SOLARWORLD AMERICAS, INC., Plaintiff, v. UNITED STATES, Defendant, and Jinko Solar Import & Export Co., Ltd. et al., Defendant-Intervenors.
Court No. 15-00232
United States Court of International Trade
October 14, 2016
Slip Op. 16-99 | 1372
ORDERED that defendant may file a response to the comment submissions within fifteen (15) days from the date on which the last of any such comments is filed with the court.
Timothy C. Brightbill, Laura El-Sabaawi, and Usha Neelakantan, Wiley Rein, LLP, of Washington, DC, for plaintiff.
Justin Reinhart Miller, Senior Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With him on the brief were Melissa Marion Devine, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Commercial Litigation Branch-Civil Division, of Washington, DC, Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of Counsel on the brief was Lisa W. Wang, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.
OPINION AND ORDER
Kelly, Judge:
This action comes before the court on a
Plaintiff, SolarWorld Americas, Inc. (“SolarWorld“), commenced this action pursuant to section 516A of the Tariff Act of 1930, as amended,
BACKGROUND
On February 3, 2014, Commerce initiated its administrative review covering subject imports entered during the period of review March 26, 2012 through December 31, 2012. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 79 Fed. Reg. 6,147, 6,149-57 (Dep‘t Commerce Feb. 3, 2014). Commerce selected Lightway Green New Energy Co., Ltd. (“Lightway“) and Shanghai BYD Co., Ltd. as mandatory respondents, initially assigning them countervailable subsidy rates of 22.73 percent and 8.63 percent, respectively. Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People‘s Republic of China, 80 Fed. Reg. 1,019, 1,019-20 (Dep‘t Commerce Jan. 8, 2015) (preliminary results of countervailing duty administrative review; 2012; and partial rescission of countervailing duty administrative review).
During the countervailing duty investigation, SolarWorld alleged in its petition that the Government of China (“GOC“), through its Export-Import Bank (“China Ex-Im Bank“), provided credits to export buyers in the form of medium and long-term loans with preferential, low interest rates to buyers of goods used in certain energy projects, including solar cells (“Export Buyer‘s Credit Program“). See Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People‘s Republic of China, 77 Fed. Reg. 63,788, 63,789 (Dep‘t Commerce Oct. 17, 2012) (final affirmative countervailing duty determination and final affirmative critical circumstances determination); see also Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, from the People‘s Republic of China at 59, C-570-980, (Oct. 9, 2012), available at http://ia.ita.doc.gov/frn/summary/prc/2012-25564-1.pdf (last visited October 11, 2016) (“Original Investigation Final Determination“). Commerce determined that the Export Buyer‘s Credit Program is countervailable, and Commerce applied adverse facts available (“AFA“)2 to
In its final determination in this administrative review, Commerce applied AFA to the Export Buyer‘s Credit Program because it could not verify that respondents had not used export buyer‘s credits, as the GOC claimed in its questionnaire responses. Final Decision Memo at 33 (citing Memorandum re: Verification of the Questionnaire Responses Submitted by the Government of the People‘s Republic of China at 4-7, PD 255, bar code 3269089-01 (Apr. 6, 2015)).3 Commerce applied an AFA rate of 5.46 percent to the same Export Buyer‘s Credit Program.4 Final Decision Memo at 44. Commerce selected this rate because it corresponds to the highest rate calculated for Lightway for the Preferential Policy Lending to the Renewable Energy Industry program, which Commerce considered similar and comparable to the China Ex-Im Bank Export Buyer‘s Credit Program. Id.
