Slip Op. 19-65
UNITED STATES COURT OF INTERNATIONAL TRADE
REBAR TRADE ACTION COALITION,
Plaintiff,
HABAù SINAI VE TIBBI GAZLAR
ISTIHSAL ENDÜSTRISI A.ù.,
Consolidated Plaintiff,
Before: Leo M. Gordon, Judge
v.
Consol. Court No. 17-00202
UNITED STATES,
Defendant,
REBAR TRADE ACTION COALITION,
Defendant-Intervenor.
OPINION
[Final Determination sustained as to Habaú.]
Dated: May 31, 2019
Alan H. Price, John R. Shane, and Maureen E. Thorson, Wiley Rein LLP of
Washington, DC for Plaintiff and Defendant-Intervenor Rebar Trade Action Coalition.
David L. Simon, Law Office of David L. Simon of Washington, DC for Consolidated
Plaintiff Habaú Sinai ve Tibbi Gazlar Istihsal Endüstrisi A.ù.
Margaret J. Jantzen, Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice of Washington, DC for Defendant, United States. With her
on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson,
Director, and L. Misha Preheim, Assistant Director. Of counsel was Reza Karamloo,
Attorney, U.S. Department of Commerce, Office of the Chief Counsel for Trade
Enforcement and Compliance of Washington, DC.
Consol. Court No. 17-00202 Page 2
Gordon, Judge: This action involves the affirmative final determination of the
U.S. Department of Commerce (“Commerce”) in the countervailing duty (“CVD”)
investigation published as Steel Concrete Reinforcing Bar From the Republic of Turkey,
82 Fed. Reg. 23,188 (Dep’t of Commerce May 22, 2017) (final determ.), PD 306,1 and
accompanying Issues and Decision Memorandum (Dep’t of Commerce May 15, 2017)
(“Decision Memorandum”), PD 302 (collectively, “Final Determination”), amended by
Steel Concrete Reinforcing Bar From the Republic of Turkey, 82 Fed. Reg. 32,531 (Dep’t
of Commerce July 14, 2017) (amended final determ.), PD 315 (“Amended Final
Determination”). Before the court is the motion for judgment on the agency record of
Consolidated Plaintiff Habaú Sinai ve Tibbi Gazlar Istihsal Endüstrisi A.ù. (“Habaú”).2 See
Pl. Habaú’s R. 56.2 Mot. for J. on the Agency R., ECF No. 263 (“Habaú Br.”); see also
Def.’s Resp. in Opp’n to Pls.’ Mots. for J. on the Agency R., ECF No. 31 (“Def.’s Resp.”);
Habaú Reply Br., ECF No. 37 (“Habaú Reply”). The court has jurisdiction pursuant to
Section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C.
1
“PD” refers to a document contained in the public administrative record, which is found
in ECF No. 19-1, unless otherwise noted. “CD” refers to a document contained in the
confidential administrative record, which is found in ECF No. 19-2, unless otherwise
noted.
2
Plaintiff Rebar Trade Action Coalition ("RTAC") has also filed a motion for judgment on
the agency record in this matter that remains pending before the court. See Pl. RTAC’s
R. 56.2 Mot. for J. on the Agency R., ECF No. 27. The court has stayed consideration of
the issues raised in RTAC’s motion as they are substantially similar to the issues under
consideration by the U.S. Court of Appeals for the Federal Circuit in Rebar Trade Action
Coalition v. United States, 42 CIT ___, 335 F. Supp. 3d 1302 (2018), appeal docketed,
No. 2019-1228 (Fed. Cir. Nov. 26, 2018).
3
All citations to parties' briefs and the agency record are to their confidential versions
unless otherwise noted.
Consol. Court No. 17-00202 Page 3
§ 1516a(a)(2)(B)(i) (2012)4, and 28 U.S.C. § 1581(c) (2012). For the reasons that follow,
the court sustains the Final Determination as to Habaú.
I. Standard of Review
The court sustains Commerce’s “determinations, findings, or conclusions” unless
they are “unsupported by substantial evidence on the record, or otherwise not in
accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing
agency determinations, findings, or conclusions for substantial evidence, the court
assesses whether the agency action is reasonable given the record as a whole. Nippon
Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed. Cir. 2006). Substantial
evidence has been described as “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” DuPont Teijin Films USA v. United States,
407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S.
