HabaÅŸ Sinai ve Tibbi Gazlar Istihsal Endüstrisi, A.Åž. v. United States, No. 20-00065 (Ct. Int'l Trade 2021)

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Slip Op. 21-100 UNITED STATES COURT OF INTERNATIONAL TRADE +$%$ù 6,1$, 9( 7,%%, GAZLAR ISTIHSAL ENDÜSTRISI $ ù , Plaintiff, v. Before: Judge Gary S. Katzmann Court No. 20-00065 UNITED STATES, Defendant, and REBAR TRADE ACTION COALITION, Defendant-Intervenor. OPINION [Plaintiff’s Motion for Judgment on the Agency Record is denied, and Commerce’s Final Results are sustained.] Dated: August 18, 2021 David L. Simon, Law Office of David L. Simon, of Washington, D.C., argued for plaintiff. Ann C. Motto, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for defendant. With her on the brief were Jeffrey Bossert Clark, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of Counsel Reza Karamloo, Senior Attorney, Office of Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce. Maureen E. Thorson, Wiley Rein LLP, of Washington, D.C., argued for defendant-intervenor. With her on the brief were John R. Shane, Stephanie M. Bell, Jeffrey O. Frank, Cynthia A. Galvez, and John Allen Riggins. Katzmann, Judge: This case involves a challenge to the Department of Commerce’s (“Commerce”) use of a tier-three benchmark in its determination of countervailing duties Court No. 20-00065 Page 2 (“CVD”s) in the administrative review of steel concrete reinforcing bar (“rebar”) from Turkey. Steel Concrete Reinforcing Bar From the Republic of Turkey: Final Results of Countervailing Duty Administrative Review; 2017, 85 Fed. Reg. 16,056 (Dep’t Commerce Mar. 20, 2020) (“Final Results”) PR 147. Plaintiff +DEDú 6LQDL YH 7LEEL *D]ODU ,VWLKVDO (QG VWULVL $ ù (“+DEDú”), a Turkish rebar producer, specifically challenges Commerce’s selection of a tier-three benchmark IRU +DEDú¶V SXUFKDVHV RI QDWXUDO JDV IURP 7XUNLVK JRYHUQPHQW-RZQHG HQWLW\ %RWDú +DEDú DUJXHV that Commerce impermissibly rejected viable tier-two benchmarks, and that Commerce’s ultimate calculation of a tier-three benchmark was arbitrary and capricious and unsupported by substantial evidence. Pl.’s Mot. for J. on the Agency R. 23–33, Aug. 21, 2020, ECF No. 23 (“Pl.’s Br.”). The court sustains Commerce’s Final Results. BACKGROUND I. Legal Background A countervailable subsidy exists when (1) a government or public authority has provided a financial contribution; (2) a benefit is thereby conferred upon the recipient of the financial contribution; and (3) the subsidy is specific to a foreign enterprise or foreign industry, or a group of such enterprises or industries. 19 U.S.C. § 1677(5). To empower Commerce to offset economic distortions caused by countervailable subsidies, Congress promulgated the Tariff Act of 1930. 6LRX[ +RQH\ $VV¶Q Y +DUWIRUG )LUH ,QV , 672 F.3d 1041, 1046–47 (Fed. Cir. 2012); ATC Tires Private Ltd. v. United States, &,7 __, __, 322 F. Supp. 3d 1365, 1366 (2018). The Tariff Act authorizes Commerce to investigate potential countervailable subsidies and, where such subsidies are identified, issue orders on the subject merchandise imposing duties equal to the net countervailable subsidies. Sioux Honey, 672 F.3d at 1046–47; ATC Tires, 322 F. Supp. 3d at 1366–67; 19 U.S.C. §§ 1671, 1673. Beginning on the anniversary of publication of a CVD order, Court No. 20-00065 Page 3 if Commerce has received a request for administrative review of that order, Commerce is required to review and determine the amount of the countervailable subsidy at issue. 19 U.S.C. § 1675(a)(1). ,Q GHWHUPLQLQJ ZKHWKHU D EHQHILW KDV EHHQ FRQIHUUHG XSRQ WKH UHFLSLHQW RI D ILQDQFLDO contribution under 19 U.S.C. § 1677(5), Commerce considers (among other factors) whether a good or service has been provided to the recipient for less-than-adequate remuneration (“LTAR”). 19 U.S.C. § 1677(5)(E)(iv); see also Nucor Corp. v. United States, 927 F.3d 1243, 1245 (Fed. Cir. 2019). To identify such benefits, [T]he adequacy of remuneration shall be determined in relation to prevailing market conditions for the good or service being provided or the goods being purchased in the country which is subject to the investigation or review. Prevailing market conditions include price, quality, availability, marketability, transportation, and other conditions of purchase or sale. 19 U.S.C. § 1677(5)(E)(iv). ,Q SUDFWLFH Commerce determines if goods or services are being provided for LTAR by conducting an analysis under 19 C.F.R. § 351.511. See Nucor Corp., 927 F.3d at 1246; 19 C.F.R. § 351.511(a)(2). Section 351.511 requires Commerce to follow a threetier analysis to identify a “suitable benchmark” that will be used to determine “the existence and amount of a benefit conferred.” ArcelorMittal USA LLC v. United States, &,7 BB BB 337 F. Supp. 3d 1285, 1291 (2018); see Essar Steel Ltd. v. United States, 678 F.3d 1268, 1273 (Fed. Cir. 2012) (“Commerce must determine the proper benchmark price in order to determine if the goods were sold for ‘less than adequate remuneration.’”). Typically, Commerce employs a tier-one benchmark by measuring the government price of the good or service against a “marketdetermined price” based on “actual transactions in the country in question.” 