Activated Carbon Exporter Takes Surrogate Data Challenges to Federal Circuit

Chinese exporter Carbon Activated Tianjin Co. on Feb. 5 filed its opening brief at the U.S. Court of Appeals for the Federal Circuit, contesting the surrogate data used by the Commerce Department in the agency's 2019-20 review of the antidumping duty order on activated carbon from China (Carbon Activated Tianjin Co. v. United States, Fed. Cir. # 23-2413).

The exporter took issue with the data used to set the financial ratios in the surrogate value calculation, arguing that the decision to base the ratios on data from Malaysian producers Century and Bravo does not satisfy the requirement that Commerce made decisions on the basis of the "best available information." The data from Century and Bravo did not present "disaggregated information, resulting in adoption of distorted overhead and sales, general expense and administrative expenses ('SGA') and distorted financial ratios," the brief said.

Instead, the agency should have used data from Romanian producer Romcarbon since it was disaggregated and gave more accurate financial ratios, Carbon Activated claimed. As part of its decision to reject Romcarbon's data, Commerce said Romania wasn't a significant producer of comparable merchandise. The exporter disagreed.

Commerce also failed to include data from Malaysian tariff schedule subheading 4402.90.9000, which covers "wood-based carbon," instead using import statistics from Malaysian subheading 4402.91.1000, which covers coconut shell imports, Carbon Activated said. The coal the company used to make the activated carbon "has characteristics comparable to both wood and coconut shell-based materials, and data covering both products should have been used because Malaysian data under subheading 4402.90 ... for the period of review was demonstrably unreliable and impeached by domestic price data," the brief said.

The Malaysian data was also "unreliable and aberrant" since it reported higher average unit values for coal tar -- a "basic product" -- than for pitch -- a "value-added product" -- the brief said. Commerce additionally failed to properly value hydrochloric acid by using data for Malaysian subheading 2806.10 since it was "not specific to the input, and contained values for both pure HCI and HCI in aqueous form, the type used in making the imported activated carbon," the brief said. Instead, Brazilian subheading 2806.10.20 data should have been used, Carbon Activated Tianjin said.

The company also challenged the use of subheading 2711.11 data for liquefied natural gas and Maersk data for surrogate freight data. Instead, Commerce should've used subheading 2711.21 data and Descartes data, respectively, Carbon Activated Tianjin argued.

The Court of International Trade sustained Commerce's surrogate value picks in a July 2023 opinion, upholding the surrogate data for five inputs and the ocean freight costs (see 2307240049).