US Defends Finding Foreign Steel Maker Didn't Reimburse Affiliated Importer for AD at CAFC
The Commerce Department properly found that Australian steel maker BlueScope Steel did not reimburse its affiliated U.S. importer, BlueScope Steel Americas, for antidumping duties, the U.S. argued in a Jan. 27 reply brief at the U.S. Court of Appeals for the Federal Circuit. The government said that claims from AD petitioner U.S. Steel "are based entirely on a misreading of the supply agreement," since the agreement actually sets the price the importer will charge Steelscape, the affiliated final customer, and is silent as to the transfer price between the exporter and importer (U.S. Steel Corp. v. U.S., Fed. Cir. # 22-2078).
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The case concerns Commerce's final results in the administrative review of the antidumping duty order on hot-rolled steel flat products from Australia. During the review period, BlueScope made sales to BlueScope Americas, which then sold the merchandise to Steelscape. This company further manufactured the steel into nonsubject merchandise, selling the final goods to an unaffiliated U.S. customer.
According to the supply agreement governing these sales, BlueScope set the price charged to BlueScope Americas, called a formula price, by deducting the estimated antidumping duties and freight price from the price charged to Steelscape. To calculate BlueScope Americas' duty transfer price, BlueScope started with the price paid by Steelscape then deducted the AD to estimate the entry value. U.S. Steel told Commerce that by decreasing the invoice price by the amount of the antidumping duty, BlueScope reimbursed BlueScope Americas for the duties, meaning the agency was required by its regulation to lower the exporter's U.S. price by the amount of the estimated duties.
In the review, Commerce disagreed since there was no evidence of any reimbursement. U.S. Steel then took its case to the Court of International Trade, arguing that the exporter reimbursed the duties indirectly by decreasing its invoice price. However, CIT sided with Commerce, holding that the deduction of duties "on its own, is unremarkable when viewed in the context of the record." The court found the reimbursement regulation does not apply (see 2206100066). U.S. Steel appealed to the Federal Circuit, claiming that the exporter failed to invoice the importer at the formula price, instead lowering the price by the amount of the duties (see 2210030049).
In its reply, the government said BlueScope properly explained how the transfer price is set and provided evidence showing the importer "actually did pay the applicable duties" and carried them over to Steelscape. This evidence included invoices from a customs broker charging BlueScope Americas for the duties, a bank transfer for a payment from BlueScope Americas to the customs broker for the duties and an invoice with the duty-inclusive price carried over to Steelscape.
The U.S. defended its use of Commerce's reimbursement regulation, which tells the agency to account for the amount of any AD/CVD that the exporter reimbursed to the importer, or add the amount of any reimbursed duties to the constructed export price. "Commerce’s practice is to require 'direct evidence' of reimbursement in the case of affiliated entities, and Commerce’s conclusion that no reimbursement occurred here is supported by substantial record evidence: the supply agreement, the transfer price methodology, and the sales traces," the brief said. "Commerce’s determination that BlueScope’s transfer price to its U.S. affiliate is not indicative of reimbursement is consistent with law, supported by substantial evidence, and should be affirmed."