Failure to Produce Land-Use Contracts Rightfully Didn't Warrant AFA, Exporters Say
Two Chinese exporters of chlorinated isocyanurates said March 7 that the Commerce Department was right to not hit them with an adverse inference when they couldn’t locate information for a review (Bio-Lab, Inc. v. United States, CIT # 24-00118).
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The exporters, Heze Huayi Chemical and Juangcheng Kangtai Chemical, followed the U.S. (see 2502240065) in responding to petitioner Bio-Lab’s motion for judgment in the case (see 2412300009). Like the U.S., they pointed out that they had adequately established the payments they had made for land-use rights despite their contemporaneous inability to locate the actual land-use contracts.
They said Commerce requested the “date of acquisition, identity of selling, location, area, price paid [and] terms” regarding the acquired land, as well as “a copy of the land-use contract and land-use certificates.” They provided everything but the copies of the contracts, they said. In a supplemental questionnaire response, they also handed over purchase slips for the land “and reconciled those land purchase payments to their financial statements,” they said.
The exporters explained that both of them had purchased the land use rights in question prior to the 2013 investigation into their products -- Heze Huayi in particular having done so “10-20 years before this” review period.
“The Department was satisfied with the information that Respondents provided,” they said.
They disagreed that the documentation they did provide Commerce was “self-generated or self-selected.” They said the purchase slips, not the contracts, were the “decisive documentation of the actual price paid,” acting as “definitive proof” that they’d paid the amounts they’d reported.
Bio-Lab had committed a “fundamental accounting mistake” when alleging those slips were self-selected, they said: the petitioner failed to realize the slips “tie to the intangible assets ledger” of the exporters’ financial record and were audited by outside accountants every year, they said.
And the payments varied as to their recipients and amounts due to differences in the way local governments operated, Heze Huayi and Kangtai said.
“It is the local government's discretion for the land-use right payment to be made directly to the Bureau of Land and Resources Bureau of Finance or the Juancheng Bureau of Local Taxation, etc.,” they said.