19 C.F.R. § 351.511(a)(2)(i). ,I “there is no useable market-determined price” available for comparison, Commerce employs a tier-two benchmark by measuring the government price against a “world Court No. 20-00065 market price” that is “available to purchasers in the country in question.” Page 4 19 C.F.R. § 351.511(a)(2)(ii). Where there is more than one commercially available world market price, Commerce considers an average of the available world market prices. ,G ,I QHLWKHU D PDUNHWdetermined price nor a world market price is available, Commerce employs a tier-three benchmark by evaluating whether the government price is “consistent with market principles.” 19 C.F.R. § 351.511(a)(2)(iii); see POSCO v. United States, 977 F.3d 1369, 1372 (Fed. Cir. 2020). Commerce’s tier-three analysis considers “such factors as the government’s price-setting philosophy, costs (including rates of return sufficient to ensure future operations), or possible price discrimination.” Countervailing Duties, 63 Fed. Reg. 65,348, 65,378 (Dep’t Commerce Nov. 25, 1998). These factors are not hierarchical in application, and Commerce may rely on one or more factors to calculate a tier-three benchmark in any particular case. ,G II. Factual Background On May 22, 2017 and July 14, 2017, respectively, Commerce published the CVD order and amended CVD order on rebar from Turkey. Steel Concrete Reinforcing Bar From the Republic of Turkey: Final Affirmative Countervailing Duty Determ., 82 Fed. Reg. 23,188 (Dep’t Commerce May 22, 2017); Steel Concrete Reinforcing Bar From the Republic of Turkey: Am. Final Affirmative Countervailing Duty Determ. and Countervailing Duty Order, 82 Fed. Reg. 32,531 (Dep’t Commerce Jul. 14, 2017) WRJHWKHU ³,QLWLDO 2UGHUV´ . Collectively, the ,QLWLDO Orders set out Commerce’s determination that countervailable subsidies were being provided to producers and exporters of Turkish rebar, and calculation of estimated net countervailable subsidy UDWHV IRU +DEDú DQG RWKHU SURGXFHUV On July 3, 2018, Commerce published a notice of opportunity to request administrative review of WKH ,QLWLDO 2UGHUV for the period of March 1, 2017 through December 31, 2017. Court No. 20-00065 Page 5 Antidumping or CouQWHUYDLOLQJ 'XW\ 2UGHU )LQGLQJ RU 6XVSHQGHG ,QYHVWLJDWLRQ 2SSRUWXQLW\ to Request Administrative Review, 83 Fed. Reg. 31,121 (Dep’t Commerce Jul. 3, 2018) +DEDú timely submitted a request for review, and Commerce published a notice initiating its review of +DEDú’s countervailable subsidy rates on September 10, 2018. Antidumping or Countervailing 'XW\ 2UGHU )LQGLQJ RU 6XVSHQGHG ,QYHVWLJDWLRQ 2SSRUWXQLW\ 7R 5HTXHVW Administrative Review, 83 Fed. Reg. 31,121 (Dep’t Commerce Jul. 3, 2018). $W &RPPHUFH¶V UHTXHVW +DEDú DQG WKH *RYHUQPHQW RI 7XUNH\ VXEPLWWHG TXHVWLRQQDLUH UHVSRQVHV 6HFWLRQ ,,, 4XHVWLRQQDLUH 5HVSRQVH RI +DEDú 6LQDL YH 7LEEL *D]ODU ,VWLKVDO (QG VWULVL $ ù. (Apr. 15, 2019), P.R. 20, C.R. 6–17; Letter from Ministry of Trade, Directorate Gen. for Exports, Republic of Turkey to Sec’y Commerce, re: First Administrative Review of Countervailing Duty Order on Steel Concrete Reinforcing Bar from Turkey: 4XHVWLRQQDLUH 5HVSRQVH RI WKH *RYHUQPHQW RI 7XUNey 35 (Apr. 15, 2019), P.R. 21– 42, C.R. 18–44 ³4XHVWLRQQDLUH 5HVSRQVH RI WKH *RYHUQPHQW RI 7XUNH\´ Rebar Trade Action Coalition (“RTAC”) MRLQHG WKH DGPLQLVWUDWLYH UHYLHZ LQLWLDWHG E\ +DEDú DV D SHWLWLRQHU DQG RQ $XJXVW ERWK +DEDú DQG 57$& VXEPLWWHG EHQFKPDUN SURSRVDOV WR &RPPHrce. Letter from Wiley Rein LLP to Dep’t Commerce re RTAC Benchmark Submission, P.R. 79–81 (“RTAC Submission”) /HWWHU IURP ' / 6LPRQ WR 'HS¶W &RPPHUFH UH +DEDú %HQFKPDUN 6XEPLVVLRQ ³+DEDú 6XEPLVVLRQ´ , P.R. 76–79, C.R. 75–77. ,Q UHOHYDQW SDUW +DEDú¶V EHQFKPDUN VXEPLVVLRQ provided data from the United Nations Comtrade database on natural gas purchase prices in dollars SHU NLORJUDP DQG SURSRVHG FRQYHUVLRQ IDFWRUV IRU WKH FRQYHUVLRQ RI +DEDú¶ QDWXUDO JDV SXUFKDVHV from cubic mHWHUV DQG NLORZDWW KRXUV WR NLORJUDPV +DEDú 6XEPLVVLRQ DW – +DEDú¶V VXEPLVVLRQ also requested that Commerce employ the Comtrade data to calculate a tier-two benchmark based on Russian natural gas prices and included additional data in support of Habaú¶V FRQWHQWLRQ WKDW Russian natural gas prices are market-driven, not politically determined, and are thus appropriate Court No. 20-00065 Page 6 for benchmark calculation. ,G at 3–7. RTAC’s benchmark submission provided natural gas price GDWD IURP WKH ,($ along with source documentation and additional natural gas import data from Eurostat DQG UHTXHVWHG WKDW &RPPHUFH HPSOR\ WKH ,($ GDWD LQ LWV EHQFKPDUN FDOFXODWLRQV. RTAC Submission at 1–2. %RWK +DEDú DQG 57$& VXEVHTXHQWO\ VXEPLWWHG EHQFKPDUN UHEXWWDOV Letter from Wiley Rein LLP to Sec’y. of Commerce, re Steel Concrete Reinforcing Bar from Turkey: RTAC’s Rebuttal Benchmark Submission (Aug. 19, 2019), P.R. 89–92 (“RTAC’s Rebuttal Benchmark Submission”) /HWWHU IURP ' / 6LPRQ WR 'HS¶W &RPPHUFH UH +DEDú %HQFKPDUN Rebuttal (Aug. 19, 2019), P.R. 88. ,Q September of 2019, Commerce issued its preliminary results of administrative review. Steel Concrete Reinforcing Bar From the Republic of Turkey: Prelim. Results of Countervailing Duty Administrative Review; 2017, 84 Fed. Reg. 48,583 (Dep’t Commerce Sept. 16, 2019), P.R. 115 (“Preliminary Results”); see also Mem. from J. Maeder to J. Kessler re Decision Mem. for the Prelim. Results of the Countervailing Duty Administrative Review: Steel Concrete Reinforcing Bar from the Republic of Turkey; 2017 (Dep’t Commerce Sept. 6, 2019), P.R. 106 (“PDM”). ,Q the Preliminary Results and accompanying Preliminary Decision Memorandum, Commerce preliminarily determined that +DEDú KDG EHHQ UHFHLYLQJ FRXQWHUYDLODEOH VXEVLGLHV through the purchase of natural gas from %RWDú D state-owned natural gas company. Preliminary Results at 48,583; PDM at 8. ,Q PDNLQJ LWV GHWHUPLQDWLRQ, Commerce undertook an LTAR analysis of +DEDú¶V QDWXUDO JDV SXUFKDVHV IURP %RWDú SXUVXDQW WR & ) 5 D (2)(ii) and preliminarily found, consistent with its prior determinations, that (1) the only applicable tier-two benchmark price for natural gas in Turkey is the price valid in countries “‘connected to Turkey through natural gas pipelines’ (i.e. Russia, AzHUEDLMDQ DQG ,UDQ ´ DQG natural gas prices from 5XVVLD SURSRVHG E\ +DEDú DV D WLHU-two benchmark, are distorted and therefore unsuitable for the Court No. 20-00065 Page 7 construction of a natural gas benchmark. 1 PDM at 10–11 (quoting Steel Concrete Reinforcing Bar From the Republic of Turkey: Preliminary Results of Countervailing Duty Administrative Review DQG ,QWHQW 7R 5HVFLQG WKH 5HYLHZ LQ 3DUW , 83 Fed. Reg. 63,472 (Dep’t Commerce Dec. 10, 2018), and accompanying Preliminary Decision Memorandum at 23). Accordingly, Commerce concluded that no viable tier-two benchmarks were available on the record. ,G at 12. Next, Commerce preliminarily found the Comtrade GDWD VXEPLWWHG E\ +DEDú WR EH XQUHOLDEOH and therefore unsuitable for the calculation of a tier-three natural gas benchmark. ,G DW ,Q particular, Commerce explained that the Comtrade data were not accompanied by an underlying document explaining the reporting, collection, and conversion of the data; that use of the Comtrade data would require cRQYHUVLRQ RI +DEDú¶V RZQ QDWXUDO JDV SXUFKDVH GDWD DQG WKDW WKH Comtrade data were inconsistent with other data on the record. ,G Commerce therefore rejected the Comtrade data submitted by +DEDú DQG calculated a preliminary tier-three benchmark using the ,($ GDWD VXEPLWWHG E\ 57$& ,Q March of 2020, Commerce issued its final results of administrative review, which GHWHUPLQHG WKDW +DEDú UHFHLYHG FRXQWHUYDLODEOH VXEVLGLHV DQG reiterated the findings of the Preliminary Results. Final Results. 2 ,Q WKH DFFRPSDQ\LQJ ,VVXHV DQG 'HFLVLRQ 0HPRUDQGXP, Commerce FRQFOXGHG WKDW WKH ,($ GDWD VXEPLWWHG E\ 57$& DUH ³DFFXUDWH DQG UHOLDEOH DQG 1 &RPPHUFH IXUWKHU QRWHG LQ LWV 3'0 WKDW QHLWKHU $]HUEDLMDQL QRU ,UDQLDQ QDWXUDO JDV SULFHV ZHUH proposed during the course of the review as alternative tier-two benchmarks (whether by RTAC RU +DEDú DQG WKDW $]HUEDLMDQL QDWXUDO JDV SULFHV KDG ³SUHYLRXVO\ >EHHQ@ IRXQG WR EH XQXVDEOH IRU benchmark purposes.” PDM at 11. 2 A correction to the Final Results was subsequently issued, clarifying that the countervailable subsidy rate set out in the Final Results LV DSSOLFDEOH WR ERWK +DEDú DQG LWV FURVV-owned companies. Steel Concrete Reinforcing Bar From the Republic of Turkey: Correction to Final Results of Countervailing Duty Administrative Review; 2017, 85 Fed. Reg. 20,665 (Dep’t Commerce Apr. 14, 2020). For purposes of this opinion, “Final Results” refers to Commerce’s final determination in toto, including the subsequent correction. Court No. 20-00065 Page 8 RWKHUZLVH IUHH RI PHWKRGRORJLFDO XQFHUWDLQW\ ´ DQG UHMHFWHG +DEDú¶V arguments to the contrary. 