Vicentin S.A.I.C. et al v. United States

Slip Op. 21-33
UNITED STATES COURT OF INTERNATIONAL TRADE
VICENTIN S.A.I.C. ET AL.,
Plaintiffs and Consolidated
Plaintiff,
v.
UNITED STATES,
Defendant,
and
NATIONAL 	BIODIESEL 	BOARD 	FAIR
TRADE COALITION,
Defendant-Intervenor and
Consolidated Defendant-
Intervenor.
Before: Claire R. Kelly, Judge
Consol. Court No. 18-00111
PUBLIC VERSION
OPINION
[Sustaining the U.S. Department of Commerce’s remand redetermination making a
particular market situation adjustment for soybean input prices when determining
constructed value.]
Dated: March 25, 2021
Daniel L. Porter, Christopher A. Dunn, James P. Durling, and Valerie S. Ellis, Curtis,
Mallet-Prevost, Colt & Mosle LLP, of Washington, DC, for plaintiffs Vicentin S.A.I.C.,
Oleaginosa Morenos Hermanos S.A., and Molinos Agro S.A.
Gregory J. Spak, White & Case LLP, of Washington, DC, for consolidated plaintiff
LDC Argentina S.A. Also on the brief was Jessica Lynd.
Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, for Defendant. Also on the brief were
Jeffrey Bossert Clark, Acting Assistant Attorney General, Jeanne E. Davidson,
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Director, and L. Misha Preheim, Assistant Director. Of Counsel was Daniel J.
Calhoun, Assistant Chief Counsel, Office of the Chief Counsel for Trade Enforcement
and Compliance, U.S. Department of Commerce, of Washington, DC.
Myles S. Getlan, Cassidy Levy Kent (USA) LLP, of Washington, DC, for defendant-
intervenor and consolidated defendant-intervenor National Biodiesel Board Fair
Trade Coalition. Also on the brief were Jack A. Levy, Thomas M. Beline, and Chase
J. Dunn.
Kelly, Judge: 	Before the court for review are the final results of the U.S.
Department of Commerce’s (“Commerce”) second remand redetermination pursuant
to the court’s order in Vicentin S.A.I.C. v. United States, 44 CIT __, 466 F. Supp. 3d
1227 (2020) (“Vicentin II”). 	See Final Results of Redetermination Pursuant to Ct.
Remand [in Vicentin II] Confidential Version, Nov. 12, 2020, ECF No. 107-1 (“Second
Remand Results”). 	In Vicentin II, the court remanded for further explanation or
reconsideration Commerce’s decision—when determining the normal value (here,
constructed value) of biodiesel from Argentina—to disregard reported costs for
soybeans in Argentina, and to instead use world market prices for soybeans as a
means of correcting for a cost distortion caused by a particular market situation
(“PMS”). 	See 44 CIT at __, 466 F. Supp. 3d at 1242–46. 	Since Commerce
countervailed 	the 	export 	tax 	regime 	giving 	rise 	to 	the 	PMS 	in 	a 	concurrent
countervailing duty (“CVD”) proceeding, the court instructed Commerce to either
reconsider its PMS adjustment or further explain why the adjustment is necessary
given that the distortion caused by the subsidy may have already been cured by the
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PUBLIC VERSION
CVD. 	See id. 	On remand, Commerce, under respectful protest, 1 conducts a “pass-
through” 	analysis 	of 	prices 	for 	U.S. 	sales 	of 	subject 	Argentine 	biodiesel 	to
demonstrate that the countervailed export tax regime did not affect the difference
between the constructed value of the merchandise and U.S. prices in this instance.
See Second Remand Results at 4–17. 	According to Commerce, a showing that the
subsidy at issue did not affect U.S. prices assuages the court’s concerns that the CVDs
remedying 	those 	subsidies 	also 	cures 	the 	same 	harm 	addressed 	by 	the 	PMS
adjustment here. 	See id. 	For the following reasons, Commerce’s second remand
redetermination is sustained.
BACKGROUND
The court presumes familiarity with the facts as set out in its previous opinions
ordering remand to Commerce, and now recounts the facts relevant to the court’s
review of the Second Remand Results. See Vicentin II, 44 CIT at __, 466 F. Supp. 3d
at 	1230–33; see also Vicentin S.A.I.C. v. United States, 43 CIT __, __, 404 F. Supp.
3d 1323, 1327–29 (2019) (“Vicentin I”). 	On March 1, 2018, Commerce published its
final determination pursuant to its less-than-fair-value (“LTFV”) investigation of
biodiesel from Argentina. 	See Biodiesel from Argentina, 83 Fed. Reg. 8,837 (Dep’t
Commerce Mar. 1, 2020) (final determination of sales at [LTFV] and final affirmative
determination of critical circumstances, in part) (“Final Results”) and accompanying
1 By adopting a position “under protest,” Commerce preserves its right to appeal. See
Viraj Grp., Ltd. v. United States, 343 F.3d 1371, 1376 (Fed. Cir. 2003).
