CIT Upholds AFA for Glycine Exporter for Failure to Verify Non-Affiliation With 2 Companies

The judge also upheld the agency's decision to deduct antidumping and countervailing duties paid by Kumar from its U.S. price, finding that evidence supported the conclusion that Kumar included AD/CVD in its amount of U.S. duties paid.

In the 2021-22 review of the AD order on glycine from China, India and Japan, Commerce said it had evidence from past reviews that Kumar was affiliated with two companies, dubbed "Company A" and "Company B." So when Kumar didn't list Companies A and B as affiliates in the review, the agency issued two supplemental questionnaires asking about the firms. The respondent consistently told Commerce that it wasn't affiliated with the companies. The agency ultimately didn't bite and said the respondent withheld information about its affiliation with the companies, using AFA against Kumar.

Katzmann first assessed whether Commerce appropriately used facts otherwise available to address a gap on the record. The judge said the agency's "conclusion that necessary information was missing" is adequately supported, since Commerce said that, without the affiliation information, it wasn't able to verify Kumar's claim that it didn't have "viable home markets for purposes of calculating normal value." Also, the agency wasn't able to determine if Kumar and Companies A and B should be collapsed into one entity, absent the withheld information, the court noted.

During the review, Commerce said mere statements from Kumar and Companies A and B saying they aren't affiliated isn't enough, adding that it needs a narrative explanation and supporting documentation. Katzmann held that "Kumar’s failure to substantiate its claims of non-affiliation deprived Commerce of information that was fundamental to calculate the dumping margin."

While the respondent said it gave detailed charts and supporting information for all of its affiliated parties and a series of letters between itself and Companies A and B, the court said this information doesn't cut it. The charts were created by Kumar itself and weren't accompanied by any "substantiating documentation," Katzmann said. And the letters are merely the same as the unsubstantiated statements from Kumar declaring that it's not affiliated with the companies, the judge held.

Katzmann then said Commerce was on firm ground in using an adverse inference against the respondent. In the review, Kumar had "three opportunities to provide a sufficient response and instead consistently made unsubstantiated claims that it was not affiliated with Companies A and B," the court said.

While Kumar said it couldn't provide documentation "it did not possess," the court said the respondent's "failure to adequately maintain records is a failure to act to the best of its ability." Due to Commerce's suspicions of affiliations from prior review, Kumar knew that records about its affiliation with the companies was necessary for the review. The agency's requests for information on the affiliations thus "should not have come as a surprise," the judge said, adding that "Kumar should reasonably have maintained records regarding its affiliation with Companies A and B.

The court also held that the supplemental questionnaires were sufficiently detailed regarding any affiliation with Companies A and B and that Commerce gave Kumar a sufficient chance to correct the record. The respondent was asked about its affiliation three times and "was aware of the consequences of non-cooperation based on the prior administrative review," where Commerce also used AFA based on "information contradicting Kumar’s claims of non-affiliation," the court said.

Kumar also challenged Commerce's decision to deduct AD/CVD from the respondent's U.S. price for only three transactions. The respondent said it included the duties "for every transaction," making the agency's removal of the duties for only three of them unlawful. Kumar asked Commerce to remove the AD/CVD from its reported U.S. duties for every transactions "before reducing the export price by the amount of U.S. duties" as required by law.

Katzmann said Commerce permissibly deducted the duties for only the three transactions, since "Kumar provided supporting documentation and a sample calculation demonstrating it included antidumping and countervailing duties in the amount of U.S. duties for only three transactions."

While the respondent said Commerce should have asked for further clarification, Katzmann again said it's the respondent's burden to fill the record and provide supporting information for its claims.

(Kumar Industries v. United States, Slip Op. 25-52, CIT # 23-00263, dated 04/23/25; Judge: Gary Katzmann; Attorneys: David Craven of Craven Trade Law for plaintiff Kumar Industries; Kelly Geddes for defendant U.S. government)