German Subsidy Program Not Specific, Steel Exporter Argues in CVD Case Remand

The Commerce Department failed to comply with a Court of International Trade remand order in a countervailing duty case concerning forged steel fluid end blocks from Germany, exporter Edelstahl said in its Sept. 6 remand comments at the Court of International Trade. Edelstahl's comment contested the second remand redetermination by the Commerce Department, which continued to find that Germany's KAV program was de jure specific and could be countervailed (BGH Edelstahl Siegen v. U.S., CIT # 21-00080).

Commerce's remand finding "directly conflicts with the Court’s prior decisions," Edelstahl said. CIT ruled that in order for the KAV program’s criteria to be vertical in application, it would need to "expressly limit" the program to specifically named enterprises or industries, which it does not do, Edelstahl said.

Commerce incorrectly interpreted the statute in its conclusions, Edelstahl said. Commerce's claim that any measure applicable only to a subset of the total economy and not applicable to the total economy is automatically vertical and specific would render the section of the statute on "specific enterprises or industries" irrelevant, Edelstahl said. The exporter argued that any interpretation that would make a statutory clause either “redundant or superfluous is a 'violation of the elementary canon of construction'" and that CIT must "'give effect, if possible, to every clause and word of a statute ... .'"

Any conclusion by Commerce that the KAV program's eligibility limitations made it a specific subsidy runs counter to the Statement of Administrative Action and prior court rulings. The court previously has rejected arguments from Commerce that de jure specificity applies when there is no uniform treatment in the provision of benefits. Edelstahl cited Asemesa v. U.S., in which the court said that a foreign law’s "failure to provide uniform treatment in the distribution of subsidies is not equivalent to its explicit restriction of those benefits to a specific enterprise or industry."

In its remand order, CIT Judge Claire Kelly said that Commerce failed to explain how the criteria for the KAV program were economic in nature and horizontal in application (see 2305090053). In its redetermination, Commerce said that because the German government, through legislation, limited access to the program's relief to a "group" of enterprises, the eligibility criteria are vertical and satisfy the de jure specificity standard laid out in the statute (see 2308070053).