US Defends Decision Not to Use AFA Against Tire Exporter for Expense Ratio Reporting
The Commerce Department lawfully decided not to use partial adverse facts available against respondent Prinx Chengshan Tire (Thailand) in the antidumping duty investigation on truck and bus tires from Thailand regarding Prinx's reporting of its financial expense ratio calculation, the U.S. argued. Responding to petitioner United Steelworkers' motion for judgment, the government said Commerce "has broad discretion under the statutory scheme in deciding whether to apply an adverse inference" (United Steel, Paper and Forestry, Rubber, Manufacturing, Energy Allied Industrial and Service Workers International Union, AFL-CIO v. United States, CIT # 25-00004).
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In its complaint, United Steelworkers noted that Prinx is only one subsidiary within a group of consolidated companies, and that Commerce's practice is to calculate financial expense ratios based on the audited financial statements of the company at the highest level of consolidation available (see 2502070071). However, the agency won't use financial statements that come from companies in non-market economies, the petitioner said.
In the present investigation, Prinx tried to report its financial expense ratio on the basis of a non-market economy entity. Commerce issued a supplemental questionnaire ordering the exporter to switch to using a market economy entity, but Prinx instead switched to a different non-market economy entity while “falsely claiming” it was following instructions, United Steelworkers said. The agency opted to only use neutral facts available despite acknowledging that Prinx's statements still came from an NME entity, the petitioner said.
In defense of Commerce's actions, the U.S. said "Commerce reasonably determined that Prinx had cooperated to the best of its ability to provide the information requested" in light of "the nature of Commerce’s supplemental questionnaire and Prinx’s explanation."
The government said Commerce has "broad discretion" in deciding as to whether to apply an adverse inference, and this discretion doesn't require the agency to show an interested party cooperated to the best of its ability every time it finds that AFA shouldn't be applied. In any event, "Prinx had submitted information for the company it maintained both operated in a market economy and represented the highest level of consolidation with regard to Prinx," the U.S. said.