CIT Says Commerce Can't Make Court-Ordered Changes to AD/CV Rates Until After FR Notice
The Commerce Department can’t modify antidumping and countervailing duty rates after a court ruling before first publishing a notice that they’re going to change, the Court of International Trade said in a Sept. 6 decision. In a challenge from an importer of solar cells that was hit with retroactive duty increases for merchandise entered before Commerce’s tardy notice, CIT found the merchandise entered before the notice should be reliquidated at the lower rate that was previously in effect.
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Sumecht NA, dba Sumec North America, imported solar cells from its Chinese supplier, Sumec Hardware, which had been assigned an individual AD duty rate in the original 2012 investigation. But after CIT sided with domestic solar companies mounting a legal challenge, Commerce reversed course and said Sumec Hardware should be subject to the 249.96% China-wide rate. Previously, Sumec Hardware’s rate was 13.18%. CIT sustained Commerce’s redetermination on Oct. 5, 2015.
By law, and also as a result of a Federal Circuit decision in a case called “Timken,” Commerce is required to issue a notice in the Federal Register within 10 days of any court decision that goes against a previous Commerce determination. The deadline for announcing the change to Sumec Hardware’s rate was Oct. 15, 2015. But inexplicably, Commerce failed to publish the notice until Nov. 23, which was 49 days after the court decision. Nonetheless, in that notice, Commerce said the rate change was effective Oct. 15.
In the meantime, Sumec North America had imported several shipments of solar panels between the date that CIT’s opinion was issued and the publication date of Commerce’s notice. The opinion had been confidential until a public version was released Dec. 22, 2015, and Sumec North America did not participate in the lawsuit. The importer paid a 13.18% cash deposit rate. Commerce subsequently notified Sumec North America that it would liquidate those entries at a 249.96% rate.
Sumec sued. The government argued that, even though its “Timken” notice was late, the relevant date for legal purposes is when Commerce sets the effective date, and not the publication date. It pointed out that Commerce had issued late Timken notices before. CIT found those arguments “unavailing.” The law “explicitly requires Commerce to publish notice within ten days of the contrary judgment issuance date and makes no allowance for an effective date in lieu of publication in the Federal Register,” it said.
The government also argued that, because the law is silent as to what it should do if it misses the deadline, it should be “afforded deference” as to what it does in those circumstances. But by law, subject merchandise is liquidated in accordance with Commerce’s original determination until the publication date of the Timken notice announcing court-ordered changes, CIT said. The notice “identifies when liquidation should no longer take place in accordance with Commerce’s prior determination,” the trade court said.
“The court concludes that [Sumec’s] entries that were entered, or withdrawn from warehouse, for consumption on or before the date of Commerce’s Timken Notice publication in the Federal Register on November 23, 2015 were entitled to a rate in accordance with Commerce’s prior determination,” CIT said. “The court directs Commerce to reliquidate the entries at issue.”
(Sumecht NA, Inc. v. U.S., Slip Op. 19-118, CIT # 17-00244, dated 09/06/19, Judge Choe-Groves)