2023 CIT 83
Ct. Intl. Trade2023Background
- Commerce investigated antidumping duties on "certain metal lockers and parts thereof" from the People’s Republic of China and issued a final affirmative determination (Final Determination) selecting Turkey as the primary surrogate country.
- Record included two complete, audited financial statements: Ayes (Turkish producer) and Grupo Carso (Mexican conglomerate); Commerce found Ayes produced comparable merchandise and Grupo Carso did not.
- Commerce used Ayes' financial statements to calculate surrogate SG&A and profit ratios, but its treatment of several income line items changed between the Preliminary and Final Determinations.
- Key contested items: treatment (inclusion/exclusion) of various "other real operating income" categories, rental income, shipping revenues, incentive income, and interest income in SG&A and profit ratio calculations.
- List Industries challenged Commerce’s surrogate-country choice, selection and adjustment of surrogate values and financial ratios; the Court sustained most of Commerce’s determinations but remanded limited issues for further explanation or reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ayes (Turkey) and not Grupo Carso (Mexico) is a producer of comparable merchandise | List: Commerce failed to properly apply the three-part comparability test and lacked substantial evidence to find Ayes comparable and Grupo Carso not comparable | US: Commerce applied the three-part test and the record supports finding Ayes comparable and Grupo Carso not | Sustained: Commerce reasonably found Ayes comparable and Grupo Carso not, given the limited record materials for Grupo Carso |
| Whether Ayes' financial statements were suitable for surrogate financial ratios because Ayes was profitable | List: Ayes' apparent profitability resulted from other income; without these items Ayes would be unprofitable and unsuitable | US: Commerce followed its practice and properly treated other income, and Ayes remained profitable | Sustained in part: Court rejected the profitability challenge—even removing disputed items Ayes remained profitable |
| Whether Commerce properly treated specific income categories (incentive income, shipping revenues, rental income, interest income) in SG&A and profit calculations | List: Commerce's inconsistent treatment is unexplained; several categories should be excluded from SG&A and/or profit | US: Commerce sought consistency between revenue and expense lines and excluded/treated items per its practice | Remanded in part: Court remanded treatment of incentive income, shipping revenues, rental income, and interest income for reconsideration or clearer explanation |
| Whether selection of Turkey over Mexico as the primary surrogate country was supported by substantial evidence | List: Mexican data (Grupo Carso) were superior and more contemporaneous; Commerce failed to compare data quality | US: Turkey had complete, audited financials from a producer of comparable merchandise; Mexican record data were incomplete/misclassified | Sustained: Commerce’s selection of Turkey was supported by substantial evidence and consistent with law |
Key Cases Cited
- Jiaxing Brother Fastener Co. v. United States, 822 F.3d 1289 (Fed. Cir. 2016) (describing Commerce’s four-step surrogate-country selection approach)
- Qingdao Sea-Line Trading Co. v. United States, 766 F.3d 1378 (Fed. Cir. 2014) (burden of creating an adequate record lies with interested parties)
- Wheatland Tube Co. v. United States, 161 F.3d 1365 (Fed. Cir. 1998) (agency action may be sustained if the path of reasoning is reasonably discernible)
- Shanghai Foreign Trade Enters. Co. v. United States, 318 F. Supp. 2d 1339 (Ct. Int’l Trade 2004) (three-part test for comparability: physical characteristics, end uses, production processes)
- Tri Union Frozen Prods., Inc. v. United States, 227 F. Supp. 3d 1387 (Ct. Int’l Trade 2017) (Commerce preference to value all factors in a single surrogate country)