Commerce Sticks With AFA Regarding Use of China's EBCP

The Commerce Department stuck by its decision to apply to countervailing duty respondent The Ancientree Cabinet Co. adverse facts available related to its alleged receipt of benefits under China's Export Buyer's Credit Program. In Dec. 6 remand results to the Court of International Trade, Commerce said it tried to verify Ancientree's submissions regarding its customers' non-use of the EBCP but was unable to verify key information regarding non-use, leading to the continued AFA rate for the exporter (Dalian Meisen Woodworking Co. v. United States, CIT # 20-00110).

The trade court previously sent back the use of AFA after Commerce said Ancientree only submitted loan information for most but not all of its customers, finding that perfection is not required in verifying an exporter's non-use of the EBCP (see 2305030063). On remand, the agency said it took another stab at verifying non-use of the EBCP for Ancientree but still came up empty, noting that it cannot verify non-use by only looking at a part of a respondent's customers since this would give the company a chance to evade Commerce's scrutiny by providing responses only from customers that haven't used the EBCP.

Among Ancientree's 27 U.S. customers, 12 of them gave no response to Commerce's EBCP questionnaire when the agency reopened the record. Two of the remaining 15 "nominally provided information," though the submissions were "plainly unresponsive and did not provide any of the requested data relating to the customers' [period of investigation] financing." Three more of the customers "would not agree to verification," while an additional two customers were unable to be verified given their refusal to either provide documents or allow further inspection when Commerce officials were actually at their facilities.

Commerce said that after "accounting for [these] difficulties," the agency was unable to verify non-use for over 70% of Ancientree's customers. Admitting that no actual use of the program for the remaining eight customers was found, these eight accounted for "far less than Ancientree's claim of 'approximately 90 [percent] of POI sales,'" the remand said.

"Given that a clear majority of the customers that provided certifications of non-use in this proceeding declined, or otherwise were unable, to support such certifications with verifiable information, we do not find that this level of completeness is sufficient to overcome the [Government of China's] non-cooperation, and to permit a finding of non-use here," the brief said.

The agency emphasized in its remand that it's not hitting Ancientree with AFA due to its customers' failure to cooperate but instead due to the company's failure to provide complete information to "fill the gaps" left by the Chinese government's failure to cooperate. Submitting comments on the remand, Ancientree said that Commerce's approach was "far from 'a practical solution to verify the non-use,'" as mandated by the court.