0HP WR - .HVVOHU IURP - 0DHGHU UH ,VVXHV DQG 'HFLVLRQ 0HP IRU WKH )LQDO 5HVXOWV RI Countervailing Duty Administrative Review of Steel Concrete Reinforcing Bar from the Republic of Turkey; 2017 14 (Dep’t Commerce Mar. 13, 202 3 5 ³,'0´ Commerce further concluded, in line with the PDM and Preliminary Results, that the Comtrade data provided by +DEDú DUH XQUHOLDEOH DQG WKDW 5XVVLDQ QDWXUDO JDV SULFHV DUH GLVWRUWHG DQG FDQQRW EH XVHG DV D EHQFKPDUN ,'0 DW –18. III. Procedural History 2Q 0DUFK +DEDú LQLWLDWHG WKH LQVWDQW FDVH 6XPPRQV (&) 1R The following day, +DEDú timely filed a complaint challenging Commerce’s Final Results. Compl., Mar. 27, 2020, ECF No. 10. The complaint alleged three specific objections to the Final Results: first, that &RPPHUFH¶V XVH RI ,QWHUQDWLRQDO (QHUJ\ $JHQF\ ³,($´ WDEOHV DV D EHQFKPDUN IRU +DEDú¶V natural gas purchase prices was unsupported by the record or otherwise unlawful; second, that Commerce’s rejection of European Union (“EU”) natural gas import prices from Russia as a tiertwo or -three benchmark was unsupported by the record or otherwise unlawful; and three, that Commerce’s rejection of EU natural gas import prices from Norway, Algeria, Libya, and Ukraine as a tier-two or -three benchmark was unsupported by the record or otherwise unlawful. Compl. at 5. On April 2, 2020, RTAC joined the action as Defendant-,QWHUYHQRU 2UGHU *UDQWLQJ 0RW WR ,QWHUYHQH DV 'HI -,QWHU (&) 1R 2Q $XJXVW +DEDú ILOHG a motion for judgment on the agency record. Pl.’s Br. The United States (“Government”) filed a response on November 10, 2020, and RTAC filed a response on November 11, 2020. Resp. to Mot. for J. on Agency R., ECF No. 26 (“Def.’s Br.”); Conf. Resp. to Mot. for J. on Agency R., ECF No. 27; Def.-,QWHU ¶V 5HVS WR Mot. for J. on Agency R., ECF No. 28 (“Def.-,QWHU ¶V %U ´ 2Q 'HFHPEHU +DEDú ILOHG Court No. 20-00065 Page 9 its reply brief. Reply Br. of Pl. ECF No. 29 (“Pl.’s Reply”). On April 27, 2021, at the request of the court, the parties filed supplemental briefs prior to oral argument. Conf. Resp. of Pl. to Court’s Letter of Apr. 15, ECF No. 36; Resp. of Pl. to Court’s Letter of Apr. 15, ECF No. 37; Def.’s Resp. to Court’s Apr. 15 Order, ECF No. 38; Def.-,QWHU ¶V 5HVSV WR 4XHVWLRQV IRU 2UDO $UJ &RQI (&) No. 39; Def.-,QWHU ¶V 5HVSV WR 4XHVWLRQV IRU 2UDO $UJ (&) 1R Oral argument was held on 0D\ 2UDO $UJ (&) 1R +DEDú DQG 57$& HDFK ILOHG SRVW-argument briefs on May 26, 2021. Cmts. of Pl. Following Oral Arg., ECF No. 42; Post-Arg. Submission of Def.-,QWHU Conf., ECF No. 43; Post-Arg. Submission of Def.-,QWHU (&) 1R -85,6',&7,21 $1' 67$1'$5' 2) 5(9,(: The court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C. D D $ L , DQG D % LL 7KH VWDQGDUG RI UHYLHZ LQ this action is set forth in 19 U.S.C. § 1516a(b)(l)(B)(i): “[t]he court shall hold unlawful any determination, finding or conclusion found . . . to be unsupported by substantial evidence on the record, or otherwise not in accordance with law.” See also N.M. Garlic Growers Coal. v. United States, 953 F.3d 1358, 1368 (Fed. Cir. 2020). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Nippon Steel Corp. v. United States, 337 F.3d 1373, 1379 (Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 299 (1938)). Support from substantial evidence is satisfied by “less than the weight of the evidence but more than a mere scintilla of evidence.” (OELW 6\VWHPV RI $PHULFD //& Y 7KDOHV 9LVLRQL[ ,QF , 881 F.3d 1354, 1356 (Fed. Cir. 2018) (quoting ,Q UH 1XYDVLYH ,QF , 842 F.3d 1376, 1379 (Fed. Cir. 2016)). “[T]he possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence.” AK Steel Corp. v. United States, 192 F.3d 1367, 1371 (Fed. Cir. 1999) (alteration in original) (quoting Consolo v. Court No. 20-00065 Page 10 Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966)). Rather, for the court to sustain the Final Results, Commerce must simply demonstrate a “rational connection between the facts found and the choice made.” Nucor Corp. v. United States &,7 ) 6XSS G 31–32 (2008) (quoting %XUOLQJWRQ 7UXFN /LQHV ,QF Y 8QLWHG 6WDWHV, 371 U.S. 156, 168 (1962)). DISCUSSION As set out above, +DEDú argues that Commerce’s Final Results are unsupported by substantial evidence and not in accordance with law because (1) Commerce wrongly rejected the Comtrade data on natural gas imports from Russia in calculating a tier-two benchmark IRU +DEDú¶V natural gas purchase prices; (2) Commerce similarly wrongly rejected the Eurostat data on natural gas imports from Russia in calculating a tier-two benchmark; and (3) Commerce wrongly rejected the Eurostat data on natural gas import prices from Norway, Algeria, Libya, and Ukraine in calculating a tier-three benchmark. Compl. at 5. 7KH FRXUW ILQGV WKDW FRQWUDU\ WR +DEDú¶V allegations, Commerce’s Final Results are supported by substantial evidence and in accordance with law. I. Commerce Reasonably Determined There Were No Data on the Record Suitable for the Calculation of a Tier-Two Benchmark. Where the record cannot support calculation of a tier-one benchmark, Commerce is permitted to employ a tier-two benchmark in its LTAR analysis. 19 C.F.R. § 351.511(a)(2)(i)– (ii). To calculate a tier-two benchmark, Commerce must rely on a world market price that is both “available to purchasers in the country in question,” pursuant to 19 C.F.R. § 351.511(a)(2)(ii), and reliable based on the evidence in the record. 