Ad Hoc Shrimp Trade Action Committee v. United States

Slip Op. 11-106

UNITED STATES COURT OF INTERNATIONAL TRADE

AD HOC SHRIMP TRADE ACTION
COMMITTEE,

Plaintiff,
Before: Pogue, Chief Judge
- v -
UNITED STATES, Court No. 10-00275
Defendant,

- and -

HILLTOP INTERNATIONAL
and OCEAN DUKE CORP.,

Defendant-Intervenors.

OPINION AND ORDER

[Remanding Department of Commerce’s final results of
administrative review of antidumping duty order]

Dated: August 24, 2011

Picard Kentz & Rowe LLP (Andrew W. Kentz, Jordan C. Kahn,
Nathaniel M. Rickard and Kevin M. O’Connor) for the Plaintiff.

Tony West, Assistant Attorney General; Jeanne E. Davidson,
Director; Patricia M. McCarthy, Assistant Director, Commercial
Litigation Branch, Civil Division, United States Department of
Justice (Joshua Kurland) for the Defendant.

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
(Mark E. Pardo, Andrew T. Schutz and Jeffrey O. Frank) for the
Defendant-Intervenors.

Pogue, Chief Judge: This action seeks review of two

determinations by the United States Department of Commerce
Court No. 10-00275 Page 2

(“Commerce” or the “Department”) in the final results of the

fourth administrative review of the antidumping duty order

covering certain frozen warmwater shrimp from the People’s

Republic of China (“China”).1

Specifically, Plaintiff Ad Hoc Shrimp Trade Action Committee

(“AHSTAC”) – the Petitioner in the administrative proceeding

below – challenges (I) Commerce’s exclusive reliance on Customs

and Border Protection Form 7501 data, for entries designated by

the importer as “Type 03” (consumption entries subject to

antidumping/countervailing duty2) (“Type 03 CBP data”), when

determining, under Section 777A(c)(2)(B) of the Tariff Act of

1930, as amended, 19 U.S.C. § 1677f-1(c)(2)(B) (2006),3 the

volume of entries of subject merchandise for this review; and

(II) the Department’s use of certain price data for merchandise

exported from North Korea when calculating, under 19 U.S.C.

1
See Certain Frozen Warmwater Shrimp From the People’s
Republic of China, 75 Fed. Reg. 49,460 (Dep’t Commerce Aug. 13,
2010) (final results and partial rescission of antidumping duty
administrative review) (“Final Results”); Issues & Decision Mem.,
A-570-893, ARP 08-09 (Aug. 9, 2010), Admin. R. Pub. Doc. 180
(adopted in Final Results, 75 Fed. Reg. at 49,460) (“I & D
Mem.”). The period of review (“POR”) was February 1, 2008,
through January 31, 2009. Final Results, 75 Fed. Reg. at 49,460.
2
See Dep’t of Homeland Security, U.S. Customs and Border
Protection, CBP Form 7501 Instructions (Mar. 17, 2011), available
at www.cbp.gov (Forms) (“CBP Form 7501 Instr.”) 1.
3
All further citation to the Tariff Act of 1930, as
amended, is to Title 19 of the U.S. Code, 2006 edition.
Court No. 10-00275 Page 3

§ 1677b(c)(1), the normal value of subject merchandise.

The court has jurisdiction pursuant to 19 U.S.C. § 1516a and

28 U.S.C. § 1581(c).

As explained below, the court concludes that (I) because the

Department improperly failed to take into account record evidence

that fairly detracts from the weight of the evidence supporting

its entry volume determinations, the Department’s consequent

determinations regarding which respondents account for the

largest volumes of subject entries during this POR were not

supported by a reasonable reading of the record, and are

therefore remanded to the agency for reconsideration; and

(II) because the Department’s application of its reasonable

methodology comports with a reasonable reading of the

administrative record, Commerce’s treatment of North Korean data

in this case is affirmed.

STANDARD OF REVIEW

When reviewing the Department’s decisions in administrative

reviews of antidumping duty orders, this Court “shall hold

unlawful any determination, finding, or conclusion found . . . to

be unsupported by substantial evidence on the record, or

otherwise not in accordance with law.” 19 U.S.C.

