AD Respondent Rails Against Use of Another Respondent's Third-Country Sales to Value CV Profit
The Commerce Department cannot use one antidumping respondent's third-country sales to calculate another's constructed value profit, selling expenses and constructed export price profit since the second respondent has no means to review the underlying data to gauge its accuracy, plaintiff Hyundai Steel Company argued in a brief at the Court of International Trade. The record had many alternative sources for calculating these elements, including sources Commerce had used in the past for calculating CV profit, selling expenses and CEP profit, the brief said (Hyundai Steel Company v. United States, CIT Consol. #22-00138).
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The cases concern the 2019-2020 administrative review of the antidumping duty order on oil country tubular goods from South Korea in which Hyundai Steel and SeAH Steel Corp. were tapped as mandatory respondents. In the review, Commerce said that since there was no viable comparison market for Hyundai Steel, it could use "any reasonable method" to find the respondent's CV profit, selling expenses and CEP profit. The agency ended up using SeAH's third-country sales to Kuwait to do this.
Hyundai Steel challenged that decision at CIT (see 2205100033). The respondent argued that Commerce could not use these sales to calculate CV profit and selling expenses since Hyundai Steel itself has no means to review the underlying data to check accuracy since it can't access SeAH's business proprietary information. Commerce admitted that it picked this third-country data because Hyundai Steel's counsel had access to the other respondent's business confidential information under an administrative protective order.
"Having conceded that it adopted a particular margin calculation approach only because Hyundai Steel was represented by counsel with access under APO to the BPI of another respondent, which it might not have adopted if Hyundai Steel was, for example, a pro se respondent without any such access, Commerce has acknowledged the arbitrary nature of its decision-making," the brief said. "The Court should remand to Commerce to adopt a CV profit and selling expense selection approach that is based on substantial evidence that does not penalize Hyundai Steel for having legal representation in this case."
For CV profit and selling expenses, Hyundai Steel further argued that Commerce failed to impose the required CV profit cap, which was especially important in this instance since SeAH's third-country profit ratio "far exceeded other record sources."
A later-conducted confidential analysis of the Kuwaiti data showed that the source was not representative for calculating CV profit and selling expenses, Hyundai Steel said. The same rings true for Commerce's use of the Kuwaiti data to calculate CEP profit. For this metric, though, the respondent also argued that SeAH's third country data does not comply with the statutory requirement to reflect the total profit earned by Hyundai Steel and its U.S. affiliate for the sale of the same goods for which the companies' total expenses were determined.