CIT Sustains Use of Quarterly Costs, No Deduction of Section 232 Duties From US Price in AD Review
The Court of International Trade upheld the Commerce Department's decision to accept antidumping duty respondent Oman Fasteners' supplemental questionnaire response after initially rejecting it for being submitted 16 minutes late. Judge M. Miller Baker, in a Jan. 5 opinion made public Jan. 16, nodded to his prior opinion in the case, in which he held that the rejection of the submission was "the very definition of abuse of discretion" (see 2307170036). The result was a zero percent dumping margin for the exporter.
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.
In the opinion, Baker rejected challenges from petitioner Mid Continent Steel & Wire, which said that Commerce erred in using Oman Fasteners' quarterly costs instead of annual costs in setting the comapny's margin and by not deducting Section 232 steel and aluminum duties from the company's U.S. price for all of the exporter's entries instead of just for three of them.
The court noted that Commerce's normal practice is to calculate annual weighted-average costs for the review period, adding that the agency deviates from this preference when there is a significant change in the cost of manufacturing and sales prices during the shorter cost averaging period can be reasonably linked with the cost or production during the same periods. On remand, the agency said Oman Fasteners' cost data met both criteria, since the company experienced serious cost changes between the high and low quarterly cost of manufacturing and there was a reasonable link between the changes and sales prices.
Mid Continent challenged Commerce's finding that most of the respondent's top control numbers sold to the U.S. pass the tests for significant changes and for correlation. Baker noted that the petitioner "acknowledges that the majority of Oman's control numbers experienced significant changes in material costs." The petitioner's apparent theory that not enough of Oman Fasteners' control numbers satisfy the test for a significant change falls short, since Mid Continent "is silent about what percentage it believes would be enough."
While the petitioner also claimed that Oman Fasteners didn't provide its direct material costs on a quarterly basis, Mid Continent did acknowledge that Oman relied on quarterly adjustment factors to calculate its costs and that Commerce used those factors. It is the agency's job, and not the court's, to weigh Oman Fasteners' data, the opinion said.
On remand, Commerce also didn't deduct Section 232 duties from Oman Fasteners' entries, except for three. Mid Continent cited U.S. Court of Appeals for the Federal Circuit precedent finding it proper to deduct these duties from the U.S. price in AD cases. However, Baker found that the entries were subject to an injunction in a separate action challenging the Section 232 duties themselves, meaning, as a result, the company didn't have to pay the duties at the time of entry, except for three entries.
The U.S. said Commerce's obligation is to deduct "the amount, if any, included in [the export] price, attributable to any ... United States import duties," adding that the "words 'included in [the export] price' are the key." Baker found that the petitioner pointed to no evidence showing that the respondent's pricing reflected amounts linked to Section 232 duties.
(Oman Fasteners v. United States, Slip Op. 24-1, CIT # 22-00348, dated 01/05/24; Judge: M. Miller Baker; Attorneys: Adam Gordon of The Bristol Group for defendant-intervenor Mid Continent Steel & Wire; Brian Boynton for defendant U.S. government; Michael Huston of Perkins Coie for plaintiff Oman Fasteners)