Case Explained: 25-1411: KG DONGBU STEEL CO., LTD. v. US [OPINION], Precedential

Court: United States Court of Appeals for the Federal Circuit

Filed: 2026-07-16

The Federal Circuit reversed the Court of International Trade’s judgment sustaining the Department of Commerce’s determination that debt-to-equity conversions conferred no countervailable benefit, and remanded with instructions to reinstate Commerce’s original Final Results finding that such benefits existed. The court held that Commerce acted in accordance with law when it re-evaluated prior administrative reviews to find a countervailable benefit, clarifying that the standard for agency changes in position is governed by *F.C.C. v. Fox Television Stations, Inc.*, which requires only a “reasonable explanation” for a change in policy rather than the trial court’s erroneous requirement of “new information” or proof of fraud. The court further determined that Commerce’s finding of countervailable benefit was supported by substantial evidence because the record adequately demonstrated government dominance over the Creditors’ Committee and insignificant private investor participation, rendering an equityworthiness analysis necessary under 19 C.F.R. § 351.507(a)(6). Additionally, the court found Commerce’s determination that the benefit passed through to the post-acquisition entity supported by substantial evidence, noting that Dongbu failed to rebut the baseline presumption of pass-through and that the acquisition was not an arm’s length transaction for fair market value. Consequently, the trial court’s orders remanding the matter for reconsideration based on arbitrary and capricious grounds are vacated, and Commerce’s original determinations imposing countervailing duties are reinstated.

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