Commerce's Duty Drawback Adjustment Correctly Captured 'Actual Drawback,' AD Respondent Argues

The Court of International Trade should sustain the Commerce Department’s duty drawback calculation in its final remand redetermination for an antidumping duty investigation on common alloy aluminum sheet from Turkey, AD respondent Assan Aluminyum Sanayi ve Ticaret (Assan) said in its July 31 response comments (Assan Aluminyum Sanayi ve Ticaret v. U.S., CIT # 21-00246).

On remand, Commerce dropped the duty neutral methodology and divided the amount of the duties exempted during the investigation period by the total quantity of exports made in order to find a "per-unit duty drawback adjustment" that reasonably reflected the duties actually exempted (see 2305310065), which resulted in a de minimis rate for Assan.

In its comments, Assan objected to arguments from the petitioner, the Aluminum Association Common Alloy Aluminum Sheet Trade Enforcement Working Group, which the respondent said were based on a "fundamental misunderstanding of the per-unit drawback calculation." The calculation includes all imports and exports under the Inward Processing Certificates (IPCs). Petitioner's claim that the closed IPC also included sales made before the period of investigations and exports to non-U.S. destinations is irrelevant because both the numerator and the denominator of the revised drawback calculation "directly relate to the closed IPC," Assan said.

The revisited drawback calculation properly captured the amount of drawback actually received by Assan during the period of investigation, the respondent said. The methodology was not "fundamentally flawed," as the petitioner argued in its remand comments (see 2307050037).

The methodology also conformed to Commerce's practice in other recent cases and does not ignore "longstanding practice" as the petitioner claimed, Assan argued. The court does not have the authority to overturn an adequately explained methodological change that adequately describes the duty drawback methodology used and why it was reasonable for a particular case. The methodology advocated by the petitioners is currently on appeal and should not be treated as a precedent, the company said.

The petitioner also confused the plain language and the purpose of the drawback provision, Assan said. The CIT has "repeatedly recognized" that duty drawback adjustments should be granted "only when there is some kind of connection between the nonpayment of import duties and the exportation of the subject merchandise" to the U.S. The petitioners proffered methodology would sever the “statutory linkage” between the exempted duties under the closed IPC and the products exported to the U.S. under that same IPC, Assan said.

In its own response, DOJ argued that Commerce correctly rejected the alternative methodology, which would have required the agency to trace specific inputs to U.S. exports. That link is not required under the Turkish duty drawback program for a drawback to be granted, the brief said.

The proposed drawback method does not involve tracing, the petitioner added in a separate response. Commerce's use of the term "tracing" is in reference to determining whether a respondent is eligible for a duty drawback adjustment but does not concern the calculation of the adjustment itself, Ticaret said.