Commerce Must Conduct AD Duty Verification, Even During COVID Pandemic, Brief Says

The Commerce Department’s failure to verify data submitted by an Indian exporter of forged steel fittings during an antidumping duty investigation conducted during the COVID-19 pandemic means the agency should be ordered to go back and reexamine the exporter’s zero rate, the petitioners from that investigation said in a brief filed April 26 seeking a Court of International Trade remand (Bonney Forge Corporation et al v. U.S., CIT # 20-03837).

In a Rule 56.2 motion for judgment, Bonney Forge and the United Steelworkers labor union say Commerce failed to meet statutory and regulatory requirements for verifications during AD duty investigations. While the agency was under a Level 4 travel advisory and unable to travel during the pandemic, the petitioners say Commerce should have conducted a virtual verification at the minimum. The zero rate assigned to the exporter, Shakti Forge Industries Pvt. Ltd., means it’s exempt from the resulting AD duty order on forged steel fittings from India.

“The statute clearly states that Commerce is required to verify the information it relies upon in an antidumping investigation …,” the brief said. “There is no ambiguity in this statutory command. There is also no discretion under the statute for Commerce to refuse to verify the information upon which it relies, even in extenuating circumstances.”

CIT itself has “recognized that verification is ‘critical,’ because it serves as a kind of audit to test the accuracy of the information that respondents have reported,” the petitioners said. “Indeed, there are any number of cases where, at verification, Commerce has discovered that the information respondents have reported is not supported by the company’s own books and records or has even been created solely for the purposes of engineering artificially low dumping margins in Commerce’s proceedings.” A verification outline, verification exhibits, and verification report typically compiled by Commerce also allows petitioners to comment on the accuracy of an exporter’s data.

“None of those goals were achieved in this investigation,” the brief said. Commerce says additional questions it asked of Shakti Forge constituted a verification, but “these supplemental questions on their own did not meet any of Commerce’s own regulatory requirements for verification, including the issuance of a verification report to all of the parties,” it said.

“Even though there were at least two months remaining between the case briefs and the final determination, Commerce did not obtain information necessary to confirm the accuracy of the information that it relied [on] for its final determination or produce a verification report,” the petitioners said in their brief. “These failures were contrary to law. They alone provide sufficient and necessary grounds for a remand of this action.”