'No Means No' on Question of EBCP Non-Use Verification, Exporter Tells Trade Court
When it comes to the question of whether a countervailing duty respondent's U.S. customers used China's Export Buyer's Credit Program, "'No' means 'no,'" respondent Yama Ribbons and Bows Co. said in a June 3 reply brief at the Court of International Trade. Yama said it fully answered whether this program was used by any of its customers and that should be enough for Commerce to verify non-use (Yama Ribbons and Bows Co., Ltd. v. United States, CIT #21-00402).
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The brief comes in a case over the 2018 administrative review of the CVD order on narrow woven ribbons with woven selvedge from China. In the review, Commerce hit Yama with adverse facts available over its customers' alleged use of the EBCP -- a program whereby China pays U.S. customers to buy China-exported goods -- and the provision of synthetic yarn and caustic soda at less than adequate remuneration. Commerce applied AFA over both of these issues for the Chinese government's failure to provide the agency with requested information.
Commerce, as it has done repeatedly, based its use of AFA on the Chinese government's refusal to provide two pieces of information. The trade court has repeatedly struck down this position.
Yama, in its motion for judgment said that verifying non-use of the EBCP can actually be done "very simply" (see 2202070032). Commerce asks for a sample of U.S. invoices in every review, and, among the 50-60 documents that an exporter will submit with each U.S. sale, is a wire transfer, showing payment from the customer's U.S. bank to the exporter's bank. Yama says that if this wire transfer is instead from the Export-Import Bank of China, Commerce would "immediately know that the payment did not come from the U.S. customer directly." This is all Commerce needs to look at to verify non-use, the plaintiff said. "It is really quite easy to verify the source of payment," the exporter quipped.
In its motion, the U.S. said that it needed the requested information from the Chinese government to verify whether the U.S. customers actually did use the program. "Again, it is arbitrary and capricious for Commerce to single out one program for such 'verification' steps," the brief said. "'No' means 'no.' There is no equivocation here. Both the GOC and Yama fully answered whether this program was utilized by any of Yama’s customers in the [period of review]."
Yama also argued that Commerce "conflates" the meaning of the term "gap," since this term under the statute means a hole in the information needed to find whether a subsidy was used. In the present case, though, Commerce tries "sleight-of-hand" to make the term mean a hole in the verification documents it wants and not the information needed to find if a subsidy was used, the respondent said. "This is nothing more than a 'red herring' and no credence given should be given to this argument," the brief said.