Celik Halat ve Tel Sanayi A.S. v. United States

• Decision Date: 15 February 2022
• Docket Number: Slip Op. No. 22-13,Court No. 21-00050
• Parties: CELIK HALAT VE TEL SANAYI A.S., Plaintiff, v. UNITED STATES, Defendant, and Insteel Wire Products Company, Sumiden Wire Products Corporation, and Wire Mesh Corp., Defendant-intervenors.
• Court: U.S. Court of International Trade

557 F.Supp.3d 1363

CELIK HALAT VE TEL SANAYI A.S., Plaintiff,

v. UNITED STATES, Defendant,andInsteel Wire Products Company, Sumiden Wire Products Corporation, and Wire Mesh Corp., Defendant-intervenors.

Slip Op. No. 22-13

Court No. 21-00050

United States Court of International Trade.

February 15, 2022

Irene H. Chen, Chen Law Group LLC, of Rockville, MD, for plaintiff Celik Halat ve Tel Sanayi A.S.

Miles K. Karson, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant United States. With him on the submission were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan, Assistant Director. Of counsel on the submission was Reza Karamloo, Senior Counsel, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Kathleen W. Cannon, Kelley Drye & Warren LLP, of Washington, DC, for defendant-intervenors Insteel Wire Products Company, Sumiden Wire Products Corporation, and Wire Mesh Corp. With her on the submission were Paul C. Rosenthal, R. Alan Luberda, Brooke M. Ringel, and Joshua R. Morey.

OPINION AND ORDER

Stanceu, Judge:

Plaintiff Celik Halat ve Tel Sanayi A.S. ("Celik Halat") contests a final determination by the International Trade Administration, U.S. Department of Commerce ("Commerce" or the "Department") in a countervailing duty ("CVD") investigation of certain prestressed concrete steel wire strand ("PC strand") from the Republic of Turkey ("Turkey"), and the associated countervailing duty order. Commerce determined an estimated net CVD subsidy rate of 158.44%, and imports of Celik Halat's merchandise are now subject to cash deposits at this ad valorem rate.

The high countervailing duty rate resulted from the Department's decision to reject, as untimely filed, Celik Halat's response to "Section III" of the Department's initial questionnaire ("Initial Questionnaire"), for an inadvertent filing error by Celik Halat's counsel. Although a version of the Initial Questionnaire response was timely filed on the due date, Celik Halat's counsel electronically filed the "final" business proprietary version, and the public version, of the document on the following business day, as the Department's regulations allowed, but counsel erroneously made the filing 87 minutes after the 5:00 p.m. filing deadline.

The court sets the contested determination aside because certain findings of fact on which Commerce relied, and which were essential to that determination, are not supported by substantial evidence on the record and also because Commerce abused its discretion when imposing a drastic and disproportionate penalty for a technical error by plaintiff's counsel that had no appreciable effect on the investigation. The court remands the decision to Commerce for corrective action.

I. BACKGROUND

A. The Contested Decision and the Countervailing Duty Order

The contested countervailing duty determination (the "Final Determination") is Prestressed Concrete Steel Wire Strand From the Republic of Turkey: Final Affirmative Countervailing Duty Determination and Final Negative Critical Circumstances Determination , 85 Fed. Reg. 80,005 (Int'l Trade Admin. Dec. 11, 2020) ("Final Determination "). The Final Determination incorporates by reference an "Issues and Decision Memorandum" containing explanatory discussion. Decision Memorandum for the Final Determination of the Countervailing Duty Investigation of Prestressed Concrete Steel Wire Strand from the Republic of Turkey (Dec. 7, 2020) (P.R. Docs. 370–72) (" Final I &D Mem. ").¹

Commerce published the countervailing duty order (the "Order") on February 3, 2021. Prestressed Concrete Steel Wire Strand From the Republic of Turkey: Countervailing Duty Order , 86 Fed. Reg. 7,990 (Int'l Trade Admin.) ("Order "). The Order applies to PC strand that is "produced from wire of non-stainless, non-galvanized steel." Id. at 7,991. PC strand "consists of multiple steel wires (non-stainless and non-galvanized) wound together to produce a strong, flexible product that is used to strengthen prestressed concrete structures." Prestressed Concrete Steel Wire Strand from Argentina, Colombia, Egypt, Indonesia, Italy, Malaysia, Netherlands, Saudi Arabia, South Africa, Spain, Taiwan, Tunisia, Turkey, Ukraine, and United Arab Emirates – Petition for the Imposition of Antidumping and Countervailing Duties 12 (Apr. 16, 2020) (P.R. Docs. 1–10).

B. The Parties

Plaintiff is a Turkish producer and exporter of PC strand and was a mandatory respondent in the investigation that resulted in the Final Determination. See Compl. ¶¶ 1, 3, 7 (Feb. 3, 2021), ECF No. 2.

Defendant is the United States. Defendant-intervenors Insteel Wire Products Company, Sumiden Wire Products Corporation, and Wire Mesh Corp. are U.S. domestic producers of PC strand that were the petitioners in the countervailing duty investigation. Consent Mot. to Intervene as of Right 2 (Feb. 25, 2021), ECF No. 8.

