Commerce Correctly Used Adverse Inferences for Late Information Disclosure, DOJ Argues

Commerce correctly used adverse facts available against Korean exporter SeAH Steel for its failure to cooperate in a countervailing duty investigation on oil country tubular goods from Korea, DOJ said in its May 16 reply at the Court of International Trade. The government argued that Commerce correctly found that the Export-Import Bank of Korea's (KEXIM's) Performance Guarantee program provided a countervailable benefit using AFA (SeAH Steel Corp. v. U.S., CIT # 22-00338).

SeAH’s eventual disclosure that it used a KEXIM performance guarantee was properly rejected by Commerce because it was not disclosed during the investigation in response to questionnaires, DOJ said. Commerce's application of an adverse inference was warranted because SeAH "impeded Commerce's investigation."

The fact that SeAH received a performance guarantee in 2019, prior to the period under investigation, did not relieve it of its obligation to report the guarantee because it was received during the average useful life period and was outstanding during the period of investigation, DOJ said.

Even if the performance guarantee was not in the form of a loan guarantee, and Commerce had requested loan guarantee information, the way Commerce classified the program "should have indicated to SeAH that the request pertained to performance guarantees outstanding during the period of investigation," DOJ said. Because of SeAH's untimely disclosure, Commerce only discovered the benefit from the program at verification, DOJ said. By then, the department lacked the time to investigate the program because SeAH failed to report it initially.

Despite SeAH's argument at verification that it received no countervailable benefit from KEXIM, Commerce rightly rejected the information that argument relied upon, DOJ said. Because SeAH's failure to provide information in a timely manner "prevented Commerce from gathering the necessary information to analyze the program" Commerce properly concluded that SeAH’s arguments were moot, DOJ said.

SeAH argued that it fully responded to Commerce’s initial questionnaire and that it presented new information at verification to support its position that it had not received any KEXIM performance guarantees during the investigation period. It further argued that Commerce should have issued a supplemental questionnaire instead of penalizing SeAH in its March 17 motion for judgment (see 2303200052).