Commerce Drops Partial AFA for Partial Neutral FA, Slashes Roller Bearing Exporter's AD Rate

The Commerce Department swapped its use of partial adverse facts available for partial neutral facts available for antidumping duty respondent Shanghai Tainai Bearing Co. after admitting that it isn't able to determine whether Tainai has "sufficient control over its suppliers to induce their cooperation" (Shanghai Tainai Bearing Co. v. United States, CIT # 22-00038).

In remand results to the Court of International Trade on Jan. 12, Commerce used Tainai's allocation methodology for its direct input materials factors of production. The agency also said it continues to cap Section 301-related revenue when the amount of the duties were reported separately on invoices issued to Tainai's customers.

The result dropped the dumping rate for Tainai from 538.79% to 76.58% in the 2019-20 AD review on tapered roller bearings from China.

The trade court remanded the review in September 2023 after finding that Commerce must reconsider whether Tainai could exercise control over suppliers to induce them to comply after the unaffiliated companies failed to submit factors of production information. On remand, Tainai said it asked the suppliers for information but was met with "nothing but rejections." As a result, Commerce said it is unable to show that the exporter had control over its suppliers "sufficient to induce cooperation."

However, the agency noted that it is "troubled by the implications of the Court's opinion," since it is difficult for Commerce to identify substantial evidence of a respondent's control over a supplier since the information which would prove this point would come from the non-cooperative supplier. Despite this concern and concerns over the accuracy of the respondent's information, the agency used Tainai's allocation methodology for its direct input materials factors of production, as it did in the review's preliminary results.

In the review, Tainai also reported additional revenue related to Section 301 duties, which the agency capped "by the amount of the expenses associated with the section 301 duty imposed." The trade court remanded this issue, telling the agency to explain why the revenue is related to profits on the sale of services instead of on the sale of the subject merchandise, asking Commerce to consider whether there are any grounds to exclude the revenue from the price adjustments.

On remand, the agency said it continues to cap the revenue where the amount of the duties was reported separately on invoices issued to Tainai's customers. Commerce also modified its calculations so that no adjustment to constructed export price is made with respect to the Section 301 duties where an additional invoice for Section 301 duties is involved.

Commerce said it "correctly capped the additional tariff charge revenue and continues to apply this methodology in the final redetermination," continuing not to treat Tainai's additional tariff charge revenue as an addition to U.S. price. The agency is "following its normal practice for when the movement-related revenue exceeds expenses by treating such movement-related revenue as an offset to the corresponding expense rather than as an addition to U.S. price," the remand results said.