Chinese Companies Vie for Preferred Surrogate Pick in Activated Carbon AD Row
The Commerce Department should not have tapped Malaysia as the primary surrogate country in an antidumping duty review, plaintiff-appellants, led by Carbon Activated Tianjin Co., said in an April 7 opening brief at the U.S. Court of Appeals for the Federal Circuit. The appellants said that after the Court of International Trade invalidated Commerce's basis for picking Malaysia, the agency "advanced meritless bases" to keep its pick and that Romania figures to be the better choice (Carbon Activated Tianjin Co. Ltd. v. United States, Fed. Cir. #22-1298).
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The case concerns the 11th administrative review of the antidumping duty order on activated carbon from China, covering entries in 2017-18, wherein plaintiff Carbon Activated Tianjin Co. served as a mandatory respondent. In the review, Commerce chose from Malaysia and Romania as potential primary surrogate countries. The agency initially chose Malaysia but used a financial statement from Romanian company Romcarbon to calculate the financial ratios. Commerce held that Romania was not a significant producer of similar merchandise, barring it from serving as the primary surrogate country. In April, Barnett remanded this finding, among other things, to Commerce.
The agency then reversed course, declaring Romania a significant producer and using Romcarbon's financial statements but continuing to rely on Malaysia as the main surrogate (see 2107010079). The plaintiffs argued that Romania should have been the primary surrogate because it was found to be a significant producer of activated carbon (see 2108040078). Instead, the trade court upheld Commerce's finding that the Malaysian data was more specific. Commerce said that it used Malaysia as the primary surrogate because that country gave data on a Harmonized System 10-digit level specific to coconut-shell charcoal -- a key input of activated carbon -- while Romanian data had only a six-digit basket category subheading (see 2110250027).
However, Commerce used Romcarbon's financial statement to find the financial ratios because the statement gave specific breakouts for raw material, labor and energy not found in the Malaysian statements. At the Federal Circuit, the appellants now argue that "despite Commerce's strained suggestions, Romanian data are contemporaneous, and coconut-shell charcoal does not favor Malaysia." Romanian coconut-shell charcoal data is superior since Romanian HTS 4402.90 gives "vastly superior data quality" compared with Malaysian HTS 4402.90.1000, the brief said.
In its opening brief, the appellants also argued that Commerce's valuation of coal tar pitch is unlawful and that the agency unlawfully valued bituminous coal by valuing different types of coal from different countries. On the latter point, the brief said that Commerce "impermissibly speculated as to the heat value to favor one subheading over the other when it was compelled to average values per agency precedent when more than one applies."