Trade Court Upholds Total AFA Over Lack of Service-Related Revenue Info, Omission of 1 U.S. Sale
The Commerce Department properly used total adverse facts available over antidumping respondent Hyundai Electric & Energy System's failure to report service-related revenue for its U.S. sales and failure of the completeness test at verification, the Court of International Trade ruled in a Jan. 11 opinion. Since the trade court previously upheld the use of AFA for each of these issues independently, Judge Mark Barnett said the court now finds substantial evidence supports the use of total AFA, as opposed to partial AFA, for both of these points.
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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 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 the company presented at verification. Commerce asked for a voluntary remand to add the documents to the case, which the trade court approved.
The remand results were not sufficient for the trade court, though, 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). However, the court did uphold the use of AFA over the failure to report the service-related revenue and the completeness failure at verification. 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 service-related revenue documents and sale of an transformer to the U.S. that the agency believed to be made in South Korea (see 2208160047).
In response, Hyundai said the service-related revenue documents relate to only a limited and discrete category of information and warrant only partial AFA. Barnett ruled that since AFA had already been sustained for both of the grounds that the agency now relies on, the use of total AFA is supported.
For the service-related revenue reporting failure, Commerce said it needed this information to apply its capping methodology for U.S. sales transactions whereby it caps service-related revenue. Barnett ruled "Commerce has adequately explained why it is treating HEES’s failure to provide service-related revenue differently than it did in the second administrative review." In the second review, the agency received the service-related revenue information, using it to cap service-related revenues, though in the present review, Commerce did not receive the service-related revenue.
The respondent cited the U.S. Court of Appeals for the Federal Circuit's ruling in Mukand v. U.S., which said total AFA is appropriate where the record shows pervasive deficiencies and partial AFA is appropriate where the deficiencies are in a discrete category of information. Also looking to Mukand, the U.S. said partial AFA is not appropriate where the missing information is central to the antidumping analysis, as it is in this case. Barnett said the information here "was vital to Commerce’s ability to cap service-related revenue, calculate accurate export prices, and ultimately calculate an accurate dumping margin."
Addressing the omission of a single sale so that the respondent failed the completeness test at verification, Barnett again backed Commerce's finding. The agency said it "found no reason to assume that the omitted sale was dumped at the same level as another similarly priced U.S. sale because the dumping margin depends not simply on the price of the U.S. sale, but the differential between that price and its normal value -- and the relevant normal value may differ based upon the timing of the U.S. sale and the physical characteristics of that sale."
(Hyundai Electric & Energy Systems v. U.S. Slip Op. 23-3, CIT #20-00108, dated 01/11/23, Judge Mark Barnett. Attorneys: Ron Kendler of White & Case for plaintiff Hyundai; Kelly Krystyniak for defendant U.S. government; and Melissa Brewer of Kelley Drye for defendant-intervenors Hitachi Energy USA and Prolec-GE Waukesha)