Commerce Further Explains Surrogate Value Picks on Remand in Activated Carbon AD Case
The Commerce Department in Nov. 17 remand results submitted to the Court of International Trade further explained its surrogate value selection for coal-based carbonized materials and Malaysian company Bravo Green's 2018 financial statements to calculate the surrogate financial ratios in an antidumping duty case (Carbon Activated Tianjin Co. v. United States, CIT #21-00131).
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The case concerns the 2018-19 administrative review of the antidumping duty order on activated carbon from China. Respondent Carbon Activated Tianin Co. challenged Commerce’s selection of surrogate values for bituminous coal, anthracite coal, hydrochloric acid, carbonized materials, caustic soda and steam, along with the agency’s selection of surrogate financial ratios. For bituminous coal, anthracite coal, hydrochloric acid, caustic soda and steam, the trade court found Commerce’s selections reasonable, especially in light of the lack of evidence on the record to support the alternatives supported by Carbon Activated (see 2208090015).
On the other hand, the trade court found Commerce didn't adequately justify its selection of a more specific Malaysian tariff subheading for coconut shell charcoal, rather than a basket category for all wood charcoal (including shell or nut). Though the agency said there was no evidence that Carbon Activated specifically used wood charcoal, it failed to cite any evidence that Carbon Activated specifically used coconut charcoal either, CIT said. Likewise, Commerce failed to properly justify the selection of Bravo Green for determining surrogate financial ratios, the court ruled.
On remand, the agency gave greater explanations for its carbonized materials and financial ratio surrogate choices. For carbonized materials, Commerce said that in the past, since SV information specific to coal-based carbonized materials was not available, it found coconut shell charcoal to be the best available information to value coal-based carbonized materials.
"Furthermore, Commerce has consistently selected the more specific subheading category (i.e., coconut shell charcoal) to value the mandatory respondents’ [carbonized materials] in this proceeding," the remand results said. "As a result, notwithstanding the respondents’ general arguments in this review about the split in properties between coconut-shell and wood-based [carbonized materials] (as compared to coal-based activated carbon), the mandatory respondents have not provided any new evidence in this review to warrant a departure from Commerce’s practice of selecting coconut-shell charcoal to value the respondents’ [carbonized materials] in this proceeding."
For the use of Bravo Green's financial statements, Commerce said that while they're not as detailed as the agency prefers, the statements have enough information to calculate surrogate financial ratios. The plaintiff argued that Commerce should use the statements from JSC Sorbent or Romcarbon instead. In reply, Commerce said that there is no evidence that these potential surrogate companies have production "comparable to that of the mandatory respondents."
"Therefore, because the record lacks information to assess the comparability of JSC Sorbent’s production experience to that of the mandatory respondents, and Romcarbon’s business operations and production experience are less comparable to that of the mandatory respondents, we have chosen to rely on Bravo Green’s 2018 financial statements that are contemporaneous with the [period of review], and which most closely relate to the operations of a company involved in activated carbon manufacturing," Commerce said.