197, 229 (1938)). Substantial evidence has also been described as “something less than
the weight of the evidence, and the possibility of drawing two inconsistent conclusions
from the evidence does not prevent an administrative agency’s finding from being
supported by substantial evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620
(1966). Fundamentally, though, “substantial evidence” is best understood as a word
formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and
Practice § 9.24[1] (3d ed. 2019). Therefore, when addressing a substantial evidence issue
raised by a party, the court analyzes whether the challenged agency action
4
Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of
Title 19 of the U.S. Code, 2012 edition.
Consol. Court No. 17-00202 Page 4
“was reasonable given the circumstances presented by the whole record.” 8A West’s Fed.
Forms, National Courts § 3.6 (5th ed. 2019).
II. Discussion
A. Application of Adverse Facts Available (“AFA”) to Habaú
If Commerce finds that a respondent's information is unreliable because the
respondent has withheld information that Commerce requests, failed to provide requested
information in a timely manner or in the form or manner requested, or significantly
impeded the progress of the proceeding, Commerce uses the facts otherwise available.
19 U.S.C. § 1677e(a)(2). Commerce may draw an adverse inference against
a respondent in selecting from among the facts otherwise available when it finds that
a respondent “has failed to cooperate by not acting to the best of its ability.” 19 U.S.C.
§ 1677e(b).
Prior to applying an adverse inference, Commerce examines a respondent's
actions and assesses the extent of the “respondent's abilities, efforts, and cooperation in
responding to Commerce's information requests.” Nippon Steel Corp. v. United States,
337 F.3d 1373, 1382 (Fed. Cir. 2003). “Acting to the best of its ability” requires that
a respondent do the maximum that it is able to do. Id. Although the standard does not
require perfection and recognizes that mistakes occur, it does not condone
inattentiveness, carelessness, or inadequate record-keeping. Id. Rather, it is the
responsibility of a respondent to comply with Commerce's information requests.
Consol. Court No. 17-00202 Page 5
In its initial questionnaire, Commerce inquired:
Did the GOT, or entities wholly or partially owned by the GOT
or any provisional or local government, provide, directly or
indirectly any other forms of assistance to your company
during the [period of investigation (“POI”)] and the proceeding
AUL period? If so, please describe such assistance, in detail,
including the relevant benefit amounts, dates of receipt, and
purposes and terms.
See Decision Memorandum at 28 (quoting the initial questionnaire sent to Habaú). During
verification, in explaining a contract provision referring to “export-related incentives,”
Habaú officials informed Commerce that the company “occasionally” received export-
related incentives pursuant to Turkey’s Domestic Processing Regime (“RDP”) Resolution
2005/839 (“RDP program” or “duty drawback program”). Id. When Commerce asked why
such benefits were not reported in the company’s questionnaire response, Habaú officials
asserted that there was “no countervailable aspect” of the duty drawback program. Id.
In Habaú’s view, the RDP program did not provide “assistance,” it did not need to be
reported in Habaú’s questionnaire response as “other forms of assistance.” Id. Commerce
rejected Habaú’s arguments, noting that “[Commerce], not the interested parties,
determines whether or not a response is required.” Id. After reviewing the available
information about the RDP program and Habaú’s failure to timely provide Commerce with
information about Habaú’s utilization of that program, Commerce determined that “the use
of facts available [was] warranted” pursuant to both 19 U.S.C. §§ 1677e(a)(1) and (a)(2).
Id. at 29.
Commerce further found that Habaú “did not cooperate to the best of its ability”
by failing to timely report its receipt of assistance under the RDP program. Id. Commerce
Consol. Court No. 17-00202 Page 6
also determined that Habaú’s failure to report “impeded the investigation and precluded
the Department from adequately examining the program (i.e., the Department was unable
to issue a supplemental questionnaire response to the [Government of Turkey (“GOT”)]
concerning the extent to which this program constitutes a financial contribution, is specific
under sections 771(5)(D) and 771(5A) of the Act, and provides a benefit under section
771(5)(E) of the Act and 19 CFR 351.519).” Id. at 29–30.
Consequently, Commerce found that it was appropriate to apply an adverse
inference, and “that the unreported RDP duty drawback program meets the financial
contribution and specificity criteria outlined under sections 771(5)(D) and 771(5A) of the
Act, respectively.” Id. at 30. Additionally, Commerce found that the RDP program “confers
a benefit under section 771(5)(E) of the Act and 19 CFR 351.519.” Id.
