Slip Op. 25-115
UNITED STATES COURT OF INTERNATIONAL TRADE
PASTIFICIO GENTILE S.R.L.,
Plaintiff, Before: Mark A. Barnett, Chief Judge Court No. 24-00037 v.
UNITED STATES, PUBLIC VERSION
Defendant.
OPINION AND ORDER
[Remanding in part and sustaining in part the U.S. Department of Commerce’s final results in the administrative review of the countervailing duty order on certain pasta from Italy.] Dated: August 27, 2025
David J. Craven, Craven Trade Law LLC, of Chicago, Illinois, for Plaintiff Pastificio Gentile S.r.l.
Sosun Bae, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. Also on the brief were Brett A. Shumate, Acting Assistant Attorney General, Patricia M. McCarthy, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Brien Stonebreaker, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.
Barnett, Chief Judge: Before the court is a motion for judgment on the agency
record pursuant to U.S. Court of International Trade (“CIT”) Rule 56.2 challenging the
final results of the U.S. Department of Commerce’s (“Commerce or “the agency”)
administrative review of the countervailing duty (“CVD”) order on certain pasta from
Italy. See Certain Pasta From Italy, 89 Fed. Reg. 3,382 (Dep’t Commerce Jan. 18, Court No. 24-00037 Page 2
2024) (final results of CVD admin. rev.; 2021) (“Final Results”), ECF No. 14-4, 1 and
accompanying Issues and Decision Mem., C-475-819 (Jan. 11, 2024) (“I&D Mem.”),
ECF No. 14-5; Confid. Pl.’s Mot. for Summ. J. on the Agency R., ECF No. 20, and
accompanying Confid. Mem. of Law in Supp. (“Pl.’s Mem.”), ECF No. 20-1.
Plaintiff Pastificio Gentile S.r.l. (“Gentile”) argues that Commerce
(1) inappropriately used total facts available with an adverse inference for Gentile, 2
(2) abused its discretion by terminating the verification early, and (3) applied a subsidy
rate that violates the Excessive Fines Clause of the Eighth Amendment. Pl.’s Mem. at
9, 13, 26. Defendant United States (“the Government”) urges the court to sustain the
Final Results. See Confid. Def.’s Resp. to Pls.’ Mot. for J. Upon the Agency R. (“Def.’s
Resp.”), ECF No. 27. For the reasons discussed herein, the court affirms, in part, and
remands, in part, the Final Results.
1 The administrative record filed in connection with the Final Results is divided into a
Public Administrative Record (“PR”), ECF No. 14-2, and a Confidential Administrative Record (“CR”), ECF No. 14-3. Plaintiff submitted joint appendices containing record documents cited in the parties’ briefs. See Confid. J.A., ECF No. 33; Public J.A., ECF No. 34. Because Plaintiff relies on the public or confidential administrative record number to identify record documents in the joint appendices, the court likewise cites to the PR or CR, as appropriate. 2 While the phrases “total adverse facts available” and “total AFA” are not referenced in
either the statute or the agency's regulations, they can be understood, within the context of this case, to refer to Commerce’s application of the “facts otherwise available” and “adverse inference” provisions of 19 U.S.C. § 1677e after finding that it could not accurately determine a countervailable subsidy rate with the information submitted by respondents in this review and could not fill in the gaps in information without undue difficulty. See Mukand Ltd. v. United States, 767 F.3d 1300, 1308 (Fed. Cir. 2014). Court No. 24-00037 Page 3
BACKGROUND
On July 24, 1996, Commerce issued a CVD order on certain pasta from Italy.
Certain Pasta From Italy, 61 Fed. Reg. 38,544 (Dep’t Commerce July 24, 1996) (notice
of CVD order and am. final affirmative CVD determination). On September 6, 2022,
Commerce initiated an administrative review of the order for the 2021 period of review
(“POR”). Initiation of Antidumping and Countervailing Duty Admin. Revs., 87 Fed. Reg.
54,463, 54,473 (Dep’t Commerce Sept. 6, 2022). Commerce selected Gentile to
participate as a mandatory respondent. I&D Mem. at 2.
