Commerce Defends Use of AFA Over Conflicting Data Regarding Affiliation
The Commerce Department properly used adverse facts available after finding that antidumping duty respondent Kumar Industries failed to provide key information on its affiliation status, instead supplying conflicting reports on whether one of its partners received income from two unnamed companies, the U.S. argued in a Sept. 26 reply brief at the Court of International Trade. Kumar's bid to explain the discrepancy between the conflicting information "was unpersuasive, and even if true, failed to fully address Commerce's concerns," the brief said (Kumar Industries v. United States, CIT #21-00622).
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The case concerns the 2018-20 administrative review of the antidumping duty order on glycine from India. During the review, Commerce hit Kumar with AFA for its alleged withholding of information about potential affiliation between it and the two companies. The agency believed that there was affiliation between Kumar and the two companies since both were owned by former Kumar partners. The respondent said that the partners have since sold their interests in the companies and no longer exert any control over their business operations.
Commerce ultimately found that Kumar's alleged failure to cooperate with the request for its affiliation status with the two companies meant the agency was unable to find whether the respondent's home market sales to the first company were sales to an affiliate which would require data for downstream sales, and whether its purchases of major inputs from the second company were purchases from an affiliated supplier that would warrant the use of the major input rule and a cost adjustment.
In its motion for judgment, Kumar said that at no point did Commerce ask it to report a home market buyer's resales of its purchases as home market sales or report an input supplier's own input purchases of its sales to Kumar in the AD review responses (see 2207280055). In response, the U.S. focused on Kumar's failure to disclose its partner's history with the unnamed companies until after multiple questionnaires were issued. Even when Kumar did disclose this history, it gave "conflicting information as to whether the partner continues to receive income from those companies, which it failed to adequately explain," the brief said.
Kumar further argued that prior case law shows that the errors are not grave enough to justify an adverse inference, as one cannot be drawn just from a failure to respond. Commerce responded that it did not automatically apply the adverse inference as a result of any inadvertent omission or lack of access to information, but it did so after Kumar "consistently withheld accurate information regarding its affiliations ... over the course of numerous questionnaires."