CIT OKs Decision to Prorate CVD Rate Based on Buyers That Verified Non-Use of China's EBCP
The Court of International Trade on June 12 sustained the Commerce Department's decision to prorate the countervailing duty set for exporter The Ancientree Cabinet Co. in the CVD investigation on wooden cabinets and vanities from China to account for the percentage of its U.S. customers that failed to verify non-use of China's Export Buyer's Credit Program. Judge Richard Eaton said Commerce's approach is supported by substantial evidence and is superior to using total adverse facts available against Ancientree due to the Chinese government's failure to supply information about the EBCP.
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Luke Meisner, counsel for the petitioner, the American Kitchen Cabinet Alliance, said the Chinese government and Chinese producers "can rest assured that Commerce cannot apply" total AFA when the Chinese government "refuses to cooperate by providing information on the Export Credit Buyers Program. Based on this court decision, China will have zero incentive to cooperate in future proceedings -- an outcome that eviscerates the purpose of the AFA provisions of the statute."
Last year, Eaton remanded the agency's use of total AFA pertaining to the EBCP for the third time, noting that many of Ancientree's U.S. customers certified that they didn't use the program (see 2407310024). The judge told Commerce to set a customer-specific CVD rate that excludes the EBCP subsidy amount for the U.S. buyers that verified non-use of the program.
On remand, the agency did just that, noting that 21.56% of Ancientree's U.S. sales by volume were to customers that didn't verify non-use. Commerce thus prorated the CVD for Ancientree, lowering the respondent's CVD cash deposit rate from 13.33% to 5.06% and calculating individual CVD rates for the company's U.S. buyers (see 2411130010). However, the agency said that the cash deposit rate has been superseded by the cash deposit rate given to Ancientree based on the 2022 review of the CVD order.
To account for the EBCP offset in the related AD proceedings, Commerce varied the cash deposits for six different time periods. For periods where no AD proceeding was in place, the agency imposed a 13.33% cash deposit rate for non-verified customers and a 2.79% rate for verified customers. For the period when the first AD review was in place, Commerce applied the EBCP offset, raising the cash deposit rate for verified customers to 7.28%.
Ancientree argued that the case should be remanded for a fourth time, taking issue with the subsidy rates applied to entries made during an eight-month period that overlapped with the second review of the related AD order. Commerce disagreed on the grounds that the respondent had the opportunity to argue it was "entitled to an export subsidy offset to the antidumping duty rate" in the company's CIT case challenging the AD review.
Eaton sided with Commerce, finding that there's "no basis for the adjustment that Ancientree now asks," in light of its CIT loss in the AD case. And while the company asks for equitable relief, "Ancientree’s problem is that the issue was properly before the Ancientree Court, and the Court found as a matter of law that the company had failed to exhaust its administrative remedies -- a ruling that Ancientree did not challenge," the judge said.
The American Kitchen Cabinet Alliance also vied for remand on the grounds that Commerce failed to address China's failure to comply with requests for information about the EBCP by not using total AFA against Ancientree. Eaton declined, holding that China's failure to comply with Commerce's requests created a "gap in the record with respect to whether Ancientree’s U.S. customers had used the Program" and that this gap was partially filled by the non-use certificates of Ancientree's U.S. customers.
The judge said it's "worth noting that the Alliance does not complain about the manner of Commerce’s various adjustments in the Third Remand Results, and so they cannot be the subject of any appeal." Eaton added that there's a "great deal of law discouraging the use of the failure of a third party (such as China) to comply with questionnaires as a basis for applying adverse facts available."
(Dalian Meisen Woodworking Co. v. United States, Slip Op. 25-74, CIT # 20-00110, dated 06/12/25; Judge: Richard Eaton; Attorneys: Stephen Brophy of Husch Blackwell for plaintiff Dalian Meisen Woodworking Co.; Alexandra Salzman of deKieffer & Horgan for plaintiff-intervenor The Ancientree Cabinet Co.; Mark Ludwikowski of Clark Hill for plaintiff-intervenor Cabinets to Go; Ioana Meyer for defendant U.S. government; Luke Meisner of Schagrin Associates for defendant-intervenor American Kitchen Cabinet Alliance)