Lack of On-Site Verification Due to COVID-19 in Line With Past Agency Practice, Commerce Argues

The Commerce Department properly relied on a questionnaire instead of conducting on-site verification due to COVID-19-related travel restrictions, the U.S. argued in a May 10 reply brief at the Court of International Trade. The plaintiffs, led by Ellwood City Forge, didn't take issue with the verification methodology until litigation and the methodology is in line with Commerce's actions in prior crises, so the questionnaire should be sustained, Commerce argued (Ellwood City Forge Company v. U.S., CIT #21-00007).

In the antidumping duty investigation into forged steel end blocks from India, Bharat Forge was the sole mandatory respondent. Commerce determined it could not conduct on-site verification, as required by law, due to COVID-19-related restrictions. The agency instead 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 to calculate a de minimis dumping rate.

Facing a CIT challenge, Commerce requested a voluntary remand period to review its position. On remand, Commerce considered conducting in-person verification 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 left unchanged the de minimis margin.

The plaintiffs, petitioners in the investigation, resubmitted their motion for judgment to account for the remand, suggesting videoconferencing as a preferred alternative to the questionnaire. The U.S. disagreed: "That Ellwood would have preferred a different method, such as videoconferencing, does not render Commerce’s exercise of its discretion unreasonable or contrary to law," the brief said.

Commerce then cited examples of its actions taken in prior crises (i.e., political violence, natural disasters) to argue it didn't need to conduct on-site verification. "Commerce exercised the broad discretion delegated by Congress to perform verification through the use of a verification questionnaire in light of a global pandemic," the brief said. "Moreover, plaintiffs themselves suggest an alternative to on-site verification, videoconferencing, as an example of an alternative method for conducting verification."

The U.S. said its verification questionnaire is proper under the statute, addressing one of the key elements of Ellwood's case. Ellwood had argued the statute clearly means on-site when it discusses verifying information in antidumping cases and said Commerce should have consulted with the petitioners when coming up with a new verification method.

"The statute gives Commerce wide latitude in its verification procedures; therefore, Congress has implicitly delegated to Commerce the latitude to derive verification procedures ad hoc," the brief said. "In exercising this discretion, Commerce is under no obligation to 'consult' with parties. However, Commerce provides parties with multiple opportunities to file rebuttal factual information, submit comments regarding Commerce’s exercise of its discretion, and file case briefs arguing how Commerce should exercise its discretion, if relevant."