Tianjin Tiancheng Pharmaceutical Co. v. United States

Slip Op. 05-29

UNITED STATES COURT OF INTERNATIONAL TRADE

TIANJIN TIANCHENG PHARMACEUTICAL
CO., LTD.,

Plaintiff,
BEFORE: Pogue, Judge
v.
Consol. Court No. 03-00654
UNITED STATES,
PUBLIC VERSION
Defendant.

[Plaintiff’s motion for judgment on the agency record denied;
judgment entered for Defendant.]

Decided: March 9, 2005

Lafave & Sailer LLP (Francis J. Sailer & Arthur J. Lafave III),
for Plaintiffs.

Peter D. Keisler, Assistant Attorney General, David M. Cohen,
Director, Jeanne E. Davidson, Assistant Director, Stephen C.
Tosini, Trial Attorney, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice; James K. Lockett, Senior
Attorney, Office of the Chief Counsel for Import Administration,
U.S. Department of Commerce, for Defendant.

OPINION

POGUE, Judge: This action requires the Court to review

certain determinations in the “new shipper” review of Plaintiff’s

imports of glycine from the People’s Republic of China. Defendant,

the U.S. Department of Commerce (“Commerce”), rescinded its review

of Plaintiff’s imports after concluding that the sale upon which
Court No. 03-00654 Page 2

the review was based was not bona fide. Because the Court finds

that Defendant’s conclusions are supported by substantial record

evidence, the Court denies Plaintiff’s motion and enters judgment

for Defendant.

BACKGROUND

Commerce published an antidumping duty order on glycine from

the People’s Republic of China in 1995. Glycine from the People’s

Republic of China, 60 Fed. Reg. 16,116 (Dep’t Commerce Mar 29,

1995) (antidumping duty order). An exporter may request a “new

shipper review” of its products that are subject to an antidumping

duty order if it began shipment of the products after the order was

imposed. See 19 U.S.C. § 1675(a)(2)(B) (2000). This statute

enables the new shipper to demonstrate that it should be accorded

a dumping rate specific to itself, and not the “all-others” rate,

which is usually higher than a firm-specific rate would be.

In this case, Commerce received a request for a new shipper

review from Plaintiff on March 29, 2002. Plaintiff refiled its

request on May 1, 2002, after having been informed by Commerce that

its original request did not comply with the applicable statutes

and regulations. See Pl.’s Conf. Mem. Supp. R. 56.2 Mot. J. Agency

R. at 2-3 (“Pl.’s Conf. Br.”); Final Results of Determination

Pursuant to Court Remand (“Remand Determ.”), CRR Doc. No. 13 at 2
Court No. 03-00654 Page 3

(Apr. 23, 2004).1

In response to a Commerce questionnaire issued pursuant to the

new shipper review, Plaintiff indicated that on January 25, 2002,

it sold 1000 kilograms of glycine to a U.S. importer of

pharmaceuticals, denoted here for confidentiality purposes as

Company X. The goods were sold at a price of [ ]2 per kilogram,

and the accompanying customs documentation did not indicate that

the goods were subject to antidumping duties. See Additional Copy

of CF 7501, Sales Contract, Exs. S-1 & S-3 to Response of Tianjin

Tiancheng Pharmaceutical Co., Ltd. to the Supplemental

Questionnaire in the New Shipper Review of the Antidumping Duty

Order on Glycine from the People’s Republic of China, Attach. to

Letter from Francis J. Sailer, Lafave & Sailer LLP, to the Hon.

Donald L. Evans, Sec’y of Commerce, Re: First Supplemental

Questionnaire Response of Tianjin Tiancheng Pharmaceutical Co. Ltd.

in the New Shipper Review of Glycine from the People’s Republic of

China, CR Doc. No. 11 (Dec. 9, 2002).

1
The record in this case consists of the record amassed by
Commerce prior to its first, voluntary remand, see infra p. 6, in
both public and confidential formats, and the supplemental record
which was created during the voluntary remand. The Court will
cite to documents in the pre-remand record’s confidential version
as CR, followed by the document number. The Court will cite to
documents in the confidential versions of the record on remand as
CRR, followed by the corresponding document number.
2
Throughout this opinion, brackets designate information
held confidential by the parties and thus not publicly divulged
by the Court.
Court No. 03-00654 Page 4

In response to a supplemental questionnaire, Plaintiff

disclosed that although payment on the sale to Company X had been

due one month after the date of sale, the payment was not made

until over nine months later. See Pl.’s Conf. Br. at 23-24. This

was confirmed by Commerce during verification procedures. See

Memorandum from Matthew Renkey & Scott Fullerton, Analysts, Office

of AD/CVD Enforcement VII, to The File, Re: New Shipper Review of

Glycine from the People’s Republic of China: Sales and Factors

Verification Report for Tianjin Tiancheng Pharmaceutical Co., Ltd.,

CR Doc. No. 19 at 5 (Mar. 6, 2003). Commerce also ascertained that

Company X had previously purchased products other than glycine from

Plaintiff for importation. See id. Finally, Commerce learned that

during the period corresponding to Plaintiff’s sale into the United

States, Plaintiff had sold the same product to a third-country

market for [ ]. See October 10, 2001 Invoice, Spot Checks of

Other Sales, Ex. 7. to CR Appendix 1.

Commerce then issued questionnaires to Plaintiff’s importer,

Company X. See Glycine from the People’s Republic of China, 68

Fed. Reg. 49,434 (Dep’t Commerce Aug. 18, 2003) (notice of

rescission of antidumping duty new shipper review). The responses

confirmed that the January 25, 2002 invoice was paid nine months

after the invoice date. See Bank Statement 11/01/02 - 11/29/02,

Attach. B to Glycine from PRC (A-570-836) Questionnaire Response,

CR Doc. No. 25 (April 28, 2003) (showing that an international
Court No. 03-00654 Page 5

funds transfer from Company X to Plaintiff was made on Nov. 22,

2002.) Company X also reported that it had been late in making

payment to Plaintiff on previous occasions, but that this

transaction represented the longest delay. See Glycine from PRC

(A-570-836); Questionnaire Response, CR Doc. No. 35 at Answer 3

(July 17, 2003). In response to questions about Customs

irregularities, Company X averred that it had improperly filed

documentation because its broker was unaware of the antidumping

duties on the goods. Id. at Answer 2.

On August 18, 2003 Commerce rescinded Plaintiff’s new shipper

review. Commerce stated that it was taking this action because the

questionnaire responses from both Plaintiff and its importer

indicated that the sale upon which the review was based was not

bona fide –- that is, it was not typical of normal commercial

transactions in the industry. Commerce based its finding that the

sale was not bona fide on four considerations: (1) the price at

which the goods were sold was not “commercially reasonable,” (2)

the sales were made outside Plaintiff’s normal U.S. sales channels,

(3) the extent to which late payment was made by Company X, the

importer, and (4) inconsistencies in the import documentation. See

Glycine from the People’s Republic of China, 68 Fed. Reg. 49,434,

49,435 (Dep’t Commerce Aug. 18, 2003) (notice of rescission of

antidumping duty new shipper review).

Plaintiff consequently filed suit, seeking review of the
Court No. 03-00654 Page 6

determination to rescind the new shipper review. See Remand

Determ., CRR Doc. No. 13 at 4 (Apr. 23, 2004). Plaintiff

challenged Commerce’s use of factual information upon which the

parties had had no opportunity to comment in the determination to

rescind. Id. at 4-5. On November 19, 2003, Commerce requested

that the Court remand the determination so that the record could be

reopened to allow the parties to comment on the two new pieces of

factual information: (1) publicly available U.S. Customs and Border

Protection (“Customs”) data on average unit values for glycine and

(2) proprietary data from a Customs query regarding U.S. imports of

glycine from the People’s Republic of China. Id. at 5.

