Commerce Can Rely on Incomplete Surrogate Records, Parties Argue Before CIT

Led by AD petitioner Ashley Furniture Industries, the plaintiffs contesting the administrative review brought their initial complaint against Commerce’s choice of Indian mattress exporter Emirates Sleep to calculate surrogate financial ratios for the respondents.

Reif ruled in December 2022 that Commerce had failed to demonstrate it had complete access to Emirates’ financial records (see 2212080061). Plaintiffs pointed to five missing annexes that they said could contain information about countervailing subsidies that would call the accuracy of Emirates’ surrogate values into question. They also protested that, despite Commerce’s claims, Emirates’ business records were not publicly available (see 2304280056).

Reif remanded Commerce’s administrative review specifically because of the missing fifth annex, which included a section for short-term loans and advances.

During the Jan. 18 oral argument, Reif asked for examples of times in the past that Commerce has relied on incomplete financial statements to make decisions. None of the parties had specific instances, but the petitioners’ counsel said he had a statement from Commerce saying that it did so in the course of practice as long as no vital information was missing. When asked where the statement came from, he said he thought it was another case.

The judge admonished the parties for lack of citations.

“We try to actually do what they teach in law school afterward and look for actual citations to things,” he said. “It helps with writing these opinions. And you can actually cite to something, substantiate what you’re citing. Also helps in briefs to the court.”

Regarding the contents of the missing fifth annex, the judge added, “We’re grappling with the fact that we don’t know. You don’t know, I don’t know.”

The petitioners said that by Commerce’s usual practice, the question of whether Emirates received countervailable subsidies wouldn't be answered, or even raised, in the missing documents. That had been affirmed by CIT and the U.S. Court of Appeals for the Federal Circuit, it said.

“Congress was very explicit that Commerce is not required to do a formal CVD analysis of these financial statements,” it said.

On the subject of public access to Emirates’ financial records, Ashley Furniture has said in the past that it can't access the relevant Indian Ministry of Corporate Affairs database because logging in requires an “Income Tax PAN.” DOJ responded that the company must log in as a “registered user,” not a “business user.”

Ashley Furniture’s counselor said he had managed to do so, but had not been able to get past putting items in the online shopping cart to pay the nominal access fee.

“From that point on, I could never get to actually seeing the document,” he said. “I’m not speaking of the record, I’m trying to get to what’s real here. Because sometimes I know the court will go and try to log on yourself. Maybe it will work for you, but it never worked for us so far, to where we can actually view this Emirates Sleep financial data.”

If the government did access the data in the same way, Ashley Furniture said it probably did so with the help of an Indian consultant who had a PAN, or permanent account number.

However, the company said it ultimately had been able to locate the financial data using another website the government offered.

“Okay, so they gave you two sources to find this thing, and you found it,” the judge said.

Ashley Furniture said it hadn't been able to during prior case proceedings, and had ultimately hired a consultant of its own.