Slip Op. 23- 127 UNITED STATES COURT OF INTERNATIONAL TRADE YAMA RIBBONS AND BOWS CO., LTD., Plaintiff,

v. UNITED STATES, Defendant. Before: Timothy C. Stanceu, Judge
Court No. 21-00402

OPINION AND ORDER [Ordering remand of an agency de termination in a countervailing duty proceeding on certain woven ribbons from the People’s Republic of China] Dated: August 25, 2023 John J. Kenkel , deKieffer & Horgan, PLLC, of Washi ngton, D.C., for plaintiff Yama Ribbons and Bows Co., Ltd. With him on the briefs was Judith L. Holdsworth

. Kara M. Westercamp , Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washin gton, D.C., for defendant United States. With her on the brief were Brian M. Boynton , Principal Deputy Assistant Attorney General, and Patricia M. McCarthy, Director. Of coun sel on the brief is Leslie M. Lewis , Attorney, Office of the Chief Counsel fo r Trade Enforcement & Compliance, U.S. Department of Commerce. Stanceu, Judge: Plaintiff Yama Ribbons and Bows Co., Ltd. (“Yama”) contests an administrative determination of the In ternational Trade Administration, U.S. Department of Commerce (“Commerce” or th e “Department”) conc luding the eighth periodic administrative review of a countervailing duty (“CVD”) order on certainCourt No. 21-00402 Page 2 woven ribbons from the People’s Republic of China (“China” or the “PRC”). Finding merit in one of the claims plaintiff raised in contesting the Final Results, the court remands the Final Results to Commerce for reconsideration in accordance with this Opinion and Order. On other claims, th e court allows supplementation of the administrative record in respon se to a request of defendant. I. B ACKGROUND A. The Contested Determination The contested determinat ion (the “Final Result s”) was published as Narrow Woven Ribbons With Woven Selvedge From the Pe ople’s Republic of China: Final Results of Countervailing Duty Administrative Review; 2018 , 86 Fed. Reg. 40,462 (Int’l Trade Admin. July 28, 2021) (“ Final Results ”). B. Proceedings before Commerce On September 1, 2010, Commerce issued a countervailing duty order (the “Order”) on narrow woven ribbons with wo ven selvedge from China (the “subject merchandise”). Narrow Woven Ribbons With Woven Selve dge From the People’s Republic of China: Countervailing Duty Order, 75 Fed. Reg. 53,642 (Int’l Trade Admin.) (“ Order ”). 1

1 The subject merchandise is defined generally in the countervailing duty order as woven ribbons twelve centimeters or le ss in width, and of any length, that are composed in whole or in part of man-made fibers and that have woven selvedge. Some exclusions apply. Narrow Woven Ribbons With Woven Selv edge From the People’s Republic (continued. . . .)Court No. 21-00402 Page 3 In November 2019, Commerce published a notice of initiation of the eighth administrative review of the Order (“eighthreview”), which pertained to a period of review (“POR”) of Januar y 1, 2018 to December 31, 2018. Initiation of Antidumping and Countervailing Duty Administrative Reviews , 84 Fed. Reg. 61,011, 61,016 (Int’l Trade Admin. Nov. 12, 2019). Commerce published the preliminary result s of the eighth review (“Preliminary Results”) in early 2021, preliminarily dete rmining for Yama, the sole reviewed respondent, a total net CVD subsidy rate of 42.20%. Narrow Woven Ribbons With Woven Selvedge From the People’s Republic of China: Preliminary Results of Countervailing Duty Administrative Review; 2018 , 86 Fed. Reg. 7,264, 7,265 (Int’l Trade Admin. Jan. 27, 2021) (“ Preliminary Results ”). Commerce incorporated an explanatory document. Decision Memorandum for Preliminary Results of 2018 Countervailing Duty Administrative Review: Narrow Woven Ribbons with Woven Selvedge from the People’s Republic of China (Int’l Trade Admin. Jan. 19, 2021), P.R. Doc. 162 (“ Prelim. Decision Mem. ”). 2

of China: Countervailing Duty Order, 75 Fed. Reg. 53,642, 53,642–43 (Int’l Trade Admin. Sept. 1, 2010). The term “selvedge” refers to “the edge on either side of a woven or flat-knitted fabric so finished as to prevent raveling.” Selvage or selvedge, W EBSTER ’ S T HIRD N EW I NTERNATIONAL D ICTIONARY U NABRIDGED (2002).

2 Documents in the Joint Appendix (June 17, 2022), ECF Nos. 42 (Conf.), 43 (Public) are cited herein as “P.R. Doc. __.” All citations to record documents are to the public versions of those documents.Court No. 21-00402 Page 4 In the Final Results, Commerce determined a final total net CVD subsidy rate of 42.20% for Yama. Final Results , 86 Fed. Reg. at 40,462. Commerce incorporated by reference an explanatory memorandum, the “F inal Issues and Decision Memorandum.” Issues and Decision Memorandum for the Final Results of 2018 Countervailing Duty Administrative Review: Narrow Woven Ribbons with Woven Selvedge from the People’s Republic of China (Int’l Trade Admin. July 22, 2021), P.R. Doc. 174 (“ Final I&D Mem. ”). Commerce calculated the 42.20% rate by adding individual “program rates” for what it considered to be countervailable subsidie s arising from 24 government programs. Id

