396 F.Supp.3d 1334
Ct. Intl. Trade2019Background
- Commerce investigated antidumping duties on aluminum foil from the PRC and selected Jiangsu Zhongji (Zhongji) as a mandatory respondent. Commerce treated the PRC as a nonmarket economy and used surrogate country data to value factors of production.
- Commerce listed six candidate surrogate countries and parties submitted data mainly for South Africa and Bulgaria; Commerce preliminarily selected South Africa and used South African data (including Hulamin financials) to calculate margins.
- Zhongji challenged Commerce’s choices: primary surrogate country (South Africa vs. Bulgaria), international freight data (Descartes/Maersk vs. proprietary Xeneta), HTS classification for aluminum scrap, VAT adjustment basis, and Commerce’s missed statutory deadline for the preliminary determination.
- In the final determination Commerce: kept South Africa as the primary surrogate, used Descartes (adjusted with Maersk) for freight, valued Zhongji’s scrap under HTS 7602.00, applied its prior VAT methodology, and had published a preliminary determination after the statutory deadline.
- Zhongji sued in CIT. The court affirmed Commerce’s surrogate-country selection, freight data choice, and scrap valuation; found the preliminary-deadline violation non‑dispositive; but granted Commerce’s request for remand to recalculate the VAT adjustment using the correct sale price.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of primary surrogate country (South Africa v. Bulgaria) | South Africa data distorted by subsidies; Bulgarian data more specific and contemporaneous | Record lacks evidence that South African data were distorted; South Africa provided better overall data and usable inputs | Affirmed Commerce’s selection of South Africa; substantial evidence supported the choice |
| Freight surrogate data (Xeneta proprietary v. Descartes public) | Xeneta more contemporaneous and representative; Xeneta available to Commerce | Descartes publicly available and preferred; Xeneta proprietary and not publicly available | Affirmed Commerce’s use of Descartes (with FOB→CIF adjustment via Maersk) |
| HTS classification for aluminum scrap (7602.00 v. 7601.20) | Zhongji’s scrap is high‑purity and should be valued under 7601.20 | Zhongji sold and accounted for the material as scrap; 7602.00 better matches actual disposition | Affirmed Commerce’s use of HTS 7602.00; valuation based on how respondents handled the material |
| VAT adjustment basis (sale to affiliated HK reseller v. resale price in U.S.) | VAT should be calculated on the sale to the affiliated reseller because VAT assessed on that transaction | Commerce used U.S. resale price; asks to reconsider in light of related precedent | Remanded: court granted Commerce’s request to recalculate VAT using the correct sale price |
| Missed statutory deadline for preliminary determination | Late preliminary determination voids preliminary finding and duty deposits | Statutory deadline is directory absent an express consequence; Commerce may act after deadline | Held: deadline violation did not preclude issuing an affirmative preliminary determination or collecting deposits |
Key Cases Cited
- Sioux Honey Ass’n v. Hartford Fire Ins. Co., 672 F.3d 1041 (Fed. Cir. 2012) (explains dumping and statutory framework)
- Qingdao Sea-Line Trading Co. v. United States, 766 F.3d 1378 (Fed. Cir. 2014) (Commerce has broad discretion to determine best available information)
- QVD Food Co. v. United States, 658 F.3d 1318 (Fed. Cir. 2011) (reviewing standard for Commerce’s information choices)
- Home Meridian Int’l, Inc. v. United States, 772 F.3d 1289 (Fed. Cir. 2014) (data need not be perfect to be best available)
- Zhejiang Dunan Hetian Metal Co. v. United States, 652 F.3d 1333 (Fed. Cir. 2011) (court’s role is to determine whether a reasonable mind could conclude Commerce chose best available information)
- Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir. 2006) (consider record as a whole, including detracting evidence)
- Barnhart v. Peabody Coal Co., 537 U.S. 149 (U.S. 2003) (statutory ‘shall’ not dispositive of agency power expiration absent explicit consequence)
- Hitachi Home Elecs. (Am.), Inc. v. United States, 661 F.3d 1343 (Fed. Cir. 2011) (Congress must express consequences for statutory deadline noncompliance)
- SFK USA, Inc. v. United States, 254 F.3d 1022 (Fed. Cir. 2001) (Commerce may request remand to reconsider positions)