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DOJ Supports Commerce Remand Determination in Case on Xanthan Gum From China

The Court of International Trade should sustain the Commerce Department's remand results in an antidumping duty case on xanthan gum from China, DOJ argued in its Sept. 12 response at the Court of International Trade. In June, Commerce stuck by its decisions to apply adverse facts available to Meihua, not to rescind its review of Deosen Biochemical, and not to recalculate a separate rate, in spite of a court order to reconsider all three (see 2306280043) (Meihua Group International (Hong Kong) v. U.S., CIT # 22-00069).

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DOJ said Commerce's remand results were supported by substantial evidence and complied with the remand order on all three items. The department "fully" reconsidered its decision to use adverse facts, it said.

There is no absolute requirement on Commerce to permit or require parties to remedy any inaccurate reporting, DOJ said in defending the Commerce AFA decision. The agency said Meihua "intentionally and knowingly submitted an inaccurate U.S. sales database." Commerce found the inaccuracies shortly before issuance of the preliminary results. The U.S. Court of Appeals for the Federal Circuit has held that Commerce is not obliged to give respondents an opportunity to amend information that was intentionally misreported, DOJ said.

In defending Commerce's collapsing analysis, DOJ said it is the agency's practice to presume that a company that was collapsed in a previous review will remain collapsed in successive reviews, DOJ said. Commerce correctly used its collapsing analysis from the 2017-18 administrative review, in which it found that Deosen Biochemical Ltd. and Deosen Biochemical (Ordos) Ltd. were a single entity. Deosen disagreed and argued that Commerce is allowed to collapse entities only as part of its respondent selection.

DOJ argued that the initiation notice clearly stated that whether a company is treated as a single entity is an issue "that affects Commerce’s entire dumping calculation" and even if Deosen thought Commerce’s presumption of single-entity treatment was only for the purposes of respondent selection, it still failed to provide evidence to rebut the presumption that it should have again been collapsed.

Finally, DOJ argued that Commerce adequately responded to arguments concerning separate rate calculation, even though the lack of a changed rate for Meihua meant that the agency wasn't required to reconsider the rate for separate rate respondents. Deosen's arguments that the rates calculated in the review aren't reflective of potential dumping are unconvincing because one of the mandatory respondents was dumping at 154.07%, and "the Federal Circuit has held that, for the purposes of calculating a separate rate, the largest exporters are assumed to be representative of the likelihood of dumping for separate rate companies," DOJ said.