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Issues and Decisions Memo. for the [Final Results], A-357-820, Feb. 20, 2018, ECF
No. 16-5 (“Final Decision Memo”). Commerce calculated estimated weighted-average
dumping margins of 60.44 and 86.41 percent for mandatory respondents LDC
Argentina S.A. (“LDC Argentina” or “LDC”) and Vicentin S.A.I.C., 2 respectively, and
an estimated all-others margin of 74.73 percent. Final Results, 83 Fed. Reg. at 8,838.
Pursuant 	to 	U.S. 	Court 	of 	International 	Trade 	Rule 	56.2, 	Vicentin 	S.A.I.C.,
Oleaginosa Morenos Hermanos S.A., and Molinos Agro S.A. (collectively “Vicentin”)
as 	well 	as 	LDC 	Argentina, 	commenced 	this 	consolidated 	action 	challenging
Commerce’s final determination. 	See generally [Vicentin’s] Mot. J. Agency R., Oct.
29, 2018, ECF No. 26; Rule 56.2 Mot. J. Agency R. on Behalf of Consol. Pl. [LDC
Argentina], Oct. 29, 2018, ECF No. 25.
Vicentin I remanded Commerce’s final determination for further explanation
or reconsideration. 	See 43 CIT at __, 404 F. Supp. 3d at 1343. 	The court held that
Commerce’s adjustment to constructed value to neutralize the value of renewable
identification numbers (“RINs”) 3 reflected in prices for U.S. sales of biodiesel was
2 Commerce treated Vicentin S.A.I.C., and companies Renova S.A., Oleaginosa
Moreno Hermanos S.A., Molinos Agro S.A., Patagonia Energia S.A., VFG Inversiones
y Actividades Especiales S.A., Vicentin S.A.I.C. Sucursal Uy, Trading Company X,
and Molinos Overseas Commodities S.A. as a single collapsed entity. 	See Final
Results, 83 Fed. Reg. at 8,838 n.8 (citations omitted).
3 RINs are tradeable credits pursuant to a U.S. regulatory scheme administered by
(footnote continued)
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unlawful. 	See Vicentin I, 43 CIT at __, 404 F. Supp. 3d at 1329–35. 	Moreover,
although the court held that Commerce’s finding that a PMS arising from the
Government of Argentina’s (“GOA”) export tax regime distorted the reported costs of
soybeans (a primary input in the production of biodiesel), as well as Commerce’s
consequent reliance on market-determined prices for soybeans to determine the
constructed value of biodiesel, were not precluded by statute, see id. at __, 404 F.
Supp. 3d at 1334–37, and that the PMS finding was lawful, see id. at __, 404 F. Supp
3d at 1337–40, the court held that Commerce’s determination was unsupported by
substantial 	evidence 	because 	Commerce 	failed 	to 	reasonably 	explain 	how 	the
purported market-distortion was not already cured by CVDs imposed on the export
tax regime in a concurrent CVD case. See id. at __, 404 F. Supp. 3d at 1340–43.
Vicentin II sustained in part and remanded in part Commerce’s first remand
redetermination. See 44 CIT at __, 466 F. Supp. 3d at 1233–46. The court sustained
the Environmental Protection Agency (“EPA”). 	See Vicentin I, 43 CIT at __, 404 F.
Supp. 3d at 1328 (citing Biodiesel From Argentina, 82 Fed. Reg. 50,391 (Dep’t
Commerce Oct. 31, 2017) (preliminary affirmative determination of sales at [LTFV],
prelim. 	affirmative 	determination 	of 	critical 	circumstances, 	in 	part) 	(“Prelim.
Results”) and accompanying Decision Memo. for the [Prelim Results] at 28–30, PD
353, bar code 3632930-01 (Oct. 19, 2017)). The EPA requires that biodiesel producers
or importers (“obligated parties”) meet an annual “renewable volume obligation,”
pursuant to which obligated parties must submit RINs equal to the number of gallons
of renewable fuel comprising their renewable volume obligation. 	Id. (citations
omitted). 	RINs are generated through biodiesel production in the United States or
importation of biodiesel. Id. (citations omitted). The obligated party that generates
RINs may use them to satisfy its renewable volume obligation, or it may trade or sell
them to other obligated parties. Id. (citations omitted).
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Commerce’s decision to neutralize the difference in value between U.S. sales of
biodiesel and foreign market sales of biodiesel owing to premiums placed on RIN-
eligible U.S. sales by reducing U.S. prices by an estimated value for RINs—as well as
Commerce’s methodology for calculating the adjustment. See id. at __, 466 F. Supp.
