539 F.Supp.3d 1316
Ct. Int'l Trade2021Background
- Commerce conducted a 2017 countervailing-duty administrative review of passenger vehicle and light truck tires from the PRC; it selected Cooper (Kunshan) Tire and Shandong Longyue as mandatory respondents.
- Commerce investigated alleged use of the Export Buyer's Credit Program (EBCP) administered by the China Ex-Im Bank; initial responses from the GOC and respondents claimed non-use.
- Commerce asked for (a) internal 2013 EBCP revisions (including whether a USD $2 million threshold was eliminated) and (b) a list of partner/correspondent banks used to disburse credits; the GOC refused to produce the 2013 internal rules and declined to identify partner banks, supplying screenshots and the 2000 Administrative Measures instead.
- Citing the GOC's refusal, Commerce applied adverse facts available (AFA) and concluded Cooper Tire and Longyue used and benefited from the EBCP, assigning a 4.99% ad valorem rate.
- Cooper Tire challenged that the AFA finding lacked substantial evidence and that Commerce failed to (1) define the record gaps adequately with respect to the threshold and partner banks, (2) explain why the withheld threshold material was critical to verification, and (3) explain why Cooper Tire’s own non-use statements were unverifiable.
- The Court remanded: it found Commerce adequately identified missing information and adequately explained why partner-bank data was necessary, but remanded for Commerce to justify (a) why threshold information was necessary for verification, and (b) why Cooper Tire’s on-the-record non-use statements were unverifiable, and to describe verification methodology and feasibility of obtaining missing material.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce permissibly applied AFA based on GOC non-cooperation to find respondent use of the EBCP | AFA is unsupported because Cooper Tire and the GOC (via screenshots and certifications) showed non-use; Commerce ignored adequate on‑record evidence | GOC withheld critical internal bank materials and partner‑bank identities; AFA was warranted because GOC did not act to the best of its ability | Court: Commerce identified record gaps and permissibly applied AFA in principle, but remand required for further explanation on certain points |
| Whether Commerce explained why partner/correspondent bank identities were necessary to verify non‑use | Not necessary because Commerce could have relied on China Ex‑Im Bank system screenshots or other on‑record evidence | Partner banks may appear in company records instead of ‘‘Ex‑Im Bank’’ name; without partner names verification would be futile | Held: Commerce reasonably explained partner‑bank importance; explanation adequate |
| Whether Commerce explained why information about the alleged USD $2 million threshold (2013 revisions) was necessary to verify non‑use | Threshold is irrelevant; Commerce has verified non‑use historically without relying on such a threshold | Threshold narrows universe of contracts for feasible verification; without it Commerce cannot target records given resource limits | Held: Commerce did not adequately explain in its decision why the threshold information was critical; remand to supply that rationale (post‑hoc claims at oral argument insufficient) |
| Whether Commerce explained why Cooper Tire's own certified non‑use responses were unverifiable and insufficient to establish non‑use | Cooper Tire's sworn questionnaire responses and customer lists suffice; Commerce should have analyzed and accepted them absent government cooperation | Record non‑use evidence is scant and unverifiable without bank materials; Commerce must explain verification steps and why respondent statements are insufficient | Held: Commerce failed to analyze or explain why Cooper Tire's on‑record statements were unverifiable; remand required with step‑by‑step verification methodology and assessment of relying on respondent/customer information |
Key Cases Cited
- Consol. Edison Co. v. NLRB, 305 U.S. 197 (defining substantial evidence standard)
- INS v. Elias-Zacarias, 502 U.S. 478 (deference to agency in fact‑intensive determinations)
- Consolo v. Fed. Mar. Comm'n, 383 U.S. 607 (administrative findings may be sustained despite conflicting inferences)
- NMB Sing. Ltd. v. United States, 557 F.3d 1316 (agency must explain its reasoning so path of decision is discernable)
- Nan Ya Plastics Corp. v. United States, 810 F.3d 1333 (burden to create adequate record lies with parties)
- Guizhou Tyre Co. v. United States, 523 F. Supp. 3d 1312 (CIT) (standards for applying AFA when GOC withholds EBCP information)
- RZBC Grp. Shareholding Co. v. United States, 222 F. Supp. 3d 1196 (CIT) (screenshots inadequate substitute for database access; government non‑cooperation can justify AFA)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (agency action must be upheld on the basis articulated in its decision)