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CIT Remands Commerce's All-Others Rate Based on Average of AFA and Zero Dumping Margin

The Court of International Trade in a Sept. 24 order remanded for the fourth time the Commerce Department's attempt to set the all-others rate in an antidumping duty investigation by averaging a zero percent and an adverse facts available rate given to the two mandatory respondents. The court said Commerce has an obligation to assign dumping margins as accurately as possible, which it said the agency was not doing when it came up with the all-others rate without using any company's actual data.

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Forty plaintiffs challenged the antidumping duty investigation into hardwood plywood products from China. Commerce had assigned the two mandatory respondents, Linyi Chengen and Dongfang, a zero percent and 114.72% AFA dumping rate, respectively. The agency then established the all-others rate by departing from the expected method and averaging the two rates to a 57.36% rate.

Judge Jennifer Choe-Groves first upheld Commerce's decision to depart from the expected method, which is defined as averaging the zero and de minimis margins and margins determined based on facts available. Following this method, the non-individually examined respondents would have received a zero percent dumping margin -- an outcome that Commerce said was not representative of the non-individually examined respondents' rates.

By comparing a price quote listed in the dumping petition with a price from the petition's separate rate application, identifying differences between Linyi Chengen's and the separate rate plaintiffs' pricing and cost structures and pointing out commercial invoices showing disparities between the separate rate plaintiffs' and Linyi Chengen's selling activities, Commerce's decision was supported, Choe-Groves said. “The Court concludes that Commerce has reasonably supported its determination to depart from the expected method,” the judge said.

However, the method that Commerce actually used to find the all-others rate was not supported, the judge said. It can't simply average the zero and AFA rates because this would lead to a rate not based on any company's actual data and does not reasonably represent the all-other respondents' dumping margins. “Commerce created its own problems when it selected only two mandatory respondents, which resulted in sparse information on the record to support its assertions regarding the potential dumping margins of the separate rate respondents,” the opinion said.

Specifically, Commerce cited only one commercial invoice revealing an approximate 20% price difference between Linyi Chengen's prices and the price shown on the invoice from the petition separate rate application, Choe-Groves said, concluding that Commerce's 57.36% separate rate is not supported by substantial evidence.

(Linyi Chengen Import and Export Co., Ltd., et al. v. United States, Slip Op. 21-127, CIT #18-00002, dated 09/24/21, Judge Jennifer Choe-Groves. Attorneys: Gregory Menegaz of deKieffer & Horgan for plaintiffs; Sonia Orfield for defendant U.S. government)