3d 	at 	1233–42. 	However, 	the 	court 	remanded 	for 	further 	explanation 	or
reconsideration Commerce’s refusal to explain why an unadjusted cost-based PMS
remedy in this case was necessary even though the export tax regime giving rise to
the cost distortion was countervailed by duties imposed pursuant to a concurrent
CVD proceeding. See id. at __, 466 F. Supp. 3d at 1242–46. The court observed that
Commerce’s explication of the different purposes of the ADD and CVD regimes did
not 	address 	the 	court’s 	concerns 	regarding 	the 	reasonableness 	of 	Commerce
remedying the effects of a domestic subsidy that may have already been cured in the
concurrent CVD proceeding. See id. at __, 466 F. Supp. 3d at 1244.
On November 13, 2020, Commerce filed its second remand redetermination.
See generally Second Remand Results. 	Commerce, under protest, sought to comply
with the court’s remand order in Vicentin II by conducting a pass-through analysis of
U.S. prices. See id. at 8–17. On December 14, 2020, LDC Argentina filed comments
challenging the final results of Commerce’s second remand redetermination. 	See
Cmts. on [Second Remand Results], Dec. 14, 2020, ECF No. 112 (“LDC’s Br.”). 	On
January 13, 2021, Defendant and Defendant-Intervenor National Biodiesel Board
Fair Trade Coalition filed their replies to LDC’s comments. 	Def.’s Resp. Cmts. on
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[Second Remand Results], Jan. 13, 2021, ECF No. 114 (“Def.’s Br.”); Def.-Intervenor’s
Cmts. on [Second Remand Results], Jan. 13, 2021, ECF No. 113 (“Def.-Intervenor’s
Br.”).
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to section 516a(a)(2)(B)(i) of the Tariff Act
of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2018) 4 and 28 U.S.C. § 1581(c)
(2018), which grant the court authority to review actions contesting the final
determination 	in 	an 	ADD 	investigation. 	The 	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 . . .” 19 U.S.C. §
1516a(b)(1)(B)(i). 	“The results of a redetermination pursuant to court remand are
also reviewed ‘for compliance with the court’s remand order.’” 	Xinjiamei Furniture
(Zhangzhou) Co. v. United States, 38 CIT __, __, 968 F. Supp. 2d 1255, 1259 (2014)
(quoting Nakornthai Strip Mill Public Co. v. United States, 32 CIT 1272, 1274, 587
F. Supp. 2d 1303, 1306 (2008)).
DISCUSSION
I. 	Commerce’s Pass-Through Analysis is Reasonable
LDC submits that Commerce’s focus on a “pass-through” analysis of U.S. prices
is “misguided” and does not address the court’s concerns that Commerce’s cost-based
4 Further citations to the Tariff Act of 1930, as amended, are to the relevant
provisions of Title 19 of the U.S. Code, 2018 edition.
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PMS adjustment may remedy a distortion that was already cured by the concurrent
CVD proceeding. 	See LDC’s Br. at 1–13. 	Defendant and Defendant-Intervenor
counter that Commerce’s methodology is a reasonable means of addressing the court’s
concerns. 	See Def.’s Br. at 12–24; Def.-Intervenor’s Br. at 9–11. For the following
reasons, Commerce’s pass-through analysis demonstrates that the PMS remedy is
reasonable.
When investigating whether merchandise is (or is likely to be) sold in the U.S.
at LTFV, Commerce makes a comparison between the export price (or constructed
export price) of sales of the merchandise into the U.S. and its normal value. See 19
U.S.C. § 1677b(a). The “normal value” of the merchandise may be based upon home
market or third-country sales that are made in the ordinary course of trade, or
constructed value. 	See 19 U.S.C. § 1677b(a)(1)(B)–(C), (a)(4). 	Commerce may
determine normal value based upon constructed value, rather than home market
sales, 	where 	a 	PMS 	distorts 	prices 	in 	the 	home 	market. 	See 	19 	U.S.C. 	§
1677b(a)(1)(B)(ii)(III), (C)(ii); see also id. § 1677b(a)(4).5 The statute further provides
that, when calculating constructed value, the presence of a separate “cost-based” PMS
permits Commerce to deviate from the typical methodology:
For purposes of paragraph (1), if a [PMS] exists such that the cost of
materials and fabrication or other processing of any kind does not
accurately reflect the cost of production in the ordinary course of trade,
5 Commerce resorted to constructed value after finding that “domestic biodiesel sales
prices are established by the government and are not based on competitive market
conditions[,]” resulting in a PMS. Final Decision Memo at 16.
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the administering authority may use another calculation methodology
under this part or any other calculation methodology.
19 U.S.C. § 1677b(e). Therefore, when using constructed value, Commerce may resort
to any other calculation methodology if a PMS renders the cost of materials and
fabrication unsuitable for use as normal value. Commerce’s determinations must be
supported by substantial evidence, such that a reasonable mind might accept the
evidence 	as 	adequate 	to 	support 	Commerce’s 	conclusion 	while 	considering
contradictory evidence. 	See Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938);
see also Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978,
985 (Fed. Cir. 1994).
