CIT Says Withdrawal of Targeted Dumping 'Limiting Rule' Illegal; Old Reg Still in Effect
The Commerce Department’s 2008 withdrawal of a regulation providing for partial application of “targeted dumping” alternative calculation methods in antidumping proceedings was invalid, and the regulation is still in effect, said the Court of International Trade in a June 17 decision. The finding resulted in a remand of the final determination from the antidumping duty investigation of coated paper suitable for high-quality print graphics using sheet-fed presses from China (A-570-958). CIT also remanded Commerce’s reliance on a hard 33 percent threshold for disregarding market prices for inputs, as well as the agency’s decision to treat sales made by Asia Pulp & Paper’s Hong Kong affiliate as normal “export price” transactions.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Until 2008, in circumstances where Commerce found targeted dumping, it would “normally” limit use of its alternative average-to-transaction (A-T) method for calculating AD duties only to the sales that constituted targeted dumping. But in 2008, Commerce withdrew its “limiting rule,” deciding in some cases to use the alternative method for all sales when it found targeted dumping. So when Commerce later found targeted dumping for several Chinese affiliates of Asia Pulp & Paper (APP China), including Gold East, it used the alternative A-T calculation method for all of the company’s sales.
APP China contested Commerce’s use of its new targeted dumping procedures, arguing that the agency’s 2008 withdrawal of the old regulations was illegal under the Administrative Procedure Act. Commerce was required to ask for public comment, but never really did so, APP China said. Although the government pointed to two comment requests on targeted dumping analysis in general, the court agreed that Commerce never explicitly asked for comment on the limiting rule. And no exceptions to the notice-and-comment requirement applied to the withdrawal. Because it violated the APA, CIT found that “the repeal of the regulation was invalid, and the limiting rule is still in force.” The court remanded the targeted dumping analysis for APP China, because it doesn’t comply with the still-in-effect regulation.
CIT also remanded several other aspects of Commerce’s final determination. It said Commerce’s decision to disregard market economy prices when valuing APP China’s inputs because less than 33% of the inputs were sourced from market economy countries was “arbitrary and capricious.” APP China sourced 32.9% of its inputs from market economy countries. CIT said the 0.1% difference between the regulatory threshold and the actual amount was not a “meaningful distinction.”
And the court said Commerce’s decision to treat sales made by APP China’s Hong Kong affiliate as normal “export price” sales was unreasonable. Export price sales aren’t subject to as much downward adjustment as “constructed export price” sales. Under antidumping duty law, only sales made by the original exporter/producer, and in this case the goods were sold by APP China to the Hong Kong affiliate before the sales at issue were made to the U.S. importer.
(Gold East Paper (Jiangsu) Co. v. United States, Slip Op. 13-74, dated 06/17/13, Judge Musgrave)
(Attorneys: Daniel Porter of Curtis Mallet-Provost for plaintiff Gold East Paper (Jiangsu) Co., Ltd., Ningbo Zhonghua Paper Co., Ltd. and Global Paper Solutions (collectively, APP China); Alexander Sverdlov for defendant U.S. government; William Fennell for defendant intervenors Appleton Coated LLC, et al.)