Commerce Can't Penalize CVD Respondents for Withholding Info Not Requested, Brief Says

The Commerce Department erred when it used adverse facts available against Korean exporter SeAH Steel Corp.'s alleged benefits under the Export-Import Bank of Korea's (KEXIM's) Performance Guarantee program, SeAH argued in a May 17 motion for judgment at the Court of International Trade. Commerce illegally used adverse facts available in assigning SeAH a 1.33% CVD rate when it found that a 2019 KEXIM guarantee amounted to "untimely new factual information" (SeAH Steel Corp. v. U.S., CIT # 22-00338).

SeAH was a mandatory respondent in a countervailing duty investigation on oil country tubular goods from South Korea. In its questionnaire, the company told Commerce that it received no assistance from the government of Korea during the period of investigation.

Commerce’s determination to apply AFA was based on its conclusion that SeAH had received a guarantee from KEXIM during the relevant period but there is no evidence to support that claim, SeAH said. "There was no basis for Commerce to find that any such guarantee had been received during 2020, or that SeAH had failed to report any guarantees received during 2020," the company said.

Commerce can't use AFA when it never requested the underlying information in the first place, SeAH argued. The initial questionnaire asked respondents to self-report any other subsidies that they may have benefited from only during the period of investigation. Since the 2019 guarantee was received before the POI, SeAH said, it was not obligated to report it and shouldn't be penalized for withholding the information.

Even if SeAH had reported the guarantee, Commerce's finding that the guarantee was a countervailable subsidy during the investigation period is incorrect, SeAH said. The KEXIM Performance Guarantee did not benefit SeAH's exports of OCTG to the U.S. "Under Commerce's longstanding practice," any benefit of the 2019 guarantee would have been assigned to 2019 and would not affect the calculation of SeAH's 2020 subsidy rate, SeAH said. The amount of benefit derived from the guarantee would be de minimis "even under the most adverse assumptions possible," the company said.

Commerce's claim that the company was not fully cooperative is untrue and should not have resulted in a punitive rate, the company argued. "Commerce attempted to manipulate the record to support its false claim that SeAH had improperly failed to report a KEXIM performance guarantee that fell within the scope of the reporting requirements," SeAH argued.