After hearing comments and rebuttals from the parties, as well

as after issuing a new questionnaire to Company X, Commerce issued

a new determination. See id. at 34-35. In this new determination,

Commerce found that Plaintiff’s sale had not been bona fide for the

same reasons stated in its earlier determination, except that

Commerce now found that the sale had been within Plaintiff’s normal

U.S. sales channels. Id. Commerce still maintained, however, that

the price, payment timing, and import documentation all revealed a

sale that was not reflective of “normal commercial realities,” such

that it was not “a reliable indicator of future activity.” Id.

Therefore, Commerce found that the sale was not bona fide for

purposes of a new shipper review. Id.

Plaintiff now challenges this remand determination before the
Court No. 03-00654 Page 7

Court.

STANDARD OF REVIEW

This Court reviews Commerce’s determinations in antidumping

duty proceedings, including new shipper reviews, to determine

whether they are “unsupported by substantial evidence on the

record, or otherwise not in accordance with law.” 19 U.S.C. §

1516a(b)(1)(B)(I)(2000).

DISCUSSION

In conducting a new shipper review, Commerce is essentially

conducting a new antidumping review that is specific to a

particular producer. To conduct such a review, Commerce must

determine the “normal value and export price (or constructed export

price) of each entry of the subject merchandise.” See 19 U.S.C.

1675(a)(2)(A). However, pursuant to the rulings of the Court,

Commerce may exclude sales from the export price calculation where

it finds that they are not bona fide. A sale is not bona fide, and

therefore may be exluded from export price, where it is

“unrepresentative or extremely distortive.” See Am. Silicon Techs.

v. United States, 24 CIT 612, 616, 110 F. Supp. 2d 992, 995 (2000)

(quoting FAG U.K. Ltd. v. United States, 20 CIT 1277, 1282, 945 F.

Supp. 260, 265 (1996)). Accordingly, where a new shipper review is

based on a single sale, exclusion of that sale as non-bona fide
Court No. 03-00654 Page 8

necessarily must end the review, as no data will remain on the

export price side of Commerce’s antidumping duty calculation.

To determine whether a sale in a new shipper review is

“unrepresentative or extremely distortive,” and therefore

excludable as non-bona fide, Commerce employs a “totality of the

circumstances” test, see Memorandum from Joseph A. Spetrini, Deputy

Assistant Sec’y for Imp. Admin. Group III, to James J. Jochum,

Assistant Sec’y for Imp. Admin., Re: Glycine from the People’s

Republic of China: the Bona Fide Issue in the New Shipper Review of

Tianjin Tiancheng Pharmaceutical Co., Ltd. (“Bona Fide Memo”)3, CR

Doc. No. 39 at 3 (Aug. 8, 2003), focusing on whether or not the

transaction is “commercially unreasonable” or “atypical of normal

business practices.” See Freshwater Crawfish Tail Meat from the

People’s Republic of China, 68 Fed. Reg. 1,439, 1,440 (Jan. 10,

2003) (notice of final results of antidumping duty new shipper

review, and final rescission of antidumping duty new shipper

review); see also Remand Determ., CRR Doc. No. 13 at 34 (Apr. 23,

2004) (finding that the sale was not reflective of “normal

commercial considerations”); Bona Fide Memo, CR Doc. No. 39 at 3

(Aug. 8, 2003) (finding that the value of and practices surrounding

the sale were “atypical of normal, commercial transactions in the

3
This memorandum was incorporated by reference into
Commerce’s original detetermination. See Glycine from the
People’s Republic of China, 68 Fed. Reg. 49,434, 49,435 (Dep’t
Commerce Aug. 18, 2003).
Court No. 03-00654 Page 9

industry”). In evaluating whether a sale is commercially

reasonable or not, Commerce has considered, inter alia, such

factors as (1) the timing of the sale, (2) the price and quantity,

(3) the expenses arising from the transaction, (4) whether the

goods were resold at a profit, (5) and whether the transaction was

at an arms-length basis. See Am. Silicon Techs. v United States,

24 CIT 612, 616 110 F. Supp. 2d 992, 995 (2000); see also Windmill

Int’l Pte., Ltd. v. United States, 26 CIT 221, 224-25, 193 F. Supp.

2d 1303, 1307 (2002). However, because the ultimate goal of the

new shipper review is to ensure that the U.S. price side of the

antidumping calculation is based on a realistic figure, any factor

which indicates that the sale under consideration is not likely to

be typical of those which the producer will make in the future is

relevant. See id. Otherwise, the producer may unfairly benefit

from an atypical sale to obtain a lower dumping margin than the

producer’s usual commercial practice would dictate. See Memorandum

from Richard W. Moreland, Deputy Assistant Sec’y, Group I, to

Faryar Shirzad, Assistant Sec’y for Imp. Admin., Re: Issues and

Decision Memorandum: New Shipper Review of Clipper Manufacturing

Ltd., available at http://ia.ita.doc.gov/frn/summary/prc/02-6076-

2.txt (last accessed Feb. 28, 2005) (incorporated by reference into

Fresh Garlic from the People’s Republic of China, 67 Fed. Reg.

11,283, 11,283 (Dep’t Commerce Mar. 13, 2002) (final results of

antidumping administrative review and rescission of new shipper
Court No. 03-00654 Page 10

review.)

Turning to the particular sale at issue here, Plaintiff argues

that Commerce’s determination that its sale to Company X was not

typical of its future sales to the U.S. is unsupported by

substantial evidence. Specifically, Plaintiff argues that Commerce

has not demonstrated, by substantial evidence, that (1) the price

of its sale was atypical, (2) that the payment timing demonstrated

that the sale was atypical, (3) that the inconsistencies in the

import documentation demonstrate that the sale was atypical, or (4)

that even to the extent that all three factors are shown, they

constitute substantial evidence to support the determination that

the sale was non-bona fide. The Court will address each contention

in turn.

1. SUBSTANTIAL EVIDENCE SUPPORTS COMMERCE’S DETERMINATION THAT
THE PRICE OF THE SALE SUPPORTED A FINDING THAT THE SALE WAS
ATYPICAL.

In making its determination on the bona fide issue, Commerce

relied on its finding that the price at which the product was sold

was not typical of industry practice or of Plaintiff’s own pricing

practices. See Remand Determ., CRR Doc. No. 13 at 4, 34 (Apr. 23,

2004). The Court will first review the data with which Commerce

supported its finding, and then consider Plaintiff’s arguments that

these data do not constitute substantial evidence, or ignore other

contradictory evidence.

To support the finding that the price charged by Plaintiff to
Court No. 03-00654 Page 11

Company X was not a typical or commercially reasonable one,

Commerce first looked to data from Customs that showed the monthly

Average Unit Values (“AUV”) for imports of glycine from China for

the year previous to Plaintiff’s sale. See id. at 16-17, Bona Fide

Memo, CR Doc. No. 39 at 3-4 (Aug. 8, 2003). After discounting the

AUV for October of 2001 as an obvious outlier,4 Commerce averaged

the monthly prices, including the AUV for the month in which

Plaintiff imported its goods, to calculate a yearly average of

$2.27 per kilogram for Chinese glycine. See POR Glycine Imports

from China, Attach. 1 to Bona Fide Memo, CR Doc. No. 39 (Aug. 8,

2003). The price of the sale under consideration was [ ] per

kilogram, significantly higher than the AUV.5 Id.

