2021-10675. Chlorinated Isocyanurates From the People's Republic of China: Notice of Court Decision Not in Harmony With the Results of Countervailing Duty Administrative Review; Notice of Amended Final Results

AGENCY:

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

On May 6, 2021, the U.S. Court of International Trade (CIT) issued its final judgment in Clearon Corporation et al v. United States, Consol. Court No. 17-00171, sustaining the Department of Commerce (Commerce)'s final remand results pertaining to the administrative review of the countervailing duty (CVD) order on chlorinated isocyanurates (chlorinated isos) from the People's Republic of China (China) covering the period February 4, 2014, through December 31, 2014. Commerce is notifying the public that the CIT's final judgment is not in harmony with Commerce's final results of the administrative review, and that Commerce is amending the final results with respect to the countervailable subsidy rate assigned to Heze Huayi Chemical Co., Ltd. (Heze Huayi).

DATES:

Applicable May 17, 2021.

FOR FURTHER INFORMATION CONTACT:

Justin Neuman, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

On June 15, 2017, Commerce published its Final Results in the 2014 CVD administrative review of chlorinated isos from China.^[1] In the Final Results, Commerce determined that the use of adverse facts available (AFA) under sections 776(a) and (b) of the Tariff Act of 1930, as amended (the Act), was warranted in determining the countervailability of the Export Buyer's Credit Program, because the Government of China (GOC) had failed to provide the necessary information Commerce required to analyze the program.^[2] Commerce also determined that it could not rely on statements of non-use provided by the respondents and their customers because of the GOC's failure to provide the necessary information with respect to the operation of the program.^[3] Consistent with Commerce's CVD AFA hierarchy, Commerce selected the highest calculated rate for the same or similar program as the AFA rate for this program, 0.87 percent, in accordance with section 776(d) of the Act and Commerce's established practice.^[4] Commerce calculated a total net subsidy rate of 1.91 percent for Heze Huayi.^[5]

Heze Huayi appealed Commerce's Final Results. On January 25, 2019, Commerce's rate selection for the Export Buyer's Credit Program was sustained by the CIT in Clearon I.^[6] However, in Clearon I, the CIT also remanded the Final Results to Commerce with four specific instructions: (1) Explain why certain requested information “is necessary to make a determination of whether the `manufacture, production, or export' of {Heze Huayi's} merchandise has been subsidized, pursuant to {section 701(a) of the Act},” and “{i}n doing so, Commerce shall tie its inquiries to {Heze Huayi}, its products, and/or its customers;” (2) “either provide an adequate answer relating to why the information it seeks `to fully understand the operation of the program' fills a gap as to {Heze Huayi's} products and their sale, or rely on the information it has on the record;” (3) “comply with the statute by tying its facts available and adverse facts available determinations to Heze Huayi, its products, or its customers;” and (4) “support with substantial evidence its necessary conclusion that there were gaps in the record evidence that could only be filled with the GOC's responses to its questionnaires.” ^[7]

In its first remand redetermination, issued in May 2019, Commerce continued to find that, without the information that the GOC withheld about the operation of the Export Buyer's Credit Program, the use of facts available was required because “necessary” information was missing from the record, under section 776(a) of the Act.^[8] Commerce further found that the application of an adverse inference was justified because the GOC failed to cooperate with Commerce's information requests to “the best of its ability.” ^[9] Using AFA, Commerce thus determined that Heze Huayi used and benefitted from the Export Buyer's Credit Program, and we continued to use 0.87 percent as the AFA rate for the program.^[10] In response to the CIT's instruction, Commerce explained why it was necessary to know whether the China Export Import Bank uses third-party banks to disburse/settle export buyer's credits, stating that conducting “a thorough verification of Heze Huayi's customers' nonuse of this program without understanding the identity of these correspondent banks would be unreasonably onerous, if not impossible.” ^[11]

In October 2020, the CIT again remanded Commerce's decision with respect to the Export Buyer's Credit Program.^[12] The CIT noted that it had previously rejected Commerce's position that information about the operation of the Export Buyer's Credit Program is necessary for it to verify a respondent's claimed non-use of the program.^[13] The CIT remanded Commerce's decision for a second time, instructing Commerce and Heze Huayi “to confer and jointly devise a procedure . . . by which {Commerce} can conduct verification of the declarations of non-use.” ^[14] Alternatively, the CIT stated that Commerce may find, based on existing record evidence, “that neither {Heze Huayi} nor its customers used or received a benefit under the program.” ^[15]

