CIT Remands PMS Adjustment, Partial AFA in Antidumping Review

The Court of International Trade remanded the Commerce Department's particular market situation adjustment to sales-below-cost test and use of partial adverse facts available in a July 9 decision made public on July 19. As the court has repeatedly held, there is no statutory authority for Commerce to make a PMS adjustment to the cost of production for a sales-below-cost test when using normal value, leading to Judge Claire Kelly to send the case back to the agency for further consideration.

The decision comes in a case over the 2017-18 administrative review of the antidumping order on welded carbon steel standard pipes and tubes (CWP) from India. Garg Tube Export, a mandatory respondent to the proceedings, brought its case to CIT after Commerce made the PMS adjustment for hot-rolled coil, a key input for CWP and saddled the respondent with partial AFA for the non-cooperation of the unaffiliated suppliers. Commerce determined a PMS existed for CWP in India due to global steel overcapacity, the Indian government's trade interventions and Garg's non-payment of antidumping and safeguard duties on hot-rolled coil imports.

As CIT repeatedly has, Kelly ruled that Commerce cannot make a PMS adjustment to the cost of production for a sales-below-cost test when calculating normal value. The statute does allow the agency to "determine the normal value of the subject merchandise based on a constructed value where there is a PMS that prevents a proper comparison between prices in the foreign market and prices for U.S. sales," she said.

Kelly also remanded the use of partial AFA because the court couldn't discern how Commerce is applying the law in its use of partial AFA. Since Commerce is attempting to get a non-cooperating supplier to cooperate with the proceedings, it needs to have substantial evidence that Garg has leverage over this supplier. To the extent that Commerce addresses this standard, it "must do more to support its determination," the judge said. "Commerce states that a partial AFA rate 'potentially induces the cooperation' of Garg’s unaffiliated supplier. ... However, Garg proffered evidence that it had insufficient market power to induce the cooperation of the unaffiliated supplier."

(Garg Tube Export LLP et al. v. United States, Slip Op. 21-83, CIT # 20-00026, dated 07/09/21, Judge Kelly. Attorneys: Ned Marshak of Grunfeld Desiderio for plaintiff Garg Tube; Robert Kiepura for defendant U.S. government)