Having found that Plaintiff’s sales price did not appear to be

4
The Court notes that while the particular value that
Commerce threw out was in this instance so substantially greater
than the other monthly prices as to appear to be an obvious
outlier, a simple modal analysis would have allowed Commerce to
show its reasons for disregarding that month’s value with greater
precision. See Laurence C. Hamilton, Data Analysis for Social
Scientists 78-82 (Duxbury Press, 1996). Furthermore, such an
analysis would have shown that, given how tightly clustered the
monthly AUVs were, the value for March of 2001 was also an
outlier, and should have been excluded from the average.
Exclusion of this value as an outlier would have driven the
average yearly AUV down still farther, to $2.21. However, as even
without the exclusion of the March 2001 AUV from the
calculations, Plaintiff’s sale price was over [ ] more than
the yearly average, the Court does not find the error important.
5
The invoice price was [ ] per kilogram, but Customs
deducted certain non-dutiable charges, making the AUV for
Plaintiff’s sale to Company X [ ] per kilogram. See POR
Glycine Imports from China, Attach. 1 to Bona Fide Memo, CR Doc.
No. 39 (Aug. 8, 2003).
Court No. 03-00654 Page 12

in conformity with the benchmark of other Chinese glycine

producers’ sales into the market, Commerce also looked to see what

prices Plaintiff charged for the same product in third-country

markets. Commerce found evidence of another sale by Plaintiff

during the period of review (“POR”) to a third-country importer.

See October 10, 2001 Invoice, Spot Checks of Other Sales, Ex. 7 to

CR Appendix 1. In this sale, Plaintiff charged [ ] per kilogram

for pharmaceutical grade glycine, an amount in line with the AUV.

Id.6 Accordingly, Commerce found that Plaintiff’s price was out of

line with both the benchmark of other Chinese exporters’ sales of

glycine to the United States, and with Plaintiff’s own pricing

practice as it applied to third-country sales. Bona Fide Memo, CR

Doc. No. 39 at 3-4 (Aug. 8, 2003). Commerce therefore concluded

that the price was not one which would be typical Plaintiff’s

future sales into the United States. See id.

Plaintiff challenges this finding with a variety of arguments.

Briefly listed, Plaintiff’s arguments on the price factor are: (i)

that Commerce cannot reconcile a finding that its price was too

high for bona fide purposes with its finding that Plaintiff should

be accorded a 43.44% dumping margin, (ii) that the AUV data were

not reliable because they included sales of all forms of Chinese

6
Commerce also found evidence of a sale to a different
third-country for the same price, but this sale was made outside
the POR. See August 14 Invoice, Payment Training, Ex. 14 to CR
Appendix 1.
Court No. 03-00654 Page 13

glycine, and not just the pharmaceutical grade glycine that

Plaintiff sold to Company X, (iii) that Company X’s pricing data

provide a more reliable benchmark than the AUV data, (iv) that to

the extent the AUV data provide a reliable benchmark, they do so in

a different way from that expounded by Commerce, (v) that the fact

that Company X resold the goods for a profit establishes that the

price was commercially sound, (vi) that Plaintiff’s product was

“granular” glycine and thus commanded a higher price than other

pharmaceutical grade glycine, and (vii) that third-country sales

reflected different market considerations and different grades of

glycine. The Court will discuss each argument in turn.

(i) Plaintiff’s argument that Commerce cannot reconcile
a finding that its price was too high for bona fide purposes
with its finding that Plaintiff should be accorded a 43.44%
dumping margin is waived.

Plaintiff argues that Commerce cannot reconcile a finding that

its price was too high for bona fide purposes with its finding that

Plaintiff should be accorded a 43.44% dumping margin. See Pl.’s

Conf. Br. at 14. Commerce did not address this contention in its

Bona Fide Memo, or in its Remand Determ. Commerce’s omission is

hardly surprising, as Plaintiff did not make this particular

contention at the administrative level. See generally Letter from

Francis J. Sailer, Lafave & Sailer LLP, to the Hon. Donald L.

Evans, Sec’y of Commerce, Re: Glycine from the PRC; Remand Rebuttal

Info and Comments, CCR Doc. No. 3 (Jan. 14, 2004); Letter from

Francis J. Sailer, Lafave & Sailer LLP, to the Hon. Donald L.
Court No. 03-00654 Page 14

Evans, Sec’y of Commerce, Re: Glycine from the PRC; Comments on

Draft Results of Determination Pursuant to Court Remand, CCR Doc.

No. 8 (April 13, 2004).

Therefore, the Court finds that the argument is waived. Any

possible contradiction between Commerce’s pre-rescission finding

that Plaintiff should be assessed a dumping margin of 43.44% and

Commerce’s later determination that Plaintiff’s sale was non-bona

fide because of its high price was apparent at the time of the

rescission. Plaintiff’s argument was therefore available and open

to it as of the time of rescission. Moreover, although the record

was reopened for the sole purpose of allowing the parties to

comment on evidence that Commerce relied upon to demonstrate that

the sale price was not commercially reasonable, Plaintiff never

advanced this particular contention until briefing before the

Court. “If a court is to review an agency’s action fairly, it

should have before it neither more nor less information than did

the agency when it made its decision.” See McDonnell Douglas Corp.

v. U.S. Dep’t of the Air Force, 375 F.3d 1182, 1187-88 (D.C. Cir.

2004) (quoting Walter O. Boswell Mem’l Hosp. v. Heckler, 749 F.2d

788, 792 (D.C. Cir. 1984)). Plaintiff may not, at this late date,

to present Defendant, and this Court, with new arguments that were

better made below.7

7
Even to the extent such an argument was not waived, it is
highly unpersuasive. The “all others” rate for the antidumping
order on glycine from China is over 155%. Glycine from the
Court No. 03-00654 Page 15

(ii) Plaintiff’s argument that the AUV data were not
reliable because they included sales of all forms of Chinese
glycine, and not just the pharmaceutical grade glycine that
Plaintiff sold to Company X is waived.

Plaintiff argues that the AUV data are not a reliable

indication of what a commercially reasonable price for Plaintiff’s

People’s Republic of China, 60 Fed. Reg. 16,116, 16,116 (Dep’t
Commerce Mar. 29, 1995) (antidumping duty order). Commerce found
that Plaintiff’s individual dumping margin should be 43.44%. See
Glycine from the People’s Republic of China, 68 Fed. Reg. 13,669,
13,672 (Dep’t Commerce Mar. 20, 2003) (notice of preliminary
results of antidumping duty new shipper review). Commerce, in
effect, found that while Plaintiff was dumping, it was dumping
far less than other Chinese producers; that is, rather than being
“too low,” its price was far higher than many other Chinese
producers’ prices. The bona fide analysis also found that
Plaintiff’s price was high. See Bona Fide Memo, CR Doc. No 39 at
3-4 (Aug. 8, 2003); Remand Determ., CCR Doc. No. 13 at 17 (Apr.
23, 2004). In this case, the combination of a high “all others”
rate and the Plaintiff’s high price compared to other import
prices could mean two things: either Plaintiff truly means to
replicate the high price sale upon which it predicated the
review, or, Plaintiff will take advantage of one high price sale
to secure a lower-than-average dumping margin, and then typically
charge a far lower price (low enough to undercut the competition
that has a higher dumping margin, but still high enough to make a
hefty profit which would otherwise be unavailable). Considering
that the latter is a far more profitable avenue, and that,
because of the extended timelines of antidumping reviews,
Plaintiff could have more than two years to enjoy an extremely
advantageous, and possibly predatory, market position predicated
entirely on an atypical sale, the weight of the evidence is in
Commerce’s favor in holding that the scenario above is likely
indicative of an atypical, or non-bona fide, sale. See Pl.’s
Conf. Br. at 9, 18 (describing Plaintiff as “a profit maximizer”
and appearing to admit that Plaintiff was in fact dumping by not
accounting for various factors of production in its export
price). Moreover, given that the dumping margin calculation and
the bona fide analysis address different concerns, there is
nothing inherently contradictory in Commerce’s finding that a
price was low enough to be dumped, and yet so high when compared
to other prices in the U.S. market as to be unlikely to be
sustained in the future, especially where the motives for not
sustaining the price are so clear.
Court No. 03-00654 Page 16

product might be, because the AUV data includes all grades and

forms of glycine, whereas Plaintiff only sells pharmaceutical grade

glycine, which is more refined, and hence, more expensive to

produce. See Pl.’s Conf. Br. at 16-18, Pl.’s Conf. Reply Br. at 7.

