Court Opinion

ID: 4402582
Source: CourtListenerOpinion
Date Created: 2019-05-31 18:01:30.318382+00
Date Added: 2024-06-11T07:49:54.319385
License: Public Domain

Slip Op. 19-65

               UNITED STATES COURT OF INTERNATIONAL TRADE

 REBAR TRADE ACTION COALITION,

                     Plaintiff,

 HABAù SINAI VE TIBBI GAZLAR
 ISTIHSAL ENDÜSTRISI A.ù.,

                     Consolidated Plaintiff,
                                                      Before: Leo M. Gordon, Judge
                     v.
                                                      Consol. Court No. 17-00202
 UNITED STATES,

                     Defendant,

 REBAR TRADE ACTION COALITION,

                     Defendant-Intervenor.

                                        OPINION

[Final Determination sustained as to Habaú.]

                                                              Dated: May 31, 2019

     Alan H. Price, John R. Shane, and Maureen E. Thorson, Wiley Rein LLP of
Washington, DC for Plaintiff and Defendant-Intervenor Rebar Trade Action Coalition.

        David L. Simon, Law Office of David L. Simon of Washington, DC for Consolidated
Plaintiff Habaú Sinai ve Tibbi Gazlar Istihsal Endüstrisi A.ù.

       Margaret J. Jantzen, Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice of Washington, DC for Defendant, United States. With her
on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson,
Director, and L. Misha Preheim, Assistant Director. Of counsel was Reza Karamloo,
Attorney, U.S. Department of Commerce, Office of the Chief Counsel for Trade
Enforcement and Compliance of Washington, DC.
Consol. Court No. 17-00202                                                        Page 2

       Gordon, Judge: This action involves the affirmative final determination of the

U.S. Department of Commerce (“Commerce”) in the countervailing duty (“CVD”)

investigation published as Steel Concrete Reinforcing Bar From the Republic of Turkey,

82 Fed. Reg. 23,188 (Dep’t of Commerce May 22, 2017) (final determ.), PD 306,1 and

accompanying Issues and Decision Memorandum (Dep’t of Commerce May 15, 2017)

(“Decision Memorandum”), PD 302 (collectively, “Final Determination”), amended by

Steel Concrete Reinforcing Bar From the Republic of Turkey, 82 Fed. Reg. 32,531 (Dep’t

of Commerce July 14, 2017) (amended final determ.), PD 315 (“Amended Final

Determination”). Before the court is the motion for judgment on the agency record of

Consolidated Plaintiff Habaú Sinai ve Tibbi Gazlar Istihsal Endüstrisi A.ù. (“Habaú”).2 See

Pl. Habaú’s R. 56.2 Mot. for J. on the Agency R., ECF No. 263 (“Habaú Br.”); see also

Def.’s Resp. in Opp’n to Pls.’ Mots. for J. on the Agency R., ECF No. 31 (“Def.’s Resp.”);

Habaú Reply Br., ECF No. 37 (“Habaú Reply”). The court has jurisdiction pursuant to

Section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C.

1
  “PD” refers to a document contained in the public administrative record, which is found
in ECF No. 19-1, unless otherwise noted. “CD” refers to a document contained in the
confidential administrative record, which is found in ECF No. 19-2, unless otherwise
noted.
2
  Plaintiff Rebar Trade Action Coalition ("RTAC") has also filed a motion for judgment on
the agency record in this matter that remains pending before the court. See Pl. RTAC’s
R. 56.2 Mot. for J. on the Agency R., ECF No. 27. The court has stayed consideration of
the issues raised in RTAC’s motion as they are substantially similar to the issues under
consideration by the U.S. Court of Appeals for the Federal Circuit in Rebar Trade Action
Coalition v. United States, 42 CIT ___, 335 F. Supp. 3d 1302 (2018), appeal docketed,
No. 2019-1228 (Fed. Cir. Nov. 26, 2018).
3
  All citations to parties' briefs and the agency record are to their confidential versions
unless otherwise noted.
Consol. Court No. 17-00202                                                        Page 3

§ 1516a(a)(2)(B)(i) (2012)4, and 28 U.S.C. § 1581(c) (2012). For the reasons that follow,

the court sustains the Final Determination as to Habaú.

