Commerce Sticks With Adverse Inference Over Incorrect US Sales Dates in Pasta AD Review

The Commerce Department stuck by its decision to hit affiliated antidumping respondents Ghigi 1870 and Pasta Zara with an adverse inference over their U.S. payment dates in Feb. 28 remand results submitted to the Court of International Trade. However, the agency dropped the adverse inference on the U.S. sales for which Commerce verified the correct date. The result, if sustained, is a weighted-average dumping margin of 91.74% for Ghigi/Zara (Ghigi 1870 S.P.A. v. United States, CIT #20-00023).

The case involved the 22nd administrative review of the antidumping duty order on certain pasta from Italy, in which Ghigi and Zara served as one mandatory respondent. Following the questionnaire period, Commerce undertook a verification of Ghigi's U.S. constructed export price sales, when Ghigi told the agency that the U.S. payment dates were wrong due to a programming error. Ghigi subsequently requested that Commerce revert to using its original database to get a more accurate list of the U.S. sales dates.

The agency declined, declaring that its practice is to use the most recently submitted data. Settling on using the wrong data, Commerce then found it couldn't verify the dates, and thus relied on facts available with an adverse inference. Judge Richard Eaton upheld Commerce's use of facts available but not the adverse inference (see 2111300060). The judge said that an adverse inference can only be used when a respondent has been found to not cooperate to the best of its ability in the investigation. Commerce did not establish that here, so it cannot rightfully claim AFA, Eaton said.

On remand, Commerce maintained the adverse inference on the U.S. sales for which the correct date could not be found. To establish the adverse inference, the agency looked to the U.S. Court of Appeals for the Federal Circuit precedent in Nippon Steel which established the "best of its ability" standard. "The record is clear that Ghigi/Zara did not meet the standard articulated in Nippon Steel," the remand said. Commerce said that since Ghigi/Zara is an experienced respondent having participated in past reviews, it should have known the proper format regarding payment date submissions.

"Second, the failure of Ghigi/Zara to respond fully is the result of the respondent’s lack of cooperation in failing to put forth its maximum efforts to investigate and obtain the requested information from its records," the brief said. "At verification, Commerce found that the payment dates were incorrect for all five U.S. sale traces performed (three of which Ghigi/Zara were informed would be examined prior to verification and two of which were identified at verification)."

Ghigi and Zara clearly showed "inattentiveness, carelessness or inadequate record keeping," in line with the Nippon Steel standard, Commerce said. Since the date of the U.S. sales is a consequential piece of information for the calculation of the adjustment for imputed credit expenses, this carelessness need be met with an adverse inference, the agency argued.

In comments to Commerce, Ghigi and Zara said the agency was wrong to verify its original U.S. sales database and that the existence of this database makes it wrong for the agency to apply an adverse inference. "These arguments are not responsive to Commerce’s findings in the Draft Results, but rather attempt to relitigate an aspect of the Final Results that was upheld by the Court," Commerce said. "In the Remand Order, the Court concluded that Commerce had not justified the application of an adverse inference and remanded the Final Results."