SolarWorld challenges Commerce‘s determination to countervail the China Ex-Im Bank‘s Export Buyer‘s Credit Program at an AFA rate of 5.46 percent as unsupported by substantial evidence and otherwise contrary to law. Br. Supp. Pl. SolarWorld Americas, Inc.‘s Rule 56.2 Mot. J. Agency R. 9-20, Feb. 12, 2016, ECF No. 24 (“SolarWorld Br.“). Defendant responds that Commerce followed its practice of selecting an AFA rate to apply in administrative reviews. Def.‘s Resp. Br. 8-18. For the reasons that follow, the court remands Commerce‘s selection of an AFA rate of 5.46 percent for the Export Buyer‘s Credit Program for further explanation or reconsideration.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to
DISCUSSION
SolarWorld argues that Commerce‘s application of an AFA rate of 5.46 percent to the China Ex-Im Bank‘s Export Buyer‘s Credit Program is unreasonable, inconsistent with prior agency practice, and otherwise contrary to law. SolarWorld Br. 9-20. Specifically, SolarWorld argues that Commerce unreasonably selected an AFA rate of 5.46 percent in this review
If, in the course of a countervailing duty proceeding, an interested party or any other person provides information to Commerce that cannot be verified, Commerce shall use facts otherwise available in making its determination.
Where Commerce countervails a subsidy program at an AFA rate, neither the statute nor the regulation dictate how Commerce is to determine that rate.7 See
In administrative reviews, Commerce has developed a methodology for selecting an AFA rate to countervail a subsidy program according to a hierarchy of sources. For subsidy programs not involving income tax exemptions and reductions, Commerce first applies the highest calculated rate for the identical program in the same proceeding if another responding company used that program. Final Decision Memo at 44 (citing Aluminum Extrusions from the People‘s Republic of China, 79 Fed. Reg. 78,788 (Dep‘t Commerce Dec. 31, 2014) (final results of the countervailing duty administrative review; 2012); Decision Memorandum for the Final Results of the Countervailing Duty Administrative Review: Aluminum Extrusions from the People‘s Republic of China at 15-16, C-570-968, (Dec. 22, 2014), available at http://ia.ita.doc.gov/frn/summary/prc/201430659-1.pdf (last visited October 11, 2016) (“Aluminum Extrusions from PRC I&D“)). Second, if no other company in the review used the identical program, Commerce‘s practice is to use the highest calculated non-de minimis rate for a similar program in the same proceeding. Id. (citing Aluminum Extrusions from PRC I&D 15-16). Third, if there is no identical or similar program match in the CVD proceeding at issue, Commerce uses the highest rate calculated for an identical program in another CVD proceeding involving the same country. Id. (citing Aluminum Extrusions from PRC I&D 15-16). Last, in the absence of an identical program in another CVD proceeding involving the country at issue, Commerce uses the highest calculated rate from a similar program in another CVD proceeding involving the country at issue. Id. Defendant suggests Commerce‘s methodology reflects a preference in an administrative review for a similar program in an earlier segment of the same proceeding because it has a stronger relation to the respondent‘s prior commercial activity. See Def.‘s Resp. Br. 13 (citing Sodium Nitrite From the People‘s Republic of China, 73 Fed. Reg. 38,981, 38,982 (Dep‘t Commerce July 8, 2008) (final affirmative countervailing duty determination) (“Sodium Nitrite from the PRC“)).
Here, noting that it lacked a calculated rate for the Export Buyer‘s Credit Program from another responding company, Commerce applied the second level of its AFA rate selection hierarchy for administrative reviews. See Final Decision Memo at 44. Thus, it selected the rate calculated for the Preferential Policy Lending to the Renewable Energy Industry program in this same administrative review to the Export Buyer‘s Credit Program after determining that the two programs were similar.8 Id. Commerce supported its determination that the programs were similar, noting that both programs call for financial institutions to provide loans at preferential rates. Id. at 27, 33.