Given these findings, Commerce proceeded to apply its “established hierarchy” for
selecting an AFA rate for the program, explaining that:
under the hierarchy, the Department will select AFA rates in
the following order of preference: the highest calculated rate
for the identical subsidy program in the investigation if a
responding company used the identical program and the rate
is not zero; if there is no identical program match within the
investigation, or if the rate is zero, the highest non-de minimis
rate calculated for the identical program in a CVD proceeding
involving the same country; if no such rate is available, the
highest non-de minimis rate for a similar program, based on
treatment of the benefit, in another CVD proceeding involving
the same country; absent an above-de minimis subsidy rate
calculated for a similar program, the highest calculated
subsidy rate for any program otherwise identified in a CVD
case involving the same country that could conceivably be
used by the non-cooperating companies.
Consol. Court No. 17-00202 Page 7
Decision Memorandum at 30. Applying this hierarchy to the record, Commerce
determined that “it is appropriate to apply, as AFA, a rate of 14.01 percent ad valorem,”
which was the subsidy rate calculated for an export tax rebate program in Final Affirmative
Countervailing Duty Determinations; Certain Welded Carbon Steel Pipe and Tube
Products from Turkey, 51 Fed. Reg. 1268 (Dep’t of Commerce Jan. 10, 1986) (“1986
Welded Pipe and Tube from Turkey Determination”). Id.
Habaú argues that Commerce erred in finding that Habaú’s failure to include
information about the RDP program in its questionnaire response merited the application
of AFA. See Habaú Br. at 3–20. Habaú further contends that, even if Commerce properly
determined that Habaú was subject to AFA, Commerce’s selection of a 14.01% subsidy
rate for the RDP program based on the 1986 Welded Pipe and Tube from Turkey
Determination was unreasonable. Id. at 20–24.
Habaú contends that its failure to include information about the RDP program in its
initial questionnaire response did not merit Commerce’s application of AFA because
“Commerce’s Treatment of the Turkish Drawback Regime Has Been Inconsistent.”
See id. at 4–11. Habaú argues that because Commerce has decided that the RDP
program was not countervailable in prior proceedings, Commerce should not have
reasonably expected Habaú to provide information about the RDP program in the present
proceeding. Id. Commerce acknowledged that Habaú is correct that “the Department has
not consistently examined Turkey’s duty drawback program and, in particular, the RDP
program at issue in this case;” however, Commerce explained that “[t]he examination and
analysis of a particular duty drawback system, including the RDP duty drawback program,
Consol. Court No. 17-00202 Page 8
hinges on the specific facts on the record of a CVD proceeding, such as how the
government implemented and monitored the system during the POI and whether or not
product-specific and company-specific yield factors, including waste rates, are accurate.”
Decision Memorandum at 29. By failing to report its use of the duty drawback program
during the POI, Commerce concluded that “Habas denied the [agency] and other
interested parties the opportunity to collect and analyze the information necessary to
determine the [] duty drawback program’s countervailability in this proceeding.” See id.
The court agrees that Commerce’s determination as to whether a duty drawback
program is countervailable is a fact-intensive examination that the agency is entitled to
undertake, and Habaú cannot unilaterally foreclose it by refusing to respond to the
agency. See id. at 28–29; see also Essar Steel Ltd. v. United States, 34 CIT ___, ___,
721 F. Supp. 2d 1285, 1298–99 (2010) (“Regardless of whether [the respondent] deemed
the [] information relevant, it nonetheless should have produced it [in] the event that
Commerce reached a different conclusion . . . .”), rev’d in part on other grounds, 678 F.3d
1268 (Fed. Cir. 2012); Ansaldo Componenti, S.p.A. v. United States, 10 CIT 28, 37,
628 F. Supp. 198, 205 (1986) (holding that “it is Commerce, not the respondent,
that determines what information is to be provided,” despite any claim by respondent that
the information request “cannot legally serve as the basis” for the agency’s view).
Habaú contends that Commerce erred in its application of AFA by failing to “satisfy
the statutory criteria for finding that the drawback program is countervailable.” See Habaú
Br. at 11 (citing Changzhou Trina Solar Energy Co. v. United States, 40 CIT, ___, ___,
195 F. Supp. 3d 1334, 1350 (2016)). Habaú maintains that Commerce failed to
Consol. Court No. 17-00202 Page 9
“make a specific factual finding as to whether” the RDP program constitutes a “financial
contribution,” is “specific,” and provides a “benefit” as defined pursuant to 19 U.S.C.
§ 1677(5). Id. at 11–13. Habaú argues that Commerce’s failure to make these factual
findings demonstrates that Commerce’s determination is not supported by substantial
evidence and must be remanded as the court concluded in Changzhou Trina. Id.
The court disagrees.
Commerce recognized its statutory obligations in evaluating the countervailability
of the RDP program, (pursuant to 19 U.S.C. § 1677(5)), and reasonably applied AFA
(pursuant to 19 U.S.C. § 1677e) in finding that the duty drawback program was
countervailable as it met all of the statutory criteria. See Decision Memorandum at 29-30.
