Commerce Says Questionnaire Satisfies In-Person Verification Requirement in AD Investigations

The Commerce Department dropped its reliance on facts available in an antidumping duty investigation after conducting remand proceedings at the Court of International Trade, finding a questionnaire it issued in lieu of a site visit during the coronavirus pandemic "satisfies the verification requirement" laid out in the statute, in remand results filed Jan. 12 at the Court of International Trade (Ellwood City Forge Company v. United States, CIT #21-00007).

The remand comes from a case on the antidumping duty investigation into forged steel fluid end blocks from India, in which Bharat Forge Limited served as the sole mandatory respondent. During the investigation, Commerce determined that it could not conduct on-site verification, as required by law, due to COVID-19-related restrictions. So, the agency issued a supplemental questionnaire to the investigation's respondents as a stand-in for verification. Absent the results from on-site verification, Commerce said it needed more information and then ultimately relied on facts otherwise available and calculated a de minimis dumping rate.

The Pennsylvania-based Ellwood City Forge Company filed suit challenging Commerce's reliance on the questionnaire instead of the on-site verification. The agency requested a voluntary remand to "reconsider its position on the questionnaire in lieu of on-site verification and subsequent application of facts available in this investigation."

Commerce considered conducting in-person verification on remand since travel restrictions from the U.S. have been lifted on India (see 2111010056), but ultimately did not. Instead, it dropped its reliance on facts otherwise available, finding the questionnaire a suitable stand-in and refusing to change the de minimis margin. The plaintiffs opposed this move in their comments to Commerce, arguing that the remand results do not address the agency's statutory obligation to conduct in-person verification and issue a report. The plaintiffs also took issue with the fact that Commerce did not offer an explanation as to why the questionnaire was the best alternative to in-person verification or why the questionnaire satisfies its obligations. The plaintiffs also cited the COVID-19 vaccine as being sufficient to lower the risk of the virus enough to conduct verification.

"We disagree with the petitioner that the questionnaire did not satisfy our verification requirements in accordance with 782(i) of the Act," Commerce replied. "The statute gives Commerce wide latitude in its verification procedures; in fact, Congress has implicitly delegated to Commerce the latitude to derive verification procedures ad hoc. ... Commerce disagrees with the petitioner that it is required to conduct an in-person, on-site verification ... Commerce was unable to conduct an in-person, on-site verification, and, accordingly, did not issue a verification report.

"... Additionally, the verification procedures utilized for this investigation were consistent with the CIT’s opinions regarding Commerce’s verification practice: 'Verification is a spot check and is not intended to be an exhaustive examination of the respondent's business.' The 'Questionnaire in Lieu of Verification' probed information already submitted by Bharat and the questions were a spot check regarding specific sales and cost issues identified by Commerce and the petitioner. Therefore, Commerce’s verification procedures in response the Covid-19 pandemic were appropriate and within its statutory authority."