Commerce Says No Potential Manipulation of CVD Margin, Defends Conclusion at CIT
The Commerce Department reasonably found that countervailing duty petitioner Wind Tower Trade Coalition's allegations that CVD respondent CS Wind Vietnam could potentially manipulate its CVD margin are unsupported, the U.S. argued in Oct. 21 comments on remand results submitted to the Court of International Trade. Aside from addressing WTTC's four alleged factors showing potential manipulation individually, the U.S. said that, when taken collectively, the factors still fail to show a potential for manipulation of the margin via CS Wind Vietnam's relationship with its Korean parent company (Wind Tower Trade Coalition v. United States, CIT #20-03692).
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WTTC filed its suit primarily to contest two elements of the CVD review: the denominator in the subsidy calculation and Commerce's use of certain evidence for its subsidy calculation for the Import Duty Exemptions on Imports of Raw Materials for Exporting Goods program. Finding mixed success in a lengthy opinion at CIT, WTTC saw the trade court sustain the agency's positions relating to its decisions not to apply adverse facts available over the Import Duty Exemptions program and to use the sales of CS Wind Korea for the subsidy calculation (see 2204050041).
However, the trade court found Commerce to have erred in failing to respond to WTTC's argument that CS Wind Vietnam manipulated the duty rate by restructuring sales transactions and shifting a majority of its revenue and profits from Vietnam to South Korea. The judge said Commerce didn't address the argument that using CS Wind Korea's sales value could allow CS Wind Vietnam to manipulate the CVD rate. In its remand results it continued to find there was no potential for manipulation. WTTC took issue with the remand results, arguing that Commerce failed to address the possibility that all four alleged factors showing a potential for manipulation, when taken together, reveal this potential.
In its reply, the U.S. said that it did in fact discuss this possibility. "On remand, Commerce provided a detailed, 20-page analysis of the record evidence with respect to all four factors in WTTC’s manipulation allegations, specifically referencing the relevant documents on the record and explaining why the evidence is insufficient to constitute potential manipulation," the brief said. In its comments on the remand results, the government went through all four of the alleged factors and showed how it thought the record failed to show any evidence for manipulation.
For instance, the first factor the WTTC put forth says that CS Wind Korea and CS Wind Vietnam "suddenly" took up the tolling arrangements to avoid paying CV duties. Commerce found on remand that the record shows the two companies entered into tolling agreement during the review period, but that similar tolling agreements also existed between CS Wind Vietnam and CS Wind Korea long before the review period.