Korean Steel Exporter Says Commerce Misinterpreting CAFC Ruling, Supports Remand Results

Plaintiffs in a case regarding the countervailability of three debt-to-equity swaps filed a brief Oct. 7 in support of the Commerce Department’s reluctant reversal on remand (see 2407030073). The department found those swaps weren't countervailable, because it hadn't countervailed them in three prior reviews either (KG Dongbu Steel Co. v. United States, CIT # 22-00047).

The Court of International Trade ruled in April that Commerce couldn’t change course on its countervailability decisions “absent new information” or any sort of reasonable explanation (see 2404040043).

In turn, after Commerce reversed its countervailability determination on remand, petitioner Nucor Steel argued that CIT’s decision unduly limited the department’s authority by forcing it “to perpetuate determinations that it no longer believes are consistent with its own regulatory standards” (see 2409130024).

But this wasn’t what was happening, the plaintiffs, led by exporter KG Dongbu Steel, said in their Oct. 7 brief. The department may still reconsider its decisions, Dongbu said; it just has to provide a reasonable explanation “for treating similar situations differently.” Because CIT found Commerce hadn’t provided such an explanation, the trade court correctly ruled that the change had been arbitrary, the exporter said.

It also pushed back against “the basis for Commerce’s” respectful protest in the remand results in which it reversed course. The department argued that the U.S. Court of Appeals for the Federal Circuit “has recognized that Commerce can revisit any potential benefits received during the administrative period of review.” But that CAFC decision came in the context of a suspension agreement and asked whether two companies had been the recipients of prohibited subsidies.

The sentence that Commerce drew from that case came out of context, Dongbu said. That sentence, responding to a claim about the impact of illicit subsidies potentially received by a company not party to the suspension agreement, read: “Because we are reviewing compliance with the suspension agreement, to which only Flotado and Plano are parties, the relevant inquiry is whether or not they received any benefits during the period of review, not whether any other member of the Vitro group or FCE received benefits.”

This wasn’t clear in Commerce’s final results on remand because the department hadn’t fully quoted the sentence it used in support of its argument, Dongbu said.

“Dongbu is frankly at a loss for how Commerce thinks this case supports its position that it has authority to reconsider the benefit issue for Dongbu, which had been consistent for the first three reviews, absent new evidence or a reasonable explanation,” it said.

And the “new information” that Nucor argued should have supported the countervailing of the debt-to-equity swaps actually dealt with another issue not before the court, the exporter said. It said Commerce’s new results were clearly based on a review of the record as a whole, meaning that its new explanation wasn’t insufficient.