In response, Commerce first points to the fact that the AUV data

represent all sales of glycine from China into the United States

during the POR, that they cover importation of over 100 metric tons

of glycine, and that, therefore, the data provide a large sample

that enables Commerce to have confidence that the prices

represented in the AUV data are representative of prices for

Chinese glycine during the POR. See Remand Determ., CCR Doc. No.

13 at 16-17 (Apr. 23, 2004). Commerce acknowledges that the AUV

data represent sales of all grades of glycine, but notes that in

its analysis of Plaintiff’s factors of production, the total value

of the labor, energy, and materials needed to produce the

pharmaceutical grade glycine was [ ] per kilogram, only [ ]

of which was attributable to the processes needed to refine the

glycine from industrial grade to pharmaceutical grade. See id. at

17-18. Even were Commerce to add this amount, [ ], to the yearly

AUV average of $2.27,8 Plaintiff’s sale price would still be

8
Commerce, in its Remand Determ., does not specifically
state that adding [ ] to the AUV for the POR would compensate
for the expenses of pharmaceutical grade glycine, but Plaintiff
argues that this is what Commerce means for the reader of the
determination to do. See Remand Determ, CCR Doc. No. 13 at 18
(Apr. 23, 2004); Pl.’s Conf. Br. at 17-18.
Court No. 03-00654 Page 17

significantly higher than the average yearly price. See id. at 18.

Although Plaintiff does not appear to have argued this point

before Commerce, see generally Letter from Francis J. Sailer,

Lafave & Sailer LLP, to the Hon. Donald L. Evans, Sec’y of

Commerce, Re: Glycine from the PRC; Remand Rebuttal Info and

Comments, CCR Doc. No. 3 (Jan. 14, 2004); Letter from Francis J.

Sailer, Lafave & Sailer LLP, to the Hon. Donald L. Evans, Sec’y of

Commerce, Re: Glycine from the PRC; Comments on Draft Results of

Determination Pursuant to Court Remand, CCR Doc. No. 8 (April 13,

2004), Plaintiff now challenges the notion that adding the

specified amount, [ ], to the AUV is sufficient, arguing that

the amount, [ ], only accounts for extra labor, energy, and

materials, and does not take into account other factors of

production, such as factory overhead, selling, general, and

administrative expenses, and profit. See Pl.’s Conf. Br. at 17-18.

The Court holds that the argument is waived. Commerce first

analyzed the increased costs associated with producing

pharmaceutical grade, rather than industrial grade, glycine in its

draft remand results. See Draft Results of Determination Pursuant

to Court Remand, CCR Doc. No. 7 at 10-11 (Apr. 9, 2004). Plaintiff

was able to submit comments on this draft, and in fact did so. See

Letter from Francis J. Sailer, Lafave & Sailer LLP, to Hon. Donald

L. Evans, Sec’y of Commerce, Re: Glycine from the PRC; Comments on

Draft Results of Determination Pursuant to Court Remand, CCR Doc.
Court No. 03-00654 Page 18

No. 8 (April 13, 2004). It failed, however, to take exception to

the government’s calculation.9 See id. Again, the Court will not

entertain arguments that were not made before the agency when the

Plaintiff had a clear opportunity to make them on the record.

9
To the extent this argument was not waived, Plaintiff’s
contentions do not help it achieve its desired result. In
essence, Plaintiff argues that Commerce did not include in its
calculation all the factors of production which should have been
included to account for the refining process. See Pl.’s Conf.
Br. at 17. Commerce’s calculation results in enlarging the AUV
by [ ]; under Plaintiff’s calculation, [ ] should be added,
resulting in a figure that makes Plaintiff’s export price appear
more reasonable. See id. at 17-18. Nonetheless, even assuming,
as Plaintiff would, that the AUV data represent only industrial
grade glycine and that all the factors Plaintiff proffers should
be accounted for, Plaintiff’s price exceeds the AUV data by
approximately [ ]. See id. Moreover, Plaintiff’s argument
rests on the supposition that the AUV represents nothing but
industrial grade glycine. See id. at 18. There is no evidence on
the record by which Plaintiff has shown that this is actually the
case. See Remand Determ., CCR Doc. No. 13 at 17 n.2 (Apr. 23,
2004) (admitting that the AUV includes “various grades of
glycine”). On the contrary, the Harmonized Tariff Schedule of
the United States (“HTSUS”) does not distinguish between glycine
of different grades; therefore, it would appear that Customs does
not keep records as to what grades of glycine are imported. See
subheading 2922.49.4020, HTSUS (2003). Thus, the record does not
reveal what proportion of the AUV data represents industrial
grade glycine and what proportion represents food or
pharmaceutical grade glycine. See Remand Determ., CCR Doc. No.
13 at 17. The fair inference is that there is a mixture of the
two. It is hardly likely that the demand for pharmaceutical
grade glycine in the United States is so small that Plaintiff’s
shipment represented the entire universe of such imports during
the POR. It is just as reasonable, in fact, to assume that only
pharmaceutical grade glycine was shipped, and that, therefore,
there is no reason to add anything at all to the AUV. In such
case, Plaintiff’s price exceeds the AUV by approximately [ ].
See Remand Determ., CCR Doc. No. 13 at 17. The actual percentage
likely falls somewhere in between. Only one thing remains clear:
no matter how the AUV data is manipulated to account for
differences in grade, Plaintiff’s price remains above the AUV,
and is likely higher above the AUV than Plaintiff claims.
Court No. 03-00654 Page 19

(iii) Company X’s pricing data does not provide a more
reliable benchmark than the AUV data.

Plaintiff argues that even to the extent that the AUV data

have some measure of reliability, they should have been discounted

in favor of a more reliable indicator of the market price of

glycine: five invoices from Company X. See Pl.’s Conf. Br. at 19-

20; Pl.’s Conf. Reply Br. at 7. Plaintiff argues the price at

which Plaintiff sold its goods was typical of the price that

Company X paid for similar goods during the POR. The evidence

shows that Company X paid at least [ ] per kilogram for

domestically sourced glycine purchased during the POR. See Ex. A.

to Letter from Francis J. Sailer, Lafave & Sailer LLP, to the Hon.

Donald L. Evans, Sec’y of Commerce, Re: Glycine from the PRC;

Remand Rebuttal Info and Comments, CCR Doc. No. 3 (Jan. 14, 2004).

Moreover, because these were invoices for purchases of glycine of

a similar grade to Plaintiff’s, Plaintiff argues that they are more

reliable overall than the AUV data, which included various grades

of glycine. See Pl.’s Conf. Br. at 20; Pl.’s Conf. Reply Br. at 7.

