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Korean Wind Tower Maker Didn't Receive Import Duty Exemption on Steel Plate, DOJ Argues

South Korean wind tower maker CS Wind didn't receive any special benefit from the Import Duty Exemptions on Raw Materials for Exported Goods program and actually overreported information on its raw material inputs, making the application of adverse facts available improper, the Department of Justice argued. In a May 26 reply brief, DOJ responded to a challenge from the Wind Tower Trade Coalition claiming that the Commerce Department erred in not applying AFA to CS Wind in a countervailing duty investigation of utility-scale wind towers from Vietnam. WTTC argued that certain inputs of steel plate, a raw material in the wind towers, could have actually been imported instead of made in Vietnam (Wind Tower Trade Coalition v. United States, CIT #20-03692).

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"The fundamental problem with WTTC’s argument is that the record evidence demonstrates that the [most favored nation (MFN)] import duty rate for steel plate in Vietnam is zero percent," DOJ said. Since this rate was zero, no benefit was conferred from any duty exemption program, the defendant argued. "Moreover, the record shows that CS Wind purchased the steel plate at issue from an unaffiliated company in Vietnam for which CS Wind reported Vietnam as the country of origin to Vietnam Customs." DOJ also found that any application of AFA would be improper since it's only supposed to be used when a company is not being forthcoming about key information. Since CS Wind's reporting was actually "overinclusive" by including domestically purchased raw materials along with requested information about its steel plate purchases, any application of partial AFA would be made with no basis, the defendant said.

DOJ also defended Commerce's calculation of the denominator in CS Wind's benefit calculation, which included sales value data from CS Wind's parent company, CS Wind Korea, "rather than the tolling fee CS Wind Korea paid to CS Wind." Commerce's regulations actually stipulate that the agency must determine the "sales value of a product" and divide the amount of the benefit from the sales value of the product to which Commerce attributes the subsidy. "As a result of the tolling arrangement in this case, the sales of subject merchandise produced by CS Wind are negotiated and made by CS Wind Korea," the brief said. "Thus, Commerce properly attributed the subsidy to those sales and used them in the benefit calculation denominator."