C. Proceedings Before Commerce and the International Trade Commission

On May 13, 2020, Commerce published an initiation notice for a countervailing duty investigation "to determine whether imports of PC strand from Turkey benefit from countervailable subsidies" conferred by the government of Turkey. Prestressed Concrete Steel Wire Strand From the Republic of Turkey: Initiation of Countervailing Duty Investigation , 85 Fed. Reg. 28,610, 28,612 (Int'l Trade Admin.).

On June 4, 2020, Commerce selected Güney Çelik Hasir ve Demir and Hasçelik Halat Sanayi Ticaret A.S. ("Hasçelik") as mandatory respondents for the countervailing duty investigation. Countervailing Duty Investigation of Prestressed Concrete Steel Wire Strand from the Republic of Turkey: Respondent Selection 2 (June 25, 2020) (P.R. Doc. 58) ("Respondent Selection "). Commerce sent an Initial Questionnaire to the Turkish government on June 9, 2020, and requested that the government forward copies of the Initial Questionnaire to the mandatory respondents. Investigation of Prestressed Concrete Steel Wire from the Republic of Turkey: Countervailing Duty Questionnaire 1 (P.R. Doc. 49). On June 25, 2020, Commerce revised its selection of mandatory respondents, determining that Celik Halat would be the second mandatory respondent in the investigation and suspending Hasçelik's obligation to participate. Respondent Selection at 2, 5.

On August 5, 2020, the three petitioners submitted to Commerce "allegations of possible new subsidies" alleged to have been provided by the government of Turkey to Turkish producers of PC strand. Prestressed Concrete Steel Wire Strand from the Republic of Turkey—Petitioners’ New Subsidy Allegations 1 (P.R. Doc. 180). On September 1, 2020, Commerce initiated a supplemental investigation of two programs (Exemption of Exchange Tax for Foreign Exchange Transactions and Provision of Steel Wire Rod for Less Than Adequate Remuneration ("LTAR")) that were identified in the petitioners’ allegations. Countervailing Duty Investigation of Prestressed Concrete Steel Wire Strand from the Republic of Turkey: Post-Preliminary Analysis 1 (Nov. 19, 2020) (P.R. Doc. 352).

On September 21, 2020, Commerce published its Preliminary Determination, in which it preliminarily determined an estimated net countervailable subsidy rate of 135.06% for Celik Halat. Prestressed Concrete Steel Wire From the Republic of Turkey: Preliminary Affirmative Countervailing Duty Determination, Preliminary Affirmative Critical Circumstances Determination, in Part , 85 Fed. Reg. 59,287, 59,288 (Int'l Trade Admin.). In the Preliminary Determination, Commerce announced that it would instruct U.S. Customs and Border Protection ("Customs") to collect cash deposits at the rate of 135.06% on entries of subject merchandise exported by Celik Halat, on and after the September 21, 2020 date of publication of the Preliminary Determination. Id. The Preliminary Determination incorporated by reference the " Preliminary Decision Memorandum." Decision Memorandum for the Preliminary Determination of the Countervailing Duty Investigation of Prestressed Concrete Steel Wire from the Republic of Turkey (Int'l Trade Admin. Sept. 14, 2020) (P.R. Doc. 253) ("Prelim. Decision Mem. "). For purposes of the Preliminary Determination, Commerce deferred examination of five programs (Investment Incentive Scheme Program—Value-Added Tax ("VAT") programs, Natural Gas for LTAR, Güney Çelik Hasir ve Demir's Unknown Tax Program, Export Buyer's Credits, and Renewable Energy Mechanism) in addition to the two programs identified in the petitioners’ new subsidy allegations. Id. at 33. The Final Determination was published on December 11, 2020, establishing the final estimated net countervailable subsidy rate of 158.44% for Celik Halat. Final Determination , 85 Fed. Reg. at 80,006.

On January 25, 2021, the U.S. International Trade Commission ("ITC") notified Commerce that it had reached an affirmative final determination that an industry in the United States was materially injured by reason of imports of PC strand from Turkey. Order , 86 Fed. Reg. at 7,991. Commerce announced that it would direct Customs to collect cash deposits at the increased rate of 158.44% for each entry of subject merchandise exported by Celik Halat made on or after the date of publication of the ITC's affirmative final injury determination. Id. The ITC published its determination four days later. Prestressed Concrete Steel Wire Strand From Argentina, Colombia, Egypt, Netherlands, Saudi Arabia, Taiwan, Turkey, and the United Arab Emirates , 86 Fed. Reg. 7,564 (Int'l Trade Comm'n Jan. 29, 2021). Publication of the Order followed thereafter. Order , 86 Fed. Reg. at 7,990.

D. Proceedings Before the Court

Plaintiff brought this action to contest the Final Determination on February 3, 2021. Summons, ECF No. 1; Compl., ECF No. 2. On February 25, 2021, Insteel Wire Products Company, Sumiden Wire Products Corporation, and Wire Mesh Corp....