CIT Says Burden on CVD Respondent to Clarify Commerce's Instructions, Upholds Use of AFA

The Commerce Department properly hit exporter SeAH Steel Corp. with adverse facts available due to its failure to submit information on its use of the Korean Export-Import Bank Performance Guarantee program prior to the countervailing duty investigation period, the Court of International Trade ruled in a Sept. 26 opinion.

Judge Mark Barnett said that the burden falls on a respondent to "clarify its understanding of Commerce’s directives and instructions rather than rely on its own interpretation." SeAH didn't submit information showing it received a guarantee from the South Korean government in 2019, prior to the 2020 review period in the CVD investigation on oil country tubular goods from South Korea, claiming that Commerce only asked for data from the review period. Barnett acknowledged that a "plain-text reading of Commerce's" instructions would settle the case, if not for the respondent's burden.

Performance guarantees from the Korean Export-Import Bank are given to Korean exporters and guarantee performance for certain contracts, "often taking the form of a bid bond, advance payment bond, performance bond, or retention bond." Commerce asked if the exporter received any such guarantee during the investigation period, to which SeAH said it didn't. During verification, however, Commerce found that SeAH had an outstanding performance guarantee during the investigation period, though it was issued in 2019. As a result, the agency said the exporter impeded the investigation, slapping it with a 1.33% AFA rate.

Barnett said that the use of AFA was permissible. The judge ruled that SeAH had "ample opportunity to seek clarity prior to submitting its responses," noting that it is the respondent's job to adequately reply to Commerce's requests "regardless of the respondent's perception or substituted judgment."

The agency's rejection of the 2019 performance guarantee information as untimely data first presented at verification is supported since the information "did not corroborate, support, or clarify factual information already on the administrative record," the opinion said. Commerce appropriately rejected the submission since verification is only meant to be chance to submit minor corrections and not add new information to the record.

(SeAH Steel Corp. v. United States, Slip Op. 23-141, CIT #22-00338, dated 09/26/23; Judge: Mark Barnett; Attorneys: Amrietha Nellan of Winton & Chapman for plaintiff SeAH Steel; Hardeep Josan for defendant U.S. government; Christopher Cloutier of Schagrin Associates for defendant-intervenors led by Borusan Mannesmann)