Commerce Says Germany's KAV Program Not de Facto Specific on Remand at CIT

The Commerce Department said on remand at the Court of International Trade that Germany's Konzessionsabgabenverordnung (KAV) program, which exempts from a fee gas and power pipeline companies that sell electricity below a certain price, isn't de facto specific. The fees would otherwise be passed on to consumers. Commerce made the finding on Sept. 17 after being instructed by the trade court to conduct a de facto specificity analysis (BGH Edelstahl Siegen v. U.S., CIT # 21-00080).

The agency said it lacked information on whether the program qualified for any of the four de facto specificity criteria due to confidentiality laws in Germany. Commerce added that no adverse inference is warranted in the proceeding because the German government "does not and is not allowed to maintain or collect" the required information and the gap on the record isn't a result of an interested party failing to cooperate.

Commerce had said in its third remand results in the countervailing duty investigation on forged steel fluid end blocks from Germany that the KAV program wasn't de jure specific, refusing to countervail the program (see 2402130034). The trade court previously agreed with petitioner Ellwood City Forge that the agency failed to assess the de facto specificity of the program when it had "reasons to believe" the program is de facto specific (see 2405280048).

On remand, the German government provided data on the electricity sales of electricity supply companies, sorted by customer groups. The data showed that special contract customers consumed 294,737 GWh of electricity in 2018 compared with 445,188 GWh consumed by all final customers. As a result, special contract customers -- the entities eligible for the KAV concession fee exemption -- "accounted for over half of Germany’s electricity consumption," the agency said.

However, the data didn't categorize the special contract customers "on an enterprise or industry basis," nor did it provide the number of enterprises or industries that are considered special contract customers, Commerce said.

Due to the nation's trade secret laws, the German government is prohibited from collecting the specific information on the special contract customers. This reality, combined with the fact that the network operators charged by the German government with providing a financial contribution to the special contract customers aren't government authorities, precludes the need for an adverse inference, the remand results said.

The parties "have not cited evidence" that the German government controls the network operators, Commerce said. As a result, the agency continued to not countervail the KAV program.