. at 3–5. In this action, Yama contests the Department’s inclusion of the following three subsidy rates in the 42.20% total subsidy rate : a rate of 10.54% for the Export Buyer’s Credit Program (“EBC Program” or “EBCP” ), which is an expo rt-promoting loan program administered by the Export Import Bank of China; a rate of 27.74% for the provision of synthetic yarn for less than adequate remuneration (“LTAR”); and a rate of 0.27% for the provision of caustic soda for LTAR. C. Proceedings in the Court of International Trade Yama commenced this action in August 2021. Summons (Aug. 12, 2021), ECF No. 1; Compl. (Aug. 12, 2021), ECF No. 7. Before the court is Yama’s motion for judgment on the agency record under US CIT Rule 56.2 and acco mpanying brief. Pl. Yama Ribbons and Bows Co., Ltd.’s Rule 56.2 Mot. for J. Upon the Agency R. (Feb. 4,Court No. 21-00402 Page 5 2022), ECF Nos. 27 (Conf.), 28 (Public); Mem. of Law in Supp. of Pl. Yama Ribbons and Bows Co., Ltd’s 56.2 Mot. for J. Upon the Ag ency R. (Feb. 4, 2022), ECF No. 27-1 (Conf.), 28-1 (Public) (“Pl.’s Br.”). Defendant United States opposes Yama’s motion for judgme nt on the agency record. Def.’s Resp. to Pl.’s Rule 56.2 Mot. for J. Upon the Agency R

. (Apr. 22, 2022), ECF No. 37 (“Def.’s Br.”). Plaintiff replie d to defendant’s submission. Pl. Yama Ribbons and Bows Co., Ltd.’s Reply to Def.’s Opp’n to Pl.’ s Rule 56.2 Mot. for J. Upon the Agency R. (June 3, 2022), ECF No. 41 (“Pl.’s Reply”). II. D ISCUSSION A. Jurisdiction and Standard of Review The court exercises jurisdiction over this action according to section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581( c), which grants this Court subject matter jurisdiction of actions commenced unde r section 516A of the Tariff Act of 1930, as amended (the “Tariff Act”), 19 U.S.C. § 1516a, in cluding actions contesting a final determination that Commerce issues to co nclude an administrative review of a countervailing duty order. Id . § 1516a(a)(2)(B)(iii). 3 In reviewing a final determination, the court “shall hold unlawful any determination, finding, or conclusion foun d . . . to be unsuppo rted by substantial

