US Urges CIT to Accept New Basis for Partial AFA on Affiliation With Home Market Buyer

In June, the trade court remanded the review for a third time for Commerce's failure to follow the "procedural prerequisites" for changing its position on remand when using AFA (see 2506090017). During the review, the agency initially said Saha Thai failed to respond to the best of its ability by not reporting that it and BNK shared a human resources manager.

Commerce initially said Saha Thai should have disclosed this employee in response to question six of the agency's third supplemental questionnaire. The trade court said that this question, however, asks if Saha Thai and another company share not just any employee but one that also has an "equity or a debt position in any other company" that sells related merchandise. Meanwhile, the court noted that question five of the questionnaire only asks for "current or previous shared employees."

On remand, Commerce took new agency action and flipped the basis for the partial AFA finding against Saha Thai to the company's failure to fully respond to question five, not question six (see 2509190063). Saha Thai contested this action, arguing that Commerce defied the trade court's last remand order, since the agency said its original citation to question six was an "inadvertent mistake," and that Commerce doesn't directly acknowledge that it's changing its position.

In response, the U.S. said this assertion is "wrong." Commerce directly acknowledged it originally cited question six, and, "as part of a new agency decisionmaking action, it was now relying on Saha Thai’s failure to adequately answer Question Five for the affiliation analysis."

The government argued that Commerce correctly applied partial AFA to Saha Thai, since necessary information regarding ties between the respondent and BNK wasn't available and Saha Thai failed to cooperate to the best of its ability.

Regarding the gaps in the record, the respondent argued that it "disclosed all relevant information and disclosed all entities that could be considered affiliates." In response, the U.S. said this statement is "erroneous" and "mischaracterizes the standard." Crucial to the government's argument is the fact that Saha Thai already conceded that there were at least six home market customers that Saha Thai "failed to properly disclose in response to Commerce’s questionnaires." The U.S. added that the trade court has already correctly stated that Saha Thai never named the six companies as potential affiliates, despite having notice the agency was requesting information about potential affiliates.

CIT already held that Saha Thai omitted information "directly responsive to Commerce’s requests for information about potential affiliates." This same gap in the record the court found for the other six companies, which was due to the respondent's failure to fully answer question five, "warrants the same treatment from this Court now," the brief said.

Saha Thai argued that it was "unreasonable for it to disclose a shared human resources manager in response to Question Five," since human resources personnel aren't involved in the "development, production, sale and/or distribution of the merchandise under review." Not only does this mischaracterize question five, but it "fails to engage at all with Commerce’s repeated explanations that Question Five does not ask for" managers specifically involved in the sale of the foreign like product, but for "any" ties between Saha Thai and BNK, the U.S. said.

The government added that Saha Thai failed to cooperate to the best of its ability, warranting AFA. While the respondent said it couldn't have known to report its shared manager with BNK and that there's no evidence this was an "intentional omission," the U.S. said CIT has made clear that the statute doesn't have an intent element.

Saha Thai also argued that Commerce failed to issue a deficiency notice. In response, the U.S. noted that the trade court has already held that the use of partial AFA with respect to six other undisclosed home market buyers complied with the AD statute. The court explained that Commerce complied with the law, since the respondent's own answers to the agency's questions show the company "understood the questions to include not only companies that, in Saha Thai’s view, clearly were affiliates but also companies for which the question of affiliation might be disputed."

The U.S. said that if Saha Thai's arguments were to be adopted, "it would greatly incentivize parties to narrowly respond to Commerce’s questions or entirely omit relevant information -- safe in the knowledge that, even if Commerce were to discover later that such information had been withheld, a party would have an opportunity to provide such information without repercussion." The government urged the court to "deny such weaponization" of the AFA statute.

The government also said that if another remand is required, the court shouldn't order the agency to re-calculate Saha Thai's AD rate without the affiliation finding between the exporter and BNK, as urged by the respondent. The U.S. said CIT doesn't have the power to order specific relief. Instead, the court can only remand the decision again for lacking substantial evidence.