Commerce Cannot Verify AD Respondent's Data Against Another Party's Information, AD Respondent Argues

The Commerce Department violated the law by hitting consolidated antidumping duty respondents Apiario Diamante Comercial Esportadora and Apiario Diamante Producao e Comercial de Mel (collectively Supermel) with total adverse facts available, the respondent argued in a July 27 complaint at the Court of International Trade. Commerce unlawfully used unaffiliated beekeepers to verify Supermel's data, despite the fact that Supermel was the mandatory respondent and not the beekeepers, the complaint said (Apiario Diamante Comercial Exportadora Ltda. v. United States, CIT #22-00185).

"There is no legal authority for Commerce to verify a respondent's data against another party's information," the respondent argued. The three-count complaint further tackles Commerce's finding that Supermel failed to act to the best of its ability and the finding that beekeepers are the producers of subject honey.

The case concerns the antidumping duty investigation on raw honey from Brazil. Commerce treated both Apiario companies as a single entity given that they are connected through family ownership and both operate under the name Supermel. During the investigation, Supermel said it sources its honey from over 1,000 unaffiliated beekeepers in Brazil. From there, the respondent processes the honey with a heat treatment, homogenization, filtration, organic certification and inspection, then ships it abroad.

Supermel then submitted cost of production data based on its acquisition costs from the beekeepers, giving the company's entire honey purchase data with information about each transaction such as the name of the supplier, purchase date, quantity and value and physical characteristics. The respondent made it clear how difficult it would be if Commerce required the cost of production data from the unaffiliated beekeepers since there are thousands of them, and they are nearly all small, mom-and-pop shops.

In the investigation, Commerce said that there is a discrepancy between the quantity and value data of unprocessed honey reported as procured from the beekeepers. In the complaint, the respondent said that these figures that Commerce asked the company to verify, "were neither the total quantity and value reported by Supermel nor the beekeepers." Supermel then provided its honey purchase data to clear up the record. Supermel, though, acknowledged discrepancies between its data and data from tax invoices submitted to Commerce by two of the respondent's many beekeepers. However, the respondent said the discrepancies represented only 0.2% of the total value of the honey bought by Supermel.

Commerce also held in the investigation that the beekeepers are the actual producers of the subject merchandise, using the respondent's acquisition costs as a proxy for the actual cost of production of the beekeepers since the sampling and selection of the largest beekeepers was not attainable. The agency hit Supermel with an 83.72% dumping rate based on AFA given the discrepancies between Supermel's honey purchase data and the beekeeper suppliers' tax invoices, and Supermel's failure to provide journal entries for honey buyers as Commerce requested.

The respondent then took to the trade court to argue against Commerce's use of AFA and finding that Supermel failed to act to the best of its ability. "Commerce’s allegation that Supermel failed to provide the requested documentation because its journal entries are not 'accounting' journal entries is unreasonable," the brief said. "Supermel explained that the journal entries are the actual records maintained by the company and provided the complete reconciliation between the journal entries and account 41 of the company’s financial statements."

Further, it was illegal for Commerce to use the beekeeper's documents to verify Supermel's data, the complaint said. "In the Preliminary Determination, Commerce explained that it collected information from the beekeepers to 'assess the reasonableness' on relying on Supermel’s acquisition costs by examining whether Supermel’s acquisition costs are higher than the beekeepers’ costs. This reasonability test has been met. The alleged discrepancies were present at the time of the Preliminary Determination and did not impact the outcome of the reasonability test." Lastly, Supermel said that it was illegal for Commerce to use AFA based on a beekeeper's failure to provide information given that the beekeepers are not respondents and are not producers of subject merchandise.