3 All citations to the United States Code herein are to the 2018 edition.Court No. 21-00402 Page 6 evidence on the record, or otherwis e not in accordance with law.” Id . § 1516a(b)(1). Substantial evidence refers to “such releva nt evidence as a reasonable mind might accept as adequate to support a conclusion.” SKF USA, Inc. v. United States , 537 F.3d 1373, 1378 (Fed. Cir. 2008) (quoting Consol. Edison Co. v. NLRB , 305 U.S. 197, 229 (1938)). B. Countervailing Duties under the Tariff Act When certain conditions are met, the Ta riff Act provides for a “countervailing duty” to be assessed on imported merchand ise to redress the effect of a subsidy provided by the government of the exporting country. Sect ion 701(a) of the Tariff Act, 19 U.S.C. § 1671(a), provides for impositionof a countervailing duty if: (1) Commerce determines that an “au thority,” defined as either the government of a country or any public entity within the territory of the country, id . § 1677(5)(B), “is providing, directly or indirectly, a countervailable subsidy with respect to the manufacture, production, or export of a class or kind of merchandise im ported, or sold (or likely to be sold) for importation, into the United States”; and (2) the U.S. International Trade Commission determines that an industry inthe United States is materia lly injured or threatened with material injury by reason of the subsidized imports. A “countervailable subsidy” exists, generally, where anauthority provides a financial contribution to a person and a benefit is thereby conferred, and the subsidy meets the requirement of “specificity,” as determined according to various rules set forth in the statute. Id. §§ 1677(5), (5A). When subsidie s consist of the provision ofCourt No. 21-00402 Page 7 goods or services rather than the provision ofmonies directly, a be nefit is conferred if those goods or services are provided for less than adequate remuneration. Id. § 1677(5)(E)(iv). C. Use of Facts Otherwise Available an d Adverse Inferences when the Exporting Country Government Fails to Cooperate in a CVD Proceeding In the Final Results, Commerce invoked its authority to use “the facts otherwise available” under section 776(a) of the Ta riff Act, 19 U.S.C. § 1677e(a), and “adverse inferences” under section 776(b) of the Tariff Act, 19 U.S.C. § 1677e(b), with respect to the EBCP and the provision of synthetic yarn and caustic soda. When using both the “facts otherwise availabl e” and the “adverse infere nce” provisions, Commerce describes its action by using the term “adverse facts available” (“AFA”). Commerce may resort to the use of th e facts otherwise available when, for example, “an interested party or any othe r person” withholds requested information, 19 U.S.C. § 1677e(a)(2)(A), or “signi ficantly impede s a proceeding,” id . § 1677e(a)(2)(C). Commerce also may use the facts otherwise available if Commer ce finds that an interested party provides requested informat ion “but the information cannot be verified as provided in section 1677m(i) of this title [19 U.S.C. § 1677m(i)].” Id . § 1677e(a)(2)(D). If Commerce finds that “an interested party has failed to cooperate by not acting to the best of its ability to comply” with a request for information, Commerce “may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available.” Id . § 1677e(b)(1)(A).Court No. 21-00402 Page 8 In some circumstances arising in a coun tervailing duty investigation or review, Commerce may use an inference adverse to the interests of a party in the proceeding in the event of non-cooperation by the government of the exporting country in responding to the Department’s requests for information, even if the result is a collateral adverse effect upon a fully cooperative party. See Fine Furniture (Shan ghai) Ltd. v. United States , 748 F.3d 1365, 1373 (Fed. Cir. 2014); see also Changzhou Trina So lar Energy Co. v. United States , 42 CIT __, __, 352 F. Supp. 3d 1316, 1325 (2018) (quoting Archer Daniels Midland Co. v. United States , 37 CIT 760, 769, 917 F. Supp. 2d 1331, 1342 (2013)) (“Commerce may apply AFA even if the collateral effect is to ‘adversely impact a cooperating party.’”). But in such circumstances, Commerce should “seek to avoid such impact if relevant information exists else where on the record.” Changzhou Trina, 42 CIT at __, 352 F. Supp. 3d at 1325 (citation omitted). Commerce did not find that Yama withheld any information or failed to cooperate in responding to th e Department’s information re quests. Commerce, instead, based its use of the facts otherwise availabl e and adverse inferenc es entirely on its findings of non-responsiveness and non-cooperation on the part of the government of China (the “GOC”). D. The Export Buyer’s Credit Program Commerce found that the Ex port Buyer’s Credit Prog ram provides medium and long-term loans at preferential, low interest rates. Final I&D Mem . at 30. The programCourt No. 21-00402 Page 9 is administered by a government entity, the Export Import Bank of China (the “EX-IM Bank”). See id . at 35. Commerce did not find from record evid ence that Yama participated in the EBCP, and the only record evidence relevant to that issue supports a finding that Yama did not do so. Had one or more of Yama’s customers received preferential loans under the EBCP and used the proceeds to purchase Yama’s subject merchandise during the POR, a benefit indirectly would have been “conferred” upon Yama. But in this case, Commerce did not find as a fact that any Yama customer actually received a loan under the program. Here again, the record lack ed evidence that such an event occurred during the POR and contained reco rd evidence that it did not. Commerce began its analysis by stating a negative finding, as follows: “Consistent with the Preliminary Results and Commerce’s practice, we continue to find that the record of the instant review does not support a finding of non-use regarding the EBC program for Yama.” Final I&D Mem . at 30 (footnote omitte d). This is not an affirmative finding under 19 U.S.C. § 1677(5) that Yama was conferred a “benefit” as a result of participation in the EBCP by one or more of its customers. Instead, it is a “double negative,” i.e., a conclu sion that the record does notsupport a “finding” that Yama did not benefit from the EBCP. Nevertheless, defendant argues that “Com merce’s determination that Yama used the EBC program, and its selection of an ad verse rate for that program, are supportedCourt No. 21-00402 Page 10 by substantial evidence and otherwise in accordance with la w.” Def.’s Br. 11. Because Commerce did not actually “d etermine” from record ev idence (substantial or otherwise) that Yama used the EBC program, defendant’ s argument mi sstates what Commerce actually decided. Applying 19 U.S.C. § 1677e(a), Comme rce found that “the GOC withheld necessary information thatwas requested of it.” Final I&D Mem . at 42. It concluded from this finding that the withholding of information “resulted in necessary information not being available on the reco rd of this review” and that “the GOC significantly impeded the proceeding.” Id . Referring to record information submitted by Yama and some of its customers to demons trate that no customer of Yama used the EBCP, Commerce found that info rmation about the operation of the EBCP it considered to be necessary but missing from the record “prevents complete and effective verification of the customers’ certifications of non-use.” Id . at 41. Commerce concluded, further, that “an adverse infere nce is warranted in the application of facts available, pursuant to section 776(b) of the Act [19 U.S.C. § 1677e(b)] because the GOC did not act to the best of its ability in providing the necessary information to Commerce.” Id . at 42. As adverse inferenc es, Commerce asserted that “we continue to find this pr ogram provides a financial contribution, is specific, and provides a benefit to Yama within the me aning of sections 771(5)(D), 771(5A), andCourt No. 21-00402 Page 11 771(5)(E) of the Act, respectively [19 U.S.C. §§ 1677(5)(D), (5A), and (5)(E), respectively].” Id

