Commerce Right to Reject Alleged Ministerial Errors in Activated Carbon Review, US Says
In a 61-page response to multiple parties, the U.S. supported Feb. 2 the Commerce Department’s calculation of the selling, general and administrative expenses of a Chinese-origin activated carbon review’s surrogate. It also said an exporter had tried to correct a reporting error too late in the review process (Ningxia Guanghua Cherishmet Activated Carbon Co. v. United States, CIT # 24-00262).
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Exporters Ningxia Guanghua Cherishmet Activated Carbon (GHC) and Jilin Bright Future Chemicals brought their case in 2024, arguing Commerce should have corrected two alleged ministerial errors in its final results in the 16th antidumping duty administrative review on Chinese-origin activated carbon. They claimed the department, first, wrongly subtracted a couple of costs from the Malaysian surrogate’s general, administrative and selling expenses, but not its profit, and, second, miscalculated Jilin Bright’s per-unit VAT tax (see 2508180060).
They, along with consolidated plaintiffs Carbon Activated Tianjin Co. and Carbon Activated Corp. and plaintiff-intervenors led by Bengbu Modern Environmental Co., also challenged Commerce’s choice of Malaysia instead of Romania as the review’s surrogate.
But the department’s calculation of Malaysian surrogate Century Chemical Works’ factors of production was accurate, the government said in its response.
In its initial final results, Commerce added two expenditures, “fair value loss on equity investments” and “loss on disposal of equity investments,” to Century’s profit, the government said. However, it neglected to remove the expenditures from Century’s SG&A costs. It therefore issued amended final results after receiving ministerial error allegations, the U.S. explained.
The exporters argued that the expenditures shouldn’t have been included in Century’s profit, either; but they were attempting to treat the expenditures as offsets of SG&A expenses, not as simply costs unrelated to selling, general and administrative activities, the government said.
“[I]t is simply illogical that removal of losses would decrease a company’s profitability, which plaintiffs appear to argue,” it said.
It also said Commerce had been right to reject Jilin Bright’s proposed methodology for calculating its per-unit VAT tax. The exporter hadn’t realized it made reporting errors until after Commerce issued the review’s preliminary results, the government said. That meant the department hadn’t been able to evaluate the new information, it said.
Further, Jilin Bright hadn’t argued that the error meant the results weren’t supported by substantial evidence, it said, so the exporter’s argument should be deemed waived.
And it supported Commerce’s selection of Malaysian surrogate information over Romanian. The plaintiffs, as well as consolidated plaintiffs and plaintiff-intervenors, were trying to rewrite Commerce’s surrogate selection process, it said.
The exporters argued that, “because Romanian data met ‘all of Commerce’s established criteria for the best available information for valuing FOPs,’” Commerce had to “evaluate the comparative quality of the Romanian and Malaysian data.” But Romania wasn’t a significant producer of activated carbon, the government said, making its selection inappropriate.
The U.S. Court of Appeals has already affirmed Commerce’s selection of Malaysia over Romania “on substantially identical facts,” it added.