In its questionnaire to Gentile, Commerce requested that Gentile identify all
affiliated companies and indicated this identification was “necessary early in this
administrative review.” CVD Questionnaire (Dec. 8, 2022) at III-2–III-3, PR 27. Gentile
timely submitted its Affiliated Parties Response. Resp. to Affiliated Parties Portion of
Sec. III of the Dep’t’s Initial Questionnaire (Dec. 22, 2022) (“Affiliated Parties Resp.”) at
1, CR 5. In this response, Gentile reported two affiliates, Forno Gentile S.r.l and
Agricola Gentile S.r.l., and indicated that neither company was involved in pasta
production. Id. at 2.
Gentile provided a timely response to the remaining questions. Resp. to Sec. III
of the Dep’t’s Initial Questionnaire (Feb. 7, 2023) (“Initial Questionnaire Resp.”) at 1, PR
61. Gentile did not correct or add to its reported affiliates in any of its additional
questionnaire responses. See, e.g., Initial Questionnaire Resp. at III-3; Resp. to the
Dep’t’s Suppl. Questionnaire (May 24, 2023), Ex. S-1, CR 18. Based on Gentile’s
reporting, Commerce determined a preliminary subsidy rate of 1.79 percent for Gentile. Court No. 24-00037 Page 4
Certain Pasta from Italy, 88 Fed. Reg. 45,886, 45,887 (Dep’t Commerce July 18, 2023)
(prelim. results and partial rescission of CVD admin. rev.; 2021) (“Prelim. Results”).
After issuing the Preliminary Results, Commerce scheduled a three-day on-site
verification at Gentile’s facility in Gragnano, Italy. See Verification of [Gentile] (Sept. 29,
2023) (“Verification Agenda”) at 1, PR 106. In the Verification Agenda, Commerce
stated that “verification is not intended to be an opportunity for the submission of new
factual information” and warned that a failure to cooperate could result in the agency
“relying on adverse ‘facts available’” pursuant to 19 U.S.C. § 1677e. Id. at 1–2.
During verification, Commerce “discovered multiple discrepancies between the
information presented at verification and the information in Gentile’s response to
Section III of the Initial Questionnaire.” I&D Mem. at 5. Specifically, Commerce found
that “Gentile failed to report multiple affiliated companies . . . that were active during the
POR.” 3 Id. After Commerce discovered this new information, Commerce “concluded
verification without analyzing other information submitted by Gentile.” Id. Commerce
stated that Gentile’s failure to disclose the existence of its affiliates rendered the agency
“unable to examine the full scope of subsidies attributable to any cross-owned and/or
trading companies involved with the subject merchandise in a timely manner.” Id. at 7.
Commerce issued the Final Results on January 18, 2024. 89 Fed. Reg. at 3,382.
For the Final Results, Commerce relied on the facts available with an adverse inference
3 The unreported affiliates were [[
]] (the “Omitted Affiliates”). See Verification of the Questionnaire Resp. of [Gentile] (Nov. 2, 2023) (“Verification Report”) at 3, CR 50; see also I&D Mem. at 5. Court No. 24-00037 Page 5
to determine Gentile’s rate because Gentile: (1) withheld requested information,
(2) failed to provide timely responses in the required format, (3) significantly impeded
the proceeding, and (4) failed to cooperate to the best of its ability. I&D Mem. at 7.
Commerce determined that Gentile’s omissions called into question the accuracy and
completeness of Gentile’s responses. Id. at 13. Commerce also found that it lacked the
information necessary to “examine the complete scope of subsidies provided to Gentile
and its cross-owned affiliates/trading companies.” Id. at 7. As an adverse inference,
Commerce determined that “Gentile used and benefited from each program under
review” during the POR. Id. Commerce considered three factors when selecting the
AFA rate: “(1) the need to induce cooperation; (2) the relevance of a rate to the industry
in the country under investigation or review; and (3) the relevance of a rate to a
particular program.” Id. at 9. For the Final Results, Commerce applied the highest non-
de minimis rate for each of the programs subject to review, based on same or similar
programs previously countervailed in this proceeding, as well as the income tax
program, for a total AFA rate of 88.67 percent for Gentile. Id. at 10, 13. Commerce
selected this rate to “effectuate the statutory purpose” of 19 U.S.C. § 1677e: “to induce
respondents to provide Commerce with complete and accurate information in a timely
manner.” Id. Commerce determined that it was not required to corroborate the AFA
rates “because the selected program-specific rates [were] all from a prior segment of
[the same] proceeding.” Id. at 12–13. Court No. 24-00037 Page 6
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to section 516A(a)(2)(B)(iii) of the Tariff Act of
1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2018), 4 and 28 U.S.C. § 1581(c).
