Petitioners Claim Commerce Ignored Errors Found During Post-COVID Visit to Exporter

After the Commerce Department undertook a court-ordered on-site verification visit for an Indian forged steel fluid end block exporter due to a petitioner’s lawsuit, the petitioner responded in comments March 8 saying that the visit stirred up new inconsistencies that Commerce should have taken into consideration when calculating the exporter’s antidumping duty rate (Ellwood City Forge Co. v. U.S., CIT # 21-00007).

“Commerce has consistently found that errors identified in spot checks call into question the overall reliability of a respondent’s reporting,” the petitioners, led by Ellwood City Forge, said in the brief.

Commerce released another remand redetermination Feb. 7 that upheld the de minimis rate received by exporter Bharat Forge Limited after it conducted an on-site verification visit on remand that had initially been canceled due to the COVID-19 pandemic (see 2402080076). The visit, Commerce said, resulted in a number of small changes to Bharat’s margin calculation, even application of partial adverse facts available at points, but those ultimately didn't affect the exporter’s final AD rate.

Opposing the redetermination, Ellwood cited two purported errors that arose in the course of Commerce’s verification visit that it said should have had a larger impact on Bharat’s dumping margin.

First, it said that mill certificates submitted to Commerce by Bharat Forge were inconsistent in regard to one category of its products with a specific steel grade. The exporter had “presented the same mill test certificate for the same heat number” with “different … content measurements,” and the “corrected … content shows it to be an in-scope merchandise.”

The exporter presented three inconsistent mill certificates to Commerce as part of a “minor correction package,” but Commerce went on to find more errors Bharat had not included, Ellwood said.

Commerce said these errors were minor because the department didn't find that problem with any of the mill certificates for ingots used in the exporter’s other steel grades. But the department “fails to explain how reviewing a few additional mill certificates for other grades can establish the mill certificates themselves as accurate,” Ellwood argued. The only thing Commerce did was determine that the other ingots’ mill certificates were consistent, not that they were true, the petitioners said.

Second, Ellwood said that Bharat’s financial reporting showed the exporter had misrepresented some of its products’ CONNUM numbers. Two products indicated by their numbers that they were made up of certain parts, but those parts’ costs were not reflected in Bharat’s finances, it said.

“Commerce explained that it inspected ‘the supporting documents (purchase order, invoice, packing lists, etc.),’ and found that one of the CONNUMs ‘should have been reported with additional costs for parts’ and the other ‘should have been reported with a parts characteristic of zero,’” the petitioners said.

The department wrongly “explained away” this error by saying that the “parts” characteristic -- ”the last of 18 physical characteristics which makes up the CONNUM” -- was not very significant compared with the other characteristics. Commerce also argued that the parts’ costs were not an important portion of Bharat’s total expenditures, making application of adverse facts available for the error unreasonable.

The petitioners disagreed, as “simply stating that the errors are too small to warrant total adverse facts available is not substantial evidence for the conclusion that the CONNUM coding is reliable,” they argued. Neither of Commerce’s explanations provided substantial enough evidence to contravene the larger issue of accuracy raised by the errors, they said.

Commerce’s dismissive treatment of these two problems discovered during its on-site visit was arbitrary and inconsistent with its past practice, the petitioners said. The department should have applied a broader AFA to Bharat, they said, because the limited AFA currently included in Bharat’s dumping margin is not enough to ensure the exporter’s full cooperation in the future.