AD Petitioner Says Commerce Misinterpreted Statute When Using AD Respondent's Costs

Antidumping duty petitioner Wind Tower Trade Coalition argued on Sept. 11 that the Commerce Department unlawfully interpreted statutory language on whether exporter Dongkuk S&C's records reasonably reflected the costs associated with the production and sale of subject goods (Wind Tower Trade Coalition v. United States, CIT # 24-00070).

The petitioner said the statute at issue, 19 U.S.C. Section 1677b(f)(1)(A), and precedent from the U.S. Court of Appeals for the Federal Circuit "limit the use of an exporter's reported costs to circumstances where those costs reflect the physical characteristics of the subject merchandise." The statute says costs shall normally be based on the exporter's records if those records "reasonably reflect the costs associated with the production and sale of the merchandise."

The coalition argued that the use of the term "if" conditions any use of the exporter's records on those records reflecting costs linked with the production and sale of the goods. "If that condition is not met, then the rule is not triggered -- and the costs should normally not be calculated based on the exporter's records," the brief said.

The petitioner said that, in the 2021-22 antidumping duty review on utility scale wind towers from South Korea, Commerce used Dongkuk's records "even though those costs are unrelated to the physical characteristics of the wind towers." The respondent concedes its conversion costs are "akin to fixed costs that are not impacted by the product characteristics of the produced merchandise," the petitioner said.

The coalition also argued that Commerce failed to "articulate a rational connection between the cost impact of international components" on control numbers and the decision to accept Dongkuk's conversion costs "without modification."