Habaú’s argument that Commerce did not make the requisite statutory findings that the
RDP program constitutes a “financial contribution,” is “specific,” and provides a “benefit,”
does not account for the fact that Habaú’s failure to provide information about its use of
the duty drawback program is precisely what prohibited Commerce from directly making
those findings. Id. (“Because Habas impeded the investigation and precluded the
Department from adequately examining the program (i.e., the Department was unable to
issue a supplemental questionnaire response to the GOT concerning the extent to which
this program constitutes a financial contribution, is specific under sections 771(5)(D) and
771(5A) of the Act, and provides a benefit under section 771(5)(E) of the Act and 19 CFR
351.519), an adverse inference is warranted in selecting the [sic] from facts otherwise
available.”).
Consol. Court No. 17-00202 Page 10
Moreover, Habaú’s reliance on Changzhou Trina is unavailing as it is
distinguishable given the lack of information in that matter as to the nature of the programs
that Commerce determined to be countervailable. See Changzhou Trina, 40 CIT at ___,
195 F. Supp. 3d at 1347–50 (noting that, in contrast to other cases in which Commerce
permissibly “applied AFA to a program about which the record contained at least some
factual allegations and supporting evidence,” Commerce’s determination under review
lacked “any information, from any source” justifying findings that the “programs and
verification grants and tax deduction” at issue satisfied the elements for
countervailability.”). There, Commerce similarly applied AFA to grants and a tax deduction
about which the record was devoid of any relevant information. See Changzhou Trina,
40 CIT at ___, 195 F. Supp. 3d at 1349 (distinguishing Commerce’s reasonable
application of AFA to infer countervailability as to a particular program in a prior
proceeding with Commerce’s improper use of AFA to make “sweeping legal conclusion[s]
lacking any factual foundation” in the determination under review). In this action, Habaú
informed Commerce at verification that it received export related incentives under the
RDP program during the POI. See Decision Memorandum at 28. Commerce was familiar
with the RDP program because it had examined this program in prior unrelated
proceedings; although, as noted by Habaú, Commerce reached different determinations
as to whether the program was countervailable depending on the record of each
proceeding. See Habaú Br. at 6–9. Accordingly, the court rejects Habaú’s argument that
Commerce unreasonably failed to “satisfy the statutory criteria for finding that the
drawback program is countervailable.” See Habaú Br. at 11–13.
Consol. Court No. 17-00202 Page 11
Habaú next contends that even if the court concludes that “the finding of
countervailability is adequately supported, Commerce has still failed to meet the statutory
criteria for its finding [that the use of facts available was warranted].” See id. at 13–17.
Habaú argues that Commerce’s decision to apply facts available is predicated on
19 U.S.C. §1677e(a)(2)(A) because the agency’s explanation referenced Habaú’s failure
to provide “requested information.” See id. at 13. However, Commerce was quite clear in
reaching its determination that it was applying facts available pursuant to both
§ 1677e(a)(2)(A) and § 1677e(a)(1). See Decision Memorandum at 29 (“For these
reasons, we find that necessary information is not available on the record, pursuant to
section 776(a)(1) of the Act. Furthermore, pursuant to section 776(a)(2) of the Act, the
Department finds that Habas withheld information that was requested, failed to provide
such information by the appropriate deadlines, and significantly impeded the proceeding
…. Consequently, we determine that, in accordance with section 776(a)(1) and (2) of the
Act, the use of facts available is warranted.” (emphasis added)). Regardless of the merits
of Habaú’s contention that Commerce erred in concluding that Habaú withheld information
pursuant to § 1677e(a)(2)(A), Habaú makes no argument (and the court sees no basis on
which to conclude) that Commerce’s application of facts available pursuant to
§ 1677e(a)(1) was unreasonable. Accordingly, the court rejects Habaú’s argument that
Commerce “failed to meet the statutory criteria” of 19 U.S.C. §1677e(a). See Habaú Br.
at 13.