Although 	the 	statute 	empowers 	Commerce 	to 	use 	another 	methodology
provided under the statute—or any other methodology it chooses—to establish
constructed value in light of a PMS, the methodology it chooses must be reasonable.
The court reviews Commerce’s determinations for substantial evidence, meaning that
they are reasonable given the factual record in the case. See Huaiyin Foreign Trade
Corp. v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (citing Atl. Sugar, Ltd.
v. United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)). 	The lack of a statutory
directive does not render Commerce’s alternative methodology reasonable. See Motor
Vehicle Mfrs. Ass’n of U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43–49
(1983) (“Motor Vehicle”). 	The problem posed by Vicentin II is whether Commerce’s
imposition of an unadjusted PMS remedy is reasonable as a methodological and
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factual matter in this case.6 See Vicentin II, 44 CIT at __, 466 F. Supp. 3d at 1244–
46.
Here, Commerce seeks to demonstrate the reasonableness of its unadjusted
PMS remedy by conducting a “pass-through” analysis of U.S. sales. 	See Second
Remand Results at 8–12. 	Commerce developed this pass-through analysis in order
to comply with the statutory mandate in ADD investigations involving merchandise
from a nonmarket economy (“NME”) country, where there is a concurrent CVD
proceeding involving the same subject merchandise. See 19 U.S.C. § 1677f-1(f)(1); see
also, e.g., Wheatland Tube Co. v. United States, 38 CIT __, __, 26 F. Supp. 3d 1372,
1378–88 (2014) (“Wheatland”). 	In ADD investigations involving an NME country
where a countervailable subsidy has been provided with respect to the subject class
or kind of merchandise, the statute provides for a reduction in ADDs where, inter
alia, a “countervailable subsidy has been demonstrated to have reduced the average
price of imports of the class or kind of merchandise during the relevant period[.]” 19
U.S.C. § 1677f-1(f)(1). Commerce’s “pass-through” analysis of U.S. sales determines
whether the subsidy reduced the price of imports such that an offset may be
necessary. 	See 	Second 	Remand 	Results 	at 	9. 	According 	to 	Commerce, 	“in
6 Commerce argues there is no presumption that domestic subsidies typically reduce
U.S. prices such that it is incumbent upon Commerce to prove otherwise. 	See, e.g.,
Second Remand Results at 8, 13–17. Whether there should be such a presumption is
for Commerce to determine in the first instance. However, Commerce must provide
an explanation as to why its methodology is reasonable. See Motor Vehicle, 463 U.S.
at 48–49.
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administering 19 U.S.C. § 1677f-1(f)(1) . . . Commerce has required the producer or
exporter under examination to demonstrate: a ‘subsidies-to-cost link,’ e.g., the
subsidy’s effect on cost of manufacture; and, a ‘cost-to-price link,’ e.g., the producer’s
or exporter’s prices changed as a result of changes in cost of manufacture.” 	Id. at 9
(citations omitted). Commerce also inquires whether “countervailable subsidies have
been demonstrated to have reduced the average price of imports during the period
under examination.” Id. at 9–10. Implicit in any determination from Commerce that
the subsidies did not affect the price of imports is the finding that CVDs do not affect
the dumping margin. See id.; cf. 19 U.S.C. § 1677f-1(f) (providing for an adjustment
of the impact of CVDs in cases where the domestic subsidies affected the price of
imports).
LDC asserts that Commerce’s remand redetermination does not respond
directly to the court’s inquiry. 	See, e.g., LDC’s Br. at 1, 4–5, 9. 	Indeed, Commerce
elides several analytical steps when explaining how its demonstration that U.S.
prices are unaffected by the export tax regime addresses the court’s concern that the
cost-based PMS remedy targets a distortion that Commerce has already cured. 	In
adopting Vicentin II’s comparison to Commerce’s methodology in NME proceedings,
Commerce posits that if a “subsidy affects neither U.S. price nor normal value, the
even-handedness of the subsidy’s effects is maintained and no portion of the LTFV
differential can be attributed to the subsidy.” Second Remand Results at 9; see also
Vicentin II, 44 CIT at __, 466 F. Supp. 3d at 1245. Left unaddressed by Commerce’s
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stated position, however, is how it would cohere with the court’s concern regarding
the protection afforded to the domestic industry when Commerce countervails a
domestic subsidy. 	See, e.g., Vicentin II, 44 CIT at __, 466 F. Supp. 3d at 1244
(“Commerce’s use of an alternative methodology . . . may remedy the effects of
domestic subsidy already remedied by the concurrent CVD case[.]”). As LDC submits,
“once a particular benefit has been neutralized through the imposition of a CVD,” it
would not appear “reasonable to seek to neutralize it again in the [ADD] case.” 	See
LDC’s Br. at 10; see also id. at 12 (arguing that the cost-distortion Commerce
addresses with its PMS adjustment relates to the benefit that Commerce neutralized
in the concurrent CVD proceeding.).7
7 LDC argues that this case is distinguishable from the NME context, where a pass-
through analysis would be appropriate. 	See LDC’s Br. at 12–13. 	More specifically,
in the NME context Commerce uses surrogate values for factors of production to build
a normal value, which is different from what happens in this case where Commerce
is using constructed value to build a normal value from costs in the home country,
but seeking to provide a substitute for the actual costs of soybeans because of the
PMS caused by the domestic subsidy. 	Despite the somewhat analogous actions of
replacing a home market sales price based normal value with a substitute out of a
concern that prices in the home market are not appropriate, LDC focuses on the fact
that here the export tax gives rise to both the subsidy and the PMS adjustment. Thus,
LDC argues that as the CVD cured the export tax subsidy, it therefore cured the PMS.
