Commerce Defends Use of Third-Country CONNUM Costs as Surrogate Costs at CIT
The Commerce Department defended its final results in an antidumping duty review in a Feb. 1 reply brief at the Court of International Trade, arguing, among other things, that Commerce did not illegally change its methodology when it decided to use third-country control number (CONNUM) costs. The agency also claimed that plaintiff Navneet Education misread Commerce's decision not to use third-party CONNUMs in a review on ripe olives from Spain when it argued that the ripe olives case affirmed agency practice (Navneet Education v. United States, CIT # 22-00132).
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The case contests Commerce's final results in the administrative review of the antidumping duty order on lined paper products from India in which Navneet served as a respondent. Navneet made three challenges to its dumping margin, arguing that (1) Commerce departed from its established practice by using the cost of CONNUMs only sold in third countries as surrogate costs for the difference-in-merchandise (DIFMER) test, (2) Commerce's alleged practice of not using third-country CONNUM costs was affirmed in the ripe olives from Spain review, and (3) the third-country CONNUM costs practice is reflected in the agency's public standard margin calculation program which was illegally altered ot include Navneet's third-country CONNUM costs.
Replying to the respondent's motion for judgment, Commerce argued against all three of these points. Addressing the first point, the agency said that it did not depart from its practice. "As Commerce explained, its practice in assigning surrogate costs is to use the most similar product from a pool of all available CONNUMs with cost information on the record as long as it does not lead to distortions," the brief said.
Discussing the ripe olives from Spain review, Commerce said Navneet misinterpreted the proceeding. In the case, Commerce didn't just adjust the database to fall in line with its practice of picking the most similar products available to set up surrogate costs, it also relied on third-country costs to do so, the agency explained.
As for the third claim over Commerce's public standard margin calculation program, the agency said that its actions in a review on stainless steel and strip in coils from Mexico establishes that its adjustment to the calculation program "is often necessitated because respondents often fail to properly report product-characteristic information as Navneet did here." Navneet further argued that Commerce changed its methodology without giving notice and an explanation of its departure from its past practice. Commerce claimed that its use of third-country CONNUM costs is not a change in methodology nor a departure from past practice, but even if it was, Commerce only needed to give Navneet a chance to comment, which it did.
Commerce also railed against Navneet's "highly-technical and fact-specific distortion claims," claiming that the respondent failed to exhaust its administrative remedies for these points. "Those technical and fact-specific arguments do not appear in its briefing before Commerce," the brief said. "Rather, in those briefs, Navneet raised nothing more than undeveloped and vague arguments concerning distortion. In this case, however, it raises distortion claims based on Commerce’s application of the DIFMER test and its model matching methodology. Because Navneet failed to raise these claims before Commerce, the agency was not afforded an opportunity to address those arguments on the record. In failing to raise these arguments before Commerce, Navneet has also impeded judicial review; this Court has no record of the agency’s consideration and resolution of these issues."