Commerce Just 'Recycling' Justification for Directly Valuing Energy, Coal Exporter Says
After the Commerce Department chose on remand to again directly value antidumping duty review mandatory respondent Neimenggu Fufeng Biotechnologies’ energy costs in an AD administrative review, the exporter said June 20 in response that the department just “recycled” its initial results (Neimenggu Fufeng Biotechnologies Co. v. United States, CIT # 23-00068).
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Court of International Trade Judge Gary Katzmann remanded the review’s results in May, saying that he wasn't sure why the department had chosen to directly value the exporter’s energy costs after years of relying on a surrogate (see 2412160069). He also returned Commerce’s refusal to address Fufeng’s pushback against the Harmonized Tariff Schedule headings selected to value its bituminous coal inputs.
Commerce said that it had been provided better information in this review than in reviews past, allowing it to separate out surrogate Ajinomoto (Malaysia) Berhad’s energy costs from its other general and administrative costs for the first time (see 2505080047). Doing so still preserved 56% of the exporter’s general and administrative costs for use in the review, it claimed, while also letting the department value energy directly using Fufeng’s information.
But the department already explained this in its initial results, Fufeng said. It claimed the only new material in Commerce’s remand results, certain estimates of its costs, were irrelevant to the issue of whether it was reasonable for the department to depart from past practice without being able to actually show its new methodology was more precise -- especially when the separation was being made on the basis of a single “imprecisely-worded sub-line item.”
Commerce even admitted that some energy costs were still “embedded” in the general and administrative costs from Ajinomoto that the department used in the review, it said.
Fufeng also argued that the remand results offered a “threshold rationale” that the exporter’s energy costs had to be valued separately because they were unusually large, energy being of “relative importance” to the manufacturing of xanthan gum. But this wasn’t actually true; rather, Commerce’s calculation was inflated by its reliance on a surrogate value for energy of 0.84 RM/kg, but that value was inflated compared with Fufeng’s actual costs, the exporter claimed.
It also disagreed with Commerce’s continued decision to value its bituminous coal inputs under subheading 2701.12 and not subheading 2701.19. The department claimed that the latter subheading was broader, potentially including non-coking coal, but Fufeng already had offered “unimpeached” record evidence that none of its coal inputs could meet the heat value threshold limit for HTS 2701.12.
“The Remand fails to explain how in the context of purchasing coal solely for energy generation, its coking designation could be more important than its heat value,” it said.
And it claimed the department unlawfully failed to put the exporter’s coal testing certificates, “numbering several hundreds,” on the record. Commerce had called the certificates “unsolicited factual information that should have been” provided earlier, in a supplemental questionnaire response, even though that questionnaire hadn’t asked for the coal’s heat values, the exporter said. Adding those certificates to the record would show that Fufeng’s coal should have been valued under subheading 2701.19, it said. But they aren’t even necessary, it claimed; the heat value of Fufeng’s coal hasn’t been challenged.
“The root cause of the Remand’s erroneous analysis and conclusion is its adoption of a disjunctive analysis rather than the judicially mandated conjunctive ‘side-by-side’ comparative analysis of available data choice,” it argued.