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CIT Backs Commerce's Surrogate Pick for Constructed Value in Antidumping Administrative Review

The Court of International Trade sustained the final results of the second administrative review of the antidumping duty order on steel nails from Oman, in a June 14 decision. Judge Richard Eaton held that there was substantial evidence to back the Commerce Department's decision to use a Japanese company's financial statement to determine constructed value profit and indirect selling expenses for mandatory respondent Oman Fasteners, as opposed to an Indian company's financial statement as favored by petitioner and plaintiff in the case, Mid Continent Steel & Wire.

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The case stems from the 2016-17 administrative review of the antidumping duty order on steel nails from Oman wherein Oman Fasteners was selected as a mandatory respondent. Since Commerce determined that Oman Fasteners' sales data did not provide a viable basis for calculating the normal value of the product, the need arose to select a surrogate company to find this value. The agency had nine companies to choose from, including Indian company Astrotech Steel Private Limited, and the Japanese nail producer that Commerce eventually ended up selecting, Amatei Incorporated.

When making its selection, Commerce weights four concerns: (1) the similarity between the surrogate's business operation and products and the respondents, (2) the extent of the surrogate's sales in the U.S. and its home market, (3) contemporaneity of the surrogate's data and (4) the similarity of the customer base between the surrogate and respondent.

After finding that 80% of Astrotech's 2016 revenue was from U.S. sales, Commerce found that "Astrotech’s profit and indirect selling expenses do not reflect the home market." Over 90% of Amatei's sales, on the other hand, came from its sales in its home market of Japan. This led to the selection of Amatei as the surrogate for the constructed value and a 0% weighted-average dumping margin for Oman Fasteners.

Eaton determined that the selection was reasonable and that substantial evidence supported the selection. "As Commerce acknowledged, 'each of the [financial statement] options has certain limitations,'" the decision said. "Mid Continent, however, has not shown a lack of substantial evidence for the factual determinations under the four criteria that the Department considered in its analysis."