Fengchi Imp. and Exp. Co., Ltd. of Haicheng City v. United States, 37 I.T.R.D. (BNA) 1221

Background

Commerce initiated a 2010 countervailing-duty (CVD) administrative review of magnesia carbon bricks (MCBs) from the PRC and named Fengchi (exporter and affiliated producer) as a mandatory respondent. Fedmet, a U.S. importer, participated as an interested party.
Commerce placed Customs entry data on the record suggesting Fengchi had entries during the period of review (POR); Commerce issued an initial CVD questionnaire to the Government of China (to be forwarded to Fengchi) requesting sales and export data, including for magnesia alumina carbon bricks (MACBs).
Fengchi repeatedly told Commerce it had no U.S. entries or sales of subject merchandise during the POR and declined to provide the requested MACB sales data; Commerce issued a scope ruling (MACB within the Order) 245 days after review initiation and then requested the MACB information.
Fengchi refused to produce the requested MACB information, citing 19 C.F.R. § 351.225(l)(4) and burden/timeliness objections; Commerce treated the refusal as lack of cooperation and applied total adverse facts available (AFA), assigning a 262.80% rate.
The Court reviews Commerce’s interpretation of the regulation, whether it was practicable to request the MACB data, whether AFA was properly applied, and whether the chosen AFA rate was corroborated and reasonable; the court denies Plaintiffs’ motion and sustains Commerce.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Commerce lawfully requested MACB sales data after scope ruling issued >90 days after review initiation	Commerce: the regulation bars requesting such data (bright-line prohibition) and Commerce’s request was untimely and burdensome	Commerce: regulation is permissive; it may request data where practicable even if scope ruling is after 90 days; it did so here	Court: Commerce’s interpretation reasonable; regulation permissive; request lawful
Whether it was practicable to request MACB data late in the review	Commerce: not practicable given timing and burden	Commerce: it was practicable — questionnaire issued well before preliminary deadline, extensions offered, final opportunity given	Court: practicable; Commerce reasonably requested data and afforded time/extensions
Whether Commerce properly applied AFA for Fengchi’s refusal to provide requested data	Commerce: AFA improper because request itself was unlawful	Commerce: AFA proper because Fengchi failed to act to the best of its ability to comply with a lawful request	Court: AFA appropriate; Fengchi’s refusal constituted lack of cooperation under 19 U.S.C. § 1677e(b)
Whether the 262.80% AFA rate was corroborated and reasonable	Commerce: rate punitive and unrepresentative of Fengchi; improperly relied on partial-AFA-derived rates	Commerce: rate based on secondary sources (rates from investigation and other reviews) and corroborated to the extent practicable given non-cooperation	Court: corroboration satisfied to the extent practicable; selected proxy rate permissible and not unreasonably punitive given lack of company data

Key Cases Cited

Universal Camera Corp. v. NLRB, 340 U.S. 474 (substantial evidence standard for agency factfinding)
Thomas Jefferson Univ. v. Shalala, 512 U.S. 504 (deference to agency interpretation of its own regulation)
Nippon Steel Corp. v. United States, 337 F.3d 1373 (best-of-ability standard for cooperation in trade proceedings)
F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027 (AFA proxy must be a reasonably accurate estimate; deterrent element allowed)
Timken Co. v. United States, 354 F.3d 1334 (balance between accuracy and inducing cooperation in AFA selection)
Gallant Ocean (Thailand) Co. v. United States, 602 F.3d 1319 (AFA proxies must have grounding in commercial reality)
KYD, Inc. v. United States, 607 F.3d 760 (corroboration requires probative value: reliability and relevance)
Essar Steel, Ltd. v. United States, 753 F.3d 1368 (corroboration limits where respondent fails to cooperate)