Wind Tower Trade Coal. v. United States
| Citation | 569 F.Supp.3d 1221 |
| Decision Date | 24 March 2022 |
| Docket Number | Slip Op. 22-27,Court No. 20-03692 |
| Parties | WIND TOWER TRADE COALITION, Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Maureen E. Thorson and Derick G. Holt, Wiley Rein, LLP, of Washington, D.C., argued for plaintiff Wind Tower Trade Coalition. On the brief were Alan H. Price, Daniel B. Pickard, Robert E. DeFrancesco, III and Laura El-Sabaawi.
Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for defendant United States. With him on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Mykhaylo Gryzlov, Senior Counsel, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.
This action pertains to the final determination of the U.S. Department of Commerce ("Commerce") in the countervailing duty ("CVD") investigation on utility scale wind towers from the Socialist Republic of Vietnam ("Vietnam") for the period of investigation ("POI") January 1, 2018, through December 31, 2018. See Utility Scale Wind Towers from the Socialist Republic of Vietnam: Final Affirmative Countervailing Duty Determination and Negative Determination of Critical Circumstances ("Final Determination"), 85 Fed. Reg. 40,229 (Dep't of Commerce July 6, 2020) (final affirm. countervailing duty deter. and negative deter. of critical circumstances) and accompanying Issues and Decision Memorandum ("IDM"), PR 215.
Plaintiff Wind Tower Trade Coalition ("WTTC" or "plaintiff"), "an association of domestic utility scale wind tower producers" qualifying as an "interested party" under 19 U.S.C. § 1677(9)(E), Compl. ¶ 3, ECF No. 6, challenges Commerce's Final Determination in a motion for judgment on the agency record with respect to: (1) the denominator Commerce used in its subsidy calculation; and (2) Commerce's acceptance of certain steel plate documentation for its subsidy calculation for the Import Duty Exemptions on Imports of Raw Materials for Exporting Goods program ("Import Duty Exemptions program"). WTTC's Mem. in Supp. of Rule 56.2 Mot. for J. upon Agency R. ("Pl. Br.") at 2, ECF No. 13. Defendant United States ("Government") asserts that Commerce: (1) followed its regulations to apply the appropriate denominator in its subsidy calculation; and (2) reached a reasonable determination and was correct to not apply adverse facts available ("AFA") as related to documentation for the Import Duty Exemptions program. Def's Resp. in Opp'n. to Pl.’s Mot. for J. upon Admin. R. ("Def. Br.") at 5-6, 11, ECF No. 15.
As discussed herein, the court sustains the Final Determination with respect to Commerce's decision not to apply AFA as related to the Import Duty Exemptions program and remands the Final Determination with respect to Commerce's failure to address the evidence and argument related to manipulation for the benefit calculation and Commerce's failure to substantiate its finding as to the origin of the steel plate in question.
On July 9, 2019, WTTC filed a petition regarding utility scale wind towers from Vietnam. Pet'r's Letter, "Petitions for the Imposition of Antidumping and Countervailing Duties on Utility Scale Wind Towers from Canada, Indonesia, the Republic of Korea, and the Socialist Republic of Vietnam" (July 9, 2019), CR 1-18, PR 1-18. On July 29, 2019, Commerce initiated the CVD investigation, and, on August 19, 2019, Commerce selected CS Wind Tower Co., Ltd. ("CSWT") as the mandatory respondent. Respondent Selection Mem., CR 31, PR 57 (Aug. 19, 2019). However, in 2008, CSWT and CS Industries Ltd. ("CSI") merged to form CS Wind Vietnam Co., Ltd. ("CS Wind Vietnam"),1 a wholly owned subsidiary of CS Wind Corporation ("CS Wind Korea").2 Letter from Grunfeld, Desiderio, Lebowitz, Silverman and Klestadt LLP to Sec'y Commerce, re: CS Wind Affiliation Response: Countervailing Duty Investigation of Utility Scale Wind Towers from Vietnam (C-522-826) (Sept. 3, 2019) ("Affiliation Resp.") at 4, CR 32-33, PR 67; Memorandum from John McGowan and Julie Geiger, International Trade Analysts, Office VI, Antidumping and Countervailing Duty Operations, to The File, re: Verification of the Questionnaire Responses of CS Wind Vietnam Co., Ltd., Countervailing Duty Investigation of Utility Scale Wind Towers from the Socialist Republic of Vietnam (Mar. 18, 2020) ("Verification Mem.") at 6, CR 105, PR 186. Therefore, CS Wind Vietnam responded to Commerce's investigation. See, e.g. , Affiliation Resp.
