CVD Petitioner Says Commerce Can Change Position on Countervailability Without Mistake of Fact
Countervailing duty petitioner Nucor Corp. argued on Sept. 9 that the Commerce Department erred in reconsidering the alleged benefit conferred by debt-to-equity swap element of exporter KG Dongbu's debt restructuring program. Nucor said Commerce "has the inherent authority to reconsider its prior determinations, whether or not that reconsideration is based on specific types of new evidence on the record," making the decision to countervail the debt-to-equity swaps lawful, despite the agency having come to different conclusions in the past (KG Dongbu Steel Co. v. United States, CIT # 22-00047).
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The Court of International Trade remanded Commerce's decision in the 2019 review of the CVD order on corrosion-resistant steel products from South Korea to countervail the restructurings after declining to countervail them in the prior three reviews (see 2404040043). The court said the agency can't reverse its countervailability decisions without new evidence to address fraud or mistake of fact. On remand, Commerce decided not to countervail the three restructurings, though it disagreed with the court that the benefit can't be reevaluated during each review without such evidence (see 2407030073).
Nucor echoed the agency's claim, arguing that "Commerce's own determinations regularly consider whether there is new evidence or argument that would cause it to reconsider a determination." Limiting the agnecy's authority in this way "unduly restricts the agency's discretion and, in cases such as this one, forces Commerce to perpetuate determinations that it no longer believes are consistent with its own regulatory standards," the brief said.
Regardless of the agency's authority, the petitioner claimed that Commerce's remand decision "is insufficiently explained," since the agency said it finds "no other basis" to find that a benefit was conferred regarding the three debt-to-equity infusions. Nucor cited evidence, including information relating to the Korean government's policy of "influencing non-government financial institutions to actively support debt restructuring for Korean corporations."
The Korean government's creation of the United Asset Management Co., which seeks the improvement of struggling firms via restricting programs, belies the point, the brief said. Around when Dongbu Steel entered its restructuring program, the Korean government expanded the role of the management company "in overhauling debt-laden companies, in an effort to speed up the country's corporate restructuring," the brief said.
News of the UAMCO expansion "implicated Dongbu Steel's restructuring in particular," since it came "as major banks and two policy lenders" were suffering huge losses related to the "recent collapses of big businesses." Nucor said not only is the combination of Korean government policy pressure evidence of the Korean government directing all the members of Dongu Steel's creditor committees, but at the very least, the agency "should reject any contention that the actions of non-government banks on the creditor committees were sufficiently independent of government influence to serve as benchmarks" for any part of the debt restructuring program.