Commerce's FA Exception to Verification Claim in AD Case 'Defies Common Sense,' Petitioner Says

The Court of International Trade should remand the Commerce Department's failure to meet its obligation to verify the information of mandatory respondent Shakti Forge Industries in an antidumping duty investigation on forged steel fittings from India, petitioner Bonney Forge Corporation, along with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, said in a July 22 reply brief. Commerce's use of facts otherwise available doesn't excuse the agency from its duty to verify and leads to "absurd results," Bonney Forge said (Bonney Forge Corporation et al. v. United States, CIT #20-03837).

Shakti was the sole mandatory respondent in the antidumping duty investigation. Due to the COVID-19 pandemic, Commerce argued, it was permitted to apply facts otherwise available where it was unable to verify certain information due to travel restrictions (see 2107090055). The agency also held that Bonney Forge never fully broached the argument of failure to verify administratively to Commerce, instead only pushing for a "virtual verification" in their administrative case brief.

The argument that facts available can be used where the agency cannot verify respondent responses "defies common sense," Bonney Forge responded. "If Commerce’s interpretation is correct, the agency could deem itself unable to adequately verify a respondent’s information by traditional means and then reward the respondent by relying on facts available," the brief said. This position also does not align with the legislative history on the matter, the petitioner argued. The only specific description of an inability to verify information, found in the Statement of Administrative Action accompanying the Uruguay Round Agreements Act, holds that if the foreign government concerned objects to verification, then Commerce will not conduct the verification and may disregard "the submitted information in favor of the facts available."

"In short, the facts available provision is intended to give Commerce flexibility where a respondent refuses to permit verification or provides information that is unverifiable -- i.e., information that fails the verification that Commerce is required to perform," the brief said. "The provision therefore also provides an incentive for respondents to not only respond to Commerce’s information requests, but to respond with information that is accurate and can withstand the required verification. The facts available provision is triggered by a failure or lack of cooperation on the part of respondents; it is not intended to excuse Commerce from conducting its investigative duties."

Bonney Forge also countered Commerce's claim that it failed to raise the matter administratively, pointing to a note from the court that said the “plaintiff’s brief statement of the argument is sufficient if it alerts the agency to the argument with reasonable clarity and avails the agency with an opportunity to address it.” The court should therefore reject Commerce's exhaustion argument, the petitioner said.