308 F. Supp. 3d 1373
Ct. Int'l Trade2018Background
- Commerce conducted a countervailing duty (CVD) investigation of certain off‑the‑road (OTR) tires from Sri Lanka; Camso was the mandatory respondent.
- Commerce preliminarily found countervailable benefits from TCENTP (tax concession) and NBT (National Building Tax); post‑preliminary it assessed three additional programs and found the Guaranteed Price Scheme for Rubber (GPS) countervailable.
- In the final determination Commerce assigned Camso a 2.18% ad valorem CVD rate (TCENTP 0.82%, GPS 0.95%, plus a small rate for other items).
- GSL challenged Commerce’s findings on TCENTP and GPS; Camso challenged only GPS.
- TCENTP reduced Camso’s statutory income tax rate from 28% to 12% for qualifying exporters; Commerce treated that as a financial contribution and an export‑contingent specific subsidy.
- GPS guaranteed an above‑market price to smallholder rubber producers; under some methods buyers (including Camso) paid growers the guaranteed price and were later reimbursed by GSL. Commerce treated those reimbursements to Camso as direct transfers and benefits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TCENTP is a financial contribution and confers a benefit | GSL: TCENTP is sovereign tax policy, not "revenue foregone"; any benefit nullified by a one‑time Super Gains Tax | U.S./Commerce: TCENTP is revenue foregone under 19 U.S.C. §1677(5)(D)(ii); Camso paid less tax than absent program | Held: Commerce's finding sustained — TCENTP is a financial contribution and an export‑contingent specific subsidy; Super Gains Tax did not eliminate the benefit |
| Whether TCENTP is specific (export subsidy) | GSL: TCENTP applied broadly across industries and was not specific to exporters | Commerce: Camso qualified under a statutory subsection contingent on export performance, thus an export subsidy | Held: Sustained — as applied to Camso, TCENTP is contingent on export performance and therefore specific |
| Whether GPS reimbursements to Camso were a financial contribution under §1677(5)(D) | GSL/Camso: Payments were repayment of amounts Camso advanced (i.e., repayment of a debt), not a grant/loan or equity infusion — no financial contribution or benefit | Commerce: Reimbursements were direct transfers of funds to Camso and therefore a financial contribution and benefit | Held: Partly rejected — Court remanded. Commerce erred by treating reimbursements in isolation and failing to recognize they were repayments (no clear financial contribution/benefit as treated). Commerce must remove GPS attributable duties or re‑examine whether GPS otherwise benefitted Camso (including upstream subsidy analysis) |
| Whether Commerce may disregard effect of transfers when determining benefit | GSL/Camso: Even if a transfer occurred, the net effect was not a benefit (Camso effectively provided interest‑free financing to GSL) | Commerce: Statute permits finding subsidy without considering overall effect; transfers increased Camso's revenues by full amount | Held: Court: Distinct concepts — financial contribution and benefit both required; Commerce improperly ignored that reimbursements were repayments and failed to show the payments conferred a benefit to Camso; remand required |
Key Cases Cited
- Delverde, SrL v. United States, 202 F.3d 1360 (Fed. Cir.) (statutory requirement that subsidy finding requires both financial contribution and benefit)
- Corus Staal BV v. Dep't of Commerce, 395 F.3d 1343 (Fed. Cir.) (interpretation of U.S. domestic law over conflicting treaty obligations)
- Micron Tech., Inc. v. U.S., 243 F.3d 1301 (Fed. Cir.) (use of Statement of Administrative Action as interpretive authority)
- Koyo Seiko Co. v. United States, 36 F.3d 1565 (Fed. Cir.) (use of dictionary meaning when statute/regulation silent)
- Changzhou Trina Solar Energy Co. v. United States, 264 F. Supp. 3d 1325 (Ct. Int'l Trade) (Commerce's treatment of grants and inference of benefit from positive account balances)