                               I.     Standard of Review

       The court sustains Commerce’s “determinations, findings, or conclusions” unless

they are “unsupported by substantial evidence on the record, or otherwise not in

accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing

agency determinations, findings, or conclusions for substantial evidence, the court

assesses whether the agency action is reasonable given the record as a whole. Nippon

Steel Corp. v. United States, 458 F.3d 1345, 1350–51 (Fed. Cir. 2006). Substantial

evidence has been described as “such relevant evidence as a reasonable mind might

accept as adequate to support a conclusion.” DuPont Teijin Films USA v. United States,

407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S.
197, 229 (1938)). Substantial evidence has also been described as “something less than

the weight of the evidence, and the possibility of drawing two inconsistent conclusions

from the evidence does not prevent an administrative agency’s finding from being

supported by substantial evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620

(1966). Fundamentally, though, “substantial evidence” is best understood as a word

formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and

Practice § 9.24[1] (3d ed. 2019). Therefore, when addressing a substantial evidence issue

raised by a party, the court analyzes whether the challenged agency action

4
 Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of
Title 19 of the U.S. Code, 2012 edition.
Consol. Court No. 17-00202                                                        Page 4

“was reasonable given the circumstances presented by the whole record.” 8A West’s Fed.

Forms, National Courts § 3.6 (5th ed. 2019).

                                     II. Discussion

          A.     Application of Adverse Facts Available (“AFA”) to Habaú

       If Commerce finds that a respondent's information is unreliable because the

respondent has withheld information that Commerce requests, failed to provide requested

information in a timely manner or in the form or manner requested, or significantly

impeded the progress of the proceeding, Commerce uses the facts otherwise available.

19 U.S.C. § 1677e(a)(2). Commerce may draw an adverse inference against

a respondent in selecting from among the facts otherwise available when it finds that

a respondent “has failed to cooperate by not acting to the best of its ability.” 19 U.S.C.

§ 1677e(b).

       Prior to applying an adverse inference, Commerce examines a respondent's

actions and assesses the extent of the “respondent's abilities, efforts, and cooperation in

responding to Commerce's information requests.” Nippon Steel Corp. v. United States,

337 F.3d 1373, 1382 (Fed. Cir. 2003). “Acting to the best of its ability” requires that

a respondent do the maximum that it is able to do. Id. Although the standard does not

require perfection and recognizes that mistakes occur, it does not condone

inattentiveness, carelessness, or inadequate record-keeping. Id. Rather, it is the

responsibility of a respondent to comply with Commerce's information requests.
Consol. Court No. 17-00202                                                       Page 5

       In its initial questionnaire, Commerce inquired:

              Did the GOT, or entities wholly or partially owned by the GOT
              or any provisional or local government, provide, directly or
              indirectly any other forms of assistance to your company
              during the [period of investigation (“POI”)] and the proceeding
              AUL period? If so, please describe such assistance, in detail,
              including the relevant benefit amounts, dates of receipt, and
              purposes and terms.

See Decision Memorandum at 28 (quoting the initial questionnaire sent to Habaú). During

verification, in explaining a contract provision referring to “export-related incentives,”

Habaú officials informed Commerce that the company “occasionally” received export-

related incentives pursuant to Turkey’s Domestic Processing Regime (“RDP”) Resolution

2005/839 (“RDP program” or “duty drawback program”). Id. When Commerce asked why

such benefits were not reported in the company’s questionnaire response, Habaú officials

asserted that there was “no countervailable aspect” of the duty drawback program. Id.

In Habaú’s view, the RDP program did not provide “assistance,” it did not need to be

reported in Habaú’s questionnaire response as “other forms of assistance.” Id. Commerce

rejected Habaú’s arguments, noting that “[Commerce], not the interested parties,

determines whether or not a response is required.” Id. After reviewing the available

information about the RDP program and Habaú’s failure to timely provide Commerce with

information about Habaú’s utilization of that program, Commerce determined that “the use

of facts available [was] warranted” pursuant to both 19 U.S.C. §§ 1677e(a)(1) and (a)(2).

Id. at 29.

       Commerce further found that Habaú “did not cooperate to the best of its ability”

by failing to timely report its receipt of assistance under the RDP program. Id. Commerce
Consol. Court No. 17-00202                                                          Page 6

also determined that Habaú’s failure to report “impeded the investigation and precluded

the Department from adequately examining the program (i.e., the Department was unable

to issue a supplemental questionnaire response to the [Government of Turkey (“GOT”)]

concerning the extent to which this program constitutes a financial contribution, is specific

under sections 771(5)(D) and 771(5A) of the Act, and provides a benefit under section

771(5)(E) of the Act and 19 CFR 351.519).” Id. at 29–30.

       Consequently, Commerce found that it was appropriate to apply an adverse

inference, and “that the unreported RDP duty drawback program meets the financial

contribution and specificity criteria outlined under sections 771(5)(D) and 771(5A) of the

Act, respectively.” Id. at 30. Additionally, Commerce found that the RDP program “confers

a benefit under section 771(5)(E) of the Act and 19 CFR 351.519.” Id.

