Rulings, remedies and court proceedings for customs and trade professionals

CIT Blasts Commerce's Use of AFA on Entire Collapsed Entity, Says Agency Created Own Problem

The Commerce Department isn't allowed to rely on its past practice if it's contrary to a statute, though it "has sought to do just that in" the antidumping duty investigation on wind towers from Spain, the Court of International Trade ruled in an Oct. 12 opinion. Judge Timothy Stanceu said Commerce can't assign an individual company's adverse facts available rate to an entire collapsed entity in the present circumstances. The judge sent back the investigation for a second time, taking Commerce to task for ignoring the court's prior orders.

After collapsing exporter Siemens Gamesa with affiliated supplier Windar Renovables and five of Windar's subsidiaries on remand, Commerce levied the collapsed companies a 73% AFA rate based on Windar's having received the rate in the AD investigation by failing to respond to a quantity and value (Q&V) questionnaire. Stanceu ruled that, even though Windar didn't challenge the AFA rate, the rate isn't final and could be changed if the court sustains a future Commerce redetermination that gives the broader collapsed entity a new rate.

In the investigation, Commerce sent a Q&V questionnaire to 19 known exporters, 13 of which replied. The agency examined only one, Vestas Eolica, though the firm dropped out of the investigation. Commerce didn't investigate another company, despite a request for individual review from Siemens Gamesa. All companies got hit with the 73% AFA rate. In his first opinion, Stanceu found this to be improper, given the "unlawful respondent selection method." On remand, the court told Commerce to individually investigate Siemens (see 2302170028).

On remand, Commerce made the collapsing decision but hit the combined entity with the 73% margin, given Windar's failure to respond to the Q&V questionnaire. The agency "overlooked" that Windar's exports "could not be subject to the old rate and the newly determined rate at the same time," Stanceu said. For its second remand, the court gave Commerce two options: submit a new decision applying to Siemens alone and allow the 73% rate for Windar to stand or substitute a new rate for Windar that applies to the collapsed entity.

Stanceu further commented on the illegality of the use of AFA here "to the prejudice of Siemens Gamesa," given that it was invoked entirely on the grounds of Windar's failure to submit a Q&V questionnaire response. The AFA statute is meant to induce cooperation, and Siemens Gamesa didn't fail to cooperate on remand, the court noted.

Evidence also refutes the idea that the lack of a Q&V questionnaire response from Windar deprived Commerce of information it needed to individually examine Siemens as ordered, because Siemens Gamesa didn't withhold any information, Stanceu said. Siemens established that Windar made no exports directly to the U.S., nor did it make any sales to third countries ultimately meant for the U.S. As a result, the affiliated supplier had no reportable sales in the Q&V questionnaire.

Stanceu also railed against Commerce's finding that the record didn't allow for a margin calculation for Siemen. The judge wrote that if there is any such gap in the record, it is of Commerce's own making, since the agency didn't individually examine the export sales of any respondent and "thereby failed to conduct what could be described as a valid antidumping duty investigation." If the state of the record is shoddy due to the remand proceedings, "the problem is one of the Department's own making," the opinion said.

The record didn't give Stanceu confidence that Commerce had the objective of investigating Siemens Gamesa and giving the company an individual margin as directed, the judge noted.

Commerce again tried to defend its conduct by saying its practice is to assign a single company's AFA rate to an entire collapsed entity. The agency pointed to a prior CIT case sustaining the practice. The prior case, however, "did not present the issue of whether Commerce could apply an adverse inference rate to a fully cooperative interested party," nor did it find that Commerce's practice "was lawful, having also stated that the plaintiffs in the case did not challenge that practice."

(Siemens Gamesa Renewable Energy v. U.S., Slip Op. 23-149, CIT # 21-00449, dated 10/11/23; Judge: Timothy Stanceu; Attorneys: Daniel Cannistra of Crowell & Moring for plaintiff Siemens Gamesa Renewable Energy; Sara Kramer for defendant U.S. government; Alan Price of Wiley for defendant-intervenor Wind Tower Trade Coalition)