In the alternative, Habaú maintains that even if “Habaú may be considered to have
failed to meet the requirement of §1677e(a)(2)(A), Commerce erred in deciding that
Consol. Court No. 17-00202 Page 12
Habaú ‘did not act to the best of its ability in responding to the Department’s requests for
information,’ as required by 19 U.S.C. §1677e(b)(1).” See Habaú Br. at 17–20. Despite
Habaú’s claim that it would have needed to be “clairvoyant” to predict that Commerce
would want information about Habaú’s utilization of the RDP program, see Habaú Br.
at 19, the court concludes that Habaú’s failure to inform Commerce about its use of the
RDP program clearly constituted a failure of Habaú to act to “the best of its ability to
comply with a request for information from” Commerce. See 19 U.S.C. § 1677e(b)(1);
Decision Memorandum at 29. Habaú’s argument that Commerce’s evaluation of the RDP
program has been inconsistent demonstrates that Habaú was aware that Commerce had
previously found the RDP program to provide a countervailable benefit in other
proceedings. See Habaú Br. at 6–9 (noting instances where Commerce found Turkish
duty drawback countervailable). Even if Habaú was at best confused or uncertain as to
whether Commerce would consider the RDP program countervailable, it had an obligation
to raise its concerns so that Commerce, not Habaú, could determine whether the program
was countervailable in this proceeding. See Essar Steel, 34 CIT at ___, 721 F. Supp. 2d
at 1298–99 (“Regardless of whether [the respondent] deemed the [] information relevant,
it nonetheless should have produced it [in] the event that Commerce reached a different
conclusion . . . .”). Accordingly, the court finds no merit in Habaú’s contentions that
Commerce acted unreasonably in finding that Habaú’s failure to disclose its use of the
RDP program merited the application of AFA pursuant to 19 U.S.C. § 1677e(b)(1).
Habaú also argues that even if the court sustains Commerce’s determination to
apply AFA for its failure to provide information about the RDP program, remand is
Consol. Court No. 17-00202 Page 13
nevertheless appropriate because the AFA rate selected by Commerce is unreasonable.
See Habaú Br. at 20–24. Habaú maintains that Commerce’s selection of the 14.01% rate
is unreasonable because Commerce could not corroborate the rate from a 32-year-old
terminated program as relevant and reliable pursuant to 19 U.S.C. § 1677e(c) (the
statutory requirements for relying on secondary information). Id.; see also Decision
Memorandum at 30–31 (explaining how Commerce determined that the selected AFA
rate was “corroborated to the extent practicable”).
As described above, see supra pp. 5–6, Commerce applied its established
hierarchy for the selection of an AFA rate to assign for Habaú’s use of the RDP program.
See Decision Memorandum at 30. Notably, Habaú does not challenge Commerce’s
hierarchy for the selection of an AFA rate, but instead challenges only Commerce’s
corroboration of the selected rate. See Habaú Br. at 20–23. Specifically, Habaú contends
that despite the fact that the court has sustained Commerce’s use of the 14.01% rate in
a prior CVD proceeding as a corroborated AFA rate, that rate (from the 1986 Welded Pipe
and Tube from Turkey Determination) has never been (and cannot be) found to be
“reliable” under 19 U.S.C. § 1677e(c). See Habaú Br. at 20–23 (discussing the selected
AFA rate, statutory corroboration requirements, and distinguishing Özdemir Boru San. ve
Tic. Ltd. Sti. v. United States, 41 CIT ___, ___, 273 F. Supp. 3d 1225, 1247–48 (2017)).
Defendant disagrees with Habaú’s reading of Özdemir, and maintains that the court
evaluated Commerce’s selection of an AFA rate based on the 1986 Welded Pipe and
Tube from Turkey Determination and “deemed [that rate selection as] sufficiently reliable,
reasonable, and supported by substantial evidence.” See Def.’s Resp. at 22 (citing
Consol. Court No. 17-00202 Page 14
Özdemir as holding that the “rate was reliable and corroborated because it was calculated
in a previous Turkish countervailing duty investigation”). Moreover, Defendant maintains
that Commerce properly applied its AFA rate selection hierarchy and, within the discretion
afforded to the agency by the relevant statutory scheme, reasonably selected (and
corroborated to the extent practicable) the 14.01% rate. Id. at 19–22.
The court agrees with Defendant. Habaú’s arguments about the alleged
insufficiency of Commerce’s corroboration of the 14.01% rate ignore the fact that Habaú’s
failure to provide the relevant information about the RDP program is what led Commerce
to select an AFA rate from a similar program from a previous proceeding involving Turkey.
The text of 19 U.S.C. § 1677e(d) provides broad discretion to Commerce, permitting the
agency to “use a countervailable subsidy rate applied for the same or similar program in
a countervailing duty proceeding involving the same country,” and to “apply any of the
countervailable subsidy rates or dumping margins specified under that paragraph,
including the highest such rate or margin.” Commerce adhered to its unchallenged
hierarchy for selecting AFA rates, and reasonably selected a 14.01% rate because it was
the highest non-de minimis rate calculated for a similar program in another Turkish
countervailing duty proceeding. See Decision Memorandum at 30 (referring to the 1986
Welded Pipe and Tube from Turkey Determination).