Defendant acknowledges that, in the absence of data pertaining to an identical program in the same proceeding, Commerce‘s AFA rate selection methodology in administrative reviews, unlike in investigations, looks for similar or comparable programs in any segment of the same proceeding before moving on to find identical programs in another proceeding. Def.‘s Resp. Br. 12. Defendant explains the distinction by focusing on the more limited availability of calculated rates in an investigation. See id. at 13 (citing Sodium Nitrite From the PRC, 73 Fed. Reg. at 38,982). This explanation implies that Commerce prefers rates from the same proceeding but Commerce has fewer such rates in an investigation. However, it does not address why, in an investigation where Commerce does have a calculated rate for a similar subsidy program on the record, Commerce would prioritize an identical program from another proceeding over a similar program from the same proceeding.10 In fact, Defendant‘s explanation
Where Commerce lacks a calculated rate to use as AFA for an identical program in the same proceeding, Commerce may have a reasonable basis to look to a rate selected as AFA from a similar program in the same proceeding in a review while preferring a rate selected as AFA from an identical program in another proceeding involving the same country in an investigation. However, Commerce must explain why its disparate AFA rate selection practices in administrative reviews versus investigations is reasonable. See Motor Vehicle Mfrs. Ass‘n v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43 (1983). It did not do so in its final determination in this administrative review.11 If Commerce
Defendant concedes that this issue was not addressed by Commerce in its final determination, but Defendant provides an explanation for the difference in methodologies. Def.‘s Suppl. Br. 6. In response to the court‘s question to Defendant on this issue, see Court‘s Supplemental Questions at 3-4, Defendant explains that, in reviews, “Commerce‘s AFA hierarchy prioritizes an inquiry into the subsidization experience of the industry at issue by its government, rather than an inquiry into the use of the identical program by any industry.” Def.‘s Suppl. Br. 4. Defendant further explains that a rate from within the industry (i.e., from within the same proceeding) for a similar program has a stronger relationship to the respondent‘s likely prior commercial activity than a rate from a different industry obtained from outside the proceeding. Id. (citing Sodium Nitrite From the PRC, 73 Fed. Reg. at 38,982).
In contrast, Defendant continues, “Commerce‘s purpose in an investigation is to achieve an overarching understanding of how the industry under investigation uses subsidies.” Id. at 5. Defendant observes that, given the limited information available to Commerce in an investigation pertaining to the industry‘s use of subsidies, Commerce focuses on the program rather than the industry where it lacks an available rate for the same proceeding. Id.
Defendant argues that Commerce has previously explained its AFA hierarchies extensively, and it argues that the explanations provided by Defendant are reasonably discernible from Commerce‘s explanations in other proceedings, which have been affirmed by the Court and the Court of Appeals for the Federal Circuit. Def.‘s Suppl. Br. 6. (citing Essar Steel Ltd. v. United States, 37 CIT —, —, 908 F.Supp.2d 1306, 1310 (2013), aff‘d 753 F.3d 1368 (Fed. Cir. 2014); Fengchi Imp. & Exp. Co. of Haicheng City v. United States, 39 CIT —, —, 59 F.Supp.3d 1386, 1396 (2015); Tai Shan City Kam Kiu Aluminium Extrusion Co. v. United States, 39 CIT —, —, 125 F.Supp.3d 1337, 1342 n.7 (2015)). Although the cases referenced by Defendant independently affirm Commerce‘s practices for AFA rate selection in reviews and investigations, none explain or affirm Commerce‘s rationale for having different AFA rate selection practices in investigations versus administrative reviews. See Essar Steel, 37 CIT at —, 908 F.Supp.2d at 1310-11 (affirming Commerce‘s application of the second step of its AFA rate selection hierarchy in an administrative review because the program identified in the investigation is similar); Fengchi, 39 CIT at —, 59 F.Supp.3d at 1396 (affirming Commerce‘s application of the second step of its AFA rate selection hierarchy in an administrative review because the program identified in the investigation is similar); Tai Shan City Kam Kiu, 39 CIT at —, 125 F.Supp.3d at 1342 n.7 (reciting Commerce‘s AFA rate selection hierarchy in administrative reviews). Defendant‘s explanations are post hoc rationalizations. On remand, Commerce must explain why these differences in methodology are reasonable or reconsider its methodology.
CONCLUSION
In accordance with the foregoing, it is hereby
ORDERED that this action is remanded to Commerce to clarify or reconsider, as appropriate, its AFA rate selection hierarchy as applied in this administrative review; and it is further
ORDERED that Commerce shall file its remand redetermination with the court
ORDERED that the parties shall have 30 days thereafter to file comments on the remand redetermination; and it is further
ORDERED that the parties shall have 15 days to file their replies to comments on the remand redetermination.
CLAIRE R. KELLY
JUDGE