       Given these findings, Commerce proceeded to apply its “established hierarchy” for

selecting an AFA rate for the program, explaining that:

              under the hierarchy, the Department will select AFA rates in
              the following order of preference: the highest calculated rate
              for the identical subsidy program in the investigation if a
              responding company used the identical program and the rate
              is not zero; if there is no identical program match within the
              investigation, or if the rate is zero, the highest non-de minimis
              rate calculated for the identical program in a CVD proceeding
              involving the same country; if no such rate is available, the
              highest non-de minimis rate for a similar program, based on
              treatment of the benefit, in another CVD proceeding involving
              the same country; absent an above-de minimis subsidy rate
              calculated for a similar program, the highest calculated
              subsidy rate for any program otherwise identified in a CVD
              case involving the same country that could conceivably be
              used by the non-cooperating companies.
Consol. Court No. 17-00202                                                        Page 7

Decision Memorandum at 30. Applying this hierarchy to the record, Commerce

determined that “it is appropriate to apply, as AFA, a rate of 14.01 percent ad valorem,”

which was the subsidy rate calculated for an export tax rebate program in Final Affirmative

Countervailing Duty Determinations; Certain Welded Carbon Steel Pipe and Tube

Products from Turkey, 51 Fed. Reg. 1268 (Dep’t of Commerce Jan. 10, 1986) (“1986

Welded Pipe and Tube from Turkey Determination”). Id.

       Habaú argues that Commerce erred in finding that Habaú’s failure to include

information about the RDP program in its questionnaire response merited the application

of AFA. See Habaú Br. at 3–20. Habaú further contends that, even if Commerce properly

determined that Habaú was subject to AFA, Commerce’s selection of a 14.01% subsidy

rate for the RDP program based on the 1986 Welded Pipe and Tube from Turkey

Determination was unreasonable. Id. at 20–24.

       Habaú contends that its failure to include information about the RDP program in its

initial questionnaire response did not merit Commerce’s application of AFA because

“Commerce’s Treatment of the Turkish Drawback Regime Has Been Inconsistent.”

See id. at 4–11. Habaú argues that because Commerce has decided that the RDP

program was not countervailable in prior proceedings, Commerce should not have

reasonably expected Habaú to provide information about the RDP program in the present

proceeding. Id. Commerce acknowledged that Habaú is correct that “the Department has

not consistently examined Turkey’s duty drawback program and, in particular, the RDP

program at issue in this case;” however, Commerce explained that “[t]he examination and

analysis of a particular duty drawback system, including the RDP duty drawback program,
Consol. Court No. 17-00202                                                        Page 8

hinges on the specific facts on the record of a CVD proceeding, such as how the

government implemented and monitored the system during the POI and whether or not

product-specific and company-specific yield factors, including waste rates, are accurate.”

Decision Memorandum at 29. By failing to report its use of the duty drawback program

during the POI, Commerce concluded that “Habas denied the [agency] and other

interested parties the opportunity to collect and analyze the information necessary to

determine the [] duty drawback program’s countervailability in this proceeding.” See id.

       The court agrees that Commerce’s determination as to whether a duty drawback

program is countervailable is a fact-intensive examination that the agency is entitled to

undertake, and Habaú cannot unilaterally foreclose it by refusing to respond to the

agency. See id. at 28–29; see also Essar Steel Ltd. v. United States, 34 CIT ___, ___,

721 F. Supp. 2d 1285, 1298–99 (2010) (“Regardless of whether [the respondent] deemed

the [] information relevant, it nonetheless should have produced it [in] the event that

Commerce reached a different conclusion . . . .”), rev’d in part on other grounds, 678 F.3d
1268 (Fed. Cir. 2012); Ansaldo Componenti, S.p.A. v. United States, 10 CIT 28, 37,

628 F. Supp. 198, 205 (1986) (holding that “it is Commerce, not the respondent,

that determines what information is to be provided,” despite any claim by respondent that

the information request “cannot legally serve as the basis” for the agency’s view).

       Habaú contends that Commerce erred in its application of AFA by failing to “satisfy

the statutory criteria for finding that the drawback program is countervailable.” See Habaú

Br. at 11 (citing Changzhou Trina Solar Energy Co. v. United States, 40 CIT, ___, ___,

195 F. Supp. 3d 1334, 1350 (2016)). Habaú maintains that Commerce failed to
Consol. Court No. 17-00202                                                         Page 9

“make a specific factual finding as to whether” the RDP program constitutes a “financial

contribution,” is “specific,” and provides a “benefit” as defined pursuant to 19 U.S.C.

§ 1677(5). Id. at 11–13. Habaú argues that Commerce’s failure to make these factual

findings demonstrates that Commerce’s determination is not supported by substantial

evidence and must be remanded as the court concluded in Changzhou Trina. Id.

