Commerce Properly Set AFA Rate Based on Petitioner's Data in Silicon Metal AD Case, CIT Rules
The Commerce Department properly picked an adverse facts available rate based on the financial data of one of the antidumping duty petitioner's parent companies in an AD investigation, the Court of International Trade said in a March 21 decision. Senior Judge Thomas Aquilino ruled that the arguments from plaintiffs Globe Specialty Metals and Mississippi Silicon fall flat since they are based mainly on "their interpretation of outdated agency practices." The agency was not compelled to pick the highest AFA rate out there, the judge said.
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In June 2020, Globe and Mississippi Silicon petitioned for an antidumping duty investigation into silicon metal from Bosnia, Iceland and Malaysia. In the Bosnian AD investigation, Bosnian producer R-S Silicon D.O.O. (RSS) was selected as the sole mandatory respondent. The company failed to respond to Commerce's questionnaires, leading to a 21.41% AFA antidumping duty rate that Commerce said was based on the highest rate on the petition. The petitioners took issue with this rate, however, since they also identified a margin of 39% in their petition.
Globe and Mississippi Silicon got the 39% rate using financial statements from Norwegian producer Elkem. Commerce rebuffed this surrogate pick, telling the petitioners that it would only use data for constructed value from a Bosnian producer or one of the petitioners. The plaintiffs gave the agency data from Ferroglobe, one of their parent companies, leading to the 21.41% dumping rate.
The petitioners then took their case to CIT, arguing that the court should compel Commerce to disregard this decision and run with the Elkem data. Globe and Mississippi Silicon made a string of arguments all rejected by Aquilino. One such argument claimed that Commerce's reliance on the Ferroglobe data violated the agency practice of not using data from a company that suffered a loss. Aquilino said that there is nothing in the statute that requires that Commerce use finances showing a profit and that the statute does not establish a hierarchy for picking among the alternative companies for calculating constructed value profit.
The trade court also held that the plaintiffs failed to show Commerce's decision revealed a departure from any sort of consistent practice. "[Commerce] frequently uses financial statements of a U.S. producer of comparable merchandise to calculate normal value based on constructed value for initiations when no in-country data are available," the judge said. "The IDM makes clear that this is done in accordance with agency practice of relying on a petitioner’s own data for initiation purposes in the absence of in-country information, as well as [the Commerce Department International Trade Administration (ITA)]’s preference for not using third-country financial statements to calculate constructed value profit and selling expense ratios."
Globe and Mississippi Silicon said that Ferroglobe, though, like Elkem is located in a third country. But this ignores many key differences between the two companies, the judge wrote. While Ferroglobe is headquartered abroad, its financial states include data from the petitioner itself, making the statements reflective in part of a U.S. domestic producer.
"To summarize, ITA acted in accordance with its current practice when it based the AFA rate on the initiation rate of 21.41 percent, which, as discussed above, was reasonably determined based on Ferroglobe’s financial statements," the opinion said. "The plaintiffs at times appear to suggest that this rate was so low that RSS secretly wanted it to apply because it would be more favorable than the rate it would be assigned if RSS had participated. However, ITA 'is not required to determine, or make any adjustments to' a 'weighted average dumping margin based on any assumptions about information the interested party would have provided if the interested party had complied with the request for information.'"
(Globe Specialty Metals v. United States, Slip Op. 22-23, CIT #21-00231, dated 03/21/22, Judge Thomas Aquilino. Attorneys: Adam Gordon of The Bristol Group for the plaintiffs; Bret Vallacher for defendant U.S. government)