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At CAFC, US, CVD Petitioners Defend Use of 160% AFA Rate Due to Untimely Submissions

Exporter Tau-Ken Temir waived its arguments against the Commerce Department's decision to grant the company's first two extension requests in part and reject the third request, the U.S. argued in a reply brief at the U.S. Court of Appeals for the Federal Circuit. The government said that because TKT did not raise the issues either at Commerce or at the Court of International Trade in its case on the countervailing duty investigation on silicon metal from Kazakhstan, the appellate court need not address the claims (Tau-Ken Temir v. U.S., Fed. Cir. # 22-2204).

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If the court does address the extension request decisions, TKT did not offer any valid reason to usurp the agency's rational expression of its discretion, the U.S. said. The exporter cited its newness to the process, COVID-19 and the large amount of information requested as reasons its first two extension requests -- for 14 and seven days, respectively -- should have been granted in full. The government replied that these three reasons gave no explanation for why 14 and seven days were required instead of the 10- and five-day extensions Commerce granted.

"Given the wide discretion this Court affords Commerce to set its own schedule for countervailing duty investigations, it was not irrational for Commerce to come to a different judgment regarding how long of an extension was warranted based on the reasons TKT provided in their request," the brief said.

Petitioners Globe Specialty Metals and Mississippi Silicon echoed the government's claims in their own brief, telling the appellate court that the agency also "properly exercised its discretion" by rejecting TKT's third extension request. The exporter filed this request minutes before the deadline, triggering Commerce's regulations allowing for the initial subsidy questionnaire response to be filed by 8:30 a.m. the next day. "TKT never filed part of its response," nor explained how the basis of its third request -- a vague statement about technical difficulties -- could be resolved by the 8:30 a.m. deadline, both the U.S. and the petitioners said.

Both the government and the petitioners said the use of total adverse facts available, resulting in a 160% duty rate, was justified given these circumstances. Globe and Mississippi Silicon said the rate is not, as TKT argues, "unduly punitive," given it is the result of both TKT's and the Kazakh government's failures to cooperate "to the best of their ability" by submitting incomplete data or not submitting data on time at all.

The U.S. said hitting a party with an AFA rate when that party does not cooperate to the best of its ability "is permissible and not punitive." TKT's citation to a case rejecting AFA for a minor technicality "is misplaced" because the exporter's failure here "was not a technicality" and can be distinguished from the cited proceeding. Whether using AFA affected TKT's "narrow incentive or motivation to cooperate in other parts of the segment is inapposite," the U.S. added.