CVD Petitioners Challenge Commerce's Decision Not to Use AFA on Alleged Land Use Subsidy

Countervailing duty petitioners Bio-Lab, Innovative Water Care and Occidental Chemical Corp. challenged the Commerce Department's refusal to use adverse facts available against exporters Heze Huayi Chemical Co. and Juancheng Kangtai Chemical Co. in an administrative review of the CVD order on chlorinated isocyanurates from China (Bio-Lab v. United States, CIT # 24-00118).

The petitioners alleged during the review that information in Kangtai's initial responses indicated that both respondents benefited from the provision of a land grant or land use for less than adequate remuneration. In response, Commerce asked for a copy of the land-use contract for both Heze Huayi and Kangtai.

The Chinese government failed to respond, but both companies submitted responses, claiming they couldn't locate the land-use right purchase contracts. In the review's preliminary results, Commerce used AFA on the alleged subsidy, though the agency didn't use AFA when picking the benchmark for the subsidy.

After the exporters failed again to supply the land-use contracts, Commerce in its final results said that despite the fact that the contracts are "necessary to our determination," it wouldn't use AFA since neither company seemingly "failed to act to the best of its ability."

The petitioners filed suit, claiming that Commerce's failure to use AFA isn't supported by substantial evidence.