In its final remand redetermination, issued in January 2021, Commerce found, under respectful protest,^[16] that there was no use of the Export Buyer's Credit Program with respect to Heze Huayi in this review and removed the subsidy rate for the Export Buyer's Credit Program from Heze Huayi's final CVD subsidy rate, resulting in a 1.04 percent rate for Heze Huayi.^[17] On May 6, 2021, the CIT sustained Commerce's final redetermination.^[18]

Timken Notice

In its decision in Timken,^[19] as clarified by Diamond Sawblades,^[20] the Court of Appeals for the Federal Circuit held that, pursuant to section 516A(c) and (e) of the Act, Commerce must publish a notice of court decision that is not “in harmony” with a Commerce determination and must suspend liquidation of entries pending a “conclusive” court decision. The CIT's May 6, 2021, judgment constitutes a final decision of the CIT that is not in harmony with Commerce's Final Results. Thus, this notice is published in fulfillment of the publication requirements of Timken.

Amended Final Results

Because there is now a final court judgment, Commerce is amending its Final Results with respect to Heze Huayi as follows:

Company	Subsidy rate (percent ad valorem)
Heze Huayi Chemical Co., Ltd	1.04

Cash Deposit Requirements

Because Heze Huayi has a superseding cash deposit rate, i.e., there have been final results published in a subsequent administrative review, we will not issue revised cash deposit instructions to U.S. Customs and Border Protection (CBP). This notice will not affect the current cash deposit rate.

Liquidation of Suspended Entries

At this time, Commerce remains enjoined by CIT order from liquidating entries that: Were produced and/or exported by Heze Huayi, and were entered, or withdrawn from warehouse, for consumption during the period February 4, 2014, through December 31, 2014. These entries will remain enjoined pursuant to the terms of the injunction during the pendency of any appeals process.

In the event the CIT's ruling is not appealed, or, if appealed, upheld by a final and conclusive court decision, Commerce intends to instruct CBP to assess countervailing duties on unliquidated entries of subject merchandise produced and/or exported by Heze Huayi in accordance with 19 CFR 351.212(b). We will instruct CBP to assess countervailing duties on all appropriate entries covered by this review when the ad valorem rate is not zero or de minimis. Where an ad valorem subsidy rate is zero or de minimis,^[21] we will instruct CBP to liquidate the appropriate entries without regard to countervailing duties.

Notification to Interested Parties

This notice is issued and published in accordance with sections 516A(c) and (e) and 777(i)(1) of the Act.

Dated: May 14, 2021.

Christian Marsh,

Acting Assistant Secretary for Enforcement and Compliance.

Footnotes

1.  See Chlorinated Isocyanurates from the People's Republic of China: Final Results of Countervailing Duty Administrative Review, and Partial Rescission of Countervailing Duty Administrative Review; 2014, 82 FR 27466 (June 15, 2017) (Final Results), and accompanying Issues and Decision Memorandum.

2.  Id. at Comment 2.

3.  Id.

4.  Id.

5.  See Final Results, 82 FR at 27467.

6.  See Clearon Corp. v. United States, 359 F. Supp. 3d 1344, 1361-62 (CIT 2019) (Clearon I).

7.  Id., 359 F. Supp. 3d at 1363.

8.  See Final Results of Redetermination Pursuant to Court Remand, Clearon Corp. v. United States, Court No. 17-00171, Slip Op. 19-13, dated May 16, 2019 at 38 and Comment 2, https://enforcement.trade.gov/​remands/​19-13.pdf.

9.  Id. at 29-30.

10.  Id. at 40.

11.  Id. at 27-28.

12.  See Clearon Corp. v. United States, Court No. 17-00171, Slip-Op. 20-141, (CIT 2020).

13.  Id. at 20 (citing Guizhou Tyre Co. v. United States, 348 F. Supp. 3d 1261, 1270 (CIT 2018)).

14.  Id.

15.  Id.

16.  See Viraj Group, Ltd. v. United States, 343 F.3d 1371, 1376 (Fed. Cir. 2003).

17.  See Final Results of Redetermination Pursuant to Court Remand, Clearon Corp. v. United States, Court No. 17-00171, Slip Op. 20-141, dated January 4, 2021, at 9, available at https://enforcement.trade.gov/​remands/​20-141.pdf.

18.  See Clearon Corp. v. United States, Consol. Court No. 17-00171, Slip Op. 21-56 (CIT 2021).

19.  See Timken Co. v. United States, 893 F.2d 337 (Fed. Cir. 1990) (Timken).

20.  See Diamond Sawblades Manufacturers Coalition v. United States, 626 F.3d 1374 (Fed. Cir. 2010) (Diamond Sawblades).

21.  See 19 CFR 351.106(c)(2).