Court Opinion

ID: 4672702
Source: CourtListenerOpinion
Date Created: 2021-03-30 15:00:56.193847+00
Date Added: 2024-06-11T08:03:08.945917
License: Public Domain

Case: 20-1506    Document: 43     Page: 1   Filed: 03/30/2021

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

     HABAS SINAI VE TIBBI GAZLAR ISTIHSAL
               ENDUSTRISI A.S.,
                Plaintiff-Appellant

                             v.

      UNITED STATES, REBAR TRADE ACTION
                  COALITION,
               Defendants-Appellees
              ______________________

                        2020-1506
                  ______________________

    Appeal from the United States Court of International
 Trade in Nos. 1:17-cv-00202-LMG, 1:17-cv-00203-LMG,
 Senior Judge Leo M. Gordon.
                 ______________________

                 Decided: March 30, 2021
                 ______________________

     DAVID L. SIMON, Law Offices of David L. Simon, Wash-
 ington, DC, argued for plaintiff-appellant.

     MARGARET JANTZEN, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, argued for defendant-appellee United States.
 Also represented by JEFFREY B. CLARK, JEANNE DAVIDSON,
 LOREN MISHA PREHEIM; REZA KARAMLOO, Office of the
 Chief Counsel for Trade Enforcement & Compliance,
 United States Department of Commerce, Washington, DC.
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 2              HABAS SINAI VE TIBBI GAZLAR   v. UNITED STATES

     JOHN R. SHANE, Wiley Rein, LLP, Washington, DC, ar-
 gued for defendant-appellee Rebar Trade Action Coalition.
 Also represented by STEPHANIE MANAKER BELL, LAURA EL-
 SABAAWI, JEFFREY OWEN FRANK, CYNTHIA CRISTINA
 GALVEZ, ALAN H. PRICE, MAUREEN E. THORSON.
                  ______________________

     Before NEWMAN, REYNA, and STOLL, Circuit Judges.
 REYNA, Circuit Judge.
     Habas Sinai Ve Tibbi Gazlar Istihsal Endustrisi A.S.
 appeals the decision of the U.S. Court of International
 Trade that affirms the U.S. Department of Commerce’s fi-
 nal affirmative determination imposing a 14.01 percent
 countervailing duty on imports of certain steel concrete re-
 inforcement bar from the Republic of Turkey. Because Ha-
 bas has not shown that Commerce exceeded its statutory
 authority in the selection of the 14.01 countervailing duty
 rate, we affirm.
                         BACKGROUND
     On September 20, 2016, the Rebar Trade Action Coali-
 tion (“Coalition”) submitted a petition to the U.S. Depart-
 ment of Commerce (“Commerce”) requesting the initiation
 of a countervailing duty (“CVD”) investigation on imports
 of certain reinforcement bar (“rebar”) imported from Tur-
 key. See Steel Concrete Reinforcing Bar From the Republic
 of Turkey: Initiation of Countervailing Duty Investigation,
 81 Fed. Reg. 71,705 (Oct. 18, 2016); J.A. 17. The Coalition
 alleged that the Turkish government provided countervail-
 able subsidies to Turkish companies that manufactured,
 produced, or exported rebar from Turkey to the United
 States, and that those subsidies were causing material in-
 jury to the United States rebar industry. See 81 Fed. Reg.
 at 71,705–06; J.A. 17–18.
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 HABAS SINAI VE TIBBI GAZLAR   v. UNITED STATES                 3