§ 1516a(b)(1)(B)(i).

Substantial evidence is “such relevant evidence as a

reasonable mind might accept as adequate to support a
Court No. 10-00275 Page 4

conclusion.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229

(1938); Ad Hoc Shrimp Trade Action Committee v. United States,

618 F.3d 1316, 1321 (Fed. Cir. 2010) (same). Importantly, “[t]he

substantiality of evidence must take into account whatever in the

record fairly detracts from its weight.” Universal Camera Corp.

v. NLRB, 340 U.S. 474, 488 (1951); Tudor v. Dep’t of Treasury,

639 F.3d 1362, 1366 (Fed. Cir. 2011) (same). The substantial

evidence standard of review essentially asks whether, given the

evidence on the record as a whole, the agency’s conclusion was

reasonable. Nippon Steel Corp. v. United States, 458 F.3d 1345,

1351 (Fed. Cir. 2006).

An agency acts contrary to law when it acts arbitrarily or

based on an impermissible construction of its statutory

authority. See Chevron, U.S.A., Inc. v. Natural Res. Def.

Council, Inc., 467 U.S. 837, 842-43 (1984); SKF USA Inc. v.

United States, 263 F.3d 1369, 1382 (Fed. Cir. 2001).

DISCUSSION

I. Commerce’s Exclusive Reliance on Type 03 CBP data for
Respondent Selection

A. Background

In its Notice of Initiation for this administrative review,
Court No. 10-00275 Page 5

the Department announced its intention to rely on CBP data4 to

select respondents for individual examination, in the event that

resources did not permit examination of all respondents for whom

review was requested.5

Responding to the Department’s request for “comments

regarding the CBP data and respondent selection,” Notice of

Initiation, 74 Fed. Reg. at 13,178, AHSTAC argued that the CBP

data released for comment – consisting entirely of Type 03 CBP

4
Specifically, the Department relies in such situations on
CBP 7501 forms. See Selection of Respondents for Individual
Review, A-570-893, ARP 08-09 (May 29, 2009), Admin. R. Con.
Doc. 8 [Pub. Doc. 41] (“Resp’t Selection Mem.”) 6; Pakfood Pub.
Co. v. United States, __ CIT __, 753 F. Supp. 2d 1334, 1344-45
(2011) (“Pakfood”). Block 2 on CBP Form 7501 asks importers to
“[r]ecord the appropriate entry type code by selecting the two-
digit code for the type of entry summary being filed.” CBP Form
7501 Instr., supra note 2, at 1 (“The first digit of the code
identifies the general category of the entry (i.e., consumption
= 0, informal = 1, warehouse = 2). The second digit further
defines the specific processing type within the entry category.
The following codes shall be used: Consumption Entries[:] Free
and Dutiable [=] 01 . . . Antidumping/ Countervailing Duty
(AD/CVD) [=] 03 . . . .”).
5
Certain Frozen Warmwater Shrimp from the Social Respublic
of Vietnam and the People’s Republic of China, 74 Fed. Reg.
13,178, 13,178 (Dep’t Commerce Mar. 26, 2009) (notice of
initiation of administrative reviews and requests for revocation
in part of the antidumping duty orders) (“Notice of Initiation”).
See 19 U.S.C. § 1677f-1(c)(2)(B) (“If it is not practicable to
make individual weighted average dumping margin determinations []
because of the large number of exporters or producers involved in
the investigation or review, [Commerce] may determine the
weighted average dumping margins for a reasonable number of
exporters or producers by limiting its examination to . . .
exporters and producers accounting for the largest volume of the
subject merchandise from the exporting country that can be
reasonably examined.”).
Court No. 10-00275 Page 6

