Commerce Drops EBCP Finding, Maintains CVD Rates for Provision of Soda, Yarn on Remand at CIT

The Commerce Department flipped its position on remand to find that exporter Yama Ribbons and Bows Co. didn't use China's Export Buyer's Credit Program, though it did continue to find that the exporter benefited from the provision of caustic soda and synthetic yarn for less than adequate remuneration (Yama Ribbons and Bows Co. v. United States, CIT # 21-00402).

The result of the remand, ordered by the Court of International Trade in a case on the 2018 review of the countervailing duty order on woven ribbon from China, saw Yama's CVD rate drop to 31.66% after the 10.54% rate for the EBCP was removed. Yama didn't comment on Commerce's draft remand.

In an August opinion, the trade court sent back Commerce's benefit finding for the EBCP, finding that the "record as it exists cannot support an imposition of countervailing duties for the EBCP" (see 2308280034). The agency said that, as a result, it "has no recourse but to find that Yama did not use the EBCP during the POR. Consequently, we do so under respectful protest." The case marks another in a long line where the court has rejected, and Commerce has subsequently dropped. the use of adverse facts available on the EBCP due to the Chinese government's failure to produce more information on the program.

CIT also remanded the case so that Commerce could supplement the record with the new subsidy allegation filed as part of the 2015 review of the CVD order that Commerce relied on in making its specificity decisions for the provision of synthetic yarn and caustic soda for LTAR. The agency did just that, additionally providing Yama a chance to comment on the use of the new subsidy allegation and reconsidering the yarn and soda decisions in their entirety.

Commerce came back to the court and said it continues to find that the programs "conferred countervailable subsidies to Yama" in 2018, often using facts otherwise available given the Chinese government's failure to submit certain information on the programs. For instance, the agency used AFA regarding whether the Chinese government is the predominant provider of synthetic yarn and caustic soda in China and "whether its presence in the market distorts all transaction prices for synthetic yarn and caustic soda."

Commerce asked Beijing the total number of enterprises and production volume for the two inputs, the percentage of domestic consumption made up by domestic production and the total volume and value of the imports during the review period. China said it couldn't provide a list of companies in which it has a majority ownership interest or information about companies in which it has some, but not a majority, interest in. However, the agency said that, based on a prior review, it knows that China does have this information.

Since the Chinese government "failed to cooperate by not acting to the best of its ability to comply with our request for information, we find that an adverse inference is warranted in the application of facts available," the remand results said.

Commerce said the input suppliers are authorities, again basing its findings on AFA. The agency asked the Chinese government for information on the involvement of the Chinese Communist Party in each of the privately owned input suppliers Yama identified. Beijing again said it couldn't comply. However, Yama offered information showing that the programs weren't used by any of its suppliers, all yarn and soda suppliers were privately owned, the suppliers' senior managers didn't hold positions in any level of the Chinese government, and the suppliers' operations are independent from government control.

Commerce said that the fact that the suppliers are privatelybowned companies is not "dispositive" given the potential for Beijing to pull the strings. Despite certifications from senior managers, Yama "failed to provide this information for all of its input suppliers, and it did not provide such information for the individual owners or board members of any of these companies," the remand results added. Given this lack of complete information, AFA was warranted, the brief said.

Lastly addressing the specificity of the findings, Commerce said it asked the Chinese government for a list of industries in China that buy yarn and soda, the amounts bought by the industry in which Yama operates and all other industries, and the classification scheme the government normally uses to define industries. Beijing didn't offer the information, again leading Commerce to use AFA. As a result, the agency used AFA to find that the programs are de facto specific.