CIT OKs Commerce's Use of Indian Company's Surrogate Statements in AD Investigation on Mattresses
The Court of International Trade on Dec. 20 sustained the Commerce Department's use of surrogate financial statements from Emirates Sleep Systems Private Limited in the antidumping duty investigation on mattresses from Vietnam, despite various objections from exporters led by Ashley Furniture Industries. Judge Timothy Reif said Commerce reasonably found the statements to be complete, publicly available and the best information available.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
In addition, Reif rejected Ashley Furniture's challenge to Commerce's use of its differential pricing analysis, used to identify "masked" dumping, for lack of standing. The court said the exporter "did not suffer an injury in fact," since the use of the analysis didn't result in the use of the more restrictive "alternative comparison methodology."
The trade court previously sent back Commerce's use of the Emirates Sleep financial statements to address Ashley Furniture's concerns that the statements weren't complete or publicly available (see 2212080061). Regarding the data's completeness, Reif said Commerce failed to explain its finding that the missing "Annexure 5" from the statements didn't have information related to the company's potential receipt of subsidies that could have distorted the financial ratios calculations.
On remand, Commerce said Annexure 5 couldn't have any evidence of subsidies, since Note 13 in the statement, under which Annexure 5 falls, contains assets and clearly says any loans or advances contained in the annexure must be from the company to government authorities, since loans given are classified as assets and loans received are classified as liabilities. Thus, Annexure 5 relates to "loans or advances given, not received." The court said this explanation "is adequate."
Ashley Furniture pointed to statements from the auditor of the statements that indicated that Emirates Sleep didn't grant any loans or give any guarantees to any companies, firms or other parties. While Commerce didn't address this argument, the court said the auditor's statements are precluded since they weren't raised on remand.
The exporter added that Commerce improperly found that the amounts found in Note 13 have no impact on the financial ratio calculation. Reif was satisfied with the agency's explanation that the amounts in Note 13 relate to loans and advances from Emirates Sleep to other entities and thus have no impact on the financial ratio calculation.
Ashley Furniture also argued that Commerce failed to explain the significance of the size of the amount listed by the company under the "balances with government authorities" field to the financial ratios calculation. Again, Commerce said these figures didn't show evidence of countervailable subsidies and thus were irrelevant to the ratio calculation -- an explanation the court said was reasonable.
Previously, the court questioned the public availability of the statement due to questions on the availability of the subscription database -- the only source of the statements -- in which the statements could be found. On remand, Commerce reopened the record and asked the petitioners how they got the statements. After reviewing their responses, Commerce said all parties could obtain the financial statements and that the petitioners originally erred in noting how they accessed the documents. Reif was satisfied with the explanation.
On remand, Commerce also explained its rejection of financial statements from Sheela Foam Limited, noting evidence that Sheela Foam received funds from programs the agency has found to be countervailable -- namely, a duty drawback scheme and investment subsidy. The court found there to be a "reference" in the Sheela Foam statements to the duty drawback scheme and that Commerce properly weighed the evidence and said the Emirates Sleep statements amount to "better information on the record."
In addition, Reif considered Ashley Furniture's claims that the Emirates Sleep statements weren't contemporaneous with the record or representative of the business of three participants in the AD investigation.
Regarding the contemporaneity of the data, the court said the agency reasonably acknowledged the non-contemporaneity of the financial statements and chose them since they "show a profit, are publicly available and show production of subject merchandise." Also, the statements are only non-contemporaneous by a single fiscal year, the court said.
Ashley Furntiure also argued that Emirates Sleep's business operations are not representative of those of other companies in the investigation, citing disparate revenues between the companies and evidence showing the participating firms don't have retail operations but Emirates Sleep does. Reif said Commerce reasonably stuck to its practice of not considering company size in its analysis of financial statements and that, while the court couldn't conclude whether the allegations regarding retail activities were true, it's ultimately "not accompanied by factual support of any kind."
(Ashley Furniture Industries v. United States, Slip Op. 24-147, CIT # 21-00283, dated 12/20/24, Judge: Timothy Reif; Attorneys: Kristin Mowry of Mowry & Grimson for plaintiffs led by Ashley Furniture; Kara Westercamp for defendant U.S. government; Yohai Baisburd of Cassidy Levy for defendant-intervenors led by Brooklyn Bedding)