Commerce Drops Exporter as Mandatory Respondent on Remand in Wood Flooring CVD Review Case
The Commerce Department withdrew exporter Jiangsu Guyu International Trading Co. as a mandatory respondent in a countervailing duty administrative review on remand at the Court of International Trade after reviewing CBP data the agency used in its respondent selection process. After it was ordered by the trade court to look into very large entry volumes, Commerce accepted the explanation that these entries would take an unrealistic number of containers. Due to this, the agency dropped these entries from its respondent selection process and found that Jiangsu Guyu is no longer one of the two exporters that ship the most volume of the subject merchandise. The result, if sustained, would be a 6% decrease in the CVD rate for the non-selected companies (Jiangsu Senmao Bamboo and Wood Industry Co. v. United States, CIT Consol. #20-03885).
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The dispute arises from Commerce's 2017 CVD administrative review on multilayered wood flooring from China. In the review, Commerce used faulty CBP data to pick Baroque Timber Industries and Jiangsu Guyu as the mandatory respondents since they were the two largest exporters of multilayered wood flooring. While not contesting Baroque Timber's selection, the plaintiffs, led by Jiangsu Senmao Bamboo and Wood Industry Co., took issue with Jiangsu Guyu's presence as a mandatory respondent. After consolidating cases challenging the review in CIT, the proceedings now involve 30 plaintiffs.
During the review, Commerce rejected as untimely a submission from Jiangsu Guyu over the respondent selection process that included quantity and value information. In the submission, paired with comments from other parties, the exporter said that the CBP data had inaccurate entry information due to inconsistent and unusual units of measurement and uncommonly large entry volumes, among other issues. In an August opinion, the trade court remanded the case so that Commerce could fully address comments submitted on the use of the errant CBP data. CIT further said that the agency unlawfully rejected Jiangsu Guyu's quantity and value data.
On remand, Commerce admitted that it failed to address one entry in the CBP data that had a different unit of measurement from the rest of the data and certain large entry volumes labeled in cubic meters. On the second point, the agency said it didn't address the parties' explanation that an average 40-foot shipping container with a capacity of 67.7 cubic meters could not realistically fit the volume of these particular entries. Commerce accepted this explanation, finding that the CBP data is "unreaslitic" for an unnamed number of entries. While the agency redacted the precise number of the relevant entries, Commerce said it constituted only 0.1% of all entries in the CBP data.
Seeing as this percentage is so low, and that "there is no indication that the remaining 99.9 percent of entries are unusuable," Commerce continued to use the CBP data, just without the entries in question. "While the interested parties argued that the unrealistically large entries detract from the reliability of the CBP data as a whole, we disagree," the remand results said. Ideally, the agency said it would like to have the four companies with these "unrealistically large entries" to submit quantity and value data for respondent selection, it's "impractical to reopen the record" at this stage in the game.
After removing these entries, Jiangsu Guyu no longer remained as one of the top two exporters of multilayered wood flooring from China. As such, the company was stripped of its mandatory respondent status, though the agency continued to saddle it with its 122.92% CVD rate. Commerce said, though, that it is "not practicable at this stage to select another mandatory respondent and proceed with a full review of the newly selected company." Baroque Timbers thus became the sole mandatory respondent, but Commerce said it is now treating the exporter and its cross-owned affiliate Riverside Plywood as a combined exporter, giving the two companies a 14.09% CVD rate. As such, the non-selected companies' rate dropped from its previous 20.75% mark to Baroque Timber's 14.09% rate.