RZBC Group Shareholding Co. v. United States, 2017 CIT 40

Background

This case challenges Commerce’s fourth administrative review final results for countervailing duties on citric acid and citrate salts from the PRC (POR: Jan 1–Dec 31, 2012); Commerce imposed a 17.55% CVD rate, including an AFA adverse inference that RZBC benefited from the EXIM Bank Export Buyer's Credit program with a 10.54% AFA component.
In an earlier opinion the Court found the Chinese government (GOC) failed to cooperate and remanded one discrete issue: whether Commerce could avoid AFA by verifying RZBC’s non‑use of the Buyer's Credit program using RZBC’s books (noting Article 5 of the Administrative Measures references a $2 million contract threshold).
On remand Commerce concluded it still could not verify non‑use with RZBC because the Administrative Measures are ambiguous (e.g., translation uses "should" vs. "shall"), other record materials raise uncertainty, and currency/exchange issues could affect any $2 million threshold.
Commerce therefore continued to apply AFA and selected a 10.54% rate for the Buyer's Credit program by applying its established practice of using the highest calculated rate for a similar lending program in another PRC CVD proceeding (from Coated Paper from the PRC).
RZBC challenged both (1) Commerce’s refusal to verify non‑use via RZBC records and (2) the selection/corroboration of the 10.54% AFA rate; the Court upheld Commerce on both points, finding substantial evidence supports Commerce’s remand conclusions and methods.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Commerce could verify RZBC's non‑use of the EXIM Buyer's Credit program by inspecting RZBC's contracts and audited books in light of Article 5's purported $2M threshold	RZBC: Article 5 unambiguously imposes a $2M mandatory threshold; record (and RZBC answers) show no contracts over $2M, so Commerce should have verified non‑use with RZBC and avoided AFA	Commerce/GOC: Administrative Measures (certified translation) and other record materials make the $2M requirement ambiguous ("should" vs "shall", currency issues, working papers); therefore reviewing RZBC contracts would not definitively establish non‑use	Held: Commerce complied with remand — substantial evidence supports that the program language and record are ambiguous and verification via RZBC records would not conclusively establish non‑use; application of AFA sustained
Whether Commerce erred by rejecting RZBC’s late alternate translation as "new factual information" and thereby refusing to accept it on remand	RZBC: The alternate translation corrected Commerce’s mistaken factual finding and should have been admitted under 19 C.F.R. § 351.301(c)(4)	Commerce: It made a new conclusion based on previously submitted record materials, not new factual submissions, so the rule’s rebuttal deadline was not triggered; RZBC had earlier opportunity to submit translations and did not	Held: Commerce did not err; it reasonably treated the translation as untimely and the remand conclusion was a new interpretation of existing record evidence
Whether Commerce’s selection of the 10.54% AFA rate (from Coated Paper) was unsupported or unlawfully uncorroborated	RZBC: The 10.54% rate is outdated, uncreditworthy, not representative of RZBC’s commercial reality (pointing to a 0.64% Seller’s Credit rate on the record), and thus not corroborated	Commerce: In absence of verifiable Buyer's Credit data (due to GOC refusal), Commerce reasonably used its established hierarchy — highest comparable lending program rate from prior PRC CVD proceedings — and corroborated to the extent practicable	Held: Court sustains the 10.54% rate; Commerce’s methodology and corroboration were reasonable and supported by substantial evidence
Whether applying AFA and the selected rate was impermissibly punitive to a cooperating respondent	RZBC: Imposing a high AFA rate when the respondent cooperated (and the GOC did not) is excessively punitive	Commerce: AFA’s deterrent effect and Commerce’s discretion permit adverse rates when critical government information is unavailable; collateral impact on cooperating respondents is allowable	Held: Applying AFA and the 10.54% rate was lawful and not shown to be punitive or irrational

Key Cases Cited

Universal Camera Corp. v. NLRB, 340 U.S. 474 (defines substantial evidence standard)
Nippon Steel Corp. v. United States, 458 F.3d 1345 (clarifies substantial evidence review in trade cases)
Essar Steel, Ltd. v. United States, 753 F.3d 1368 (AFA rate should be a reasonably accurate estimate with built‑in deterrent)
Fine Furniture (Shanghai) Ltd. v. United States, 748 F.3d 1365 (upholding AFA application despite collateral impact on cooperating respondent)
QVD Food Co. v. United States, 658 F.3d 1318 (limitations on using subsequent proceedings/records for judicial review)
Co‑Steel Raritan, Inc. v. ITC, 357 F.3d 1294 (discourages reopening administrative proceedings based on new facts/trends)