415 F.Supp.3d 1402
Ct. Int'l Trade2019Background:
- Plaintiffs Guizhou Tyre Co., Guizhou Tyre Import & Export Co., and Xuzhou Xugong Tyres (Xugong) were respondents in a countervailing duty investigation into off-the-road tires from the PRC; Commerce investigated use of the Export Buyer’s Credit Program (EBCP).
- Plaintiffs submitted U.S. customer certifications and declarations stating non-use of the EBCP; the GOC likewise stated customers did not use the Program.
- In its Final Determination Commerce applied adverse facts available (AFA), concluding it could not verify non-use because of an alleged record "gap" related to 2013 internal EBCP rule changes (use of intermediary banks and $2M contract threshold).
- In Guizhou I and Guizhou II the court held Commerce misapplied AFA and faulted Commerce for failing to identify the required missing information or to attempt alternative verification methods.
- On remand Commerce ("under protest") withdrew the AFA finding, accepted the non-use certifications, removed the EBCP rate from respondents’ subsidy calculations, but continued to claim an unsupported record "gap." The court sustains Commerce’s remand results but criticizes Commerce’s persistent, inadequately supported gap assertion.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce properly applied AFA to attribute EBCP benefits | Guizhou: AFA was improper; Commerce failed to show missing material information and non-use certifications suffice | Commerce: 2013 rule changes create a verification gap (intermediary banks); AFA appropriate absent verification | Court: Previously held AFA misapplied; on second remand Commerce withdrew AFA and court sustains that determination |
| Whether the record supports a finding of non-use of EBCP | Non-use certifications and customer statements prove non-use | Initially challenged verifiability; later conceded under protest that record shows no use | Court: Record evidence suffices to find no use; Commerce correctly removed EBCP rate |
| Whether Commerce identified the "gap" required to apply AFA under 19 U.S.C. § 1677e | Dept failed to identify what material info was missing and why it was necessary for verification | Dept asserts need for intermediary bank data due to EBCP revisions | Court: Commerce did not adequately identify or support the alleged gap; adverse inference cannot rest on unsupported assertions |
| Whether the remand redetermination is supported by substantial evidence and complies with court orders | Remand should remove AFA and be based on record non-use evidence | Remand, though made "under protest," complies by finding no use and removing the rate | Court: Sustains Commerce’s remand redetermination as supported by record and consistent with prior orders |
Key Cases Cited
- Guizhou Tyre Co. v. United States, [citation="348 F. Supp. 3d 1261"] (Ct. Int’l Trade 2018) (holding Commerce misapplied AFA for failure to identify missing material information)
- Guizhou Tyre Co. v. United States, [citation="399 F. Supp. 3d 1346"] (Ct. Int’l Trade 2019) (further detailing requirements for Commerce to justify AFA and verification obligations)
- Ad Hoc Shrimp Trade Action Comm. v. United States, [citation="992 F. Supp. 2d 1285"] (Ct. Int’l Trade 2014) (standard for sustaining Commerce determinations on remand)