Read the Federal Circuit’s decision [PDF 135 KB]
At issue in this countervailing duty (CVD) was the application of adverse inferences in a CVD investigation when a party fails to provide requested information.
The producer of hardwood flooring in China exported flooring material into the United States. In response to a petition by U.S. domestic industries, the Commerce Department instituted a CVD investigation of multi-layered wood flooring in China, and selected the producer as a mandatory respondent in the investigation.
After the government of China (a foreign government respondent) did not provide requested information, Commerce relied on adverse inferences to find that the Chinese government’s provision of electricity constituted a specific financial contribution and applied this adverse inference to select the benchmark for determining the existence and amount of benefit.
The Court of International Trade determined that Commerce had properly used adverse inferences to substitute for information controlled by the government of China that was not provided in the course of the investigation.
The flooring producer appealed the trade court’s findings to the Federal Circuit, alleging that Commerce had improperly used adverse inferences against a cooperating party in calculating the CVD rate.
Today, the Federal Circuit affirmed the trade court and concluded that in calculating the CVD rate, Commerce had properly applied adverse inferences to determine the CVD levied on the importation.
For more information, contact a professional with KPMG’s Trade & Customs practice:
John L. McLoughlin
Todd R. Smith
Luis A. Abad
Or your local KPMG Trade & Customs professional.