Non-Selected Respondents Rail Against Use of AFA for All-Others Rate in AD Review at CAFC
The Commerce Department violated the law when it used the total adverse facts available rate for two non-cooperative respondents as the all-others rate in an antidumping duty review, plaintiff-appellants led by Cheng CH International argued in a Dec. 23 opening brief at the U.S. Court of Appeals for the Federal Circuit. Appealing a Court of International Trade ruling upholding the rate, the appellant said the "punitive, total AFA rate" Commerce assigned the non-individually examined respondents was not based on their actual dumping margin (PrimeSource Building Products v. United States, Fed. Cir. #22-2128).
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The case concerns an antidumping duty review on steel nails from Taiwan. In the review, Bonuts Hardware Logistics and Create Trading were picked as the mandatory respondents, but Bonuts did not respond to Commerce's questionnaires and Create said it didn't have any U.S. sales. Create was then dropped for Pro-Team Coil as a respondent, but Pro-Team also did not reply to Commerce's questionnaires. As a result, both companies were hit with an AFA rate from a previous review, and the non-selected respondents' rate was determined by weight-averaging the AFA rates.
In the CIT case, none of the plaintiffs challenged the AFA rate given to Bonuts and Pro-Team; rather, they went after the use of the expected method and the agency's conclusion that the all-others rate was representative of the appellants' actual dumping margin. However, the trade court relied on various court precedential opinions to recognize an "important assumption" built into Commerce's respondent selection, that the largest exporters by volume are meant to be representative of the non-selected companies. The court said the burden is on the plaintiffs to establish that the expected method should not be used (see 2206170040).
The appellants took to the Federal Circuit, noting the awkward position Commerce is placed in when the mandatory respondents do not cooperate but the smaller exporters do. "If those such respondents are willing to cooperate in the proceeding in accordance with Commerce’s instructions, and indeed do cooperate to the best of their abilities, then it stands to reason that Commerce’s decision to penalize them with a total AFA rate applied to uncooperative mandatory respondents is fundamentally unreasonable," the brief said. "In this case, Taiwan Plaintiff-Appellants were effectively being penalized just for being smaller exporters, despite their cooperativeness in the proceeding."
The appellants railed against Commerce's reliance on the 2016 Federal Circuit decision Albemarle Corp. v. U.S. in their arguments. The decision "arguably" frees Commerce from the obligation to show that the margin picked for a non-cooperative respondent "reflects some form of commercial reality." The appellants said that the reliance on this decision is "unwarranted" since it does not make the same claim for non-examined, cooperative respondents and due to the fact that the appellants put forth a "far more reasonable method based on the margin rate calculated in the then-most recently completed review segment of the proceeding ... ."
"As this rate would have been more reflective of the cooperation demonstrated by the Taiwan Plaintiff-Appellants than the punitive 78.17 percent that was imposed on them in the Final Results, we respectfully submit that this could have constituted a more reasonable method, and reflective of commercial reality, under the Statute as applied to Taiwan Plaintiff-Appellants," the brief said.