The court will uphold an agency determination that is supported by substantial evidence
and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). The court
reviews “verification procedures employed by Commerce in an investigation for abuse
of discretion.” Micron Tech., Inc. v. United States, 117 F.3d 1386, 1396 (Fed. Cir.
1997). 5
DISCUSSION
When “necessary information is not available on the record,” or an interested
party “withholds information” requested by Commerce, “fails to provide” requested
information by the submission deadlines, “significantly impedes a proceeding,” or
provides information that cannot be verified pursuant to 19 U.S.C. § 1677m(i),
Commerce “shall . . . use the facts otherwise available.” 19 U.S.C. § 1677e(a). Once
Commerce determines that the use of facts otherwise available is warranted, if
Commerce also “finds that an interested party has failed to cooperate by not acting to
the best of its ability to comply with a request for information,” Commerce “may use an
inference that is adverse to the interests of that party in selecting from among the facts
4 All citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S. Code,
and references to the U.S. Code are to the 2018 edition, unless stated otherwise. 5 Although Micron Tech. involved a Commerce decision governed by an earlier version
of the statute, it remains relevant because the governing language of the statute is unchanged. Court No. 24-00037 Page 7
otherwise available.” Id. § 1677e(b). “Compliance with the ‘best of its ability’ standard
is determined by assessing whether a respondent has put forth its maximum effort to
provide Commerce with full and complete answers to all inquiries in an investigation.”
Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir. 2003); see also
Essar Steel Ltd. v. United States, 678 F.3d 1268, 1275–76 (Fed. Cir. 2012).
Commerce’s ability to apply total AFA ensures “that the party does not obtain a more
favorable result by failing to cooperate than if it had cooperated fully.” Nan Ya Plastics
Corp., Ltd. v. United States, 810 F.3d 1333, 1338 (Fed. Cir. 2016).
Commerce uses total AFA when “none of the reported data is reliable or usable.”
Zhejiang DunAn Hetian Metal Co. v. United States, 652 F.3d 1333, 1348 (Fed. Cir.
2011). Commerce also “has a practice of applying total AFA where a company does
not timely report its affiliations” because Commerce considers that the reported
information may be incomplete. Uttam Galva Steels Ltd. v. United States, 45 CIT __,
__, 518 F. Supp. 3d 1333, 1338 (2021) (citation omitted). When applying total AFA,
Commerce has discretion to use the highest countervailable subsidy rate, and the
agency is not required to estimate what the subsidy rate would have been if the
respondent had cooperated to the best of its ability. 19 U.S.C. § 1677e(d)(2)-(3).
I. Substantial Evidence Supports Commerce’s Application of Total AFA
Gentile contends that the omission of “two small entities . . . that would not have
been required to submit a full questionnaire response” was a minor flaw and harmless
error that “could easily have been confirmed” by Commerce at verification. Pl.’s Mem.
at 11. Gentile also contends that it provided Commerce with information showing the Court No. 24-00037 Page 8
“minor nature” of the Omitted Affiliates, but the agency “refused to accept, let alone
review, the information which established” that Gentile’s omission was “a minor flaw in
reporting.” Id. Gentile asserts that the omitted entities were disclosed in the exhibits to
its supplemental responses, but the agency did not inquire about them until verification. 6
Id. at 12. Finally, Gentile contends that the “appropriate response” for its failure to
identify the entities in the Affiliated Parties Response would have been for Commerce
“to fill the gaps with neutral facts available.” Id. at 13.
The Government contends that Commerce’s application of total AFA, which was
based on Gentile’s failure to identify required affiliates in a timely manner, is supported
by substantial evidence and in accordance with law. Def.’s Resp. at 10. The
Government also argues that Gentile did not remedy its failure by identifying the
Omitted Affiliates in any subsequent responses to Commerce. Id. In reply, Gentile
claims that its failure to report the Omitted Affiliates was a small error, and that “[a] small
error is not an appropriate basis for the imposition of total AFA.” Pl.’s Reply Br. (“Pl.’s
Reply”), ECF No. 31.