While Özdemir is not binding on the court, it is persuasive as to how and why the
rate from the 1986 Welded Pipe and Tube from Turkey Determination may be
corroborated by Commerce. See Özdemir, 41 CIT at ___, 273 F. Supp. 3d at 1247–48.
Consol. Court No. 17-00202 Page 15
Habaú is incorrect when it contends that Özdemir failed to evaluate the “reliability” of the
challenged AFA rate. The court there stated:
Commerce determined that the CWP & T 1986 rate was
reliable because it was “calculated in ... previous Turkey CVD
investigations or administrative reviews.” Under the limitations
articulated by the agency, and under the statutory standard[,]
Commerce's statement regarding reliability served the
purposes of corroboration “to the extent practicable.”
Özdemir, 41 CIT at ___, 273 F. Supp. 3d at 1248 (internal citations omitted). Here, as in
Özdemir, Commerce was confronted with a limited record and was forced to select, as an
AFA rate, a rate from a “similar” Turkish subsidy program from a prior proceeding. See
Decision Memorandum at 30–31. Commerce corroborated this rate to the extent
practicable by confirming its relevance and reliability. Id. (“With regard to the reliability
aspect of corroboration, we are relying on a subsidy rate calculated in another CVD
proceeding. … because the calculated rate was based on information provided for another
tariff rebate program (i.e., export tax rebates), it reflects the actual behavior of the GOT with
respect to a program that is similar to the RDP duty drawback program.”) While Habaú urges
the court to conclude that Commerce’s analysis is insufficient, Habaú has “not provided
binding authority that would impose on Commerce a corroboration standard stricter than
that identified in the statute and the legislative history.” See Özdemir, 41 CIT at ___,
273 F. Supp. 3d at 1248. Considering the record as a whole, the court concludes that
Commerce reasonably corroborated the 14.01% AFA rate as required by § 1677e(c)(1).
Habaú lastly maintains when Commerce did not assign Habaú a rate lower than
14.01%, the agency unreasonably failed to evaluate the “situation that resulted in … an
adverse inference”. See Habaú Br. at 23–24. Habaú contends that the “‘situation’ that led
Consol. Court No. 17-00202 Page 16
to AFA was that everyone concerned was well aware of drawback in the context of Turkish
steel trade cases in general, and rebar cases in particular, and nobody – not the
petitioners, not Commerce, and not Habaú – thought to ‘connect the dots’ between this
general knowledge and the specifics of answering the CVD questionnaire.” Habaú Br.
at 24. Contrary to Habaú’s position, Commerce explained that:
[t]he Department has previously found that import duty
rebate/drawback programs may provide countervailable
assistance to companies importing goods. Although, as noted
by Habas, the Department has not consistently examined
Turkey’s duty drawback program and, in particular, the RDP
program at issue in this case, determining the
countervailability of a duty drawback program requires a fact-
intensive examination … By failing to report its use of the RDP
duty drawback program during the POI in response to the
Department’s initial questionnaire, Habas denied the
Department and other interested parties the opportunity to
collect and analyze the information necessary to determine the
RDP duty drawback program’s countervailability in this
proceeding.
Decision Memorandum at 29. Commerce went on to acknowledge Habaú’s argument that
Commerce “should consider the fact that, in prior proceedings, [Commerce has] often
calculated de minimis rates for [the RDP Program],” but explained that its selection of an
AFA rate “is guided by an established hierarchy, which does not allow for the use of
de minimis rates.” Id. at 30.
Notably, Habaú does not challenge Commerce’s “established hierarchy” for
selecting AFA rates, nor does Habaú identify any specific non-de minimis rates that
Commerce may have selected as an appropriate “lesser rate” after an “evaluation of the
situation” pursuant to 19 U.S.C. § 1677e(d)(2). See Habaú Br. at 23–24; Habaú Reply at
4–5. Habaú provides no insight as to how Commerce may have reasonably selected an
Consol. Court No. 17-00202 Page 17
AFA rate other than 14.01%, nor does Habaú explain how Commerce may have
reasonably reduced such a rate in light of an “evaluation of the situation” under
§ 1677e(d)(2). Id. Commerce did explain its selection of an AFA rate for the RDP Program
in light of the limited facts on the record and the totality of the circumstances. See Decision
Memorandum at 31 (noting that “unlike other types of information, such as publicly available
data on the national inflation rate of a given country or national average interest rates, there
are typically no independent sources for data on company-specific benefits resulting from
countervailable subsidy programs”). Commerce further explained how it applied its
“established hierarchy” in selecting the 14.01% rate. See id. at 30. Nevertheless, Habaú
insists that “Commerce failed to make the analysis required by §1677e(d)(2), and a
remand is therefore required.” Habaú Reply at 5.
