Commerce Sticks With Questionnaire Instead of On-Site or Virtual Verification on Remand at CIT

The Commerce Department stuck by its decision to issue questionnaires in lieu of on-site verification due to the COVID-19-related travel restrictions in 2020 following an order from the Court of International Trade to either conduct verification virtually or further explain its original decision. The agency in June 30 remand results said that the plaintiffs, led by Bonney Forge, raised the issue of conducting a virtual verification too late and that mandatory respondent Shakti Forge Industries' questionnaire responses provide a "reasonable alternative" to on-site or remote verification (Bonney Forge Corporation v. United States, CIT #20-03837).

The opinion concerns the antidumping duty investigation on forged steel fittings from India. Due to COVID-19 travel restrictions, Commerce said it couldn't conduct on-site verification. The agency issued supplemental questionnaires instead, took Shakti at its word and then used "facts available," resulting in a zero percent dumping margin for the respondent. A group of U.S. producers, led by Bonney Forge, filed suit at CIT, arguing Commerce can't shirk its responsibility to conduct verification (see 2107090055).

Of particular concern to the plaintiffs, and Judge Stephen Vaden, was that during the investigation, the U.S. producers requested that Commerce conduct virtual verification, but the agency didn't respond. This lack of verification is "at the heart" of all of the plaintiffs' arguments, but there is no record answer as to why Commerce rejected this method, Vaden said in the court order remanding the case. Accordingly, the judge sent back the issue for the agency to either conduct the verification or explain why it believes some form of virtual verification is impossible (see 2202030024).

In response, Commerce said that the petitioners mentioned the issue of verification only once in the investigation, but that the request for virtual verification came "far too late" in the matter. The producers brought it up in August 2020, when they should have raised the issue between April and June 2020, when Commerce gears up for such verification trips.

"Raising the possibility of a virtual verification for the first time in a case brief is simply too late in the proceeding for Commerce to reverse course, sort out the significant logistics involved, conduct the sales and cost virtual verifications, draft the verification reports, allow for a second round of case and rebuttal briefs to discuss the findings of the verification reports, hold another hearing on the issues raised in that second round of briefs, if requested, and analyze all comments before issuing the final determination by the statutory deadline," the remand results said.

Commerce said it also did consider conducting virtual verification, despite not explicitly explaining its decision-making process. It said it ruled out virtual verification for "several reasons," including Shakti's lack of electronic record keeping, Shakti's lack of access to systems remotely due to internet issues, the lockdown in India that prevented Shakti's personnel from accessing its facilities, the nine-and-a-half-hour time difference between Washington, D.C., and Rajkot, India, and Commerce's lack of experience with virtual verifications.

The agency also addressed Vaden's mention of three past times where Commerce had to forgo or delay verification due to confounding situations. The remand results, though, said that these instances are uniquely different than the COVID travel restrictions that hobbled the ability to conduct verification. "As an initial matter, an important distinction between the cases referenced and the case at hand is that each of the noted cases resulted from security concerns affecting a specific geographical area," the remand results said. "When security concerns are limited to a single area and travel is not restricted, it is possible to conduct verification at alternative locations. However, because COVID-19 is a global pandemic which closed international borders including those of India and the United States, there were no suitable alternative locations to conduct in-person verification in 2020."