Looking first at Gentile’s failure to report the Omitted Affiliates, Commerce
explained that without full and accurate responses to its questions, the agency could not
properly determine which affiliates met the criteria for cross-ownership and, therefore, it
could not determine from which entities it would require full subsidy information. I&D
6 Gentile asserts that [[ ]] were disclosed in Exhibit S-6a and [[ ]] was also disclosed in Exhibit S-7a. Pl.’s Mem. at 12. Gentile does not assert that [[ ]] was disclosed in any of its responses. Court No. 24-00037 Page 9
Mem. at 6. Commerce explained that, because of Gentile’s omissions, the agency was
not able to conduct a complete and accurate analysis of Gentile’s affiliations and the full
scope of subsidies potentially attributable to Gentile in a timely manner, so the use of
total AFA was warranted. Id. at 7.
When relying on total AFA, Commerce must “examine the record and articulate a
satisfactory explanation for its action.” Yangzhou Bestpak Gifts & Crafts Co. v. United
States, 716 F.3d 1370, 1378 (Fed. Cir. 2013) (holding that the agency may not base its
determination on “mere conjecture or supposition”). “The statutory trigger for
Commerce’s consideration of an adverse inference is simply a failure [of the responding
party] to cooperate to the best of respondent’s ability, regardless of motivation or intent.”
Nippon Steel, 337 F.3d at 1383. “[T]he statutory mandate that a respondent act to ‘the
best of its ability’ requires the respondent to do the maximum it is able to do” to provide
full and complete answers to all of Commerce’s inquiries. Id. at 1382.
Commerce’s application of total AFA is supported by substantial evidence and in
accordance with law. Pursuant to 19 U.S.C. § 1677e(a), Commerce must make two
showings to determine that a foreign importer did not act to the best of its ability and
draw adverse inferences. Id. at 1382–83. First, Commerce “must make an objective
showing that a reasonable and responsible importer would have known that the
requested information was required to be kept and maintained.” Id. The agency
requires respondents to report affiliate information early in the investigation or review so
that Commerce may determine which entities must supply additional information. E.g.,
Uttam Galva Steels Ltd. v. United States, 44 CIT __, __, 425 F.Supp.3d 1366, 1372 Court No. 24-00037 Page 10
(2020) (rejecting plaintiff’s argument because it “ignore[d] the importance that
Commerce places on receiving affiliated company information early in the proceeding”);
see also CVD Questionnaire at III-2–III-3. Commerce requests this information from
respondents so it can “determine whether such affiliates are cross-owned with the
respondent and . . . may meet the requirements for attribution of subsidies provided in
19 CFR 351.525(b)(6).” I&D Mem. at 6.
Gentile does not dispute that it maintained the information and simply failed to
report it in its Affiliated Parties Response. In its questionnaire to Gentile, Commerce
instructed Gentile to provide “[t]he identity of all companies with which [the] company is
affiliated” and “complete responses for ‘cross-owned’ affiliate companies.” Id. at 5–6.
Gentile did not report all its affiliates in its Affiliated Parties Response. See Affiliated
Parties Resp. at 2 (naming two affiliates only). Moreover, Gentile clearly maintained
information on at least some of its affiliates because it acknowledges that it referenced
them elsewhere in its responses. See Pl.’s Mem. at 12.
Second, Commerce must subjectively demonstrate that “the failure to fully
respond [results from] respondent’s lack of cooperation in either: (a) failing to keep and
maintain all required records, or (b) failing to put forth its maximum efforts to investigate
and obtain the requested information from its records.” Nippon Steel, 337 F.3d at
1382–83 (interpreting 19 U.S.C. § 1677e(a)). Here again, Gentile did not produce the
requested information in its Affiliated Parties Response or when responding to the
remaining parts of the initial questionnaire. Affiliated Parties Resp. at 2; Initial
Questionnaire Resp. at III-3. Gentile did not fail to keep or maintain the required Court No. 24-00037 Page 11
records, because Commerce discovered the existence of the Omitted Affiliates by
means of information provided by Gentile at verification. Verification Report at 3–4.
