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CIT Remands Part of Commerce's Decision to Start AD Investigation on Argentine OCTG

The Court of International Trade in a decision made public March 21 sustained the Commerce Department's decision to rely on "other information" instead of polling the industry to calculate industry support for the antidumping duty investigation on oil country tubular goods from Argentina. But Judge Claire Kelly sent back the industry support decision due to accuracy concerns on the data Commerce relied on, including on whether "finishing operations were counted twice."

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Importers, led by Tenaris Bay City, contested Commerce's decision to start the investigation on the ground that Commerce can't rely on information from before the most recent 12-month period prior to the filing of the AD petition instead of polling the industry. Tenaris said that the relevant statute mandates that Commerce poll the domestic industry if the petition doesn't establish the statutory 50% level of support.

The court noted that the statute says that when the petition satisfies the 25% industry support threshold but falls short of the 50% requirement, Commerce shall poll the industry or use other information to gauge industry support. Kelly said that Commerce is instructed to "normally" measure production based on either "value or volume" over a 12-month period "as specified by the Secretary." But if a party shows the "unavailability of production data for the specified period, then Commerce may establish production levels" by referring to alternative data that the agency finds to be indicative of production levels.

In this case, the court said Commerce legally used other information instead of polling the industry since "Congress gave Commerce the choice for how to proceed when faced with a petition that" clears the 25% support mark but falls short of the 50% threshold. "Commerce chose one of the avenues expressly provided for by statute," the opinion said.

Tenaris said Commerce needed to use actual production data for the most recent 12-month period prior to the petition instead of the petitioners' shipment data. Kelly found that the agency legally used the petitioners' data since "a fully populated data set for 2020 was unavailable." As a result, Commerce's use of 2018 and 2019 shipment data and the incomplete 2020 data to "approximate production levels" was reasonable.

The importers also claimed that Commerce was required to extend the initiation deadline of the investigation, since the agency's past practice requires a 20-day extension when the petition didn't clearly establish industry support. The court found that when a petition falls under the 50% threshold, Commerce has the discretion to extend the deadline when "exceptional circumstances are present."

Kelly said the decision not to extend the deadline was reasonable given evidence Commerce "thought was sufficient evidence of industry support" and the agency's "discretion to extend the initiation deadline." Tenaris' bid to "characterize the factual circumstances here as 'exceptional,'" fails to undermine Commerce's decision, the court said, finding the company's invocation of the term "exceptional circumstances" to be conclusory and without any evidence that "any fact at issue actually fits into the purpose of the section." Tenaris' case is just a disagreement with Commerce's finding, and the court refused to reweigh the evidence.

However, the court did remand the industry support decision on the ground that the data Commerce relied on was insufficient. Tenaris alleged that the industry support calculation failed to ensure that finishing operations were not counted twice.

Kelly said Commerce failed to address evidence showing that certain domestic companies both make and finish oil country tubular goods, leading to the inference that some domestic pipe may have been double counted. This evidence included petitioners Borusan Mannesmann Pipe U.S.'s and PTC Liberty Tubular's websites showing that it's unclear what part of the operations involve actual pipe production as opposed to finishing operations.

In addition, Tenaris pointed to evidence that PTC Liberty wasn't identified as a producer in the International Trade Commission's sunset review, which Commerce relied on in calculating industry support. As a result, "the record evidence leads to the reasonable inference, argued by Plaintiffs to Commerce, that there may be pipe that was counted for the purposes of industry support when it was produced and again when it was finished," the opinion said.

(Tenaris Bay City v. United States, Slip Op. 24-31, CIT # 22-00343, dated 03/14/24, Judge Claire Kelly; Attorneys: Gregory Spak of White & Case for plaintiffs led by Tenaris Bay City; Hardeep Josan for defendant U.S. government; James Ransdell of Cassidy Levy for defendant-intervenor U.S. Steel Corp.; Christopher Cloutier of Schagrin Associates for defendant-itnervenors led by Borusan Mannesmann Pipe U.S.)