data6 – did not accurately reflect the actual volume of subject

merchandise entered by each respondent during the POR.7

Specifically, ASTAC claimed that the volume of entries subject to

the antidumping duty order on frozen warmwater shrimp from China,

as reported on CBP 7501 forms, was substantially inaccurate. In

support of this challenge, AHSTAC attached to its submission, and

thereby placed on the record, inter alia, two reports to Congress

– from CBP and the U.S. Government Accountability Office,

respectively – as well as Commerce’s own verified findings from

the immediately preceding administrative review of this

antidumping duty order, detailing recent discoveries of such

substantial inaccuracies.8

6
See CBP Data for Resp’t Selection, A-570-893, ARP 08-09
(Mar. 30, 2009), Admin. R. Con. Doc. 1 [Pub. Doc. 15].
7
[AHSTAC’s] Comments on Resp’t Selection, A-570-893, ARP
08-09 (Apr. 9, 2009), Admin. R. Con. Doc. 3 [Pub. Doc. 18]
(“AHSTAC’s Apr. 9, 2009 Comments”).
8
AHSTAC’s Apr. 9, 2009 Comments, Admin. R. Con. Doc. 3
[Pub. Doc. 18] Ex. 1 (U.S. Customs and Border Protection, Report
to Congress on (1) U.S. Customs and Border Protection’s Plans to
Increase AD/CVC Collections and (2) AD/CVD Enforcement Actions
and Compliance Initiatives 11 (“Based on an allegation from the
domestic shrimp industry, CBP conducted a special operation . . .
to determine whether imports of shrimp from China were being
misdescribed . . . so that the shipments would fall outside of
the scope of the [antidumping duty] order. CBP’s operation
confirmed the allegation.” (describing enforcement of antidumping
duties owed for financial year 2007))) & Ex. 2 (U.S. Gov’t
Accountability Office, GAO–09-258, Seafood Fraud: FDA Program
Changes and Better Collaboration Among Key Federal Agencies Could
Improve Detection and Prevention 20 (2009) (“CBP and [Immigration
and Customs Enforcement]’s investigation found that foreign
Court No. 10-00275 Page 7

The Department refused to consider this evidence. See Resp’t

Selection Mem., Admin. R. Con. Doc. 8 [Pub. Doc. 41] at 6

(“[AHSTAC]’s references to evidence that CBP data contained flaws

in other segments of this proceeding . . . are not on the record

of [this] administrative review. Thus, those issues will not be

addressed in the context of the information available on the

record of the instant administrative review with respect to

respondent selection.”).

After rejecting AHSTAC’s arguments, Commerce, relying

exclusively on Type 03 CBP data, selected Zhanjiang Regal

Integrated Marine Resources Co. Ltd. (“Regal”) and Hilltop

International (“Hilltop”) as respondents accounting for the

manufacturers and importers were . . . attempting to circumvent
antidumping duties by sending Chinese shrimp to the United States
through Malaysia . . . .”)). See also Certain Frozen Warmwater
Shrimp from the People’s Republic of China, Issues & Decision
Mem., A-570-893, ARP 07-08 (Aug. 28, 2009) (adopted in 74 Fed.
Reg. 46,565, 46,566 (Dep’t Commerce Sept. 10, 2009) (final
results and partial rescission of antidumping duty administrative
review)) (“AR3 I & D Mem.”) Cmt. 7 at 23 (“[A]t verification the
Department found that certain importers improperly classified
subject entries as non-dutiable.”); AHSTAC’s Apr. 9, 2009
Comments, Admin. R. Con. Doc. 3 [Pub. Doc. 18] at 5 (discussing
the inaccurate reporting of subject entry volume discovered in
the third administrative review) & nn. 11-13 (noting that,
according to the terms of the Administrative Protective Order
issued in the third review, “[i]f business proprietary
information that is submitted in [the third administrative review
of this antidumping duty order] is relevant to an issue in two
consecutive subsequent administrative reviews, an authorized
applicant may place such information on the record of those
reviews,” and affirming that AHSTAC, “an authorized applicant,
[was] placing business proprietary information from that segment
of the proceeding on the record of this review”).
Court No. 10-00275 Page 8

largest volume of subject imports that could reasonably be

examined,9 concluding that Hilltop and Regal were the “largest

exporters by volume during the POR.” Prelim. Results, 75 Fed.

Reg. at 11,855 (citing Resp’t Selection Mem., Admin. R. Con.

Doc. 8 [Pub. Doc. 41]).

In its Final Results, the Department, over AHSTAC’s

reiterated objections,10 continued to rely exclusively on Type 03

CBP data to select respondents accounting for the largest volume

of exports of subject merchandise. See 75 Fed. Reg. at 49,460; I

& D Mem. Cmt. 1. AHSTAC now challenges this determination.

