AD Petitioner Defends Use of AFA to Federal Circuit Over Methodological Error in Sales Reporting

The Court of International Trade illegally substituted its judgment for the Commerce Department's when it found that the application of total adverse facts available was not backed by substantial evidence, antidumping duty petitioner and defendant-appellant ABB Enterprise Software argued in its Nov. 22 opening brief at the U.S. Court of Appeals for the Federal Circuit. The CIT wrongly held that Commerce impermissibly speculated when finding that an antidumping duty respondent's reporting error backed disregarding the respondent's entire U.S. and home market databases, ABB said (Hyundai Electric & Energy Systems, fka Hyundai Heavy Industries Co., Ltd., et al. v. United States, Fed. Cir. #21-2312).

The case concerns the fourth administrative review of the antidumping duty order on large power transformers from South Korea, in which Hyundai Heavy Industries Co. and Hyosung Corporation served as mandatory respondents. In the review, Commerce hit both respondents with total AFA, finding, in particular, that HHI's reporting of its home market prices warranted the label. Following two court opinions, Commerce eventually dropped the AFA finding, prompting CIT to uphold the case's second remand results.

Under respectful protest, Commerce said that Hyundai still understated the gross unit price for a home market sale in which it treated a certain part as a non-foreign like product, but treated the same part as a foreign like product in another home market sale. In its opening brief, ABB points to the agency's first remand results, in which Commerce deemed this misreporting to be a "methodological error" on HHI's part and that HHI was well-aware of the scope of the order as a "seasoned respondent," and had made similar errors in the past, warranting AFA.

"Hyundai bore the burden of creating and building an accurate and reliable record in the underlying administrative review, yet it failed to do so, leaving Commerce unable to determine the accuracy and reliability of the home market sales price reporting and to calculate accurate dumping margins, the brief said. "This warrants the application of total adverse facts available. ... The CIT also incorrectly determined that Commerce had not shown that HHI had failed to put forth its maximum effort and that any error in reporting was based on a 'good faith' position about the appropriate treatment of subject and non-subject merchandise."

It is this methodological error that justifies the application of AFA, ABB said. The two errors Commerce found in the sample documentation were found to actually be indicative of a larger problem in HHI's methodology to find home market prices. "Particularly troubling is the fact that HHI’s reporting of the parts as non-foreign like product is inconsistent with the scope of the antidumping duty order, a finding that the CIT upheld and that HHI did not appeal," the brief said. "Without accurate home market sales prices -- and with no means to correct those prices -- Commerce is unable to determine an accurate margin using HHI’s reported prices."