The court disagrees.

       Commerce recognized its statutory obligations in evaluating the countervailability

of the RDP program, (pursuant to 19 U.S.C. § 1677(5)), and reasonably applied AFA

(pursuant to 19 U.S.C. § 1677e) in finding that the duty drawback program was

countervailable as it met all of the statutory criteria. See Decision Memorandum at 29-30.

Habaú’s argument that Commerce did not make the requisite statutory findings that the

RDP program constitutes a “financial contribution,” is “specific,” and provides a “benefit,”

does not account for the fact that Habaú’s failure to provide information about its use of

the duty drawback program is precisely what prohibited Commerce from directly making

those findings. Id. (“Because Habas impeded the investigation and precluded the

Department from adequately examining the program (i.e., the Department was unable to

issue a supplemental questionnaire response to the GOT concerning the extent to which

this program constitutes a financial contribution, is specific under sections 771(5)(D) and

771(5A) of the Act, and provides a benefit under section 771(5)(E) of the Act and 19 CFR

351.519), an adverse inference is warranted in selecting the [sic] from facts otherwise

available.”).
Consol. Court No. 17-00202                                                          Page 10

       Moreover, Habaú’s reliance on Changzhou Trina is unavailing as it is

distinguishable given the lack of information in that matter as to the nature of the programs

that Commerce determined to be countervailable. See Changzhou Trina, 40 CIT at ___,

195 F. Supp. 3d at 1347–50 (noting that, in contrast to other cases in which Commerce

permissibly “applied AFA to a program about which the record contained at least some

factual allegations and supporting evidence,” Commerce’s determination under review

lacked “any information, from any source” justifying findings that the “programs and

verification   grants   and   tax   deduction”   at   issue   satisfied   the   elements   for

countervailability.”). There, Commerce similarly applied AFA to grants and a tax deduction

about which the record was devoid of any relevant information. See Changzhou Trina,

40 CIT at ___, 195 F. Supp. 3d at 1349 (distinguishing Commerce’s reasonable

application of AFA to infer countervailability as to a particular program in a prior

proceeding with Commerce’s improper use of AFA to make “sweeping legal conclusion[s]

lacking any factual foundation” in the determination under review). In this action, Habaú

informed Commerce at verification that it received export related incentives under the

RDP program during the POI. See Decision Memorandum at 28. Commerce was familiar

with the RDP program because it had examined this program in prior unrelated

proceedings; although, as noted by Habaú, Commerce reached different determinations

as to whether the program was countervailable depending on the record of each

proceeding. See Habaú Br. at 6–9. Accordingly, the court rejects Habaú’s argument that

Commerce unreasonably failed to “satisfy the statutory criteria for finding that the

drawback program is countervailable.” See Habaú Br. at 11–13.
Consol. Court No. 17-00202                                                        Page 11

         Habaú next contends that even if the court concludes that “the finding of

countervailability is adequately supported, Commerce has still failed to meet the statutory

criteria for its finding [that the use of facts available was warranted].” See id. at 13–17.

Habaú argues that Commerce’s decision to apply facts available is predicated on

19 U.S.C. §1677e(a)(2)(A) because the agency’s explanation referenced Habaú’s failure

to provide “requested information.” See id. at 13. However, Commerce was quite clear in

reaching its determination that it was applying facts available pursuant to both

§ 1677e(a)(2)(A) and § 1677e(a)(1). See Decision Memorandum at 29 (“For these

reasons, we find that necessary information is not available on the record, pursuant to

section 776(a)(1) of the Act. Furthermore, pursuant to section 776(a)(2) of the Act, the

Department finds that Habas withheld information that was requested, failed to provide

such information by the appropriate deadlines, and significantly impeded the proceeding

…. Consequently, we determine that, in accordance with section 776(a)(1) and (2) of the

Act, the use of facts available is warranted.” (emphasis added)). Regardless of the merits

of Habaú’s contention that Commerce erred in concluding that Habaú withheld information

pursuant to § 1677e(a)(2)(A), Habaú makes no argument (and the court sees no basis on

which to conclude) that Commerce’s application of facts available pursuant to

§ 1677e(a)(1) was unreasonable. Accordingly, the court rejects Habaú’s argument that

Commerce “failed to meet the statutory criteria” of 19 U.S.C. §1677e(a). See Habaú Br.

at 13.

