Commerce Switches Basis for AFA in Turkish CVD Case, Respondent Takes Issue
The Commerce Department continued to rely on adverse facts available in a countervailing duty case on remand at the Court of International Trade, holding that respondent Celik Halat ve Tel Sanayi failed to act to the best of its ability when providing certain information about a Turkish government subsidiary. While it dropped AFA over Celik Halat's Section III of the initial CVD questionnaire, as instructed by the court, the agency still used AFA over Celik Halat's failure to respond to the Standard Questions Appendix of the Tax Program Appendix for the subsidy (Celik Halat ve Tel Sanayi A.S. v. U.S., CIT #21-00050).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Celik Halat took issue with the remand results, arguing that Commerce should have used neutral facts available. The agency attempted to squeeze a six-month questionnaire process into a two-week remand period, the company said. "Commerce’s inability to ask follow-up questions, require clarifying information, or conduct extensive verification was due to Commerce’s unjustified rejection of Celik Halat’s initial response during the investigation, particularly considering Celik Halat’s continued attempts to cooperate," making the use of AFA unlawful, Celik Halat argued.
Celik brought the case to CIT to contest the CVD investigation into prestressed concrete steel wire strand from Turkey in which Celik served as a mandatory respondent. In the investigation, Commerce rejected Celik Halat's Section III response for being 87 minutes late. Prior to the late submission, the company said COVID-19, closed offices, no robust work-from-home infrastructure and a Turkish holiday necessitated a requested filing extension. Commerce granted that request.
The respondent then submitted its business proprietary version of the document on time. Then, due to Commerce's one-day lag rule, Celik Halat had until Aug. 10, 2020, at 5 p.m. EDT to submit the bracketed, public version of the filing. It was this filing that was completed 87 minutes late. Prior to this, Celik requested another extension because its finance manager was in a minor traffic accident and its counsel had knee surgery. Commerce refused to grant this extension, saying that the circumstances weren't extraordinary as laid out in the agency's regulations.
The trade court found this refusal to be an abuse of discretion, characterizing the movie as a "draconian penalty" on Celik Halat for an inadvertent error (see 2202160021). On remand, Commerce dropped its use of AFA for the questionnaire response but continued to hold AFA for other elements of the respondent's submissions. In the investigation, Commerce found Celik Halat received a countervailable benefit under the Turkish Government's General Investment Incentive Scheme (GIIS) Customs Duty Exemption program.
Under the program, the Turkish government exempts import duties, but they remain payable to the government until the Turkish authorities close out the relevant investment incentive certificate (IIC). Pending this close-out, the respondent is liable for the exempted duties, making it a countervailable benefit in Commerce's eyes. The agency said had it received a complete response from Celik Halat on remand, it could have assessed the benefit under this program.
Commerce said Celik Halat didn't issue responses to the Standard Questions Appendix or the Tax Program Appendix during the initial responses, precluding the possibility of finding the benefit conferred under the GIIS Customs Duty Exemption program. Those questions Celik Halat did provide in the supplemental questionnaire responses weren't answered fully, Commerce said. "Due to Celik Halat’s incomplete response, Commerce is unable to assess the benefit under this program," the remand said.
Celik Halat took issue with this characterization, arguing the agency ignored the court's orders in the scope of its remand and also improperly denied the company more time to respond to Commerce's protracted questions. Celik Halat said it answered all of Commerce's questions and the basis for AFA was illegal because the agency never requested certain information that it said it did. The result was a 2.96% dumping margin for Celik Halat.
"Even if Commerce were to apply an AFA rate, the rate chosen in the Draft Results is impermissibly disproportionate because the AFA rate is 45 times higher than the average rate of all other programs for which Celik Halat received a benefit and 25 times higher than the highest program rate," the comments said.