CIT Says Exporter Failed to Offer Alternate Assessment Rate, Didn't Exhaust Remedies

The Court of International Trade on July 30 sustained the Commerce Department's decision on remand to remove exporter Nagase's compensation for payment expense from the company's general and administrative expense ratio. Judge Stephen Vaden also said that Nagase failed to exhaust its administrative remedies pertaining to its challenge to Commerce's assessment rate in the first review of the antidumping duty order on glycine from Japan.

The trade court previously said Commerce didn't accurately consider Nagase's compensation for payment expense as a general and administrative expense. The exporter said the expense stemmed from halted production and disposal of already produced inventory. Vaden said Commerce's explanation didn't "articulate a rational connection between the facts found and the choice made" (see 2304110063).

The judge said the compensation payment wasn't a "regulatory penalty, nor a litigation accrual, nor a fine."

On remand, Commerce said the amount "represents the reimbursement of certain of the consignee’s expenses incurred for the production of non-subject merchandise." As a result, the "cost of compensation for payment expense scan be offset by that continuing line of business" and thus shouldn't be included in the general and administrative expense figure, the agency said. Vaden sustained the move as supported by substantial evidence.

During the remand proceeding, Nagase also challenged the assessment rate, despite not raising the issue in the review. The exporter said that, despite the procedural default, the remand "created a new determination for judicial review." Commerce said the remand was on a "separate issue," making it "inappropriate to reconsider the assessment rate."

Vaden said he's "unconvinced that the remand eliminated the consequences of Nagase’s procedural default." The exporter has "consistently refused to provide either Commerce or this Court with what it believes the 'correct' entered value amount is." Since Nagase filed the "only entered value amount on the record, the record it built does not demonstrate error."

During the review, Commerce asked Nagase to provide the entered value for its glycine exports, to which the company gave a dollar figure for the amount. The agency used that figure to calculate the assessment rate and the additional duties owed by the exporter. Nagase said it gave an "inaccurate amount of the entered value," though it failed to provide any other figure establishing an alternative amount for the entered value.

"Commerce cannot be held responsible for Nagase’s failure to create a perfect record," the judge said.

Vaden added that the company failed to timely raise the issue by only bringing the issue up three weeks after the final results were issued. Even if the company raised the issue during the ministerial error period, "its objection still would have been untimely," since the assessment rate Commerce used in its original decision was the same one it used in the preliminary review.

(Nagase & Co. v. United States, Slip Op. 24-87, CIT # 21-00574, dated 07/30/24; Judge: Stephen Vaden; Attorneys: Neil Ellis of Law Office of Neil Ellis for plaintiff Nagase & Co.; Kelly Geddes for defendant U.S. government; Michelle Li of Thompson Hine for defendant-intervenor Deer Park Glycine)