         In the alternative, Habaú maintains that even if “Habaú may be considered to have

failed to meet the requirement of §1677e(a)(2)(A), Commerce erred in deciding that
Consol. Court No. 17-00202                                                        Page 12

Habaú ‘did not act to the best of its ability in responding to the Department’s requests for

information,’ as required by 19 U.S.C. §1677e(b)(1).” See Habaú Br. at 17–20. Despite

Habaú’s claim that it would have needed to be “clairvoyant” to predict that Commerce

would want information about Habaú’s utilization of the RDP program, see Habaú Br.

at 19, the court concludes that Habaú’s failure to inform Commerce about its use of the

RDP program clearly constituted a failure of Habaú to act to “the best of its ability to

comply with a request for information from” Commerce. See 19 U.S.C. § 1677e(b)(1);

Decision Memorandum at 29. Habaú’s argument that Commerce’s evaluation of the RDP

program has been inconsistent demonstrates that Habaú was aware that Commerce had

previously found the RDP program to provide a countervailable benefit in other

proceedings. See Habaú Br. at 6–9 (noting instances where Commerce found Turkish

duty drawback countervailable). Even if Habaú was at best confused or uncertain as to

whether Commerce would consider the RDP program countervailable, it had an obligation

to raise its concerns so that Commerce, not Habaú, could determine whether the program

was countervailable in this proceeding. See Essar Steel, 34 CIT at ___, 721 F. Supp. 2d

at 1298–99 (“Regardless of whether [the respondent] deemed the [] information relevant,

it nonetheless should have produced it [in] the event that Commerce reached a different

conclusion . . . .”). Accordingly, the court finds no merit in Habaú’s contentions that

Commerce acted unreasonably in finding that Habaú’s failure to disclose its use of the

RDP program merited the application of AFA pursuant to 19 U.S.C. § 1677e(b)(1).

       Habaú also argues that even if the court sustains Commerce’s determination to

apply AFA for its failure to provide information about the RDP program, remand is
Consol. Court No. 17-00202                                                      Page 13

nevertheless appropriate because the AFA rate selected by Commerce is unreasonable.

See Habaú Br. at 20–24. Habaú maintains that Commerce’s selection of the 14.01% rate

is unreasonable because Commerce could not corroborate the rate from a 32-year-old

terminated program as relevant and reliable pursuant to 19 U.S.C. § 1677e(c) (the

statutory requirements for relying on secondary information). Id.; see also Decision

Memorandum at 30–31 (explaining how Commerce determined that the selected AFA

rate was “corroborated to the extent practicable”).

      As described above, see supra pp. 5–6, Commerce applied its established

hierarchy for the selection of an AFA rate to assign for Habaú’s use of the RDP program.

See Decision Memorandum at 30. Notably, Habaú does not challenge Commerce’s

hierarchy for the selection of an AFA rate, but instead challenges only Commerce’s

corroboration of the selected rate. See Habaú Br. at 20–23. Specifically, Habaú contends

that despite the fact that the court has sustained Commerce’s use of the 14.01% rate in

a prior CVD proceeding as a corroborated AFA rate, that rate (from the 1986 Welded Pipe

and Tube from Turkey Determination) has never been (and cannot be) found to be

“reliable” under 19 U.S.C. § 1677e(c). See Habaú Br. at 20–23 (discussing the selected

AFA rate, statutory corroboration requirements, and distinguishing Özdemir Boru San. ve

Tic. Ltd. Sti. v. United States, 41 CIT ___, ___, 273 F. Supp. 3d 1225, 1247–48 (2017)).

Defendant disagrees with Habaú’s reading of Özdemir, and maintains that the court

evaluated Commerce’s selection of an AFA rate based on the 1986 Welded Pipe and

Tube from Turkey Determination and “deemed [that rate selection as] sufficiently reliable,

reasonable, and supported by substantial evidence.” See Def.’s Resp. at 22 (citing
Consol. Court No. 17-00202                                                      Page 14

Özdemir as holding that the “rate was reliable and corroborated because it was calculated

in a previous Turkish countervailing duty investigation”). Moreover, Defendant maintains

that Commerce properly applied its AFA rate selection hierarchy and, within the discretion

afforded to the agency by the relevant statutory scheme, reasonably selected (and

corroborated to the extent practicable) the 14.01% rate. Id. at 19–22.

      The court agrees with Defendant. Habaú’s arguments about the alleged

insufficiency of Commerce’s corroboration of the 14.01% rate ignore the fact that Habaú’s

failure to provide the relevant information about the RDP program is what led Commerce

to select an AFA rate from a similar program from a previous proceeding involving Turkey.

The text of 19 U.S.C. § 1677e(d) provides broad discretion to Commerce, permitting the

agency to “use a countervailable subsidy rate applied for the same or similar program in

a countervailing duty proceeding involving the same country,” and to “apply any of the

countervailable subsidy rates or dumping margins specified under that paragraph,

including the highest such rate or margin.” Commerce adhered to its unchallenged

hierarchy for selecting AFA rates, and reasonably selected a 14.01% rate because it was

the highest non-de minimis rate calculated for a similar program in another Turkish

countervailing duty proceeding. See Decision Memorandum at 30 (referring to the 1986

Welded Pipe and Tube from Turkey Determination).

