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CVD Respondent Impeded Investigation, Justifying Use of AFA, Defendant-Appellees Tell CAFC

Countervailing duty review respondent Uttam Galva Steels impeded the Commerce Department's countervailing duty administrative review by omitting information about its affiliation with Lloyds Steel Industry, defendant-appellees California Steel Industries and Steel Dynamics told the Federal Circuit in a Jan. 11 reply brief urging the appellate court to uphold the Court of International Trade's decision in the case (Uttam Galva Steels Limited v. United States, Fed. Cir. #21-2119).

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The appeal concerns an administrative review of the countervailing duty order on corrosion-resistant steel products from India. In the review, Commerce hit Uttam Galva with a 588.42% adverse facts available rate since it failed to come forward with information about a key affiliate. Uttam Galva, one of the review's two mandatory respondents, only conceded the existence of the affiliate after prompting from Commerce and, even after doing so, mischaracterized its acquisition of the company, Commerce said.

In April 2021, CIT upheld Commerce's decision to stick Uttam Galva with the high AFA rate (see 2104300045). The defendant-appellees now urge the Federal Circuit to uphold this decision. California Steel and Steel Dynamics characterize Uttam Galva's arguments as asking the court to unilaterally hold that the decision to not hand over affiliate information was the company's to make and that Commerce should have no recourse if it disagrees with the respondent's assessment of the facts.

Uttam Galva was required to "put forth its best efforts" in responding to Commerce's inquiries, or otherwise receive AFA, the brief said. "Failing to provide any information about LISL to Commerce at the start of the proceeding imperiled the agency’s ability to fulfill its statutory obligation to conduct a thorough investigation," the brief said. "Uttam Galva’s early decision to withhold information therefore impeded the proceeding, justifying the use of facts available with an adverse inference."

California Steel and Steel Dynamics also argued in favor of Commerce's AFA methodology. Uttam Galva argues that Commerce erred when it calculated a benefit for subsidy programs that the affiliate could not have used. The argument is not new and nothing Uttam Galva's presented compels a different result, the brief said. "Commerce’s determination that the information in Uttam [Galva]’s financial statement does not preclude the possibility that the company had operations in other states or that it engaged in certain upstream activities that could qualify it for additional subsidies is reasonable and should not be disturbed," the defendant-apellees said.