Commerce argues in response that four invoices from a single

purchaser of glycine do not represent a large enough sample for

Commerce to be sure that these prices accurately reflect typical

glycine transactions. See Remand Determ., CCR Doc. No. 13 at 16-

17. Moreover, Commerce argues that it has no means by which to

evaluate these invoices so as to determine their reliability. Id.

The Court agrees with Commerce. While the invoices from Company X
Court No. 03-00654 Page 20

may be sufficient to show how a typical future domestic sale to

Company X might be priced, there is no reason for Commerce to

believe that all of Plaintiff’s future sales would be to Company X

or that, indeed, Company X represents a typical customer. Company

X might be selling glycine in a niche market where higher prices

dominate, or buying in comparatively small amounts, and therefore

paying a higher price. While, as Plaintiff contends, these

invoices might be probative of the price that Company X is willing

to pay, see Pl.’s Conf. Br. at 20, they cannot tell Commerce or

this Court much, if anything, about how much other domestic

purchasers of glycine are willing to pay. Certainly they do not go

as far as the AUV data in showing the typical U.S. price for

Plaintiff’s product.

(iv) The AUV data provide a reliable benchmark in the manner
expounded by Commerce.

Plaintiff argues that to the extent the AUV data provide a

reliable benchmark, they do so in a different way from that

expounded by Commerce. See Pl.’s Conf. Br. at 21; Pl.’s Conf.

Reply Br. at 5-6. Specifically, Plaintiff alleges that the AUV

data should be disaggregated by month, because this would show that

Plaintiff’s price was within the range of the individual monthly

AUVs. See id. Plaintiff alternatively argues that its sale should

only be compared with the AUVs of months with similar volumes of

sales, contending that months with smaller volumes “reflect FOB
Court No. 03-00654 Page 21

prices at a spot basis (as compared to a generic, long-term basis)

likely more reflective of a few individual transactions than other

months in which ‘larger’ volumes consisting of multiple shipments

of various different grades of product were imported.” Remand

Determ. at 19-20 (quoting Letter from Francis J. Sailer, Lafave &

Sailer LLP, to the Hon. Donald L. Evans, Sec’y of Commerce, Re:

Glycine from the PRC; Comments on Draft Results of Determination

Pursuant to Court Remand, CCR Doc. No. 8 at 8 (April 13, 2004));

see also Pl.’s Conf. Br. at 21, n.61; Pl.’s Conf. Reply Br. at 6 &

n.17.

On the first count, Commerce argues that to disaggregate the

monthly AUVs would amount to “cherry-picking” the data, and would

therefore be contrary to Shanghai Foreign Trade Enters. Co. v.

United States, slip op. 04-33 (CIT Apr. 9, 2004). See Remand

Determ., CCR Doc. No. 13 at 18 (Apr. 23, 2004). Commerce also

argues that the yearly average “smooths out” monthly variations and

allows for a more reliable figure covering a longer period of time

and a greater volume of merchandise. Id. Finally, Commerce notes

that even were it to consider only data for the month in which

Plaintiff’s product was imported, once Plaintiff’s shipment is

eliminated from the data for that month, the resulting AUV for that

month was [ ] per kilogram, over a [ ] less than Plaintiff’s

selling price. Id. Commerce argues that this differentiates the

instant case from Fresh Garlic from the People’s Republic of China,
Court No. 03-00654 Page 22

68 Fed. Reg. 11,368 (Dep’t Commerce Mar. 10, 2003) (notice of

amended final results of antidumping duty administrative review),

in which a sale was held to be bona fide when it was shown to be in

line with the AUV data for both the entire POR and the month of

importation. See id. at 19. As to Plaintiff’s argument on

comparing months of similar volumes, Commerce argues that

Plaintiff’s FOB contention is pure speculation, and that no record

evidence was introduced to suggest that larger volume months do not

reflect spot basis sales, that glycine companies other than

Plaintiff ship in similar volumes, or that larger volume months

necessarily indicate dissimilar grades of glycine. See id. at 19-

20.

The Court agrees with Commerce that disaggregation of the data

is not required. Larger sample sizes are generally preferable when

the goal is, as here, to generalize from a sample to a population,

because the larger the sample, the less risk run that the sample

chosen is extreme or unusual simply by chance. See, e.g., Laurence

C. Hamilton, Data Analysis for Social Scientists 203 (Duxbury

Press, 1996) (“Larger samples permit more precise estimates of

unknown population parameters . . . a larger sample is always

better”). Plaintiff’s arguments ignore this fundamental rule of

statistics without providing any evidence beyond mere speculation

for the contention that months with lower volumes reflect spot

basis sales containing similar grades of glycine. Commerce cannot
Court No. 03-00654 Page 23

be required to disaggregate the data without a more substantive

basis for Plaintiff’s claim. Without such a basis, disaggregation

on Commerce’s part would violate the long-standing rule that

administrative agency determinations must evince “a rational

connection between the facts found and the choices made.” See

Shanghai Foreign Trade Enters. Co. at 13 (quoting Burlington Truck

Lines, Inc. v. United States, 371 U.S. 156, 168 (1968). Moreover,

Commerce is correct in stating that, even were Commerce to only

compare Plaintiff’s sale price with the prices of other imports

entered in the same month, once Plaintiff’s sale is removed from

that data, what remains is a monthly AUV of [ ], which is still

over [ ] less than Plaintiff’s price. See Remand Determ.,

CCR Doc. No 13 at 18.

(v) The fact that Company X resold the goods for a profit does
not establish that the price was commercially sound.

Plaintiff alleges that the fact that Company X resold the

goods for a profit establishes that the price was commercially

sound. See Pl.’s Conf. Br. at 14-15; Pl.’s Conf. Reply Br. at 2.

Commerce, in turn, acknowledges that the merchandise was resold at

a profit, although not at such a large one as Plaintiff initially

alleged. See Remand Determ., CCR Doc. No. 13 at 17. Commerce does

not address the argument further, resting on its other evidence

suggesting that the sale was unusually priced. See id.

The Court agrees with Commerce’s implicit contention that a

profit on resale cannot establish the bona fides of the sale where
Court No. 03-00654 Page 24

there is other evidence suggesting that the sale is not bona fide.

Company X’s profits on the sale may indicate that the particular

price agreed upon was not such as to be utterly uncommercial, or

that the two companies were not colluding to arrive at it;

nonetheless, the existence of a profit does not provide significant

evidence of whether the sale price is typical for the market as a

whole, or for Plaintiff’s future practice in particular. It is

true that a non-profit making price would likely invalidate a new

shipper sale as atypical for the market. See Am. Silicon Techs. v.

United States, 24 CIT 612, 616, 110 F. Supp. 2d 992, 996 (2000);

see also Certain Cut-to-Length Carbon Steel Plate from Romania, 63

Fed. Reg. 47,232, 47,234 (Dep’t Commerce Sept. 4, 1998) (rescission

of antidumping duty administrative review). Sales made at a loss,

in normal circumstances, could reasonably be viewed as likely not

being market-price sales. But the converse – a profit-enabling

price - is not an automatic basis for conferring typicality upon

the sale. Consequently, resale at a profit is not the alpha and

omega of a bona fide analysis.

(vi) The record does not contain substantial evidence to show
that Plaintiff’s product was “granular” glycine and thus
commanded a higher price than other pharmaceutical grade
glycine.

Plaintiff contends that the glycine it sold to Company X was

granular, and therefore commands a higher price than powdered

glycine of a similar grade. See Pl.’s Conf. Br. at 15. Commerce
Court No. 03-00654 Page 25

notes that there was no evidence to substantiate the claim that

granular glycine is more expensive than powdered glycine. See

Remand Determ., CCR Doc. No. 13 at 18 (Apr. 23, 2004).

