CIT Ruling on de Facto Specificity Finding Instructive, Canadian Exporter Tells CAFC

A September Court of International Trade decision is instructive in how to consider the Commerce Department's methodology for assessing de facto specificity regarding Quebec's On-The-Job-Training tax credit in a countervailing duty proceeding, exporter Marmen Energy Co. told the U.S. Court of Appeals for the Federal Circuit (Government of Quebec v. U.S., Fed. Cir. # 22-1807).

Filing a notice of supplemental authority Dec. 12, Marmen said that in Mosaic Co. v. U.S. the trade court found Commerce's method unlawful. In the case, Commerce compared the number of corporate recipients of a tax penalty relief measure with the total number of corporate taxpayers in Morocco, ultimately finding the resulting percentage was "limited" and thus de facto specific.

In Mosaic, CIT said the numerator and denominator in the calculation were "not logically comparable," making the percentage "essentially meaningless," Marmen noted (see 2309150066). The court said in Mosiaic that Commerce should have "compared the actual recipients to the universe of taxpayers actually eligible to use the measure -- those that had incurred a penalty eligible for mitigation," Marmen said.

Marmen argued that Commerce made this same error in the CVD investigation on wind towers from Canada regarding the Quebec tax measure. The exporter said the trade court's ruling in its case regarding the specificity analysis "stands in sharp contrast to Mosaic's thorough statutory interpretation analysis," the brief said.

In response, the petitioner, the Wind Tower Trade Coalition, said that the opinion is "not a proper supplemental authority" since it is not a "pertinent and significant" ruling. The decision is nonbinding and "does not involve any of the Canadian subsidy programs at issue in this case" and has "distinguishable facts," the letter said.