LDC’s argument appears to conflate the cost-distortion Commerce seeks to
cure in this case with the broader array of benefits that Commerce may remedy in a
CVD proceeding. 	See LDC’s Br. at 12 (“…the ‘benefit’ that Commerce purports to
neutralize in the subsidies case relates to the same soybean input cost.”). Vincetin II
instructed Commerce to explain whether “any distortion created by the PMS in this
(footnote continued)
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Although Commerce does not directly respond to the court’s concerns that the
CVDs imposed in the concurrent proceeding cure the distortion giving rise to the cost-
based PMS adjustment here, it is reasonably discernible, based on several statements
made throughout these proceedings and in this remand redetermination, 8 that
Commerce’s failure to do so stems from its position that, due to differences between
case has not already been remedied by the concurrent CVD case.” 44 CIT at __, 466
F. Supp. 3d at 1244. 	The PMS is the GOA’s export tax regime and the distortion it
causes is an artificially reduced price for soybeans in the home market. It is unclear
the full array of benefits that companies may be afforded as a result of the export tax
regime. 	The subsidy may have allowed benefiting companies to invest in new
technologies or products, pay the workforce more, lower export prices, or any number
of things. 	In light of the possibility that the cost-distortion itself was already
addressed by imposition of CVDs, however, the court instructed Commerce to explain
why its PMS adjustment in this case was nonetheless reasonable. 	In response,
Commerce’s pass-through analysis addresses whether the CVDs remedied lower U.S.
prices by delinking any reduced costs of soybeans from the U.S. prices. In the absence
of such a linkage, the court understands Commerce to have addressed its concern
that the CVDs impact the relationship between U.S. prices and normal value for the
dumping calculation.
8 First, Commerce rejects the notion that domestic subsidies typically reduce U.S.
prices. See, e.g., Second Remand Results at 8, 18. Second, Commerce references the
proposition set forth in its initial remand redetermination that “CVD law imposes
duties in an amount equal to the subsidy, rather than the effects of the subsidy, and
does not remedy sales at [LTFV].” 	Second Remand Results at 5–6; see also Final
Results of Redetermination Pursuant to Ct. Remand [in Vicentin I] at 	24–27, Jan.
31, 2020, ECF No. 79-1. Finally, Commerce asserts that refusing a PMS adjustment
“risks undermining the relief afforded to the domestic industry by Congress, given
the complexity of tying subsides in a foreign market to export prices in the United
States.” 	Second Remand Results at 21; see also, e.g., id. at 15 & nn. 52–53.
Reasonably 	discernible 	from 	these 	statements 	is 	Commerce’s 	position 	that 	its
methods for countervailing a domestic subsidy are such that duties imposed pursuant
to the concurrent CVD proceeding likely do not redress the precise trade effect arising
from the cost distortion that Commerce targets by rendering its cost-based PMS
remedy in this antidumping case.
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the CVD and ADD regimes, it assumes CVDs that target domestic subsidies do not
address artificially low U.S. prices. See Final Results of Redetermination Pursuant
to Ct. Remand [in Vicentin I] at 	25–26, Jan. 31, 2020, ECF No. 79-1 (“Remand
Results”). 	And although the court and the parties have referred to the problem as
one involving a potential double remedy, the problem as illustrated by Commerce’s
adoption of the pass-through methodology is one of determining whether the dumping
margin is affected by duties imposed to countervail the domestic subsidy in the
concurrent proceeding.9 	Commerce uses the pass-through analysis to ascertain
whether the imposition of a CVD in a subsidy case affects the analysis in the
antidumping case. Only if the CVDs affect the dumping analysis would the potential
for a double remedy arise.
In this case, Commerce finds the reported costs that would be used to construct
the normal value of the subject merchandise inadequate because there exists a PMS
that distorts the cost of soybeans. 	See Final Decision Memo at 26 (“Commerce
9 Commerce calculates a dumping margin based on the difference between U.S. price
and normal value of subject products imported into the United States. See 19 U.S.C.
