Commerce Didn't Need to Select Mandatory Respondent for Circumvention Inquiry, US Says

The Commerce Department was right to consider the assembly of hardwood plywood in Vietnam “minor and insignificant” when it reached an affirmative circumvention ruling for 20 Vietnamese exporters, the U.S. said July 2 in response to importers’ and exporters’ multiple motions for judgment (see 2404020054) and 2402020054) (Shelter Forest International Acquisition v. U.S., CIT Consol. # 23-00144).

However, “without confessing error,” the government asked for a partial remand to reconsider the affirmative circumvention findings for exporters An An Plywood Joint Stock Company and Greatwood Hung Yen Joint Stock Company.

Plaintiffs led by importer Shelter Forest International Acquisition Inc. argued before the Court of International Trade that the department’s circumvention inquiry had been procedurally flawed: Fact-finding had been conducted via only “about six pages of questions and a few excel charts over eight months,” they said, and no mandatory respondent had ever been named. Instead, the department used “hypothetical” data that the petitioner had submitted for the original investigation on hardwood plywood from China, they alleged.

Responding first to the claim that no respondent had been selected for the circumvention inquiry, the U.S. said that the governing statute “does not specify how Commerce should identify companies for examination” in such investigations.

When it requested the circumvention ruling, petitioner Coalition for Fair Trade in Hardwood Plywood alleged that “a country-wide finding of circumvention should apply to all exports of Chinese-origin hardwood plywood assembled in Vietnam,” the government said. Therefore, Commerce “identified the universe of potential respondents based on information submitted by the Coalition, publicly-available information, and entries of appearances submitted by interested parties,” and also relied on CBP entry data, it said.

It issued questionnaires to Vietnamese hardwood plywood producers and exporters and received 51 back, including a few that had been unsolicited, the government said. However, it said eight companies also failed to respond.

After none of those responses came from companies that reported producing hardwood plywood under the process Commerce indicated it was examining in its initiation notice, the department “did not select any individual respondents for further examination,” it said. Commerce also placed “additional relevant documents” on the record, including some from “an earlier, related scope proceeding,” it said. Both these decisions were within the bounds of its discretion, it claimed.

The department’s data collection was adequate, it said. “Commerce issued multiple questionnaires to the respondents, seeking information regarding companies’ U.S. sales of Vietnamese plywood with Chinese inputs, imports of Chinese plywood inputs, and affiliations with Chinese producers and/or exporters,” the government claimed.

The plaintiffs argued that these questionnaires hadn’t provided enough information, but the department didn’t have to outline statutory criteria in them, it noted. All they needed to contain was enough to get “the information [Commerce] needed to make a determination,” it said.

“Furthermore, if the interested parties had concerns regarding the sufficiency of Commerce’s three questionnaires, they had ample opportunity to submit comments detailing such concerns and ask for clarification on the nature of Commerce’s requests or how they related to the statutory requirements; no such comments were filed prior to the preliminary determination and the closing of the record,” it said.

Unlike when the department decides to apply adverse facts available, no notification of deficiency needed to be sent to respondents, it said, as “plaintiffs contest the adequacy of the questionnaires, not the responses.” Plus, Commerce then issued two further questionnaires, which in itself provided notice, it said.

The department also reasonably rejected “untimely” new factual information from several parties, it said, as that new information “did not constitute rebuttal information pursuant to” the relevant statute. And because no new information was included in the investigation’s preliminary determination, Commerce hadn’t needed to issue further questionnaires -- nor would it “have been practicable to issue 22 company-specific third (or in some cases fourth or fifth) supplemental questionnaires,” it said.

The government also defended the department’s “certification program,” implemented “to allow cooperating parties to certify that their merchandise was not circumventing orders.” This was in line with the department’s past practices and needed to allow it to fulfill its role of preventing evasion, it said. And Commerce “reasonably determined that removing certain non-inquiry merchandise from the certification requirement would undermine the effectiveness of its determinations because there would be no requirement for exporters or importers of such merchandise to gather and maintain supporting documentation,” it said.