On Remand, Commerce Defends AFA and Use of Larger, Less Specific Tier II Benchmark
After the Court of International Trade’s remand of the Commerce Department’s countervailing duty review of Chinese-origin multilayered wood flooring (see 2504030070), the department maintained its decisions to both use a larger, less-specific dataset for calculating Tier II benchmarks over a smaller, more-specific one and to apply adverse facts available for the Chinese government’s refusal to provide government documents showing non-ownership (Baroque Timber Industries (Zhongshan) Co. v. United States, CIT Consol. # 22-00210).
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Exporters led by Baroque Timber Industries are challenging Commerce’s 2019 and 2020 administrative reviews of their products. CIT Judge Timothy Reif remanded both in April.
Reif remanded the 2019 review’s results so that Commerce could further explain its use of averaged UN Comtrade and International Tropical Timber Organization (ITTO) data as plywood input benchmark prices. The exporters argue that the Comtrade data is unrepresentative because it includes some number of sales of grades “A” and “B” plywood, which are more expensive than the “C” and “D” grades purchased by Baroque, without distinguishing sales by grades. Only the ITTO’s data should be used, they claim.
In its remand results, Commerce said that it doesn’t need to ensure its benchmarks are “identical” to subject merchandise. In practice, it does usually use data “reflecting the narrowest category of products encompassing the purchased product,” it acknowledged. But it may choose to use broader datasets to avoid excluding relevant data, it said.
It said it doesn’t have any evidence actually showing how much of the Comtrade data is unrepresentative of Baroque’s inputs.
Baroque is only arguing the data is distortive based on general plywood pricing distinctions by grade and the difference between the UN Comtrade and ITTO data; it hasn’t quantified the claimed distortion, Commerce said.
And the difference between the two datasets “cannot be solely attributed to the grade of the plywood based on the information provided by parties on the record” because the only evidence showing as such offered by the parties is an “affidavit from Chunping Dai, which provides conclusory statements that it is ‘inaccurate’ to benchmark Baroque’s plywood purchases with data that does not distinguish by grade,” the department said.
It said it reasonably chose to use both datasets because that “results in a benchmark that is arguably more comparable.” The ITTO data only offers bi-monthly plywood prices for two countries and doesn’t include eucalyptus plywood, the type Baroque purchases, it said.
Reif also remanded Commerce’s decision to apply AFA to the review’s mandatory respondents for Beijing's refusal to provide government records showing none of the respondents’ high-level employees were members of the Chinese Communist Party.
Beijing said that it couldn’t provide the requested information because “there is no central governmental database to search for the requested information.”
“The [Chinese government] also asserts ‘there is no record evidence suggesting otherwise,’” Commerce said, “and that, as such, ‘the burden is no longer with the GOC to further prove the negative but is with the party making the allegation to present evidences (sic) proving otherwise. There is no such evidence.’”
But the Chinese government could have looked to local government records or Chinese Communist Party records, not just official central government records, Commerce said. It did so in the 2012 review of citric acid from China, for example, the department said.
“For example, the [Chinese government] could have provided screenshots from a national, or sub-national CCP database with the results when searching for each individual owner, member of the board of directors, and senior manager of the input suppliers,” Commerce said.