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CAFC Judges Question Whether OK to Start AD Review on Company With No Entries

Federal judges last week questioned the Commerce Department's policies on the initiation of antidumping duty reviews for exporters with no entries of subject merchandise, asking why Commerce could continue an AD review if there were no entries on the record (Canadian Solar International v. United States, Fed. Cir. # 20-2162).

The issue arose after Commerce declined to grant exporter Ningbo Qixin a separate rate in a review on solar cells from China for not having sales during the 2014-15 review period. Ningbo argued that the agency should have rescinded the review rather than deny the separate rate application and treat the company as part of the China-wide entity (see 2204130036). But the U.S. said Ningbo hadn’t yet exhausted its administrative remedies and Commerce didn’t actually determine that Ningbo had no entries.

"My concern is that under those circumstances, it seems to me a determination not to rescind would be completely arbitrary and inappropriate," said Judge Richard Linn, who was presiding over March 10 oral arguments at the U.S. Court of Appeals for the Federal Circuit along with judges Timothy Dyk and Raymond Chen. "It seems to me the regulation, if anything, should say 'shall rescind' if the secretary determines there are no entries."

But DOJ's Joshua Kurland, who was the only attorney present and had been ordered to appear despite both the U.S. and Ningbo waiving their arguments, said regulations governing the initiation of AD reviews is discretionary.

Linn disagreed. "It can't be unbridled discretion," he said. "There has to be some standard, and I don't see a standard built into that regulation or anything surrounding it." Dyk added that he didn't see a way Commerce could continue a review if an exporter had no entries.

Kurland agreed that this type of review would be improper, but he said this was not the case in the present review. He also said that Ningbo’s position, if adopted, "would be a really, really bad thing" and would "open the door up for really bad manipulation.

“If you're a company that doesn't think it dumped a lot during the current period of review or thinks that you have a problem and you'd end up with a country-wide rate, their position would be, 'Well, [we] didn't produce any sales, gotta give me the last rate that I'm very happy with.' Maybe they got a zero in the last review."