415 F.Supp.3d 1303
Ct. Intl. Trade2019Background
- This case challenges the U.S. Department of Commerce’s final results in the antidumping duty administrative review of certain passenger vehicle and light truck tires (PVLT) from the People’s Republic of China; plaintiffs include Shandong Yongtai Group, Qingdao Sentury Tire (and affiliates), and Pirelli (and affiliates).
- Key procedural posture: Commerce published final results on March 16, 2018; plaintiffs filed Rule 56.2 motions; the U.S. Court of International Trade (Judge Choe-Groves) sustained in part and remanded in part several Commerce determinations on November 27, 2019.
- Contested issues include: (1) whether Commerce’s initiation notice properly covered Shandong Yongtai given a corporate name change, (2) Commerce’s denial of separate-rate status to Shandong Yongtai Chemical, (3) Commerce’s adjustment for irrecoverable VAT to Sentury’s U.S. price, (4) Commerce’s refusal to adjust for the Export Buyer’s Credit Program (EBCP) treated in the companion CVD review, and (5) Commerce’s denial of separate-rate status to Pirelli and assignment of the China-wide rate.
- The court found Commerce’s initiation notice lawful but remanded for further consideration or explanation as to the separate-rate denials (Shandong Yongtai Chemical and Pirelli), the VAT deduction to Sentury, and the EBCP adjustment.
- Remand schedule: Commerce to file remand determination by January 27, 2020, with subsequent deadlines for administrative record and party comments set by the court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of Commerce’s initiation notice re: Shandong Yongtai (name change) | Shandong Yongtai argued Commerce failed to give adequate notice because of name variations and because the corrected notice wasn’t on the administrative record in searchable form. | Commerce argued Federal Register publication (including corrected November notice) satisfied statutory notice requirements and plaintiff had requested review. | Held: Commerce’s initiation and notice in the Federal Register were lawful. |
| Separate-rate denial for Shandong Yongtai Chemical | Shandong Yongtai argued its SRA and supporting documents showed the name change and same entity status, so Shandong Yongtai Chemical should have separate-rate status (or be covered as successor). | Commerce said the SRA lacked specifics about the former name in Question 2 and did not establish separate-rate eligibility for the old name or successor status. | Held: Commerce’s denial was not supported by substantial evidence; remanded to reconsider separate-rate status or successor-in-interest treatment. |
| Irrecoverable VAT deduction to Sentury’s U.S. price | Sentury argued Commerce’s VAT deduction was not authorized by the statute, misapplied China’s VAT rules (Circular 39), and record evidence contradicted Commerce’s method. | Commerce (and DOJ) argued irrecoverable VAT under Chinese law is a company-wide tax allocable to exports and Commerce’s method properly reduced U.S. price. | Held: Commerce’s VAT calculation and reasoning were not supported by substantial evidence; remanded for further explanation and application to the record. |
| Adjustment for Export Buyer’s Credit Program (EBCP) | Sentury argued Commerce should have adjusted U.S. price under 19 U.S.C. § 1677a(c)(1)(C) because the EBCP is an export-contingent subsidy shown countervailable in the companion CVD review. | Commerce said it found specificity under AFA in the CVD review but did not make an explicit finding the EBCP was an export subsidy for §1677a purposes, so no AD adjustment was required. | Held: Commerce’s refusal to adjust for the EBCP was unsupported; remanded for reconsideration in light of the CVD findings. |
| Separate-rate denial for Pirelli (post-acquisition by ChemChina and for bifurcated period) | Pirelli argued Commerce improperly equated foreign acquisition (ChemChina’s purchase of Pirelli S.p.A.) with de facto PRC government control and failed to apply full de jure/de facto separate-rate analysis; Pirelli also challenged denial for the pre-acquisition portion of the POR. | Commerce/DOJ argued ChemChina’s acquisition supported an inference of government control and that record ownership information for the pre-acquisition period was incomplete. | Held: Commerce’s denial was not supported by substantial evidence; remanded for fuller analysis on de jure/de facto control and related ownership-period issues. |
Key Cases Cited
- A.L. Patterson, Inc. v. United States, [citation="585 F. App'x 778"] (Fed. Cir. 2014) (the court examines the record as a whole, weighing supporting and detracting evidence)
- Sigma Corp. v. United States, 117 F.3d 1401 (Fed. Cir. 1997) (rebuttable presumption of government control in nonmarket-economy separate-rate analysis)
- Ad Hoc Shrimp Trade Action Comm. v. United States, 925 F. Supp. 2d 1315 (Ct. Int’l Trade 2013) (discussion of de jure and de facto separate-rate criteria)
- Changzhou Trina Solar Energy Co. v. United States, 359 F. Supp. 3d 1329 (Ct. Int’l Trade 2019) (finding that specificity determinations can carry implications for export-contingency even if not explicitly stated)
- Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304 (Fed. Cir. 2017) (upholding PRC-wide entity rate application in appropriate circumstances)