      While Özdemir is not binding on the court, it is persuasive as to how and why the

rate from the 1986 Welded Pipe and Tube from Turkey Determination may be

corroborated by Commerce. See Özdemir, 41 CIT at ___, 273 F. Supp. 3d at 1247–48.
Consol. Court No. 17-00202                                                            Page 15

Habaú is incorrect when it contends that Özdemir failed to evaluate the “reliability” of the

challenged AFA rate. The court there stated:

              Commerce determined that the CWP & T 1986 rate was
              reliable because it was “calculated in ... previous Turkey CVD
              investigations or administrative reviews.” Under the limitations
              articulated by the agency, and under the statutory standard[,]
              Commerce's statement regarding reliability served the
              purposes of corroboration “to the extent practicable.”

Özdemir, 41 CIT at ___, 273 F. Supp. 3d at 1248 (internal citations omitted). Here, as in

Özdemir, Commerce was confronted with a limited record and was forced to select, as an

AFA rate, a rate from a “similar” Turkish subsidy program from a prior proceeding. See

Decision Memorandum at 30–31. Commerce corroborated this rate to the extent

practicable by confirming its relevance and reliability. Id. (“With regard to the reliability

aspect of corroboration, we are relying on a subsidy rate calculated in another CVD

proceeding. … because the calculated rate was based on information provided for another

tariff rebate program (i.e., export tax rebates), it reflects the actual behavior of the GOT with

respect to a program that is similar to the RDP duty drawback program.”) While Habaú urges

the court to conclude that Commerce’s analysis is insufficient, Habaú has “not provided

binding authority that would impose on Commerce a corroboration standard stricter than

that identified in the statute and the legislative history.” See Özdemir, 41 CIT at ___,

273 F. Supp. 3d at 1248. Considering the record as a whole, the court concludes that

Commerce reasonably corroborated the 14.01% AFA rate as required by § 1677e(c)(1).

       Habaú lastly maintains when Commerce did not assign Habaú a rate lower than

14.01%, the agency unreasonably failed to evaluate the “situation that resulted in … an

adverse inference”. See Habaú Br. at 23–24. Habaú contends that the “‘situation’ that led
Consol. Court No. 17-00202                                                      Page 16

to AFA was that everyone concerned was well aware of drawback in the context of Turkish

steel trade cases in general, and rebar cases in particular, and nobody – not the

petitioners, not Commerce, and not Habaú – thought to ‘connect the dots’ between this

general knowledge and the specifics of answering the CVD questionnaire.” Habaú Br.

at 24. Contrary to Habaú’s position, Commerce explained that:

               [t]he Department has previously found that import duty
              rebate/drawback programs may provide countervailable
              assistance to companies importing goods. Although, as noted
              by Habas, the Department has not consistently examined
              Turkey’s duty drawback program and, in particular, the RDP
              program at issue in this case, determining the
              countervailability of a duty drawback program requires a fact-
              intensive examination … By failing to report its use of the RDP
              duty drawback program during the POI in response to the
              Department’s initial questionnaire, Habas denied the
              Department and other interested parties the opportunity to
              collect and analyze the information necessary to determine the
              RDP duty drawback program’s countervailability in this
              proceeding.

Decision Memorandum at 29. Commerce went on to acknowledge Habaú’s argument that

Commerce “should consider the fact that, in prior proceedings, [Commerce has] often

calculated de minimis rates for [the RDP Program],” but explained that its selection of an

AFA rate “is guided by an established hierarchy, which does not allow for the use of

de minimis rates.” Id. at 30.

       Notably, Habaú does not challenge Commerce’s “established hierarchy” for

selecting AFA rates, nor does Habaú identify any specific non-de minimis rates that

Commerce may have selected as an appropriate “lesser rate” after an “evaluation of the

situation” pursuant to 19 U.S.C. § 1677e(d)(2). See Habaú Br. at 23–24; Habaú Reply at

4–5. Habaú provides no insight as to how Commerce may have reasonably selected an
Consol. Court No. 17-00202                                                           Page 17

AFA rate other than 14.01%, nor does Habaú explain how Commerce may have

reasonably reduced such a rate in light of an “evaluation of the situation” under

§ 1677e(d)(2). Id. Commerce did explain its selection of an AFA rate for the RDP Program

in light of the limited facts on the record and the totality of the circumstances. See Decision

Memorandum at 31 (noting that “unlike other types of information, such as publicly available

data on the national inflation rate of a given country or national average interest rates, there

are typically no independent sources for data on company-specific benefits resulting from

countervailable subsidy programs”). Commerce further explained how it applied its

“established hierarchy” in selecting the 14.01% rate. See id. at 30. Nevertheless, Habaú

insists that “Commerce failed to make the analysis required by §1677e(d)(2), and a

remand is therefore required.” Habaú Reply at 5.

