CAFC Upholds Total AFA for Pipe Exporter's Failure to Fix Issues in Cost Reconciliation

In the 2019-20 administrative review of the AD order on large diameter welded pipe from Greece, Corinth was initially issued a questionnaire in which it was requested to supply its per-unit cost of production and constructed value costs based on actual costs as recorded in its accounting system. Prior to submitting its first supplemental questionnaire, Commerce said Corinth's reconciliation worksheet "failed to show the cost of manufacture for the period of review or 'tie to the cost reported in' Corinth’s cost accounting system."

The agency asked for worksheets in a specified format that reconciled the total cost of manufacturing for the review period to the total per-unit manufacturing costs submitted to Commerce. In its response, Corinth said it can't generate one cost of manufacture report from its system, since it would "double or triple count costs when the product passed through multiple production phases."

Commerce then issued a second supplemental questionnaire, explaining that the first supplemental response had "extensive calculation worksheets and reconciliation" data that was "difficult to interpret because of the lack of adequate descriptions as to the methodology used." The agency again asked for one cost of manufacture report, asking for an explanation as to why the respondent couldn't provide one. In response, Corinth again said a single cost of manufacture report from its system would double or triple count costs, adding that it can't extract from its system a "costing report that combines years."

In its preliminary determination, Commerce relied on Corinth's information and said the company didn't sell its goods in the U.S. below the rate at which it sold its pipe in the home market. However, in its final determination, the agency said it couldn't rely on Corinth's data, finding at least three deficiencies: the data didn't reconcile the expenses per Corinth's audited income statement to its extended cost database, it relied on double-counted costs and Corinth failed to give Commerce one completed reconciliation as requested. The result was a 41.04% total AFA rate for the respondent.

Corinth first challenged Commerce's use of facts otherwise available, arguing that it submitted a complete cost reconciliation. Reyna, writing for the court, disagreed, noting Commerce's determinations, on three separate occasions, that "Corinth failed to provide costs that reconciled." In the final results, "Commerce reviewed in detail the numerous deficiencies in the reconciliation data in Corinth’s first two responses and described the continuation of these deficiencies in the third response," the court said.

While Corinth said Commerce mistakenly characterized certain costs as double counted, Reyna said the court disagrees. Corinth was required to provide a complete reconciliation, yet it "failed to do so." Thus, the agency reasonably found Corinth failed to provide an adequate record, the judge said. And while Corinth also argued that it didn't fail to provide information in the requested form and manner and that the agency failed to notify the company about the deficiencies in its cost reconciliation, Reyna dismissed these claims as waived, since they weren't raised before the Court of International Trade.

The respondent also challenged Commerce's adverse inference, arguing that it responded to the best of its ability. "We are not persuaded," Reyna responded.

While Commerce recognized that Corinth may not have been able to "generate a cost report for a period that spans two fiscal years" due to "constraints in Corinth's cost accounting system," the agency noted that Corinth admitted it can extract from its system a costing report for a "range of months in the same year." Thus, the agency said Corinth could have generated data for the last nine months of 2019 as it did for the first four months of 2020. The respondent's failure to do so "is indicative of a failure to act to the best of its ability," Commerce said. "We agree," Reyna added.

Corinth said Commerce could have used other facts to resort to neutral facts available, but "Commerce is not obligated in every case to fill gaps in a respondent’s questionnaire response using partial AFA," the court said. "This is particularly true where the missing or deficient information concerns core data, such as cost reconciliation data."

Lastly, Corinth said Commerce was required to provide the company a chance to respond to the agency's "analysis that Commerce used in the Final Results that led to the conclusion that Corinth’s ‘reported costs did not reconcile with its financial accounting system.’” Reyna again disagreed, noting that the statute requiring an opportunity to comment only covers information filed by interested parties. The statute doesn't include "Commerce's internal findings or interpretations of facts," the court said.

Corinth also said it was "improperly denied an opportunity to comment on Commerce’s change in methodology made after the Preliminary Results." The court said this claim is "without merit," holding that Commerce isn't bound by its preliminary determinations.

Timothy Brightbill, counsel for petitioner American Line Pipe Producers Association Trade Committee, said in an email that the decision “is a strong win for the domestic industry, confirming that the Commerce Department properly imposed high duty margins on the Greek respondent company. The record showed that Corinth Pipe Works submitted highly deficient information, withheld requested information, and significantly impeded the Commerce proceeding. As such, Commerce was fully justified in imposing a duty margin based on facts available. We commend the court for upholding Commerce’s important determination.”

Corinth didn't respond to our request for comment.

(Corinth Pipeworks Pipe Industry v. United States, Fed. Cir. # 23-2094, dated 09/08/25; Judges: Jimmie Reyna, Richard Taranto and Leonard Stark; Attorneys: Bryan Cenko of Mowry & Grimson for plaintiffs-appellants Corinth Pipeworks Pipe Industry SA and CPW America Co.; Ashley Akers for defendant-appellee U.S. government; Timothy Brightbill of Wiley Rein for defendant-appellee American Line Pipe Producers Association Trade Committee)