B. Commerce Improperly Refused to Consider AHSTAC’s
Evidence.

AHSTAC’s evidence, as noted above, indicated that Type 03

CBP data, as reported by importers on CBP Form 7501, did not

accurately reflect the actual volume of entries subject to this

9
Resp’t Selection Mem., Admin. R. Con. Doc. 8 [Pub. Doc.
41] at 8; Certain Frozen Warmwater Shrimp From the People’s
Republic of China, 75 Fed. Reg. 11,855, 11,855 (Dep’t Commerce
Mar. 12, 2010) (preliminary partial recision of antidumping duty
administrative review and intent not to revoke, in part)
(“Prelim. Results”).
10
See [AHSTAC’s] Case Br., A-570-893, ARP 08-09 (Apr. 12,
2010), Admin. R. Pub. Doc. 151 (“AHSTAC’s Admin. Case Br.”) 8-9
(“[E]xclusive reliance on [Type 03] CBP Form 7501 data in spite
of significant historic evidence of willful circumvention of the
antidumping duty order fails to reasonably identify exporters and
producers ‘accounting for the largest volume of the subject
merchandise from the exporting country that can be reasonably
examined’ as significant volumes of subject merchandise are
likely misclassified by U.S. importers.” (quoting 19 U.S.C.
§ 1677f-1(c)(2))).
Court No. 10-00275 Page 9

order.11 As further explained below, because this evidence

detracts from the weight of the data relied on, and because the

Department did not account for this evidence in its determination

that Regal and Hilltop were the largest POR exporters/producers

by entry volume,12 the Department’s entry volume determinations,

and hence its selection of mandatory respondents in this review,

were unsupported by substantial evidence. See Universal Camera,

340 U.S. at 488.

As a threshold matter, because Customs officers have a duty

to assure the accuracy of information submitted to that agency by

penalizing negligent or fraudulent omissions and/or inaccurate

submissions,13 CBP data are presumptively reliable as evidence of

respondent-specific POR entry volumes. Pakfood, __ CIT at __,

753 F. Supp. 2d at 1345-46.14 The record of this review,

11
See supra note 8.
12
See Resp’t Selection Mem., Admin. R. Con. Doc. 8 [Pub.
Doc. 41] at 6; I & D Mem. Cmt. 1 at 4.
13
See 19 C.F.R. § 162.77(a) (“If the [appropriate Customs]
Officer has reasonable cause to believe that a violation of
[19 U.S.C. 1592 (prohibiting fraudulent and/or negligent
submission and/or omission of material information to Customs)]
has occurred . . . he shall issue to the person concerned a
notice of his intent to issue a claim for a monetary penalty.”).
14
See also id. at 1345 (“In the absence of evidence in the
record that the CBP data – for merchandise entered during the
relevant POR and subject to the [antidumping] duty order at issue
– are in some way inaccurate or distortive, the agency reasonably
concluded that such data, collected in the regular course of
business under penalty of law for fraud and/or negligence,
Court No. 10-00275 Page 10