Additionally, Gentile included two of the Omitted Affiliates in exhibits provided in
response to other questions. See supra note 6. Thus, Gentile failed to put forth its
maximum efforts to report all of its affiliates in its Affiliated Parties Response.
For these reasons, Commerce’s decision to rely on total adverse facts available
to determine Gentile’s subsidy rate is supported by substantial evidence. 7
II. Commerce Did Not Abuse Its Discretion When It Terminated the Verification
Gentile contends that Commerce’s decision to terminate the verification early
was an overreaction “and an abuse of discretion.” Pl.’s Mem. at 13. Gentile contends
that terminating the verification on its second day “foreclosed Gentile the opportunity to
prove the accuracy of the voluminous information submitted by Gentile.” Id. at 14.
The Government responds that because Gentile failed to report all affiliates, the
agency was “left uninformed” and had already told Gentile that verification was not an
opportunity to submit new facts. Def.’s Resp. at 19. The Government argues that
Gentile’s failure “called into question whether all subsidies were reported, as well as the
accuracy and completeness of its submissions,” and Commerce acted within its
discretion when it decided not to verify the other information. Id. at 20.
7 Gentile invokes 19 U.S.C. § 1677m(e) to argue that Commerce should have used
certain record information to “temper the AFA margin.” Pl.’s Mem. at 19–20. Plaintiff overlooks the requirement for a respondent to act “to the best of its ability in providing the information,” 19 U.S.C. § 1677m(e)(4), for that statutory provision to apply. Court No. 24-00037 Page 12
Verification is a process during which Commerce seeks to confirm “‘the accuracy
and completeness’ of factual information submitted by interested parties,” before the
agency makes a final determination. Gov’t of Quebec v. United States, 105 F.4th 1359,
1364 (Fed. Cir. 2024) (quoting 19 C.F.R § 351.307(d)). Verification is therefore not an
opportunity to submit new factual information. I&D Mem. at 14; Verification Agenda at
1–2. And here, Gentile did not proffer information at verification about the Omitted
Affiliates in the first instance; rather, Commerce discovered the omission while
reviewing Gentile’s accounting system. Verification Report at 3–4. For this reason,
Gentile’s arguments regarding the minor or minimal nature of the Omitted Affiliates are
wholly misplaced. See Pl.’s Mem. at 14–16. By failing to report these entities, Gentile
left Commerce unable to determine for itself whether the companies would have been
required to provide complete questionnaire responses. I&D Mem. at 13. And as
discussed, this is a determination Commerce must make early in the proceeding, not at
verification. Id.
It is not for a respondent to substitute its judgment for that of the agency’s when
deciding what information to report in its questionnaire responses. See, e.g., SeAH
Steel Corp. v. United States, 47 CIT __, __, 659 F. Supp. 3d 1318, 1326 (2023).
Moreover, Gentile’s suggestion that Commerce “‘manipulate[d]’ the record” by declining
to accept new information after Commerce discovered the Omitted Affiliates is without Court No. 24-00037 Page 13
legal basis. See Pl.’s Mem. at 15–16. 8 Accordingly, Commerce’s decision to terminate
verification early upon discovering the Omitted Affiliates was not an abuse of discretion.
Cf. Gov’t of Quebec, 105 F.4th at 1369–70 (affirming the termination of verification due
to discrepancies between the original sales documents and the respondent’s submitted
information).
III. Commerce’s Application of Total AFA Does Not Violate the Eighth Amendment
Gentile contends that a rate based at least in part on adverse facts available
serves as punishment for an offense and is subject to the Eighth Amendment to the
U.S. Constitution. Pl.’s Mem. at 27. 9 Gentile contends that the rate Commerce applied
is excessive and in violation of the Eighth Amendment, because it is not “[r]easonably
[r]elated to the [c]onduct” the AFA statutory provisions seek to deter. Pl.’s Reply at 9.
