Activated Carbon Exporter Argues for Preferred Surrogate Values at Federal Circuit

Exporter Carbon Activated Tianjin Co. responded to a host arguments from the U.S. regarding the Commerce Department's surrogate value calculations on a variety of activated carbon inputs as part of the 2019-20 review of the antidumping duty order on activated carbon from China. In a reply brief filed last week at the U.S. Court of Appeals for the Federal Circuit, Carbon Activated said the Court of International Trade erred in sustaining Commerce's surrogate financial ratios and surrogate values for carbonized metal, coal tar, hydrochloric acid, steam and ocean freight (Carbon Activated v. United States, Fed. Cir. # 23-2413).

In the review, Commerce calculated the surrogate financial ratios using data from two Malaysian producers, Century Chemical Works and Bravo Green (see 2403190061). The exporter said Commerce "blinded itself to the universe of 'significant producers' of comparable merchandise," thus "relieving itself of obligations to consider the data quality."

By doing so, the agency skirted its "own policy directives requiring the use of the best available information and the obligation to select financial data which was not sufficiently disaggregated to allow accurate calculation of surrogate financial ratios," the brief said.

The record revealed that eight countries were producers of comparable merchandise, but Commerce only recognized Malaysia as one since it was a "net exporter" of activated carbon, reasoning that the law doesn't define the concept of a surrogate country that's a significant producer of comparable merchandise. However, the agency relied on "Policy Bulletin 04.1," which said that the agency should define "'significant producer' in relation to world production and trade," Carbon Activated noted.

Commerce's policies indicate that the agency must look to the "most accurate financial ratios," and here, "Commerce erred in not considering the data quality of the Romanian financial statements in making its determination of 'significant producer' status," the brief said. "Choosing convenience over quality and accuracy, Commerce sought to shield itself from having to consider the on-record (and superior) financial statements of Romanian producer, Romcarbon, and Russian producer, Joint Stock Company Sorbent."

As a result, Activated Carbon asked the appellate court to send the case back to CIT "with instructions to set aside Commerce’s use of the Century Chemical and Bravo Green financial statements, and direct Commerce to use the financials from Romcarbon, or alternatively, JSC Sorbent."