3 See 49' )RRG &R /WG Y 8QLWHG 6WDWHV, 658 F.3d 3 ,W LV XQGLVSXWHG WKDW &RPPHUFH FRXOG QRW GHWHUPLQH D WLHU-one benchmark based on the evidence on the record. See Pl.’s Br. at 5 (“[T]he parties agree that there is no tier-one benchmark.”); Def.’s Br. at 8 ³>+DEDú@ GRHV QRW FKDOOHQJH &RPPHUFH¶V ILQGLQJ that there were no usable tier-one Court No. 20-00065 Page 11 1318, 1325–26 (Fed. Cir. 2011) (sustaining Commerce’s decision to reject appellant’s more recent financial statements because evidence on the record “undermined the reliability of the data”); see also Archer Daniels Midland Co. v. United States &,7 –71, 917 F. Supp. 2d 1331, 1343 (2013) (upholding Commerce’s decision to utilize tier-two prices when reliable tier-one prices are unavailable). For a tier-two benchmark to be sustained by the court, it must be supported by sufficient evidence for there to be a reasonable connection between the evidence in the record and Commerce’s conclusion. See Nippon Steel Corp., 337 F.3d at 1379. +DEDú DOOHJHV WKDW the evidence on the record was adequate for the calculation of a tier-two benchmark, and that Commerce was therefore obligated, pursuant to 19 C.F.R. § 351.511(a)(2)(ii), to employ a tier-two benchmark in its LTAR analysis. Pl.’s Br. at 5. +DEDú VSHFLILFDOO\ DUJXHV that Commerce erred by rejecting its proffered Comtrade data, and by failing to consider the Eurostat data also on the record as a potential tier-two benchmark. ,G The Government and RTAC respond that Commerce permissibly rejected the Comtrade and Eurostat data, and reasonably determined that there were no viable tier-two benchmarks available for its LTAR analysis. Def.’s Br. at 6–7; Def.-,QWHU ¶V %U DW –9. The court concludes that Commerce’s determination, and its rejection of the Comtrade and Eurostat data, was supported by substantial evidence and in accordance with law. A. Commerce Reasonably Determined that the Comtrade Data Are Unsuitable for the Calculation of a Tier-Two Benchmark. Commerce rejected +DEDú¶V Comtrade submission as unreliable for three reasons. First, Commerce noted that “there is no explanation of the methodology used to calculate the COMTRADE data or the methodology the original sources (i.e., each country) used to collect the prices.”) (citing Pl.’s Br. at 5). The court therefore only considers the parties’ arguments regarding the calculation of tier-two and tier-three benchmarks. Court No. 20-00065 Page 12 data.´ ,'0 DW 24. This includes whether the data were in fact initially collected in kilograms or whether they were converted post hac, thereby risking varying conversion amounts due to temperature and density factors. ,G Second, Commerce explained that, because the Comtrade data are UHSRUWHG LQ NLORJUDPV DQG +DEDú¶V RZQ GDWD are reported in a price per unit of energy basis, using the Comtrade data in an LTAR analysis would require conversion and would further risk varying conversion amounts. ,G Finally, Commerce noted that the Comtrade data were distorted by the inclusion of Russian export prices, which are themselves distorted by the Government of Russia’s “monopoly over the sales and distribution of natural gas” domestically, and its “position as a dominant supplier in the international market, which enables it to leverage natural gas prices and supplies for geopolitical purposes.” ,G at 25 (citing Steel Concrete Reinforcing Bar From the Republic of Turkey; 2016, 83 Fed. Reg. 63,472, and accompanying Preliminary Decision Memorandum at 22). Commerce’s rejection of the Comtrade data is supported by substantial evidence and in accordance with law. First addressing Commerce’s collection methodology and conversion-factor concerns, the court concludes that Commerce reasonably determined that the data were unreliable for purposes of an LTAR analysis. Commerce is correct that the record provides no explanation of the initial collection and conversion of the Comtrade data. ,'0 DW 'HI ¶V %U DW Despite +DEDú¶V DVVHUWLRQV WR WKH FRQWUDU\ WKH court agrees with the Government and RTAC that the explanatory documentation accompanying the Eurostat data cannot be imputed wholesale to the Comtrade data without more evidence, and without an explanation of the various discrepancies between the two datasets. Pl.’s Br. at 26–28; Def.’s Br. at 12; Def.-,QWHU ¶V %U DW –10. Nor is the court persuaded E\ +DEDú¶V DUJXPHQW WKDW &RPPHUFH KDV SUHYLRXVO\ HPSOR\Hd Comtrade data in its investigations regarding non-natural gas products, and should therefore do so here: rather, “each Court No. 20-00065 Page 13 administrative review is a separate exercise of Commerce’s authority that allows for different conclusions based on different facts in the record.” 