however, contains evidence sufficient to call this presumptive

reliability into question.15

Specifically, evidence on the record of this review

indicates that, notwithstanding Customs’ duty to assure the

accuracy of CBP data, the volume of subject merchandise

produced/exported by respondents subject to this review and

entered during the POR may have been inaccurately reported in CBP

Form 7501 data.16 The fact that, in the immediately preceding

presents reliably accurate information.” (citing 19 U.S.C.
§ 1592(a)(1) (“[N]o person, by fraud, gross negligence, or
negligence [] (A) may enter, introduce, or attempt to enter or
introduce any merchandise into the commerce of the United States
by means of [] (i) any document or electronically transmitted
data or information, written or oral statement, or act which is
material and false, or (ii) any omission which is material, or
(B) may aid or abet any other person to violate subparagraph
(A).”); id. at §§ 1592(b)(2) & (c) (providing for penalties for
violation of § 1592(a)); 19 C.F.R. § 162.79 (same); Seneca Grape
Juice Corp. v. United States, 71 Cust. Ct. 131, 142, 367 F. Supp.
1396, 1404 (1973) (noting “the general presumption of regularity
that attaches to all administrative action” (“In the absence of
clear evidence to the contrary, the courts presume that public
officers have properly discharged their duties . . . . This
presumption, of course, also attaches to the official actions
taken by customs officers.”) (citing, inter alia, United States
v. Chem. Found., 272 U.S. 1, 14-15 (1926)) (additional citations
omitted)).
15
Cf. A.C. Aukerman Co. v. R.L. Chaides Const. Co.,
960 F.2d 1020, 1037 (Fed. Cir. 1992) (“[A] presumption . . .
completely vanishes upon the introduction of evidence sufficient
to support a finding of the nonexistence of the presumed fact.
In other words, the evidence must be sufficient to put the
existence of a presumed fact into genuine dispute.” (citations
omitted)).
16
See supra note 8; AHSTAC’s Admin. Case Br., Admin. R.
Pub. Doc. 151 at 5-6 (“The Department has failed to point to any
Court No. 10-00275 Page 11

review, Commerce discovered significant inaccuracies, undetected

by Customs, in the CBP entry volume data for subject merchandise

from the very same respondents as those covered in this review17

casts sufficient doubt on the presumption that Customs has

assured the accuracy of such data for this POR. See Aukerman,

960 F.2d at 1037; Pakfood, __ CIT at __, 753 F. Supp. 2d at 1345-

46. Cf. Home Products Int’l, Inc. v. United States, 633 F.3d

1369, 1380-81 (Fed. Cir. 2011) (determination of data

inaccuracies in a separate review of the same producer/exporter,

subject to the same antidumping duty order, casts doubt on

similar data regarding such producer/exporter in an adjacent

review).18 Accordingly, AHSTAC’s evidence must be taken into

evidence on the record of this review – or, indeed, provide any
logical explanation – for why evasion of the antidumping duty
order by misclassification would not have continued during [this
POR].”); I & D Mem. Cmt. 1 at 4 (stating, without further
explanation, that evidence of entry misclassification, undetected
by Customs, in the immediately preceding review of this
antidumping duty order “ha[s] no bearing on the instant
administrative review”). Compare with Resp’t Selection Mem.,
Admin. R. Con. Doc. 8 [Pub. Doc. 41] at 7 (“[A]bsent information
to the contrary, we will continue to treat any affiliated
companies found to be collapsible in previous segments as a
single entity in the current segment.”); see infra note 18.
17
See AR3 I & D Mem. Cmt. 7 at 23 (discussing inaccuracies
discovered in CBP entry volume data for Regal); Resp’t Selection
Mem., Admin. R. Con. Doc. 8 [Pub. Doc. 41] at 8 (selecting Regal
for individual examination in this review).
18
The court also notes that the Department has acted
inconsistently in its treatment of data from prior reviews as
evidence of conditions in this POR. On the one hand, the
Department relies, in the absence of evidence to the contrary, on
Court No. 10-00275 Page 12

account when the Department makes its determinations regarding

POR subject entry volumes, prior to respondent selection under

19 U.S.C. 1677f-1(c)(2). See Universal Camera, 340 U.S. at 488.

Because Commerce failed to take into account record evidence

that fairly detracts from the weight of the evidence supporting

its POR subject entry volume determinations, these determinations

are not supported by substantial evidence. Id. This issue is

therefore remanded to the agency for reconsideration.

Specifically, upon remand, Commerce must take into account the

record evidence of significant entry volume inaccuracies in

Type 03 CBP Form 7501 data for merchandise subject to this

antidumping duty order, and explain why it is nevertheless

reasonable to conclude that the Type 03 CBP Form 7501 data used

in this case are not similarly inaccurate, and/or otherwise

reconsider its determination.19

the continued accuracy of information on company affiliations
from prior reviews. See Resp’t Selection Mem., Admin. R. Con.
Doc. 8 [Pub. Doc. 41] at 7; Pakfood, __ CIT at __, 753 F. Supp.
2d at 1346-48. But with regard to the discovery that entries
subject to this antidumping duty order have been inaccurately
reported as non-dutiable in the prior review, the Department does
the opposite – it assumes, without evidence, that the inaccurate
entry volume reporting discovered in the prior review has not
continued into this POR. See I & D Mem. Cmt. 1 at 4.
19
The court notes in this regard that, as AHSTAC suggested
below, see AHSTAC’s Admin. Case Br., Admin. R. Pub. Doc. 151 at
10-11, one way to corroborate the accuracy of CBP Type 03 entry
volume data without undue administrative burden is to compare
such data with CBP Type 01 entry volume data (for merchandise
declared to be non-dutiable), for entries of merchandise from
Court No. 10-00275 Page 13

