Commerce Reasonably Said Holding Company Is 'Exporter or Producer' in AD Case, CIT Says

Stanceu also sustained Commerce's decision to collapse Siemens Gamesa with wind tower maker Windar and five of its manufacturing subsidiaries, as well as the agency's calculation of the collapsed entity's constructed export price (CEP).

Commerce issued its second remand results in the case after the court previously rejected the agency's attempt to only use Windar as the sole mandatory respondent and give it a 73% adverse facts available AD rate (see 2310120031). Stanceu also rejected Commerce's attempt to collapse Siemens Gamesa and Windar and use the total AFA rate for the collapsed entity. On remand, the agency conducted a full investigation into the collapsed entity, then used partial AFA due to information it considered misreported to set a 28.55% AD rate.

The petitioner made a host of claims against the remand results, the first of which was that the holding company Siemens Gamesa isn't an "exporter or producer" and thus shouldn't be investigated. To advance the claim, the coalition put forth the common definition of "holding company," which defines the entity as one that's formed to control other companies and confines its role to owning stock and supervising management.

Stanceu found the claim unpersuasive, holding that even if Siemens Gamesa didn't take part in the "day-to-day" production, sales or export decisions of Windar, "it would not necessarily follow that Siemens Gamesa had no involvement in the production, sales, or export of the subject merchandise such that Commerce was required to rescind the investigation of Siemens Gamesa.” The statute broadly defines "exporter or producer," leaving it up to the agency to "decide whether a foreign entity’s activities are sufficient to qualify it as an exporter, producer," the decision said.

The judge held that Commerce "reasonably looked at Siemens Gamesa's relationships with the Windar companies and the record evidence as a whole," noting that the petitioner failed to point to anything in the statute or the agency's regulations "that would have compelled Commerce to accede to the Coalition’s position." And despite "confusing references" to Siemens Gamesa the holding company and Siemens Gamesa Renewable Energy Inc., the holding company's U.S. affiliate, the court said the record doesn't sufficiently compel Commerce to reach the coalition's position.

The agency noted evidence of "intertwined operations" between Siemens Gamesa and Windar and of the fact that Siemens Gamesa "performs an essential role in the production of the wind towers" by designing the towers.

Stanceu then upheld Commerce's decision to collapse Siemens Gamesa and the Windar companies despite the petitioner's claim that collapsing isn't supported. The coalition said Siemens Gamesa doesn't exercise significant leverage over Windar's operations, since it has no facilities that could be retooled for production, nor does it set the prices or oversee day-to-day operations of the companies in which it holds equity.

The court again said that Commerce reasonably disagreed with the petitioner, noting that the agency found a "significant potential for the manipulation of price or production," based on Siemens Gamesa's partial ownership of Windar, the directors and managers shared by both firms and the fact that Windar's subsidiaries are governed by Windar management. While the petitioner argued that Siemens Gamesa would have to "overcome significant barriers" to "establish itself as a producer," such as setting up production facilities and hiring a workforce, the agency's criteria merely address the "significant potential for the manipulation of price or production," the decision said.

The petitioner lastly challenged Commerce's calculation of the collapsed entity's CEP, which the agency developed due to the "absence of individual prices for the resale of subject wind towers to unaffiliated U.S. purchasers." No such prices existed, since the wind towers were only supplied as "components in complete wind turbine projects."

To avoid the use of transfer prices for towers supplied by the collapsed entity, the agency ultimately didn't use the costs associated with the towers as reported by the entity, instead using cost of production data for the individual wind towers sections identified by control number. For the subject wind tower components supplied by the collapsed entity, Commerce said it used a revised cost of production calculated in the "comparison market program." The agency then made "pre-allocation deductions from the gross revenue shown on the wind turbine invoices" for freight and logistics.

The petitioner challenged the use of the "invoice prices for the wind turbine projects to calculate" CEP, arguing that the AD margin was "arbitrarily deflated" due to the use of the total revenue received by Siemens Gamesa for the projects. The coalition said the agency should have used an alternative method, through which the agency could get the "appropriate revenue figures" from "specific line items to the wind turbines" in the collapsed entity's reported information.

The court said the petitioner "does not make out a prima facie claim that the Department’s method of determining constructed export prices for subject wind towers was impermissible." While the petitioner is right that the total revenue found on the invoices included "some revenue realized from the inclusion in the projects of various components and services that were unrelated to the subject wind towers," the invoices were only the "starting point" for Commerce's analysis, the court said. The petitioner failed to show that Commerce's allocation of revenue between subject merchandise and the other elements of the invoices was a "misallocation."

(Siemens Gamesa Renewable Energy v. United States, Slip Op. 25-12, CIT # 21-00449, dated 01/28/25; Judge Timothy Stanceu; Attorneys: Daniel Cannistra of Crowell & Moring for plaintiff Siemens Gamesa Renewable Energy; Stephen Tosini for defendant U.S. government; Alan Price of Wiley Rein for defendant-intervenor Wind Tower Trade Coalition)