Commerce Right Not to Use Potential Surrogate That Received Subsidies, US Says
The Commerce Department properly chose not to use domestic producer Edsal’s desired surrogate in a review of boltless steel shelves from Thailand, the agency said in response to Edsal’s motion for judgment (see 2412100059) (Edsal Manufacturing Co. v. U.S., CIT # 24-00108).
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From a number of financial statements submitted by both Edsal and the exporters, Commerce selected a statement submitted by PNS Manufacturing because that was the only company selling like merchandise, the department said. Edsal’s preferred surrogate, Sahamitr Pressure Container, sold non-comparable merchandise -- and received countervailable subsidies.
While PNS produces boltless steel shelves, the government noted that Sahamitr produces liquified petroleum gas cylinders. As a result, Commerce found that Sahamitr’s financial statements were “not a viable option” to construct a value for the review’s mandatory respondent.
In addition, Sahamitr received subsidies from Thailand, and Commerce doesn’t usually rely on surrogates that received subsidies, the government said. That was an “additional reason” that the department chose not to use Sahamitr’s information, it said; it disagreed that the department was “fixat[ed] almost entirely on the presence of subsidies in Sahamitr’s financial statements.”
Edsal argued that Sahamitr manufactures merchandise “in the same general category” as the respondents’ products. In doing so, it was “effectively ask[ing] this Court to substitute its judgment for Commerce’s,” the U.S. said. The department, it said, has “wide discretion” in deciding the best way to construct values. PNS’ boltless steel shelving was “plainly” more similar to the subject merchandise because it was the same product, it said.
It disagreed with Edsal’s characterization of several prior proceedings involving steel products, saying that “Commerce did not establish a rule that all steel products are in the same general category of merchandise.”
Regarding the countervailable subsidies received by Sahamitr, the U.S. said Commerce analyzed the situation correctly. Edsal claimed that Commerce should have analyzed the “distortive impacts” the subsidies may have had on Sahamitr’s data, but that went far beyond the scope of surrogate selection, it said.
It also defended the department's decision to use commercial invoice dates, not contract dates, as the final dates of sale for SMT U.S., a mandatory respondent. Commerce’s regulations “establish a presumption that the date of sale is the invoice date,” it said. It also noted the department also has a long-standing practice of using the same method, such as looking to an invoice or contract, to determine each sale’s date across a review.
And without evidence showing that a sale’s material terms were set on a different date, Commerce doesn’t have to justify its use of invoice dates as dates of sales, the government said.
Edsal did claim that the sales’ contract dates should have been used as the sales dates, but it did so in part by taking a 2004 investigation determination by Commerce out of context, the U.S. said.
First, Edsal agreed with the government that the boltless steel shelving units sales contracts didn’t include destinations, it said. But Edsal said that didn’t matter because, in 2004, Commerce had found that “changes to delivery location” wasn’t a material term of sale in a shrimp investigation.
But the “delivery terms” considered in that 2004 investigation “pertained to ‘extra freight expenses incurred to ship the merchandise to a different location,’” it said. It also said the court has since held that destination is a material sales term.