Statutory Obligations Led to Discrepancy in 'Bona Fide Sales Analysis,' DOJ Says
The Commerce Department in an antidumping proceeding correctly used a bona fide sale analysis of a single sale of wooden cabinets by importer Dalian Hualing Wood (Hualing) from a linked investigation, DOJ argued in an Aug. 24 response at the Court of International Trade. The brief came in reply to a June motion for judgment, in which Hualing argued that Commerce illegally made separate determinations in linked antidumping and countervailing duty reviews (see 2306260033) (Dalian Hualing Wood Co. v. U.S., CIT # 22-00334).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The case concerns the first administrative review of the AD order on wooden cabinets and vanities from China. Hualing participated in that review as a separate rate respondent while serving as a mandatory respondent in the CVD review. The importer was assigned a 2.78% CVD rate based on the same sale included in the AD review, where Commerce had said that it was not bona fide. Hualing had also argued that Commerce broke with "well-established practice" when it conducted a sales analysis for a separate rate applicant.
DOJ claimed that Commerce had reasonably explained its decision to analyze the bona fides of Hualing's sale in the AD review because an earlier new shipper review request by Hualing had bound Commerce by statute to conduct a bona fide sale analysis.
In 2020, Commerce issued an antidumping duty order covering wooden cabinets and vanities and components thereof from China. That same year, Hualing requested a new shipper review based on a single sale of the subject merchandise, which Commerce initiated. Several months later, Hualing requested an administrative review of the period of review from Oct. 9, 2019, through March 31, 2021, covering the same sale at issue in the ongoing new shipper review, which Commerce also initiated. Seven months later, Hualing submitted a separate rate application in the administrative review proceeding.
Commerce then issued its preliminary intent to rescind the new shipper review because Hualing's shipping of subject merchandise during the period of investigation made it ineligible as a potential "new shipper." The department also preliminarily determined that Hualing’s single sale was not bona fide, and preliminarily rescinded the review with respect to the company. In the final results of the AD review, Commerce concluded that Hualing’s single sale was not bona fide as it was atypical and not indicative of regular business practices.
Commerce reasonably explained its decision to analyze the bona fides of Hualing's sale despite its practice of not doing so for separate-rated applicants, DOJ said. The practice is based on Commerce's resource constraints, but the department was already required by statute to evaluate the bona fides of Hualing’s single sale in the new shipper review. Although the department never completed that review due to Hualing's ineligibility, it had "all information necessary to evaluate the bona fides of Hualing’s sale."
Hualing's challenge of past practice ignores the unique nature of Hualing and that Commerce can evaluate and implement its own resources with correct explanation, DOJ said.
Additionally, Hualing's new arguments challenging Commerce’s statutory authority to evaluate the bona fides of Hualing’s sale and the alleged inconsistent treatment between the CVD and AD reviews should be tossed because Hualing failed to exhaust those arguments before Commerce, DOJ said.
The American Kitchen Cabinet Alliance concurred with DOJ in its own response, adding that Commerce has the statutory authority to exclude sales from consideration where the sales are “clearly atypical,” as was the case with Hualing. The alliance also argued that Commerce's authority to conduct a bona fide sales analysis in administrative reviews was upheld in Novolipetsk Steel Pub. Joint Stock Co. v. U.S. (see 2107290062).