     On October 18, 2016, Commerce initiated a CVD inves-
 tigation on U.S. imports of rebar from Turkey. See 81 Fed.
 Reg. at 71,705–09; J.A. 17–21. Commerce issued CVD
 questionnaires to the Turkish government and to Habas
 Sinai Ve Tibbi Gazlar Istihsal Endustrisi A.S. (“Habas”),
 the sole respondent subject to the investigation. The ques-
 tionnaire broadly inquired about benefits the Turkish gov-
 ernment extended to Habas during the period of
 investigation. See J.A. 22–36.
     In its questionnaire response, Habas did not disclose
 that it received benefits via a duty drawback program im-
 plemented under Article 22 of Turkey’s Domestic Pro-
 cessing Regime (RDP) Resolution 2005/8391 (“duty
 drawback program”). 1 J.A. 6, 37–88. Under this duty
 drawback program, the Turkish government granted in-
 centives, including “inward processing permits,” to Turkish
 manufacturers and exporters. J.A. 94. During Commerce’s
 verification of Habas’s questionnaire response, Habas re-
 vealed that it held a permit under the program and there-
 fore occasionally benefitted from import duty drawbacks
 for billets and ferroalloys, raw materials used to make re-
 bar. J.A. 94, 125, 129. Habas informed Commerce that it
 had no obligation to disclose the duty drawback program in
 its questionnaire response because Commerce had previ-
 ously, in an investigation on circular welded carbon steel
 pipes and tubes from Turkey, determined that benefits un-
 der the duty drawback program were not countervailable.
 J.A. 129–30 (citing Circular Welded Carbon Steel Pipes
 and Tubes From Turkey: Preliminary Results of Counter-
 vailing Duty Administrative Review; Calendar Year 2015,
 82 Fed. Reg. 16,994 (Apr. 7, 2017)). Habas also asserted

    1     Generally, a duty drawback is a rebate of import
 duties paid on imported goods (or components or raw ma-
 terials) that are subsequently exported in whole or finished
 form. 19 U.S.C. § 1313.
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 4               HABAS SINAI VE TIBBI GAZLAR   v. UNITED STATES

 that the questionnaire did not specifically inquire about
 the program. J.A. 130.
     On May 15, 2017, Commerce issued a final affirmative
 CVD determination. J.A. 123. Commerce imposed a CVD
 rate of 14.01 percent ad valorem on Habas’s imports of re-
 bar from Turkey. J.A. 133. Commerce faulted Habas for
 not reporting benefits received from the duty drawback
 program. Specifically, Commerce found that Habas failed
 to cooperate with Commerce’s investigation, as required by
 19 U.S.C. § 1677e(b), when it failed to timely report receipt
 of benefits under the duty drawback program. J.A. 125–
 33. Commerce determined that Habas’s failure to disclose
 that information impeded the CVD investigation, including
 by preventing Commerce from issuing a supplemental
 questionnaire directed to whether the program constitutes
 a financial contribution conferring a benefit upon Habas,
 as required to establish a countervailable subsidy under
 19 U.S.C. §§ 1677(5)(B), -(E). J.A. 132–33. Commerce de-
 termined that it was appropriate to draw an adverse infer-
 ence that those requirements were met and to apply a CVD
 rate based on “facts otherwise available” under 19 U.S.C.
 § 1677e. J.A. 132–33.
      Commerce used its established hierarchy as a guide to
 determine the applicable CVD rate based on facts other-
 wise available. 19 U.S.C. § 1677e(d)(1)(A); J.A. 133. Spe-
 cifically, Commerce selected a CVD rate from the following
 order of preference: (1) the highest calculated rate for the
 identical subsidy program in the investigation if a respond-
 ing company used the identical program and the rate is not
 zero; (2) the highest non-de minimis rate calculated for the
 identical program in a countervailing duty proceeding in-
 volving the same country; (3) the highest non-de minimis
 rate for a similar program, based on treatment of the ben-
 efit, in another countervailing duty proceeding involving
 the same country; (4) the highest calculated subsidy rate
 for any program otherwise identified in a countervailing
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 HABAS SINAI VE TIBBI GAZLAR   v. UNITED STATES                 5

