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Commerce Killed Incentive to Cooperate With AFA Rate Over Late Filing, CVD Respondent Tells CAFC

The Commerce Department failed in its obligation to calculate an accurate rate for a Kazakh exporter in a countervailing duty investigation when it unjustifiably rejected the exporter's questionnaire response, despite the response being only two hours late, the exporter, Tau-Ken Temir, said in the opening brief of its appeal at the U.S. Court of Appeals for the Federal Circuit (Tau-Ken Temir v. United States, Fed. Cir. # 22-2204).

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Joined in the appeal by Kazakhstan's Ministry of Trade and Integration and JSC NMC Tau-Ken Samruk, Tau-Ken Temir said that after rejecting the submission, there was nothing the Kazakh government could have done to stop the impending 160% adverse facts available CVD rate, eliminating "any reason or incentive for the Kazakh Government to further cooperate."

The case concerns the countervailing duty investigation on silicon metal from Kazakhstan in which Tau-Ken Temir served as the sole mandatory respondent. During the investigation, Tau-Ken Temir's lawyer said they experienced filing issues, and failed to resolve them by the deadline, which had been automatically extended until 8:30 a.m. the next business day. Elements of the questionnaire came past the deadline.

Commerce rejected the submission and hit Tau-Ken Temir with a total AFA rate. Tau-Ken Temir filed suit at the Court of International Trade, which said that it was reasonable for Commerce to deny Tau-Ken Temir's request for an extension beyond the new 8:30 a.m. deadline for lack of "good cause" (see 2207150035).

In their opening brief, Tau-Ken Temir, the Kazakh trade ministry and Tau-Ken Samruk said Commerce failed to consider three required factors when it decided to reject the filing as untimely. In CVD proceedings, Commerce must consider the interest in ensuring finality, the burden on the investigation and whether the information will boost the accuracy of the calculated CVD margin, the brief said. Commerce also never said that its investigation would have been hindered by fully granting Tau-Ken Temir's extension requests, the exporter said, adding that it submitted the response 158 days before the case's final determination.

Tau-Ken Temir cited the 2022 Supreme Court decision West Virginia v. EPA, which said that issues pertaining to "major questions" of the U.S. economy must be specifically delegated to federal agencies by Congress. Congress gave Commerce the statutory mandate "to accurately calculate CVD/AD margins within the statutory deadlines set for an investigation," the brief said. "Congress did not say that Commerce may elect to not meet its statutory obligations to save money or for its own convenience. Commerce provides no support for such an implicit assumption in its claim."

The appellants also cited a recent CIT decision, Oman Fasteners v. U.S., in which CIT struck down Commerce's rejection of a submission from the Omani steel nail exporter (see 2302280040). In that case, Commerce said that Oman Fasteners' lawyers did not allow for enough time to file its submission since "past performance is no guarantee of future results."

Tau-Ken Temir said that argument was hypocritical, given the agency's finding that counsel's past experience should have led to a timely filing. "So Commerce seems to be saying that experience doesn’t count for anything," the brief said. "And yet Commerce bases its decision on the involvement of experienced counsel. Commerce belies its own decision. The Trade Court in that case was not impressed with Commerce claims, reversing them."

Tau-Ken Temir cited a lengthy list of instances in which Commerce accepted questionnaire responses in cases "that are similar or less compelling" than the appellants'. "The list goes on. But the point is clear. Commerce practice is to accept questionnaires in situations similar to [Tau-Ken Temir's] Subsidy Questionnaire response. It is well-established that an 'agency action is arbitrary' and thus unlawful 'when the agency offers insufficient reasons for treating similar situations differently.'"