Commerce Failed to Find Practical Solution to Verifying Non-Use of EBCP on Remand, Plaintiffs Argue
The Commerce Department, in seeking to have countervailing duty respondents verify that neither they nor their U.S. customers benefited from China's Export Buyer's Credit Program, implemented requirements "so onerous" as to make verification "out of reach," plaintiff Dalian Mesien Woodworking Co. said in Sept. 6 comments on Commerce's remand results. Adding to the rebuke of Commerce's submission to the Court of International Trade, plaintiff-intervenor The Ancientree Cabinet Co. argued that the agency's verification process flies in the face of the court's directive to find a "practical solution to verify the non-use" of the EBCP (Dalian Meisen Woodworking Co. v. United States, CIT #20-00110).
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Meisen launched its case to challenge the underlying countervailing duty investigation on wood cabinets and vanities from China. In the investigation, Commerce hit the respondents with AFA over the supposed use of the EBCP. The agency said the use of AFA was needed since the Chinese government refused to provide two key pieces of information regarding how the program works: information about the role of third-party banks in disbursing credits, and revisions made to the program in 2013. However, the respondents in the investigation submitted declarations from their U.S. customers that they did not use the program.
As it has held many times before, the court said that Commerce did not establish solid enough grounds to use AFA for this program (see 2205230033). But in this decision, Judge Richard Eaton told Commerce to find a practical solution for verifying information from CVD respondents' U.S. customers that shows that they did not use the EBCP. On remand, the agency issued supplemental questionnaires to the respondents, "requesting very expansive and highly confidential information from all of their unaffiliated customers."
Meisen characterized Commerce's actions as creating questions designed to create artificial gaps in the record by laying out requirements so out of reach as to make a complete response impossible. "The approach created by Commerce is contrary to the procedures typically followed by Commerce and are not necessary to confirm non-use," the respondent said. "As a result, Commerce’s procedures are not a practical solution to the issue before this Court and are yet another abuse of discretion."
Ancientree said that on remand Commerce requested information on "the unaffiliated customers’ outstanding financing during the [review period], documentation for the largest five loans/financing, additional questions regarding the application/process of obtaining EBC financing, and requests for several confidential documents including the chart of accounts, audited income statements, trial balance ledger, and tying loan and expense amounts to these documents." Counsel for Ancientree said this was an "unprecedented request." Meisen added that some of the requested information, including data on types of financing outstanding during the review period, "such as vehicle loans or loans from shareholders," is "not material to Commerce's decision as they cannot rationally be connected to the" EBCP.
"We respectfully request that the Court either order Commerce to accept the information on the record as sufficient to demonstrate non-use or to remand the case again with instructions to develop a reasonable verification procedure," Meisen said. "This game by Commerce has gone on for far too long."