 duty case involving the same country that could conceiva-
 bly be used by the non-cooperating companies. J.A. 133.
      Commerce found that the first two options in its hier-
 archy did not apply. Turning to the third option, Com-
 merce selected a countervailing duty rate of 14.01 percent
 ad valorem, reasoning that it had applied that rate with
 respect to an export tax rebate program in a 1986 CVD in-
 vestigation on “Welded Pipe and Tube from Turkey.” Id. &
 n.208 (citing Final Affirmative Countervailing Duty Deter-
 minations; Certain Welded Carbon Steel Pipe and Tube
 Products from Turkey, 51 Fed. Reg. 1268 (Jan. 10, 1986)
 [hereinafter Welded Pipe and Tube]). Commerce thus se-
 lected the 14.01 percent ad valorem rate as facts otherwise
 available on the basis that it was the highest rate for a sim-
 ilar program in a countervailing duty proceeding involving
 Turkey. J.A. 133.
      Commerce is required under the statute to corroborate,
 “to the extent practicable,” any rate that it relies on as best
 information available. 19 U.S.C. § 1677e(c). Here, Com-
 merce explained that the 14.01 percent rate was a rate es-
 tablished in the course of a prior CVD investigation that
 involved a tariff rebate program similar to the duty draw-
 back program in the underlying investigation, from which
 it determined Habas had benefited. J.A. 133–34. On that
 basis, Commerce concluded that the 14.01 percent rate was
 both relevant and reliable. J.A. 134.
      Habas appealed Commerce’s final affirmative determi-
 nation to the Court of International Trade (“Trade Court”).
 See Rebar Trade Action Coal. v. United States,
 389 F. Supp. 3d 1371 (Ct. Int’l Trade 2019). As relevant to
 this appeal, Habas argued that, even if Commerce was jus-
 tified in using “facts otherwise available” to select a CVD
 rate, Commerce’s selection of the 14.01 percent rate was
 unreasonable because it was not adequately corroborated
 by the 1986 Welded Pipe and Tube investigation. Id.
 at 1379. The Trade Court rejected Habas’s argument,
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 6               HABAS SINAI VE TIBBI GAZLAR   v. UNITED STATES

 finding that it was Habas’s failure to timely disclose the
 duty drawback program from which it benefitted that led
 Commerce to apply facts otherwise available. Id. The
 Trade Court further reasoned that, because the statute re-
 quires that a rate selected from facts otherwise available
 must be “corroborated to the extent practicable,” Com-
 merce has “broad discretion” to follow its established hier-
 archy and ultimately select a rate that had been applied for
 the same or similar program in a CVD program involving
 the same country. Id. Concluding that Commerce did not
 exceed its statutory discretion, the Trade Court affirmed
 Commerce’s final affirmative determination. Id. at 1379–
 80, 1384. Habas appealed. We have jurisdiction pursuant
 to 28 U.S.C. § 1295(a)(5).
                    STANDARD OF REVIEW
     We review Trade Court decisions involving Commerce
 countervailing duty determinations on a de novo basis. In
 doing so, we apply the same standard of review applied by
 Trade Court in its review of Commerce’s CVD investiga-
 tions. Saha Thai Steel Pipe (Public) Co. v. United States,
 635 F.3d 1335, 1340 (Fed. Cir. 2011). Under the applicable
 standard, we will uphold a Commerce determination un-
 less it is unsupported by substantial evidence on the rec-
 ord, or is otherwise not in accordance with law. Id.;
 19 U.S.C. § 1516a(b)(1)(B)(i).
                         DISCUSSION
     Generally, countervailing duty investigations are un-
 dertaken by Commerce to determine whether a foreign gov-
 ernment has conferred to its producers benefits that are
 deemed to be countervailable subsidies. See 19 U.S.C.
 §§ 1671, 1677. A countervailable subsidy is defined to in-
 clude certain types of financial assistance provided by a for-
 eign government or entity that confers a “benefit” to the
 recipient relating to its production, manufacture, or export
 of the subject goods. See 19 U.S.C. §§ 1677(5), 1677(5A);
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 HABAS SINAI VE TIBBI GAZLAR   v. UNITED STATES                 7