8 Gentile also suggests that any statement by the Government that the omissions were
substantial in nature would be untrue, even going so far as to recite the Rules of Professional Responsibility. Pl.’s Mem. at 16. As Commerce explained, however, “Commerce’s discovery of unreported affiliated companies during verification is not minimal in nature, as it calls into question whether all subsidies received by Gentile (via any cross-owned affiliates) have been reported.” I&D Mem. at 18. Commerce’s decision to conclude verification was not based on the significance of the Omitted Affiliates per se, but on the agency’s belated discovery of these affiliates, owing to Gentile’s failure to report them. See id. Gentile’s “arguments [thus] fundamentally misunderstand the significance of a respondent’s affiliation response, as well as the basis for Commerce’s application of AFA.” Def.’s Resp. at 11. 9 Gentile argues broadly that “the selected facts must have a relationship to reality,”
Pl.’s Mem. at 20 (formatting omitted), and that Commerce “must consider the magnitude of the error and the impact on the results,” id. at 22 (formatting omitted). But to support these broad assertions, Gentile relies on arguments implicating the Eighth Amendment to the U.S. Constitution. See id. at 20–31. Thus, the court considers the arguments actually raised and not merely alluded to. Court No. 24-00037 Page 14
The Government contends that trade remedy laws are remedial, rather than
punitive, in nature. Def.’s Resp. at 21. The Government further contends that even if
the court were to review Commerce’s rate pursuant to the Eighth Amendment, 10 the
court should find that the applied rate “is proportional to Gentile’s failure to cooperate to
the best of its ability.” Id. at 22.
The Eighth Amendment to the U.S. Constitution states that “excessive fines”
shall not be imposed. U.S. Const. amend. VIII. The Amendment “limits the
government’s power to extract payments, whether in cash or in kind, ‘as punishment for
some offense.’” Austin v. United States, 509 U.S. 602, 609–10 (1993). The Excessive
Fines Clause applies to sanctions that are punitive, rather than remedial, United States
v. Bajakajian, 524 U.S. 321, 333–34 (1998), and when determining whether a fine is
excessive, the court considers whether “[t]he amount of the forfeiture . . . bear[s] some
relationship to the gravity of the offense that it is designed to punish,” id. at 334.
However, a rate selected by Commerce using AFA that is “in accordance with the
statutory requirements is not a punitive measure, and the limitations applicable to
punitive damages assessments therefore have no pertinence to duties imposed based
on lawfully derived margins.” KYD, Inc. v. United States, 607 F.3d 760, 768 (Fed. Cir.
2010). Thus, if the rates applied by Commerce are in accordance with their statutory
10 The Government maintains that the Eighth Amendment does not apply to judicial
review of Commerce’s use of AFA to assign a subsidy rate. Def.’s Resp. at 22. Court No. 24-00037 Page 15
requirements, then there is likely no constitutional issue pursuant to the Eighth
Amendment. Rimco Inc. v. United States, 98 F.4th 1046, 1054–55 (Fed. Cir. 2024). 11
Gentile makes no effort to address Rimco (or KYD) in its moving or reply briefs.
See Pl.’s Mem. at 25 (asserting instead that “the issue as to the applicability of the
[Eighth] Amendment to [trade remedy] proceedings has never been directly
addressed”); Pl.’s Reply at 8 (stating same with respect to AFA specifically). Gentile
goes to great lengths to argue that the Eighth Amendment applies to a duty assessment
based on AFA because such assessment is a fine. See Pl.’s Mem. at 26–28. But that
is not the question. Rather, the question is whether Commerce complied with the
statute when it selected the rates to use as AFA. 12 See Rimco, 98 F.4th at 1054.
