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CIT Says Commerce Reasonably Found Germany's KAV Program to Not Be Specific

The Court of International Trade on Dec. 26 upheld the Commerce Department's finding that Germany's Konzessionsabgabenverordnung (KAV) program, which exempts from a fee gas and power pipeline companies that sell electricity below a certain price, isn't de facto specific and so isn't countervailable. Judge Claire Kelly approved Commerce's use of facts otherwise available to find "the recipients were too numerous to render" the program de facto specific.

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Commerce made its ultimate finding in its fourth remand results at the trade court. Initially, in the countervailing duty investigation on forged steel fluid end blocks from Germany, the agency said the program was de jure specific. After Kelly twice rejected this position, Commerce said the program wasn't specific. The trade court then remanded this posture as well, finding that the statute required Commerce to conduct a de facto specificity analysis in light of the information on the record (see 2405280048).

The agency requested information about the program from the German government. Commerce sought what steps the German government took to obtain data from network operators regarding concession fees paid by final consumers and whether government authorities collect any data regarding the implementation of the reduced concession fees.

The German government didn't provide the requested data, explaining that it isn't involved in administering the program and that it "lacks the legal authority to require such information due to trade secret laws" (see 2409180017). The German government submitted a 2018 monitoring report showing "aggregate concession fees paid by industrial customers as well as statistical data related to electricity sales and revenue of electricity supply companies."

Kelly held that, although Commerce didn't collect aggregate data on the program requested by the petitioners, it got information "which indicated that special contract customers consumed more than half of the electricity consumed by all customers." The agency couldn't determine whether any subset of the program's users is a predominant user or gets a disproportionately large amount of the subsidy since the German government's report didn't "categorize special contract customers on an enterprise or industry basis, and did not provide the number of enterprises or industries considered special contract customers," the court noted.

While the petitioners said Commerce failed to cite evidence supporting its finding, it's "reasonably discernible that Commerce" used the information on special contract customers as facts otherwise available, the court held. Kelly said the court can't say this decision "is unreasonable" even if two "inconsistent conclusions may be drawn from the evidence."

Since the German government isn't involved in administering the program and couldn't collect the requested information due to the nation's trade secret laws, "it could not provide evidence regarding whether network operators exercised discretion or favored any enterprise or industry over others," the court said.

(BGH Edelstahl Siegen v. U.S., Slip Op. 24-148, CIT # 21-00080, dated 12/26/24; Judge: Claire Kelly; Attorneys: Marc Montalbine of deKieffer & Horgan for plaintiff BGH Edelstahl Siegen; Kelly Geddes for defendant U.S. government; Thomas Beline of Cassidy Levy for defendant-intervenors led by Ellwood City Forge Co.)