. In some situations, the serious and perv asive nature of the non-cooperation of the exporting government may prevent any meaningful inquiry by Commerce and justifies an adverse inference against a cooperative party. For example, in Yama Ribbons & Bows Co., Ltd. v. United States , 46 CIT __, 611 F. Supp. 3d 1394 (2022), this Court sustained an adverse inference that Yama benefited upon the government of China’s inadequately responding to the Department’s questionnaire by providing, essentially, nothing beyond a copy of the GOC’s questi onnaire response for the previous review, which was unresponsive to the Department’s request. This case presents a differ ent situation. Here, the Ch inese government provided requested information that pertained specific ally to the operation of the EBCP in the eighth review and explained the basis for it s response to Commerce that neither Yama nor its customers were EBCP participants. Although Commerce permissibly found that the GOC failed to provide certain requested information about the EBCP, the essential finding Commerce drew from that failure, wh ich was that the lack of the requested information prevented it either from determining, or from verifying, that Yama did not benefit from the EBCP, was unsupported by substantial evidence on the record. As the court noted previously, Commerce in some circumstances may use an inference adverse to a cooperative party when the exporting government fails to act toCourt No. 21-00402 Page 12 the best of its ability to respond to informat ion requests but should “seek to avoid such impact if relevant information ex ists elsewhere on the record.” Changzhou Trina , 42 CIT at __, 352 F. Supp. 3d at 1325 (citation omi tted). Commerce did not adhere to this principle in inferring, adversely, that Yama benefited from the EBCP. 1. Record Evidence that Yama Did Not Benefit from the EBCP In response to a request in the Depa rtment’s initial questionnaire, Yama provided Commerce, as Exhibit 13 to its response to the Department’s initial questionnaire, a “list of U.S. customers to which Yama expo rted during the POR,” along with their shipment addresses. Narrow Woven Ribbons With Woven Selvedge from People’s Republic of China, Antidumping Duty: Response to Section III Questionnaire at 18 and Ex. 13 (Jan. 10, 2020), P.R. Doc. 40 (“ Yama Initial Questionnaire Resp. ”) (list of customers and addresses). The list contained the names of a large number of U.S. retailers. In response to the Department’s directive that Yama “discuss in detail the role your company plays in assisting your customers in obtaining buyer credits” under the EBCP, Yama stated that it “did not provide any as sistance to its customers in obtaining buyer credits.” Id . at 18. Yama further stated that it “contacted all of its U.S. customers listed in Exhibit 13 and confirmed th at no customer obtained bu yer credits from China Ex-IM Bank during the POR.” Id . at 19. Yama added that, in respon se to a request it sent to all customers, “certain U.S. customers provided written declaration certifying that they did not use buyer credits from Ex -IM Bank during the POR.” Id . Yama submitted for theCourt No. 21-00402 Page 13 record the customer certifications it received from approximately 28% of the customers on its customer list. Id . at Exs. 14-1 and 14-2. The Chinese government made statem ents paralleling those of Yama. Narrow Woven Ribbons with Woven Selvedge from the People’s Republic of China, Case No. C-570-953: Initial Questionnaire Response at 34 (Jan. 10, 2020), P.R. Doc. 17–39 (“ GOC Initial Questionnaire Resp .”) (“The GOC determined that none of the customers of Yama used this program through a process in which Yama provided its customer list to the GOC. The EX-IM Bank then searched its records to confirm that these customers did not receive credits under the Export Buyer’s Credit program.”). Other record evidence further detracts from a conclusion that Yama benefited from the EBCP. The “Administrative Measur es of Export Buyer’ s Credit of EBCP,” provided in original and translated form as Exhibit D-2 to the GOC’s response to the Department’s Initial Questionnaire and Exhibit D-4 to the GOC’s response to the Department’s First Supplemental Questionnaire (the “Administrative Measures”), states in Article 3: “Except fo r the government special approv al, export buyer ’s credit is mainly used for supporting the export of capital goods, (such as Chinese electromechanical products, complete sets of large scale equipment) and High-tech products and services.” GOC Initial Questionnaire Resp . at Ex. D-2 and Narrow Woven Ribbons with Woven Selvedge from the People’s Republic of China, Case No. C-570-953: First Supplemental Questionnaire Responseat Ex. D-4 (Apr. 17, 2020), P.R. Doc. 140 (“ GOC FirstCourt No. 21-00402 Page 14 Suppl. Questionnaire Resp .”) (“ Administrative Measures ”). Although not precluding the possibility that woven ribbon exports would receive an EBCP benefit, Article 3 indicates that exports such as Yama’s are not the fo cus of the program. The same document provides evidence that the providing of credits under the EBCP, which is intended to promote exports, does not occur without the participation of the exporter. Id. at Article 4. 2. The Government of China’s Responses to the Department’s Initial and First Supplemental Questionnaires The record does not contain evidence that the GOC failed to respond to any requests for information or documentation ab out the EBCP in its response to the Initial Questionnaire. The questio nnaire contained seven questions the GOC was required to answer “regarding Export Buyer’s Credits provided to all U.S. customers of the mandatory company respondents [sic] (including all respondi ng crossowned affiliated companies) during the POR.” GOC Initial Questionnaire Resp . at 32. Commerce wrote the questionnaire so as to di rect the GOC to skip the se ven questions unless the GOC was reporting that EBCP credits were provided to customers of Yama (the sole “mandatory company respondent”). The GO C reported that none of Yama’s U.S. customers used the EBCP, and hence the qu estions were not applicable. The GOC responded “Not applicable” to four of the questions but responded voluntarily to the other three questions and attached documents identified in two of them.Court No. 21-00402 Page 15 The GOC’s response to the First Supplem ental Questionnaire contains evidence to support the Department’s finding that the GOC failed to cooperate by not acting to the best of its ability to respond to certain of the Department’s requests for information. In response to the request for “the 2013 revi sions to the Administrative Measures of Export Buyer’s Credits of th e Ex-Im Bank of China,” the GOC responded that “[t]he GOC does not maintain the re quested document, as the Expo rt Buyer’s Credit Program is a commercial, financial product offered by the bank.” GOC First Suppl. Questionnaire Resp. at 20. The answer provided by the GOC, read literally, is nonsensical. If interpreted to mean that only banks, and not a government entity (such as the EX-IM Bank) maintain the document, the GOC’s answer begs the question of why the government, the apparent originator of the document, could not locate a copy anywhere. In the First Supplemental Qu estionnaire, Commerce also requested “a list of all partner/correspondent banks involved in disbursement of funds under the Export Buyer’s Credit Program,” to which the GO C responded that “[s]ince none of the customers of the mandatory respondent obtained Export Buyer’s Credits during the POR, the GOC understands that this question is not applicable.” Id . The GOC’s “understanding” was correct as to the Department’s request for this list in the Initial Questionnaire but was incorrect as to the same request in the First SupplementalCourt No. 21-00402 Page 16 Questionnaire. The second it eration of the request was no t specific to Yama or its

customers.

