Commerce Overvalued 'Minor' FOP to Pick Less Accurate Surrogate, Exporters Claim

The Commerce Department chose the wrong primary surrogate country in its antidumping duty review on aluminum foil from China, multiple exporters argued in a motion for judgment July 29. The department chose Romania, citing minor factors of production and slightly more contemporaneous data, over Malaysia and Bulgaria, which were more accurate, they claimed (Jiangsu Dingsheng New Materials Joint-Stock Co. v. U.S., CIT # 23-00264).

The exporters, including mandatory respondent Jiangsu Dingsheng New Materials -- which received a 32.81% AD rate -- filed their complaint in January (see 2401090038). In the complaint and the subsequent motion, they argued that Malaysia or Bulgaria were more accurate surrogates because the Romanian financial data Commerce used, which came from Romanian exporter Alro, was less specific, potentially being distorted by countervailable subsidies and missing an auditor’s report.

Commerce unlawfully found that Alro was not receiving a countervailable subsidy, they said.

Alro, they said, “is on a shortlist of companies which received Romanian government grants under the indirect Emissions Trading Scheme (‘ETS’) program funded by the European Union,” which Commerce has repeatedly countervailed in the past, they argued.

Alro’s data also is less disaggregated, and is missing an auditor’s report, they said.

And the Romanian exporter focuses more on aluminum processing than production, the exporters argued. It also sells a wider variety of aluminum products than the specific merchandise under review. Alro, they said, was, “in the true sense, a vertically integrated producer of aluminum products (but not foil),” so its “production experience” was “vastly different” than Dingsheng’s.

On the other hand, Bulgaria’s and Malaysia’s data came from actual aluminum foil producers, it said.

The reasons Commerce rejected Bulgaria and Malaysia as surrogates, meanwhile, are unsupportable, the plaintiffs said. Commerce emphasized several “minor” factors of production, labor and domestic insurance, over overall accuracy in choosing a surrogate country, they said. And it was wrong to find “Dingsheng’s arguments unpersuasive concerning labor and domestic insurance being minor production elements,” they claimed.

Domestic insurance and labor are minor inputs, they said, citing redacted figures.

The department also “misconstrues” its own regulations, they said. Commerce found that “pursuant to 19 CFR § 351.408(c)(2), Commerce has a regulatory preference for valuing all FOPs in a single surrogate country”; but this doesn’t mean the department must limit its choice of a surrogate for a country that offers such data for all factors of production, it said.