Commerce Correct to Take New Agency Action Finding Questionnaires Were Verification, US Says

The Commerce Department properly stuck by its decision to issue questionnaires in lieu of on-site verification due to the COVID-19-related travel restrictions on remand at the Court of International, the agency argued in a Sept. 6 brief filed to the Court of International Trade. During the remand, Commerce took a new agency action by finding that the questionnaire responses constituted verification -- a move it says was not only legal but justified since the antidumping duty respondent, Shakti Forge Industries, gave an amount of information that typically exceeds that found in other investigations, and the information corroborated and verified information that Shakti previously submitted (Bonney Forge Corporation v. United States, CIT #20-03837).

The case 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).

The court 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 (see 2207050070). 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.

In reply to the remand, the plaintiffs argued that Commerce needed to carry out a separate verification. The U.S., in its comments, said that it found on remand that the record relied on in the investigation had been verified, so the agency was not obligated to verify the same information a second time. "In fact, to go back and conduct a more traditional 'spot check' verification, when all of the relevant information has already been placed on the record for review by all parties -- something that far exceeds the level of access normally provided parties -- is counterintuitive to the goals not just of verification, but of the entire exercise of calculating accurate antidumping duty margins," the brief said.

The U.S. further replied to the plaintiffs' arguments against Commerce's decision to take new agency action to find that the questionnaire responses constitute verification. "Contrary to plaintiffs’ characterization, Commerce has not argued that any particular action may constitute verification within the meaning of 19 U.S.C. § 1677m(i); rather, Commerce has consistently maintained that during an unprecedented global pandemic where Commerce and the parties were faced with travel restrictions, among other things, it was reasonable and lawful to issue and evaluate the responses to specialized, voluminous post-preliminary questionnaires designed to achieve corroboration of the information a respondent has already reported in the course of the proceeding, as is required by the statute," the brief said.

DOJ then railed against the plaintiffs' argument that Commerce was "obligated to issue a verification," characterizing the claim as being "without merit." The agency can "relax or modify" requirements if there's no substantial prejudice to any party, the brief said. "Given the inherently more transparent nature of the post-preliminary verification questionnaires and the subsequent responses submitted directly on the record, the petitioners had direct knowledge of the procedures and methods of verification, and a formal verification report was not required, thus, no party was prejudiced," the U.S. said.