TMK IPSCO v. United States
2017 CIT 54
| Ct. Intl. Trade | 2017Background
- This case reviews Commerce’s remand redetermination in the countervailing duty (CVD) investigation of certain oil country tubular goods (OCTG) from the People’s Republic of China after the court remanded several aspects of Commerce’s Final Determination.
- The court previously held Commerce erred by using China’s WTO accession date (Dec. 11, 2001) as a uniform cut-off for identifying/measuring non-recurring subsidies and remanded to assess each program considering relevant reforms.
- Other remand issues included: (1) whether two disparate ocean freight quotes should both be used in the tier II benchmark, (2) inclusion of SBB East Asia billet pricing in the benchmark, (3) attribution of subsidies among parent and subsidiaries (Changbao and TPCO groups), and (4) whether provision of steel rounds/billets at LTAR was tied to sales of seamless pipe.
- On remand Commerce: (a) abandoned the uniform WTO-accession cut-off and established category-specific start dates tied to Chinese legal reforms; (b) retained both Maersk and Jianli freight-forwarder quotes as representative market rates; (c) excluded SBB East Asia data from the tier II benchmark; (d) narrowed prior attribution decisions (revising attribution for Changbao and TPCO subsidiaries); and (e) kept attribution of steel rounds/billets to TPCO’s total sales because record lacked evidence tying the benefit to seamless pipe only.
- Commerce applied adverse facts available (AFA) for many programs where the GOC/respondents failed to respond, resulting in revised subsidy rates for mandatory respondents and the all-others rate; the court sustained the Remand Results as supported by substantial evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Use of WTO accession date as universal cut-off for non-recurring subsidies | WTO date was arbitrary; Commerce must identify earlier start dates per program | Commerce should evaluate by program type tied to reforms | Court sustained Commerce’s program-by-type approach and rejected the uniform WTO cut-off; dates tied to specific legal reforms are reasonable |
| Start dates chosen for credit- and land-oriented subsidies (1996 and 1999) | These cut-offs are arbitrary; evidence shows earlier identifiability (e.g., 1993, 1986) | Selected dates reflect when legal framework allowed identification/measurement of loans and land transactions | Court upheld Commerce’s dates as supported by substantial evidence |
| Inclusion of Jianli freight-forwarder quote in tier II benchmark despite disparity | Forwarder quote is unreliable or a sweetheart deal; including it skews benchmark | Both Maersk and forwarder rates reflect market options (direct carrier vs freight forwarder); forwarder rates are supported by affidavit/transaction data | Court sustained inclusion of both freight quotes as representative market rates |
| Inclusion of SBB East Asia pricing in tier II benchmark | Not specifically contested on remand | Commerce argued SBB may include distorted Chinese import prices, so exclude | Court accepted Commerce’s exclusion of SBB East Asia data from tier II benchmark |
| Attribution of subsidies among parent and subsidiaries (Changbao, TPCO) | Commerce lacked authority to attribute subsidiary subsidies to consolidated sales of all subsidiaries | Commerce must apply its attribution rules and may adjust on remand | Court sustained Commerce’s revised attribution (narrowed attribution per 19 C.F.R. §351.525) |
| Tying: whether provision of steel rounds/billets at LTAR is tied to seamless pipe sales | Subsidy is tied to OCTG and should be attributed only to seamless pipe sales | No record evidence GOC intended the benefit for OCTG at time of bestowal; default is attribution to all sales | Court sustained Commerce’s attribution to total sales because no evidence showed tying at time of bestowal |
Key Cases Cited
- Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (agency must provide reasoned explanation for discretionary action)
- Viraj Grp., Ltd. v. United States, 343 F.3d 1371 (preserving government appellate posture by acting "under protest")
- Xinjiamei Furniture (Zhangzhou) Co. v. United States, 968 F. Supp. 2d 1255 (review standard for remand compliance)
- Nakornthai Strip Mill Public Co. v. United States, 587 F. Supp. 2d 1303 (remand redetermination review for compliance)