3. The Department’s Invalid Finding that It Requested Information It Considered Essential to Its Verifying the “Non-Us e” of the EBCP by Yama’s Customers

Commerce permissibly found inadequate th e GOC’s responses to the request for the 2013 revisions to the Administrative Me asures and the list of what it termed “partner/correspondent banks .” Commerce also found, bu t impermissibly, that the GOC failed to provide certain other requested in formation that it considered essential to its verifying the “non-use” of the EBCP by Yama’s customers. As shown by the questionnaires it sent to th e GOC, Commerce did not reques t that other information but proceeded as if it had. Commerce found that “the GOC’s refusal to provide the 2013 revisions, as well as other requested informat ion, such as key information and documentation pertaining to the application and approval process, and partner/correspondent banks, impeded Commerce’s ability to conduct its investigation of this program and to verify the claims of non-use by Yama’s customers.” Final I&D Mem . at 37 (emphasis added). The GOC provided “information and documentation pertaining to the application and approval process” when it submitted the Administrative Measures and the “Detailed Implementation Rules Governing Export Buyer’s Credit of the Export-Import Ba nk of China,” (the “EBCP Implementation Rules”), which the GO C provided, in origin al and translated form, as Exhibit D-3 to its response to the In itial Questionnaire and as Exhibit D-5 to itsCourt No. 21-00402 Page 17 response to the First Supplemental Questionnaire. GOC Initial Questionnaire Resp . at Ex. D-3 and GOC Suppl. Questionnaire Resp . at Ex. D-5 (“ EBCP Implementation Rules ”). Commerce found, further, that even had the GOC provided the “list of correspondent banks,” it still could not de termine whether loans obtained by a U.S. customer of Yama were “loans originating from, facilitated by, or guaranteed by the China EX-IM Bank.” Final I&D Mem . at 38. Commerce reached this finding even though it made no attempt to conduct a verification by examining the record of bank loans of any U.S. customer of Yama, concluding thatit would have beenfutile to do so. Id . at 39. Commerce stated that in order to di fferentiate ordinary ba nk loans, such as a loan from the private bank HSBC, from government-benefited loans under the EBCP: Commerce would need to know what un derlying documentation to look for in order to determine whether particular subledger entries for HSBC might actually be China EX-IM Bank fi nancing: specific applications, correspondence, abbreviations, account numbers, or other indicia of China EX-IM Bank involvement. As explai ned above, the GOC failed to provide Commerce with any of this information. Id . at 38–39. The reference “[a]s explained above” apparently pertains to the allegation of “the GOC’s failure to provide other re quested information, such as a sample application, and other documents making up th e ‘paper trail’ of a direct or indirect export credit from the China EX-IM Bank, discussed above.” Id . at 38. The Initial Questionnaire requested thatthe GOC submit “a sample buyer’s credit application along with the application’s approval an d the agreement betweenthe respondent’s customer and the bank, which establish the terms of the assistance provided under theCourt No. 21-00402 Page 18 facility,” but this request was one of the seve n requests applicable only if the GOC was reporting that Export Buyer’s Credits were provided to U.S. customers of the mandatory respondent. GOC Initial Questionnaire Resp . at 33. As noted above, that request was inapplicable, the GOC, like Yama, ha ving reported that no U.S. customer of Yama was provided an Export Buyer’s Credit. Commerce did not repeat in its First Supplemental Questionnaire its request for “a sample buyer’s credit application along with the application’s approval and the agreement between the responde nt’s customer and the bank, which establish the terms of the assistance provided unde r the facility.” Other than th e inapplicable request in the Initial Questionnaire, the questionnaires Commerce relies upon made no request for documents comprising a “pap er trail” and do not requ est “specific applications, correspondence, abbreviations, account numbers, or other indicia of China EX-IM Bank involvement.” In short, Comme rce concluded that it could not verify the “non-use” of the EBCP by Yama’s customers because itlacked this additional, unrequested information. As a result, the Department’s decision to infe r adversely a benefit to Yama from the EBCP was critically flawed, Commerc e having based that adverse inference on its reliance on “missing” information from th e GOC that it never requested. According to the record evidence, the information Co mmerce requested of the GOC but did not receive was limited to the list of corresp ondent banks and the 2013 revisions to the Administrative Measures.Court No. 21-00402 Page 19 In defense of the Department’s draw ing an adverse inference that Yama benefited from the EBCP, defendant argues that “[i]n its supplemental response, the government [of China] . . . fa iled to explain with supportin g documentation the steps it had taken to determine that none of Yama’s customers had used the EBC program during the review period, whic h Commerce specifically reques ted.” Def.’s Br. 14 (citing the GOC First Suppl. Questionnaire Resp. at 17, which requeste d “documentation from the Ex-Im Bank of China to su pport the GOC’s claims that itsearched it [sic] records and confirmed that Yama’s customers did not receive credits under this program during the POR”). This argument is unsu pported by, and is in stead refuted by, the record evidence. The GOC provided an expl anation of the steps taken to determine that no customer on Yama’s list obtained credits under the EBCP. GOC First Suppl. Questionnaire Resp . at 17–20. The “supporting document ation” part of the question was satisfied by the GOC’s submitting (a second time) the Administrative Measures and the EBCP Implementation Rules. Both clarify th at the borrower may be an importer or a private bank, but these docume nts, read together and in the entirety, are record evidence supporting a finding that in eith er event the EX-IM Ba nk necessarily would have in its records required documentat ion submitted by, and to, the exporter. See, e.g. , Administrative Measures at Article 14 (requiring submissi on of the “commercial contract draft or letter of intent” and “the credit materials and related supporting document ofCourt No. 21-00402 Page 20 the borrower, guaranto r, importer, exporter, and financ ial statement of the borrower and guarantor”); EBCP Implementation Rules at I(3) (providing for issuance of a letter to the exporter “to enable the export ente rprise to engage in further commercial negotiations”), III(1) (“After the loan agreement has been signed and officially taken effect, the Export-Import Bank of China shall notify the exportenterprise in writing.”). Further, the EX-IM Bank’s proc edures require that the EX-IM Bank have recourse in the event of default and that the exporter obtain export credit insurance. See, e.g. , EBCP Implementation Rules at I(4); Administrative Measures at Article 20 (specifying that the EX-IM Bank has the “right to recourse against borro wer, loan guarantor