The Court agrees that the record does not contain substantial

evidence to demonstrate that granular glycine was more expensive

than powdered glycine. Commerce here somewhat overstated its point

in saying that there was no record evidence to that effect, see id.

18, when in fact Company X averred in a questionnaire response that

Plaintiff’s “granular powder” glycine has a bigger market and

better quality than “fine powder” glycine purchased from other

companies. See Pl.’s Conf. Br. at 15; Glycine From PRC A-570-836;

Questionnaire Response, CR Doc. No. 22 at para. 7 (Mar. 12, 2003).

However, no other evidence on the record supports the existence of

“granular powder” glycine, as differentiated from “fine powder”

glycine. Plaintiff has put forth no evidence specifically stating

the price differences incurred in creating this “granular powder”

or suggesting that purchasers of glycine are typically willing to

pay a premium for such a good. Accordingly, Company X’s single

statement is insufficient to refute Commerce’s finding that the

amount by which Plaintiff’s price exceeded the AUV and its own

third-country practice cannot be accounted for by the expenses

associated with “granular powder” glycine.

(vii) Plaintiff’s third-country sales reflected different
market considerations and different grades of glycine.

Plaintiff argues, albeit briefly, that its third-country
Court No. 03-00654 Page 26

prices were not evidence of its future pricing practices, and hence

not relevant. See Pl.’s Conf. Br. at 19; Pl.’s Conf. Reply Br. at

9. Plaintiff alleges that there is no reason to believe that the

third-country sales were of pharmaceutical grade glycine, and that

the absence of dumping orders on Chinese glycine in the third-

country markets means that the pricing in those countries is

dissimilar to what would be typical of its U.S. price. Id.

Plaintiff did not appear to take issue with the third-country data

before the agency, despite it having been mentioned in the Draft

Remand Results. See Draft Results of Determination Pursuant to

Court Remand, CCR Doc. No. 7 at 11 (April 9, 2004); see also Letter

from Francis J. Sailer, Lafave & Sailer LLP, to the Hon. Donald L.

Evans, Sec’y of Commerce, Re: Glycine from the PRC; Comments on

Draft Results of Determination Pursuant to Court Remand, CCR Doc.

No. 8 (April 13, 2004). Before the Court, Commerce responds to

Plaintiff’s argument, stating that there was no evidence on the

record suggesting that the market conditions in the third-countries

were significantly different from those in the U.S. Def.’s Conf.

Br. at 17-18 (citing to Anshan Iron & Steel Co. v. United States,

slip op 03-83 (CIT July 16, 2003).

The Court agrees that there is no reason to discount the

third-country data. First, Plaintiff waived this argument when it

did not bring it up before the agency. Second, while it might be

possible to show that the third-country markets and the U.S. market
Court No. 03-00654 Page 27

were significantly different, no evidence to support that

contention appears on the records. Finally, contrary to

Plaintiff’s supposition, Commerce found at least two third-country

invoices for pharmaceutical grade glycine, see Pl.’s Conf. Br. 19,

one of which showed that Plaintiff had priced the identical product

at [ ] per kilogram during the POR, an amount in line with the

AUV. See October 10, 2001 Invoice, Spot Checks of Other Sales, Ex.

7 to CR Appendix 1; August 14, 2002 Invoice, Payment Training, Ex.

14 to CR Appendix 1. Accordingly, the Court finds that (i)

Plaintiff’s argument that there is an inherent contradiction

between the margin calculation and the bona fide analysis is

waived, (ii) that even when the AUV is adjusted to account for

different grades of glycine, Plaintiff’s price is still

comparatively high, (iii) that despite its flaws, the AUV data is

a more reliable benchmark than Company X’s five invoices, (iv) that

the AUV data was best viewed in the aggregate, and not in

disaggregation, (v) that the mere fact that Company X resold the

product at a profit does not answer the question of whether the

transaction was typical for the market, (vi) that Plaintiff’s

evidence that it sold “granular” glycine, and thereby commanded a

premium is insufficient to rebut Commerce’s finding that

Plaintiff’s price was too high (vii), that third-country sales were

relevant to the determination and demonstrated that Plaintiff had

priced the product in a manner more reflective of the AUV data
Court No. 03-00654 Page 28

during the POR. Moreover, the Court agrees with Commerce that the

evidence in the record demonstrates that Plaintiff’s price was

neither in line with prices in the U.S. market nor with Plaintiff’s

third-country pricing. Accordingly, the Court finds that

substantial evidence supports Commerce’s determination that the

Plaintiff’s price indicated that its sale was not a typical sale

for the U.S. market and would not be predictive of future sales.

2. SUBSTANTIAL EVIDENCE SUPPORTS COMMERCE’S DETERMINATION
THAT THE PAYMENT TIMING OF THE SALE SUPPORTED A FINDING
THAT THE SALE WAS ATYPICAL

In addition to finding that the price of Plaintiff’s sale was

such that future sales were unlikely to be similarly priced,

Commerce also found that the payment timing involved in Plaintiff’s

sale did not reflect commercial reality. See Remand Determ., CCR

Doc. No. 13 at 29-30 (Apr. 23, 2004). Commerce found that the

terms of sale required payment within 30 days of the invoice date

of January 25, 2002. Bona Fide Memo, C.R. Doc. No. 39 at 4-5 (Aug.

8, 2003). However, payment was not actually made until nine months

later. Id. at 5. Moreover, Commerce could find no evidence that

any attempt at collection had been made on Plaintiff’s part until

November 1, 2002. Id. at 6. While Commerce found that Company X

had been late in making payments to Plaintiff before, it had never

failed to make payment for such a long period of time. See Remand

Determ., CCR Doc. No. 13 at 29 (Apr. 23, 2004). Moreover, Commerce
Court No. 03-00654 Page 29

found that Company X continued to make payments to Plaintiff for

other sales. Id. Commerce found that allowing payment to go

uncollected departed from “normal, commercial” business practices.

Bona Fide Memo, CR Doc. No. 39 at 6 (Aug. 8, 2003).

Plaintiff argues that the record evidence demonstrates that

Company X had long engaged in a “regular commercial pattern” of

failing to pay in a timely manner, but that payment was always

eventually received. Letter from Francis J. Sailer to the Hon.

Donald L. Evans, Sec’y of Commerce, Re: Glycine from the PRC;

Comments on Draft Results of Determination Pursuant to Court

Remand, CCR Doc. No. 8 at 13-14 (April 13, 2004); see also Pl.’s

Conf. Br. at 23.

Plaintiff points out that during verification, it stated that

it had several times made telephone contact with Company X in an

attempt to collect payment. See Pl.’s Conf. Br. at 23. Moreover,

at least one other customer had been as late as Company X in making

payment, lending credence to the idea that allowing late payments

was part of Plaintiff’s normal commercial practice. See id. To

further its argument before Commerce, Plaintiff cited Certain Cold

Rolled and Corrosion-Resistant Carbon Steel Flat Products From

Korea, 64 Fed. Reg. 12,927, 12,929 (Dep’t Commerce Mar. 16, 1999)

(final results of antidumping duty administrative reviews),

claiming that it is not unusual for respondents in dumping cases to

receive late payments, and not to receive recompense for such late
Court No. 03-00654 Page 30

payment. See Letter from Francis J. Sailer to the Hon. Donald L.

Evans, Sec’y of Commerce, Re: Glycine from the PRC; Comments on

Draft Results of Determination Pursuant to Court Remand, CCR Doc.

No. 8 at 14-15 (Apr. 13, 2004). However, in its briefs before the

Court, Plaintiff now cites instead to a memorandum written in

conjunction with Certain Preserved Mushrooms from the People’s

Republic of China, 68 Fed. Reg. 10,694, 10,696 (Dep’t Commerce Mar.

