Commerce Unlawfully Applied AFA Rate, Chinese Metal Locker Exporter Argues
The Commerce Department unreasonably applied adverse facts and unlawfully requested audited financial statements or unaudited statements with notes from Hangzhou Evernew Machinery & Equipment Company, the metal locker exporter argued in its memorandum of law filed with the Court of International Trade on Feb. 5 (Hangzhou Evernew Machinery & Equipment Company v. United States, CIT # 25-00151).
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According to the memo, Evernew wasn't required under Chinese laws to “prepare notes accompanying financial statements for its daily internal accounting management or business.” Citing a 2009 CIT decision, Solvay Solexis, the plaintiff argued that Commerce’s demands for audited financial statements or unaudited statements with notes was unlawful, because CIT ruled “unaudited statements are accepted by Commerce when they are prepared in the normal course of business.”
As a result, the company argued, it “fully answered all the questionnaires issued by Commerce to the best of its ability and never impeded the proceeding” by providing unaudited financial statements without notes.
Commerce determined Evernew’s CVD rate was 15.35% in the preliminary results of the countervailing duty administrative review, which covered metal lockers from China. However, Commerce applied “a new total AFA rate of 220.95%” in its final results and said “Evernew significantly impeded the proceeding” by failing to provide requested information and financial statements (see 2506130066).
Evernew argued it was subjected to special scrutiny and “arbitrary and capricious” criteria, according to the brief. In the original AD/CVD investigations on metal lockers from China in 2021, Evernew said “Commerce not only accepted those unaudited financial statements without notes, but that mandatory respondent received a zero-dumping margin.”
Evernew also argued Commerce’s implementation of the final AFA rate was “self-contradictory” as “Commerce never asked Evernew to provide audited financial statements or unaudited financial statements with notes, in any supplemental questionnaires issued to Evernew in either the preliminary or final stage” of a “companion AD review.”