2018 CIT 117
Ct. Intl. Trade2018Background
- Commerce investigated countervailing subsidies for hot-rolled steel from Korea; POSCO and Hyundai Steel were mandatory respondents.
- Commerce preliminarily found no countervailable benefit from Korean electricity (Tier Three analysis) and calculated de minimis rates; final determination found countervailable subsidies and assigned POSCO a large AFA-based rate.
- Commerce discovered at verification unreported affiliated input suppliers (four cross-owned affiliates) and a previously undisclosed facility in a Korean free economic zone (Songdo R&D center).
- POSCO submitted late factual submissions (including Daewoo-related information) that Commerce rejected as untimely; Commerce applied adverse facts available (AFA) to POSCO for these nondisclosures and used high AFA rates from prior Korea cases.
- Nucor and other petitioners challenged Commerce’s electricity analysis (use of KEPCO’s pricing, exclusion of KPX, and Tier Three market-principles finding); POSCO challenged application and rate-selection of AFA.
- The Court sustained Commerce’s AFA applications for the affiliates and the free economic zone disclosure but remanded because Commerce failed to explain selection of the highest AFA rates; the Court sustained Commerce’s electricity findings and refusal to apply AFA to the Government of Korea.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce properly applied AFA to POSCO for not reporting four cross-owned input affiliates | POSCO: reasonably believed disclosure not required; sought to supplement record so only neutral facts available warranted | Commerce: POSCO missed regulatory deadlines, failed to be forthcoming; AFA appropriate | Held: AFA application sustained; record shows ownership and inputs and untimely disclosure |
| Whether Commerce properly rejected verification factual submissions about Daewoo loans | POSCO: submission should have been considered; supports reducing AFA effects | Commerce: submission untimely / not a minor correction | Held: Moot because AFA for affiliates sustained |
| Whether Commerce properly applied AFA for POSCO’s failure to disclose facility in free economic zone | POSCO: disclosure was timely or nonmaterial; Gov’t response negates benefit | Commerce: initial denial then late contradictory website-based disclosure justified AFA; benefit plausible | Held: AFA application sustained; adverse inference that POSCO could have benefited is supported |
| Whether Commerce properly selected highest available AFA rates and corroborated them | POSCO: Commerce defaulted to highest rates without fact-specific analysis or corroboration | Commerce: selection consistent with statutory AFA hierarchy and verification discoveries | Held: Remand — Commerce must articulate and justify its selection of the highest AFA rates; corroboration to be addressed after remand |
| Whether Commerce erred in finding KEPCO electricity not provided for less than adequate remuneration | Nucor: Commerce improperly relied on pre-URAA-style standard-pricing analysis, ignored cost distortions and KPX effects | Commerce: Tier One/Two benchmarks unavailable; Tier Three market-principles analysis (standard pricing mechanism, costs, nondiscrimination) applied and supported | Held: Commerce’s Tier Three analysis and finding of no benefit sustained |
| Whether Commerce should have applied AFA to Government of Korea for allegedly incomplete KEPCO data | Nucor: GoK withheld or failed to provide verifiable KEPCO cost data so AFA warranted | Commerce: GoK cooperated fully; no withholding or impediment | Held: Commerce’s decision not to apply AFA to GoK sustained |
Key Cases Cited
- Nippon Steel v. United States, 337 F.3d 1373 (Fed. Cir.) (explains "best of its ability" standard for AFA)
- Essar Steel Ltd. v. United States, 753 F.3d 1368 (Fed. Cir.) (describes Commerce AFA hierarchy and selection principles)
- NMB Singapore Ltd. v. United States, 557 F.3d 1316 (Fed. Cir.) (agency must make its reasoning reasonably discernable)
- Downhole Pipe & Equip., L.P. v. United States, 776 F.3d 1369 (Fed. Cir.) (court will not reweigh evidence; substantial-evidence review)
- Trent Tube Div. v. Avesta Sandvik Tube AB, 975 F.2d 807 (Fed. Cir.) (describes limits on courts reweighing agency factual determinations)
- Maverick Tube Corp. v. United States, 273 F. Supp. 3d 1293 (Ct. Int'l Trade) (discusses electricity/Tier Three analyses and use of MAGNESIUM precedent)