Rulings, remedies and court proceedings for customs and trade professionals

Commerce's Rigid Enforcement of AD/CVD Filing Deadlines Hits Trade Bar

As filing day approaches, the calendar is marked with a big figurative red X, multiple alerts have been set and hours have been spent combing through documents to make sure the Commerce Department’s ACCESS system accepts the submission. But sometimes, despite all the preparation, something derails the process and the documents are turned in late. Suddenly, a routine part of the job has morphed into every lawyer’s nightmare -- a missed deadline.

For the trade bar, an even minutes-late submission sets them on a collision course with Commerce’s rigid enforcement of its deadlines. The agency has recently been rejecting the entirety of a company’s submissions if even one document is late and assigning a full adverse facts available rate, often derived from the antidumping duty or countervailing duty petitioner. This can mean soaring AD/CVD rates, and even the revocation of AD/CVD orders or lost clients.

“Essentially, what they’re doing right now is they’re giving the corporate death penalty for the equivalent of a parking ticket,” said David Craven, counsel for various AD/CVD respondents.

From Commerce’s perspective, ensuring deadlines are met is essential to its operation. The agency oversees over 660 AD/CVD orders and handles more than 8,000 filings a month. “I know from watching the practice how difficult it is for Commerce to manage all this,” said Nathan Rickard, counsel for AD/CVD petitioners. “There are parties that surely abuse deadlines and tend not to meet them overall, which requires Commerce to come down to just at least manage the immense amount of litigation they have.”

Commerce does not differentiate between a submission that is filed five minutes late and one five hours past deadline. What it does make clear via guidance on its website is that the most important thing to do to avoid a missed deadline is to reach out to the agency.

Commerce lays out three possible scenarios in which attorneys can’t file their submissions on time: the attorney just needs more time, is having ACCESS filing troubles or has another type of emergency. For all three, Commerce says to file a letter in ACCESS requesting an extension. If the request is timely filed, that could guarantee the party until 8:30 am ET the next business day to make the filing, if not given a decision from the agency. If ACCESS is not working, however, the agency says to call or email the analyst in charge of the case.

Some trade lawyers noticed a change in Commerce’s practice a few years ago. Prior to 2018, the agency was more lenient on accepting documents, granting extensions or even applying partial AFA as opposed to total AFA for a single late submission, according to the attorneys. Then, in just the last year, Commerce has moved toward even more rigidly applying total AFA in situations in which even one document is late and falling short on its rationalizations for making that move, they say.

“Rationalizing consequences is something that has been missing in the last year,” said Arpit Bhargava, an India-based trade attorney for AD/CVD respondents at SBA Consulting. “Commerce has always been strict about enforcing deadlines, but they would rationalize it. Like, okay, ‘you missed the deadline, what else do you have on the record?’ If it’s reasonable enough, they do partial AFA. In 2022, if anything goes wrong, they go, ‘Oh, we have an opportunity, we’re just going to go full AFA.’”

But issues can arise outside of lawyers' control with Commerce’s ACCESS system. Many lawyers have experienced technical difficulties in submitting various documents on the platform, leading to delays and steep consequences.

Commerce added a file-checking service on ACCESS through which attorneys can run submissions to see if their documents will be accepted by the system. The problem is that lawyers may sometimes find their submissions clear the file-checking application only to be rejected by ACCESS when it comes time to actually submit the document. The file-check feature even appeared in a CIT case, Oman Fasteners v. U.S., where it was part of the reason Judge M. Miller Baker issued a strong rebuke of Commerce's use of AFA over a late submission.

“I’ve stopped using the file-checking system because it doesn’t give me anything other than false confidence,” Craven said. He added that one problem with ACCESS is that it requires text to be on every page, so if a page has a picture on it with no text, it gets sent through the system as a blank page and can result in the rejection of the submission. Craven said he has found watermarks to be a convenient workaround.

Commerce received direct feedback from trade lawyers on its ACCESS system after it requested comments on its regulations pertaining to service of documents submitted in AD/CVD proceedings. The Bristol Group and Cassidy Levy were two firms that provided input, with Cassidy specifically telling the agency that it should make further technical changes to ACCESS, including increasing ACCESS file size limits, increasing the number of files in each “batch” download and consolidating all parts of a submission under a single barcode.

“Commerce is currently considering the comments received on the Proposed Rule and will issue a Final Rule in the near future,” a Commerce official said when asked about the feedback.

Bhargava, an attorney who deals with AD/CVD proceedings across the globe, commended the speed of the ACCESS system in processing uploads, especially when stacked up against different countries’ systems, but still finds room for improvement. Commerce could borrow from the European Commission’s TRON system, which accepts all different types of document types in zip files, unlike ACCESS, which accepts only individual PDFs, Excel sheets and sometimes SAS files, Bhargava said.

“What the DOC analysts don’t understand is that if they impose a 300% duty or even a 60% duty because they didn’t understand something or the company just didn’t do something right, the effect of that is real people are losing jobs or companies are being shut for months because of something that you do not understand,” Bhargava said. “I guess what’s missing is the real implication of the responsibility given to Commerce. And it cuts both ways.”

Given the stakes, many lawyers have challenged cases involving missed deadlines in court. The result has been a mixed bag for respondents and petitioners alike, with different judges at the Court of International Trade either upholding the agency's strict enforcement of its deadlines or remanding it as a “draconian” reaction to minutes-late submissions.

CIT over the last year has strung together a handful of rulings rejecting Commerce’s use of total AFA for a minutes-late submission. The Oman Fasteners opinion offered a stark rebuke of the practice, which the judge dubbed the “very definition of abuse of discretion” (see 2302280040). In another decision, Judge Jane Restani remanded the rejection of a less-than-two-hours-late submission on the grounds that Commerce was hypocritical since it gave itself lengthy extensions during the associated administrative review (see 2210280033).

Other opinions have upheld the use of AFA, either faulting the respondent for not taking greater action to seek extensions (see 2207150035) or citing Commerce’s need to enforce its deadlines. Through it all, trade attorneys say that no clear standard has emerged under which the courts can declare that Commerce acted arbitrarily in using total AFA in this way, leading to a fact-specific, case-by-case adjudication of these instances.

The trade court has suggested, however, that a different standard may apply for AD/CVD petitioners that miss their filing deadlines. While there are both fewer opinions involving petitioners and fewer deadlines these companies need to hit, the court has shown itself to have less tolerance for petitioners, according to Rickard. Judge Timothy Stanceu, for instance, ruled that a lawyer’s medical issues did not justify a late filing, which led to the revocation of the relevant antidumping duty order (see 2111080069).

“The court is much more protective of foreign exporters and importers from missing deadlines,” Rickard said. “I know our firm would be really reluctant to bring a challenge to Commerce’s exercise of discretion ... because I don’t think our chances would be terribly good at appealing that to the court.”

Multiple lawyers told us that Commerce also treats respondents differently based on the agency’s history with a given company, including imposing irregular filing deadlines or rejecting extension requests for respondents who have presented certain difficulties to the agency.

A Commerce official said that “history with a certain respondent or anyone doesn't impact [the untimely submission/extension process] at all."

“Officially, they’ll tell you of course not. The answer is that that’s not true,” Craven said. “Commerce is made of human beings, and they will certainly take into account history” when making decisions.