Chinese Producer Further Pushes for Separate Rate in AD Review, Decries AFA Despite Cooperation

Antidumping respondent Jilin Forest Industry Jinqiao Flooring Group continued to argue that assigning it the China-wide entity rate is an unfair application of adverse facts available in Dec. 16 comments on the Commerce Department's remand results submitted to the Court of International Trade. Notably, though, Jinqiao Flooring did not mention a recent U.S. Court of Appeals for the Federal Circuit opinion that found that China-wide rates can still be based on AFA even if no members of the countrywide entity were found to be uncooperative. Nevertheless, the company claimed it should be granted a separate dumping rate and that substantial evidence does not back Commerce's contention that it is de facto controlled by the Chinese government (Jilin Forest Industry Jinqiao Flooring Group v. U.S., CIT #18-00191).

Following an antidumping duty order from 2011 on multilayered wood flooring from China, Jinqiao Flooring, along with several other Chinese exporters, found itself subject to annual administrative reviews of the order. In every review, Jinqiao Flooring received an individual antidumping rate. That ended with the 2015-16 review. After a change to policy, Commerce found Jinqiao Flooring under de facto government control, applying the AFA rate to the exporter and prompting Jinqiao Flooring to file a complaint with CIT. The respondent accused Commerce of unlawfully determining that it is not separate from Chinese state control and said the agency's failure to calculate an individual rate was contrary to law.

In the first opinion in the case, Judge Richard Eaton said Commerce failed to adequately explain why it applied the policy to Jinqiao Flooring (see 2104300079). Seeing as the policy was meant to incentivize greater compliance in AD administrative proceedings and Jinqiao fully complied with all Commerce requests, the NME policy should not have been used in this case, Eaton said. The judge told Commerce that if it wanted to stick with its NME policy, it will have to explain much more about how it came to its decision, including an explanation of the purpose of the policy itself.

Then, the Federal Circuit, in an unrelated case, said that country-wide rates assigned in NME cases are individual rates, rather than "all-others" rates as provided for in the statute (see 2106100044). Further fleshing out the proper use of the NME policy in its remand results, Commerce said that the state's role in the economy results in "fundamental distortions" in the economy. This gave Commerce the cover to stick with its decision on remand to find that Jinqiao Flooring was de facto controlled by the Chinese government and that the company could be assigned the China-wide rate (see 2111160069).

Jinqiao Flooring argued that not only did it rebut the presumption of government control, but that the court acknowledged this unfair application of AFA and ordered a reconsideration of the position of the respondent. Commerce's remand is no different than its final results and should thus be remanded again, the company said. "Commerce’s Remand Order is deficient in that the agency continues to fail to provide a reasonable explanation for why it is not obligated under the Court’s order to calculate an antidumping duty rate for [Jinqiao]," the brief said. "Its only explanation is its conclusory determination, unsupported by the record, that Jilin has not rebutted the presumption that it is not government-controlled. ... The Remand results, although lengthy, do not rectify this deficiency by explaining why Jinqiao is not entitled to a separate rate despite its compliance and how the application of the China-wide rate to Jinqiao further the statutory goal of establishing an accurate rate for Jinqiao."

The bulk of Jinqiao Flooring's brief was primarily concerned with proving that it was not controlled by the Chinese government. The company is majority owned by two entities that are themselves majority controlled by the Chinese government. According to the company's bylaws, though, a labor union was entitled to appoint three of the five members of the board of directors, but since the labor union was controlled by the All-China Federation of Trade Unions, it is under government control. Commerce made this conclusion in a separate case. Jinqiao Flooring, though, argues that the "general status of labor unions in China is simply not relevant" as to whether the record in this case shows whether Jinqiao Flooring's labor union operated free of government control.

"Commerce’s remand results however, failed to cite to any record evidence that would even suggest, under the circumstances of this case, that the ACFTU exerted control over the Jinqiao labor union’s selection of Jinqiao Flooring’s management or any of its export activities during the relevant period of review," the comments said. "... As in the final results, Commerce’s Remand Results continue to ignore all record information and legal arguments presented by Jinqiao Flooring that establish that through operation of the company’s Articles of Incorporation, the selection of company management and export operations are placed solely with the minority owning Jinqiao Labor Union and the Board of Directors that are controlled by the Jinqiao Labor Union, and that the Labor Union’s activities is not controlled by the Chinese government."