AFA Warranted Over Failure to Disclose Affiliation in CVD Review, DOJ Tells Federal Circuit

The Commerce Department reasonably hit countervailing duty respondent Uttam Galva Steels Limited with adverse facts available over its failure to reveal its affiliation with a cross-owned producer of the subject merchandise, Lloyds Steel Industries Limited, the Department of Justice told the U.S. Court of Appeals for the Federal Circuit in a Jan. 14 reply brief. Since Uttam Galva only admitted to affiliation with LSIL after prodding from Commerce, the respondent failed to have cooperated to the best of its ability, justifying the use of AFA, DOJ said (Uttam Galva Steels Limited v. United States, Fed. Cir. #21-2119).

The case concerns an administrative review of the countervailing duty order on corrosion-resistant steel products from India. In the review, Commerce assessed Uttam Galva with a 588.42% adverse facts available rate over its failure to admit to the affiliation with LSIL. Uttam Galva only conceded the existence of the affiliate after prompting from Commerce and, even after doing so, mischaracterized its acquisition of the company, Commerce said. In April 2021, CIT upheld Commerce's decision to stick Uttam Galva with the high AFA rate (see 2104300045).

Uttam Galva then appealed the decision, where it was met with an initial reply brief from the CVD petitioners California Steel Industries and Steel Dynamics (see 2201110069). The defendant-appellees told the Federal Circuit that Uttam Galva impeded the administrative review by omitting the affiliation information, warranting AFA.

DOJ in its reply brief argues that Commerce's AFA decision was backed by substantial evidence and in line with the law. Uttam Galva, in its opening arguments, said that the CVD questionnaire only required that the company disclose its affiliates it believed were cross-owned and that benefited from the same subsidies. However, "the plain language of the request for information does not contain that limitation or caveat," DOJ said. Rather, Commerce reasonably found that LSIL was an affiliate of Uttam Galva since they are both owned by the Miglani family, the brief said.

"As an additional, third basis for applying facts otherwise available, Commerce determined that Uttam Galva’s failure to disclose its affiliation hindered Commerce’s ability to perform a thorough investigation," DOJ said. "... The record simply does not support Uttam Galva’s unfounded assertion that it 'complied fully with the administrative review.' ... Uttam Galva did not provide a complete and accurate response regarding its affiliations at the start of the proceeding. It did not comment on the LSIL financial statements placed on the record. It only finally proffered a full explanation of Uttam Galva’s affiliation/cross-ownership with LSIL after the Preliminary Results and only in response to at least four rounds of prodding by Commerce."