On August 20, 2019, Commerce issued its initial questionnaire. IDM at 3. On September 3, 2019, and September 20, 2019, CS Wind Vietnam provided affiliation responses. See Affiliation Resp.; Letter from Grunfeld, Desiderio, Lebowitz, Silverman and Klestadt LLP to Sec'y Commerce, re: CS Wind Supplemental Affiliation Response: Countervailing Duty Investigation of Utility Scale Wind Towers from Vietnam (C-522-826) (Sept. 20, 2019) ( ), CR 35, PR 76. In its first response, CS Wind Vietnam reported no sales through any export trading company in Vietnam nor any affiliates in Vietnam, but instead explained that "all of ... [CS Wind Vietnam]’s export sales are made through [it]s parent company, CS Wind Corporation, in Korea." Affiliation Resp. at 2.
As to its affiliates, CS Wind Vietnam further explained: "Several of its overseas affiliates provide the company with raw materials, including CS Wind [Vietnam]’s parent corporation, CS Wind Corporation, which provides a majority of the company's inputs free-of-charge under a tolling operation agreement."3 Id. at 3. CS Wind Vietnam also noted that it "falls within [Commerce]’s meaning of cross-ownership." Id. In addition, CS Wind Vietnam clarified that Suppl. Affiliation Resp. at 1. CS Wind Vietnam and CS Wind Korea utilized "tolling agreements" for all sales in the POI.4 Id.
On October 9, 2019, CS Wind Vietnam provided its initial questionnaire response. Letter from Grunfeld, Desiderio, Lebowitz, Silverman and Klestadt LLP to Sec'y Commerce, re: CS Wind Initial Questionnaire Response: Countervailing Duty Investigation of Utility Scale Wind Towers from Vietnam (C-522-826) (Oct. 9, 2019) ("Initial Questionnaire Resp."), CR 55-67, PR 103-104. CS Wind Vietnam explained that its "sales revenue is not based on invoice prices or amounts of wind towers sold to unaffiliated U.S. customers (or the entered value of such merchandise), but the tolling processing fees issued to [its] parent company (equating to the latter's tolling expenses)." Id. at 5. CS Wind Vietnam further noted:
Under the per-project processing contract between CSWV and CS Wind Corporation, CS Wind Corporation supplies all main materials — steel plate, flange, steel plate for door frame and internal mounting items — from outside of Vietnam for the production of the wind towers. Therefore, most of [sic] raw materials are exported to Vietnam by CS Wind [Korea].
Regarding the materials, CS Wind Vietnam reported that it "merely imports them and then re-exports them" without ever purchasing anything from CS Wind Korea. Id. CS Wind Vietnam further provided: "Because of the processing contracts and the fact that all final goods are being exported, Vietnam Customs permits [CS Wind Vietnam] to be exempt from import duties for all imported raw materials according to Article 10 of Decree 134 [of the Government of Vietnam ("GOV")]." Id.
On October 23, 2019, WTTC requested that Commerce ask CS Wind Vietnam for clarification regarding its purchases of steel plate from [[ ]] based on [[ ]]. Letter from Wiley Rein LLP to Sec'y Commerce, re: Utility Scale Wind Towers from the Socialist Republic of Vietnam: Comments on CS Wind's Initial Questionnaire Response (Oct. 23, 2019) ("Comments on CS Wind Initial Questionnaire Resp.") at 8, CR 71; see also Oral Argument Tr. at 58:24-59:2. On November 8, 2019, CS Wind Vietnam provided to Commerce a list of suppliers of raw materials that CS Wind Vietnam used to produce internal components; the list included steel plate supplied by "[[ ]]" in [[ ]] and purchased by [[ ]], as well as steel plate supplied by [[ ]]. Letter from Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP to Sec'y Commerce, re: CS Wind First Supplemental Questionnaire Response – Remaining Questions : Countervailing Duty Investigation of Utility Scale Wind Towers from Vietnam (C-552-826) (Nov. 8, 2019) ( ) at 1, Ex. SQ2-6a, CR 83-84.
On November 6, 2019, CS Wind Vietnam also noted that it Letter from Grunfeld, Desiderio, Lebowitz, Silverman and Klestadt LLP to Sec'y Commerce, re: CS Wind First Supplemental Questionnaire Response: Countervailing Duty Investigation of Utility Scale Wind Towers from Vietnam (C-522-826) (Nov. 6, 2019) ( ) at 9, CR 76-82, PR 122-128. Moreover, CS Wind Vietnam stated: "Tracking the steel scrap generated from imported steel plate ... is not necessary since the import duty, without the exemption, is zero because of the various Free Trade Agreements in place." Id.
On November 26, 2019, CS Wind Vietnam expanded upon this response, noting that there is a zero percent duty on the Harmonized Tariff Schedule ("HTS") codes for its steel plate imports under most favored nation ("MFN") treatment, as CS Wind Vietnam confirmed through a search of those HTS codes on the Vietnam Customs website....
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