US Tile Makers Challenge Commerce's Cross-Ownership Analyses in CVD Investigation
The Commerce Department's failure to investigate and attribute subsidies received by respondent Antiqa Minerals' cross-owned affiliates and their suppliers in a countervailing duty investigation was unlawful, petitioner The Coalition for Fair Trade in Ceramic Tile argued in an Aug. 15 complaint at the Court of International Trade. Challenging the CVD investigation on ceramic tile from India, the coalition said Commerce's cross-ownership analysis of Antiqa was unsupported by substantial evidence (The Coalition for Fair Trade in Ceramic Tile v. United States, CIT # 25-00152).
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In the investigation, Antiqa identified the following six companies as affiliated and cross-owned companies involved in the production of subject tile: Antiek Vitrified, Antiqa Ceramic, Shivam Enterprises, Antique Non Woven, Epsilon Tile and Antique Marbonite. The agency found that Antiqa, Antiek Vitrified, Antiqa Ceramic, Antique Non Woven and Shivam "share common ownership because members of one family hold substantial ownership interests and board of director positions in the five companies."
Nevertheless, the agency only preliminarily said that Antiek Vitrified, Antiqa Ceramic and Antique Non Woven are cross-owned with Antiqa.
The other respondent, Win-Tel Ceramics, reported that it has four affiliated companies: Bhabha Exports, Brilliant Pinewood Pallets, Winart Industries and Theos Tiles. The respondent also said it was supplied subject tile by an unaffiliated producer, Neelson Porselano. Commerce preliminarily said Win-Tel and Theos share common ownership, and the agency decided to "attribute to Win-Tel subsidies received by Neelson, an unaffiliated producer, for the sales of subject merchandise from Neelson to Win-Tel."
However, the agency preliminarily decided not to attribute subsidies received by Win-Tel's other affiliates. In the final determination, Commerce assigned a 3.45% rate for Antiqa, a 3.06% rate for Win-Tel and a 3.18% CVD rate for the non-individually investigated respondents.
Taking the proceeding to CIT, the coalition noted that Commerce's regulations "make clear that the relationships captured by the cross-ownership definition include those where the interests of two companies have merged to such a degree that one company can use or direct the individual subsidy benefits of the other company in essentially the same way it can use its own subsidy benefits."
As a result of this definition, Commerce erred in not including Shivam in Antiqa's cross-ownership analysis and failing to investigate subsidies received by Antiqa's cross-owned affiliates, the complaint said.
The agency similarly erred in its "cross-ownership analysis, factual findings, and legal conclusions of Win-Tel and Neelson," the brief said. The coalition said Commerce failed to "properly investigate" Neelson and attribute the company's subsidies to Win-Tel. In fact, the agency should have used adverse facts available against Win-Tel for failing to report complete information regarding Neelson, the petitioner argued.
The coalition also challenged Commerce's benchmark for the state government of Gujarat's provision of subsidized gas program.