AD Respondent Challenges Separate AD Rate Denial Based on Group Membership of 2 Officials

The Commerce Department unlawfully declined to assign exporter Yantai Zhongzhen Trading Co. a separate antidumping rate in the AD investigation on pea protein from China, the company argued in a complaint at the Court of International Trade on Oct. 25. Zhongzhen targeted Commerce's decision to root its finding in the fact that one if its corporate officials is a member of a local People's Congress and another is a member of the Chinese People's Political Consultative Conference of Zhaoyuan City (CPPCC) (Yantai Oriental Protein Tech Co. v. United States, CIT # 24-00181).

Zhongzhen was tapped to serve as a mandatory respondent in the investigation and was assigned the China-wide AD rate of 280.31%. As a result, the agency didn't use any of the respondent's submissions regarding the proper surrogate values or the company's own cost information.

Administratively, and now at CIT, Zhongzhen argued that the local People's Congress and CPPCC aren't government agencies and members in these organizations don't become government officials, bucking Commerce's finding that Zhongzhen was de facto controlled by the Chinese government. The two corporate officials' membership in the two groups "did not provide a basis for separate denial" and in fact cuts against "longstanding agency practice affirmed by this Court," the brief said.

The exporter added that it has "no government ownership whatsoever," and that its ownership structure bars a finding of government control since the agency practice "had required significant government ownership to deny separate rates." The agency violated its own past practice by "narrowly focusing on potential government control through the membership of two officials despite no state ownership, rather than the totality of the record to assess a nexus between the Chinese government and export activities," the complaint said.

Zhongzhen also cited a recent CIT decision, Jilin Forest Industry Jinquiao Flooring Group Co. v. U.S., to note that the court has "invalidated Commerce’s presumption of state control that has historically been used to evaluate separate rate eligibility." Should this decision be affirmed on appeal, it would "represent a fundamental change in law invalidating" Commerce's approach taken here, the brief said.