II. Commerce’s Use of Surrogate Value Data from North Korea

A. Background

During administrative review of antidumping duty orders,

Commerce determines dumping margins by comparing the export price

of subject merchandise to its normal value. 19 U.S.C.

§ 1677b(a).20 For exports from a non-market economy (“NME”)21,

however, the “sales of merchandise in such country do not reflect

the fair [or normal] value of the merchandise.” Id. at

§ 1677(18)(A). The Department therefore calculates a surrogate

value for such merchandise, based on the best available

China falling within the scope of tariff codes subject to this
antidumping duty order. Such Type 01 data is as readily
available to the Department as Type 03 data, see I & D Mem.
Cmt. 1 at 3, and thus may be released to interested parties under
administrative protective order.
20
Generally, normal value is the price at which the
merchandise is sold in the exporter/producer’s home market. Id.
at § 1677b(a)(1)(B)(i).
21
In determining whether a nation’s economy is non-market,
Commerce considers “(i) the extent to which the currency of the
foreign country is convertible into the currency of other
countries; (ii) the extent to which wage rates in the foreign
country are determined by free bargaining between labor and
management; (iii) the extent to which joint ventures or other
investments by firms of other foreign countries are permitted in
the foreign country; (iv) the extent of government ownership or
control of the means of production; (v) the extent of government
control over the allocation of resources and over the price and
output decisions of enterprises; and (vi) such other factors as
[Commerce] considers appropriate.” 19 U.S.C. § 1677(18)(B). Once
Commerce makes a determination that a particular foreign country
operates as an NME, that determination remains in effect until
revoked by Commerce. Id. at § 1677(18)(C)(i).
Court No. 10-00275 Page 14

information regarding the relevant factors of production

(“FOPs”)22 in one or more developmentally-comparable market

economy countries that produce comparable merchandise. Id. at

§§ 1677b(c)(1) & (4).23 The surrogate value calculation

approximates normal value by reconstructing the costs of

producing comparable merchandise in a comparable market economy.

In this case, because Commerce has determined that China has

NME status,24 the Department calculated such a surrogate ‘normal’

value for the subject merchandise. Prelim. Results, 75 Fed. Reg.

at 11,859. The surrogate value calculation included, among other

FOPs, a broad market average25 for the price of tape imported

22
FOPs include hours of labor required, quantities of raw
materials employed, amount of energy and other utilities
consumed, and representative capital cost, including
depreciation. Id. at § 1677b(c)(3).
23
Commerce resorts to the calculation of surrogate values
if it determines that the available NME information does not
permit an appropriate normal value to be determined. Id. at
§ 1677b(c)(1)(A) & (B).
24
See Prelim. Results, 75 Fed. Reg. at 11,858; see also
Chrome-Plated Lug Nuts From the People’s Republic of China,
56 Fed. Reg. 46,153, 46,154 (Dep’t Commerce Sept. 10, 1991)
(final determination of sales at less than fair value).
25
See Surrogate Factor Valuations for Preliminary Results,
A-507-893, ARP 08-09 (Mar. 8, 2010), Admin. R. Pub. Doc. 136
(“FOP Mem.”) 7 & Ex. 17. The Department explained that its
“practice when selecting the ‘best available information’ for
valuing FOPs, in accordance with [19 U.S.C. 1677b(c)(1)], is to
select, to the extent practicable, [surrogate values] which are
publicly available, product-specific, representative of a broad
market average, tax-exclusive and contemporaneous with the POR.”
Id. at 3 (citation omitted). Thus, the Department based much of
Court No. 10-00275 Page 15

from twenty-seven countries into India, the chosen surrogate

market economy.26 Included in this market average of the price

of tape imported into India was the price of tape imported from

North Korea.27

After soliciting comments from interested parties, the

Department continued, over AHSTAC’s objections,28 to include WTA

data on the price of tape imported into India from North Korea in

its surrogate value calculations for the Final Results. See I & D

Mem. Cmt. 2 at 5 (disagreeing that the North Korean data should

be excluded). AHSTAC now challenges this decision.

