Steel Exporter Rails Against Treatment of Information Submitted During Verification in CVD Case
The Commerce Department illegally used adverse facts available for exporter SeAH Steel Corp.'s alleged benefits under the Export-Import Bank of Korea's (KEXIM's) Performance Guarantee program, SeAH argued in a Dec. 13 complaint at the Court of International Trade. Commerce improperly based its decision on its treatment of information related to the performance guarantee program presented at verification as "new factual information," the brief said (SeAH Steel Corp. v. United States, CIT #22-00338).
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The case concerns the countervailing duty investigation on oil country tubular goods from South Korea in which Commerce tapped SeAH and Hyundai Steel Co. as the two mandatory respondents. In the initial questionnaire, Commerce asked about any assistance received via the KEXIM Performance Guarantee program during the review period. SeAH said that it did not receive any guarantees during this period, 2020, even though it did the year before, 2019. Since Commerce only asked for data during the review period, the exporter reported that it did not receive a guarantee.
After the preliminary results came out giving SeAH a de minimis subsidy rate, Commerce carried out on-site verification during which it asked for evidence of non-use of the guarantee program. To verify non-use, the agency asked for all notes attached to SeAH's audited financial statements from the investigation period and the past 14 years. SeAH provided the information along with a document listing all its liabilities and guarantees for the 2019 and 2020 fiscal years, among other documents. This information detailed the 2019 guarantee, which was "tied to a particular export of stainless steel pipe to Canada" and that was set to remain in effect until the end of 2020 due to the underlying sales contract.
Commerce then asked for more information about the performance guarantee, ultimately finding that all of the data on the KEXIM export performance guarantee amounted to "untimely 'new factual information.'" The agency officials removed the documents from the record. In its verification report, Commerce said that SeAH failed to give information about the program in its initial questionnaire. SeAH claimed, though, that a draft version of the verification report explicitly mentioned the amount of the guarantee, though the final report did not. "In other words, a decision was made after the verification to modify the report drafted by the Commerce official who conducted the verification of this issue," the complaint said.
SeAH was ultimately hit with an AFA rate of 1.33% due to the KEXIM Performance Guarnatee program, leading the exporter to take to the trade court. The company argues that Commerce's treatment of SeAH's information submitted at verification as "new factual information" and the use of AFA are illegal. The initial questionnaire only asked for information about guarantees received from KEXIM during the investigation period, and the information submitted during verification "was consistent with the information requested in Commerce's verification agenda," the brief said.