       Habaú relies on POSCO v. United States, 42 CIT ___, ___, 296 F. Supp. 3d 1320,

1349 (2018) for the proposition that Commerce must conduct “a separate case-specific

factual evaluation” in selecting an AFA rate pursuant to § 1677e(d)(2). POSCO is

distinguishable as the court there noted that “Commerce did not expressly state which

hierarchical provision(s) it relied on in this proceeding.” See POSCO, 42 CIT at ___,

296 F. Supp. 3d at 1335. Here, Commerce explained its straightforward application of its

established hierarchy, and found that the 14.01% rate from the 1986 Welded Pipe and

Tube from Turkey Determination was “highest rate for a similar program in a proceeding

involving Turkey.” Decision Memorandum at 30. Moreover, in POSCO the court explained

that § 1677e(d)(2) “contemplates a case-specific evaluation as part of Commerce’s

selection from among a range of rates.” POSCO, 42 CIT at ___, 296 F. Supp. 3d at 1349
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(emphasis added). The court also clarified that “the issue is not whether Commerce’s

hierarchical methodology as a whole complies with the statute, but whether Commerce’s

unexplained selection of the highest rates within each prong of its hierarchy complies with

§ 1677e(d)(2).” Id. Unlike POSCO, this matter does not involve the comparison of

alternative rates available on the record as Habaú has not identified any specific “lesser

rates” that Commerce may reasonably have selected. See Habaú Br. at 24 (stating that

remand is necessary for Commerce to consider “lesser rates”). Accordingly, the court

concludes that Plaintiff’s reliance on POSCO is unavailing.

       Although Commerce did not expressly cite § 1677e(d)(2) in its explanation of the

selection of an AFA rate for the RDP Program, Commerce’s explanation provides a

reasonably “discernable path” for how the agency selected of the 14.01% AFA rate.

See NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1321–22 (Fed. Cir. 2009)

(The court must sustain a determination “of less than ideal clarity” where Commerce's

decisional path is reasonably discernable. (quoting Motor Vehicle Mfrs. Ass'n v. State

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, (1974))). Accordingly, based on the record as

a whole, the court concludes that Commerce reasonably selected the 14.01% AFA rate.

                     B.     Selection of Natural-Gas Benchmark

       In the course of investigating whether Habaú purchased natural gas for less than

adequate remuneration (“LTAR”), pursuant to 19 U.S.C. §1677(5)(D)(3), Commerce

compared the prices Habaú actually paid for natural gas to a benchmark drawn from an

International Energy Agency (“IEA”) report. See 19 C.F.R. § 351.511(a)(2) (Commerce’s

benchmarking regulation for evaluating whether goods or services were provided for
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LTAR). As Commerce explained, “Section 351.511(a)(2) of the Department’s regulations

sets forth the hierarchy of potential benchmarks, listed in order of preference: (1) market

prices from actual transaction of the good within the country under investigation

(e.g., actual sales, actual imports, or competitively run government auctions) (i.e., ‘tier

one’), (2) world market prices that would be available to purchasers in the country under

investigation (i.e., ‘tier two’), or (3) an assessment of whether the government price is

consistent with market principles (i.e., ‘tier three’).” Decision Memorandum at 8.

Commerce “found that there was no viable tier one benchmark for natural gas in Turkey

during the POI and relied on country-specific industrial natural gas prices published by

the International Energy Agency (IEA), which is part of the Organisation for Economic Co-

operation and Development (OECD), as a tier two benchmark to calculate the benefit

received by Habas under this program.” Id. at 9.

       Habaú challenges Commerce’s reliance on the IEA report as unreasonable,

contending that Commerce instead should have used the data submitted by Habaú

obtained from Global Trade Information Services (“GTIS”) as the preferable data source

for constructing a tier two benchmark pursuant to § 351.511(a)(2). See Habaú Br. at 25–