B. Commerce’s Decision is Sustained.

The question before the court is whether Commerce reasonably

declined to exclude certain prices, listed in the import statics

for India, the chosen surrogate market economy, when calculating

the average value of a factor for producing the subject

the value on information published by the World Trade Atlas
(“WTA”). See id. at 2.
26
Cf. Fujian Lianfu Forestry Co. v. United States, __ CIT
__, 638 F. Supp. 2d 1325, 1349 (2009) (upholding selection of
India, in accordance with 19 U.S.C. § 1677b(c)(4), as a market
economy that is sufficiently comparable to China to serve as its
primary surrogate country for antidumping purposes).
27
FOP Mem., Admin. R. Pub. Doc. 136 at Ex. 17.
28
See AHSTAC’s Admin. Case Br., Admin. R. Pub. Doc. 151 at
19-21 (arguing that the Department should exclude data from North
Korea because “the agency clearly has discretion to exclude the
values from certain countries . . . even absent a lack of
developed administrative case history regarding that country”).
Court No. 10-00275 Page 16

merchandise in the surrogate country. More specifically, the

question is whether Commerce should have excluded the price of

tape imported from North Korea when reconstructing the cost of

producing (and packing) the subject shrimp in India. As the

antidumping statute is silent on this particular question, the

court will uphold Commerce’s reasonable methodology if it

comports with a reasonable reading of the administrative record.

1. The Department’s Methodology Is Not Contrary to
Law.

As noted above, the Department’s methodology here was to use

a broad market average of prices of FOPs imported into the chosen

surrogate market economy. See also, e.g., Fujian, __ CIT at __,

638 F. Supp. 2d at 1349; Dorbest Ltd. v. United States, 30 CIT

1671, 1686-87, 462 F. Supp. 2d 1262, 1277 (2006). When relying

on WTA import statistics for this purpose, Commerce may not

arbitrarily choose which prices to include and which to

exclude,29 even if the data is on exports from known NMEs. See

29
See Jinan Yipin Corp. v. United States, 31 CIT 1901,
1936, 526 F. Supp. 2d 1347, 1377-78 (2007) (noting with concern
that data from certain countries were crossed off from the WTA
data used to value FOPs imported into a surrogate country, but
remanding based on a broader legal issue); Jinan Yipin Corp. v.
United States, __ CIT __, 637 F. Supp. 2d 1183, 1196 (2009)
(“Jinan II”) (remanding the exclusion of such data from
Commerce’s FOP valuation); Jinan Yipin Corp. v. United States, __
CIT __, 774 F. Supp. 2d 1238, 1248 (2011) (“Jinan III”)
(sustaining exclusion of this data once Commerce supported the
exclusion with “explicit findings that export subsidies existed
[for the relevant imports from such countries] during the time
period corresponding to the POR”).
Court No. 10-00275 Page 17