§§ 	1677(34)–(35), 	1677b, 	1677a. 	In 	contrast 	Commerce 	imposes 	CVDs 	after
calculating an ad valorem subsidy rate based on the amount of benefit allocated
during the period of review or investigation divided by the sales value during the
same period of the product to which Commerce attributes the subsidy. See 19 C.F.R.
§ 351.525(a), (b)(3) (2015). 	For domestic subsidies, Commerce generally attributes
the subsidy to all products sold by a firm, including products that are exported,
subject to the additional provisions of 19 C.F.R. § 351.525(b). See id. § 351.525(b)(3);
see 	also, 	e.g., 	[CVD] 	Investigation 	of 	Biodiesel 	from 	Argentina: 	Preliminary
Calculations for [LDC] at 4–6, C-357-821, POR 01/01/16–12/31/2016, (Apr. 21, 2017)
(ACCESS bar code 3610731-01) available at https://access.trade.gov.
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continues to find that it is appropriate to make a PMS adjustment to soybean prices
to correct for distortions that are caused by Argentina’s export tax regime and render
soybean prices outside the ordinary course of trade.”); see also 19 U.S.C. § 1677b(e).
Commerce therefore “rel[ies] on world market prices for soybeans which ha[ve] not
been distorted by the GOA’s export tax, in determining the cost of soybeans.” Remand
Results at 24. 	Further, Commerce now supplements its determination with record
evidence regarding a respondent’s pricing behavior in the U.S. market by employing
the pass-through analysis. 	See Second Remand Results at 8–12. 	Commerce finds
that U.S. prices are adequate for purposes of calculating ADDs because U.S. prices
are set based on considerations unrelated to any cost-benefit provided by the domestic
subsidy. See id. at 9. By seeking to demonstrate the U.S. prices for LDC’s sales are
unaffected by the export tax regime in Argentina, Commerce supplies facts from
which a reasonable mind may infer that Commerce here imposes duties calculated
based on an accurate dumping margin. 	Commerce’s methodology for its second
remand redetermination is reasonable.
In objecting to the relevance of a pass-through analysis in this context,
Commerce erects a straw man out of the court’s reference to Low Enriched Uranium
From France in Vicentin II. See Second Remand Results at 13–17; see also Vicentin
II, 44 CIT at __, 466 F. Supp. 3d at 1244–45 (citing Low Enriched Uranium From
France, 69 Fed. Reg. 46,501, 46,506 (Dep’t Commerce Aug. 3, 2004) (notice of final
results of [ADD] admin. review) (“Low Enriched Uranium From France”)). Vicentin
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II held that Commerce’s attempt to justify its imposition of an unadjusted PMS
remedy by pointing to differences between the ADD and CVD regimes is not
reasonable. 	See id. at __, 466 F. Supp. 3d at 1242–45. 	To illustrate the need for
further explanation, the court pointed to Commerce’s reasoning in Low Enriched
Uranium From France as support for the proposition that “domestic subsidies are
presumed to impact both sides of the LTFV equation, such that any price differential
between normal value and U.S. Price is presumed to result from something other
than the subsidy.” 	Id. at __, 466 F. Supp. 3d at 1244–45 (citing Low Enriched
Uranium From France, 69 Fed. Reg. at 46,506). 	Commerce’s lengthy refutation of
the court’s reference to Low Enriched Uranium From France as espousing the view
that Commerce has previously determined “all domestic subsidies are presumptively
fully passed through to export prices or that the effect of subsidies on export prices
can be determined with any degree of certainty” is thus misguided and distracts from
the question posed by the court in Vicentin II. 	Second Remand Results at 14.
Vicentin II asks Commerce to explain why its methodology is reasonable, when it
would appear that domestic subsidies may affect both sides of the LTFV equation as
acknowledged by Commerce in Low Enriched Uranium From France. See 44 CIT at
__, 466 F. Supp. 3d at 1242–45. 	Here, Commerce determines that the domestic
subsidies did not affect either side of the LTFV equation. Second Remand Results at
12. 	That determination must be reasonable. 	In this case, by using a pass-through
analysis, Commerce supports its determination by demonstrating that the domestic
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subsidy did not affect U.S. prices. 	As a result, Commerce reasonably addresses the
court’s concern that its PMS adjustment potentially leads to an inaccurate dumping
margin.
II. 	Commerce’s Determination is Reasonable
LDC contends that Commerce’s analysis remains unsupported by substantial
evidence and that Commerce failed to solicit information necessary to perform the
analysis accurately. LDC’s Br. at 13–19. Defendant and Defendant-Intervenor argue
that Commerce’s determination is supported by substantial evidence demonstrating
that LDC’s U.S. prices were not affected by the GOA’s export tax regime. See Def.’s
Br. at 12–24; Def.-Intervenor’s Br. at 11–15. 	Defendant adds that LDC failed to
exhaust its argument that Commerce was required to solicit information necessary
for conducting a pass-through analysis. See Def.’s Br. at 22.
