Lack of Some SRR Docs, Omission of 1 US Sale Do Not Justify Total AFA, AD Respondent Argues
The omission of certain documents related to service-related revenues (SRRs) in an antidumping review does not warrant the use of total adverse facts available, respondent Hyundai Electric & Energy Systems argued in a Sept. 15 brief at the Court of International Trade. Nor does the respondent's failure to report a sale of a large power transformer that the Commerce Department believed was made in South Korea, Hyundai said in vying for partial AFA (Hyundai Electric & Energy Systems v. U.S., CIT #20-00108).
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The case concerns the final results in the 2017-2018 administrative review of the antidumping duty order on large power transformers (LPTs) from South Korea in which Commerce initially assigned Hyundai a final dumping margin of 60.81% based on total AFA. During the ensuing lawsuit, CIT granted Hyundai’s motion to supplement the record with two documents that Hyundai presented at verification. At Commerce’s request, the Court remanded the final results of the review for Hyundai to allow Commerce to consider the two documents.
The remand results were not sufficient for the trade court, with CIT again sending the issue back to the agency, this time based on Commerce's use of AFA related to the reporting of certain unnamed parts as being not in scope (see 2205180064). In its second remand results, Commerce said it didn't have a sufficient basis to find that Hyundai misclassified the parts in question, but total AFA was still warranted given the reporting of SRR documents and sale of an LPT to the U.S. that the agency believed to be made in South Korea (see 2208160047).
In its comments on the remand, Hyundai railed against the use of total AFA on these grounds. As for the omission of certain SRR documents, the respondent said they relate only to a "limited, discrete category of information," and don't warrant total AFA. Commerce said the lack of these documents stops it from applying its capping methodology and the trade court has backed the use of AFA when Hyundai failed to give information needed to apply this methodology. However, the respondent noted that in the past the agency backed the use of partial AFA only over missing SRR documents and Commerce's "attempt to bootstrap the overall dumping margin calculation onto the SRR issue does not support total AFA."
Hyundai said the role of capping in the dumping margin calculation did not change from one review to another, precluding the possibility of using partial AFA for one review and total AFA for another. Further, the SRR issue affects only a discrete part of the dumping margin and does not "justify disregarding all of the other correctly reported and verified data," the brief said.
Commerce's finding that an alleged omission of a large power transformer sale from the U.S. sales database backs the use of total AFA also falls flat since the record does not show that a single allegedly omitted sale undermines all of Hyundai's U.S. sales reporting, the respondent said. The trade court and Commerce have previously and routinely found that the omission of a single sale is not sufficient to support the use of total AFA, Hyundai argued.
The agency has also failed to provide evidence that omitting the sale at issue results in significant inaccuracies. "Indeed, the Department does not claim that such inaccuracy or effect actually exists, but claims only that it 'could' or 'may' occur," the brief said. "Such unsupported, conclusory statements are impermissible speculation." Commerce also argued that the combination of the two bases for the use of total AFA backs the use of total AFA.
"Yet, even in combination, these issues do not justify the use of total AFA. The Department can (1) resolve the SRR issue using available information to apply AFA for allegedly missed SRR (as it did in the review underlying the POR2 Appeal); and (2) resolve the LPT issue ay adding the allegedly missing sale to the US sales database. Total AFA is unnecessary and unwarranted," the respondent said.