Trade Court Sends Back Multiple Aspects of Fabricated Structural Steel Antidumping Case

Kelly also remanded Commerce's use of adverse facts available over one of BSM's sales that the company didn't report since the project was contracted for in 2018 but was never completed. Other elements of the decision that were returned to Commerce include the agency's use of the date of sale for purposes of currency conversion and also the agency's exclusion of BSM's U.S. affiliates' Costa Rican data from BSM's constructed export price profit rate.

BSM's suit is a protective appeal since there is currently a case at the U.S. Court of Appeals for the Federal Circuit over the International Trade Commission's negative injury determination (see 2110050071). If affirmed, the case will be moot as long as the petitioner, the Full Member Subgroup of the American Institute of Steel Construction, also ditches its USMCA panel on the case.

In the investigation, Commerce used Corey's home market sales data to calculate BSM's constructed value profit rate. In all, BSM lodged three complaints against this decision: (1) that a particular sale was contracted for outside the investigation period, (2) that Commerce failed to account for countervailing subsidies received by Corey and (3) that Commerce unlawfully rejected BSM's data for insufficient volume even though Corey's data was picked and it had less volume. Kelly remanded the case on the first and third challenges, while sustaining the second.

On the countervailing subsidies point, Kelly said that "BSM essentially argues that Commerce should apply a presumption of subsidy use" since BSM failed to point to any evidence that Corey used materials that it imported duty free in its subject merchandise that it sold in Mexico. Commerce's position was sustained.

Relating to BSM's decision to contest a sale of Corey's it says was outside the investigation period, the court agreed. Since Commerce failed to address whether the sale was contracted for during 2018, the judge sent the case back to give the agency another crack at it. The date a sales bid was accepted is not necessarily the date a project is contracted, the judge said. Commerce's reliance on Corey's submitted purchase orders ignores evidence that Corey treats a bid as accepted when a contract is formed, thus throwing the question of the sale's actual date into flux, the judge ruled.

As far BSM's challenge to Commerce's decision to reject BSM's data for insufficient volume, the court took the exporter's side. "Having rejected BSM's data for insufficient volume, Commerce chooses Corey’s data which consists of indisputably fewer sales," the judge said. "Even though Corey’s sales meet the viability standard as they make up more than five percent of Corey’s U.S. sales, without further explanation, it is unclear why it is reasonable for Commerce to conclude that Corey’s home market sales are representative of the Mexican market."

In the investigation, Commerce used AFA over one of BSM's sales that the exporter failed to report since the company said it was out of scope as it was incomplete. Seeing as the last two phases of the project were cancelled, BSM excluded it from its submission. Commerce, though, said that since the last phase of the project was shipped to the U.S. during the investigation period, the project was in-scope. Kelly took issue with this, ruling that the conclusion is not reasonable "because a project cannot be both incomplete in June 2019 and complete prior to January 1, 2019." This position was remanded for either further explanation or revocation.

BSM also challenged Commerce's decision to use the date of a purchase order or sales order acknowledgement instead of the invoice date as the date of sale for the purpose of converting foreign currency into U.S. dollars. The judge said the agency can only do this when it has evidence that the transaction was established on a different date than the one listed on the invoice date. As the evidence does not establish this, the judge remanded the case.

Lastly, BSM challenged two aspects of Commerce's constructed export price: the decision to calculate separate profit rates for BSM and its U.S. affiliates and add them together, and the move to remove expenses from the affiliates' Costa Rican drafting facility, which the agency said were properly included in the exporter's indirect selling expenses. The judge sustained Commerce's decision in the first challenge, holding that BSM gave no reason as to why this methodology is unreasonable, but remanded the second decision.

Commerce said it decided to remove the affiliates' Costa Rican data since it is department practice to exclude data from facilities that don't turn a profit when calculating constructed export profit rate. "Instead, the statute explicitly requires Commerce to include 'all' expenses incurred that have been properly classified as indirect selling expenses," the judge said. "... Thus, the regulations contemplate Commerce including sales that do not generate profits. On remand, if Commerce continues to exclude NCI’s Costa Rican data, Commerce must explain why the statute and regulations permit such an exclusion."

(Building Systems de Mexico v. United States, Slip Op. 22-25, CIT #20-00069, dated 03/21/22; public version dated 03/30/22, Judge Claire Kelly. Attorneys: Matthew Nicely of Akin Gump for plaintiff Building Systems de Mexico; In Cho for defendant U.S. government; Stephanie Bell of Wiley Rein for defendant-intervenor Full Member Subgroup of the American Institute of Steel Construction)