were issued, and going back to add another respondent would impose on the agency a "significant administrative burden," DOJ said.