Habaú relies on POSCO v. United States, 42 CIT ___, ___, 296 F. Supp. 3d 1320,
1349 (2018) for the proposition that Commerce must conduct “a separate case-specific
factual evaluation” in selecting an AFA rate pursuant to § 1677e(d)(2). POSCO is
distinguishable as the court there noted that “Commerce did not expressly state which
hierarchical provision(s) it relied on in this proceeding.” See POSCO, 42 CIT at ___,
296 F. Supp. 3d at 1335. Here, Commerce explained its straightforward application of its
established hierarchy, and found that the 14.01% rate from the 1986 Welded Pipe and
Tube from Turkey Determination was “highest rate for a similar program in a proceeding
involving Turkey.” Decision Memorandum at 30. Moreover, in POSCO the court explained
that § 1677e(d)(2) “contemplates a case-specific evaluation as part of Commerce’s
selection from among a range of rates.” POSCO, 42 CIT at ___, 296 F. Supp. 3d at 1349
Consol. Court No. 17-00202 Page 18
(emphasis added). The court also clarified that “the issue is not whether Commerce’s
hierarchical methodology as a whole complies with the statute, but whether Commerce’s
unexplained selection of the highest rates within each prong of its hierarchy complies with
§ 1677e(d)(2).” Id. Unlike POSCO, this matter does not involve the comparison of
alternative rates available on the record as Habaú has not identified any specific “lesser
rates” that Commerce may reasonably have selected. See Habaú Br. at 24 (stating that
remand is necessary for Commerce to consider “lesser rates”). Accordingly, the court
concludes that Plaintiff’s reliance on POSCO is unavailing.
Although Commerce did not expressly cite § 1677e(d)(2) in its explanation of the
selection of an AFA rate for the RDP Program, Commerce’s explanation provides a
reasonably “discernable path” for how the agency selected of the 14.01% AFA rate.
See NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1321–22 (Fed. Cir. 2009)
(The court must sustain a determination “of less than ideal clarity” where Commerce's
decisional path is reasonably discernable. (quoting Motor Vehicle Mfrs. Ass'n v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, (1974))). Accordingly, based on the record as
a whole, the court concludes that Commerce reasonably selected the 14.01% AFA rate.
B. Selection of Natural-Gas Benchmark
In the course of investigating whether Habaú purchased natural gas for less than
adequate remuneration (“LTAR”), pursuant to 19 U.S.C. §1677(5)(D)(3), Commerce
compared the prices Habaú actually paid for natural gas to a benchmark drawn from an
International Energy Agency (“IEA”) report. See 19 C.F.R. § 351.511(a)(2) (Commerce’s
benchmarking regulation for evaluating whether goods or services were provided for
Consol. Court No. 17-00202 Page 19
LTAR). As Commerce explained, “Section 351.511(a)(2) of the Department’s regulations
sets forth the hierarchy of potential benchmarks, listed in order of preference: (1) market
prices from actual transaction of the good within the country under investigation
(e.g., actual sales, actual imports, or competitively run government auctions) (i.e., ‘tier
one’), (2) world market prices that would be available to purchasers in the country under
investigation (i.e., ‘tier two’), or (3) an assessment of whether the government price is
consistent with market principles (i.e., ‘tier three’).” Decision Memorandum at 8.
Commerce “found that there was no viable tier one benchmark for natural gas in Turkey
during the POI and relied on country-specific industrial natural gas prices published by
the International Energy Agency (IEA), which is part of the Organisation for Economic Co-
operation and Development (OECD), as a tier two benchmark to calculate the benefit
received by Habas under this program.” Id. at 9.
Habaú challenges Commerce’s reliance on the IEA report as unreasonable,
contending that Commerce instead should have used the data submitted by Habaú
obtained from Global Trade Information Services (“GTIS”) as the preferable data source
for constructing a tier two benchmark pursuant to § 351.511(a)(2). See Habaú Br. at 25–
28. Commerce rejected the GTIS data proffered by Habaú, stating:
[T]he specific set of GTIS data on the record of this
investigation contains pervasive problems that cannot be
corrected without making assumptions that would be
unwarranted and unsupported by the record. Specifically, the
GTIS data are reported in six substantially different units of
measure: M3, TM3, and L, which are units of volume; KG
and T, which are units of mass; and TJ, which is a unit of
energy. … The conversion factors suggested by Habas do not
address this problem. …
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The petitioner raised its conversion rate and energy
content concerns in its case brief, as well as in earlier factual
submissions. However, no party suggested a method for
standardizing the GTIS data. Rather, Habas focused its
comments on rebutting the petitioner’s suggestion that we
continue to rely on the IEA, as discussed below.