or export credit guarantor according to loan agreement.”). The GOC’s response to the First Supplemental Questionnaire, the Administrative Measures, and the EBCP Implementation Rules are sufficient to refute any finding or inference that Yama or any of its customers could have benefited from the EBC program without Yama’s participation and, further, without any record of that participation being recorded in the EBCP’s required recordkeeping. Defendant’s argument might be read to imply that some furth er “documentation” of the reco rd search should have been provided, but it is puzzling whether, or how, the EX-IM Bank could have provided additional “supporting document ation” about a record search that it reported as having undertaken when it also re ported that search as havi ng uncovered no pertinent documents, i.e., none identify ing Yama or any of the compan ies on Yama’s customer listCourt No. 21-00402 Page 21 as participants inthe program. See GOC First Suppl. Questionnaire Responseat 17 (“The GOC also checked with the China Ex-Im Bankand confirmed that none of the U.S. customers of the mandatory respondent used the Export Buyer’s Credits during the POR”); see also EBCP Implementation Rules at V (requiring retention of complete project files). It is not clear how defendant expect s the EX-IM Bank to ha ve further “explained with supporting documentation” the EX -IM Bank’s determination that EBCP “documentation” pertaining to Yama or its customers did not exist. Defendant argues, also, that “the EBC program involves a complicated loan disbursement structure, the parameters of which the Chinese government has yet to identify, despite repeated requests, and Co mmerce required certain information from the government to understand the program so that it could verify the accuracy of non-use claims.” Def.’s Br. 25 (citing Final I&D Mem. at 37–41). This argument also disregards record evidence. The EBCP Impl ementation Rules prov ide procedures that describe the “parameters” un der which the EX-IM Bank op erates the program through a settlement bank. See EBCP Implementation Rules at III (“Usage of the loan”), IV (“Repayment of the loan”). Nothing in those “parameters” suppo rts a conclusion or inference that Yama could have benefited fr om the EBCP without being aware of it or without its participation having been docume nted in the required EBCP recordkeeping.Court No. 21-00402 Page 22 4. The Department’s Determination of an EBCP Benefit to Yama Was Not Supported by the Existing Administrative Record The court rejects the Department’s basing its adverse inference of a benefit to Yama on the GOC’s failure to provide a list of correspondent banks. The absence from the record of that list did not affect the Department’s ability to determine, or to conduct a verification on, whether Yama benefited from the EBCP. According to the Department’s own findings and reasoning, that list would not have enabled Commerce to determine whether a loan from a private bank to a U.S. customer of Yama was a loanoriginating from the EX-I M Bank under the EBCP unless Commerce also was provided th e “paper trail” information it insisted it needed. Final I&D Mem . at 38 (“This same ‘paper trail’ would be necessary even if the GOC provided the list of correspondent bank s.”), 40 (“In short, because the GOC failed to provide Commerce with information necessary to identi fy a paper trail of a direct or indirect export credit from the China EX-IM Bank, we would not know what to look for behind each loan in attempting to identify which loan was provided by the EX-IM Bank via a correspondent bank under the EBC program.”). In other words, Commerce found that the list of correspondent banks would have been of no use to Commerce absent other specific information, which Commerce failed to request from the GOC. Therefore, if the list of correspondent banks—although being withheld information within the meaning of 19 U.S.C. § 1677e(a)(2)(A)—had been pres ent on the record, Commerce would not have used this information in determining whether Yama had been provided an EBCPCourt No. 21-00402 Page 23 benefit. For the same reason, the GOC, in failing to provide that list, cannot correctly be said to have significantly impeded the proceeding for purpos es of 19 U.S.C. § 1677e(a)(2)(C). For these reasons, and because Commerce disr egarded “relevant information” that “exists elsewhere on the record,” Changzhou Trina, 42 CIT at __, 352 F. Supp. 3d at 1325 (citation omitted), the ab sence of that informat ion from the record did not permit Commerce to draw an advers e inference that Yama received an EBCP benefit. Moreover, Commerce made no attempt during the review to ve rify the statement by Yama, or that of any individual U.S. cust omer of Yama, that th e EBCP was not used. Even without the list of correspondent bank s it sought from th e GOC, Commerce could have attempted to verify the negative resp onse of at least some customers and, for example, could have made inquiries to the fina ncial institutions as to the nature of any loans those customers used to buy Yama’s subject merchandise. Commerce illogically reasoned that unless it could verify the no n-EBCP origin of all the loans of all the customers, it could not so verify any loanof any customer. Inthat respect, the Department’s presumption that no verificati on was possible amounts, on the record evidence, to unsupported spec ulation. On that evidence , it was impermissible for Commerce to punish Yama simply because Yama happened to sell its subject merchandise to a relatively large numberof U.S. customers during the POR.Court No. 21-00402 Page 24 The GOC’s failure to provide the 2013 amendments to th e Administrative Measures is also insufficient, either alone or in combination with the failure to provide the list of correspondent banks, to support an adverse inference of a benefit to Yama from the EBCP. The GOC submitted the Administrative Measures and the EBCP Implementation Rules in response to the GOC’s request for the current procedures governing the EBCP. Commerce incorporated a finding from a previous review, the “Silica Fabric Investigation,” that the 2013 revisions “provide internal guidance for how this program is administra ted by the EX-IM Bank.” Final I&D Mem . at 34 (citing Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Certain Amorphous Silica Fabric from the People's Republic of China at 12 (Int’l Trade Admin. Jan 25, 2017)). If this fi nding is presumed corre ct, i.e., that the 2013 revisions are “internal guidance,” then it wo uld be inconsistent to presume also that they effected substantive, ex ternal modifications to the Ad ministrative Measures under which it could be inferred that Yama benefited from the EBCP. Commerce engaged in speculation that the 2013 docume nt related, in some undefined way, to the issue of whether Yama received an EBCP benefit. Commerce alluded to a finding from the Silica Fabric Investigation that the 2013 document “may have eliminated the USD 2 million contract minimum associated with this lending program.” Id . at 34. In this proceeding, Commerce inquired as to whether the $2 million threshold was in effect, and the GOC responded that it was. GOC First Suppl. Questionnaire Resp . at 18Court No. 21-00402 Page 25 (stating that “for a business contract to be supported by the Export Buyer’s Credits, the