 POSCO v. United States, 977 F.3d 1369, 1371 (Fed.
 Cir. 2020).
      A foreign producer subject to a countervailing duty in-
 vestigation, i.e., a respondent, must comply, to the best of
 its ability, with Commerce’s requests for information. See
 19 U.S.C. § 1677e(b). Relevant to this appeal, a respondent
 must “put forth its maximum effort to provide Commerce
 with full and complete answers to all inquiries in an inves-
 tigation. While the standard does not require perfection
 and recognizes that mistakes sometimes occur, it does not
 condone inattentiveness, carelessness, or inadequate rec-
 ord keeping.” Nippon Steel Corp. v. United States,
 337 F.3d 1373, 1382 (Fed. Cir. 2003). If the interested
 party withholds information sought by Commerce, then
 Commerce may draw an adverse inference from the party’s
 failure to comply. 19 U.S.C. § 1677e(a)–(b). The risk of an
 adverse inference is intended to incentivize cooperation
 with Commerce’s investigations. See Nan Ya Plastics
 Corp. v. United States, 810 F.3d 1333, 1348 (Fed. Cir. 2016)
 (“Commerce’s consideration of the deterrent effect of its de-
 termination reflects the law’s expectation.”); Essar Steel
 Ltd. v. United States, 678 F.3d 1268, 1276 (Fed. Cir. 2012);
 F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United
 States, 216 F.3d 1027, 1032 (Fed. Cir. 2000); Statement of
 Administrative Action accompanying the Uruguay Round
 Agreements Act (“SAA”), H.R. REP. NO. 103-316, vol. 1,
 at 870, as reprinted in 1994 U.S.C.C.A.N. 4040, 4199.
     Commerce may use an adverse inference “in selecting
 from among the facts otherwise available.” 19 U.S.C.
 § 1677e(b)(1). Potential sources of information for adverse
 inferences include the petition, the final determination in
 the investigation, any previous administrative review, or
 any other information placed on the record. See id.
 § 1677e(b)(2); 19 C.F.R. § 351.308(c). To the extent Com-
 merce relies on information outside what it obtained dur-
 ing its investigation, Commerce must, “to the extent
 practicable,    corroborate    that     information    from
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 8               HABAS SINAI VE TIBBI GAZLAR   v. UNITED STATES

 independent sources that are reasonably at their disposal.”
 19 U.S.C. § 1677e(c)(1).
     In a case where Commerce has drawn an adverse in-
 ference, Commerce may
     (i) use a countervailable subsidy rate applied for
     the same or similar program in a countervailing
     duty proceeding involving the same country; or
     (ii) if there is no same or similar program, use a
     countervailable subsidy rate for a subsidy program
     from a proceeding that the administering authority
     considers reasonable to use.
 19 U.S.C. § 1677e(d)(1)(A). Commerce has discretion, in
 such cases, to apply any rate falling into these categories,
 “including the highest such rate,” as appropriate depend-
 ing on the facts that gave rise to the adverse inference. Id.
 § 1677e(d)(2). Commerce is not required to select a rate
 that reflects the investigated party’s commercial reality,
 nor must Commerce estimate the rate that would have ap-
 plied had the investigated party cooperated.              Id.
 § 1677e(d)(3).
     Against this backdrop, we turn to Habas’s arguments
 on appeal. Habas “only appeals Commerce’s selection of
 [the 14.01 percent rate],” and explains that the “gravamen”
 of its arguments on appeal is that Commerce erred in
 adopting the 14.01 percent rate because it is not an ade-
 quately corroborated rate. Appellant’s Br. 8. According to
 Habas, the drawback program investigated in Welded Pipe
 and Tube was in effect over thirty years ago and was ter-
 minated in 1987, making any relationship between the
 1986 program and modern economic conditions too tenu-
 ous, and the 14.01 percent rate too stale, to meet the cor-
 roboration requirement. Id. at 8–9. In other words, Habas
 argues that Commerce should be permitted to apply Tur-
 key’s tax rebate programs only to the extent it determines
 they “could conceivably have benefitted Habas in 2015.”
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 HABAS SINAI VE TIBBI GAZLAR   v. UNITED STATES                 9