Consequently, without additional information clarifying the
nature of the variance in conversion rates, we find that the
various units of measure in the GTIS data cannot be
harmoniously converted to a single unit of measure that would
enable a comparison of the GTIS natural gas prices to Habas’
natural gas purchases without introducing unnecessary
distortion into the calculations.
Moreover, information on the record of this proceeding
indicates that the GTIS data includes shipments of CNG,
which, as explained by the GOT, is a different product that is
shipped in canisters rather than through pipelines. Based on
this fact, it is evident that certain shipments included in the
GTIS data (e.g., shipments of natural gas from the Czech
Republic to Cuba) are comprised entirely of CNG. Because
other shipments between countries connected by pipelines
(e.g., shipments of natural gas from Hungary to Croatia) also
likely include CNG, it is impossible to identify and remove
comprehensively all shipments of CNG from the GTIS data.
Therefore, we believe a more accurate gauge of
natural gas prices in the POI is provided by the IEA data,
which is reported in a unit comparable to the unit in which
Habas was invoiced (i.e., MWh/KWh) and, as such, does not
require any conversion. …
For the reasons explained in the Preliminary
Determination, we continue to find that the annual OECD
Europe natural gas prices for 2015, as published by the IEA,
are usable as a tier two benchmark. The IEA annual data do
not suffer from the same inconsistencies as the GTIS data.
Decision Memorandum at 22–25.
In its brief before the court, Habaú continues to assail Commerce’s selection of the
IEA data as unreasonable; however, Habaú fails to demonstrate why its proffered GTIS
data set is the only reasonable selection on the record, nor does Habaú address the
Consol. Court No. 17-00202 Page 21
problem highlighted by Commerce that “no party [has] suggested a method for
standardizing the GTIS data.” See Habaú Br. at 25–28; see also Decision Memorandum
at 24. Instead, Habaú attempts to downplay the significance of the problems with the GTIS
data highlighted by Commerce. Habaú argues that its proposed benchmark submission
provided Commerce with an analysis of the GTIS data that leaves only a “negligible
outlier” of problematic data that “will always find its way into a database, but its existence
is not grounds for discarding the entire database.” Habaú Br. at 28 (citing Habaú
benchmark submission (Mar. 2, 2017), PD 221–222). In the Decision Memorandum,
Commerce acknowledged that Habaú proposed a conversion rate for energy units to
address some of Commerce’s concerns about using the GTIS data, but found that
Habaú’s proposed energy unit conversion solution did not resolve the problems presented
in using that data. See Decision Memorandum at 24 n.155 (“Habas submitted a
conversion rate for energy units, KWh, to volume units, M3, based on its own experience.
However, for the reasons already explained, if energy content is shipment-specific,
Habas’s experience does not provide a reliable method for making conversions for other
transactions.”).
Habaú’s arguments, though, fail to address the basis of Commerce’s decision.
Commerce was presented with the choice of two competing data sets on the record
(i.e., the IEA and GTIS data). After consideration of the pros and cons of each data set,
Commerce concluded that the IEA data provided a “more accurate gauge of natural gas
prices in the POI” that further were “reported in a unit comparable to the unit in which
Habas was invoiced.” Id. at 24–25. Considering the record as a whole, the court
Consol. Court No. 17-00202 Page 22
concludes Habaú has failed to establish that a reasonable mind would have to credit
Habaú’s position as the one and only correct position on the administrative record. The
record more than adequately supports Commerce's conclusion that “the annual OECD
Europe natural gas prices for 2015, as published by the IEA, are usable as a tier two
benchmark …” and that the “IEA annual data do not suffer from the same inconsistencies
as the GTIS data.” See id.; see also Daewoo Elecs. Co. v. Int'l Union of Elec., Elec.,
Technical, Salaried & Mach. Workers, AFL–CIO, 6 F.3d 1511, 1520 (Fed. Cir. 1993) (“The
question is whether the record adequately supports the decision of [Commerce], not
whether some other inference could reasonably have been drawn.”). Accordingly,
Commerce's selection of the IEA data as a tier two benchmark for natural-gas prices is
reasonable.
III. Conclusion
For the reasons set forth above, the court sustains the Final Determination as to
Habaú.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: May 31, 2019
New York, New York