De Facto Specificity of KAV Program Probably 'Futile,' US Says

In response to a petitioner’s claim that the Commerce Department was required to conduct a de facto specificity analysis on a German subsidy after finding that subsidy was not de jure specific, the U.S. said that such an analysis would "likely be futile” (BGH Edelstahl Siegen GmbH v. U.S., CIT # 21-00080).

The U.S. said in an April 12 reply to remand redetermination comments that the Court of International Trade should uphold Commerce’s ruling that Germany’s Konzessionsabgabenverordnung (KAV) program, which exempts a fee for gas and power pipeline companies that sell electricity below a certain price point that would otherwise be passed onto consumers, was not specific to German steel exporter BGH Edelstahl.

Commerce reluctantly reached that finding after arguing that the subsidy was only accessible to a limited group of industries, making it de jure specific (see 2402130034). After that finding, it chose not to pursue a de facto specificity analysis, which petitioner Ellwood City Forge opposed in its comments upon the redetermination (see 2403150052).

But Commerce didn’t find anything on the administrative record that could support pursuing a de facto specificity analysis, the government said. Neither it nor petitioners have that evidence because, as Commerce explained, the German government doesn’t keep records about usage of the KAV program in the ordinary course of business, the government said. It said that attempting a de facto analysis would likely not be possible.

Petitioners also argued that the fact the KAV program was limited to certain customers “unquestionably form[s] a reasonable basis” for the de facto analysis, but those program limitations actually go to the question of de jure specificity, it said.

BHG also replied to Ellwood's comments, saying that "the fact that the Government of Germany does not have information concerning usage of the KAV does not evidence a reason to believe that the KAV program may be specific as a matter of fact." The government does not collect that data because there is no governmental authority that "is involved in administering the process toward the final consumer," it said.