CIT Rebukes Commerce's Use of Total AFA in AD Review Due to Lack of Notice, No Gap in Record

The opinion comes in a case over the first administrative review of the antidumping duty order on hot-rolled steel flat products from Australia, covering entries in 2016-17, in which BlueScope served as mandatory respondent. During the review, it was revealed that all of BlueScope's exports -- made through its affiliate Australian Iron & Steel -- went to its U.S. affiliate, BlueScope Steel Americas, which then entered the merchandise and resold it to yet another affiliate, Steelscape, BlueScope's affiliated processor. The only sales in the U.S. to unaffiliated customers were of merchandise further processed by Steelscape.

During the review, Commerce issued Section A supplemental questionnaires to BlueScope and its affiliates on their U.S. home market and third-country market sales. To show this information, BlueScope gave the agency two charts, one showing constructed export price (CEP) sales and entries of subject merchandise, and the other showing the total amount of Steelscape's sales of further processed merchandise and the total quantity of AIS' sales of hot-rolled steel flat products in the U.S. through the affiliated transactions. These charts show an exact match between Steelscape's sales of further processed merchandise to unaffiliated customers and the quantity of CEP sales, the court said.

Nevertheless, Commerce tossed BlueScope's U.S. sales quantity and value reporting, finding that the record lacked "(1) 'the total quantity and value of sales during the [period of review] by Steelscape of further processed merchandise made using the subject merchandise that entered during the [period of review]'; and (2) 'the total quantity and value of the subject merchandise that entered into the United States during the [period of review],'" the opinion said. The agency took issue with the "form and manner" of BlueScope's submitted materials.

Eaton found that these were not adequate grounds to apply total AFA and instructing Commerce to use BlueScope's Section A submissions unless it can show that the form and manner of the answers prevents it from finding the listed information.

"Commerce’s 'form and manner' analysis focuses on BlueScope’s perceived lack of cooperation throughout the review, rather than the usability of the information it eventually produced," Eaton said. "Under the facts of this case, whether or not BlueScope cooperated is only relevant after Commerce has first determined that necessary information is missing from the record. ... The court is not satisfied that necessary information is missing here, or that the form and manner of BlueScope’s responses created a gap in the record. The court had no trouble concluding, for example, that BlueScope represented that Steelscape was its only source of sales to unaffiliated customers in the United States, and the quantity and value of those sales."

Eaton also found that Commerce erred when applying total AFA since it failed to issue notice over allegedly deficient submissions. The agency said it lacked usable U.S. sales reconciliation and usable home market sales reconciliation due to changes made to BlueScope's U.S. and home market sales database. BlueScope, however, characterizes the changes made to its submissions throughout the review as attempts to comply with Commerce's instructions.

For instance, one mismatch occurred between BlueScope's U.S. sales in its sections A and C databases. The Section C database removed certain U.S. sales that had been returned after the end of the review period, so the difference between the sections A and C sales data was the "exact quantity of returned sales." However, Commerce never mentioned an issue with these databases. "Rather, Commerce waited to disregard BlueScope’s U.S. sales information because of the mismatch in quantity figures and the lack of supporting documentation -- and indeed, to replace all of BlueScope’s information with facts available -- until it was too late for BlueScope to remediate any deficiency in its reporting," Eaton found.

A similar story is found with regard to BlueScope's home market sales in its Section B database. In both of these instances, the court found Commerce to have failed to issue proper notice of deficient submissions. On remand, Eaton instructed Commerce to "notify BlueScope of the nature of the alleged deficiencies" in its sections A, B and C responses.

(BlueScope Steel Ltd., et al. v. United States, Slip Op. 21-160, CIT #19-00057, dated 11/30/21, Judge Richard Eaton. Attorneys: Christopher Dunn of Curtis Mallet-Prevost for plaintiffs; Kelly Krystyniak for defendant U.S. government)