Commerce determines the potential for a double remedy based on record
evidence regarding whether there is a cost-to-price link and whether the domestic
subsidy affects U.S. prices. 	See Second Remand Results at 9–10 (citing 19 U.S.C. §
1677f-1(f)(1)). Commerce’s determination is supported by substantial evidence where
there 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, 229 (1938)). However,
the “substantiality of evidence must take into account whatever in the record fairly
detracts from its weight.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951)
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(“Universal 	Camera 	Corp.”). 	Nevertheless, 	“the 	possibility 	of 	drawing 	two
inconsistent conclusions from the evidence does not invalidate Commerce's conclusion
as long as it remains supported by substantial evidence on the record.” 	Zhaoqing
New Zhongya Aluminum Co. v. United States, 36 CIT 1390, 1392, 887 F. Supp. 2d
1301, 1305 (2012) (citing Universal Camera Corp., 340 U.S. at 488).
Commerce points to statements made during LDC and Vicentin’s verification,
as well as findings contained in the U.S. International Trade Commission’s (“ITC”)
preliminary report in its investigation of biodiesel from Argentina, to support its
determination that “there is no cost-to-price link and that the subsidy has not
otherwise ‘reduced the average price of imports of the class or kind of merchandise[.]’”
Second Remand Results at 10–12 (citing 19 U.S.C. § 1677f-1(f)(1)(B)). 	Namely,
Commerce cites LDC’s explanation at verification that LDC’s U.S. affiliate agreed to
U.S. sales of biodiesel that were “generally priced based on New York Mercantile
Exchange ([“NYMEX”]) heating oil futures prices plus some specified premium[.]”10
10 Commerce also observes that
Second Remand Results at 10 & n.38 (citing Memo. re: Verification of the Sales
Responses of [LDC] in [ADD] Investigation of Biodiesel from Argentina at 9, PD 410,
CD 909, bar codes 3645896-01, 3645895-01 (Nov. 29, 2017) (“LDC Sales Verification
Report”)). According to Commerce, company officials from LDC’s U.S. sales affiliate
would later state “that U.S. companies typically prefer NYMEX heating oil prices,
since biodiesel is regarded [as] fuel and heating oil reflects fuel prices, whereas
Argentine transactions typically rely on CBOT soybean oil prices as they generally
regard biodiesel less as fuel and more similar to a soybean product.” 	Id. 	(quoting
LDC CEP Verification Report at 17).
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Id. at 10 (quoting Memo. re: CEP Sales Verification of [LDC] in ADD Investigation of
Biodiesel from Argentina at 6, PD 413, CD 912, bar codes 3646257-01, 3646256-01
(Nov. 	30, 	2017) 	(“LDC 	CEP 	Verification 	Report”)).11 	Moreover, according 	to
Commerce, officials at Vicentin “explained that the company may sell biodiesel at a
flat price or based on a Chicago Board of Trade ([“CBOT”]) future price, plus or minus
a premium.”12 	Second Remand Results at 10–11 (quoting Memo. re: Verification of
the Sales Questionnaire Responses of [Vicentin] at 26 [sic], PD 414, CD 913, bar codes
3646347-01, 3646345-01 (Nov. 30, 2017) (“Vicentin Verification Report”)). Commerce
notes that the ITC Preliminary Report’s description of the industry confirms these
11 	On 	June 	25, 	2018, 	Defendant 	filed 	indices 	to 	the 	public 	and 	confidential
administrative records underlying Commerce’s final determination. 	These indices
are located on the docket at ECF Nos. 16-2–3. On February 14, 2020, Defendant filed
indices to the public and confidential administrative records underlying Commerce’s
remand redetermination. These indices are located on the docket at ECF Nos. 80-2–
3. 	On November 27, 2020 Defendant filed indices to the public and confidential
administrative records underlying Commerce’s second remand redetermination.
These indices are located on the docket at ECF Nos. 109-2–3. 	All references to
documents from the initial administrative record are identified by the numbers
assigned by Commerce in the June 25th indices, see ECF No. 16, and preceded by
“PD” or “CD” to denote the public or confidential documents, respectively. All
references to the administrative record for the remand determination are identified
by the numbers assigned in the February 14th indices, see ECF No. 80, and preceded
by “PR” or “CR” to denote remand public or confidential documents, respectively. All
references to the administrative record for the second remand redetermination are
identified by the numbers assigned in the November 27 th indices, see ECF No. 109,
and preceded by “PRR” or “CRR” to denote second remand public or confidential
documents, respectively.
12 Commerce observes that
Second Remand Results at 11 (citing Vicentin
Verification Report at 27).