contract amount must be more than 2 million U.S. dollars.”). In summary, the record does not support the Department’s conclusion that the information that Commerce re quested and that the GOC fa iled to provide prevented Commerce from determining that Yama did not benefit from the EBCP. While lacking the list of correspondent banks and the 2013 re visions, Commerce had before it a large body of evidence, provided by Yama as we ll as by the GOC, supporting a finding that Yama did not do so. Commerce impermissibly ignored this “relevan t information” that “exists elsewhere on the record,” Changzhou Trina, 42 CIT at __, 352 F. Supp. 3d at 1325 (citation omitted), on its finding—itself un supported by substantial record evidence— that the two items of requested but missing information prevented it from finding “non-use” or verifying informatio n that the record contained. For the reasons the court has discussed, the administrative record does not contain substantial evidence to support a finding that Yama benefited from the EBCP. Nor does it contain substantial evidence to support the Department’s finding that the record did not allow Commerce to determine whether a benefit to Yama occurred or its finding that it could not conduct any verification of Yama’s or its customers’ “non-use” of that program. The Department’s determination as to the EBCP was a final agency decision that has been subjected to judicial review an d found to be unsupported by substantialCourt No. 21-00402 Page 26
evidence on the administrati ve record the agency collected and assembled during the CVD review proceeding. Th at determination, therefor e, must be remanded for reconsideration. The remaining question is whether Commerce may reopen the record. Ordinarily, an agency rema ins free to reopen the reco rd unless the court rules otherwise. NTN Bearing Corp. of Am. v. United States , 25 CIT 118, 124, 132 F. Supp. 2d 1102, 1107 (2001), aff'd, 295 F.3d 1263 (Fed. Cir. 2002) (“As long as the Court does not forbid Commerce from considering new info rmation, it remains within Commerce’s discretion to request and evaluate new data.”). In some cases a deficiency in the record can be remedied in a way that is expeditious and fair, but this is not the situation here. Rather, the record as it exists cannot supportan imposition of countervailing duties for the EBCP for multiple reasons. Moreover, re peating the entire review as to the EBCP would be highly prejudicial and unfair, in terms of both time and expense, for the plaintiff, Yama, who was a fully cooperative respondent . See, e.g., Essar Steel Ltd. v. United States , 678 F.3d 1268, 1277 (Fed. Cir. 2012) (“ To allow constant reopening and supplementation of the record would lead to inefficiency and delay in finality.”). Because Commerce, in including a rate fo r the EBCP, disregarde d critical record evidence (including, in particular, the Administrative Measures and EBCP Implementation Rules), because of the need to ensure fairness to both parties, and in the interest of finality, the court will not exerci se its discretion so as to authorize CommerceCourt No. 21-00402 Page 27 to reopen the record upon remand. Commerce must reconsider its EBCP determination on the basis of the existing record and reac h a new determination th at is in accordance with this Opinion and Order. E. Provision of Synthetic Yarn and Caustic Soda for Less-Than-Adequate Remuneration When an “authority,” which the Tariff Act defines as a “government of a country or any public entity wi thin the territory of the country, ” 19 U.S.C. § 1677(5)(B), confers a benefit upon a person by providing good s “for less than adequate remuneration,” id

. § 1677(5)(E)(iv), a countervailable subsidy may be found if the “spe cificity” requirement set forth in the statute, id

. §§ 1677(5)(A), (5A), is satisfied. In the eighth review of th e Order, Commerce stated th at “we continue to find that, in the synthetic yarn and caustic soda markets: (1) Chinese pr ices are significantly distorted by the involvement of the GOC; and (2) privatel y-owned input suppliers of synthetic yarn and caustic soda are ‘authorities’ within th e meaning of section 771(5)(B) of the Act [19 U.S.C. § 1677(5)(B)].” Final I&D Mem . at 14. Commerce stated, further, that “[w]e have also reexamined the specificity of both the synthetic yarn and caustic soda for LTAR and now find thatprovision of these inputs is de facto specific under section 771(5A)(D)(iii)(I) of the Act [19 U.S.C