28. Commerce rejected the GTIS data proffered by Habaú, stating:

               [T]he specific set of GTIS data on the record of this
              investigation contains pervasive problems that cannot be
              corrected without making assumptions that would be
              unwarranted and unsupported by the record. Specifically, the
              GTIS data are reported in six substantially different units of
              measure: M3, TM3, and L, which are units of volume; KG
              and T, which are units of mass; and TJ, which is a unit of
              energy. … The conversion factors suggested by Habas do not
              address this problem. …
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                     The petitioner raised its conversion rate and energy
             content concerns in its case brief, as well as in earlier factual
             submissions. However, no party suggested a method for
             standardizing the GTIS data. Rather, Habas focused its
             comments on rebutting the petitioner’s suggestion that we
             continue to rely on the IEA, as discussed below.
             Consequently, without additional information clarifying the
             nature of the variance in conversion rates, we find that the
             various units of measure in the GTIS data cannot be
             harmoniously converted to a single unit of measure that would
             enable a comparison of the GTIS natural gas prices to Habas’
             natural gas purchases without introducing unnecessary
             distortion into the calculations.
                     Moreover, information on the record of this proceeding
             indicates that the GTIS data includes shipments of CNG,
             which, as explained by the GOT, is a different product that is
             shipped in canisters rather than through pipelines. Based on
             this fact, it is evident that certain shipments included in the
             GTIS data (e.g., shipments of natural gas from the Czech
             Republic to Cuba) are comprised entirely of CNG. Because
             other shipments between countries connected by pipelines
             (e.g., shipments of natural gas from Hungary to Croatia) also
             likely include CNG, it is impossible to identify and remove
             comprehensively all shipments of CNG from the GTIS data.
                     Therefore, we believe a more accurate gauge of
             natural gas prices in the POI is provided by the IEA data,
             which is reported in a unit comparable to the unit in which
             Habas was invoiced (i.e., MWh/KWh) and, as such, does not
             require any conversion. …
                     For the reasons explained in the Preliminary
             Determination, we continue to find that the annual OECD
             Europe natural gas prices for 2015, as published by the IEA,
             are usable as a tier two benchmark. The IEA annual data do
             not suffer from the same inconsistencies as the GTIS data.

Decision Memorandum at 22–25.

      In its brief before the court, Habaú continues to assail Commerce’s selection of the

IEA data as unreasonable; however, Habaú fails to demonstrate why its proffered GTIS

data set is the only reasonable selection on the record, nor does Habaú address the
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problem highlighted by Commerce that “no party [has] suggested a method for

standardizing the GTIS data.” See Habaú Br. at 25–28; see also Decision Memorandum

at 24. Instead, Habaú attempts to downplay the significance of the problems with the GTIS

data highlighted by Commerce. Habaú argues that its proposed benchmark submission

provided Commerce with an analysis of the GTIS data that leaves only a “negligible

outlier” of problematic data that “will always find its way into a database, but its existence

is not grounds for discarding the entire database.” Habaú Br. at 28 (citing Habaú

benchmark submission (Mar. 2, 2017), PD 221–222). In the Decision Memorandum,

Commerce acknowledged that Habaú proposed a conversion rate for energy units to

address some of Commerce’s concerns about using the GTIS data, but found that

Habaú’s proposed energy unit conversion solution did not resolve the problems presented

in using that data. See Decision Memorandum at 24 n.155 (“Habas submitted a

conversion rate for energy units, KWh, to volume units, M3, based on its own experience.

However, for the reasons already explained, if energy content is shipment-specific,

Habas’s experience does not provide a reliable method for making conversions for other

transactions.”).

       Habaú’s arguments, though, fail to address the basis of Commerce’s decision.

Commerce was presented with the choice of two competing data sets on the record

(i.e., the IEA and GTIS data). After consideration of the pros and cons of each data set,

Commerce concluded that the IEA data provided a “more accurate gauge of natural gas

prices in the POI” that further were “reported in a unit comparable to the unit in which

Habas was invoiced.” Id. at 24–25. Considering the record as a whole, the court
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concludes Habaú has failed to establish that a reasonable mind would have to credit

Habaú’s position as the one and only correct position on the administrative record. The

record more than adequately supports Commerce's conclusion that “the annual OECD

Europe natural gas prices for 2015, as published by the IEA, are usable as a tier two

benchmark …” and that the “IEA annual data do not suffer from the same inconsistencies

as the GTIS data.” See id.; see also Daewoo Elecs. Co. v. Int'l Union of Elec., Elec.,

Technical, Salaried & Mach. Workers, AFL–CIO, 6 F.3d 1511, 1520 (Fed. Cir. 1993) (“The

question is whether the record adequately supports the decision of [Commerce], not

whether some other inference could reasonably have been drawn.”). Accordingly,

Commerce's selection of the IEA data as a tier two benchmark for natural-gas prices is

reasonable.

                                   III. Conclusion

      For the reasons set forth above, the court sustains the Final Determination as to

Habaú.

                                                         /s/ Leo M. Gordon
                                                       Judge Leo M. Gordon

Dated: May 31, 2019
       New York, New York