German Exporters Challenge AFA Rate for Lack of Manufacturer Data in Steel Plate AD Case
German exporters, led by Ilsenburger Grobblech, filed an opening brief at the U.S. Court of Appeals for the Federal Circuit challenging the Commerce Department's decision to use adverse facts available against exporter Salzgitter Mannesmann Stahlhandel in an antidumping duty investigation on cut-to-length carbon and alloy steel plate from Germany (Ilsenburger Grobblech GmbH v. United States, Fed. Cir. # 24-1219).
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The exporters said the use of partial AFA for Salzgitter's sales with an unknown manufacturer was unsupported since the evidence showing that the respondent "acted to the best of its ability is overwhelming." The company developed "special programs to maximize the manufacturer information that could be extracted from electronic databases maintained for other purposes that did not 'talk' to one another," the brief said.
While this system didn't allow the company to report the manufacturer for all of its sales, the "remaining manufacturer information was practically impossible to obtain within the timelines" set by Commerce, the exporters said.
The justification for the use of AFA -- particularly the assumptions pertaining to steel distributors' recordkeeping -- "was squarely contradicted by the record," the brief said. Commerce failed to account for the difference between manually reviewing documents for occasional requests in the ordinary course of business and manually reviewing sales within the agency's "dictated schedule," the exporter argued.
Commerce also erred in picking the "highest non-aberrational net price" as the partial AFA rate since the agency "disregarded verified data that was not related to filling the informational 'gap' identified in the record, namely the manufacturer." The result of this AFA data was a dumping margin "12 times higher" than the margin which would have resulted for the use of the verified data and any of the three options floated by Salzgitter, the brief said.
The Court of International Trade sustained the use of partial AFA against Salzgitter in June 2023 due to the company's failure to report the manufacturer for a certain amount of its 28,000 sales (see 2306230054).
During the underlying investigation at Commerce, Salzgitter offered three alternatives to show what its margin would have been if the company fully disclosed all the requested information. These alternatives either treated none of the sales as Salzgitter-made plate, treated all the sales as Salzgitter-made plate or treated only a portion of each sale as Salzgitter-made plate. The trade court rejected all three since Salzgitter did not give any additional information to show that one of the alternatives constituted the "only reasonable path forward on this record."
Salzgitter told the appellate court that "the source of the CIT's conclusion" that the company's three proposals lacked the type of "connectivity" that would make them reasonably reflect the missing plate manufacturer information is "unclear." The agency didn't discuss the proposal's lack of "connectivity," making the trade court's ruling completely untenable, the brief said.
CIT also said it "cannot understand" why the company didn't just conduct a statistical analysis of its 28,000 CTL sales with missing information using a "sufficient and randomized sample size that was then manually matched to the missing manufacturer information from its legacy mill certificate management system." The court "incorrectly characterized Salzgitter's proposed alternatives as 'mere speculation' and incorrectly suggested that they were not accurate and statistically valid," the brief said.
Salzgitter added that Commerce did not support its finding that the respondent failed to cooperate to the best of its ability with any evidence, "meaning that the Department's statement amounted to mere speculation." All Commerce showed was that the company is a "large, experienced, global steel distributor," which proves that the industry doesn't have a way to systematically track the producer of every steel plate sale, the brief said.