4LQJGDR 6HD-Line Trading Co. v. United States, 766 F.3d 1378, 1387 (Fed. Cir. 2014); see also Def.’s Br. at 12. Here, Commerce has reasonably differentiated its review by explaining that an understanding of data-reporting and conversion methodology is “particularly important for a good such as natural gas, where FRQYHUVLRQ UDWHV FDQ YDU\ EDVHG RQ IDFWRUV VXFK DV SUHVVXUH DQG WHPSHUDWXUH ´ ,'0 DW Given that there is no evidence in the record regarding the collection or reporting of the Comtrade data, and that Commerce has clearly explained its reasons for requiring documentation of the collection and conversion of any tier-two benchmark data, the court concludes that “the record adequately supports” Commerce’s decision that the Comtrade data were unreliable. Daewoo Elecs. Co. v. ,QW’l Union of Elec., Elec., Technical, Salaried & Mach. Workers, AFL–&,2, 6 F.3d 1511, 1520 (Fed. Cir. 1993); see also 'HI ¶V %U DW ,'0 DW Even if Commerce’s collection methodology and conversion-factor concerns were not adequate basis for its rejection of the Comtrade data, its determination that the data were unreliable due to distortion by Russian natural gas export prices is supported by substantial evidence and in accordance with law. Commerce’s decision to reject Russian pricing data is supported by the record: in its rebuttal benchmark submission, RTAC provided evidence of Russian price distortion in the form of a study from the European Parliament and a collection of additional publications. See RTAC’s Rebuttal Benchmark Submission at Exhibits 3–10. Commerce explicitly weighed 57$&¶V VXEPLVVLRQV DJDLQVW WKH HYLGHQFH VXEPLWWHG E\ +DEDú and determined that “due to the [Government of Russia’s] practice of distorting the natural gas market for its own geopolitical purposes, Russian export prices are unsuitable for use in constructing” a tier-WZR EHQFKPDUN ,'0 at 25–26. Furthermore, as the Government notes, the court has previously sustained Commerce’s Court No. 20-00065 Page 14 decision to reject Russian natural gas prices for the purposes of benchmark calculation because the Russian prices were distorted by the Russian Government’s political pricing. ,'0 DW Def.’s Br. at 8–9 (“This Court has previously sustained Commerce’s decision to reject using Russian natural gas prices as a benchmark because those figures were distorted.” (first citing Rebar Trade Action Coal. v. United States, &,7 BB BB 398 F. Supp. 3d 1374, 1378–79 (2019) (“RTAC”); and then citing +DEDú 6LQDL 9H 7LEEL *D]ODU ,VWLKVDO (QG VWULVL $ ù Y 8QLWHG 6WDWHV &,7 BB __, 459 F. Supp. 3d 1341, 1347–49 (2020) (“+DEDú”))). Given the foregoing, the court concludes that Commerce’s rejection of the Comtrade data for purposes of calculating a tier-two LTAR benchmark is supported by substantial evidence and in accordance with law. B. Commerce Reasonably Determined that the Eurostat Data Are Unsuitable for the Calculation of a Tier-Two Benchmark. Commerce rejected the Eurostat data for largely the same reasons it rejected the Comtrade data. First, Commerce noted that there is no record evidence suggesting the Eurostat data are unconverted (i.e., reported natively in kilograms), and there is therefore a risk of varying conversion factors both in the potential conversion of the initial data to kilograms, and in the FRQYHUVLRQ RI WKH FROOHFWHG GDWD WR SULFH SHU XQLW RI HQHUJ\ IRU WKH /7$5 DQDO\VLV ,'0 DW Second, Commerce determined that the Eurostat data were distorted by the inclusion of distorted Russian export pricing data. Def.’s Br. at 9, PDM at 11– ,'0 DW –26. The court concludes that Commerce’s rejection of the Eurostat data for purposes of calculation of a tier-two benchmark is supported by substantial evidence and in accordance with law. As noted above, Commerce adequately explained its determination that data requiring FRQYHUVLRQ LV XQVXLWDEOH IRU LQYHVWLJDWLRQ RI WKH SURYLVLRQ RI QDWXUDO JDV IRU /7$5 ,'0 DW Furthermore, Commerce’s determination that Russian pricing data are distorted by the manipulation of the Russian government is supported by evidence on the record and in line both Court No. 20-00065 Page 15 with prior determinations by Commerce and with prior GHFLVLRQV RI WKH FRXUW ,'0 DW 'HI ¶V Br. at 8–9; RTAC, 398 F. Supp. 3d at 1378-79; +DEDú, 459 F. Supp. 3d at 1347-49. Nor is the court persuaded by +DEDú¶V DUJXPHQW WKDW &RPPHUFH IDLOHG WR FRQVLGHU WKH Eurostat data as a potential tier-two benchmark. Pl.’s Br. at 22, 28. Commerce explicitly considered “the suitability of COMTRADE and Eurostat data” in the ,ssues and Decision Memorandum accompanying its Final Results ,'0 DW Commerce nevertheless rejected the data after determining it was unsuitable for the calculation of a tier-two benchmark for the reasons described above. Accordingly, the court concludes that Commerce’s rejection of the Eurostat data is supported by substantial evidence and in accordance with law. II. Commerce’s Calculation of a Tier-Three Benchmark Using the IEA Data Was Supported by Substantial Evidence and In Accordance With Law. Where the record cannot support calculation of a tier-two benchmark, Commerce is permitted to employ a tier-three benchmark in its LTAR analysis. 