Recent CAFC Decision Setting Up Bright-Line PMS Rules Favors Plaintiffs, Biodiesel Exporters Say
A recent U.S. Court of Appeals for the Federal Circuit ruling is "bears directly on, and fully supports" plaintiffs Wilmar Trading's, Wilmar Bioenergi Indonesia's and Wilmar Oleo North America's arguments in an antidumping duty case over whether a particular market situation exists, the plaintiffs said in a March 21 notice of supplemental authority at the Court of International Trade. The opinion, Nexteel Co. v. U.S., set up a bright line rule over how Commerce can use its PMS authority that cuts against the PMS determination made by Commerce in the antidumping duty matter contested by the plaintiffs, the notice said (Wilmar Trading PTE v. United States, CIT Consol. #18-00121).
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In Nexteel, the Federal Circuit said that when finding a PMS, Commerce must find that the cost incurred to make the subject merchandise doesn't accurately reflect the cost of production in the ordinary course of trade and that the circumstances around the PMS finding are specific to producers of the subject merchandise during the investigation period (see 2203110044). A global phenomenon alone, such as the overcapacity of Chinese steel, would not amount to a deviation of the ordinary course of trade.
In the antidumping duty matter contested by the plaintiffs, Commerce disregarded Wilmar's home market sales and nearly all of its reported costs due to a PMS in Indonesia. The agency said the PMS existed based on a Public Service Obligation program that requires biodiesel producers to sell a certain amount of biodiesel in Indonesia at a market-set price. Commerce also found a PMS for Wilmar's crude palm oil costs based on the Indonesian government's export tax and export levy on CPO, which lowers its cost.
"The Federal Circuit stated that Commerce could not rely on mere government intervention -- in the form of subsidization of inputs to the subject merchandise -- as evidence of market distortion without a factual nexus between the finding of subsidization and the cost of the input under review," the plaintiffs said. "... The bright line rules articulated in Nexteel apply with equal force to this appeal and demonstrate that Commerce’s sales-based PMS finding in the Final Determination lacks support in law and fact." The plaintiffs argued this by saying that the mere presence of the government in the market isn't enough to set up a PMS and that Commerce overlooked that a PMS exists only when enough evidence shows that the prices are not based on normal market forces.