Jinan II, __ CIT at __, 637 F. Supp. 2d at 1189 (explaining that

NME-origin merchandise may be imported into a market economy at

market price).30

As there is nothing in the antidumping statute, or the

Department’s regulations and practice,31 to render this approach

unreasonable, the court concludes that the Department’s

methodology in this respect is not contrary to law. See Chevron,

467 U.S. at 842; Jinan III, __ CIT __, 774 F. Supp. 2d at 1248.

2. The Department’s Methodology Was Reasonably
Applied In This Case.

AHSTAC submitted no evidence to support its contention that

30
The court notes that using import statistics for the
chosen surrogate market economy, to obtain the average value of
certain materials so as to reconstruct the cost of producing
comparable merchandise in the surrogate market economy, does not
carry the same likelihood of market price distortion, even if
some of those imports may have come from what may potentially be
NME countries, as using the price of the subject merchandise in
an NME for that merchandise’s normal value when calculating a
dumping margin. The court also notes that, even in the latter
scenario, the exclusion of price data from the NME is not
automatic. See 19 U.S.C. § 1677b(c)(1) (“If (A) the subject
merchandise is exported from a nonmarket economy country, and (B)
[Commerce] finds that available information does not permit the
normal value of the subject merchandise to be determined under
subsection (a) of this section [i.e., by using the price at which
the foreign like product is first sold for consumption in the NME
country], [then] [Commerce] shall determine the normal value of
the subject merchandise on the basis of [FOPs in a surrogate
market economy].”) (emphasis added).
31
The Department acknowledges that certain of its prior
determinations have been aberrational with regard to the policy
explained in ITA Policy Bulletin 03.1, see I & D Mem. Cmt. 2 at
5, and “seeks to avoid a similar error here.” Id.
Court No. 10-00275 Page 18

the WTA data on tape imported into India from North Korea

actually contained distorted prices. See generally AHSTAC’s

Admin. Case Br., Admin. R. Pub. Doc. 151. Even assuming,

arguendo, that North Korea operates as a non-market economy,32

the agency reasonably requires that, for antidumping purposes,

the determination to exclude from its calculations relevant price

data on FOPs imported into a surrogate market economy must be

supported with specific evidence of distortive effect. Cf. Jinan

III, __ CIT at __, 774 F. Supp. 2d at 1248 (sustaining exclusion

of the price of certain imported FOPs only once supported with

“explicit findings” that such prices were likely distorted

“during the time period corresponding to the POR”).

Commerce’s decision not to exclude this data was therefore

supported by a reasonable reading of the record, as nothing in

the record indicated that including such data would have a

32
See Mem. L. Supp. Pl.’s Rule 56.2 Mot. for J. on Agency
R. 30-31 (citing a report from the Congressional Research
Service, discussing United States policy of curtailing trade with
North Korea due to, inter alia, “its status as a Communist
country and a nonmarket economy,” and federal legislation that
deems North Korea ineligible for non-humanitarian foreign
assistance, due to its status as a communist country). The court
notes, however, that no similar references were provided to
Commerce in support of AHSTAC’s argument below. The Department
has never made a determination, for antidumping purposes,
regarding the status of North Korea’s economy. See I & D Mem.,
Cmt. 2 at 5; AHSTAC’s Admin. Case Br., Admin. R. Pub. Doc. 151 at
20 (agreeing that “the agency has not had the occasion to confirm
in a regulatory procedure [whether] North Korea operates a non-
market economy country [for purposes of the antidumping law]”).
Court No. 10-00275 Page 19

distortive effect on the surrogate value calculation. See Nippon

Steel, 458 F.3d at 1351.

CONCLUSION

For all the foregoing reasons, the Department’s Final

Results, 75 Fed. Reg. 49,460, are remanded to the agency solely

with regard to the determinations of subject entry volumes for

purposes of respondent selection under 19 U.S.C. § 1677f-1(c)(2).

Upon remand, the Department shall reconsider and provide

additional explanation for, and/or modification to,33 such

determinations, consistent with this opinion.

Commerce shall have until October 24, 2011 to complete and

file its remand redetermination. Plaintiff shall have until

November 23, 2011 to file comments. Defendant and Defendant-

Intervenors shall have until December 8, 2011 to file any reply.

It is SO ORDERED.

/s/ Donald C. Pogue
Donald C. Pogue, Chief Judge

Dated: August 24, 2011
New York, N.Y.

33
The court notes that, in the event that the Department’s
selection of mandatory respondents is modified upon remand,
Defendant-Intervenor Hilltop requests to retain the dumping
margin assigned to it upon its individual investigation in this
review. See Def.-Intervenors’ Resp. in Opp’n to Pl.’s Rule 56.2
Mot. for J. Upon Agency R. 11. The court reserves judgment on
this question until such time as it becomes relevant to the
disposition of a ripe legal issue. See Tokyo Kikai Seisakusho,
Ltd. v. United States, 529 F.3d 1352, 1362 (Fed. Cir. 2008).