US Uses Past Verification of Non-Use of EBCP to Defend Use of AFA on Remand at CIT
The fact that the Commerce Department verified non-use of China's Export Buyer's Credit Program in two administrative proceedings speaks to the validity of its verification process, the U.S. said in a Sept. 28 reply brief at the Court of International Trade. Asking the trade court to uphold its use of adverse facts available for countervailing duty respondents' failure to submit full questionnaire responses issued on remand over the EBCP, the government argued that the fact that it verified non-use administratively in other cases shows the need for the requested information (Dalian Meisen Woodworking Co. v. United States, CIT #20-00110).
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The case was filed by respondents Dalian Meisen Woodworking Co. and The Ancientree Co. to contest the results of the CVD investigation on wood cabinets and vanities from China. In the investigation, the agency said the use of AFA or the EBCP was needed since the Chinese government refused to provide two key pieces of information regarding how the program works: information about the role of third-party banks in disbursing credits, and revisions made to the program in 2013. However, the respondents in the investigation submitted declarations from their U.S. customers that they did not use the program.
As it has held many times before, the court said that Commerce did not establish solid enough grounds to use AFA for this program (see 2205230033). But in this decision, Judge Richard Eaton told Commerce to find a practical solution for verifying information from CVD respondents' U.S. customers that shows that they did not use the EBCP. On remand, the agency issued supplemental questionnaires to the respondents, requesting information from the respondents' unaffiliated customers. When the respondents failed to provide full responses, Commerce continued using AFA.
Meisen and Ancientree argued the questions in the questionnaires were designed to create artificial gaps in the record so as to make a complete response impossible. The remand was not a practical solution, the plaintiffs said (see 2209060056). In its reply, the U.S. said that its questionnaires identified a reasonable and practical solution for verifying non-use of the EBCP. To verify non-use, Commerce said it must review loan and financing data for the respondents and their customers to find that no loans were either directly or indirectly received from China's Export-Import Bank. The agency's questionnaire sought out information to verify this loan information.
The U.S. said that the respondents' challenges to the verification process fail to find any error in the remand results. Contrary to what the respondents argue, the court did not direct the agency to use the plaintiffs' preferred approach to find a solution to verifying non-use, the government said. "The respondents’ preference for an approach more favorable to their own interests does not undermine the reasonableness of Commerce’s approach, which was also consistent with past practice," the brief said. The U.S. further railed against Meisen's claim that it did not need to fully comply with Commerce's requests. "It is not Meisen's role to decide what is relevant to report to Commerce," the brief said.
The government also discussed two administrative proceedings raised by the plaintiffs. In these cases on mobile access equipment from China, Commerce verified non-use of the EBCP without the information from China. In its brief, the U.S. used this as evidence that it needed the information it requested on remand. "Here too, Commerce considered whether any information provided by the respondents would be sufficient to fill the gap of missing information, ultimately deciding the information was not sufficient," the brief said.