No Use of an AD Respondent's Third-Country Sales to Value Another's CV Profit, Hyundai Tells CIT
The Commerce Department illegally used one antidumping mandatory respondent's third-country sales to calculate another mandatory respondent's constructed value profit, selling expenses and constructed export price profit, mandatory respondent Hyundai Steel Co. and non-selected respondent AJU Besteel Co. argued in a pair of complaints at the Court of International Trade (Hyundai Steel Co. v. United States, CIT #22-00138) (AJU Besteel Co. v. United States, CIT #22-00139).
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The cases concern the 2019-2020 administrative review of the antidumping duty order on oil country tubular goods from South Korea in which Hyundai Steel and SeAH Steel Corp. were tapped as mandatory respondents. In the review, Commerce said that since there was no viable comparison market for Hyundai Steel, it could use "any reasonable method" to find the respondent's CV profit, selling expenses and CEP profit. The agency ended up using SeAH's third-country sales to Kuwait to do this.
Hyundai Steel and AJU took issue with this, though, filing their cases at CIT. Hyundai Steel argued that Commerce could not use these sales to calculate CV profit and selling expenses since Hyundai Steel itself has no means to review the underlying data to check out the accuracy of these sales since it can't access SeAH's business proprietary information. Further, the respondent said that Commerce failed to apply the mandated CV "profit cap" as required by the law -- an especially important point since SeAH's third-country profit ratio greatly outpaced other record sources -- and that SeAH's third-country sales were not representative for calculating CV profit and selling expenses for Hyundai Steel.
As for the use of SeAH's Kuwait sales to calculate Hyundai Steel's CEP profit, the respondent argued that the source does not comply with the legal requirement to reflect the "total profit earned by" Hyundai Steel and its U.S. affiliate over the sale of the same goods for which the companies' total expenses were found. Hyundai Steel also said that, as was the case for the CV profit and selling expenses, the record had other alternative sources that aligned with the statute.
"The information itself suffered from critical flaws that rendered the source unreasonable and unsuitable for use in calculating Hyundai Steel’s weighted-average dumping margin; and more representative, reasonable, and non-distortive sources existed on the record," Hyundai Steel said. "Commerce’s use of SeAH’s proprietary third-country sales data erroneously and unlawfully overstated the CV profit and selling expenses and, in turn, Hyundai Steel’s overall weighted-average dumping margin."