6, 2003) (preliminary results and partial rescission of the fourth

new shipper review and preliminary results of the third antidumping

duty administrative review). See Pl.’s Conf. Br. at 24. Plaintiff

argues that this memorandum stands for the proposition that late

payment timing alone is not enough to demonstrate that a sale was

atypical and therefore non-bona fide. See id. Finally, Plaintiff

argues that to the extent that Plaintiff received payments from

Company X in a more timely fashion in the past, these sales had

been made by Plaintiff’s U.S. subsidiary, whereas the sale at issue

was made directly from China.10 See id. at 23-24.

While the Court agrees with Plaintiff that this late payment

on its own might not be enough to support a finding of a non-bona

fide sale, the late payment here accompanies a price that is

10
Prior to the draft remand results, it appears that
Plaintiff argued that Company X did not timely pay because it did
not have available funds. See Remand Determ., CCR Doc. No 13 at
26 (Apr. 23, 2004). However, Plaintiff appears now to have
waived this argument, as it is addressed neither in Plaintiff’s
comments subsequent to the draft remand results, or in its briefs
to the Court.
Court No. 03-00654 Page 31

inconsistent with the U.S. market, with Plaintiff’s own practice,

and which is unlikely to repeat itself. Thus, while the evidence

on payment timing may be supportive rather than primary in the bona

fide analysis undertaken here, the issue is not irrelevant or

unsuggestive. Moreover, to the extent that the issue of payment

timing could support Commerce’s finding that the sale at issue here

was non-bona fide, it does so here.

It is undisputed on the record that Company X did not make

payment until nine months after the invoice date. See Pl.’s Conf.

Br. at 23. While Company X had made late payments to Plaintiff

before, none of its former payments were as late as this. Plaintiff

argues that these other payments were made more timely because they

were on sales made by a U.S. subsidiary, “which presumably has a

regular procedure for following up with customers,” rather than

directly by Plaintiff’s Chinese headquarters. Id. Although it

could be true that “follow-up may be more difficult from China,”

id. at 24, such speculation does not pass as evidence.

Finally, as regards Plaintiff’s citation to a memorandum

accompanying Certain Preserved Mushrooms from the People’s Republic

of China, 68 Fed. Reg. 10,694, 10,696 (Dep’t Commerce Mar. 6, 2003)

(preliminary results and partial rescission of the fourth new

shipper review and preliminary results of the third antidumping

duty administrative review) (“Certain Preserved Mushrooms”),

Plaintiff has not provided that memorandum to the Court and the
Court No. 03-00654 Page 32

Court has been unable to find it. See App. of Docs. Cited in Br. of

Pl. Supp. of Its R. 56.2 Mot. J. Agency. R. Nevertheless, the

Court has located the issues and decision memorandum accompanying

the final results of that antidumping duty new shipper review. See

Memorandum to Joseph A. Spetrini, Acting Assistant Sec’y, from

Jeffrey May, Deputy Assistant Sec’y for Imp. Admin., Re: Issues and

Decision Memorandum for the Final Results of the Antidumping Duty

New Shipper and Administrative Reviews on Certain Preserved

Mushrooms for the People’s Republic of China – February 1, 2001

through January 31, 2002, (July 11, 2003), available at

http://ia.ita.doc.gov/frn/summary/prc/03-17628-1.pdf (“Mushroom

Memo”). The second issue presented by that memorandum relates to

the bona fides of a new shipper, Shenzhen Qunxingyuan. Id. at 1.

Petitioners noted that the payment on the new shipper’s sole sale

into the United States did not occur until six months after the

sale. Id. at 16. While acknowledging that this argument had been

made, Commerce did not cite it as part of its determination that

the sale was non-bona fide, resting instead on other factors that

the agency found of greater significance.11 Id. at 17. This does

not reflect, however, on the issue’s importance here. As Commerce

put it in the issues and decision memorandum in Certain Preserved

11
Indeed, in Certain Preserved Mushrooms, there was strong
evidence to suggest that not only was the sale itself non-bona
fide, but that the company that made it was entirely fictitious.
Mushroom Memo at 20.
Court No. 03-00654 Page 33

Mushrooms, “[w]hile some bona fides issues may share commonalities

across various Department cases, each one is company-specific and

may vary with the facts surrounding each sale.” Mushroom Memo at

20.

Given the unusual sale price involved, it was not unreasonable

for Commerce to look beyond the price to determine whether other

characteristics of the sale were such as to demonstrate that the

sale as a whole, was atypical. Late payment may be such an aspect,

especially where the payment is so late. In this case, Plaintiff

has demonstrated that at least one other customer has been

delinquent for a comparable amount of time, and that its customer

in this sale, Company X, has also been late in paying before.

However, Company X has never been quite this late, while Plaintiff

has little evidence to suggest that it was assiduous in its efforts

at collection. These factors provide a reasonable basis for the

conclusion that this sale was viewed by both parties as outside

their normal business practice. Accordingly, Commerce had

substantial evidence to consider the payment timing as a factor

that counseled against a finding that the sale was typical,

representative, and therefore bona fide.

3. SUBSTANTIAL EVIDENCE SUPPORTS COMMERCE’S DETERMINATION
THAT INCONSISTENCIES IN THE IMPORT DOCUMENTATION OF THE SALE
SUPPORTED A FINDING THAT THE SALE WAS ATYPICAL

The third factor that Commerce cited to in support of its
Court No. 03-00654 Page 34

determination that the sale was non-bona fide relates to

inconsistencies in the import documentation accompanying the goods

when they entered the United States. See Remand Determ., CCR Doc.

No. 13 at 30, 33 (Apr. 23, 2004). Company X, the importer in this

transaction, filed with Customs a copy of Customs Form 7501 in

which it stated that the goods were listed as “Entry Type 1, “free

and dutiable,” rather than subject to antidumping duties. See id.

at 30 (Apr. 23, 2004); Entry Summary, Ex. A-4 to Response of

Tianjing Tiancheng Pharmaceutical Corp. Ltd. and its Supplier to

Section A of the Department’s Antidumping Questionnaire, Attachment

to Letter from Francis J. Sailer, Lafave & Sailer LLP, to the Hon.

Donald L. Evans, Sec’y of Commerce, CR Doc. No. 3 (July 11, 2002).

Company X also marked that the rate of antidumping duties owed on

the goods was “Free” rather than 155.89 %. See Remand Determ., CCR

Doc. No 13 at 31 (Apr. 23, 2004); Entry Summary, Ex. A-4 to

Response of Tianjing Tiancheng Pharmaceutical Corp. Ltd. and its

Supplier to Section A of the Department’s Antidumping

Questionnaire, Attachment to Letter from Francis J. Sailer, Lafave

& Sailer LLP, to the Hon. Donald L. Evans, Sec’y of Commerce, CR

Doc. No. 3 (July 11, 2002). In its questionnaire responses,

Company X indicated that its customs broker did not know the

details of the antidumping order when it filed the form, and that

Company X was working with Customs to sort out the error. See

Glycine from PRC (A-570-836); Questionnaire Response, CR Doc. No.
Court No. 03-00654 Page 35

35 at Answer 2 (July 17, 2003).

