Canadian Pipe Exporter Brings Complaint to CIT Challenging Reception of Total AFA AD Rate
Exporter Pipe and Piling Supplies brought a complaint Dec. 27 against the Commerce Department’s administrative review of the antidumping duty order on large diameter welded pipe from Canada. The exporter, sole mandatory respondent for the review, disagreed with the department's application of total adverse facts available for the review, saying it cooperated to the best of its ability (Pipe and Piling Supplies v. United States, CIT # 24-00211).
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The exporter said it was hit with a punitive 50.89% dumping margin after Commerce determined Pipe and Piling “failed to provide clear and consistent narrative explanations” of its data in its questionnaire response.
The department also claimed it “revised its reporting of certain adjustments without being directed to do so by Commerce” and that it hadn’t provided a section E response to the initial questionnaire; nor did it give the department “complete and supported sales reconciliations for its home markets and U.S. sales to its financial statements,” the exporter said.
Pipe and Piling said it had “demonstrably” participated to the best of its ability in the review.
In its Section B response, Pipe and Piling said, it reported all of its sales made during the period of review, including downstream home market sales made by four Canadian resellers -- though it did not report all sales made by its affiliated Canadian manufacturers, Canadian Phoenix Steel Products and Spiralco.
Commerce determined that Pipe and Piling was affiliated with Phoenix and Spiralco in December 2023, after a supplemental Section A questionnaire response, the exporter said. In another supplemental questionnaire, Commerce asked Pipe and Piling to review its responses to include all financial information for the collapsed entity,” including sales made by Phoenix and Spiralco,” it said.
But the department’s December 2023 decision memo “did not address other affiliates in Canada,” Pipe and Piling noted.
Regardless, it again provided the information for all its affiliates, this time including Phoenix and Spiralco, in its response to the second supplemental questionnaire, the exporter said. That meant that it “replaced almost all sales expense and adjustment worksheets that had been submitted in its initial Section B response.”
Because its accounting system wasn’t sophisticated enough to report “selling expense on a transaction-specific basis,” it was forced to recategorize yard expenses and bank charges each affiliate incurred in its home market sales as indirect selling expenses after having initially reported them as direct selling expenses, it said.
“Pipe & Piling clearly explained the reasoning underpinning all of the changes made to its initial response,” it said.
Commerce also asked it to report coating and transportation revenues from invoice-specific discounts on a transaction-specific basis, it said. It wasn’t able to separate coating and freight revenues, however, so it added a new field to its financial information “to report all other charges (e.g., freight, etc.) and discounts that were [separately] itemized on the same invoices,” it said.
It also said it provided separate reconciliation worksheets for all seven entities -- itself, its four resellers, and the two manufacturers -- because it doesn’t consolidate those financial statements in the normal course of its business.
Meanwhile, in its initial Section C response, the exporter said that it reported its sole U.S. affiliate’s yard expenses as direct selling expenses and “similarly reported the coating and freight revenues in the U.S. sales database.” It noted it didn’t submit a Section E response at the time because it “had no further manufacturing incurred in the United States for subject merchandise” during the review period.
But, while working on its supplemental questionnaire responses later on in the review, the exporter “discovered the first time that one affiliated reseller had further processed a small volume of subject merchandise in the U.S. before that merchandise was sold to the end user.” It therefore “promptly” alerted the department and provided the processing information in its Section C supplemental response. It also “prepared a worksheet for the cost of further processing” and included the new cost in its updated U.S. sales list, it said. And it provided a worksheet reconciling the sales of its sole U.S. affiliate to the report's financial statements for a supplemental Section C questionnaire, it said.
“Commerce did not ask any more questions of Pipe & Piling about its revised home market and U.S. sales reporting and sales reconciliations after Pipe & Piling submitted its Supplemental Section A-D Questionnaire Response,” it said.
But the department dinged it for not providing individual categories for transportation and coating revenue received from discounts; not reconciling the sales of all its affiliated entities to Pipe and Piling’s financial information; changing its categorization of yard expenses and bank charges to indirect selling expenses from direct selling expenses; and not submitting an initial Section E questionnaire response.
Commerce acted unlawfully by refusing to use Pipe and Piling’s data in the review and instead resorting to total adverse facts available, it said. And the department’s conclusions that led it to use AFA -- that the exporter failed to cooperate to the best of its ability and that the “necessary information [wasn’t] available on the record” -- weren’t supported by substantial evidence, it claimed.