19 C.F.R. § 351.511(a)(2)(ii)– (iii). To calculate a tier-three benchmark, Commerce “measure[s] the adequacy of remuneration by assessing whether the government price is consistent with market principles.” 19 C.F.R. § 351.511(a)(2)(iii). For a tier-three benchmark to be sustained by the court, it must be supported by “such relevant evidence as a reasonable mind might accept as adequate to support [Commerce’s] conclusion.” Nippon Steel Corp., 337 F.3d at 1379 (quoting Consol. Edison Co., 305 U.S. at 299). +DEDú DOOHJHV WKDW, even if it were appropriate for Commerce to employ a tier-three benchmark, Commerce’s selection of a tier-three benchmark was unsupported by substantial evidence and not in accordance with law. Pl.’s Br. at 33. +DEDú first argues that Commerce erred by failing to consider Eurostat data for countries other than Russia (namely, Algeria, Libya, Court No. 20-00065 Page 16 Norway and Ukraine) as a potential tier-three benchmark. 4 ,G at 34. +DEDú WKHQ DUJXHV WKDW WKH ,($ GDWD are fatally flawed because they are “not restricted to natural gas in its gaseous form, but, rather, encompass liquid natural gas as well” and are WKHUHIRUH QRW FRPSDUDEOH WR +DEDú¶V purchases of gaseous natural gas. ,G at 35. )LQDOO\ +DEDú DUJXHV WKDW WKH ³PXOWLWXGH RI DGMXVWPHQWV WKDW &RPPHUFH KDG WR PDNH WR WKH ,($ ILJXUHV,” along with its annual reporting, UHQGHU WKH ,($ GDWD XQVXLWDEOH IRU Eenchmark calculation. ,G at 38. The Government and RTAC respond that Commerce permissibly rejected the Eurostat data for purposes of tier-three benchmark calculation because of the conversion issues inherent in that data. Def.’s Br. at 15; Def.-,QWHU ¶s Br. at 15. The Government further responds that Commerce explicitly adjusted the ,($ GDWD WR LQFOXGH RQO\ JDVHRXV QDWXUDO JDV SULFHV. Def.’s Br. at 16. RTAC also notes that +DEDú¶V RZQ QDWXUDO JDV SXUFKDVHV DUH FRPSDUDEOH WR WKH QDWXUDO JDV SXUFKDVHV recorded by the ,($ GDWD 3RVW-Arg. Submission of Def.-,QWHU DW Finally, the Government and RTAC respond WKDW WKH DGMXVWPHQWV &RPPHUFH PDGH WR WKH ,($ GDWD ZHUH UHDVRQDEOH and increased the overall accuracy of the data, and that the more-frequent reporting of the Comtrade and Eurostat data cannot outweigh their overall unreliability. Def.’s Br. at 16–17; Def.-,QWHU¶V %U DW 16–17. The court concludes that Commerce’s UHOLDQFH RQ WKH ,($ GDWD IRU WKH FDOFXODWLRQ RI D WLHU-three benchmark, and its rejection of the non-Russian Eurostat data, was supported by substantial evidence and in accordance with law. For the same reasons set out above, Commerce reasonably found that the Eurostat data (and indeed, the Comtrade data) were unsuitable for the calculation of a tier-three benchmark. The record clearly shows that Commerce determined that both the Comtrade and Eurostat data were 4 $OWKRXJK +DEDú IXUWKHU DUJXHV WKDW (XURVWDW¶V 5XVVLDQ LPSRUW pricing data could provide a viable tier-WKUHH EHQFKPDUN WKH FRXUW UHMHFWV WKLV DUJXPHQW IRU WKH UHDVRQV VHW IRUWK LQ 6HFWLRQ , and declines to further discuss Russian pricing data here. See, e.g., Pl.’s Br. at 22. Court No. 20-00065 Page 17 unreliable because the conversion from kilograms to price per energy units risks varying FRQYHUVLRQ DPRXQWV GXH WR WHPSHUDWXUH DQG GHQVLW\ IDFWRUV ,'0 DW 24–25; Def.’s Br. at 15; Def.,QWHU ¶V %U DW 7KH &RPWUDGH GDWD DOWKRXJK not emphasized as a potential tier-three benchmark LQ +DEDú¶V EULHILQJ LV IXUWKHU unsuitable because there is no explanation on the record of data the collection methodology employed by the participating countries. See ,'0 DW 'HI ¶V %U DW As the court has previously stated, “Commerce must justify why the data set it chooses is appropriate” -- and Commerce has explicitly done so here. Dorbest Ltd. v. United States &,7 1671, 1717, 462 F. Supp. 2d 1262, 1302 (2006). Therefore, regardless of whether Commerce were to consider Russian export pricing data or data sourced from EU natural gas imports from Algeria, Libya, Norway and Ukraine, the court concludes that Commerce’s rejection of the Comtrade and Eurostat data for purposes of tier-three benchmark calculation is supported by substantial evidence and in accordance with law. &RPPHUFH¶V XVH RI WKH ,($ GDWD WR FDOFXODWH D WLHU-three benchmark is also supported by substantial evidence and in accordance with law. &RQWUDU\ WR +DEDú¶V DVVHUWions, there is no HYLGHQFH WKDW &RPPHUFH IDLOHG WR FRQVLGHU DQG DGMXVW IRU WKH ,($ GDWDVHW¶V LQFOXVLRQ RI OLTXLG QDWXUDO JDV SULFLQJ GDWD DV ZHOO DV JDVHRXV QDWXUDO JDV SULFLQJ GDWD 5DWKHU WKH ,($ GDWD Commerce relied upon for purposes of its tier-three benchmark calculation included only “enduse” pricing data: in other words, data regarding the sale price of natural gas when it is sold to XOWLPDWH FRQVXPHUV ,'0 DW 'HI ¶V %U DW –16. As the Government notes in its brief, “liquefied natural gas is not a product purchased by companies and households for their own energy consumption purposes,” -- thus, liqueILHG QDWXUDO JDV LV LQKHUHQWO\ H[FOXGHG IURP WKH ,($ data considered by Commerce in its tier-three benchmark calculation. Def.’s Br. at 16. Court No. 20-00065 Page 18 +DEDú further argues that the end-use, gaseous natural gas is comprised of both gaseous natural gas imports and re-gasified liquid natural gas imports and is therefore unsuitable for comparison purposes under 19 C.F.R. § 351.511(a)(2)(iii). However, there is no clear regulatory requirement that Commerce consider “product similarity; quantities sold, imported, or auctioned; and other factors affecting comparability,” as in a tier-one analysis, or “[make] due allowance for factors affecting comparability,” as in a tier-two analysis, for purposes of its tier-three analysis. 