Commerce Argues Rejection of New Information From Qatari Melamine Co. Is Lawful
The Commerce Department's rejection of untimely information submitted during verification from exporter Qatar Melamine Company (QMC) was appropriate, as was the agency's resulting application of adverse facts available to the company, DOJ said in a response brief Feb. 2 (Qatar Melamine Company v. United States, CIT # 25-00053).
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Replying to QMC's motion for judgment in the case on the countervailing duty investigation on melamine from Qatar, DOJ said that, during the verification process, Qafco, one of the owners of the QMC, attempted to submit additional as-yet-unreported data on preferential consumption of water and consumption of electricity. Qafco claimed that it "had confused the CVD reporting methodology with the antidumping methodology."
However, Commerce said reporting instructions had been provided to officials within the initial questionnaire, and QMC “did not attempt to present this previously unreported consumption data as a minor correction on the first day of verification,” the brief said.
Commerce determined this attempt to submit additional data was “untimely” and rejected the new information. As a result, Commerce’s final determination applied AFA to find the provision of water and electricity for less-than-adequate remuneration to QMC were countervailable subsidies.
Additionally, Commerce determined applying the normal hierarchy for deriving AFA rates in CVD cases "was not appropriate," because there was a lack of previous CVD proceedings involving Qatar, and "Commerce has no prior understanding of the industry and no final calculated and verified rates for the industry," the U.S. said. As a result, the agency applied an 8% AFA program rate based on "the highest combined standard income tax rate for corporations in Indonesia," which was identified as a comparable market.
QMC argued Commerce should accept the new information in their motion for judgment. DOJ responded that Commerce “does not abuse its discretion when it does not accept new factual information at verification that does not support, clarify, or corroborate the record.”
In QMC's original complaint last March, it also argued that the government failed to include “expenses associated with the development, maintenance, and management of the industrial cities” (that were built on land granted by the Qatar government) in its calculation of benefits received by affiliate QatarEnergy (see 2503310060).
In defense of its claim, the U.S. cited a 2023 CIT ruling in which the court concluded that Commerce didn't have to deduct respondent Hyundai Steel's construction costs from the calculation of the CVD rate with regard to Hyundai's right to collect revenues from third parties using the Port of Incheon, which Hyundai built but which is owned by the Korean government (see 2309270034). DOJ argued "Commerce’s decision not to subtract the costs that QatarEnergy incurred to develop the industrial areas in calculating the benefit for this program" was lawful.
"QatarEnergy’s expenses in operating or maintaining the land and port areas at issue are not among the exhaustive list of offsets provided for under section 1677(6)," the government said in their response.