Commerce argues that, where Plaintiff predicates its new

shipper review on the bona fides of this sale, Plaintiff has no

excuse for failing to inform its customer of the antidumping duty

due on the sale. See Remand Determ., CCR Doc. No. 13 at 32-33

(Apr. 23, 2004). The fact that it did not suggests, at least under

Commerce’s argument, that Plaintiff was seeking to manipulate the

terms of the sale so as to receive a lower margin than it would

obtain under a sale made under more typical circumstances. See id.

at 33. Commerce also appears to argue that it is unusual, at

least, for Company X to employ a customs broker who, by its own

admission, was unaware of antidumping orders on glycine when

Company X was, as it stated “in the business of importing and

reselling glycine.” See Def.’s Br. at 24 (quoting Glycine from PRC

A-570-836; Questionnaire Response, CR Doc. No. 22 at Answer 1 (Mar.

12, 2003)).

Plaintiff states that it has no control over the import

documentation that its importer filed, and that therefore this

error cannot be used to demonstrate that it entered into the sale

in a manner inconsistent with its typical practice. See Pl.’s

Conf. Br. at 25. Moreover, Plaintiff notes that Company X

correctly coded the goods for their proper tariff classification;

because the goods were properly classified, Plaintiff claims that

there is little reason to believe that Company X was actively
Court No. 03-00654 Page 36

trying to avoid paying antidumping duties. Id. at 25-26.

Plaintiff also argues that there is no “rational connection”

between the fact that dumping duties were not paid and the

conclusion that the sale is atypical or non-bona fide, id. at 26,

and points out that Commerce concluded that this factor, were it to

stand alone, would not be sufficient to demonstrate that the sale

was atypical for purposes of the bona fide analysis. Id. at 27.

The Court agrees with both Plaintiff and Commerce that, were

this factor to stand alone, it would not be substantial evidence

for the proposition that the sale was non bona fide. However, this

evidence, in this case, does not stand alone. Rather, it is one,

small factor that weighs against a finding that the sale was bona

fide. Divorced from the larger context of the review, the evidence

on this issue could be said to point in either direction: to a

simple mistake, as Plaintiff alleges, or to some collusive endeavor

to manipulate the sale, as Commerce alleges. However, Commerce has

already established that the price and payment timing of the sale

were unusual. It is also somewhat unusual that no antidumping

duties would be paid. Therefore, there is at least some rational

connection between a finding that duties were not paid and a

finding that the sale was atypical.

In disavowing a duty to inform Company X of the duty

applicable to the goods, Plaintiff appears to be forgetting that

this sale was to serve a very special purpose – as the predicate of
Court No. 03-00654 Page 37

a new shipper review. Plaintiff never alleges that it informed its

customer as to the fact of the duties, or that their existence

formed part of the sales negotiations. Had they done so, it would

buttress the claim that a mistake was made, and that this mistake

should not reflect at all on the conditions of Plaintiff’s sale.

Plaintiff was, of course, under no obligation to place this

information into the record or make such an argument here. However,

as the record stands, with an unusual sales price and atypical

payment timing, the record evidence cuts both ways: Commerce could

have reasonably and rationally decided the point in either

direction. This does not mean that there is not substantial

evidence for the direction Commerce did take. The mere fact that

two inconsistent conclusions could be drawn from a piece of

evidence does not render an agency’s decision unsupported by

substantial evidence. Consolo v. Fed. Mar. Comm’n, 383 U.S. 607,

620 (1966) (citations omitted).

Accordingly, the Court finds that substantial evidence

supports Commerce’s finding that the import documentation factor

supported the overall finding that the sale at issue was atypical,

and hence, non-bona fide.

4. SUBSTANTIAL EVIDENCE SUPPORTS COMMERCE’S DETERMINATION
THAT THE SALE WAS NON-BONA FIDE

Commerce found, on the basis of the three factors discussed

above, that Plaintiff’s sale was not bona fide for purposes of the
Court No. 03-00654 Page 38

new shipper review. Plaintiff argues that, even to the extent the

three factors weigh against Plaintiff, the factors do not add up to

substantial evidence demonstrating that the sale was non-bona fide.

See Pl.’s Conf. Br. at 27. In support of its argument, Plaintiff

cites to various other circumstances surrounding the sale, such as

the fact that the sale was at arm’s length, and that the sale was

for a commercial quantity, that there was no unusual transportation

of the shipment (such as air, rather than sea transport), and that

a profit was earned on resale. See Pl.’s Conf. Br. at 28.

Commerce argues that while a single sale is not inherently

commercially unreasonable, the fact that only one sale was made

will be taken into account in Commerce’s bona fide analysis. See

Bona Fide Memo, CR Doc. No. 39 at 2 (Aug. 8, 2003). In one-sale

reviews, there is, as a result of the seller’s choice to make only

one shipment, little data from which to infer what the shipper’s

future selling practices would look like. This leaves the door

wide to the possibility that the sale may not, in fact, be typical,

and that any resulting antidumping duty calculation would be based

on unreliable data. See Remand Determ., CCR Doc. No. 13 at 7, 34

(Apr. 13, 2004).

Commerce also argues that the bona fide analysis involves

consideration of the totality of the circumstances regarding the

sale. See Remand Determ., CCR Doc. No. 13 at 34 (Apr. 13, 2004).

The inquiry, then, consists not merely of a checklist of factors,
Court No. 03-00654 Page 39

in which if six factors are found unusual and seven are found to be

typical, the new shipper’s sale as a whole is found typical.

Rather, the weight given to each factor investigated will depend on

the circumstances surrounding the sale.

The Court agrees with Commerce. While a single sale is not

inherently commercially unreasonable, Windmill Int’l Pte., Ltd. v.

United States, 26 CIT 221, 231, 193 F. Supp. 2d 1303, 1313 (2002),

it will be carefully scrutinized to ensure that new shippers do not

unfairly benefit from unrepresentative sales. See Memorandum from

Richard W. Moreland, Deputy Assistant Sec’y, Group I, to Faryar

Shirzad, Assistant Sec’y for Imp. Admin., Re: Issues and Decision

Memorandum: New Shipper Review of Clipper Manufacturing Ltd.,

available at http://ia.ita.doc.gov/frn/summary/prc/02-6076-2.txt

(incorporated by reference into Fresh Garlic from the People’s

Republic of China, 67 Fed. Reg. 11,283 (Dep’t Commerce Mar. 13,

2002) (final results of antidumping duty administrative review and

rescission of new shipper review.)

In this case, the sale price was shown to be both atypical of

the market as a whole, and of Plaintiff’s own prices. Therefore,

the price factor has significant weight, and cannot necessarily be

offset by a recitation of other factors by which the sale could be

considered typical, such as the fact that the shipment term (CIF)

was normal for this type of transaction. See Pl.’s Conf. Br. at

28. The transaction must be “normal” as a whole, and price must be
Court No. 03-00654 Page 40

a large part of what produces “normal” sales in the context of an

antidumping determination.

Accordingly, the Court finds that substantial evidence

supports Commerce’s conclusion that the totality of the

circumstances surrounding the sale supported a finding that the

sale was non-bona fide.

CONCLUSION

The Court finds that substantial evidence demonstrates that

the price, payment timing, and import documentation surrounding the

sale at issue were all unusual with regard to the U.S. market,

Plaintiff’s own practice, and good business practice generally.

The Court also finds that all three factors supported a conclusion

that the sale was unlikely to be a good future indicator of

Plaintiff’s future sales in the market. Accordingly, Plaintiff’s

motion is denied and judgment entered for the Defendants.

/s/ Donald C. Pogue
Donald C. Pogue
Judge

Dated: New York, New York
March 9, 2005
 ERRATUM

Tianjin Tiancheng Pharmaceutical Corp. v. United States, Slip Op. 05-29, March 9, 2005,
Court No. 03-00654:

Page 1: The caption should read “Court No. 03-00654,” not “Consol. Court No. 03-
00654.”

March 10, 2005