11 Rimco addresses the need to exhaust administratively arguments implicating the
Eighth Amendment. 98 F.4th at 1054–55. The appellate court reasoned that so doing would allow Commerce to “review the statutory appropriateness of its . . . rates, including those based on adverse facts available,” and consider the “facts to determine whether its rates were proportional to the harm they were intended to address and ‘necessary to serve the purpose of deterrence.’” Id. at 1054 (quoting BMW of N. Am. LLC v. United States, 926 F.3d 1291, 1300 (Fed. Cir. 2019)). The court further stated that “Commerce could typically dispose of the constitutional issue by reviewing the rates for statutory compliance (i.e., finding the rates not excessive).” Id. (citing KYD, 607 F.3d at 768). While Rimco relies on BMW of North America for the proposition that Commerce should consider relevant facts, the current version of 19 U.S.C. § 1677e(d)(2) permits Commerce to use the subsidy rates specified under 19 U.S.C. § 1677e(d)(1) based on the agency’s evaluation of the situation (i.e., the facts) that resulted in the use of AFA. See BMW of N. Am., 926 F.3d at 1301 n.3 (noting that the majority opinion, which addressed an earlier version of the statute, was consistent with the amendments to section 1677e(d)(2)). 12 Gentile does not speak to whether the relevant Eighth Amendment issue is the rate
selected for each individual subsidy program or the aggregate subsidy rate determined by Commerce. In the absence of argument by the parties, the court declines to address this issue. Court No. 24-00037 Page 16
On that point, Gentile raises no substantive arguments. Gentile asserts that “we
have near perfect knowledge as to the rate which would have applied if the [agency]
had not taken adverse inferences,” Pl.’s Mem. at 29; see also Pl.’s Reply at 9–10
(same), but that is precisely what the statute does not require Commerce to consider,
see 19 U.S.C. § 1677e(d)(3)(A) (stating that Commerce “is not required” to “estimate
what the countervailable subsidy rate . . . would have been” if the respondent had
cooperated). 13 Thus, Gentile’s argument, which rests on this faulty premise that the
total AFA rate is simply too high, see Pl.’s Mem. at 30; Pl.’s Reply at 10, lacks merit.
Commerce found that the AFA rate was consistent with agency practice and the statute,
I&D Mem. at 17, and Gentile does not argue otherwise. Accordingly, the court declines
to remand the Final Results on this basis.
Nevertheless, while the court will sustain Commerce’s application of total AFA
and selection of program-specific AFA rates generally, one aspect of Commerce’s
application of total AFA in the Final Results requires remand for reconsideration or
further explanation. In this review, the Government of Italy provided program-specific
information to Commerce, and the agency verified that information. In making its
objections to the AFA rate, Gentile argued that Commerce should take account of
programs that were found to have been terminated or non-countervailable. Case Br.
(Nov. 27, 2023) at 20, CR 52. In addressing Gentile’s comments, Commerce stated
13 Gentile relies on 19 U.S.C. § 1592 to argue that the total AFA rate “shocks the
conscious [sic],” Pl.’s Mem. at 30, but does not explain why that provision, which governs penalty assessments by a different agency, is relevant here. Court No. 24-00037 Page 17
that it “determined not to include any previously terminated or non-countervailable
programs in the AFA rate for Gentile.” I&D Mem. at 17. While that might seem to be
the end of it, Gentile argues to this court that “the non-usage of certain programs was
confirmed in the verification and responses of the Government of Italy.” Pl.’s Mem. at
22. In other words, while Commerce summarized Gentile’s argument as having been
limited to programs that were found to have been terminated or non-countervailable “in
previous proceedings,” I&D Mem. at 16, Gentile argued, both to the agency and this
court, for the exclusion of programs for which “terminations have been established in
both the preliminary and final determinations for earlier periods of review and by the
submissions of the Government of Italy and the European Union in this review,” Case
Br. at 20. The Government’s only response, consistent with Commerce’s limited
response in the I&D Memorandum, is that Commerce excluded “programs previously
found to be terminated or non-countervailable.” Def.’s Resp. at 5.
Gentile appears to have identified certain programs that Commerce verified,
using information submitted by the Government of Italy, were unused during this period
of review. While Commerce excluded previously terminated or non-countervailable
programs from its AFA determination, Commerce did not explain its legal basis for
nevertheless including programs that it verified as not used in the current POR.
Consequently, remand is necessary to allow Commerce to reconsider or explain its
inclusion in Gentile’s AFA rate of subsidy programs that it verified were unused during
the period of review. Court No. 24-00037 Page 18
CONCLUSION AND ORDER
In accordance with the foregoing, it is hereby
ORDERED that Commerce’s Final Results are remanded in part to the agency
for reconsideration or further explanation of its inclusion in Gentile’s subsidy rate of
programs for which the agency verified non-use during the period of review; it is further
ORDERED that the Final Results are sustained in all other respects; it is further
ORDERED that Commerce shall file its remand redetermination on or before
November 25, 2025; it is further
ORDERED that subsequent proceedings shall be governed by CIT Rule 56.2(h);
it is further
ORDERED that any comments or responsive comments must not exceed 3,000
words.
/s/ Mark A. Barnett Mark A. Barnett, Chief Judge
Dated: August 27, 2025 New York, New York