 Id. at 22. Habas argues that a thirty-five-year-old rate can-
 not be deemed “corroborated” under the statute, and that
 the CVD determination is therefore not supported by sub-
 stantial evidence and is otherwise contrary to law. We dis-
 agree.
      Habas overlooks the context of Commerce’s analysis,
 which is that Commerce resorted to facts otherwise availa-
 ble because Habas, as it concedes, failed to disclose the
 duty drawback program from which it benefitted. When an
 interested party withholds requested information in a CVD
 investigation, as Habas did here, Commerce has statutory
 latitude to draw adverse inferences concerning the with-
 held information and resort to “facts otherwise available”
 to select a countervailing duty rate. See 19 U.S.C. § 1677e.
 Habas does not explain how Commerce exceeded that stat-
 utory authority in this case. Nor does Habas challenge as
 contrary to law Commerce’s established hierarchy for se-
 lecting a countervailing duty rate based on “facts otherwise
 available.”
      If accepted, Habas’s arguments would have this court
 impose on Commerce an obligation that is not supported by
 the statute, namely to use only “facts otherwise available”
 that reflect the commercial reality of the affected party or
 that bends to the benefit of the affected party. See
 19 U.S.C. § 1677e(d)(3). Such a requirement would be im-
 possible to apply where the respondent cannot or refuses to
 provide the very required information intended to inform
 Commerce of a respondent’s commercial reality in the con-
 text of a CVD investigation, including that it has benefitted
 from a countervailable subsidy. Even accepting Habas’s
 argument that the Welded Pipe and Tube determination is
 now “stale” and unrelated to present commercial realities,
 this does not necessarily mean that Commerce’s selection
 of the 14.01 percent rate was contrary to law. Once a party
 withholds information requested by Commerce, it invites
 Commerce to rely on information that is not limited to the
 information obtained in the course of the investigation.
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 10             HABAS SINAI VE TIBBI GAZLAR   v. UNITED STATES

 The statute requires Commerce to corroborate secondary
 information not perfectly, but “to the extent practicable.”
 See id. § 1677e(c)(1). Habas has not shown that Commerce
 acted contrary to that statutory requirement.
      Commerce’s use of the 14.01 percent rate is consistent
 with the overall statutory regime. Congress explained,
 when discussing the legislative purpose of § 1677e, that
 Commerce “may employ adverse inferences about the miss-
 ing information to ensure that the party does not obtain a
 more favorable result by failing to cooperate than if it had
 cooperated fully.” Nan Ya Plastics, 810 F.3d at 1348 (quot-
 ing SAA, 1994 U.S.C.C.A.N. 4040, 4199). In light of Con-
 gress’s desire that Commerce guard against incentivizing
 non-cooperation with Commerce’s investigations, Com-
 merce was justified in selecting a rate that, in its consid-
 ered discretion, would deter future non-cooperation and
 avoid rewarding Habas (and other would-be respondents)
 for further non-cooperation by promoting a rate lower than
 it would have received had it disclosed the duty drawback
 program. Although the origin of 14.01 percent rate may
 relate to a CVD determination from decades ago, Habas
 does not address why the rate unreasonably departs from
 § 1677e. Absent such a showing, and based on the record
 before us, we conclude that Commerce’s selection of the
 14.01 percent CVD rate is not contrary to law and is sup-
 ported by substantial evidence. We therefore affirm the
 Trade Court’s decision sustaining Commerce’s determina-
 tion.
                        CONCLUSION
    We have considered the parties’ remaining arguments
 and find them unpersuasive. For the reasons set forth
 above, the Trade Court’s decision is affirmed.
                        AFFIRMED