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explanations, 	pointing 	specifically 	to 	the 	report’s 	finding 	that 	“[b]iodiesel 	has
traditionally been marketed primarily as an additive or alternative to petroleum-
based diesel fuel, and, as a result, biodiesel prices have been influenced by the price
of 	petroleum-based 	diesel 	fuel, 	adjusted 	for 	government 	incentives 	supporting
renewable fuels, rather than biomass based diesel production costs.” Second Remand
Results at 11 (quoting Petitioner’s PMS Allegation Ex. 9 at VI-7, PDs 189, 191–92,
bar codes 3604083-01, 3604083-03–04 (Aug. 2, 2017) (“ITC Prelim. Report”)).
According to Commerce, pricing information from ITC Preliminary Report and
other 	record 	sources 	also 	“demonstrates 	Argentine 	prices 	for 	U.S. 	shipments
correspond to the overall U.S. market, and not to the cost of soybeans in Argentina.”
Second Remand Results at 11–12. 	The report indicates that the average price of
Argentine biodiesel dropped from 2014 to 2015, and then rose in 2016. See id. (citing
ITC Prelim. Report at Tables C-1 & IV-2). Citing a U.S. Department of Agriculture
report 	contained 	in 	the 	petition, 	Commerce 	observes 	that 	the 	“export 	tax 	on
Argentine soybeans fell from 35 percent to 30 percent” during this same time period.
Id. at 12. 	(citing Petitioner’s Letter, “ADD and CVD Petitions” Vol. II, Ex. GEN-30
at 4, PDs 3–5, bar codes 3554221-03–5 (Mar. 23, 2017) (“Petition Vol. II”)). Commerce
reasons that “[i]f the presumptions underlying the double remedy theory were true,
Argentine prices to the United States should have risen during this period.” 	Id.
However, here, Commerce’s assertion that the export tax on soybeans from 35 percent
to 30 percent during the same time period does not appear to be supported by the
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page that Commerce cites from the report, as the relevant statement indicates that
the reduction would have occurred either on or after December of 2015. See Petition
Vol. II, Ex. GEN-30 at 4. 	As such, Commerce’s reliance on the reduction of export
taxes on Argentine soybeans to support its findings is not persuasive. Nevertheless,
Commerce otherwise provides enough evidence for a reasonable mind to conclude that
the benefit of subsidized soybeans is not passed-through to U.S. prices.
Indeed, Commerce highlights record evidence that the drop in Argentine
biodiesel prices from 2014 to 2015, followed by the increase prices in 2016, tracks
prices for other imports of biodiesel during this time period. 	Id. 	Information
published by the U.S. Department of Agriculture and the U.S. Census Bureau depicts
a similar pattern in U.S., Argentine, and Indonesian biodiesel prices in the United
States from 2014 through 2016. Id. (citing Petition Vol. II at Ex. GEN-28). “As the
record demonstrates LDC and Vicentin price their U.S. shipments in a manner
designed to compete with (or undercut) U.S. prices for petro-diesel and biodiesel, and
not based on the domestic subsidy, Commerce concludes there is no significant link
between the subsidy and U.S. prices.” Id.
Commerce’s 	determination 	is 	supported 	by 	substantial 	evidence 	and
sufficiently 	addresses 	the 	question 	posed 	by 	the 	court’s 	remand 	order. 	It 	is
reasonable to infer, based on LDC and Vicentin’s statements during verification
regarding U.S. prices for Argentine biodiesel being tied to oil futures, as corroborated
by evidence from the ITC Preliminary Report and sources from the petition, that any
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downward pressure on soybean costs owing to Argentina’s export tax regime is not
passed-through to U.S. prices. 	If a company prices its U.S. sales based on external
price 	movements, 	a 	reasonable 	mind 	can 	conclude 	that 	the 	company 	is 	not
incorporating 	the 	benefit 	of 	a 	domestic 	subsidy. 	Although 	LDC 	argues 	that
Commerce departed from agency practice and failed to solicit enough information to
conduct its analysis, see LDC’s Br. at 15–20 (citing, inter alia, Wheatland, 38 CIT at
__, 26 F. Supp. 3d at 1385), as Defendant notes, LDC did not raise that argument
before Commerce and thus failed to exhaust its administrative remedies with respect
to that issue. 	See 28 U.S.C. § 2637(d); Boomerang Tube LLC v. United States, 856
F.3d 908, 912–13 (Fed. Cir. 2017); see also Def.’s Br. at 22. 	As such, Commerce’s
second remand redetermination is sustained.
CONCLUSION
For 	the 	foregoing 	reasons, 	Commerce’s 	second 	remand 	redetermination
complies with the court’s order in Vicentin II, is in accordance with law and supported
by substantial evidence, and is therefore sustained. Judgment will enter accordingly.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated: 	March 25, 2021
New York, New York
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