Commerce Maintains Partial AFA for Japanese Steel Exporter on Remand
The Commerce Department announced Jan. 8 that, on remand, it was still maintaining use of partial adverse facts available for steel exporter Nippon Steel in a review of hot-rolled steel flat products from Japan. It said it wasn’t enough that the exporter’s affiliate was refusing to provide certain requested information, nor that the exporter was prevented by Japanese law from making provision of that information a contractual obligation of the affiliate (Nippon Steel Corporation v. United States, CIT Consol. # 21-00533).
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The department initially applied the adverse inference to certain of the allegedly unreported downstream sales of the exporter’s home market affiliates. The Court of International Trade remanded the application of the inference because, Commerce explained, the department failed to address Nippon’s arguments regarding Japan’s antitrust laws and “communications logs reflecting efforts to engender affiliate compliance by Nippon Steel compared to past administrative reviews” (see 2410110043).
Nippon argued that it had cooperated to the best of its ability -- it had tried to obtain downstream home-market sales from its affiliate, but the affiliated-party reseller had refused to participate. The exporter provided communications demonstrating its attempts, and it said that under Japanese law it cannot “force” its affiliate to comply with its request.
But “Commerce must review all of the respondent’s home market sales of the foreign like product to perform the dumping calculation,” the department said in its remand results. “Without this critical information, Commerce cannot calculate an accurate dumping margin, and a respondent could potentially manipulate the dumping calculation.”
It expressed concern that exporters could simply rely on use of noncooperative affiliates “to shield themselves from reporting ‘high priced home market sale[s].’”
Nippon’s provided communications “are not enough to overcome the obligation to act ‘to the best of its ability,’” the department said. Because this has been a repeated issue, Nippon should have taken steps to make “compliance with requests of this nature” a contractual obligation of its affiliates, it said.
Although the exporter claimed that requiring an affiliate to provide this information “would be against Japanese law,” this wasn’t enough, either, Commerce said.
“The U.S. antidumping law does not contain a reporting exception to an antidumping duty questionnaire based on foreign government legal restrictions,” it said.
The department “has a good reason” to reject any foreign law that prevents the sharing of information to Commerce for dumping evaluation purposes as a basis to find that a respondent acted to the best of its ability in an AFA analysis, the department said. “To do so would undermine the statutory scheme envisioned by Congress to induce parties to cooperate.”