CIT Sustains Commerce's Right to Apply Total AFA for Failure to Report Data as Directed in AD Case

The Commerce Department can apply total adverse facts available for a mandatory respondent's failure to provide its factors of production (FPO) data on a control number (CONNUM)-specific basis in an antidumping case, the Court of International Trade ruled in a June 9 opinion. Judge Leo Gordon, in a consolidated action challenging an antidumping administrative review on certain steel nails from China, said that Commerce had the right to switch to a CONNUM-specific reporting requirement and that the mandatory respondent should have known about this switch. Gordon also found that Commerce was justified in using a total AFA rate for two mandatory respondents to calculate the non-individually reviewed respondent rate.

In the administrative review, the tenth of its kind, Commerce selected three mandatory respondents. Shanxi Pioneer Hardware Industrial Co., along with one of the other mandatory respondents, received a total AFA duty margin of 118.04% for its failure to report its FOP data on a CONNUM-specific basis. A weighted average was taken from that AFA rate and the 2.15% rate calculated for the third mandatory respondent to derive the non-individually investigated respondent rate of 41.75%.

Commerce found that Pioneer's refusal to submit its FOP data in the requested form and manner impeded the administrative review and justified the use of total AFA. Pioneer challenged this practice as "unlawful and unreasonable." However, since Commerce had been using this practice since the third administrative review of certain steel nails, it is well understood the proper method in which to submit the FOP data, Gordon said.

Pioneer also attempted to sway the court by saying that Commerce's switch to the CONNUM-specific reporting violates the Administrative Procedure Act by failing to provide notice and seek comment . Commerce countered by pointing out that the agency must only use this rulemaking type for "legislative rules," of which the CONNUM requirement is not. Gordon agreed, finding "Commerce’s adoption of a CONNUM-specific reporting requirement does not amount to the implementation of a legislative rule that would require notice-and-comment rulemaking."

The judge also addressed Xi'an and BMD's argument that the separate respondent rate does not reasonably reflect their potential dumping margin. "Unfortunately, Separate Rate Plaintiffs have not identified anything in the record showing that the sample rate calculated using Stanley’s calculated margin and Universal’s and Pioneer’s AFA rates is not accurate or does not bear a reasonable relationship to their actual dumping margins," Gordon said.