19 C.F.R. § 351.511(a)(2)(i)–(ii). Rather, Commerce is only expressly required by 19 C.F.R. § 351.511 to consider price comparability when conducting a tier-one or tier-two analysis. ,G ,Q any case, even if such requirement were imputed to Commerce’s tier-three analysis, it is likely satisfied here. The Government of Turkey acknowledged in its submissions to Commerce that %RWDú SURYLGHV HQG-use consumers with a commingled product of gaseous and re-gasified natural gas. 4XHVWLRQQDLUH 5HVSRQVH RI WKH *RYHUQPHQW RI 7XUNey at 35; Post-Arg. Submission of Def.,QWHU DW , 12. +DEDú¶V SXUFKDVH GDWD DQG WKH ,($ SULFLQJ GDWD WKHUHIRUH UHODWH WR GLUHFWO\ comparable products. Accordingly, the court UHMHFW¶V +DEDú¶V DVVHUWLRQV WKDW E\ FDOFXODWLQJ D WLHUWKUHH EHQFKPDUN EDVHG RQ WKH ,($ GDWD &RPPHUFH IDLOHG WR FRPSO\ ZLWK WKH FRPSDUDELOLW\ requirements of 19 C.F.R. § 351.511. Nor is the court persuaded E\ +DEDú¶V DUJXPHQWV WKDW WKH ,($ GDWD are insufficiently accurate. Pl.’s Br. at 38. +DEDú asserts that Commerce’s adjustments to the ,($ data, among them “indexing, averaging between values for industrial users and electricity generators, [and] constructing a framework to ‘eliminate’ the impact of Russian figures from the data, etc.” render the data unreliable for a tier-three determination because “[e]ach of these adjustments introduces an approximation into the benchmark, taking it further away from empirical accuracy.” ,G at 38– 39. HaEDú IXUWKHU DUJXHV WKDW WKH DQQXDOO\-UHSRUWHG ,($ GDWD fails to comply with Commerce’s Court No. 20-00065 Page 19 stated preference for monthly data, and therefore fail to account for the volatility of the energy market. ,G ,'0 DW +DEDú concludes that the ,($ GDWD are inaccurate and unsuitable for the calculation of a tier-three benchmark. Pl.’s Br. at 38. These arguments are unavailing because, as &RPPHUFH H[SODLQHG ³WKH EHVW DYDLODEOH LQIRUPDWLRQ >RQ WKH UHFRUG@ LV LQ WKH ,($ UHSRUW ´ ,'0 at 26. Specifically, ComPHUFH FRQFOXGHG WKDW WKH ,($ GDWD ZHUH WKH PRVW UHOLDEOH GDWD RQ WKH record because the Comtrade and Eurostat data required the conversion of kilograms to price per energy units whereas the adjustments required by the ,($ GDWD involved no conversions, and EHFDXVH WKH ,($ H[SUHVVO\ UHFRJQL]HV YRODWLOLW\ FRQFHUQV ,'0 DW Commerce further stated that its preference for monthly data was “superseded by the need to select the best available information on the record for purposes of determining a benchmark.” 5 ,'0 DW &RPPHUFH KDV therefore SURYLGHG D UHDVRQDEOH H[SODQDWLRQ IRU LWV UHOLDQFH RQ WKH ,($ GDWD DQG GHVSLWH +DEDú¶V disagreement, “the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence.” AK Steel Corp., 192 F.3d at 1371. Accordingly, given its conclusion that the other data on the record were unsuitable for the calculation of a tier-three benchmark, the court concludes that Commerce UHDVRQDEO\ UHOLHG XSRQ WKH ,($ GDWD LQ FDOFXODWLQJ D WLHU-three benchmark. CONCLUSION Based on the evidence in the record, Commerce reasonably rejected the Comtrade and Eurostat data on natural gas imports from Russia in calculating a tier-two benchmark for its LTAR 5 Nor is Commerce precluded from relying on annual benchmarks. Def.’s Br. at 17; Steel Concrete Reinforcing Bar from the Republic of Turkey: Final Affirmative Countervailing Duty Determination, 82 Fed. Reg. 23,188 (Dep’t Commerce May 15, 2017) DQG DFFRPSDQ\LQJ ,VVXHV and Decision Memorandum; see also Rebar Trade Action Coal. v. United States &,7 BB BB 389 F. Supp. 3d 1371, 1383 (2019), aff’d, +DEDV 6LQDL 9H 7LEEL *D]ODU ,VWLKVDO (QGXVWULVL $ 6 Y United States, 992 F.3d 1348 (Fed. Cir. 2021)). Court No. 20-00065 Page 20 analysis of +DEDú¶V QDWXUDO JDV SXUFKDVH SULFHV, reasonably rejected the Eurostat natural gas import data from Norway, Algeria, Libya, and Ukraine in calculating a tier-three benchmark, and UHDVRQDEO\ UHOLHG XSRQ WKH ,($ GDWD LQ FDOFXODting its ultimate tier-three benchmark. For the foregoing reasons, Commerce’s Final Determination is sustained. SO ORDERED. /s/ Gary S. Katzmann Gary S. Katzmann, Judge Dated: August 18, 2021 New York, New York

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