. § 1677(5A)(D)(iii)(I)].” Id

. Concluding that the Chin ese government did not provide certain requested information and failed to cooper ate by not acting to the best of its ability to respond to its information requests, Co mmerce used facts otherwise available and drew adverseCourt No. 21-00402 Page 28 inferences that: (1) Yama’s suppliers of synthetic yarn and caustic soda were “authorities,” id . at 16–19, and that the provision of these inputs was “specific,” id . at 19–22. Adopting without change the LTAR determinations itmade in the Preliminary Results, Commerce calculated a 27.74% subsidy rate for synthetic yarn, id . at 3, 23, and a subsidy rate of 0.27% for caustic soda, id . at 3. In contesting the LTAR determinations fo r the two inputs, Yama claimed that the record did not support a finding that the markets for them were distorted by either the GOC or the Chinese Communist Party, Pl.’s Br. 40, and that the record also failed to support the Department’s treating its suppliers as authorities, id . at 44–46. While arguing that the issue of specificity was, therefore, moot, Yama argued in the alternative that the provision of synthetic yarn and caustic soda was not “specific” because “synthetic yarn and caustic soda have a wide range of uses, including, but not limited [to], use in the narrow woven ribbon industry.” Id . at 46 (citations omitted). Further to the issue of specificity, Yama argued that “[t]here is no evidence on the record to even remotely suggest that any LTAR subsidy is specific either as a matter of law or fact” and that “Commerce did no t place anything on the record to suggest otherwise.” Id . at 47. Defendant stated, in resp onse, that “Yama is correct that Commerce did not place information on the record to support its de facto specificity finding.” Def.’s Br. 46. Defendant explaine d that “in determining that the subsidy is de facto specific, Commerce relied on information from the petitioner’s new subsidyCourt No. 21-00402 Page 29 allegation in the 2015 segment of this administrative review ” but “inadvertently did not place the 2015 New Subsidy Allegation inform ation on the record of this review.” Id

. (citations omitted). Noting that interested parties did not have the opportunity to comment on that info rmation as specified in 19 U.S.C. § 1677m(g), defendant requested that the court “remand this issue to Commerce so that Commerce may place the information on the record of the review and allow partie s the opportunity to comment, and if necessary, reconsider its de facto specificity determination.” Id . (citing SKF USA Inc. v. United States , 254 F.3d 1022, 1027–31 (Fed. Cir. 2001)). Defendant requests that the court “grant our motion for voluntary remand for the de facto specificity issue, deny plaintiff’s motion in all other respects, and sustain Commerce’s final results.” Id . at 47. Plaintiff opposes defendant’s motion for a remand on the grounds that the LTAR issue is “moot,” that the material sought to be added (characterized by plaintiff as the “Public Bodies Memorandum”) is speculatio n, not evidence, adding nothing to the discussion of this issue, and that the inte rest of finality dictat es against allowing supplementation of the record. Pl.’s Reply 12–13. The court does not agree wi th plaintiff’s argument th at it should preclude supplementation of the record in the limited way that defendant proposes. Defendant having pointed out that Commerce considered the information it seeks to add to the record but inadvertently omitted it when assembling that record, the court views as reasonable the request to reopen the record fo r the sole purpose defe ndant identifies. IfCourt No. 21-00402 Page 30
the information was used in th e agency’s decision-making proc ess, then the addition to the record of that informatio n should have been accomplis hed in the ordinary course, and the apparent procedural er ror should be corrected. Plaintiff may raise its objections to the relevance and probativity of the new information once that information has been placed on the record and provided to it. Beyond the request to reopen and supplem ent the record, defendant’s request for a remand is unsatisfactory in two respects. First, if the court allows Commerce to supplement the record and to reconsider its determination on specificity as to the provision of synthetic yarn and caustic soda, the court at the same time cannot, as defendant urges, “sustain Commerce’s final results.” Second, the court declines to adopt defendant’s piecemeal approach to the litigation of the LTAR issues, under which defendant would have Commerce consider on ly the specificity question and have the court “deny plaintiff’s moti on in all other respects.” The court will allow Commerce to add to the record the information from the petitioner’s new subsidy allegation in the 2015 segment of this administrative review, upon which, according to defendant’s statement to the court, Commerce relied in making its specificity determinations as to synthetic yarn and caustic soda. Commerce shall allow plaintiff to submit comments to it that address this new information. To avoid a piecemeal approach, Commerce shall reconsider its LTAR determinations for these two inputs, in the entirety, based onthe supplemented record and the commentsCourt No. 21-00402 Page 31 plaintiff submits. Plaintiff then will have the opportunity to comment on the redetermination upon remand that Commerce submits to the court. III. C ONCLUSION AND O RDER A remand of the Final Results to Commerce is required in this case for reconsideration of the Department’s determ ination as to the EBCP and to allow a limited supplementation of the record with respect to the Department’s LTAR determinations. Upon consideration of all papers and proceedings had herein, and upon due deliberation, it is hereby ORDERED that Yama Ribbons and Bows Co., Ltd.’s Rule 56.2 Motion for Judgment on the Agency Record (Feb. 4, 2022), ECF Nos 27 (Conf.), 28 (Public) be, and hereby is, granted in part; it is further ORDERED that Commerce shall submit to the court a redetermination upon remand (“Remand Redetermination”) that re considers, based on the existing record, the Department’s determination on the EBCP program and reaches a new determination that is in accordance withthis Opinion and Order; it is further ORDERED that Commerce shall supplement the administrative record with the “2015 New Subsidy Allegation information” th at, according to defendant’s statement to the court, Commerce inadvertently fa iled to place on the record of the administrative review, shall provide that in formation to plainti ff upon doing so, and shall allow plaintiff to submit to Commerce comments on this new information; it is further ORDERED that in the Remand Redetermination, Commerce shall reconsider its LTAR determinations for synthetic yarn and caustic soda in the entirety, based on the supplemented administrative record; it is furtherCourt No. 21-00402 Page 32
ORDERED that Commerce shall submit the Remand Redetermination to the court within 60 days of the date of th is Opinion and Order; it is further ORDERED that plaintiff shall have 30 days from the date of submission of the Remand Redetermination to submit to the court comments thereon; and it is further ORDERED that defendant shall have 15 days from the submission of plaintiff’s comments on the Remand Redetermination to submit to the court a response to those comments. /s/ Timothy C. Stanceu Timothy C. Stanceu Judge Dated: August 25, 2023 New York, New York